Achieve Goal Holdings Ltd v. Zhong Xin Ore-material Holding Company Ltd

[English Translation 英譯本]

CAMP 261/2023, [2024] HKCA 500

ON AN INTENDED APPEAL FROM [2023] HKCFI 1407

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 261 OF 2023

(ON AN INTENDED APPEAL FROM HCA NO 1987 OF 2005)

____________

BETWEEN

(ON ORIGINAL ACTION)

____________

(ON COUNTERCLAIM)

and

(ON COSTS ONLY)

________________________

_________________

D E C I S I O N

_________________

Hon Chu VP (giving the Decision of the Court):

Introduction

1.On 25 July 2023, the respondent, Mr Zeng Wei (“Mr Zeng”), as a party joined for costs only, re-applied to this court for leave to appeal against the judgment[1] dated 4 May 2023 (“the 4 May judgment”) of Wilson Chan J (“the trial judge”). Mr Zeng had previously applied to the trial judge for leave to appeal. On 25 July 2023, the trial judge refused the application[2].

2.Having considered the documents in the application, this court is of the opinion that it would be appropriate to determine the application without a hearing on the basis of only the documents in the case and the written submissions that have been lodged under Order 59, rule 2A(5)(a) of the Rules of the High Court, Cap. 4A of the Laws of Hong Kong.

Background

3.The factual background of this case is set out in paragraphs 4 to 28 of the trial judge’s judgment[3] of 26 August 2022 (the “anti-suit injunction judgment”), which will not be repeated here.

4.By the judgment dated 26 August 2022, the trial judge granted an anti-suit injunction against Angola Group Holdings Limited (“Angola”), the 2^nd defendant in the counterclaim, and granted leave to Bai Jun Tian Cheng Limited (“Bai Jun”), the 2^nd plaintiff in the counterclaim, on the question of whether Mr Zeng (who was not a party to the action) should be joined as a party to the action for the purpose of costs only: (1) to issue and serve a summons on Mr Zeng at his address at Room XX, Chung Ying Building, 20 Connaught Road West, Hong Kong; and (2) to serve such summons on Angola’s solicitors.

5.On 13 September 2022, the 1st and 2nd plaintiffs in the counterclaim (“Bai Jun”), in accordance with the order of the trial judge and pursuant to Order 62, rule 6A of the Rules of the High Court, issued a summons (“the 13 September 2022 summons”) and served the same together with an affirmation in support[4] on Mr Zeng at the address he specified to the court. Mr Zeng objected to the application on the grounds set out in his affirmation[5] filed on 22 December 2022. Bai Jun also filed an affirmation in reply[6].

6.On 4 May 2023, after the hearing, the trial judge granted Bai Jun its application.

The Judgment of the Trial Judge

7.In the 4 May judgment, the trial judge referred to Sun Focus Investment Limited v Tang Shing Bor [2012] 5 HKLRD 853, at paragraphs 12 to 20, which sets out the matters considered by the court in hearing an application under Order 62 rule 6A of the Rules of the High Court as follows:

(1) An application under Order 62 rule 6A is a summary procedure.

(2) The application involves a two-stage process. The court first considers whether the party should be joined for the purpose of costs, and then, give that party a reasonable opportunity to attend a hearing for the court to “consider the matter further”.

(3) At the first stage, the court should refuse the application only if it is plain and obvious that the application amounts to an abuse of process, by reason of delay or other misconduct on the part of the applicant, or because the application can be seen to be manifestly and fundamentally misconceived as to amount to an abuse by the applicant. Arguments and documents for the first stage should be limited to the above purposes. It is only at the second stage that the court considers whether it would be in the interests of justice to make the costs order against the parties.

8.The trial judge considered the merits of the application by Bai Jun and the grounds of objection by Mr Zeng. Bai Jun submitted that (1) Mr Zeng had an interest in the outcome of the proceedings; (2) Mr Zeng was the person responsible for bringing the action and he did so out of malice or bad faith, and that he had acted in a way that made it fair and reasonable to make an order against him. Mr Zeng’s reasons for objection were that (1) the judgment of the Hong Kong court (see paragraph 9 below) was wrong; and (2) he had no beneficial interests in Angola at the material time.

9.The trial judge did not accept Mr Zeng’s submission and took the view that the dispute in this case had been concluded and that the previous judgments of Au-Yeung J dated 15 December 2018 ([2018] HKCFI 2718) and that of the Court of Appeal dated 17 January 2020 (CACV 6/2019; [2020] HKCA 51) were both binding on Mr Zeng. Moreover, the question of Mr Zeng’s beneficial interests in Angola should be a matter for consideration at the second stage of the application, i.e. whether a costs order should be made against Mr Zeng himself [7]. The trial judge granted an order in terms of the summons dated 13 September 2022, ordering that Mr Zeng be joined as a party to the action for the purpose of costs only.

10.On 11 July 2023, the trial judge refused to grant leave to appeal on the basis that Mr Zeng’s intended grounds of appeal did not have a reasonable prospect of success (the “Leave to Appeal Judgment”).

11.By this summons dated 25 July 2023, Mr Zeng applied afresh to the Court of Appeal for leave to appeal.

12.Mr Zeng’s intended grounds of appeal as set out in the notice of intention to appeal are substantially the same[8] as those set out in his application for leave to appeal to the trial judge, which can be summarised as follows (“Ground of Appeal (1)” to “Ground of Appeal (5)” respectively):

(1) The trial judge erred in finding that the High Court of Hong Kong had jurisdiction over Mr Zeng. Mr Zeng was domiciled in Shenzhen, China, and the service of the summons did not comply with Order 11, rule 9 of the Rules of the High Court and was therefore invalid.

(2) The trial judge wrongly denied Mr Zeng’s application for a trial in Chinese, thereby causing him injustice. Mr Zeng was unfamiliar with the English language and his request for Chinese translations of documents from Bai Jun was refused. He was denied a reasonable opportunity of defence.

(3) The trial judge failed to take into account the fact that Mr Zeng did not have the financial resources to pay any costs and that he was not a director or shareholder of the company concerned, and that Bai Jun’s application was an abuse of process and should be dismissed.

(4) The trial judge failed to take into account the factual background that Mr Zeng had settled in Shenzhen, the PRC, and that the misconduct of Bai Jun’s refusal to provide Chinese translations of the documents was an abuse of process, and therefore Bai Jun’s application should be dismissed.

(5) The trial judge did not consider Mr Zeng’s allegation that there was serious delay in the application by Bai Jun. The failure of Bai Jun to warn Mr Zeng as early as possible and to disclose its intention to apply for a cost order against him was an abuse of process and his application should be dismissed.

Reasons for Judgment of this Court

Related Legal Principles

13.Section 14AA(4) of the High Court Ordinance (Cap. 4) provides that leave to appeal shall not be granted unless (1) the appeal has a reasonable prospect of success, or (2) there is some other reason in the interests of justice why the appeal should be heard. A reasonable prospect of success under the Ordinance means a reasonable, though not necessarily a substantial, chance of success over and above an unrealistic chance of success, and it is not sufficient merely to show that the point of appeal is arguable or not impractical. However, even if the court is satisfied that the appeal has a reasonable prospect of success, it may exercise its discretion to refuse to grant leave to appeal.

Ground of Appeal (1)

14.On ground of appeal (1), it is submitted that the trial judge erred in finding that the Hong Kong courts had jurisdiction over Mr Zeng. We are of the view that this ground has no reasonable prospect of success for the following reasons.

15.Firstly, Mr Zeng did not raise any challenge or dispute on the issue of jurisdiction in his opposition to the application by Bai Jun. More critically, as pointed out by the trial judge in paragraph 5 of the Leave to Appeal Judgment, Mr Zeng was clearly aware of the existence of the summons dated 13 September 2022 and appeared in person on 4 May 2023 to raise substantive grounds for objecting to the summons. In fact, paragraph 38 of Mr Zeng’s affirmation in opposition filed on 22 December 2022 expressly stated his position in opposing the application of Bai Jun and in the concluding paragraph, he requested the trial judge to order that each party bear its own costs. Under the circumstances, by attending the hearing on 4 May 2023 and defending the application in substance, Mr Zeng had already participated in the proceedings and thereby submitted to the jurisdiction of the Hong Kong courts.

16.Secondly, Mr Zeng attended the hearing on 4 May 2023 with the knowledge of the summons dated 13 September 2022, raised objections and stated such grounds. In his statement of grounds of appeal[9], Mr Zeng claimed that Bai Jun had misled the court about the service of documents, but he did not mention the specific factual basis and even deviated from the grounds raised in his notice of intended appeal. In any event, it could not be disputed that Mr Zeng confirmed his objection against the application of Bai Jun by means of an affirmation. Subsequently, he appeared in the hearing and raised his grounds of objection. In so doing, his conduct pointed to the fact that he submitted to the jurisdiction of the court. At this stage, Mr Zeng could no longer deny the jurisdiction of the court on the ground that the service of the summons was invalid.

17.Thirdly, in his statement of grounds of appeal[10], Mr Zeng claimed that his affirmation dated after 13 September 2022 was prepared with the assistance of a deceased friend who used his own company address in the affirmation on the assumption that it was necessary to use an address in Hong Kong, of which Mr Zeng had not been aware. Yet Mr Zeng had never mentioned that before. The Court of Appeal has repeatedly emphasised that it will not grant leave to appeal on new points which have not been raised before, see: Law Kin Shun v The Government of the HKSAR [2021] HKCA 910, at paragraph 3. Moreover, these statements are quite different from the explanation of the change of address in Mr Zeng’s affirmation in opposition filed on 22 December 2022. These statements cannot constitute valid grounds for challenging the 4 May judgment of the trial judge.

Ground of Appeal (2)

18.On this ground of appeal, it is alleged that the trial judge erred in refusing his application for the trial to be conducted in Chinese, and that he suffered injustice by the refusal of Bai Jun to provide Chinese translations of the documents. We find this ground untenable for the following reasons.

19.Firstly, in paragraph 13 of his submission, Mr Clark Wang, Counsel for Bai Jun, pointed out that throughout the hearing on 4 May 2023, Mr Zeng was assisted by the court interpreter.

20.Secondly, as pointed out by the trial judge in paragraphs 5 and 6 of the Leave to Appeal Judgment, the official language to be used by the judge in proceedings before him or in any part of the proceedings was a final decision under section 5(1) and (2) of the Official Languages Ordinance (Cap. 5), Laws of Hong Kong. Further, if Mr Zeng needed a Chinese translation of the application documents to be provided to him by Bai Jun, he should have made a formal request to Bai Jun in accordance with rule 5(1) and (2) of the High Court Civil Procedure (Use of Language) Rules (Cap. 5C), Laws of Hong Kong or applied to the court to order Bai Jun to provide him with a translation in accordance with rule 5(4) of the Rules. Mr Zeng had not made such an application.

21.Thirdly, even if Mr Zeng had not received any language assistance during the hearing on 4 May 2023, or if, as he stated, Bai Jun did not provide Chinese translations of the application documents as requested by him, Mr Zeng did not specifically point out how these circumstances had in fact affected his ability to defend Bai Jun’s application, or to express his opposition to it to the trial judge at the hearing. We also note that he was able to set out the grounds of the application for leave to appeal in his summons for leave to appeal out of time and in his affirmation to the trial judge.

22.For the above reasons, we are of the view that Mr Zeng has failed to show that there was any procedural or substantive defect or unjust in the trial judge’s handling of the Bai Jun’s application that would have warranted the Court of Appeal’s interference with his decision.

Ground of Appeal (3)

23.On ground of appeal (3), the plaintiff criticises the trial judge for his failure to take into account the fact that Mr Zeng did not have the financial resources to pay the costs and that he was not a director or shareholder of the relevant company. However, these matters are not factors to be considered at the first stage of an application under Order 62 rule 6A of the Rules of the High Court. As stated above, the judge would only consider at the first stage whether there was misconduct on the part of the applicant amounting to an abuse of process or the application was so manifestly or fundamentally misconceived that it amounted to an abuse such that the application should be refused. The issue of Mr Zeng’s financial capacity, or whether he was a shareholder or director of Angola at the material time, is not relevant to the issues to be considered at the first stage. This ground of appeal has no reasonable prospect of success.

Ground of Appeal (4)

24.Ground of appeal (4) overlaps with grounds of appeal (1) and (2), which have been dealt with above.

Ground of Appeal (5)

25.On ground of appeal (5), it is claimed that Bai Jun failed to notify Mr Zeng of its intention to apply for a costs order against him. We are of the view that this does not involve any legal proceedings or issues, and is not relevant to the 4 May judgment, which is the subject of this application. Mr Zeng referred to serious delay on the part of Bai Jun, but did not specify the nature of the delay. In any event, as early as 14 June 2022, at the anti-suit injunction hearing, Bai Jun made it clear to the trial judge that if it succeeded in its application for the anti-suit injunction order, it would seek costs from Mr Zeng who had been the sole owner of Angolan since October or November 2009. This was also recorded by the trial judge in paragraph 72 of his judgment of 26 August 2022 on the anti-suit injunction order. The trial judge also granted leave to Bai Jun to issue a summons and gave directions for the service of the summons in paragraph 73 of that judgment.

Conclusion

26.None of the grounds of appeal advanced by Mr Zeng demonstrated that the 4 May judgment of the trial judge was manifestly erroneous, or that there was an error of legal principle or an error in the exercise of discretion. Mr Zeng’s intended appeal therefore has no reasonable prospect of success. We do not see any other reason in the interests of justice why the appeal should be allowed. This court therefore refuses Mr Zeng’s application for leave to appeal.

27.Further, as Mr Zeng’s application for leave to appeal is wholly unmeritorious, this court, pursuant to Order 59, rule 2A(8) of the Rules of the High Court, orders that no party to this action may under rule 2A(7) of that Order request the determination to be reconsidered at an oral hearing inter partes.

Costs

28.As Mr Zeng’s application is unsuccessful, in line with the usual practice, he should bear the costs of Bai Jun, to be assessed summarily on a party-to-party basis.

29.Bai Jun has filed a statement of costs for the summary assessment of costs. In view of the fact that the documents and arguments involved in this application are not significantly different from the previous applications for leave to appeal before the trial judge, and that the solicitors and counsel principally involved in the case are relatively senior, the hours for items C1 (contacting clients), C3 (contacting counsel) and D2(i) and (iii) (reading summonses and bundles of documents) should be adjusted downwards. We assessed the costs payable by Mr Zeng to Bai Jun at HK$100,000.

Order

30.This court makes the following orders:

(1) The summons dated 25 July 2023 shall be dismissed.

(2) Mr Zeng shall pay the costs of the present application to the 1^st and 2^nd plaintiffs in the counterclaim, summarily assessed at HK$100,000.

(3) No party to this case shall be entitled under Order 59 rule 2A(7) of the Rules of the High Court to request this determination to be reconsidered at an oral hearing inter partes.

The respondent (on costs only) appeared in person.

Mr Clark L. Wang, instructed by Kwok, Ng & Chan, for the 1^st and 2^nd plaintiffs in the counterclaim.

Translated by the Court Language Section of the Judiciary and vetted by Mr Walter Lee, solicitor.