EXCEL CONCRETE LTD v. THE CONCRETE PRODUCERS ASSOCIATION OF HONG KONG LTD AND OTHERS

HCA 938/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 938 OF 2011

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R E A S O N S  F O R  DECISION

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Background

1.  On 18 July 2013, I handed down my Decision (“Amendment Decision”) in respect of the 1^st, 2^nd and 7^th defendants’ (“Ds’”) summons of 22 October 2012 for leave to re-amend the Amended Defence by inter alia introducing allegations relating to the “Short-Piling Scandal” and relying on it to support the assertion that a letter dated 13 October 2010 from the 2^nd defendant to MTR Corporation Ltd (“MTRC”) for the attention of Martin J Dunn, MTRC’s General Management – Procurement and Contracts was sent on an occasion of qualified privilege (see paragraphs 4 and 26(j) of the draft Re-Amended Defence (“Draft”)).

2.  By the Amendment Decision, I granted inter alia the following orders:

(a) leave be granted to the Ds to (i) make re-amendments to the Amended Defence consequential upon the filing of the Re-Amended Statement of Claim and (ii) make further re-amendments to the Amended Defence in the manner marked in green as per the Draft save and except the proposed re-amendments in paragraphs 4 and 26(j) therein;

(b) the Ds shall file and serve their Re-Amended Defence within 14 days from the date of the Amendment Decision;

(c) leave be granted to the plaintiff to file and serve their Amended Reply or Amended Replies (since there are other defendants to the present action apart from the Ds) within 14 days after filing the last Re-Amended Defence by the defendants;

(d) the time prescribed in (b)-(c) above shall run during court vacation.

3.  Dissatisfied with the Amendment Decision, on 1 August 2013 the Ds filed an inter partes summons in the present action under Order 59B rules 2B and 13 of the Rules of the High Court (“RHC”) for (a) leave to appeal against various orders made in the Amendment Decision insofar as they relate to paragraphs 4 and 26(j) of the Draft (“Orders”) on the grounds set out in the draft Notice of Appeal annexed thereto (“Draft Notice”), and (b) an interim stay of the Orders pending the determination of the application for leave to appeal, and if leave is granted, the intended appeal (“Leave Summons”).

4.  The Leave Summons was returnable before me on 23 September 2013 (“Leave Hearing”).  For easy reference, I shall adopt herein the abbreviations in the Amendment Decision.

5.  According to the written submissions by Mr Man, counsel for the Ds, dated 17 September 2013 (“Man’s 1^st Submissions”), it is the Ds’ primary stance that leave to appeal is not required. He says that “[to] remove any doubt, the Court can make a direction that the [Amendment Decision] refusing leave to re-amend falls under O 59 r 21(1)(a), and/or give leave to appeal in any event”.  Alternatively, if leave to appeal is required, Mr Man submits that it should be granted.

6.  The plaintiff opposes the Leave Summons. Mr Chow SC, counsel for the plaintiff, in his written submissions dated 18 September 2013 (“Chow Submissions”) accepts that no leave to appeal is required in respect of the proposed appeal, hence no order can be made in respect of the Leave Summons (especially when there is no doubt over the question of whether leave to appeal is required, and the Ds have not sought any direction under Order 59 rule 21(3) in the Leave Summons or at all).  Mr Chow SC adds that the court cannot grant leave to appeal where leave is not required as a matter of law.  He reminds that the time to serve Notice of Appeal has expired, but the Ds have not sought any extension of time to do so in the Leave Summons.  But Mr Chow SC contends that in any event I do not have jurisdiction to grant any such extension of time.  Even if, contrary to the Ds’ stance, an application for extension of time to serve Notice of Appeal can be made to this court, Mr Chow SC says I should not exercise my discretion to grant such indulgence. He argues that the Leave Summons should be dismissed with costs.

7.  On 19 September 2013, following the Chow Submissions, the Ds filed an inter partes summons in the present action pursuant to Order 3 rule 5 and Order 1B rule 1(2)(a) of the RHC for “[leave] …… to lodge with the Registrar those documents required to be lodged under Order 59, rule 5(1) of the [RHC] within 3 days from the date of the order to be made herein”, and for abridgment of the time for service of such summons (“Extension Summons”). The Extension Summons is also returnable before me at the Leave Hearing.

8.  In his supplemental written submissions dated 19 September 2013 (“Man’s 2^nd Submissions”), Mr Man criticises the plaintiff’s stance as “misconceived” and “the most technical argument”.  He argues that the only possible procedural infraction of the RHC by the Ds is failure to take steps to set down the appeal by lodging the necessary documents with the Registrar within 7 days after service of the Notice of Appeal under Order 59 rule 5(1) of the RHC, and such procedural irregularity can be cured by this court granting the extension of time sought under the Extension Summons.  Mr Man submits that this court should exercise its discretion under the Extension Summons in favour of the Ds.

Leave Summons

9.  It is common ground between Mr Man and Mr Chow SC that no leave is required to appeal against the Orders refusing the proposed amendments in paragraphs 4 and 26(j) of the Draft Notice.  This is Mr Man’s primary stance as set out in Man’s 1^st Submissions and Mr Chow SC’s only stance.  Mr Man’s alternative stance that “[if] leave to appeal is required, it should be granted” is secondary to his primary stance.

10.  Section 14AA (1) of the High Court Ordinance Cap.4 provides as “[except] as provided by rules of court, no appeal lies to the Court of Appeal from an interlocutory judgment or order of the Court of First Instance in any civil cause or matter unless leave to appeal has been granted by the Court of First Instance or the Court of Appeal”.

11.  Order 59 rule 21(1)(a) of the RHC provides as follows:

“Judgments and orders to which section 14AA (1) of the Ordinance (leave to appeal required for interlocutory appeals) does not apply and accordingly an appeal lies as of right from them are the following – (a) a judgment or order determining in a summary way the substantive rights of a party to an action; ……”

12.  Order 59 rule 21(2)(i) of the RHC provides as follows:

“Without affecting the generality of paragraph (1)(a), the following are judgments and orders determining in a summary way the substantive rights of a party – …… (i) an order refusing to allow an amendment of a pleading to introduce a new claim or defence or any other new issue; ……”

13.  In Man’s 1^st Submissions, Mr Man submits that the refused amendments, which concern the “Short-Piling Scandal” and the ICAC investigation/arrests, and which involve the Zen Brothers and Zen Pacific, “seek to introduce new issues concerning the Short-Piling Scandal and the ICAC Arrests, i.e. (i) whether the quantum of any damages award should be reduced because of Plaintiff’s bad reputation arising out of these scandals; (ii) whether these scandals support Ds’ contention that they had an interest in publishing the allegedly defamatory statements; and (iii) whether these scandals would support Ds’ answer to [the plaintiff’s] allegation of malice. The proposed appeal accordingly falls within O 59 r 21(2), and hence leave to appeal is not required”.  Mr Chow SC agrees, and says it is “clear” that the Ds do not require any leave to appeal by virtue of Orders 59 rule 21(1)(a) and 2(2)(i) of the RHC.

14.  However, in Man’s 2^nd Submissions Mr Man complains that it is not obvious that leave to appeal is not required since (a) the refused amendments would not introduce a new claim or defence, (b) the issues of damages, qualified privilege and malice have already been joined on the pleadings before the introduction of the refused amendments, and (c) the precise meaning of the words “any other new issue” (which words are obviously intended to limit the ambit of Order 59 rule 21(2)(i) of the RHC such that they will not cover all amendments) is not totally clear.  Mr Man argues that some debate may have been necessary to determine on what level of generality of the amendments will introduce a “new issue”.

15.  I agree with Mr Man and Mr Chow SC that the refused amendments in paragraphs 4 and 26(j) of the Draft Notice introduce new issues, ie the “Short-Piling Scandal” and the ICAC investigations/arrests. In such circumstances, the Ds do not require leave to appeal against the Orders.  I do not consider the various matters raised by Mr Man set out in the above paragraph lead me to any doubt that leave to appeal may be required.  By refusing the amendments in paragraphs 4 and 26(j) of the Draft Notice, it is clear that new substantive issues as to the “Short-Piling Scandal” and the ICAC investigation/arrests cannot be raised at trial to support the pleaded defence, hence the Orders are a determination in a summary way in respect of the substantive rights of a party.

16.  Mr Man goes further to complain against the plaintiff’s failure to intimate their stance (that they also agree leave to appeal is not necessary) to the Ds until Chow’s Submissions, and submits this is the kind of attitude that has prompted the Ds (by Man’s 1^st Submissions) to remove any doubt by seeking a direction that the Orders refusing the amendments in paragraphs 4 and 26(j) of the Draft Notice fall within Order 59 rule 21(1)(a) of the RHC and/or leave to appeal in any event.

17.  Order 59 rule 21(3) of the RHC provides that “[a] direction as to whether a judgment or order is one that is referred to in paragraph (1)(a) [ie a judgment or order determining in a summary way the substantive rights of a party to an action] may be sought from the judge who made or will make the judgment or order”. In the circumstances, if there is any doubt, it is open to the Ds to seek a direction as to whether the Orders come within Order 59 rules 1(a) and 2(i) of the RHC by virtue of Order 59 rule 21(3) of the RHC. Had they done so, they could have made a decision on whether to issue the Leave Summons or serve a Notice of Appeal with the benefit of such direction.  But the Ds have not adopted this course of action; they simply issued the Leave Summons.  Indeed, as Mr Chow SC points out, the Ds also have not sought any direction under Order 59 rule 21(3) of the RHC even in the Leave Summons.

18.  Mr Man complains that the plaintiff has had notice that the Ds are bringing the appeal for some 6 weeks, and they have never agreed to this appeal being brought such that costs of the Leave Hearing can be avoided.  He criticises the plaintiff for waiting until the last moment to show their hand so as to enable them to argue that an otherwise proper appeal should now be debarred because an extension of time should be refused. He says this is a wasteful and tactical position decried by the Civil Justice Reform, and is contrary to the underlying objectives in Order 1A rule 1 of the RHC in that it wastes costs, it delays the appeal, it does not promote proportionality or economy, and it is wasteful use of the court’s resources.  Mr Man submits that more significantly the plaintiff’s position precludes the just resolution of disputes in accordance with the substantive rights of the parties.  He reminds that all parties and their legal representatives have a duty to assist the court to further these objectives under Order 1A rule 3 of the RHC.

19.  But notwithstanding Mr Man’s complaints about the plaintiff holding their cards close to their chest, it must not be forgotten that it is the plaintiff who has the carriage of the appeal process. One therefore wonders why, if it is the Ds’ primary stance that no leave to appeal is required, they have not (a) served formal Notice of Appeal against the Orders and (b) intimated their primary stance to the plaintiff and further informed them that the Leave Summons was issued out of mere precaution.  Here, apart from issuing the Leave Summons, the Ds did not intimate their primary stance to the plaintiff or elaborate on their grounds (or doubts) as to why the Leave Summons is or may be required at all, and I cannot see how the plaintiff can be faulted even if they have adopted a wait-and-see position for the Ds to justify and explain why leave to appeal is required.  As it were, I am informed by Mr Chow SC at the Leave Hearing that not having been alerted by the Ds as to the plaintiff’s primary stance or any concern on the question over whether leave to appeal is required, the plaintiff in fact has not given much thought to this until receipt of Man’s 1^st Submissions close to the hearing whereupon Mr Chow SC (who has been briefed to attend the Leave Hearing on behalf of the plaintiff) has responded quickly by Chow’s Submissions that set out the plaintiff’s stance.

20.  In any event, notwithstanding the Ds’ criticisms and complaints, having concluded that Mr Man and Mr Chow SC are right in their common view that no leave to appeal against the Orders is required, I cannot make any order under paragraph 1 of the Leave Summons to grant leave to appeal.  In light of the parties’ common stance and my conclusion, I also do not see any need to give any further direction under Order 59 rule 21(3) of the RHC.  Therefore, at the Leave Hearing, I made no order in respect of paragraphs 1-2 of the Leave Summons with costs to the plaintiff to be taxed if not agreed.

Extension Summons

21.  Mr Man in Man’s 2^nd Submissions goes into some detail as to whether service of the Notice of Appeal against the Orders is now out of time.  He argues otherwise, and says that the Ds’ service of the Notice of Appeal is within time.

22.  Order 59 rule 3(1) of the RHC provides that an appeal to the Court of Appeal must be brought by motion, “and the notice of motion is referred to in this Order as “notice of appeal”.”  Order 59 rule 3(5) of the RHC provides that “[a] notice of appeal must be served on all parties to the proceedings in the court below who are directly affected by the appeal; ……”

23.  Hong Kong Civil Procedure 2013 Vol.1 para 59/3/4 at p 1046 provides as follows:

“        An informal notice of appeal, if otherwise complies with the rule, is sufficient ……; but mere communication of an intention to appeal is not enough and in Re Blyth and Young (1880) 13 Ch. D. 416, was held not even to be grounds for an extension of time for appealing …… The present practice is to accept an “informal” notice of appeal if it identifies the order against which the appellant wishes to appeal, and states, at least in general terms, the grounds of appeal.

          A notice of appeal does not have to be stamped, sealed or in any way authenticated by the Court of Appeal (or any other court) prior to service. There is no such process as “issue” of a notice of appeal in the case of an appeal to the Court of Appeal. …… The order of events is: first, service of the notice of appeal on the parties required to be served ……, then secondly, setting down of the appeal in the Office of the Deputy Clerk of Court (Civil Appeals) …… There is no need to send the notice of appeal to the Appeals Registry prior to service; indeed it is pointless to do so.”

24.  The Leave Summons with the Draft Notice annexed thereto was served on 1 August 2013. Mr Man submits that the plaintiff has by reason thereof been served with the Notice of Appeal (ie the Draft Notice) which makes clear that the Ds are bringing the appeal well within time, and it is not merely an intimation of an intention to bring an appeal.

25.  Mr Man argues that the only conceivable objection is that another procedure could or should have been chosen.  But that is readily remediable since there could not have been any conceivable prejudice to the plaintiff.  He says that if there is any objection as to the form of the notice, it can be rectified under Order 2 rule 1 of the RHC.  He further submits that the same result can be achieved by allowing an amendment to the Notice of Appeal by, saying, filling in the date in the Draft Notice under Order 20 rule 8 of the RHC.

26.  In my view, whether Mr Man’s submissions that service of the Leave Summons with the Draft Notice annexed thereto amounts to service of a proper and sufficient Notice of Appeal is correct or not is a matter for the Court of Appeal, and is neither here nor there for the present purpose.  It is certainly not a matter within the jurisdiction of the court below.

27.  That being the case, Mr Man says that the only possible infarction of the rules by the approach adopted by the Ds is that they have not taken steps to set down the appeal by lodging the necessary documents within the prescribed time. Order 59 rule 5(1) of the RHC provides as follows:

“Within 7 days after the date on which service of the notice of appeal was affected, the appellant must lodge with the Registrar-

(a) a copy of the sealed judgment or order and a copy of the reasoned decision (if any);

(b) two copies of the notice of appeal, one of which shall be indorsed with the amount of the fee paid, and the other indorsed with a certificate of the date of service of the notice.”

28.  Mr Man argues this court has jurisdiction to extend the 7-day deadline pursuant to Order 3 rule 5 and/or Order 1B rule 1(2)(a) of the RHC. This is the subject of the Extension Summons.  Mr Man submits that extension of time should be granted by this court because (a) the extension sought is extremely short, (b) there is no conceivable prejudice to the plaintiff, (c) the appeal has reasonable prospect of success, and (d) at worst an unnecessary course has been taken by the Ds’ legal advisers to seek leave to appeal when it is not necessary.

29.  However, it still begs the question whether this court as the court below has jurisdiction to grant extension of time for setting down an appeal.  I start with the fundamental consideration that the whole of the appeal process comes within the jurisdiction of the Court of Appeal and falls outside the jurisdiction of the court below unless any exercise of jurisdiction by the court below is expressly provided for in the rules.

30.  Mr Man submits that Order 3 rule 5 and/or Order 1B rule 1(2) (a) of the RHC are broadly worded with no curtailment against the court below exercising such powers.  I have no doubt that both the Court of Appeal and the Court of First Instance, where appropriate, can exercise the powers in such provisions.  But the question still remains whether, in respect of any appeal process, the court below has jurisdiction to exercise such powers to grant time extension or whether it is exclusively reserved to the Court of Appeal.

31.  In this respect, it is necessary to turn to Order 59 rule 15(1) of the RHC:

“Without prejudice to the power of the Court of Appeal or, a single judge under Order 3, rule 5, to extend or abridge the time prescribed by any provision of this Order, the period for serving notice of appeal under rule 4 or making application ex parte under rule 14(3) may be extended or abridged by the court below on application made before the expiration of that period.”

32.  Mr Man submits that since the Extension Summons is neither an application for extension of time for service of the Notice of Appeal under Order 59 rule 4 of the RHC nor an ex parte application under Order 59 rule 14(3) of the RHC, I am not constrained by the limitation imposed in the Order 59 rule 15(1) of the RHC that confines the jurisdiction of the court below to dealing with applications made before the expiry of the period prescribed by the rules for taking the relevant step.

33.  In my view, such submission misreads the provision in Order 59 rule 15(1) of the RHC. As Mr Chow SC argues, Order 59 rule 15(1) of the RHC in fact makes clear that the Court of Appeal or a single judge of the Court of Appeal has undoubted jurisdiction to grant extension of time in respect of all matters concerning the appeal process, which I believe is reinforced by the words “[without] prejudice to the power of the Court of Appeal or, a single judge”.  But under such broad umbrella, this rule gives the court below power to extend or abridge time for serving a notice of appeal or for renewing an ex parte application before the Court of Appeal (but only if such application is “made” before the expiration of the time limit concerned).  In my view, contrary to Mr Man’s submissions, this sets the parameters of the jurisdiction of the court below for granting extension of time. 

34.  If Mr Man’s submissions in this respect are correct, ie the court below has general and broad jurisdiction to grant extension of time to extend or abridge “time prescribed by any provision in the Order [ie Order 59 of the RHC]” (other than applications for time to serve Notice of Appeal or to make ex parte applications after the expiration of the time period prescribed by the rules under Order 59 of the RHC as prohibited by Order 59 rule 15(1) of the RHC), the logical conclusion of such argument must be that the court below can intermeddle in the appeal process in many respects by granting or abridging time imposed under other provisions of Order 59 of the RHC.  This cannot be right.

35.  Mr Man is therefore constrained to draw a distinction between the situation before and after the lodging of the appeal documents.  He argues that before the appeal documents are lodged and the appeal is set down pursuant to Order 59 rule 5(1) of the RHC, the Notice of Appeal is not filed or issued yet and there is no “CACV” action number for the appeal.  Mr Man submits that the Court of Appeal is therefore not yet seized of the appeal, and hence the court below has jurisdiction to grant extension of time for the appellant to comply with Order 59 rule 5(1) of the RHC.

36.  I am unable to accept such submission.  As rightly pointed out by Mr Man, the commencement of the appeal process envisaged under Order 59 of the RHC is a two-stage event, ie service of the Notice of Appeal which precedes the setting down of the appeal.  Once the Notice of Appeal is served, time starts to run for setting down the appeal.  The appeal process under the rules has therefore commenced, and it does not depend on the administrative act of allotting a “CACV” action number by the Appeals Registry.

37.  In the circumstances, the setting down process is outside the jurisdiction of the court below, and likewise any application for extension of time for setting down the appeal is necessarily dealt with by the Court of Appeal and not by the court below.  This is made clear in Hong Kong Civil Procedure 2013 Vol 1 at p 1053 as follows:

“Jurisdiction to extend …… time for setting down is conferred on the full Court of Appeal and a single judge with the Court of Appeal by O.3, r.5(4).” (para 59/5/5)

“Applications for an extension of time for setting down are normally heard by a single judge of the Court of Appeal. An application for an extension of time for setting down must be made by summons (r.14(1)). The application must be supported by an affidavit deposing to any facts relied on by the applicant. ……” (para 59/5/7)

38.  Even when viewed from an administrative perspective, Hong Kong Civil Procedure 2013 Vol 1 para 59/5/1 at p 1052 provides as follows:

“…… Rule 5(1) makes it clear that the process of setting down is complete when the appellant’s side have paid the requisite court fee and lodged with the Deputy Clerk of Court (Civil Appeals) the documents required by r.5 (provided, of course, that the appeal is valid and all relevant time limits have been complied with). ……” (my emphasis)

It is therefore plain that administratively the process of setting down the appeal comes within the jurisdiction of the Court of Appeal as it is the Appeals Registry that accepts the necessary documents and gives a “CACV” action number upon setting down the appeal.

39.  I am persuaded I have no jurisdiction to grant the relief sought in the Extension Summons.  So at the Leave Hearing, I dismissed the Extension Summons with costs to the plaintiff to be taxed if not agreed.