秦錦釗 v. 香港海關關長 AND ANOTHER

HCA 1284/2019

[2020] HKCFI 849

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1284 OF 2019

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DECISION

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1.  By a summons taken out on 29 April 2020 (“the summons”), P applies for leave to appeal from my decision dated 17 April 2020 (“the April Decision”), in which I have dismissed P’s appeal against Master SP Yip’s decision made on 23 October 2019 and refused to give leave under Order 77 rule 9 to P to enter judgment against Ds in default of a defence to his claim. This decision should be read together with the April Decision. For ease of reference, the abbreviations used in the April Decision are adopted herein.

2.  I have directed that the summons be determined on paper without an oral hearing[1].  The parties have provided me written submissions, and I have considered the same.

3.  The principles concerning leave to appeal are trite. Leave can 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[2].  In respect of an appeal from an exercise of a discretion by the court below, the appeal would not be entertained unless it can be shown that the discretion was exercised under an error of law, in disregard of a principle, under a misapprehension of facts or the conclusion reached is outside the generous ambit within which a reasonable disagreement is possible[3].

4.  Mr Ambrose Ho SC (leading Ms Winnie Li) for P proposes the following grounds of appeal:

Ground 1

(1)  The April Decision is plainly wrong.  Even if I am right to have regard to the pending hearing of the Ds’ summons for a striking out order into account, my dismissal of P’s appeal (rather than adjourning the same until after the court’s ruling on the strike-out application) has the effect of barring P’s default-judgment application from ever being determined on its merits.  As a result of the erroneous dismissal of the appeal, it will not be possible for P’s application for leave to enter a default judgment against Ds to be revived even if P succeeds in resisting the striking out application.

Ground 2

(2)  Further or alternatively, I have erred in having taken irrelevant matters into account, namely, Ds’ striking out application which is pending.

(a)  At all times, Ds were aware of P’s application to enter default judgment.  At no time had Ds ever applied to have P’s appeal adjourned to be heard subsequent to or at the same time as their striking out application.

(b)  I ought to have to determine whether P’s statement of claim would support a judgment to be entered.  Instead, contrary to the principle set out in [19(1)] of the April Decision, I have adopted an inconsistent approach at [19(2)] and [19(3)] by having regard to the pending striking out application, when:

(i)  the matter raised at [19(2)] could, and indeed should have been considered at the appeal in P’s favour when Ds have not advanced any contrary argument to P’s analysis of the causes of action pleaded in the statement of claim;

(ii)  the matters raised at [19(3)] would inevitably require a consideration of the evidence, which according to the principle set out in [19(1)] of the April Decision is precisely not relevant for the purpose of determining P’s application to enter default judgment; and

(iii)  the matter raised at [19(4)] of the April Decision is simply not relevant, and has been wrongly taken into account. 

(3)  Further or in the alternative, I have erred at [19(5)] in considering Ds’ failure to seek direction (for the striking out application to be heard at the same time as the appeal) as a relevant matter to be taken against P, when chronologically, Ds had only taken out the summons for striking out after the P’s notice of appeal was already issued and served.  In the circumstances, any failure to seek direction (if relevant) should be held against Ds, not P.

Ground 3

(4)  I have wrongly exercised the discretion to grant Ds extension of time to file and serve a defence at the appeal for the reasons set out in Ground 2 above.

(5)  I also erred in upholding the Master’s decision to extend time to Ds to file and serve a defence.  I ought to have held that Ds’ oral application at the hearing on 23 October 2019 for time extension should be dismissed:

(a)  I have failed to take into account that, regardless of P’s intention to amend the statement of claim, Ds remained under an obligation to file and serve a defence, and that the failure of Ds to seek an extension of time until the hearing on 23 October 2019 was a deliberate flouting of the rules prescribing the time to do so.  It was also a conscious non-compliance of the requirement for any such application (for time) to be made by summons, and be supported by a valid explanation (of which there was neither at the hearing before the Master).

(b)  I also erred in holding at [21(4)] of the April Decision that Ds’ oral application for extension of time to file and serve a defence was triggered by P’s sudden change of stance, when an extension of time was necessary regardless of P’s stance.

(c)  I have failed to take into account that an amended defence would not be necessary given the indicated amendment to the statement of claim was a mere numerical correction of the damages sought.

(d)  I erred at [21(1)] of the April Decision in taking into account that Ds were justified in considering there might have been other amendments than that mentioned in the July Letter when there was no or no sufficient factual basis for such finding, especially when the July Letter had specifically identified the intended amendment and that there was no concern or speculation on other amendments raised in the August Reply.

Ground 4

(6)  In any event, having regard to all the circumstances, the Decision was plainly wrong and should be set aside by Court of Appeal.     

5.  Having considered these proposed grounds in detail, with respect, I am unable to agree that there is any reasonable prospect of success in any of these grounds.

6.  As to Ground 1, knowing that the striking out application will be heard by the court on 2 July 2020, neither P nor Ds have sought a direction that the striking out application and this appeal be heard and determined at the same time, or that the appeal be determined after the outcome of the striking out application is known.  On the contrary, P has been pressing for a determination of the appeal before the hearing of the striking out application.  In adopting such a course, P would have pre-empted the striking-out application if he succeeds in the appeal.  At the same time, P would not be able to pursue his application for leave to enter default judgment if he fails in the appeal.  From P’s perspective, there are pros and cons in this approach.  Having adopted this approach, P cannot complain while the outcome of the appeal is unfavourable to him.

7.  As to Ground 2, I am of the view that there is no reasonable prospect of success in arguing that I have erred in taking the striking out application into account in the exercise of my discretion.

(1)  Although the striking out application was taken out after P had lodged the appeal[4], as a matter of fact, both the striking out application and the appeal have been on foot after 20 November 2019.  It is an undeniable fact that neither P nor Ds have sought a direction that the appeal and the striking out application be heard and determined in the same hearing at any time after 20 November 2019.

(2)  I do not agree that P must be considered as having put forward a meritorious claim in the statement of claim while Ds have not advanced any contrary argument.  The court has to examine the statement of claim and to see whether a reasonable cause of action has been pleaded therein. I have stated in the April Decision that given the matters before me, I am of the view that this exercise (ie examining the statement of claim to see whether a reasonable cause of action has been pleaded therein) should be done in the determination of Ds’ summons[5].

(3)  The principle stated in [19(1)] of the April Decision is the principle concerning an application for a default judgment. However, the application made by P is not an application for a default judgment, but is an application for leave under Order 77 rule 9 to enter a default judgment against Ds.  In considering in what way the court’s discretion under Order 77 rule 9 should be exercised, the matters set out in [19(3)] of the April Decision are relevant.

(4)  I am also of the view that the matter set out in [19(4)] of the April Decision is relevant for the purpose of considering how the discretion under Order 77 rule 9 should be exercised.  P’s failure in obtaining an order to dismiss Ds’ summons summarily means that the striking out application therein is arguable and Ds may succeed in that application.

8.  As to Ground 3, I do not think that the reasoning given in [21] of the April Decision can be said as being plainly wrong.  The only way to make sure that the amendment mentioned in the July Letter is the only amendment is to file and serve an amended statement of claim containing the said amendment only[6].  This has not been done by P.  Had this been done, Ds would have been automatically entitled to have time to file and serve a defence in response to the amended statement of claim without the necessity of making an application for time extension[7].  Thus, it is correct to say that Ds’ oral application for an extension of time in the hearing on 23 October 2019 was triggered by P’s sudden change of stance, ie suddenly abandoning the attempt to amend the statement of claim in that hearing[8]. With respect, I am of the view that there is no legitimate complaint in this ground.

9.  Ground 4 is a mere repetition of the previous grounds.  For the reasons set out in the above, there is also no merit in this ground.

10.  I am of the view that there is no reasonable prospect of success in the proposed grounds of appeal.  I also do not see any reason why in the interests of justice the appeal should be heard.  In the circumstances, P’s application for leave to appeal must be refused.

11.  I dismiss the summons with costs to Ds forthwith.  Those costs be summarily assessed.  There be leave to Ds to provide a bill of costs for summary assessment within 7 days, and leave to P to provide a written reply to the said bill within 7 days thereafter.

12.  I thank counsel for the assistance provided to the court.