WONG HUNG YU RICHARD v. WU MING FAT SIMON

HCA1666/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.1666 OF 2001

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REASONS FOR DECISION

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1. I have before me an appeal by the plaintiff against the order of Master C.B. Chan dated 23 November 2001 in which she ordered the defendant to pay into court the sum of $100,000 being the condition imposed in granting leave to defend the action under RHC Order 14, rule 4(3).

2. Although in the Notice of Appeal, the plaintiff seeks an order that final judgment be entered against the defendant in the sum of $1,117,800 with interest and costs, it is clear from the written submissions submitted by the plaintiff that all he seeks in the present appeal is an order that the defendant be required to pay into court the said sum of $1,117,800 as the condition for obtaining leave to defend.

3. For the purposes of the appeal, the plaintiff seeks to use the second affirmation of Wong Hung Yu, Richard dated 27 September 2001 ("Mr Wong's affirmation").

4. Mr Kwok for the defendant takes three preliminary points : -

(1) The court has no jurisdiction to hear an appeal from a master's decision as to the actual terms imposed upon the granting of conditional leave to defend.

(2) If this point fails, the court should not in its discretion permit the plaintiff to rely on Mr Wong's affirmation in this appeal. The basis was that the plaintiff had taken a stand on his evidence at the hearing before the Master and did not at that stage seek to adduce the evidence it now seeks to introduce.

(3) If this point also fails and the plaintiff is to be granted leave to use Mr Wong's affirmation in the present appeal, the defendant would then seek an adjournment in order to reply to this affirmation.

5. At the hearing on 4 January 2002, I decided that : -

(1) The court did have jurisdiction to hear the present appeal.

(2) The plaintiff should be given leave to rely on Mr Wong's affirmation in this appeal.

(3) The defendant should as a result of (2) be given leave to file and serve affidavit evidence in reply to Mr Wong's affirmation within 21 days from 4 January 2002 and the plaintiff should have leave to file and serve any affidavit evidence in reply within 21 days of being served with the defendant's evidence but that no further evidence was to be filed without leave.

(4) Costs to be in the cause.

6. I now set out the reasons for these decisions.

Jurisdiction

7. Mr Kwok relied on a passage at paragraph 58/1/2 of Hong Kong Civil Procedure 2001 in which is stated :

"Where leave to defend is given under O.14 upon the terms of the defendant giving security to the satisfaction of the master no appeal lies from the master's decision as to the sufficiency of the security (Hoare v. Morshead [1903] 2 KB 359, CA)."

8. From this passage and the case of Hoare v. Morshead, Mr Kwok advanced the argument that the court therefore had no jurisdiction under RHC Order 58 to entertain an appeal from a master's decision as to the amount of security to be paid into court as the condition to be fulfilled by a defendant in obtaining leave to defend. In other words, while the court had jurisdiction to hear an appeal as to whether leave to defend should be given in an application for summary judgment, there was no jurisdiction to hear an appeal from any decision as to the amount of money to be paid into court when conditional leave was granted.

9. In my view, Hoare v. Morshead is not authority for this proposition at all. That case only decided that where a master makes a decision as to the sufficiency of the security to be provided by a defendant where conditional leave to defend is ordered, as opposed to the amount of such security, no appeal lies from such a decision to a judge in chambers. What is meant in this context by the sufficiency of the security is the form or nature of the security to be provided, not the amount. I doubt whether this rule (if it still represents good law) has much application nowadays when orders giving conditional leave to defend under RHC Order 14, rule 4(3) almost invariably involve a payment of money into court rather than the provision of some other form of security.

10. Accordingly, this preliminary point fails.

The discretion to admit further evidence on an appeal from a master's decision

11. Here, Mr Kwok again refers to a passage from paragraph 58/1/2 of Hong Kong Civil Procedure 2001, which states :

"It is common practice for the judge in chambers, subject of course to the question of costs, to admit further or additional evidence by affidavit to that which was before the master or district judge; but if a party has taken his stand on the evidence as it stood before the master or district judge, the judge in chambers may in his discretion, by analogy with the practice in the Court of Appeal, refuse to allow him to adduce further evidence (see Krakauer v. Katz [1954] 1 W.L.R. 278;

[1954] 1 All ER 244, CA; Core Resources (Far East) Ltd v. Sky Finders Ltd, above; Wai Cheong Co. Ltd v. Kiu May Construction Co. Ltd, above; Chan Wah (t/a Ka Wah Silk Flower Factory) v. Ng Man Ming (t/a Sim Fu Trading Company), above."

12. The reception of further evidence on appeal from a master's decision is not automatic, albeit common. The court has a discretion.

13. In my view, the point made by the passage relied on by Mr Kwok is that where a party in the court below, despite being given the opportunity to serve further affidavit evidence, nevertheless refuses to do so, it is within the court's discretion on appeal not to allow him to adduce further evidence : see Krakauer v. Katz. The court may, for example, also refuse to admit further evidence where this entails a radical change of case by the party seeking to adduce that evidence : see Core Resources Far East Ltd v. The Sky Finders Ltd. It is, as I have said, a matter of discretion and, as with all exercises of discretion by the court, it depends on the circumstances of the case.

14. It is however to be remembered that an appeal from a master's decision to a judge in chambers is by way of rehearing as though the matter was before the judge for the first time : see the speech of Lord Atkin in Evans v. Bartlam [1937] AC 473, at 478. In these circumstances, the court is much more ready to admit further evidence on an appeal from a master's decision than on appeal to the Court of Appeal. Nevertheless the discretion still has to be exercised. I would therefore remind practitioners that although it is common for further evidence to be adduced on appeal from a master's decision, leave to serve such evidence is required and an application must be made for this purpose. Often such evidence is simply served and then responded to by the other party just to facilitate the hearing but strictly speaking an application to adduce further evidence is required. The other party is entitled to object to the admission of such further evidence, as Mr Kwok has done.

15. In the present case there is nothing before me to suggest that the discretion should not be exercised in the plaintiff's favour by allowing him leave to rely on Mr Wong's affirmation and I therefore give leave to the defendant to use on Mr Wong's affirmation for the purposes of the present appeal.

Adjournment

16. In view of my ruling giving leave to the plaintiff to rely on Mr Wong's affirmation, Mr Kwok sought an adjournment to enable his client to serve affidavit evidence in reply.

17. I was inclined to do so for the following reasons : -

(1) Leave to the plaintiff to rely on Mr Wong's affirmation was only recently given.

(2) There were numerous matters in Mr Wong's affirmation that required a detailed response so as to enable a complete picture to be provided to the court in this appeal.

(3) Mr Wong's affirmation was in any event only served on 27 December 2001 and with the intervening holiday, this would have meant a rather tight schedule for the defendant to work under if any affidavit in reply was to be made and served on time. It will be noted that despite the Notice of Appeal having been filed on 30 November 2001, Mr Wong's affirmation was only provided nearly a month later.

18. I therefore gave leave to the defendant to file and serve affidavit evidence in reply and as a result, the present hearing was adjourned.

My order

19. For the above reasons I therefore ordered that : -

(1) Leave be given to the plaintiff to rely on Mr Wong's affirmation for the purposes of the present appeal.

(2) Leave be given to the defendant to file and serve affidavit evidence in reply within 21 days of 4 January 2002.

(3) Leave be given to the plaintiff to file and serve affidavit evidence in reply to the defendant's affidavit evidence within 21 days of being served with such affidavit evidence.

(4) The hearing be adjourned to a date to be fixed in consultation with counsel's diaries.

(5) Costs be in the cause.