KWAN CHUI KWOK YING AND ANOTHER v. TAO WAI CHUN AND OTHERS

CACV 296/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 296 OF 2006

(ON APPEAL FROM COURT OF FIRST INSTANCE HCMP NO. 2996 OF 1990)

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THIRD PARTY PROCEEDINGS

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REASONS FOR JUDGMENT

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Hon Cheung JA :

The costs orders

1. On 30 May 2006, Deputy High Court Judge To made costs orders in favour of the 15^th defendant against the 6^th defendant in respect of the Third Party Proceedings brought by the 6^th defendant against the 15^th defendant.

2. The main action was in respect of the probate of the estate of Mr. Kwan Kai Ming deceased (‘the deceased’).  The 6^th and 15^th defendants are the natural sons of the deceased and their mother Madam Wong Woon Wan (‘Madam Wong’).  The 6^th defendant persistently denied that the 15^th defendant is a natural son of the deceased and commenced the Third Party Proceedings against him. 

3. On 30 December 1994, Patrick Chan J (as he then was) dismissed the 6^th defendant’s claim with costs (‘the 1994 trial’).  However, this was reversed by the Court of Appeal and a re-trial was ordered.  Judge To handled the re-trial.

4. On 4 October 2001 Judge To dismissed the 6^th defendant’s action against the 15^th defendant and granted a declaration that the 15^th defendant is the legitimate child of the deceased and Madam Wong.

5. The costs orders made by Judge To were :

(1)	the costs of and occasioned by the 1994 Trial before Patrick Chan J in 1994 be paid by D6 to be taxed on an indemnity basis with certificate for two counsel, if not agreed;
(2)	the costs of the appeal to the Court of Appeal in 1995 be paid by D6 to be taxed on an indemnity basis with certificate for two counsel, if not agreed;
(3)	unless otherwise provided for, the costs of preparation for the re-trial from 3 November 1995 until 10 May 1999, including all costs reserved if any, be paid by D6 to be taxed on an indemnity basis, if not agreed;
(4)	unless otherwise provided for, 75% of the costs of preparation for the re-trial from 11 May 1999, including all costs reserved if any and the costs of the present costs hearing be paid by D6 to be taxed on an indemnity basis, if not agreed;
(5)	the costs awarded under item (1) shall be with interest from 3 January 1995; the costs awarded under item (2) shall be with interest from 3 November 1995; and the costs awarded under item (3) and such of the costs awarded under item (4) which were incurred on or before 4 October 2001 shall be with interest from 4 October 2001;
(6)	50% of the total of Dl5’s costs taxed or agreed in accordance with items (1) to (4) above not inclusive of interest be borne by and paid out of the estate of Kwan Kai Ming; and
(7)	upon recovery of the costs from D6, D15 shall reimburse the estate of Kwan Kai Ming with 50% of the costs so recovered not inclusive of interest.

Judge To further ordered that, for the avoidance of doubt, Patrick Chan J’s order made on 3 January 1995 in dismissing D15’s counterclaim with costs to D6 to be taxed on party and party basis remains valid.

Leave to appeal not obtained

6. On 29 August 2006 the 6^th defendant served the Notice of Appeal in respect of the costs orders made by Judge To.

7. At the hearing of the appeal we invited the parties to deal with the preliminary point on whether the appeal was properly constituted in the first place.

8. Section 14(3)(e) of the High Court Ordinance (Cap. 4) clearly states that :

‘	No appeal shall lie ─
	(e)	without the leave of the court ... or of the Court of Appeal, from an order of the Court of First Instance ... relating only to costs which are by law left to the discretion of the court...’

9. The appeal was solely on costs which clearly was left to the discretion of Judge To.  No leave to appeal was ever been obtained.  There was no answer to section 14(3)(e).  As a result the appeal was not properly constituted.  We have no jurisdiction to hear the appeal and the appeal must be dismissed which we did.  For a further example of the dismissal of the appeal in such a situation, see A Solicitor v. Law Society of Hong Kong [1995] 1 HKC 834 (Court of Appeal (Nazareth VP, Litton and Godfrey JJA)).

Waiver of jurisdiction?

10. The only matter that needs to be considered on this appeal is the effect of the order requiring the 6^th defendant to provide security for costs of the appeal made on the application of the 15^th defendant.

11. In Knighthood Assurance Consultants Ltd. v. Meacher (13/2/1976) Vol 120 SJ 117, the English Court of Appeal (per Lord Denning MR) held that the plaintiff who had applied for and obtained an order for security for costs of the appeal had waived the irregularity of the defendant’s failure to obtain leave to appeal.

12. The decision is, of course, not binding on us but given the decision came from Lord Denning it must be accorded with the greatest degree of respect.  However, I am unable to agree to his approach.  The failure to obtain leave goes towards jurisdiction  : White v. Brunton [1984] 2 All ER 606 at 608 per Sir John Donaldson M R and since jurisdiction cannot be conferred by the express consent of all parties, as a matter of course, it cannot be conferred in consequence of an implied waiver by one party : see para. 59/1/46 of Hong Kong Civil Procedure 2008.

Conclusion

13. The appeal was accordingly dismissed.

Judgment on Costs

14. As the appeal was dismissed the 6^th defendant must be held liable for the costs of the appeal.  However the jurisdictional point ought to have been raised by the lawyers for the 15^th defendant at an earlier stage (we note Mr. Arthur Wong, counsel for the 15^th defendant was only instructed to appear in this appeal at the end of November 2007).  This is obviously a case where the 15^th defendant should have applied to strike out the notice of appeal.  This was not done.  The costs incurred in the striking out must be substantially less than preparing the full appeal which was listed for a two day hearing.  I am of the view that the 15^th defendant is only entitled to 50% of the costs of the appeal.  I will further order that unless the solicitors for the 15^th defendant informed that court within 14 days that they will not charge the 15^th defendant for the full costs of the appeal, they have to lodge a written submission to justify their claim for full costs.  The Court will give directions on receiving the submission.

15. Another set of costs is those relating to the application for security for costs of the appeal which was ordered to follow the result of the appeal.  I consider that this application was unnecessary and the proper order should be no order as to costs.  The parties agreed to vary the costs order relating to security.  The solicitors for the 15^th defendant further informed the Court that they would not charge the 15^th defendant any costs and disbursement in relation to the application for security.

Hon Yeung JA :

16. I agree with the judgment of Cheung JA and have nothing to add.

Hon Chung J :

17. I agree.