Ho Kang Yau v. Ho Chun Wing

CACV 42/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 42 OF 2011

(ON APPEAL FROM DCCJ NO. 5195 OF 2008)

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BETWEEN

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Before : Hon Cheung, Yeung and Yuen JJA in Court

Date of Hearing : 12 May 2011

Date of Decision : 24 May 2011

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J U D G M E N T

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Hon Cheung JA :

Background

1.On 25 January 2011 the plaintiff obtained judgment from HH Judge S.T. Poon of the District Court (‘the judgment’) against the defendant for, among other things, an order that the defendant do within 42 days make full and frank disclosure of all moneys, assets and properties belonging to HO SZ WO TONG otherwise known as HOA SZ WOA TONG (何泗和堂) (‘the Tong’), including but not limited to the land being Lot No. 477 in Demarcation District No. l65 (‘the Land’), which has, at any time, come into and out of the hands of the defendant, his employees, servants or agents or received by any other person on his behalf; and that such accounts to be : -

(a) prepared in accepted Hong Kong accounting practice; and

(b) verified by an affidavit/affirmation of the Defendant.

2.The judgment was obtained pursuant to the plaintiff’s application by summons under Order 43 rule 1 (summary order for account) and Order 14 (summary judgment) of the District Court Rules (Cap. 336H).

3.On 15 March 2011 the defendant filed a notice of appeal against the judgment and applied for a stay of execution of the judgment before Judge Poon.  On 12 April 2011 Judge Poon refused the application.  The defendant applied to this Court to stay the execution of the judgment.

4.This matter came before me on 29 April 2011.  I raised the issue whether the appeal has been properly constituted and adjourned the application to the Full Bench of this Court.  I directed that the issue of leave to appeal was to be considered at the adjourned hearing.  After the adjournment the plaintiff issued a summons to strike out the notice of appeal on the ground that leave to appeal has not been obtained.

The issue

5.I will now consider the following issues arising from the two applications.

(1) Is leave to appeal required?

(2) Has leave to appeal been granted to the defendant?

(3) Effect of leave not being obtained;

(4) Should leave to appeal be granted by this Court?

(5) Should there be a stay of execution of the judgment?

(6) Should the notice of appeal be struck out?

1)  Is leave to appeal required?

6.Following the judgment, the defendant had by summons dated 26 October 2010 applied to Judge Poon for leave to appeal against the judgment.  Judge Poon refused the application on 25 January 2011.

7.The defendant then renewed the application by summons dated 8 February 2011 to a single judge of this Court.  The plaintiff did not lodge any statement in opposition to the renewed application.

8.On 7 March 2011 a judge of this Court considered the application on paper and ordered that :

‘ The defendant is entitled to appeal as of right being an “order determining in a summary way the substantive rights of a party to an action” pursuant to O. 59 r. 21(1)(a).’

9.Subject to exceptions, leave to appeal is required in respect of interlocutory judgments given by the Court of First Instance of the High Court.  Order 59 rule 21(1) provides that certain ‘interlocutory’ judgments do not require leave to appeal and they can be appealed against as of right.  Amongst them is a judgment determining in a summary way the substantive rights of a party to an action (rule 21(1)(a)).

10.The judgment on the face of it falls under this Order because the plaintiff sought an account from the defendant and he obtained the order by way of summary judgment.

11.However, that Order is only relevant in respect of appeals to the Court of Appeal from the Court of First Instance in the High Court.  As the judgment was obtained in the District Court, the mode of appeal is governed by the District Court Ordinance (‘DCO’) (Cap. 336).  The effect of section 63 of DCO is that, subject to specified exceptions which are not relevant to this case, an appeal from the District Court to the Court of Appeal is subject to leave of appeal being obtained.

12.The plaintiff’s solicitors who had been acting for the plaintiff did not draw the relevant provisions to the attention of the Court after they received the order dated 7 March 2011 and the notice of appeal.  Counsel for the plaintiff informed the Court at the last hearing that the plaintiff’s legal advisers were not aware of the requirement of the DCO.

13.In my view leave to appeal is required.

2) Has leave to appeal been granted?

14.The Court did not grant leave on 7 March 2011.  It had not made a determination whether leave should be granted or not.  It merely stated that the plaintiff was entitled to appeal as of right. 

15.The defendant relied on Order 59 rule 14(3B) which required a party on whom a notice of the order granting leave has been served, to apply within seven days thereafter to the Court of Appeal to reconsider the application.  This Order is not relevant because it only applies where leave has been granted in the first place.

3) Effect where no leave to appeal has been obtained

16.Where leave to appeal is required but not obtained, the appeal is not properly constituted because a valid notice of appeal cannot be served until and unless the leave to appeal has been granted : Kwan Chui Kwok Ying and Another v. Tao Wai Chun and others (CACV 296/2006 at para 7), see also HK Civil Procedure 2011, Vol 1, para 59/14/6. 

4) Should leave be granted now?

17.As this Court had not previously addressed the defendant’s application for leave to appeal on its merits, I will consider it now.  Under section 63A(2) of DCO this Court will only grant leave if,

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

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

18.The defendant is the manager of the Tong.  The plaintiff is a member and beneficiary of the Tong.  In 1995, the defendant acting as the manager of the Tong sold a property of the Tong for $23,800,000 but has failed to provide accounts of the Tong to the beneficiary including an account of the disposed property and other properties of the Tong.

19.The defendant contended that although he is a manager of the Tong, he is not a trustee and does not have the fiduciary duty to account.  He further denied that members of the Tong are beneficiaries.

20.The Courts in Hong Kong have consistently held that the manager of a Tso or Tong is in the nature of a trustee and he has the fiduciary duty to account to the members who are beneficially entitled to the properties of the Tso or Tong : see Tang Kai Chung and another v. Tang Chik Shang and others [1970] HKLR 276; To Kan Chi & Others v. Pui Man Yau & Others (CACV 32/1992); Tang Yau Yi Tong and another v. Tang Mou Shou Tso and others (CACV 138/1995); Man Ping Nam and Another v. Man Fong Hang (FACV No. 5/2006).

21.We are not satisfied that there is any room for challenge of these well recognized principles. 

22.In terms of the ambit of the account, we are satisfied that it has been properly defined.  The defendant became a manager in 1993 and the property was disposed of in 1995.  The judgment only required him to account for money of the Tong that came to and out of his hands as a manager.  Although the defendant claimed that he had rendered accounts annually, the only document he has produced is a list of expenses of the Tong.  Information on the assets and income of the Tong is totally lacking.

23.In my view the defendant has not satisfied the requirements for leave to appeal to be granted.  I will not grant leave.

5)  Stay of execution

24.As I have refused to grant leave to the defendant, the question of stay of execution of the judgment does not arise.

6)  Striking out

25.The plaintiff’s application to strike out the notice of appeal must be granted.

Costs

26.The plaintiff is entitled to the costs of and occasioned by the striking out and stay of execution applications.

Hon Yeung JA :

27.I agree.

Hon Yuen JA :

28.I agree with the judgment of Cheung JA.

Mr. Vincent Lam, instructed by Messrs Donald Yap, Cheng & Kong, for the Plaintiff

Defendant : in person, present