CHAN KONG v. CHAN LI CHAI MEDICAL FACTORY (HONG KONG) LTD AND OTHERS

CACV 161/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 161 OF 2006

(ON APPEAL FROM HIGH COURT ACTION NO. 4101 OF 2001)

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REASONS FOR DECISION

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Hon. Yuen JA:

1.  This is an application by the Appellant (Plaintiff) by summons filed on 21 August 2008 for a stay of execution of that part of our order given on 12 June 2008 whereby he was ordered to pay the Respondents costs assessed at a gross sum of $72,500 for the hearings on 14 September 2007 and 12 June 2008. 

2.  At the end of the hearing on 4 September 2008, we dismissed the application for reasons which appear below.

3.  The relevant background is as follows. 

4.  As long ago as 2001, the Plaintiff (who was then legally represented) issued a writ against 30 defendants.  The statement of claim, which was drafted in English, was filed on 9 April 2002, amended on 14 August 2002 and re-amended on 28 November 2005.  It was lengthy (some 52 pages) and its contents were confusing and difficult to understand.

5.  Most of the defendants applied to strike out the statement of claim on the ground that the Re-Amended statement of claim disclosed no reasonable cause of action. 

Strike-out by Saunders Dep. J

6.  On 10 March 2006 Saunders Dep J (now Saunders J) gave a judgment in which he concluded that the Re-Amended statement of claim disclosed no reasonable cause of action and he struck it out.

7.  The Plaintiff appealed Saunders Dep J’s order.  

Hearing on 14 September 2007

8.  On 14 September 2007 this court (Yuen JA and Waung J) was convened to hear the appeal.  By this time, the Plaintiff was no longer legally represented. 

9.  The following is a convenient summary of the Plaintiff’s case as it then stood ( from our Reasons for Decision, 19 September 2007):

“The Plaintiff’s claim was made on the basis that he was a member of one or two tongs (the Chan Him Muk Tong and the Li King Sun Tong), or a partnership comprising members of the two tongs (the Chan Li Chai partnership) which held two properties on Hong Kong Island and carried on a business in Hong Kong. 

The judge held that the claim was doomed to fail as Hong Kong law does not recognize tongs other than for the holding of land in the New Territories.   

The Plaintiff’s counsel had sought to argue that notwithstanding the use in the Re-Amended Statement of Claim of the word tong, what was meant was not a tong as conventionally understood but something different.  However on analysis the judge held that the characteristics asserted in the Re-Amended Statement of Claim were those of a  tong as conventionally understood. 

As for the Plaintiff’s claim to be a member of the partnership, the judge held that as the Plaintiff‘s case involved an assertion that he had automatically become a “partner” by birth without having entered into any contractual arrangement, that was not a partnership known to Hong Kong law.  It is to be noted that the Re-Amended Statement of Claim did not plead any rights under the Chinese Partnerships Ordinance, No.53 of 1911".

10.  At the hearing however, the Plaintiff claimed that the Chan Li Chai partnership had been registered under the Chinese Partnerships Ordinance, but he was unable to articulate what rights that gave him and how that gave rise to a cause of action.  As I said in the Reasons for Decision handed down on 19 September 2007,

“The Plaintiff has alleged that he is a member of a tong which was a partner in a Chinese partnership.  It is clear that he has not pleaded the Chinese Partnerships Ordinance or the impact of that Ordinance on his claim.  He says that may have been due to the fault of his former legal representatives.  Be that as it may, it is clear that he needs to further amend the Re-Amended Statement of Claim”.  (Emphasis added).

11.  As the Plaintiff was not legally represented, as an indulgence to him we adjourned the hearing of the appeal to enable him to formulate a draft Re-Re-Amended Statement of Claim to incorporate his claims based on the Chinese Partnerships Ordinance for our consideration.  The order we made was as follows:

(1)     the hearing of the appeal be adjourned;

(2)     on the Plaintiff’s undertaking to apply for Legal Aid within 7 days after Reasons for Decision are handed down, the Plaintiff’s summons for leave to amend (annexing a draft Re-Re-Amended Statement of Claim) to be filed within 2 months from the grant or first refusal of legal aid;

(3)     should the Plaintiff fail to comply with (2), all parties to the appeal to have liberty to restore the appeal;

(4)     costs of the hearing to be reserved.

12.  There was no appeal from that order.

13.  Subsequent to that order, the Plaintiff did apply for Legal Aid but it was refused on 12 December 2007. 

Draft amendment

14.  The Plaintiff then issued a summons on 1 February 2008 for (amongst other thing) leave to amend the statement of claim, annexing a draft Re-Re-Amended statement of claim, and for his appeal to be allowed.

Principles governing pleadings

15.  Before we deal with the draft Re-Re-Amended statement of claim, we should say a word about the importance of pleadings.  It is well-established that pleadings need to be clear -  because pleadings are the foundations on which the rest of the action stand.  The reason why parties to litigation must ensure that the real issues in dispute are defined in advance in the pleadings is so that there is an unambiguous framework for the many interlocutory steps that follow in an action, such as discovery of documents, interrogatories and witness statements, as well as for the conduct of the trial itself.  A statement of claim should make it clear to the reader what the plaintiff’s cause of action is, and it should set out the material facts which provide the basis for him to pursue that cause of action.  It is not adequate for a plaintiff just to set out his story extensively and then to allege a number of breaches of rights for which he claims relief.  Put another way, it should not be left to the reader to guess how the dots should be connected. 

16.  The more complex the facts and the more complicated the claim, the more important it is for the pleader to get it right.  That is because the more obtuse the pleading, the more capacity there is for genuine misunderstanding or specious opportunism.  And the more blind alleys are left in a pleading, the more expensive and time-consuming the litigation will be.

17.  Although an unrepresented litigant may not be expected to use legal terminology, that does not relieve him of the need to comply with the rule that pleadings have to be clear.  A litigant in person cannot simply pour out his story and ask the court to sort out his legal rights because he himself is ignorant what rights may have been breached or how.  A pleading cannot be like a set of instructions to the judge as if he were the unrepresented litigant’s counsel.  That is not the function of the court in an adversarial system.  Having said that, a court is entitled in the exercise of its discretion to be a little more lenient to an unrepresented litigant in giving him an opportunity to get things right.     

Hearing on 12 June 2008

18.  With those principles in mind, I now come to the Plaintiff’s draft Re-Re-amended statement of claim which was now 63 pages long, with new pages tacked between pages of the Re-Amended statement of claim.

19.  At the restored hearing held on 12 June 2008, we indicated to the Plaintiff that the draft Re-Re-Amended statement of claim was unacceptable.

20.  First the pleading was now written partly in English and partly in Chinese, at times with both languages used in a single sentence.  This was contrary to rule 4(1) of the High Court Civil Procedure (Use of Language) Rules Cap. 5 which provides:

“Any document which is required by any Ordinance to be -

   (a)      filed in the Court; or

   (b)     served on any person,

for the purposes of any proceedings may be in either of the official languages”.  (Emphasis added).

In other words, a party may choose to file a document in Court in either English or in Chinese, but he has no choice to mix both languages in one document.   This requirement may be contrasted with the use of language orally during court proceedings, as s.5 of the Official Languages Ordinance Cap.5 provides:

“(1)    A judge ... may use either or both of the official languages in any proceedings ... before him as he thinks fit.

   (2)     The decision of a judge ... under subsection (1) is final.

   (3)     Notwithstanding subsection (1), a party to or a witness in  any proceedings ... may -

(a) use either or both of the official languages; and

(b) address the court or testify in any language.   

   (4)     Notwithstanding subsection (1), a legal representative in any proceedings ... may use either or both of the official languages.

   (5)     The Chief Justice may make rules and issue practice directions to regulate the use of the official languages in the courts”.

Rule 4(1) was made pursuant to s.5(5).

21.  It was held in Cheung Kong (Holdings) Ltd v Chan Wai Yip Albert [2000] 4 HKC 591, 594H - 595C that although oral proceedings may be held in English or Chinese or both languages, in court documents the parties are restricted to one language so that there would be internal consistency of language in the document.  We drew the Plaintiff’s attention to the reasoning in that case.

22.  Secondly the draft Re-Re-Amended statement of claim was deficient.  As an example of the confusion in the draft which we drew to the Plaintiff’s attention at the hearing on 12 June 2008, para. 1 pleaded that in 1600, 2 persons formed a partnership (“i.e. Chan Li Chai”) which was defined as “the said Partnership”.  It would appear from that that “Chan Li Chai” and “the Partnership” were synonymous.  And yet paras. 5F - 5G plead the law governing “the said Partnership” during the Republican Period and paras. 5N - 5P plead different law governing “Chan Li Chai” during the same period.  Another example of the confusion in the draft Re-Re-Amended statement of claim is that the term “the Chan Li Chai business” is defined differently in 4 places:

 - in para. 2B as the business registered by “the Two Tongs and/or the said Partnership” in 1922;

- in para. 2D as the business registered by “the Two Tongs and/or the said Partnership and/or the Chan Li Chai Business” in 1952;

- in para. 11 as the business carried on under the trade name of  “Chan Li Chai Medical Factory”;

- in para. 11A as the business registered by “the Two Tongs and/or the said Partnership and/or the Chan Li Chai Business” in 1922.

Plaintiff’s position on 12 June 2008

23.  When these difficulties were pointed out to the Plaintiff at the hearing on 12 June 2008, he did not seek to argue that the draft Re-Re-Amended statement of claim was sufficient, nor did he abandon the draft Re-Re-Amended statement of claim and stand by the Re-Amended statement of claim which had been struck out.  If he had done so, we would have determined the appeal then and there. 

24.  The Plaintiff asked for time to provide a proper draft which he undertook to do by 12 August 2008, and obviously he had to pay the price for yet another adjournment.  Accordingly we ordered that he should pay the costs of the Respondents forthwith for the two hearings on 14 September 2007 and 12 June 2008 which we assessed on a gross sum basis at $72,500.

Application for stay of execution

25.  The Plaintiff now seeks a stay of execution of the order for payment of costs.  He has based his application on the fact that he has asked for leave to appeal our order of 12 June 2008 to the Court of Final Appeal.  He also said that he was prepared to pay the sum into court within 2 months, that he was now unemployed and that the Respondents have issued a statutory demand against him.

26.  That this court has inherent jurisdiction to grant a stay pending an application for leave to appeal to the Court of Final Appeal is now clear from the judgment of Ribeiro PJ in Joint & Several Liquidators of Kong Wah Holdings Ltd v The Grande Holdings Ltd and others (2006) 9 HKCFAR 795.

27.  Applying the usual principles governing the exercise of the court’s discretion on an application for a stay of execution pending appeal, it is well-established that the mere fact that an application for leave to appeal has been made is not in itself a ground for a stay.  Assuming for the time being that the application for leave to appeal to the court of final appeal is within time, we do not see a good chance of success in his application.  At both the September 2007 and June 2008 hearings, the Plaintiff was asking for the indulgence of an adjournment to put his pleading in order.  That meant the Respondents have had to pay legal advisers to attend on two occasions when the matter could not be determined.  It is common sense that the price the Plaintiff had to pay was the Respondents’ costs of the two hearings.  The order we made was the usual one. 

28.  We see no reason why the Respondents should be kept out of those funds.  There is no evidence from the Plaintiff that if he were to pay the sum to the Respondents, he would not be able to get them back if he should succeed in his appeal to the court of final appeal.  Nor had the Plaintiff filed any affirmations deposing to his financial circumstances.   

29.  For these reasons, we dismissed the Plaintiff’s summons for stay of execution. 

30.  We would also make an order nisi that costs of this application should follow the event i.e. that the Plaintiff should pay the Respondents’ costs.

Hon. Lam J:

31.  I agree.