Pacific Harbor Advisors Pte Ltd and Another v. Winson Federal Ltd and Others

HCA 1257/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1257 OF 2013

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REASONS FOR DECISION
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Introduction

1.This court handed down a judgment on 1 August 2014 allowing, among other things, the plaintiffs’ application for summary judgment for monetary claims against the 1^st and/or 2^nd defendant (“Judgment”).

2.In paragraph 154 of the Judgment, I set out my order, as follows:-

“154. My order is to the following effect:

(i) Final judgment of the total sum of US$38m under the Loan Agreements and the Amendment Agreements in favour of Ps against Winson Federal and/or the Executor;

(ii) Interest on (i) above of US$43,307,387 up until 10 June 2014;

(iii) Interests on (i) above at 20% pa on US$10m from 11 June 2014 to date of judgment and 22% pa on US$28m from 11 June 2014 to date of judgment, and thereafter at judgment rate;

(iv) Reimbursement to Ps of the costs of maintenance totalling HK$12,708,405 by Winson Federal;

(v) Ds be given leave to defend on the rest of Ps’ claims in the ASOC.”

3.Pursuant to paragraph 154 (v) above, the last paragraph of the subsequent order drawn up pursuant to the Judgment (“Order”) thus read:

“IT IS FURTHER ORDERED that the 1^st, 2^nd, 3^rd, 4^th and 6^th Defendants be given leave to defend on the rest of the Plaintiffs’ claim in the Amended Statement of Claim.”

4.Ps issued an application by summons dated 26 May 2015 (“Ps’ Summons”) for leave to correct the last paragraph of the Order, namely that Ps’ position was that the manifest intention of the court was merely to grant Ds, (or, as later transpired, only D1 and D2), leave to defend in relation to the rest of Ps’ monetary claims not adjudicated upon by the Order, and that no order had been made in relation to the remainder of Ps’ non-monetary claims.

5.Ps’ Summons first came before this court for call over on 19 June 2015, during which this court had already indicated that it expressly recalled that Ps summary judgment application was solely to do with the monetary claims, and called for the transcript of the hearing on 10 June 2014 (“Hearing”) which led to the Judgment (“Transcript”).

6.Mr Edward Chan SC and Mr Hugh Kam appeared for Ps at the substantive hearing of Ps’ Summons on 24 July 2015, and Mr Au Lut Chi appeared for the 3^rd defendant Vincent (“D3”).  The 1^st, 2^nd, 4^th and 6^th defendants were absent.

7.At the commencement of the hearing, this court gave a preliminary indication that upon reading the Transcript and the Judgment, the court would be prepared to issue a corrigendum, to correct paragraph 154 (v), to the effect that the relevant Ds be given leave to defend on the rest of Ps’ monetary claims against them in the ASOC (“Corrigendum”).

8.This was acceptable to Ps, but D3 maintained his objection.

9.After hearing submissions from both sides, this court maintained its preliminary indication in issuing the Corrigendum and granted an order to Ps to amend the final paragraph of the Order to read:

“IT IS FURTHER ORDERED that the 1^st and 2^nd Defendants be given leave to defend on the rest of the Ps’ monetary claims against them in the ASOC.”

10.I hereby give my reasons.

Reasons

11.D3’s objections were based on-

(i) D3 had applied for leave to appeal out of time against the Order, which was heard before the Court of Appeal on 15 July 2015 with judgment reserved;

(ii) Once a court order was sealed and perfected, the court is functus officio and thus this court had no jurisdiction to revisit the Order;

(iii) Relying on Man Ping Nam v Man Fong Hang (2007) 10 HKCFAR 140, that even though the slip rule might come into play, but as the Order/Judgment was being appealed, the court should not lightly amend the Order by way of the slip rule, and that the only remedy for Ps would be to appeal;

(iv) Persons affected by orders of the court would need to know with certainty and finality what such orders consisted of, and that a party could not use the slip rule to insert into the original order a provision which was not there, not because of any slip in expressing the court’s intention but because it was not originally asked for: Bank of China v Xinyuan Trading Co (unreported 21 June, CACV 276/1998);

(v) When exercising the inherent jurisdiction of the court in clarifying an order, the prejudice to the other party (not the applicant) should be considered: Man Ping Nam[1].

12.So far as (i) and (iii) are concerned, I understand that there had been no application on the part of D3 for leave to appeal out of time against the final paragraph of the Order.  His application only concerned the Final Judgment part of the Order.

13.As for (ii), at the hearing, Mr Au had produced another authority Regina v Cripps Ex parte Muldoon and Others [1984] 1 QB 68 to support D3’s case.

14.In Cripps, the applicants were petitioners in a local election petition against the respondent, the successful candidate, and the petition was heard by a commissioner Mr Cripps who was appointed to hear the petition.  After a 13-day hearing, Mr Cripps made a costs order awarding the applicants ¾ of their costs properly incurred in relation to the petition. Upon the respondent’s application, Mr Cripps sat again to clarify his order and explained and directed that “properly incurred” meant that the applicants were to have ¾ of their costs only upon those issues on which they had succeeded.  The applicants applied for judicial review by way of an order of certiorari to quash the subsequent direction on the ground that (i) the subsequent direction was a variation of the original order and (ii) was made in excess of the commissioner’s jurisdiction.

15.It was held in Cripps, among other things, allowing the applicants’ application that (i) the election court, being an inferior court empowered by statute to hear the election petition itself was functus officio at the time of the subsequent direction, and (ii) in any event, the subsequent direction was not merely the correction of a slip, but was a radical departure from the original order, and that the commissioner had had no jurisdiction to vary his original order[2].

16.As pointed out by Mr Chan, it was said by Lord Justice Goff in Cripps, that the powers of a judge of the High Court included the power to operate the slip rule, but in that case, the doubt was whether this power was conferred on Mr Cripps/election court under the relevant statutory provision, and that the Justices came to the view that the election court had ceased to exist after the first order was given.  Goff JA had said “Of course, where a High Court judge sitting in the High Court exercises his power under the slip rule to correct accidental errors, he can do so, because, although his order has been drawn up, the High Court has not ceased to exist”[3].

17.Having considered Mr Chan’s submissions, I am in no doubt that this court has the power to correct certain mistakes under the slip rule.

18.Order 20 rule 11 of the RHC states that :

“Clerical mistakes in judgments or orders, or errors arising therein from any accidental slip or omission, may at any time be corrected by the Court on summons without an appeal.”

19.The relevant procedural history in the present case was:

10.07.13	Writ of Summons issued
18.11.13	ASOC filed in which Ps sought (1) monetary claims (“Monetary Claims”) and (2) specific performance claims of the (i) Share Pledge Agreements and (ii) Letters of Undertakings (“Specific Performance Claims”)
06.12.13	Ps issued the summons for summary judgment seeking both the Monetary Claims and the Specific Performance Claims of (i) Share Pledge Agreements (“1stSJ Summons”)
05.06.14	Ps Skeleton Submissions were filed in respect of the 1st SJ Summons, in which it was made clear that they were limiting the 1st SJ Summons to only the Monetary Claims[4].

20.I accept that Ds’ skeleton submissions at the time had dealt with the Specific Performance Claims as well.

21.However, it can be seen from the Transcript that Ps’ then Senior Counsel Mr Jason Pow had made it clear no fewer than 3 times at the outset of the Hearing that Ps were limiting their application in the 1^st SJ Summons to the Monetary Claims only.  Mr Pow also emphasized separately twice during the Hearing that the 1^st SJ Summons were concerned with Monetary Claims.  Later during the Hearing, Ps had made further concessions in relation to the Monetary Claims they were seeking, in that they would no longer claim summary judgment on (1) the late charge for failure to repay on time (2) the difference between the higher sum of interest calculated by Ps and the lower sum of interest calculated by the relevant Ds, and (3) the legal costs.

22.Further, as pointed out by Mr Chan, this court had noted in the opening paragraph of the Judgment that the 1^st SJ Summons was for only those Monetary Claims in the amended statement of claim.  This can further be seen in paragraphs 59, 88, 149, 150, 152-153 of the Judgment. This court did not deal with any application concerning any of the Specific Performance Claims in the Judgment.

23.Further, on 9 February 2015, Ps had taken out another summons for summary judgment in relation to the Specific Performance Claims (“2^nd SJ Summons”).  There was no immediate protest from D3 that he already had leave to defend in relation to those claims, and that it would appear that even at the first callover hearing for the 2^nd SJ Summons, even though D3 was legally represented at the time, he did not protest at the 2^nd SJ Summons on the basis that he had already been given leave to defend, and this was only raised at the 2^nd callover hearing on 24 March 2015.

24.Ps had written to D3 on 30 April 2015 to seek their consent to amend the Order to reflect the correct position, but there was no response from D3 initially and eventually on 13 June 2015, D3 replied refusing to consent.  On the other hand, D2 had written on 13 June 2015 agreeing to the proposed amendment.

25.Finally, as submitted by Mr Chan, on 15 July 2015, during the hearing of D3’s application for leave to appeal out of time, his Senior Counsel had acknowledged in open court that the Judgment was only in relation to Monetary Claims only.

26.Mr Au had attempted to refer to the Judgment to submit that the court’s manifest intention was that D3 had been given general leave to defend, namely including leave to defend the Specific Performance Claims, but the paragraphs in the Judgment he had referred to[5] did not assist D3’s case. 

27.Having considered Mr Chan’s and Mr Au’s submissions, and in particular in light of what transpired during the Hearing as reflected in the Transcript, and what was stated in the Judgment, the manifest intention of this court was that the Final Judgment given was only against the 1^st and 2^nd defendants for those Monetary Claims set out in paragraph 154 (i) to (iv) of the Judgment, and that the 1^st and 2^nd defendants were given leave to defend on the rest of the Monetary Claims against them in the ASOC.

28.The error arose out of an accidental omission on the part of the court for not specifying in paragraph 154 (v) which of the Ds were given leave to defend, and also for omitting the word “monetary”.

29.Mr Au had argued that D3 had interest in the Order as it was, since the final paragraph of the Order had touched upon D3, and that after amendment, there would be a “radical departure”.

30.As the court’s manifest intention in the Judgment was clear, in my view, the present case can be distinguished from Cripps, and the Corrigendum would not result in any radical departure from the Judgment.

31.As for any prejudice to D3, Mr Au submitted that the wording of the sealed and perfected Order was clear to any party or bystander including D3, the fact was that but for Ps’ realization of the clear wording, it would not have issued P’s Summons.  It was said that D3 was all along defending the case on the premises that leave had been granted to him against the Specific Performance Claims since there was no Monetary Claim against D3, which were directed against the 1^st and 2^nd defendants only, and that significant legal costs had been incurred in this direction.

32.D3 was legally represented by Counsel and present throughout the Hearing.  Even though after the Judgment, he decided to act in person, this was not until some 2 months later.  In any event, as set out in paragraph 100 of the Judgment, D3 had a degree from the University of Toronto and further he had been a director of the Advisory Board for the English Language Education and Assessment Centre of Lingnan University. He should be able to understand the Judgment, in which this court had made it clear in the opening paragraph of the Judgment that the 1^st SJ Summons was solely concerned with the Monetary Claims against Ds. It had nothing to do with any Specific Performance Claims.

33.Further, even though D3’s present legal team was not present at the Hearing, they had never sought to apply for the Transcript. After this court had directed that the Transcript be obtained, there should no longer be any doubt from the Transcript as to the court’s manifest intention.

34.It was argued that D3 would suffer “forensic disadvantage” if he were not to be able to subpoena Wayne Ang in light of the “new evidence”[6].  However, this court has not yet dealt with the 2^nd SJ Summons, and this is an issue which D3 can raise at the substantive hearing of the 2^nd SJ Summons.

35.For all the reasons set out above, I accepted Mr Chan’s submissions.  I granted Ps leave to amend the Order, along the lines of the Corrigendum issued by the court on 24 July 2015.

Costs

36.Mr Chan conceded there should be no order as to costs of the issue of P’s Summons but sought costs of the call-over hearing on 19 June 2015, costs of the vacated hearing on 20 July 2015 (which was vacated as I was on sick leave), and costs of the substantive hearing on 24 July 2015, with certificate for 2 Counsel.

37.Mr Au submitted that there should be no order as to costs throughout, and that in any event, there should be only certificate for one Counsel.

38.As pointed out by Mr Au, the Order was drafted and drawn up by Ps and they could have sought clarification from the court before perfecting the Order, but they did not.  Ps had initially attached a draft amended order to P’s Summons.  The effect of the 1^st draft would be that the 1^st, 2^nd, 3^rd, 4^th, 5^th and 6^th defendant be given leave to defend on the rest of the Plaintiff’s claim, namely on the outstanding interest and the late charges.

39.In Ps’ Reply Submission, they had sought leave to amend the 1^st draft to delete the reference to the 3^rd defendant.  At the commencement of the present hearing, Mr Chan had sought leave to further amend the draft amended order to include legal costs of US$117,257.58 pursuant to the Loan Agreements, as stated in paragraph 152(ii) of the Judgment.

40.Then subsequently, at the hearing, after this court’s preliminary indication of the Corrigendum, Mr Chan then indicated that any references to 4^th, 5^th and 6^th defendants should also be deleted in the Corrigendum.

41.In the end, the Corrigendum this court issued was quite different from the Ps’ 1^st draft attached to P’s Summons, or their 2^nd draft set out in their Notes on Reply[7].  I had indicated that it was not this court’s manifest intention to set out in paragraph 154 (v) the details of what constituted the rest of the monetary claims upon which the 1^st and the 2^nd defendants were given leave to defend.  This was accepted by Ps at the hearing before this court. 

42.Mr Au had submitted that it could not be said that D3 had been unreasonable to oppose P’s Summons in light of the fact that it was Ps which drew up the Order and in light of the various versions of the amendments proposed by Ps.

43.I had said earlier that the error/omission was on the part of the court. However, Ps should have become aware of the error/omission before perfecting the Order, and should have sought the court’s clarification before perfecting the Order, or at least shortly after the Order had been drawn up.  Further, it was not until Ps’ Notes on Reply that they submitted that the final paragraph in the Order should not have included D3, or as it later transpired during the Hearing, indeed any of the Ds, save for 1^st and 2^nd defendant.  Also, throughout, Ps were seeking to set out the “rest” of the Monetary Claims on which leave to defend was given in the amended order and yet there were also omissions on their part on what constituted the “rest” of the Monetary Claims.  As I have said, the Corrigendum did not set out the details of the rest of the Monetary Claims.  Even though D3 did not succeed in opposing amendments to the final paragraph of the Order, I find Ps’ own confusion in what amendments they were seeking had not helped the situation.

44.Having considered all the circumstances of this case, and the matters in Order 62 rule 5(1), I am of the view that an appropriate order for costs is that there should be no order as to costs of and incidental to Ps’ Summons.

Mr Edward Chan SC and Mr Hugh Kam, instructed by Oldham Li & Nie, for the 1^st and 2^nd plaintiffs

Mr Au Lut Chi, instructed by Tsang, Chan & Woo, for the 3^rd defendants