Success Lane Development Ltd v. Fergurson Hong Kong Ltd t/a New World Millennium Hong Kong Hotel

DCCJ 2191/2023

[2024] HKDC 1018

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 2191 OF 2023

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DECISION

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Introduction

1.By summons for leave to appeal dated 3 April 2024, the Plaintiff (“P”) sought leave to appeal from the orders given in my decision handed down on 20 March 2024 (“my Decision”).

2.In my Decision, I dismissed P’s application to set aside the Order of Master Stanley Ho given on 23 January 2024 and to stay the execution of the Order given by Master Stanley Ho dated 27 December 2023 regarding the Defendant’s Discovery & Joint inspection summons.

3.The leave application has been dealt with by paper disposal and now I hand down the decision for it.

Background

4.Regarding the background of this case, I have summarised it at paragraphs 5–15 in my Decision. I therefore should not repeat them here.

Procedural History

5.I have set out a relatively comprehensive procedural history of this action at paragraphs 16–45 in my Decision and I should not repeat the same here except the parts shown below which I think may help understanding the intertwining effects of P’s stay applications and distilling the motive behind.

6.The Defendant (“D”) first took out the Discovery & Joint Inspection summons seeking specific discovery of P’s documents and joint inspection of P’s belongings.

7.P then took out the 1^st stay summons to stay the Discovery & Joint Inspection summons but was dismissed by Master Stanley Ho, ie the 1^st Order.

8.P then took out the 2^nd stay summons to stay the 1^st Order and was also dismissed by Master Stanley Ho, ie the 2^nd Order.

9.P then filed a Notice of Appeal dated 24 January 2024 seeking to set aside the 2^nd Order and stay the execution of the 1^st Order and it was dismissed by me in my Decision.

10.The Discovery & Joint inspection summons has been heard by DDJ Gary Lam who had granted it to D on 27 March 2024 before P’s filing the present summons for leave to appeal on 3 April 2024.

The Applicable Law and Legal Principles

Leave to Appeal

11.The jurisdiction to grant leave to appeal is derived from section 63A of the District Court Ordinance (Cap 336) (“section 63A”) and the practice and procedure of the application is governed by Order 58 of the Rules of the District Court (RDC) and Order 59 rule 2A of the Rules of the High Court (RHC).

12.Section 63A(2) stipulates that:

“Leave to appeal shall not be granted unless the judge, the master or the Court of Appeal hearing the application for leave is satisfied that —

(a) the appeal has a reasonable prospect of success; or

(b) there is some other reason in the interests of justice why the appeal should be heard.”

13.The threshold is therefore the “reasonable prospect of success” test or the “interest of justice” test. (See also SMSE v KL [2009] 4 HKLRD 125.) and the duty of showing reasonable prospect of success falls upon the applicant for leave to appeal, namely, P in this case.

14.The Court of Appeal has further explained that the relevant test of whether an appeal has a reasonable prospect of success under section 63A is whether the applicant for leave can show that he has an arguable case with reasonable chances of success on appeal. A reasonable prospect of success therefore means an appeal with prospects that are more than “fanciful” but which do not need to be shown to be “probable”. (See KNM v HTF, unrep, HCMP 288/2011, [2011] HKEC 1210, at para 9)

15.To meet the “reasonable prospect of success” test, an applicant is required to show more than just an arguable case, but an appeal that has merits and ought to be heard, although he does not have to demonstrate that the appeal will probably succeed. (See Wynn Resorts (Macau) SA v Mong Henry [2009] 5 HKC 515 at para 19)

16.In assessing the merits of a proposed appeal for the purpose of leave, the court is not required to address all the points made to it, whether legal or factual. A mere repetition of arguments made at first instance without demonstrating how and why the judge went wrong is of little assistance and does not make out a case that the judge’s conclusion is plainly wrong. (See Harbour Front Ltd v Money Facts Ltd & Ors [2019] HKCA 916 at para 9)

Case Management Decision

17.In respect of case management decisions, the appellant faces a very high hurdle and has to show that the Judge had gone clearly wrong and made orders which clearly involved an injustice or an inability for the trial court to carry out its task or had erred in principle or that his order was irrational (Wong Kar Gee Mimi v Severn Villa Ltd [2012] 1 HKLRD 887 applied Lee Tak Yee v Chen Park Kuen [2001] 1 HKLRD 401 and Kan Miu Wah v Aeroflot Russian International Airlines (unrep, CACV 142/2006, [2006] HKEC 1658)). (Hong Kong Civil Procedure 2024, Volume 1, paragraph 59/2A/4)

18.Practice Direction 5.2, section J, paragraph 38 stipulates that:

“The parties should note that case management decisions are matters within the discretion or the judge making that decision and are generally not susceptible to appeals.”

Exercise of Discretion

19.Moreover, for an appeal against exercise of discretion, the Court has to be convinced that the exercise of discretion involves an error of law and/or is plainly wrong. (See Agritrade Resources Ltd v Ashok Kumar Sahoo [2022] HKCA 280, at para 20)

20.An appellate court cannot interfere merely because it would have reached a different conclusion had it been hearing the hearing at first instance. (See Bright Shipping Ltd v Changhong Group (HK) Ltd (No 2) [2019] 5 HKLRD 30, [2019] HKCA 1062 at para 5)

21.It can only interfere in three cases: (1) where the judge has misdirected himself with regard to the principles in accordance with which his discretion had to be exercised; (2) where the judge, in exercising his discretion, has taken into account matters which he ought not to have done or failed to take into account matters which he ought to have done; or (3) where his decision is plainly wrong. (See The Abidin Daver [1984] AC 398 at 420B to C, per Lord Brandon of Oakbrook)

22.In considering an appeal from a master, one must bear in mind that a master has a wide discretion in case management matters which the appellate court will not interfere, unless the master has erred in point of law. (Smart Trike MNF PTE Ltd and Others v Chiu Sui Chun (趙穗珍) and Others, HCA 847/2013, [2018] HKCFI 562, [2018] HKCU 897 at para 60)

Discussion

23.Under the heading of grounds of appeal in the draft notice of appeal, there are altogether 13 paragraphs. Out of which only the first 11 paragraphs can be categorised as grounds of appeal in relation to my Decision. Paragraph 12 is P’s prayer for costs. Paragraph 13 further branches out to 31 sub-paragraphs entitled “preliminary grounds of appeal against DDJ Gary Lams’ decision dated 27 March 2024”. I simply do not understand why P’s grounds of appeal against the decision of DDJ Gary Lam would be a ground of appeal against my Decision. More importantly, the draft notice of appeal fails to set out succinctly why the Court of Appeal should interfere with my Decision.

24.For the discussion, I shall follow the order of the paragraphs of the draft notice of appeal filed by P. For ease of reference, I shall adopt the definitions and abbreviations used in my Decision, and unless otherwise stated, the references to paragraph numbers below are references to the paragraph numbers of the draft notice of appeal of P.

Paragraph 1

25.Paragraph 1 of the draft notice of appeal states that I erred in law by equating P’s 2^nd summons for a stay of execution of the 1^st Order with an appeal against the 1^st Order. Requesting a stay of execution is about pausing the implementation of the 1^st Order, which does not suggest that Master Stanley Ho was wrong in issuing the 1^st Order. Conversely, an appeal again the 1^st Order contests the correctness of the decision of Master Stanley Ho. These actions are grounded in different legal principles.

26.This ground is plainly illogical. P did not appeal against the 1^st Order and thus the 1^st Order was correctly decided. In the 1^st Order, Master Stanley Ho dismissed P’s application to stay D’s Discovery & Joint Inspection summons and made directions to proceed with the said summons. However, in the 2^nd stay summons, P sought to stay the execution of the 1^st Order which was, as analysed above, correctly decided. I do not understand P’s logic in pausing the implementation of the 1^st Order which was correctly decided.

27.The Court of Appeal has clearly said that the correct approach in an application for a temporary stay of proceedings was to consider the balance of convenience and fairness as between the parties and the court should exercise its discretion in such a manner to ensure that its procedures are used in a logical, fair and cost-efficient manner. (Re Chime Corporation Ltd, HCMP 4146/2001, unrep, 11 March 2005, at para 14)

28.It is obvious that Master Stanley Ho has rightly exercised his discretion to refuse P’s application to stay or pause the implementation of the 1^st Order.

29.This ground is also entirely misconceived. I did not equate P’s 2^nd stay summons with an appeal against the 1^st Order. What I was saying in my Decision was that P took out the 2^nd stay summons which was a de facto out-of-time appeal without leave by getting round the appeal rules and requirements under Order 58, rule 1(3) of the RDC. This is as clear as daylight not a ground of appeal with a reasonable prospect of success.

Paragraph 2

30.Paragraph 2 of the draft notice of appeal states that I have considered matters that are irrelevant in paragraphs 69–72 of my Decision and have failed to note that there is no point in appealing the 1^st Order which is a case management decision.

31.Now P states that the 1^st Order is a case management decision. However, P did not submit or admit so in the hearing before me when D was contending that the 1^st Order was a case management decision. And that was the reason why I explained it in paragraphs 69–72 in my Decision. Without knowing P’s stance as revealed in paragraph 2 of the draft notice of appeal, namely there is no point in appealing against a case management decision, it was utterly relevant to explain it in my Decision.

32.Despite the above, no basis is advanced for P’s contention that I erred in considering something that now P agrees. As such, it simply cannot be said that P has an appeal with a reasonable prospect of success.

Paragraph 3

33.Paragraph 3 of the draft notice of appeal states that I was plainly wrong in concluding that it is illogical for P to request adjournment of the 1^st stay application, especially when Master Stanley Ho sought legal principles from P, who was acting in person, and only allotted 5 minutes for this purpose. In short, Master Stanley Ho should have adjourned the hearing for argument.

34.As elaborated in my Decision, a master has a wide discretion in case management matters which the appellate court will not interfere, unless the master has erred in point of law. Not adjourning the hearing for argument could not be seen as an error in point of law, let alone the fact that P as an applicant should have prepared for presenting their argument at the hearing. As argued by D, P cannot possibly suggest that it should be held to a lower standard of compliance with procedural rules due to its status as a litigant in person, as D’s substantive rights would otherwise be prejudiced. (See Smart Trike MNF PTE Ltd and Others v Chiu Sui Chun (趙穗珍) and Others, HCA 847/2013, [2018] HKCFI 562, [2018] HKCU 897 at para 60; Barton v Wright Hassall LLP [2018] 1 WLR 1119 at para 18)

35.This ground does not, in my opinion, demonstrates a ground of appeal with reasonable prospect of success.

Paragraph 4

36.Paragraph 4 of the draft notice of appeal states that I was plainly wrong in concluding that P should not have filed for the 1^st and 2^nd stay summonses when there were valid reasons to prevent D’s summons from proceeding further and that my findings suggest that Master Stanley Ho should not scrutinize D’s summons but should automatically allow all summonses to proceed for substantive arguments.

37.This ground is totally misconceived. My findings have never suggested that Master Stanley Ho should not scrutinize D’s summons or that all summonses should be automatically allowed to proceed for substantive hearings. By dismissing P’s 1^st stay summons for staying the Discovery & Joint Inspection summons and giving directions for the substantial hearing, Master Stanley Ho has clearly not only scrutinized but also processed D’s summons.

38.P’s reasons for applying for the stay were de facto grounds for opposing D’s summons to proceed. P should have or simply could have applied the same reasons to make out their case in the substantive hearing in which the judge could have dismissed D’s summons with costs to P if their reasons were valid. It follows that taking out the 2^nd stay summons was not necessary. Thus, I do not consider that the matters raised in this ground of appeal show a reasonable prospect of success.

Paragraph 5

39.Paragraph 5 of the draft notice of appeal states that I was plainly wrong in my findings that P’s filing of the affirmation on 24 January 2024 was a genuine necessity for case management. P argued that this necessity is manifested in the absence of staying the 1^st Order, requiring P to comply with the 1^st Order by filing the affirmation.

40.This ground is unmeritorious. I did not find that P’s filing of the affirmation on 24 January 2024 was a genuine necessity for case management. My finding was P’s compliance with the 1^st Order to file the affirmation showed the importance and genuine necessity for case management. I do not consider that P has a reasonable prospect of success in relation to my finding. Furthermore, my finding was consistent with the evidence that P did file the affirmation in opposition to D’s Discovery & Joint Inspection summons.

Paragraph 6

41.Paragraph 6 of the draft notice of appeal, in essence, states that I was plainly wrong in my findings that P’s request to stay the 1^st Order was merely a case management decision. In fact, citing Song Lihua v Lee Chee Hon [2023] HKCFI 2429, P said that it was a stay of execution of the order pending appeal. Additionally, D has changed their stance and this should support P’s position.

42.This ground is wholly misconceived. According to paragraph 1 of the 2^nd stay summons, P was seeking a stay of the 1^st Order sine die, as opposed to pending the determination of appeals of decisions of DDJ M Lam and HH Harold Leong. Moreover, P’s reliance on Song Lihua v Lee Chee Hon is misplaced since that decision showed that a stay of summonses pending appeals is a case management decision (at para 18 of the case). And, as cited in the above, a decision on stay of proceedings is a case management decision. (See Re Chime Corporation Ltd, HCMP 4146/2001, unrep, 11 March 2005, at para 14)

43.P’s allegation of D’s change of stance is also misconceived. P and D are seeking entirely different types of inspections. P sought a unilateral inspection or an inspection in which D was not allowed to inspect the undamaged items but D was seeking a joint inspection. Also, P proposed an inspection without any discovery of the inventory lists beforehand and without proper expert directions setting out the specific issues to be addressed. P’s proposed inspection is obviously ineffective and unfair to D. I do not see how the issues raised in this ground of appeal show a reasonable prospect of success.

Paragraph 7

44.Paragraph 7 of the draft notice of appeal states that I was plainly wrong in my approach in handling P’s 2^nd stay summons by deferring all matters to be addressed by another DDJ at the substantive hearing on 27 March 2024. Moreover, I handled D’s summons and commented on the joint inspection in D’s favour.

45.This ground is plainly wrong. In the appeal hearing before me, P sought to appeal against the 2^nd Order and stay the execution of the 1^st Order regarding D’s Discovery & Joint Inspection summons. In the said appeal hearing, I had to consider whether Master Stanley Ho has exercised his discretion correctly in dismissing P’s 2^nd stay summons, ie whether his discretion was exercised in such a manner to ensure that its procedures were used in a logical, fair and cost-efficient manner. (See Re Chime Corporation Ltd, supra, at para 14) I did it in the said appeal hearing and did not defer this issue to any other judge at all. Since I dismissed P’s appeal, it goes without saying that D’s Discovery & Joint Inspection summons should proceed in the manner as ordered by Master Stanley Ho, ie adjourning for arguments before a judge at the substantive hearing. I do not see how this ground shows a reasonable prospect of success.

Paragraph 8

46.Paragraph 8 of the draft notice of appeal states that I was plainly wrong in concluding that P insisted on a unilateral inspection while D maintained that a joint inspection was required. At the hearing before me, P offered to provide the transcripts of the injunction hearing to demonstrate the judgement of HHJ Harold Leong did not fully address many details. I dismissed the offer but then proceeded to comment on the joint inspection in P’s injunction hearing.

47.This ground is totally unmeritorious. My observation that P insisted on a unilateral inspection while D required a joint inspection, though true as it was, was not my basis for determining P’s appeal before me. I do not consider it as a ground showing reasonable prospect of success. Concerning the offer of transcripts, the appeal hearing before me was an appeal against the 2^nd Order which was related to or originated from D’s Discovery & Joint Inspection summons but not the injunction sought by P. I do not see why I had to consider the injunction hearing between the parties. This is simply not a valid ground.

Paragraph 9

48.Paragraph 9 of the draft notice of appeal states, in essence, that I incorrectly concluded that D’s opposition to P’s injunction order was solely about preventing a unilateral inspection. During HHJ Leong’s hearing, P had clarified that P would only claim losses for damaged items and that D could inspect those damaged items. P says that is a joint inspection for damaged items.

49.This ground is devoid of logic. Who is going to determine which items are damaged items before the permitted “joint” inspection for damaged items is held? Is a “joint” inspection of only damaged items chosen by P a joint inspection in the eyes of court or even in ordinary sense? With respect, a joint inspection of all items is necessary in assessing damages fairly. In any event, this argument of unilateral or “joint” inspection goes to merits of the Discovery & Joint Inspection summons and would not have justified a stay of the 2^nd Order. This is not a valid ground at all.

Paragraph 10

50.Paragraph 10 of the draft notice of appeal states in essence that I was plainly wrong in failing to consider the change of stance by D regarding the inspection of belongings and loss assessment as an abuse of court process and that I erred by merely accepting the judgment of HHJ Harold Leong without consulting the transcripts of the hearing in which P informed the court that D was permitted to inspect the damaged items with P’s loss adjuster and that there would be no claims for undamaged items.

51.This ground is unmeritorious. Whether D has changed its stance or whether the alleged change of stance of D amounted to an abuse of court process had already been dealt with in the hearing of HHJ Harold Leong. As long as the judgement of HHJ Harold Leong dated 9 January 2024 remains good judgement (in other word, not being overruled), I have no reason to cast any doubt on it and can fully accept it without consulting the transcripts of the hearing. I cannot see the error of relying on a valid judgment. As such, this is not a valid ground.

Paragraph 11

52.Paragraph 11 of the draft notice of appeal states that I was plainly wrong to suggest the P’s supplementary questions were merely requests for D to address arguments which D had already disagreed with or answered in their submissions and that all these questions have in fact never been answered. Had I requested D to answer all the 9 questions, I would have known that D has abused the court process by changing stances for different actions before different judges.

53.This ground is again unmeritorious. The 9 questions in P’s supplementary questions was filed without leave of court. I am entitled to disallow it since the standard of compliance with procedural rules is the same between D, a party legally represented and P, a litigant in person. (See Barton v Wright Hassall LLP [2018] 1 WLR 1119 at para 18)

54.Besides, the 9 supplementary questions are in fact repetitions of P’s grounds of opposition to the Discovery & Joint Inspection summons which had been dealt with in the hearing. Repetitions of the same grounds do not assist P’s case. Resubmitting the same grounds without leave of court amounted to an abuse of court process. I do not consider that the matters raised in this ground of appeal show a reasonable prospect of successfully overturning my Decision.

Paragraph 12

55.Paragraph 12 is P’s prayer for costs.

Paragraph 13

56.As mentioned in the above, Paragraph 13 further branches out to 31 sub-paragraphs entitled “preliminary grounds of appeal against DDJ Gary Lams’ decision dated 27 March 2024”. It is obviously not within the ambit of discussion or a valid ground of appeal in the present summons.

Conclusion

57.For the reasons set out above, I conclude that none of the proposed grounds of appeal have any reasonable prospect of success and there is no other reason why the appeal should be heard. Accordingly, I would therefore dismiss P’s application for leave to appeal.

Costs

58.D asked for costs to D on an indemnity costs, arguing that P’s summons was wholly without merit. I am not however persuaded that the present occasion is appropriate for indemnity costs. Having considered all the circumstances in this application including D’s bill of costs, I order that P do pay D costs of and occasioned by this application forthwith, on a party and party basis, summarily assessed at HK$30,000.

Ms Yung Mei Chun Jessie, director, represents the Plaintiff, acting in person

Mr Cedric Yeung instructed by Y T Chan & Co for the Defendant