LO KING YEUNG v. EDDIE CHU HOI DICK

HCMP 482/2017

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 482 OF 2017

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AND

HCMP 483/2017

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 483 OF 2017

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(Heard Together)

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D E C I S I O N

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A.  INTRODUCTION

1.  By a judgment (“the Judgment”) dated 31 July 2017, this court made an order (“the Order”) dismissing the plaintiff’s respective applications for directions to make security for costs under sections 73(5) and (6) of the Legislative Council Ordinance (Cap 542) (“the LCO”).  As indicated at paragraph 28 of the Judgment, given that the plaintiff would not be able to give security for costs, his actions against the respect defendants herein seeking a declaration that each of them has been disqualified to act as a Legislative Council member would continue to be stayed under section 73(5) of the LCO.

2.  Before the court now are the plaintiff’s respective summonses taken out on 9 August 2017 asking for leave to appeal the Order to the Court of Appeal.  This is my decision on these summonses.  It should be read together with the Judgment, and I would also adopt herein the abbreviations used in the Judgment.

B.  THE LEAVE APPLICATIONS

B1.  Primary question, is leave required to appeal against the Order

3.  Under section 14AA(1) of the High Court Ordinance (Cap 4) (“the HCO”), except as provided by rules of court, no appeal lies to the Court of Appeal from an interlocutory judgment or order of this court unless leave to appeal has been granted by this court or the Court of Appeal.

4.  In this respect, Order 59, rule 21(1)(a) of the Rules of the High Court provides that section 14AA(1) of the HCO does not apply to, and thus appeal lies as of right from, “a judgment or order determining in a summary way the substantive rights of a party to an action”.

5.  Hence, if a judgment or order falls within Order 59, rule 21(1)(a), section 14AA does not apply, and no leave to appeal from it to the Court of Appeal is required.

6.  Further, for the purpose of section 14AA(1) of the HCO, the court applies the oft called “application test” to determine whether the judgment or order intended to be appeal against is an interlocutory or final judgment.  Under the application test, the judgment would be treated as a final judgment (and thus no leave to appeal is required) if, whatever the outcome of the application on which it is made, it finally determines the entire cause or matter, or a crucial or substantive issue in the cause or matter.  In that examination, the court should apply a “broad common sense” approach to consider the purpose and substance of the application, the issue dealt with and determined by the court and the effect of a determination of this issue on the rights of the parties, the further conduct of the proceeding and the final disposal of the whole action.[1]

7.  By a letter dated 16 August 2017, the court has asked the parties to address the court the primary question as to whether the Order falls within Order 59, rule 21(1)(a).

8.  Mr Ma for the plaintiff now submits that it does. In this respect, Mr Ma says the Order, in refusing the plaintiff’s respective applications to make security for costs, in effect results in the present actions being stayed permanently.  It is therefore in nature similar to an order striking out an action for want of prosecution, which is listed under Order 59, rule 21(2) as an example of a paragraph 1(a) judgment or order.

9.  Mr Tam for the defendants however submits that the Order does not so fall within Order 59, rule 21(1)(a) and hence leave is required to appeal from it.  This is so as, counsel says, the Order only determines the “procedural” as opposed to “substantive” rights to the plaintiff to apply for directions, and hence it is not an order which determine “in a summary way the substantive rights of the parties” even though it has a collateral effect that the substantive issues can no longer be pursued.

10.  In support of his submissions, Mr Tam cites Chow J’s respective judgments in Astro Nusantara v PT Anyunda Prima Mitra (No 2) [2016] 1 HKLRD 591 at paragraph 9 and China Metal Recycling (Holdings) Ltd v Chun Chi Wai (unreported, HCA 1412/2013, 6 May 2016) at paragraph 8.

11.  In Astro Nusrantara, the subject order concerned Chow J’s refusal to grant an extension of time to the defendant to apply to set aside an arbitral award and the judgment made in Hong Kong enforcing that award, as a result of which the defendant would not be able to pursue any application to set aside the arbitral award and that judgment.  In an application seeking to appeal against that order, Chow J accepted the plaintiff’s submission that that order only determined the “procedural right” as opposed to “substantive right” of the defendant and thus did not fall within Order 59, rule 21(1)(a).  In China Metal, Chow J for the same reason concluded that leave was required to appeal from his order, which refused the defendants’ application for extension of time to apply for relief from sanction imposed under an unless order.  The learned judge concluded that the order refusing an extension time again only determined the procedural rights but not the substantive rights of the defendants and thus did fall within Order 59, rule 21(1)(a), even though as a result of that order, the defendants would not be able to seek relief from the sanction (which was to have the defendants’ defence struck out automatically after they had failed to comply with the original unless order).

12.  I agree that the Order does not fall within Order 59, rule 21(1)(a).

13.  In my view, on a proper construction, the judgment or order envisaged under Order 59, rule 21(1)(a) is one which by itself deals with substantive rights of a party.  This is firstly plain from the meaning of the words used in this provision.  Secondly, this meaning is also clear when properly understood in the context of section 14AA of the HCO and the examples listed under Order 59, rule 21(2):

(1)  As said above, to determine whether a judgment or order is final or interlocutory under section 14AA of the HCO, the court applies the application test to see whether, whichever the outcome, the application has an effect in determining the action or the substantive issues in the action.  If the judgment or order envisaged under Order 59, rule 21(1)(a) (a subsidiary legislation) included one which, by reason of its actual outcome in a particular case, has a collateral effect of summarily determining the substantive rights of a party (instead of by the judgment or order itself and instead of whichever the outcome is), this would render the application test for interpreting section 14AA of the HCO (a primary legislation) superfluous.  This cannot be the objective intention of the draftsman.

(2)  All the examples set out in Order 59, rule 21(2) are judgments or orders which by themselves (but not through a collateral effect) determine the substantive rights of the party.  Although rule 21(2) does not seek to exhaustively provide for all those judgments or orders that would fall within the meaning of paragraph 1(a),[2] it certainly informs the construction of the meaning of paragraph 1(a).

14.  In the premises, the Order, which deals with only the refusal of the plaintiff’s applications for directions to make security for costs under section 73(6) of the LCO, is not one which by itself determines the substantive rights of the plaintiff.  The fact that the refusal has a collateral effect that, by reason of section 73(5) of the LCO, the plaintiff’s actions are effectively stayed permanently does not render the Order by itself determining in a summary way the substantive right of the plaintiff.

15.  The Order therefore does not fall within Order 59, rule 21(1)(a) and thus section 14AA of HCO applies as to whether leave is required to appeal from it.

16.  In this respect, the Order is clearly not final for the purpose of section 14AA by applying the application test.  The underlying applications for directions to make security for costs would not determine the actions or the substantive issues of the actions whatever the outcome of the application.  If the court allows the applications, the plaintiff would make the security for costs and the actions would proceed as usual.  In the premises, leave is required for the plaintiff to appeal to the Court of Appeal from the Order.

B2.  Should leave be granted

17.  It is trite that leave to appeal shall not be granted unless (a) the appeal has a reasonable (as opposed to fanciful) prospect of success; or (b) that there is some other reason in the interests of justice why the appeal should be heard.  See section 14AA(4) of the HCO and Hong Kong White Book 2017, paragraph 59/2A/4.

18.  Further, it is also well established that the Court of Appeal would not interfere with the judge’s exercise of discretion unless it is shown on appeal that the judge has misunderstood the law or the evidence or failed to take relevant matters into account or has been “plainly wrong”: Pioneer Iron and Steel Group Co Ltd v Pioneer Metals Co Ltd (HCMP 2643/2013, 9 January 2014, Kwan and Macrae JJA) at paragraph 6, per Kwan JA.

19.  The Order involves an exercise of discretion of the court.  Hence, for leave to be granted, the plaintiff has to show that his proposed grounds of appeal (a) bear a reasonable prospect of success to demonstrate that this court had erred in law in that exercise of discretion or was plainly wrong in refusing to give the directions as sought; or (b) involve issues that in the interests of justice should be heard by the Court of Appeal.

20.  The proposed grounds of appeal (as set out in the draft Notice of Appeal) are in summary that the court wrongly exercised the discretion in principle or the Order was plainly wrong because:

(1)  The court in the exercise of its discretion based solely on question of delay but failed to take into account the important fact that these actions involve matters of “constitutional importance” in light of the recent “oath taking cases”.

(2)  The court’s exercise of discretion based on plaintiff’s unreasonable delay also failed to take into account the fact that Mr Cheng applied for legal aid on 17 May 2017 and thus the action against him (ie, HCMP 483/2017) had to be automatically stayed in any event for 42 days since then. Further, as the issues in HCMP 482/2017 (against Mr Chu) are closely similar to that of HCMP 483/2017, HCMP 482/2017 would also in all likelihood be stayed together with HCMP 483/2017.

(3)  The court also failed to take into account the factor that these actions raise an important new question of constitutional law as to “whether extraneous statements made by Member-elect… prior to… signing of his name on the form of oath at the end of his oath-taking ceremony constitute part of the oath”.

21.  With respect, I am not satisfied that leave should be granted on either limb for these proposed grounds of appeal.

22.  First, in my view, the proposed grounds of appeal do not bear a reasonable prospect of success:

(1)  In the Judgment, the court considered the plaintiff’s unreasonable delay in the context that the actions must proceed expeditiously as they seek to challenge the qualification of the defendants to act and continue to act as members of the LegCo.  In this consideration, the court clearly already had in mind the fact that the actions involve a challenge based on the defendants’ alleged non-compliance with the constitutional requirements of oath taking (these are the principal basis set out in the respective Originating Summonses).  There is therefore no question that the court failed to take this matter into account.

(2)  Further, it is also clear that the actions do not involve any “new” constitutional legal question as now contended and framed by the plaintiff.  This court has set out the principles regarding whether and when extraneous statements should be regarded as part of the oath taken in its judgment in CE & SJ v The President of the LegCo (HCAL 223 - 226/2016, HCMP 3378 - 3379 & 3381 - 3382/2016, 14 July 2017) at paragraphs 29 - 30 and 88 - 92.  The so-called “signature” argument now advanced by the plaintiff in this leave application is nothing but an application of the factual circumstances of the present case to those legal principles.  Further, Mr Ma has rightly and fairly accepted that this “new” constitutional point was not raised at the hearing before this court on 26 July 2017.  There is thus no question that the court failed to take this into account.

(3)  Finally, the failure to take into account the legal aid application ground is in my view also without any merits.  Leave aside the fact that this was not relied on by the plaintiff at the hearing before me on 26 July 2017, as I stated in the Judgment at paragraphs 25(2) and (3), the plaintiff was guilty of unreasonable delay in failing to prosecute the proceedings expeditiously at the latest by late March or early April 2017.  Mr Cheng’s legal aid application was only made sometime in May 2017.  This argument is clearly without merit and is irrelevant to the court’s exercise of discretion based on the prior period of unreasonable delay.  Moreover, and in any event, it is far from clear that HCMP 482/2017 (the action against Mr Chu) should allegedly unavoidably be stayed because of the automatic stay in HCMP 483/2017 given Mr Cheng’s legal application.  These are two separate proceedings involving different factual allegations, and the plaintiff has never taken out any applications to have the two matters consolidated.  It lies ill in the mouth of the plaintiff to now say that the court had failed to take into account the alleged unavoidable stay of both proceedings in these actions.

23.  Second, for the same reason I have given at paragraph 22(2) above, the proposed appeals do not involve any important new question of constitutional law.  I am therefore not satisfied that it is in the interests of justice to have it heard by the Court of Appeal.

24.  In the premises, I would refuse to grant leave to the plaintiff to appeal the Order to the Court of Appeal.

C.  CONCLUSION

25.  For these reasons, I would dismiss the plaintiff’s respective summonses seeking leave to appeal.

26.  I further order that costs of these summonses be to the defendants to be taxed of not agreed.