MENNO LEENDERT VOS v. GLOBAL FAIR INDUSTRIAL LTD AND OTHERS

HCA 4200/1995

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 4200 OF 1995

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D E C I S I O N

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INTRODUCTION

1.  On 25 March 2010, I granted the Plaintiff’s application for further disclosure sought in aid of an interim post-judgment Mareva injunction against the 1^st, 3^rd and 6^th Defendants (collectively, the “Defendants”) with costs to the Plaintiff and the Plaintiff’s application for amendments to my order dated 7 January 2010 with no order as to costs. The orders made thereunder are referred to as the “Further Disclosure Order” and “Order Amendment Order” respectively. On 15 April 2010, the Defendants applied for leave to appeal against those two orders out of time and for a stay of execution of those orders pending appeal.

2.  The background to the parties’ dispute and my judgment in the main action are set out in my judgment dated 1 December 2009 (the “Judgement”). The reasons for my decision in making the Further Disclosure Order and the Order Amendment Order are set out in my decision dated 25 March 2010 (the “Decision”). These will not be repeated here. The issues raised by these applications are whether I have jurisdiction to grant extension of time to apply for leave to appeal against my decision; and if I have, whether the jurisdiction should be exercised on the facts of the present case.

Jurisdiction to grant extension of time to apply for leave to appeal

3.  Since the implementation of the Civil Justice Reform (“CJR”), leave is required to appeal against interlocutory and certain other judgments or orders of the court and such application may only be made to the court in the first instance, referred to as the “court below”, within 14 days from the date of the judgment or order being appealed against: Order 59 rule 2B(1) of the Rules of the High Court. The orders being appealed against were made on 25 March 2010. The time to apply for leave to appeal expired on 8 April 2010. The application is therefore out of time by 7 days.

4.  Mr Lam, counsel for the Plaintiff, submits that this Court has no jurisdiction to extend time once the 14-day period has expired. He referred to Wynn Resorts (Macau) SA v Mong Henry [2009] 5 HKC 515. At 517, Chu J construed Order 59 rule 2B(1) as follows:

“10.  In my view, the starting point is to consider the wordings in Order 59 rule 2B(1), pursuant to which the application for leave to appeal is made.  The material part of rule 2B(1) provides that: ‘… an application for leave to appeal … may only be made to the Court in the first instance within 14 days from the date of the judgment or order’ (emphasis added).  The language suggests that an application to the court below for leave to appeal its judgment or order can only be made within the 14-day time limit.

11.  There is no other provision in Order 59 enabling the court below to extend time for applying for leave to appeal.  Order 59 rule 15, which deals with extension of time, provides that:

‘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.’

12.  Previously, the power under rule 15 to extend time might extend to applications for leave to appeal by reason of the reference to ‘application ex parte under rule 14(3)’.  This is no longer the case as a result of amendments to Order 59 brought about by the Civil Justice Reform.  Order 59 rule 14(2) and rule 14(3), dealing with applications for leave to appeal, had been repealed and applications for leave to appeal are now dealt with under the new rules 2A, 2B and 2C.  The new rule 14(13) further expressly provides that rule 14 does not apply in relation to an application for leave to appeal.  Consequently, the reference in rule 15 to ‘application ex parte under rule 14(3)’ can no longer cover an application for leave to appeal, quite apart from the fact that such application is now generally made inter partes: Order 59 rule 2A(2) and rule 2B(5).  It should also be noted that the power under rule 15 can only be invoked by the court below if the application to extend time is made before the expiration of the time limit, which is not the case here.

13.  Having regard to the wordings of rule 2B together with the legislative intent as appeared from the legislative development and the absence of express provision conferring a power to extend the time for applying for leave to appeal, I am of the view that the court in the first instance, which includes the Court of First Instance, only has power to deal with an application for leave to appeal under Order 59 rule 2B(1) that is made before the expiration of the 14-day time limit.  And that the power to extend time under Order 3 rule 5(1) should not apply to an application for leave to appeal.  Similarly the power under Order 3 rule 5(2) to extend time notwithstanding the application is made after the expiration of the time limit does not apply to an application for leave to appeal.  Such a construction is also consistent with the underlying objective in Order 1A rule 1(b).

14.  Additionally, it is instructive to contrast the position in Rules of the High Court with that in Rules of the District Court.  The new Order 58 rule 2(4) of Rules of the District Court (Cap. 336H), which was introduced at the same time as Order 59 rule 2B(1) of Rules of the High Court, is differently worded.  It merely states that an application for leave to appeal ‘must be made’ within the time limit specified in the sub-rule.  At the same time, Order 58 rule 2(10) of Rules of District Court expressly empowers the District Court to extend the time for applying for leave to appeal and the power may be exercised at any time and notwithstanding the time limit for so doing has expired.  This reinforces the construction stated above.

15.  For these reasons, leave to apply for leave to appeal out of time is refused.”

5.  I have quoted the relevant parts of Chu J’s judgment in full. I agree entirely with her Ladyship’s construction of Order 59 rule 2B(1), and have the following observations to add. Under this new scheme introduced by the CJR into Order 59, leave to appeal against an interlocutory judgment or order may be made to the court below and so far as is practicable to the judge or master against whose judgment or order leave to appeal is sought: rule 2B(1) and (2). If that application is refused, the applicant may make a further application for leave to appeal to the Court of Appeal within 14 days from the date of the refusal: rule 2B(3). Where leave is given, whether by the court below or by the Court of Appeal, the appellant has to serve a notice of appeal to all parties to the proceedings specifying the grounds of the appeal and the precise form of the order which the appellant proposes to ask the Court of Appeal to make: rule 3. This notice of appeal must be served within stipulated period, depending on the type of case concerned: rule 4. Rule 15 gives the court below the power to extend or abridge the period for serving notice of appeal under rule 4 on application made before the expiration of that period.

6.  The phrase “may only be made” in Order 59 rule 2B(1) is unequivocal, indicating that an application to the court below for leave to appeal against its judgment or order may only be made within the stipulated 14-day period. As observed by Chu J, there is no other provision in Order 59 giving the court below jurisdiction to extend the time for applying for leave to appeal. It should be noted that under this new scheme even where leave to appeal has been granted, rule 15 expressly gives the court below power to grant extension of time for serving notice of appeal. Even then, such application has to be made before the expiration of that period. Thus, a fortiori, in the absence of express provision giving the court below power to grant extension of time to apply for leave to appeal, it must necessarily follow that the court below does not have such power, in the light of the unequivocal language used in rule 2B(1).

7.  Two of the underlying objectives of the CJR are to ensure that a case is dealt with as expeditiously as is reasonably practicable and to promote a sense of reasonable proportion and procedural economy in the conduct of proceedings. The construction that rule 2B(1) requires an appellant to apply for leave to appeal against an interlocutory judgment or order of the court within strict time limit without any power in the court to grant extension of time best serves these objectives. A strict time limit is particularly justified for appeals against interlocutory judgments and orders. Such construction enables cases to move forward expeditiously without being dragged behind by delays caused by appeals against interlocutory judgments or orders, especially delays as a result of dilatory conduct of the intending appellant. Such a construction also promotes proportionality and procedural economy. This construction, which is consistent with the unequivocal language used and which best serves these objectives, must have been what was in the contemplation of the legislature when passing the amendments to the new Order 59.

8.  For the same reasons as given by Chu J and the above reason, I find that as the court below, I have no jurisdiction to grant extension of time to apply for leave to appeal against my interlocutory order after the stipulated 14-day period has expired.

Application for leave to appeal against the Further Disclosure Order

9.  As I have no jurisdiction to grant extension of time to apply for leave to appeal, both the application for extension of time to apply and the application for leave to appeal are to be dismissed. Were the application for leave to appeal made within time, leave should only be granted if the Defendants are able to demonstrate a reasonable prospect of success, i.e. the appeal has merits and ought to be heard: section 14AA of the High Court Ordinance. I shall deal with this briefly.

10.  In support of her appeal against the Further Disclosure Order, the 6^th Defendant (“Cheung”) argues on her own behalf and on behalf of the 1^st and 3^rd Defendants that they had made full disclosure of their assets as required by my earlier order of disclosure and there is nothing else to further disclose. She argues that her appeal against the Further Disclosure Order has good chance of success as the Plaintiff was unable to provide any evidence of non-disclosure on her part. While maintaining that I was wrong to have ordered the further disclosure, she argued that there was nothing to be shown by disclosure of the documents I ordered. If that is true, her refusal to comply with my Further Disclosure Order and her appeal against that order is meaningless, frivolous and even abusive of the process of the court. Then she shifted the focal point of her argument to the costs order which I made. She argued that the proper costs order should have been costs in the cause of the appeal and not costs to be paid to the Plaintiff forthwith. She submitted that as she really had no assets there was no way that she could comply with my order that she should pay the costs of the application forthwith and that would enable the Plaintiff to commence bankruptcy proceedings against her resulting in termination of her pending appeal.

11.  I have given full reasons for my decision in paragraphs 12 to 25 of my Decision. In essence, Cheung had been a successful medical practitioner who appeared to have accumulated very substantial assets. On the face, this made it incredible that all her assets could have evaporated over the last two years during which she had ceased practice such that she did not have any asset of individual value of over $10,000. Her assertion was so incredible against the factual background that it was reasonable to order her to verify her disclosure on oath which was to be supported by appropriate documentation. Cheung’s argument that the Plaintiff had no evidence of non-disclsoure was only to be rejected in this type of application in the light of the evidence of her means and the fact that the Plaintiff could have no means of knowing what assets she had. Even after reading her further submission contained in her letter dated 30 March 2010 sent after the order had been made, I did not consider there was any merit in her appeal against the Further Disclosure Order.

12.  I have also explained in paragraph 24 of my Decision the reasons for ordering costs to be paid forthwith and not in the cause of the appeal. Such costs order is not unusual in a contested application. In essence, regardless of the outcome of the appeal, the Defendants were under a duty to make full disclosure in compliance with the Court’s order. If Cheung had not made full disclosure, she is liable for the costs of this application which was necessitated by her default. If Cheung had made full disclosure, it was meaningless to contest the application. She would suffer no prejudice by complying with the Further Disclosure Order. In either case, there was ample justification for making the costs order as I did. Furthermore, and this is important, having had conduct of this trial, I am satisfied that these Defendants together with the 2^nd, 5^th and 7^th Defendants who are not appealing against my Judgment, had been engaging in a costs wasting exercise in contesting the action. Hitherto, they have caused horrendous amout of costs to be incurred for an action of this nature by the Plaintiff. Cheung said she has no assets and had to borrow from her sisters. Yet she took a trip to North America after the trial of this action and again shortly before the hearing of the two summonses now in issue. The 6^th Defendant, who said that she and the 1^st and 3^rd Defendants had no individual assets in Hong Kong worth more than $10,000, has means to travel around and is now mounting appeals together with the 1^st and 3^rd Defendants against my Judgment and almost all post-judgment interlocutory orders which I made. They are obviously engaging in another costs wasting exercise to make sure that the Plaintiff’s fruits of litigation (i.e. the money paid into Court) will be eaten away by costs which the Plaintiff will never be able to recover from them. This Court shall be astute in identifying litigants who seeks to abuse the process of the court in this way. It is only appropriate that these Defndants should be ordered to pay forthwith all costs of any proceedings which they should not have contested.

13.  Cheung submits that the costs order will result in her bankruptcy and will cause the 1^st and 3^rd Defendants to be wound up which will effectively put an end to the pending appeal. If I am wrong in my assessment of the Defendants’ intention and that the Defendants really have no assets whether in Hong Kong or elsewhere to pay the costs I ordered, Cheung, in particular, will most likely be made bankrupt. Under such circumstances, if indeed Cheung has a good ground for appeal against my Judgment, her right to appeal will be taken care of by the Official Receiver and perhaps with the Director of Legal Aid in view of the substantial sum standing in Court. In that event, the appeal will be conducted by the Official Receiver in a proper and not costs wasting manner. If she does not have any good ground for appeal, then it is only right and just that the appeal should be brought to a close by Cheung’s bankruptcy.

14.  For the above reasons, even if the application for leave to appeal were made within time, it will be refused for lack of merit.

Application for leave to appeal against the Order Amendment Order

15.  I have given full reasons for making theOrder Amendment Order in paragraphs 28 to 33 of my Decision. Cheung argues that she has a good ground of appeal as it was her understanding that only the pure interest element in the ordinary meaning of that word shall not be subject to the order to stay execution. Her argument simply could not stand in the face of the exchanges between the bench and Mr Lam. The Court has inherent jurisdiction to vary its own orders so as to carry out its own meaning and to make its meaning plain. The Court’s intention is manifestly clearfrom reading the transcript of proceedings on 7 January 2010. The Defendants’ appeal has absolutely no chance of success. Besides, even if the Defendants were to succeed, there is nothing to prevent the Plaintiff from making further application for payment out, which will most likely be granted in view of the reasons given in my Decision. The application for leave to appeal is an utterly meaningless exercise. Even if the application for leave to appeal were made within time, it will be refused for lack of merit.

Conclusion

16.  This Court has no jurisdiction to extend the time for applying for leave to appeal against its decision. As the applications were made out of time, the applications must be dismissed, together with that the application for leave to appeal and for stay of execution of the orders being appealed against. Furthermore, there is no merit in the intended appeals. Thus, even if I had jurisdiction to extend the time for applying for leave to appeal, leave will be refused and the applications for leave to appeal will be dismissed for want of merit. Accordingly, the applications for extension of time to apply for leave to appeal, for leave to appeal and for stay of execution of the orders are all dismissed with costs.

17.  For similar reasons as given in paragraphs 12 and 13 above and paragraph 24 of my Decision, costs should follow the event and be paid forthwith. Mr Lam presented a bill for gross sum assessment in the amount of $60,760 for all the applications. I consider the amount claimed excessive. By reason of the long drawn litigation, the Plaintiff’s solicitors and counsel should be thoroughly familiar with the facts of the case. The amount of time claimed for perusal and preparation of documents should be much less. Accordinly I reduce the costs to $32,500. I apportion the costs to the application to appeal against the Further Disclosure Order and the Order Amendment Order at the ratio of 60:40.