TSANG WOON MING v. TSAN HING TAT HEIDI AND OTHERS

DCCJ 3791/2016

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 3791 OF 2016

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REASONS FOR DECISION

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INTRODUCTION

1.  This is an appeal by the 1^st to 6^th defendant (“D1-6”) against an order made by Registrar Ho on 7 September 2017 when he dismissed an application by the defendants for an extension of time to file its defence & counterclaim (“D&C/C”) pending the appeal of a striking-out application fixed to be heard before HH Judge Winnie Tsui on 12 February 2018.  Registrar Ho ordered D1-6 to file and serve their D&C/C on or before 19 October 2017.

2.  At the end of the hearing on 22 September 2017 before me, I dismissed D1-6’s appeal with costs.  I said I would provide full written reasons for my decision in due course.  Here are the reasons. 

BACKGROUND

3.  The writ of summons (with an indorsement of claim) of this case was issued on 29 July 2016 where the plaintiff claims against D1-6 proprietary reliefs on the grounds of adverse possession since 1940s; proprietary estoppel and/or unjust enrichment.

4.  The plaintiff filed and served his statement of claim (“SoC”), including §32 thereof which D1-6 sought to strike out, on 19 September 2016.

5.  D1-6 sought 2 extensions to file and serve their D&C/C, citing different reasons, from the plaintiff. On both occasions, consent was given by the plaintiff.

6.  On 12 December 2016, just a day before they were supposed to file the D&C/C under the second extension, D1-6 issued a summons to strike out the plaintiff’s pleas on proprietary estoppel, acquiescence, waiver, unjust enrichment contained in §32 of the SoC and the related prayers for reliefs on that ground that they do not disclose a reasonable cause of action (“the Striking-out Summons”).

7.  On 13 December 2016, the plaintiff issued a summons to seek an unless order that unless D1-6 would file and serve their D&C/C on or before 3 January 2017, D1-6 be barred from defending the action.

8.  At the hearing on 23 December 2016, Registrar Ho made no order on the Unless Order application but instead adjourned the striking out application to 21 April 2017 for a substantive hearing before a master.  In the meantime, he ordered that the time for filing and service of the D&C/C of D1-6 be “extended until 28 days after the final conclusion and determination of the defendant’s summons”, ie the Striking-out Summons.

9.  The substantive hearing of the Striking-out Summons was heard before Master SH Lee on 7 August 2017 where Master Lee dismissed the striking-out application with costs in favour of the plaintiff after a whole day argument.

10.  On 16 August 2017, D1-6 lodged an appeal against the dismissal of the Striking-out Summons.

11.  On 30 August 2017, D1-6 issued a summons to seek an extension of time for filing the D&C/C before the registrar until 28 days after the final conclusion and determination of the appeal of the striking-out application.

12.  On 7 September 2017, Registrar Ho ordered that the time for D1-6 to file and serve their D&C/C be extended to 19 October 2017.

13.  On 12 September 2017, D1-6 lodged an appeal against Registrar Ho’s order for extension of time.

DISCUSSION

14.  There is no question that the present appeal against the registrar’s decision is by way of hearing de novo, so what had taken place before the registrar and his reasons for the further extension of time for filing of the D&C/C have no bearing in my consideration of the merits of this appeal as I hear this case afresh as if the case has appeared before me for the first time: see Order 58, rules 1 of the Rules of the District Court (“RDC”).  While I will pay heed to what the registrar had said in the course of refusing to allow D1-6 with a full extension of time pending the outcome of the striking-out appeal, this court is untrammeled and unfettered thereby: see Hsieh Ming Yin v Au Sin Yee [2015] 4 HKC 353, §§24-25.  Further, on appeal from a master to this court, D1-6 are fully entitled to take up new points which had not been argued in front of the registrar before: see Blundell v Rimmer [1971] 1 WLRR 123, at 127H-128B, per Payne J).   

D1-6’s Grounds of Objections

15.  The defendants’ main grounds of objections of the registrar’s decision are as follows:-

(a)  That the 28-day extension should kick in and start to countdown upon the determination of the striking-out appeal presently scheduled on 12 February 2018 before HH Judge Winnie Tsui;

(b)  The fallback submission is that this court has an unfettered discretion to extend time pending the resolution of the striking-out appeal.

16.  In my view, with respect to Mr Chan who is appearing on behalf of D1-6 and despite his very eloquent submissions, the extension of time for D1-6 to file their D&C/C in this case is essentially a case management decision made by the registrar.  He was perfectly entitled to order D1-6 to file and serve the D&C/C within a certain time after Master SH Lee had decided on the Striking-out Summons and before the striking-out appeal hearing before HH Judge Winnie Tsui. 

17.  To me, it is quite clear that the 28-day direction “pending the final conclusion and determination of the defendant’s summons” was specially referred to the Striking-out Summons and not to the striking-out application generally.  In my judgment, it certainly would not have included D1-6’s intended appeal to the master’s decision.  If the defendants’ submissions are correct, then it would lead to the absurd situation where it would include all further potential appeal channels open to the defendants, including seeking leave to appeal against Judge Tsui’s decision if she were to find against them in the striking-out appeal and the appeal before the Court of Appeal, if leave were given.  That to me could not be right as this will completely defeat the underlying objectives of the CJR which would require the parties to resolve issues in a cost-effective and proportionate manner.

18.  In my judgment, once Master SH Lee has decided on the matter, the 28 days to file and serve the D&C/C will start to run. It is not to wait until D1-6 exhaust all channels of appeal before they need to file a D&C/C.

19.  I also do not accept the defendants’ submissions that §32 of the SoC consists of at least 70% of the plaintiff’s claim and therefore there will be substantial costs saving in allowing the extension of time for D1-6 to file the D&C/C after the determination of the appeal by HH Judge Winnie Tsui in February 2018. 

20.  In my view, the main plank of the plaintiff’s claim remains one of adverse possession.  I do not see how striking out of one paragraph of the SoC will help to save 70% of the costs in the present proceedings. In fact, the matters pleaded in §32 mainly deals with issues of law rather than issues of fact.  I do not see why defendants could not file a defence in answer to those matters at this stage.

21.  I agree with Mr Yuen, counsel for the plaintiff, that it is totally unnecessary for this court to consider the merits of the striking-out application at this stage.  The court is only asked to determine an appeal against a case management decision.  In doing so, the court should pay heed to the underlying objectives of the CJR under Order 1A, rule 1 of the RDC.

22.  In my view, this matter has dragged on long enough.  The SoC was served on 19 September 2016, yet over a year later, D1-6 still have not filed their D&C/C. There is no reason to deprive the plaintiff’s right to know what the precise grounds and nature of the defendant’s defence are and if they are going to make any counter-claim against the plaintiff.  I do not see how this would affect the pending appeal of the Striking-out Summons before HH Judge Winnie Tsui. 

CONCLUSION

23.  In the circumstances and for the reasons stated above, I had dismissed D1-6’s appeal at the hearing on 22 September 2017. I also ordered that costs of the appeal would be awarded in favour of the plaintiff with certificate for counsel, such costs to be taxed if not agreed.  The plaintiff’s own costs to be taxed in accordance with the legal aid regulations.