Hong Kong Housing Society and Another v. Wong Nai Chung t/a Sun Chung Flower Shop

HCMP 880/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 880 OF 2009

(ON AN INTENDED APPEAL FROM DCCJ NO. 3620 OF 2007)

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Before: Hon Tang Ag CJHC, Yeung JA and Kwan JA in Court

Date of Hearing: 9 September 2010

Date of Decision: 9 September 2010

Date of Reasons for Decision : 22 September 2010

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REASONS FOR DECISION

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Hon Tang Ag CJHC (giving the reasons for decision of the court):

Introduction

1.This application concerns the constitutionality of section 63B of the District Court Ordinance, Cap 336 which provides that:

“No appeal lies from a decision of the Court of Appeal as to whether or not leave to appeal to it should be granted.”

2.Section 63B was introduced by Ordinance No. 3 of 2008 which, as explained by its preamble, was enacted to:

“… implement some of the recommendations made in the Final Report of the Chief Justice's Working Party on Civil Justice Reform and to implement several recommendations proposed by the Steering Committee.”

3.Appeals from the District Court to the Court of Appeal have always required leave.  Even before the enactment of section 63B, a refusal of leave to appeal by the Court of Appeal would have been final.

4.In HLF v MTC & LHN (2004) 7 HKCFAR 167, Ribeiro PJ in giving the judgment of the Court of Final Appeal said:

“23. Where the Court of Appeal refuses leave to appeal, it declines to hear the appeal at all and no judgment of that court, whether final or interlocutory, comes into being.”

5.His Lordship went on to mention that that view was supported by the decision of the House of Lords in Lane v Esdaile [1891] AC 210.  Section 63B has superseded HLF.

Background

6.On 30 January 2009, Deputy District Judge Richard Khaw gave summary judgment against the defendant, which required, inter alia, the defendant to deliver vacant possession of a cockloft and other common areas therein, No. 494 Fuk Wing Street, Sham Shui Po, Kowloon (“the Property”). 

7.The defendant’s application for leave to appeal and a stay of execution pending appeal were dismissed by the learned Deputy District Judge on 24 April 2009.

8.On 8 May 2009, the defendant applied to this Court for leave to appeal.  In refusing a stay, we (Tang VP and Yeung JA) said in our reasons for judgment dated 22 July 2009, that we did not consider the proposed appeal to be reasonably arguable. 

9.On 10 July 2009, Tang VP and Yeung JA refused a stay pending appeal.  Reasons for that decision was given on 22 July 2009.  On the same day, we refused leave to appeal on paper by a separate judgment dated 22 July 2009.  The defendant renewed its application for leave which was heard on 15 December 2009 (Tang VP and Yeung JA).  In our judgment dated 14 January 2010, we refused leave to appeal.

Leave to appeal to the Court of Final Appeal

10.The first point taken in the Notice of Motion for leave to appeal to the Court of Final Appeal pursuant to section 22(1)(b) of the Hong Kong Court of Final Appeal Ordinance, Cap. 484, is:

“Whether section 63B of the District Court Ordinance, Cap 336, is inconsistent with Article 82 of the Basic Law of the Hong Kong Special Administrative Region and thus unconstitutional;”

11.Article 82 of the Basic Law provides:

“The power of final adjudication of the Hong Kong Special Administrative Region shall be vested in the Court of Final Appeal of the Region, which may as required invite judges from other common law jurisdictions to sit on the Court of Final Appeal.”

12.In A Solicitor v. The Law Society of Hong Kong and Anor (2003) 6 HKCFAR 570, the Court of Final Appeal has decided that where the legislature seeks to limit the Court of Final Appeal’s power of final adjudication, the limitation will be upheld if it pursues a legitimate purpose and if a reasonable proportionality exists between the limitation and the purpose sought to be achieved.

13.In Li CJ’s judgment, which had the concurrence of the other members, he said:

“33. In applying the proportionality test to a particular limitation, the purpose of the limitation must first be ascertained. In ascertaining its purpose, matters such as the subject matter of the dispute, whether it concerns fact or law, whether it relates to substantive rights and obligations or only procedural matters, what is at stake, the need for speedy resolution and the cost implications of dispute resolution, including any possible appeals, will have to be considered. The legitimacy of any purpose will depend on whether it is consistent with the public interest, which of course has many facets, including the proper administration of justice. Then, in considering whether the limitation is reasonably proportionate to the legitimate purpose, it will be necessary to examine the nature and extent of the limitation.

34.     Whether a particular limitation imposed by statute satisfies the proportionality test will depend on an examination of all the circumstances.  There may be instances where a statutory limitation providing that a decision of the Court of Appeal or the Court of First Instance on appeal, whether from a statutory tribunal or a lower court, shall be final may be able to satisfy that test.”

14.The learned Chief Justice then went on to say at page 586:

“36. It has not been suggested in argument that the limitations on appeals imposed by the Court of Final Appeal Ordinance are impermissible. They are plainly valid. The limitations serve a legitimate purpose namely, to prevent the Court at the apex of the judicial system from being unduly burdened with appeals so as to enable it to focus on appeals, the judgments on which will be of importance to the legal system. And it is clear that the limitations are reasonably proportionate to that purpose. Indeed, it could be argued that further limitation may be valid; for example, not only by increasing the monetary threshold for civil appeals as of right from final judgments of the Court of Appeal but even by abolishing such appeals as of right altogether. But as these matters do not arise, it would not be appropriate to express any view on them.”

15.Mr Lee did not dispute that the limitation imposed by section 63B serves a legitimate purpose.  However, he submitted that the limitation is not reasonably proportionate to the legitimate purpose.  He submitted that a distinction should have been drawn between appeals from interlocutory decisions which do not decide any substantive issue and those which do, such as summary judgments or an order striking out an action.

16.He pointed out that such a distinction was made in the High Court Ordinance, Cap. 4 for proceedings in the Court of First Instance.  There, the combined effect of section 14AA, section 14AB of the High Court Ordinance, and O. 59 r. 21 of the Rules of the High Court, Cap. 4A is that appeals from the Court of First Instance to the Court of Appeal is as of right in respect of some interlocutory judgments and orders, which include summary judgments and an order striking out an action.  The consequence is that not only would an appeal to the Court of Appeal from them be as of right, thereafter there is also a possibility of appeal to the Court of Final Appeal under section 22(1)(b) of the Hong Kong Court of Final Appeal Ordinance.

17.Mr Lee also referred to the fact that the Final Report of the Chief Justice’s Working Party on Civil Justice Reform issued on 3 March 2004 (“the Report”), recommended that there be a leave requirement for interlocutory appeals from the Court of First Instance to the Court of Appeal, but that:

“645(c) Where a judgment deciding the substantive rights of a party is obtained through a summary process, by way of exception, there should be an appeal as of right notwithstanding the interlocutory nature of that decision.”

18.At para. 649 of the Report, the Report justified the requirement of leave in other interlocutory decisions as follows:

“649. The proposed limitation of rights to appeal under discussion relates to purely interlocutory questions which have already been considered by a master and a judge at first instance and which are considered by at least two Justices of Appeal to lack any reasonable prospect of success on appeal. Making a refusal of leave to appeal final in such circumstances would, in the Working Party's view, be valid. The decision sought to be appealed does not involve substantive rights and the objective of the limitation is the legitimate and proportional promotion of cost-effective and speedy dispute resolution.”

19.Be that as it may, the question at hand remains whether a reasonable proportionality exists between section 63B and the purpose sought to be achieved. 

20.Similar, and indeed, more stringent restrictions can be found in respect of appeals from other courts of limited jurisdiction. For example, for small claims (up to $50,000), the Small Claims Tribunal Ordinance, Cap. 338 provides a refusal of leave to appeal by the Court of First Instance is final.  See section 28(3).  Leave is also required from the Court of Appeal for any further appeal against the decision of the Court of First Instance on an appeal heard by leave.  Again, a refusal by the Court of Appeal to grant leave to appeal shall be final (See Section 29A of the Small Claims Tribunal Ordinance, Cap.338). 

21.In the case of the Labour Tribunal under the Labour Tribunal Ordinance, Cap. 25, a refusal by the Court of First Instance to grant leave is also final, see section 32(3).  The Court of Appeal may grant leave to appeal from a decision heard by leave given under section 32, if the Court of Appeal considers that a point of law of great general public importance is involved, see section 35A.  Refusal of leave by the Court of Appeal is final, see section 35A(3).

22.As for the Lands Tribunal under the Lands Tribunal Ordinance, Cap. 17, under section 11AB, refusal of leave to appeal to the Court of Appeal is final.

23.Mr Lee drew attention to the fact that under section 22(1)(a) in the case of a final decision which involves, for example, a liquidated claim in excess of $1,000,000, there is a right of appeal.  He compared that with the upper limit of the jurisdiction of the District Court.  Mr Lee also pointed out that section 22(1)(b) is already a limitation on the right of appeal.  Mr Lee reminded us that section 63B constitutes a further limitation.

24.But the question remains: Does section 63B satisfy the proportionality test?  We have no doubt that it does. 

25.The District Court is a court of limited jurisdiction.  It is true that the upper limit of its jurisdiction is $1,000,000.  But effectively, claims in the District Court fall within the range of $50,000 (the upper limit of the Small Claims Tribunal) and $1,000,000. We do not agree that it is disproportionate to distinguish between proceedings in the Court of First Instance and the District Court.  For the avoidance of doubt, we do not mean to imply that no further restriction of the right of appeal in the Court of First Instance would be permissible.  It is not something that we are required to decide.

26.Further, Mr Lee submitted that it is important to note under Rule 7 of the Hong Kong Court of Final Appeal Rules, the Court of Final Appeal may dispose of an application for leave summarily where the appeal:

“… discloses no reasonable grounds for leave to appeal, or is frivolous”.

27.So, he submitted the Appeal Committee can screen out obviously unmeritorious appeals, and it is unnecessary to place a further limitation of the right of appeal.

28.However, if a refusal of leave to appeal to the Court of Appeal is not final, and an application for leave to appeal to the Court of Final Appeal may be made under section 22(1)(b), presumably such an application should first be made to the Court of Appeal.  In which event, according to section 34B(4)(aa) of the High Court Ordinance, a court consisting of three judges will have to deal with the application.  If that application fails, presumably an application for leave would lie to the Court of Final Appeal.

29.Although Rule 7 permits an application for leave to the Court of Final Appeal to be dealt with by paper, it nevertheless requires consideration by three members of the Court of Final Appeal. 

30.The burden on both the Court of Appeal and the Court of Final Appeal is obvious. 

31.There is also the position of a respondent to an application for leave to appeal to consider.  Costs are important considerations.  Costs can be substantial if both parties are legally represented and disproportionate to the amount in dispute.  Often, cost orders which are awarded against the unsuccessful applicant would not be paid.  Also, protracted litigation can exert a toll on litigants. 

32.The second question is whether the Court of Final Appeal has jurisdiction to entertain an appeal from a judgment of the Court of Appeal refusing leave to appeal.  We do not believe it is for us to decide whether the Court of Final Appeal has jurisdiction to entertain an application for leave to appeal by the applicant. 

33.Mr Lee also submitted that we should also give leave on the “or otherwise” basis.  We do not agree.  As we have said above, section 63B has overtaken HLF, it is unnecessary for us to deal with Mr Lee’s submissions on HLF.

34.Mr. Anderson Chow, SC, who appeared for the 1^st and 2^nd plaintiffs, submitted, in any event that no questions of great general or public importance are involved.  He submitted that the issues dealt with by us:

“27 … relate to a transitional provision in the [Urban Renewal Authority Ordinance (Cap. 563)] which will become obsolete in due course. The evidence is that there are only a few outstanding projects ‘inherited’ from the [Land Development Corporation] which have not yet been completed: see Affidavit of David Au, paras 15 to 17. One of them (Kwun Tong Town Centre) has become a [Urban Renewal Authority] project, one other (MacPherson Stadium) relates to a football stadium without any occupier. In respect of the remaining three projects, they are still at the stage of acquisition and no resumption order has been made. Other than the Defendant, there is no evidence that other owners, tenants or occupiers in any of the affected sites have challenged the assessment made by the [Urban Renewal Authority] under s.15(4)(b)(ii) on the ground that it ought to have complied with the guidelines in the Strategy.”

35.We agree.

36.For the above reasons, we have dismissed the application for leave to appeal with costs.

Mr. Martin Lee, SC & Mr. Lee Siu Him, instructed by Messrs JCC Cheung & Co., assigned by the Director of Legal Aid, for the Defendant.

Mr. Anderson Chow, SC & Ms. Queenie W.S. Ng, instructed by Messrs Kao, Lee & Yip, for the 1^st & 2^nd Plaintiffs.

Defendant's application for leave to appeal to Court of Final Appeal refused by Court of Final Appeal. Please refer to FAMV33/2010 dated 21 January 2011