NG KONG YEAM BY HIS NEXT FRIEND, NG CHUNG SAN v. FARLIM GROUP (CHINA) LTD AND OTHERS

HCA 2176/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2176 of 2011

__________________

__________________

____________________

J U D G M E N T

____________________

Leave to Appeal

1.  I delivered a Judgment on 16 August 2016 concluding that I had grave doubts and reservations on the character and integrity of Madam Kay, the then next friend of the plaintiff Dato Ng.  I found that the Committee had discharged the burden of demonstrating that Madam Kay was not a suitable person on whom this court can repose trust and confident in the conduct of the action on behalf of the plaintiff.  I also concluded that Mr Ng, being the authorized representative of the Committee, is a fit and suitable person to assume the role of the next friend of the plaintiff in this action.  I therefore upheld the learned Master’s decision of removing Madam Kay as the next friend of the plaintiff.

2.  Madam Kay seeks to appeal against my decision and applies for leave to appeal to the Court of Appeal on two grounds:-

“1.  In §37 of the Judgment, the Judge erred in law in holding that he had not been presented with evidence or submission on whether “Maintenance and Champerty” remains an offence in Malaysia in rejecting the submission made by Counsel for KAY SWEE PIN that NG CHUNG SAN had offered to enter into a champertous arrangement with KAY SWEE PIN and that therefore there was a shadow cast on the integrity of NG CHUNG SAN”, and to thereby conclude at §38 of the Judgment that NG CHUNG SAN was a fit and suitable person to be the Plaintiff’s next friend, given the legal presumption, which is applicable in the present case, that in the absence of evidence of foreign law, the Hong Kong court is to presume that the foreign law is the same as the law in Hong Kong.

2.  In §24 of the Judgment, the Judge failed to pay sufficient regard to the proposition in re Chime Corporation Ltd HCMP 4146/2001 (unreported, 25 June 2003) that disputes of fact cannot clearly be resolved on affidavit evidence/without cross‑examination, in making findings on such disputes and concluding at §38 of the Judgment that KAY SWEE PIN was not bona fide and that the Committee had discharged its burden on demonstrating that KAY SWEE PIN was not a suitable person on whom the court can repose trust and confidence in the conduct of the present action on behalf of the Plaintiff.”

3.  The test for granting leave to appeal is not in dispute.  The applicant has to demonstrate a reasonable prospect of success.

4.  In relation to Ground 1, Solicitors for Madam Kay referred me to Igal Dafni v CMA CGM SA [2013] 2 HKLRD 73, at §§42 to 49.  The case involved a contract claim.  At the trial and after all factual witnesses had completed giving evidence, the defendant applied to amend his pleadings to introduce a new defence of illegality, namely that the object of the contract was to avoid paying Taiwan tax.  In support of the proposed amendment, no evidence of Taiwan tax law was adduced.  The defendant relied on a presumption that it would be same as Hong Kong law.  The learned Recorder discussed about the applicability of the presumption in the context of a proposed plea of illegality based on foreign law.

5.  Solicitors for Madam Kay did not however refer me to the recent decision of Deputy Judge Le Pichon in Caspian Resources Development Pte Ltd v Fortune Oil Plc & oths [2016] 3 HKC 13 in which her Ladyship said at §30:

“30.  It is an established principle that the default rule concerns proof of foreign law and only applies when foreign law has been pleaded but not proved. In cases where the default rule applies, foreign law is presumed to be the same as Hong Kong law.

31.  It is important to bear in mind that the rule has no application unless a party has specifically pleaded or relied on foreign law.  In the present case, neither party has pleaded or relied on Singaporean law.  In those circumstances it would be wrong for the court to do so of its own motion: see Johnston, The Conflict of Laws in Hong Kong (2^nd ed) at §§2.061 and 2.077.  Plainly there is no scope for the application of the default rule.”

6.  At the hearing, no party had pleaded or relied on Malaysian law to demonstrate that “Maintenance and Champerty” is illegal in Malaysia.  Applying the dicta of Deputy Judge Le Pichon, there is no scope for the application of the default rule.

7.  In any event, Solicitors for Madam Kay misunderstood what I said in §37 of my Judgment. The linchpin of my decision was my observation from the contemporaneous letter that Mr Ng was obviously not aware that his offer would involve unlawfulness or illegality.  I also accepted Mr Ng’s explanation in his affirmation.  I therefore did not accept that this episode constituted a blot on Mr Ng’s integrity.  I did not proceed on the basis that “Maintenance and Champerty” is not illegal in Malaysia.

8.  I find that Ground 1 has no reasonable prospect of success.

9.  As for Ground 2, Solicitors for Madam Kay again misunderstood §24 of my Judgment.  In §22, I first set out the handwriting expert’s opinion evidence that it was highly unlikely that the signature of Dato Ng on the LPA was actually signed by him.  In §24, I mentioned Madam Kay’s own admission in an affirmation she filed in the Singaporean action that Dato Ng’s signature on the LPA was actually written by her.  Although she initially tried to excuse her conduct by saying that Dato Ng had previously agreed to give her a power of attorney, she eventually accepted that the LPA was invalid.  In §23, I referred to a Statutory Declaration of the Singaporean lawyer who attested the execution of the LPA.  He explained he did not actually witness the LPA execution; he falsely attested the execution to help Madam Kay’s sister (Ms Kay); that he was misled by Ms Kay; and Ms Kay apologized and admitted that Madam Kay had in fact forged the signature of Dato Ng on the LPA.  Then I noted in §24 that in the light of the contents of the Statutory Declaration, Madam Kay did not challenge any statement made by the Singaporean lawyer in the Statutory Declaration.

10.  I then referred in §25 to an instance whereby Madam Kay was demonstrated to have made false assertion in her affirmation and that she and her counsel did not provide any explanation for such conduct.  I then referred to another handwriting expert report on the purported signatures of Dato Ng on certain pleadings filed in the action.  The expert opined that it was highly unlikely that those signatures were made by Dato Ng.  Again, Madam Kay did not seek to challenge the contents and conclusion of this report.

11.  In my judgment, the dictum of Kwan J in Re Chime does not go so far as to say that whenever factual disputes exist in affidavit evidence, the court has to conduct cross‑examination failing which the court cannot assess the weight of the evidence before it.  In §27, I made it crystal clear that I was not conducting a trial on affidavits and I was not making definitive finding of facts.  On the other hand, I opined that I was entitled to give due weight to the evidence presented before me and note the fact that such credible evidence had not been adequately challenged by Madam Kay.  In the circumstances, I am of the view that Ground 2 is equally devoid of reasonable prospect of success.

12.  In conclusion, I refuse to grant leave to appeal.  This application is dismissed with costs to be paid forthwith by Madam Kay to the plaintiff who is now represented by Mr Ng as next friend.  Such costs will be taxed on party‑and‑party basis if not agreed.

Costs Orders

13.  In my Judgment delivered on 16 August 2016, at §48, I varied §§(6) and (7) of the Order of Master M Wong to the extent of substituting the dates of “7 September 2015” by “15 December 2015”.  As a result of my decision, those paragraphs should now read:-

“(6)  the Committee do bear their own costs of the Summons dated 19 August 2015 up to and including 15 December 2015.

(7)   Madam Kay do personally pay the Committee costs of the summons dated 19 August 2015 after 15 December 2015 including today’s hearing [ie 1 February 2016] with certificate for counsel, to be summarily assessed on paper.”

14.  When I made the aforesaid variation, I was not informed by parties that in fact Master M Wong had already summarily assessed the costs pursuant to the original terms of his Order.  He had in fact assessed the costs for the period from 7 September 2015 to 1 February 2016 to be HK$120,420.  He had taxed it down from a Statement of Costs submitted by the Committee totalling HK$245,920.  I have now been told that in fact Madam Kay had fully paid the sum of HK$120,420 to the Committee on 20 April 2016.

15.  It was never my intention to disturb the summary assessment made by any Master.  I was simply not told that Master M Wong had already conducted the exercise.  However, the effect of my variation order requires costs for the period between 7 September 2015 and 15 December 2015 to be deducted from the original Order of Master M Wong.  In the circumstances, the best course is to send this matter back to Master M Wong. He would be in the best position to tell what part of his summary assessment of HK$120,420 actually relates to this period of 7 September 2015 to 15 December 2015.

16.  As for costs of the appeal before me, I had directed in §49 of my Judgment that Madam Kay should show cause as to why she should not be ordered to personally pay for the Committee’s costs of the appeal.  I have since received a first set of submission from Solicitors for Madam Kay.  The submission was premised upon my granting Madam Kay leave to appeal to the Court of Appeal on the two Grounds put forward.  I have now refused to grant leave to appeal. 

17.  In the second set of submission, Solicitors for Madam Kay submitted that the position taken by Madam Kay was bona fide in the interest of the plaintiff and that it had nothing to do with Madam Kay’s own interest.  Having considered the submissions, I reject them for similar reasons as I had set out in paragraph 47 of my Judgment.  In my Judgment, it is in the interest of justice that Madam Kay should be ordered to personally bear the costs of the appeal before me. 

18.  Having considered the matter further and in view of the unnecessary arguments raised in solicitors’ correspondence, I think the best course is not to engage in summary assessment of the costs of the appeal before me by way of written submissions.  I hereby order that Madam Kay do pay to the Committee forthwith costs of the appeal with certificate for counsel to be taxed on party‑and‑party basis if not agreed.