Standard Chartered Bank (Hong Kong) Ltd v. Khanduri Sanjay

DCCJ 1068/2022

[2024] HKDC 245

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 1068 OF 2022

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DECISION

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Introduction

1.By a Decision dated 19 October 2023 (“the Decision”), I dismissed an appeal by the Defendant (“D”) against the decision of Master Raymond Ho dated 27 July 2023: (1) dismissing D’s application for transfer to the High Court with no order as to costs; and (2) allowing an application by the Plaintiff (“P”) to strike out D’s Amended Counterclaim with costs to P, summarily assessed at HK$150,000.00.

2.The background and summary of the parties’ pleaded case have been set out in the Decision, §§3-16, and shall not be repeated herein.

3.For convenience, I will also adopt herein the abbreviations and definitions used in the Decision.

4.This is the hearing of D’s application by Inter-partes Summons dated 8 December 2023 (“the Inter-partes Summons”) for leave to appeal to the Court of Appeal against the Decision[1].

Applicable Principles

5.It is trite that leave to appeal shall not be granted unless the Court is satisfied that the appeal has a reasonable prospect of success or there is some other reason in the interests of justice why the appeal should be heard: see s 63A(2) of the District Court Ordinance, Cap 336.

6.It is also well established that the prospects of succeeding must be “reasonable” and therefore more than “fanciful”, without having to be “probable”: see SMSE v KL [2009] 4 HKLRD 125 and Hong Kong Civil Procedure 2024, Vol 1, §59/2A/4.

Analysis

7.D, acting in person, has not filed any skeleton submissions in support of his application contrary to Practice Direction 5.4.  Neither has any ground of appeal been stated in the Inter-partes Summons or elsewhere.

8.At the hearing, D confirmed that his Affirmation filed on 8 December 2023 (“D’s Affirmation”) in support of his application for leave to appeal should be treated as his skeleton.  I briefly explained to D the difference between skeleton submissions and evidence.  The latter properly should not have contained matters for legal submissions.  In any event, no clear and succinct grounds of appeal have been stated therein.

9.Nonetheless, as an indulgence to D, with the assistance of Mr Wong, counsel for P, I have distilled from D’s Affirmation a number of purported grounds of appeal against the Decision.

10.I should say at the outset that I have carefully studied D’s Affirmation and the fact that I do not refer to each and every matter he has raised therein in this Decision should not be taken as having been overlooked by me.  Matters which have been raised at the previous hearing before me were considered and rejected for the reasons given in the Decision.

11.The following are the main grounds of appeals or points as gleaned from D’s Affirmation (which D had more or less repeated in oral submissions) with some overlaps between them.

12.Firstly, D’s Affirmation stated that I did not apply a purposive or holistic approach in ascertaining the legislative intent of BO as not conferring a private cause of action to D.  It is said that I took the narrowest view and a piecemeal approach.

13.D referred to the general statement that the modern approach to statutory interpretation is commonly referred to as the “purposive approach” and that s 19 of the Interpretation and General Clauses Ordinance, Cap 1 (“Cap 1”) gives statutory recognition to the purposive approach (by referring to passages from the Department of Justice’s article, “Legislation about Legislation: a general overview of Hong Kong’s Interpretation and General Clauses Ordinance (Cap 1)”). However, there is no suggestion that the more specific authorities on whether a statute intended to confer a private right of action for breach of statutory duty (which I have referred to in the Decision, §§46-49) are contrary to the purposive approach or is otherwise wrong in law.  In any event, the authorities referred to in the Decision include the case of Kaisilk Development Ltd v Urban Renewal Authority [2004] 1 HKLRD 907 which is of course binding on me.

14.Although D asserted that I simply treated the 7^th Schedule to BO as a licensing requirement and took the narrowest interpretation of the 7^th Schedule, this is not accurate.  Apart from the 7^th Schedule, I did consider other sections of BO and the guidelines issued by HKMA issued pursuant to s 16(10) of BO, in ascertaining the legislative intent of BO: see the Decision, §§55 and 58. I cannot possibly see how I took the narrowest approach or a piecemeal approach.

15.Secondly, D asserted that the Decision is contrary to s 19 of Cap 1 which provides:

“An Ordinance shall be deemed to be remedial and shall receive such fair, large and liberal construction and interpretation as will best ensure the attainment of the object of the Ordinance according to its true intent, meaning and spirit.”

16.Essentially, D asserted that the mischief that BO was seeking to curb or remedy was unfair/unethical treatment of depositors due to banking misconduct such as where the 7^th Schedule was violated.  By deciding that there was no right of private action, D alleged that the Decision perpetuated injustice on depositors.  He said that it would set a dangerous precedent of injustice by implying that banks can freely violate the BO and leaving depositors helpless to defend or counterclaim.

17.In the Decision, §§56-57, I have held that upon a proper construction of BO, it is intended to benefit and protect the public at large but it was for HKMA, and not for individual customers or depositors, to regulate compliance with BO.  I had reached that view having consider all the relevant provisions of BO as well as the Guidelines, Guide and Policy Manuals issued pursuant to s 16(10) of BO. As I mentioned therein, there is provision in BO for appealing to the Chief Executive in Council by any person aggrieved by the decisions of HKMA.  So it is not the case that there is no “remedy” as such against breaches of BO by banks or no protection for members of the public.

18.D submitted that I have ignored the long title and other extrinsic materials which are relevant to ascertaining the object of BO.   This was never a matter that D argued or raised at the previous hearing on 4 October 2023.  D’s position was always that ascertaining the legislative intent of BO was a very difficult point of law which is not suited for determination in a strike-out application (see the Decision, §§50-51).  He further submitted that it was a question that ought to be referred to HKMA or the Financial Secretary (ibid, §§52-53).

19.Nonetheless, even having considered the long title and the Official Report of Proceedings to the Banking Bill 1986 (eventually leading to the BO), it is plain that they do not advance D’s case any further.

20.The long title states:

“To regulate banking business and the business of taking deposits; to make provision for the supervision of authorized institutions so as to provide a measure of protection to depositors; to promote the general stability and effective working of the banking system; to make provision for the supervision of money brokers; and to provide for matters incidental thereto or connected therewith.”

21.The Official Report confirms that it is the commissioner’s role to promote the general stability and effective working of the banking system, and that the supervision of authorized institutions is done by the commissioner.  There is nothing said about protection to depositors by way of private right of action by depositors.

22.As I have held in the Decision, §49, relying on the cases of X (Minors) v Bedfordshire County Council [1995] 2 AC 633 and Ko Hon Yue v Liu Ching Leung [2008] 1 HKLRD 482, although regulatory legislation, which BO clearly is one, affecting a particular area of activities does provide protection to those individuals particularly affected by that activity, the legislation is not treated as being passed for the benefit of those individuals but for the benefit of society in general.

23.Thirdly, it stated that the Decision “is a good candidate for Judicial Review”.  It is alleged that the Decision is reviewable on grounds that it is illegal, irrational in the Wednesbury unreasonable sense and there is procedural impropriety.

24.An application for leave to apply for judicial review must be made pursuant to O 53, r 3 of the Rules of the High Court, Cap 4A, which is an application to the High Court.  It is beyond the scope of the Inter-Partes Summons and jurisdiction of this court.  In any event, it is not reasonably arguable that the Decision is amenable to judicial review.

25.Fourthly, it is alleged that there is a violation of Article 10 of the Hong Kong Bill of Rights under the Hong Kong Bill of Rights Ordinance, Cap 383 in not allowing and not referring to “Exhibit LTM4”.  I simply cannot see how Article 10 is engaged at all.  Article 10 provides inter alia that all persons before the courts and tribunals shall be equal and for the right to fair and public hearing by a competent, independent and impartial tribunal established by law.

26.There is no basis for suggesting that in disallowing “Exhibit LTM4” on the basis that the requirements of Ladd v Marshall were not satisfied, D has not been treated with equality or that he has not received a fair and public hearing by a competent, independent and impartial tribunal.  The refusal to allow “Exhibit LTM4” was following the hearing by me of submissions from D and Mr Wong, and by applying the applicable legal principles.

27.As for the drastic remedy of striking out a claim, this follows in every case where the legal basis of a claimant’s claim is unarguable and is a consequence of the rules of the Court, which I am bound to apply.  The argument that by not allowing an unarguable claim to proceed (as I have found in the Decision) is in breach of Article 10 is, with most respect to D, utterly misconceived.

28.Fifthly, it is said that the Ladd v Marshall test is not applicable to new evidence produced after a hearing but before judgment was delivered by relying on the case of E v Secretary of State for Home Department [2004] EWCA Civ 49. I have already considered and given my reasons for rejecting this argument in the Decision, §§25-27.

29.Mr Wong helpfully referred to the cases of Balram Chainrai v Kushnir Family (Holdings) Ltd & Ors [2018] HKCFI 17 at §§52-56 and Re Chu Wai Tung (a bankrupt) (No 2) [2018] 1 HKLRD 398 at §§5-10 as additional authorities that confirm that the Ladd v Marshall test applies to the admission of new evidence after a hearing but before judgment is given.

30.Sixthly, it is stated that even if the Ladd v Marshall test applies, the 3 criterions are satisfied.  As in the Decision I have only held against admitting the new evidence because I was not satisfied it would have had an importance influence on the case (see §§35-42), I only need to consider whether the ground raised against this finding has a reasonable prospect of success.

31.In D’s Affirmation, all that is said is that because the case concerned a strike-out, facts are taken in favour of D and a weak case is not a ground for strike-out. All these I have accepted (see the Decision, §§18 and 19).  However, D seems to have confused the requirements for strike-out and the Ladd v Marshall requirement, in particular, that the new evidence would probably have an important influence on the strike-out.  I see no reasonable basis to argue that I erred in the application of the Ladd v Marshall test in respect of the criterion that “Exhibit LTM4” would not have an important influence on the strike-out application.

32.Seventhly, D said that I did not give him an opportunity to amend AD&CC on the new case concerning the alleged drop in D’s credit rating, difficulty in applying and have issued to D a credit card, and the harassment faced by D etc.  It is stated that this was contrary O 18, r 19 RDC which empowers the court to give an opportunity to amend.

33.As noted in the Decision, §36, at the hearing on 4 October 2023 there was never any application to amend AD&CC by D.

34.In any event, if D’s counterclaim can be cured by an amendment, I agree that it ought not be struck out.  However, for the reasons given in the Decision, §§36-42, it is plain that D’s case (even on his case and taken at its highest) is doomed to fail as it is not reasonably arguable that he has suffered any loss and damage as a result of any breach of PDPO as opposed to the contractual bargain he made with P.  Furthermore, amendments ought not be allowed which are inconsistent with D’s core pleaded case and are embarrassing.

35.For all the above reasons, none of the purported grounds of appeal enjoy any reasonable prospect of success.  There being no other reason why the appeal should be heard, and none were submitted by D, I refuse D’s application for leave to appeal.

Disposition and orders

36.According, I would dismiss the Inter-partes Summons.

37.There is no reason why costs should not follow the event.  I therefore order costs of and occasioned by the Inter-partes Summons be paid by D to P with certificate for counsel.

38.Parties have already submitted their respective statement of costs for summary assessment by me on paper.  I will direct that within 7 days of the handing down of this Decision, D is to lodge his objections to P’s Statement of Costs and P to lodge any reply to D’s objections within 3 days thereafter.

Mr Wong C K Adrian, instructed by Tsang, Chan & Wong, for the plaintiff

The defendant appeared in person