CHONG CHI KI PIERRE v. GLORY SKY PRECIOUS METALS LTD AND ANOTHER

DCCJ 1530/2019

[2023] HKDC 450

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 1530 OF 2019

--------------------------

-------------------------

--------------------------

DECISION

--------------------------

BACKGROUND

1.  On 25 August 2020, pursuant to the plaintiff’s summons for non-party discovery[1] (“the Non-Party Discovery Summons”), Master B Mak ordered that:

“(1) The Commissioner of Police do disclose certified copies of the following documents to the plaintiff on or before 8 September 2020, namely, the employment contract and/or employment records including any employer’s tax return and MPF application between the 1^st and 2^nd Defendants;

(2) Costs of and occasioned by this application (including costs incurred by the Commissioner of Police in compliance of Order hereof) be paid by the Plaintiff to the Commissioner of Police, in the sum of HK$5,200. Such costs to be reimbursed by the 1^st Defendant to the Plaintiff in any event; and

(3) The 1^st Defendant do pay the Plaintiff costs of this application on an indemnity basis, such cost being summarily assessed as HK$55,750 to be paid forthwith.”

(“the August 2020 Orders”)

2.  Paragraph 1 of the August 2020 Order will be referred to herein as “the Non-Party Discovery Order”, whereas paragraphs 2 and 3 above will be referred to herein as “the August 2020 Cost Order”.

3.  The August 2020 Orders were made by the learned Master in the absence of the 1^st defendant, whose solicitor explained to the Court subsequently that the hearing date was not properly marked in the solicitor’s diary.

4.  On 4 September 2020, the 1^st defendant took out a summons (“the Rehearing Summons”) and sought to have the Non-Party Discovery Summons re-heard. However, as the August 2020 Orders had been perfected before the hearing (14 October 2020[2]), it was agreed by the 1^st defendant and the court that the learned Master did not have any further jurisdiction to deal with the Non-Party Discovery Summons. The learned Master therefore dismissed the Rehearing Summons. The court also ordered the 1^st defendant to pay $6,000 costs to the plaintiff forthwith (“the Rehearing Cost Order”).

5.  Upon the 1^st defendant’s appeal against the August 2020 Orders and the Rehearing Cost Order, this Court made the following orders by virtue of a Decision which was handed down on 15 September 2021 (“the Decision”):

(1)  dismissed the 1^st defendant’s appeal against the Non-Party Discovery Order;

(2)  set aside the August 2020 Cost Order, and ordered that the costs of the Non-Party Discovery Summons (including the costs of the Commissioner of Police in the sum of $5,200) be in the cause;

(3)  dismissed the 1^st defendant’s appeal against the Rehearing Cost Order.

6.  By Summons filed on 28 September 2021 (“the Leave Summons”), the 1^st defendant applied for leave to appeal.[3]

THE APPLICABLE LEGAL PRINCIPLES

7.  The requirement for granting leave to appeal is set out in section 63A(2) of the District Court Ordinance (Cap 336, Laws of Hong Kong). It is trite that leave to appeal shall not be granted unless the court is satisfied that the intended appeal has a reasonable prospect of success or there is some other reason in the interest of justice why the appeal should be heard.

8.  It is also well established that a reasonable prospect of success means an appeal with prospects that are more than fanciful without having to be probable (SMSE v KL [2009] 4 HKLRD 129 at [17]).

9.  Even if the threshold test of reasonable prospect of success is satisfied, the court is not obliged to grant leave to appeal. The court still retains discretion whether to do so, although the fact there is, ex hypothesi, a reasonable prospect of success would heavily influence the court’s exercise of discretion. The court should take into account Order 1A of the Rules of the District Court (“RDC”), and shall seek to give effect to the underlying objectives set out therein in the exercise of its powers. Among those underlying objectives, RDC are “to promote a sense of reasonable proportion and procedural economy in the conduct of proceedings” (Order 1A, rule 1(c)) and “to ensure that the resources of the Court are distributed fairly” (Order 1A, rule 1(f)) (Ho Yuen Ki Winnie v Ho Hung Sun Stanley (HCA 391/2006, unreported, 25 May 2009, at [3] and [8]) and CWG v MH & Others [2014] 1 HKLRD 838 at [13]).

THE GROUNDS OF APPEAL

10.  The 1^st defendant’s grounds of appeal read:

“(a) The learned Judge failed to dismiss the Summons of the Plaintiff for non-party discovery of documents against the police filed on 2 July 2020 (‘the Non-Party Discovery Summons’) and/or to set aside or rescind paragraph 1 of the Order made by Master B. Mak on 25 August 2020, when it is one of the findings of the learned Judge that ‘The documents produced by the DOJ were not employment agreement or employment record as such, and therefore were not documents requested for under the Non-Party Discovery Summons’, thereby having erred in law;

(b) In the premises, the learned Judge failed to order the Plaintiff to pay to the 1^st Defendant, the costs of the Non-Party Discovery Summons to be summarily assessed or taxed, on party and party or indemnity basis, if not agreed, thereby having erred in law, or not having exercised his discretion judicially;

(c) In the premises, the learned Judge failed to order the Plaintiff to pay to the 1^st Defendant, the costs of the appeal under the Notice of Appeal filed on 14 October 2020, to be summarily assessed or taxed, on party and party or indemnity basis, if not agreed, further or alternatively, the learned Judge erred in having ordered that as between the Plaintiff and the 1^st Defendant, there be no order as to the costs of the appeal under the Notice of Appeal filed on 14 October 2020, thereby having erred in law, or not having exercised his discretion judicially;

(d) In the premises, the learned Judge failed to set aside or rescind paragraph 2 of the Order made by Master B. Mak on 14 October 2020 that the 1^st Defendant do pay the Plaintiff the costs of the Summons of the 1^st Defendant filed on 4 September 2020 summarily assessed at HK6,000, payable forthwith, despite that it was unreasonable or an error in law, and the learned Judge failed to order the Plaintiff do pay to the 1^st Defendant, the costs of the said Summons to be summarily assessed or taxed, on party and party or indemnity basis, if not agreed, thereby having erred in law, or not having exercised his discretion judicially;

(e) Any other grounds that counsel for the 1^st Defendant may think fit […]”

11.  I shall refer the above grounds under paragraphs 10(a) to (d) as Grounds 1 to 4 respectively and will deal with them in turn below.

DISCUSSION

12.  In order to understand the 1^st defendant’s arguments properly, it is necessary to refer to the background of the plaintiff’s non-party discovery application and the subsequent development thereof. As I have set out the same in paragraphs 4 to 22 and 33 to 35 of the Decision, I do not propose to repeat the same here.

13.  With those background in mind, I will now turn to the grounds of appeal of the 1^st defendant.

Ground 1

14.  Under this ground, it is argued that this Court should have dismissed the plaintiff’s Non-Party Discovery Summons and/or to set aside or rescind the Non-Party Discovery Order, since it has been found in the Decision that the documents produced by the DOJ were not employment agreement or employment record as such, and therefore were not documents requested for under the Non-Party Discovery Summons.

15.  In the 1^st defendant’s written submissions, it was stated that:

“The intended appeal to the Court of Appeal focuses upon whether the [Non-Party] Discovery Summons ought to have been dismissed (or no order ought to have been made in respect of paragraph 1 of the Discovery Summons) and consequently, what costs order ought to have been made in the circumstances.”[4]

16.  In paragraph 96 of the Decision, this Court observed that:

“In my view, the appeal against the non-party discovery order should not have been made. Apart from the fact that the arguments made by the 1^st defendant are unmeritorious, the appeal actually cannot serve any meaningful purpose. As emphasized time and again in this Decision, CCB had already provided the plaintiff with the document which they described as “employment agreement” before the hearing on 25 August 2020. Even though the document apparently was not an employment agreement as such but an agency agreement, the plaintiff was content with what he had been given, and no further action against the Commissioner of Police was taken. Hence, even if this court were to set aside the substantive discovery order against the Commissioner of Police herein, it cannot change the fact that the agency agreement had been provided nor would it have any effect on the subsequent procedure of this case.”

17.  The 1^st defendant’s solicitor did not argue in its skeleton argument as to how it could be said that the above view was wrong.

18.  This is understandable, because one of the issues in the present case is whether the 2^nd defendant was an agent of the 1^st defendant: see paragraph 4(2) of the Decision. Hence, the documents disclosed by the DOJ would still be relevant in this action. Indeed, they have been included in the plaintiff’s Further and Better List of Documents filed on 22 March 2021. In other words, no matter whether the Non-Party Discovery Order is set aside or not, it would make no real difference.

19.  The only difference which the 1^st defendant may argue that a success on Ground 1 would bring would be on costs. However, as I will explain further below, even if the Non-Party Discovery Order is set aside, I do not agree that it is reasonably arguable that the 1^st defendant should be awarded costs for the Non-Party Discovery Summons.

20.  Hence, even if it is reasonably arguable that this court should have set aside the Non-Party Discovery Order, I would not exercise my discretion in granting leave to appeal in the interests of procedural economy and proportionality, because it does not worth the legal costs and time, not to mention judicial resources, for the 1^st defendant to argue on a point which would not serve any meaningful purpose even if it succeeds on appeal.

Ground 2

21.  Paragraph 33 of the 1^st defendant’s skeleton argument reads:

“It follows that the learned Judge should have also allowed the appeal of the 1^st defendant by setting aside or rescinding paragraph 1 of the said Order of the learned Master [i.e. the Non-Party Discovery Order]. In such event, the learned Judge should also have awarded the 1^st Defendant the cost of the appeal, if not the costs of the Discovery Summons […]”

22.  Since I do not accept the argument under Ground 1, the 1^st defendant’s Ground 2, pursuant to which it was said that this Court should have ordered the plaintiff to pay the 1^st defendant’s costs of the Non-Party Discovery Summons, should also fall away.

23.  Furthermore, it cannot be emphasised enough that the plaintiff initially took out the Non-Party Discovery Summons because the Commercial Crime Bureau of the Police Force (“CCB”) informed his solicitors that they had seized an employment agreement between the 1^st and 2^nd defendants: See paragraph 10 of the Decision. Documents were subsequently provided by CCB to the plaintiff after the Non-Party Discovery Summons was filed. Even though it turned out that the documents provided were not employment agreement as such, but as aforesaid, the documents provided were still relevant to the action herein. In these circumstances, it is not reasonably arguable that this Court was wrong in principle or plainly wrong to make an order that the costs of the Non-Party Discovery Summons be in the cause of the action.

Ground 3

24.  Under Ground 3, the 1^st defendant complained that this Court should not have made no order as to the costs of the appeal, but should have ordered the plaintiff to pay such costs of the 1^st defendant.

25.  I refer to paragraph 33 of the 1^st defendant’s skeleton argument quoted above. Again, since the 1^st defendant fails in Ground 1, this ground should also fail.

26.  The reason why this Court considered that there should be no order as to the costs of the appeal has been explained in paragraphs 95 and 96 of the Decision. The 1^st defendant has failed to put forward any argument in support of its stance that this Court was wrong in principle or plainly wrong.

Ground 4

27.  This ground concerns the Rehearing Cost Order. It was said that the 1^st defendant’s cost of the Rehearing Summons should be paid by the plaintiff. The 1^st defendant’s argument in support may be found at paragraph 35 of the 1^st defendant’s skeleton argument as follows:

“If the appeal was allowed as respectfully submitted in the above, then it would have casted a different light on the 1^st Defendant’s application by the Rehearing Summons. Firstly, it would have been very reasonable for the 1^st Defendant to firstly take out the application so as to give the court (the learned Master) a second chance to rectify the order made. The appeal would not have been necessary thereby saving time and costs. Secondly, it would have been very unreasonable for the Plaintiff to have perfected the order made by the learned Master after the 1^st Defendant having taken out the Rehearing Summons which took away the jurisdiction of the court to rectify the order made by the learned Master. After CJR, costs of the interlocutory applications may not just follow the event, but conducts of the parties are most relevant consideration when exercising discretion of the court in deciding question of costs. In the circumstances, the learned Judge should also have set aside the costs order in respect of the Rehearing Summons and awarded the 1^st Defendant the costs of the same.”

28.  Again, this ground is premised upon the success of Ground 1 of the 1^st defendant’s grounds of appeal. Therefore, like Grounds 2 and 3, this ground should also fail in the light of my decision on Ground 1.

29.  Furthermore, as I explained in paragraphs 83 to 90 of the Decision, not only did the plaintiff not have any duty to withhold the perfection of the August 2020 Orders, to the contrary, he had the obligation to do it on a timely basis pursuant to Order 42 rule 5(5) of the RDC and Practice Direction 16.1. Apart from submitting once again that it was unreasonable for the plaintiff to perfect the August 2020 Orders, the 1^st defendant could not put forward any argument in support to say that this Court’s reasoning was wrong in law.

30.  Moreover, as pointed out by the 1^st defendant’s solicitor, in the CJR era, costs of the interlocutory applications may not necessarily follow the event, and the Court may take into account the conduct of the parties when exercising its discretion on costs. It was exactly because of this that it was explained in paragraph 91 of the Decision that:

“Moreover, it should also be borne in mind that the Rehearing Summons was necessitated because of the failure on the part of the 1^st defendant’s solicitor to mark his diary properly which led to his absence from the hearing on 25 August 2020. Even if the learned Master agreed on 14 October 2020 to set aside his own order made on 25 August 2020, it would not be unreasonable for him to order the 1^st defendant to pay for the costs of the Rehearing Summons, nor do I think he had erred in law in making such an order.”

31.  The 1^st defendant did not explain why it could be said that this Court was wrong in law or was plainly wrong in coming to the above conclusion.

32.  I therefore hold the view that Ground 4 has no reasonable prospect of success.

CONCLUSION

33.  By reasons of the aforesaid, the 1^st defendant’s application for leave to appeal is hereby dismissed.

COSTS

34.  I make a costs order nisi that the 1^st defendant shall pay the plaintiff’s costs of the Leave Summons.

35.  The above order nisi shall become absolute in the absence of application to vary (which, if any, shall be made by letter, and will be disposed of on paper) within 14 days hereof.

36.  The plaintiff’s costs shall be summarily assessed in lieu of taxation. Unless any application for variation of the aforesaid costs order nisi is made within time:

(1)  The plaintiff shall lodge and serve his statement of costs within 7 days after the expiry of the said 14-day period;

(2)  The 1^st defendant shall lodge and serve its statement of objection within 7 days thereafter;

(3)  Summary assessment of the plaintiff’s costs will be conducted on paper (no matter whether any statement of objection is lodged by the 1^st defendant within time) thereafter. The costs assessed shall be payable by the 1^st defendant within 14 days after assessment.