LIAO CHEN TOH v. LOYAL INTERNATIONAL ENTERPRISES CO. LTD AND OTHERS

HCA 2302/2014 & HCMP 1532/2019

[2020] HKCFI 2661

HCA 2302/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2302 OF 2014

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HCMP 1532/2019

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1532 OF 2019

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(Dealt with together)

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DECISION

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1.  On 4 September 2020, I handed down a decision (“the Main Decision”), in which I dismissed the LCT’s Summonses. On 18 September 2020, LCT filed 2 summonses in HCA 2302/2014 and HCMP 1532/2019, seeking leave to appeal against the Main Decision, and a stay of the Contempt Proceedings pending the final determination of LCT’s intended appeal. This decision should be read together with the Main Decision. For ease of reference, the abbreviations used in the Main Decision are adopted herein.

2.  I have directed that the leave application and the stay application made by LCT be determined on paper without an oral hearing.  Both sides have provided me detailed written submissions, and I have considered the same.

The Leave Application

3.  Leave to appeal would only be granted if the appeal has a reasonable prospect of success (which means that the prospect of success is reasonable and more than fanciful, without having to be probable), or there is some other reason in the interests of justice why the appeal should be heard^[1].

4.  LCT submits that there are reasonable prospects of success in his intended appeals against the Main Decision by relying upon the following grounds:

(1)  This court has no jurisdiction over LCT, a resident out of jurisdiction, in relation to the Contempt Proceedings.  In particular, Ps failed to obtain leave to serve the Originating Summons in the Contempt Proceedings out of jurisdiction in accordance with Order 11 rule 1, which sets out the entire and mandatory code for the service of an originating summons out of jurisdiction.

(2)  Without prejudice to LCT’s jurisdictional challenge, LCT also argues that Ps’ Contempt Statement is incurably defective, by reason that the allegations set out therein were not sufficiently particularised so as to enable LCT to defend himself.

(3)  LCT also submits that the Contempt Proceedings should be struck out and dismissed as an abuse of process, given that it is (at most) a pointless satellite litigation which were not pursued by Ps for any legitimate ends.

5.  LCT is also relying upon the “some other reason in the interests of justice” limb to seek leave to appeal.  In LCT’s submissions, the points of law involved in the issue of jurisdiction and service for contempt proceedings are plainly of general and public importance, in respect of which guidance from the Court of Appeal would be to the public advantage. 

6.  Having read the draft notices of appeal prepared by LCT and the written submissions of Senior Counsel and Counsel for LCT, with respect, I am of the view that LCT is repeating the arguments put before this court on the previous occasion.  I have explained why I could not accept these arguments in the Main Decision, and I am not going to repeat the same here.  I am not satisfied that LCT has demonstrated a reasonable prospect of success in his intended appeal.  I refuse to give leave to appeal to LCT under the “reasonable prospect of success” limb.

7.  Notwithstanding the above, and although I am of the view there is no merit in the Jurisdiction Argument put forward by LCT, I reach the conclusion that I should allow LCT to seek a determination on the Jurisdiction Argument from the Court of Appeal.

8.  Ps give me an update that the Saif Partners case went before Anthony Chan J again on an inter partes basis.  The learned judge handed down a decision on 17 September 2020[2], in which he maintained his view on the jurisdiction issue expressed in the first decision[3].  I am in complete agreement with Anthony Chan J on the jurisdiction issue.  However, I have to recognize the fact that there is not yet any Court of Appeal’s decision on the point.

9.  I should allow LCT to pursue the Jurisdiction Argument in the Court of Appeal, so that the Court of Appeal would have an opportunity to determine the jurisdiction issue.  This area of the law would very much benefit from appellate guidance.  I would give leave to appeal to LCT under the “some other reason in the interests of justice” limb, but such leave is confined to the jurisdiction issue only.  Under s.14AA(3)(a) of the High Court Ordinance, I may grant leave to appeal in respect of a particular issue only.

10.  Since I only grant leave to appeal to LCT in respect of the jurisdiction only, if LCT lodges an appeal pursuant to this leave, LCT may only raise the jurisdiction issue in the notice of appeal.

The Stay Application

11.  I have given LCT leave to appeal.  From the case management’s perspective, I would order stay of the Contempt Proceedings pending the outcome of the appeal.

12.  Ps oppose the stay application and refer me to Chu Kong v Sun Min[4], in which Marlene Ng J mentioned that breaches of orders should ordinarily be dealt with swiftly and effectively[5].  In my view, each case depends upon its own facts.  In these proceedings, the jurisdiction issue is a crucial issue.  If the Court of Appeal reverses my ruling on the jurisdiction issue, that would be the end of the Contempt Proceedings.  Obviously, there cannot be a final determination in the Contempt Proceedings before the outcome of the appeal is known.

13.  Before the Main Decision, Ps and LCT have agreed that there should be a stay of the Contempt Proceedings pending the determination of the LCT’s Summonses.  This agreement was given effect by a consent order made by me on 2 January 2020.  I have dismissed the LCT’s Summonses in the Main Decision, but I have also given leave to appeal to LCT.  In these circumstances, granting a temporary stay to LCT pending the outcome of the appeal would in effect be a mere extension of the previous stay granted by this court by consent. 

14.  Further, I agree with LCT that Ps have not demonstrated any pressing urgency for the Contempt Proceedings.  The Contempt Proceedings are not directed at obtaining compliance with the Subject Order. As to the return of the Documents, this is a matter among the final reliefs sought by Ps in HCA 2302/2014.

15.  Taking into account all the above, I am of the view that the stay sought by LCT should be granted.

Disposition

16.  I grant leave to appeal to LCT, but the leave granted is limited to the Jurisdiction Argument put forward by LCT only.  I also order that there be a stay of the Contempt Proceedings pending the outcome of the appeal.  LCT shall prepare the draft orders in accordance with this decision and, after seeking Ps’ comments thereon, submit the same to this court for approval.

17.  There be a costs order nisi that costs of the leave application and costs of the stay application be costs in the appeal, with a certificate for 2 counsel.

18.  I thank counsel for the helpful assistance provided to the court.