FONG CHAK KWAN v. ASCENTIC LTD AND OTHERS

HCPI 242/2016

[2020] HKCFI 1889

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 242 OF 2016

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D E C I S I O N

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I.  INTRODUCTION

1.  On 29 April 2020, this court handed down judgment (“Judgment”) that dismissed the summons filed on 1 November 2018 (“Summons”) by the 3^rd defendant (“D3”) that sought inter alia the following reliefs, and granted a costs order nisi that D3 shall pay 70% of P’s costs of and occasioned by the Summons, including all costs reserved if any, to be taxed if not agreed (“Order”):

(a)

that the order of Master Roy Yu dated 17 October 2016 (“Yu Order”)[1] be set aside or discharged as the case may be, that the concurrent writ of summons issued by the plaintiff (“P”) in the present action and the service thereof on the 2nd defendant (“D2”) pursuant to the Yu Order be set aside, and that the interlocutory judgment entered on 4 July 2017 in P’s favour against D for damages to be assessed and costs to be taxed (“D2 Judgment”) be set aside (collectively, “Setting Aside Application”);[2]

(b)

all further proceedings in the Writ of Summons (now the Amended Writ of Summons) herein be permanently stayed forthwith on the ground of forum non conveniens in favour of either the District People’s Court of Zhenhai District, Ningbo Municipal or the Intermediate People’s Court of Ningbo Municipal (collectively, “PRC Courts”) (“Stay Application”).

2.  On 13 May 2020, D3 filed a summons for leave to appeal against the Order based on the intended grounds of appeal (“Intended Grounds”) set out in the Draft Notice of Appeal (“Draft Notice”) annexed thereto (“Leave Summons”).

3.  The Leave Summons was originally scheduled to be heard on 18 June 2020. By written directions dated 19 May 2020, I drew the parties’ attention to the guidance by the Court of Appeal in Tsang Wing Kwai v Tsang Wing Fai,[3] and directed D3 and P to lodge written submissions.  D3 and P respectively lodged written submissions on 26 May 2020 and 10 July 2020. Having considered the written submissions, I find an oral hearing unnecessary, and considered the Leave Summons to be fit for paper disposal.

4.  For convenience, unless otherwise stated, I shall adopt the abbreviations in the Judgment.

II.  LEGAL PRINCIPLES ON LEAVE TO APPEAL

5.  Under section 14AA(4) of the High Court Ordinance Cap 4 (“HCO”), leave to appeal shall not be granted unless the court is satisfied the appeal has a reasonable prospect of success or there is some other reason in the interests of justice why the appeal should be heard. In SMSE v KL,[4] Le Pichon JA pointed out such leave to appeal is not lightly granted.  Reasonable prospect of success involves the notion that the prospect of succeeding must be “reasonable” and therefore more than “fanciful”, without having to be “probable”.  Chu J (as she then was) explained in Wynn Resorts (Macau) SA v Mong Henry[5] that to meet the “reasonable prospect of success” test, an applicant is required to show more than an arguable case, ie an appeal that has merits and ought to be heard although he does not have to demonstrate that the appeal will probably succeed.

6.  Further, it is pertinent to bear in mind that even if there is a reasonable prospect of success on appeal, the court still retains a discretion whether to grant leave to appeal, and the court may refuse leave to appeal in the interests of procedural economy and proportionality even though the fact that there is, ex hypothesi, a reasonable prospect of success will heavily influence the court’s exercise of discretion.[6]

7.  “Alternatively, the court can grant leave for the purpose of s 14AA(1), Cap. 4 if it is satisfied that there is some other reason in the interests of justice why the appeal should be heard (s 14AA(4)(b) of Cap. 4).  It is impossible to give an exhaustive list of the circumstances in which the Court of Appeal would find that there is some other reason in the interests of justice that an appeal should be heard.  …… The Court of Appeal may grant leave if the question is one of general principle, decided for the first time; or a question of importance upon which further argument and a decision of the Court of Appeal would be to the public advantage”.[7]

8.  The intended appeal by D3 sought to impugn an exercise of discretion, so it had to be shown an arguable case with reasonable chance of success that the relevant decision exceeded the generous ambit within which reasonable disagreement is possible and is in fact plainly wrong, and not merely that the appellate court would prefer a solution which this court had not chosen.[8] It has been said that the appellate court should adopt a cautious approach regarding the weight given by the judge to facts taken into account when exercising the discretion.[9] The function of the appellate court on appeal against an exercise of discretion is not to exercise the discretion afresh, and the appellate court will only interfere with the decision if the appellant can show that the discretion was wrongly exercised on principle or had taken into account irrelevant consideration or had ignored relevant consideration.[10]

III.  DISCUSSION

9.  The Draft Notice ran to 16 pages and 22 intended grounds of appeal.  The Judgment is there for all to see, and it is unnecessary to repeat here what has been said in the Judgment. Both Mr Wong SC (and Mr Wang with him), counsel for D3, and Mr Wong, counsel for P, dealt with 3 broad areas in their written submissions, and I adopt the same approach. But I hasten to add that I have carefully considered the Draft Notice and the Intended Grounds stated therein in their entirety in coming to my conclusion below.

10.  The starting point is that the Gateways are disjunctive in the sense that P only had to establish 1 and not all 3 of the Gateways relied on. But D3 argued that even if P were able to establish 1 or more Gateways (and forum conveniens being part of the elements to be established for the exercise of such long-arm jurisdiction), the Yu Order should still be set aside for material non-disclosure without any re-grant of leave for service out, or to put it in another way, even if there are no reasonable prospects of success in relation to the Intended Grounds concerning Gateways C and D,  I still need to go on to consider the Intended Grounds concerning material non-disclosure (including Gateway F).

11.  I start by setting out my conclusion that leave to appeal ought to be granted although I have reservations on the vitality of certain Intended Grounds when considered on their own. But given the inter-relation among the Gateways, the matter of forum conveniens for the Setting Aside and Stay Applications, and the impact of alleged material such non-disclosures on the ex parte leave for service out, on the inter partes discretion to maintain ex parte leave and on the power to re-grant leave at the inter partes stage, I consider it more appropriate to grant general leave to appeal.  But that said,  I will make some observations on the Intended Grounds given that this is a filtering process.

(a)  Jurisdictional gateways

12.  Gateway C (Intended Grounds 12-16)  Mr Wong SC submitted this court erred in effectively finding on the basis of a single sentence in paragraph 21 of P’s WS that “[Suen]會再與[D2]方面就時間和工作地點商量” (“P’s Sentence”) that there was a serious question to be tried as to D1’s role as not merely administrative/facilitative[11] notwithstanding (a) the clear terms of the Employment Contract, (b) the undisputed evidence of D1 and D3, and (c) the fact P himself did not allege P’s Sentence suggested any control exercised by D1 over P,  and as a result,  this court drew an erroneous distinction between the present case and that of Dacas v Brook Street Bureau (UK) Ltd.[12]

13.  On the other hand, Mr Wong argued that (a) D3’s above complaint was another attempt to invite the court to resolve factual disputes on affidavit evidence at an interlocutory stage, and (b) in addition to the role of liaising with D2 this court found “D1 was arguably a contracting party who could also assign work to P and whom P looked to for payment of his salary”,[13] so there was no basis to say this court was plainly wrong, especially when the issue of whether an employment relationship exists is a fact-sensitive issue.

14.  I note that here, D3 tried to say the terms of the Employment Contract clearly pointed to an employment relationship between P and D2 (not D1), but in paragraph 92(a)-(d) of the Judgment I have explained there were other pointers in the Employment Contract that suggested otherwise, and in paragraphs 113-115 of the Judgment I have also explained how the contents of P’s WS arguably dovetailed with paragraph 92(b) of the Judgment to raise the possibility that D1 might also be an employer.

15.  Next,  D3 relied on the “undisputed” evidence of D1 and D3 and on the fact that P did not say P’s Sentence suggested D1 exercised control over him, but in paragraphs 90(b), 99(c), 111-112 and 116 of the Judgment I have explained why (a) the fact P’s WS did not raise express challenge would not mean the evidence of D1 and D3 was thereby “undisputed”, (b) it would be inappropriate at this pre-trial stage to resolve factual disputes on countervailing WSs/SWSs and affidavits, especially when the Poon Chau Nam test for employer-employee relationship required the court to adopt a nuanced approach in forming an overall impression after weighing/assessing the accumulated detail of the case, and (c) any subjective assertion by P on the issue of control (or absence thereof) was but a factor amongst all other indicia/factors to be considered under the Poon Chau Nam test.[14]

16.  As apparent from the Judgment, this court looked much further beyond  P’s Sentence (eg the pointers in the Employment Contract,[15] various factual matters and documents D3 referred to,[16] various WSs/ SWSs served by D1 and P’s WS,[17] and the various Poon Chau Nam indicia/factors[18]) before concluding that the factual disputes raised a serious question to be tried as to whether both Ds were  P’s employers.[19]

17.  As for distinguishing Dacas, this court did not simply rely on P’s Sentence. Rather, in paragraphs 98 and 99(a) of the Judgment, this court also considered the difference between the contractual position in Dacas and the Employment Contract and the relationship between P and Ds here.

18.  Whilst I will not come to any firm view,  it is frankly not easy to see the vitality of Intended Grounds 12-16.

19.  Gateway D – Sub-ground 3 (Intended Grounds 10-11)  Mr Wong SC submitted this court applied the wrong test of “serious question to be tried” when considering the applicability of Gateway D by relying on findings made in the context of Gateway C.[20] In any event, the holding that Hong Kong law was the legal system with which the Employment Contract had its closest connection[21] was wrong since (a) the connecting factors overwhelmingly pointed in favour of PRC law, and (b) the only factor that had some connection with Hong Kong was P’s collection of salary in Hong Kong.  On the other hand, Mr Wong submitted the complaint that this court applied the threshold of “serious question to be tried” was incorrect, and this court did correctly apply the “good arguable case” standard when assessing P’s case on Gateway D.[22] Further, for the reasons given by this court, Mr Wong submitted there was no basis to say this court was plainly wrong.

20.  In my view, as regards the appropriate test to be applied, this court was alive to the relevant test.[23] Although this court in paragraphs 140 and 144 of the Judgment noted certain findings were made in the context of Gateway C, this court went on to consider those matters together with other matters, eg the D2 Project[24] and other considerations in relation to the D1 Projects,[25] all under the umbrella of the “good arguable case” criterion (see paragraph 145 of the Judgment).

21.  Further, this court did not conclude that Hong Kong law was the legal system with which the Employment Contract had its closet connection; rather,  this court held there was “a good arguable case” that the relevant law of the Employment Contract was Hong Kong law.  In saying that this court came to the wrong conclusion because the connecting factors overwhelmingly pointed to PRC law and the only connection with Hong Kong was P’s collection of salary in Hong Kong, D3 merely repeated arguments raised at the Hearing which had been addressed in Part VII(e) of the Judgment.

22.  Again, whilst I will not come to any firm view,  I find it not easy to see the vitality of Intended Grounds 10-11.

23.  Gateway F – 2^nd Limb  Since I have found the ex parte Yu Order could not be supported by the 2^nd Limb,[26] it is more appropriate for me to consider Intended Ground 9 in the context of the exercise of discretion not to set aside the Yu Order on the basis of the 2^nd Limb or (if the Yu Order should be set aside) the exercise of discretion to re-grant leave to serve out via Gateway F.

(b)  Forum conveniens (Intended Grounds 17-22)

24.  D3 by Intended Grounds 17-22 that concerned forum conveniens took issue with the Judgment in relation to both the Setting Aside Application and the Stay Application,  so it appeared more convenient to deal with them together.

25.  Mr Wong SC submitted this court wrongly exercised its adjudicatory discretion by the following:

(a)	wrongly taking into account (i) Hong Kong law was the proper law of the Employment Contract,[27] (ii) Hong Kong law was the lex fori,[28] which contention was circular, and (iii) the assumption that P would have no legal aid if he were to commence proceedings in Mainland China against D2;[29]
(b)	failing to take into account relevant factors, including (i) the evidence and witnesses of the Accident located in Mainland China as identified by D3, (ii) the convergence of the lex fori and lex loci delicti if the action were tried in Mainland China, and (iii) (at least for the Stay Application) ex post facto events that occurred after the Yu Order.[30]

26.  On the other hand, Mr Wong submitted D3’s complaint was wrong because this court was entitled to look at the governing law of the transaction[31] by applying the Hong Kong conflict of law rules,[32] and this court had ruled (on a good arguable case basis) that the governing law of the Employment Contract was Hong Kong law, and that the applicable law was also Hong Kong law for the claim in tort. There was also no circularity in that the lex loci delicti was also relevant and applicable under the double actionability rule. Mr Wong went on to say this court had taken into account and rightly refused to give substantial weight to further witnesses who might be discovered in Mainland China.[33]

27.  Further, for reasons given in paragraph 186 of the Judgment, Mr Wong further submitted it was right for this court not to take into account ex post facto events after the Yu Order for the Setting Aside Application, but to take them into account for the Stay Application.[34] As to the matter of legal aid, Mr Wong submitted P would lose his right to legal aid in Hong Kong if the present proceedings were stayed in favour of the PRC Courts, and it was open to this court on the available materials to take into account the fact P had been granted legal aid in Hong Kong, but it was unclear or uncertain whether P would stand to benefit in a like manner in Mainland China.[35]

28.  As Mr Wong SC fairly acknowledged, the relevant Intended Grounds sought to impugn the exercise of discretion by this court, so D3 had to show reasonable prospect of success in demonstrating the view taken by this court on discretionary and fact-specific matters exceeded the generous ambit of reasonable disagreement and was in fact plainly wrong.

29.  I turn first to the matters which it was said this court wrongly took into account:

(a)	It is not easy to see why I should not take into account the choice of law for the Employment Contract as P pursued a cause of action in contract. Given the discussion in paragraphs 20-21 above,[36] it appeared the contention that the relevant law of the Employment Contract was Hong Kong law under the rubric of a “good arguable case” would have vitality.
(b)	D3 suggested it was a circular to say Hong Kong law was the lex fori, but as made clear in the last sentence in paragraph 159 of the Judgment, the issue being addressed in paragraphs 160-175 of the Judgment was not what law (ie Hong Kong law) was the lex fori, but rather what law was the choice of law for P’s other cause of action in tort, ie whether it should be the lex loci delicti (PRC law) or the lex fori (Hong Kong law). This was to be determined by Hong Kong conflict of law rules (see footnote 32 above), and for reasons explained in paragraphs 160-175 of the Judgment, there was good arguable basis that the choice of law for P’s tort claim was Hong Kong law which was the lex fori and not PRC law which was the lex loci delicti. Thus, if P’s tort claim were to proceed in Hong Kong, there was good arguable basis for convergence of the choice of law of such tortious claim and the lex loci, ie Hong Kong law.
(c)	In light of the authorities cited by Mr Wong (see footnote 35 above), the loss of local legal aid if P’s claim were to be stayed in favour of the PRC Courts was a matter that could be taken into account. In fact, what this court took into account in paragraph 196 of the Judgment was even more limited, ie if P had to start his claim afresh in the PRC Courts, the bulk of the efforts he had already made in the present action with the benefit of legal aid he had already enjoyed would be wasted, and any fresh litigation in the PRC Courts would not be able to enjoy such legal aid that had been granted to and utilised by P in taking the present action to the present mature stage. There was no need for this court to make any assumption about “legal aid” in Mainland China as neither party placed such material before the court.

30.  Turning next to the matters which it was said this court failed to take into account:

(a)	As regards the evidence and witnesses in relation to the Accident which/who were located in Mainland China, this court had taken into account this factor and for reasons given declined to give it substantial weight.[37] In particular, this court in paragraphs 187-189 of the Judgment gave reasons as to why the alleged witness(es) in Mainland China would not have significantly swayed the court’s exercise of discretion, which must also be considered in light of the fact (i) there were some key witnesses in Hong Kong on the issue of the employment relationship and the issue of liability (eg P, Lee, Suen and possibly Lau),[38] and (ii) the bulk of the witnesses and documents on quantum would be in Hong Kong.[39]
(b)	As regards the convergence of the lex fori and the lex loci delicti if P’s claim were tried in Mainland China, I have explained in paragraph 29(b) above that the issue at hand was the choice of law for P’s claim in tort of which there was a good arguable case that under Hong Kong conflict of law rules such choice of law was Hong Kong law (ie the lex fori and not the lex loci deliciti).
(c)	As regards the suggestion that this court failed to take in account ex post facto events at least for the Stay Application, this court in fact had taken into account P’s current residence,[40] the witnesses and evidence on the issue of quantum,[41] the witnesses and evidence on the issues of employment relationship and liability,[42] and D2’s potential assets and receivables in Mainland China.[43] On the possibility of potential witnesses on the issue of liability, this court explained that whilst in principle ex post facto matters should not be considered for the Setting Aside Application, this court went on to substantively consider D3’s contentions in paragraphs 187-188 of the Judgment. On the possibility of other parties to be sued as potential defendants and third parties,[44] whilst this court considered such ex post facto factor would be relevant (at best) for the Stay Application and not the Setting Aside Application, nevertheless in paragraph 192 of the Judgment this court actually went on to consider such ex post facto factor if it should have been considered. Although the impact of the Settlement would be an ex post facto matter not pertinent to the Setting Aside Application,[45] this court had gone on to consider such matter in paragraph 196 of the Judgment on the assumption that it was relevant at the inter partes stage. Thus the ex post facto factors relevant for the Stay Application had been considered on assumed/alternative basis under the Setting Aside Application, and this court by Part X of the Judgment captured all those considerations for the Stay Application.

31.  In the circumstances, it is again not easy to see the vitality of Intended Grounds 17-22.

(c) Gateway F – 2^nd Limb (Intended Ground 9)

32.  Since P did not alert the ex parte Master of any intention to rely on the 2^nd Limb of Gateway F, question arose as to whether at the inter partes stage this court could maintain the Yu Order on such basis, and if not, whether this court should re-grant leave for service out.[46] I have concluded that P was not barred from ever relying on the 2^nd Limb of Gateway F,[47] so the issue was whether such gateway would be applicable. This court has endorsed the majority view in Brownlie (SC), and on such basis has considered the 2^nd Limb of Gateway F to be applicable, so had it been necessary, this court would have maintained the Yu Order on such basis, but even if this court were wrong and ought to have set aside the Yu Order, this court would have re-granted leave to serve out as this involved a pure point of law untouched by other established and/or alleged non-disclosures.[48]

33.  Mr Wong SC submitted this court erred in law by endorsing the majority view in Brownlie (SC) that “damage” under the 2^nd Limb includes “indirect” damage suffered as a result of a tort:[49]

(a)	This court fell into error in holding the minority in paragraph 23 in Brownlie SC equated “damage” in the sense of “damage done to an interest protected by law” (as distinct from the “facts which are merely evidence of the financial value of that damage”) with “damage which completes the cause of action”[50] though the 2 concepts are clearly related,[51] and in fact the distinction drawn between “direct” and “consequential” damage is intelligible even for torts actionable per se.
(b)	The “conceptual difficulty” that (i) direct damage should “logically” only have been felt on one place whilst (ii) “damage” under the 2nd Limb may be experienced in more than one jurisdiction[52] is illusory, and there were clearly cases where direct damage may be sustained in more than one place,[53] so reliance on Metall und Rohstoff AG v Donaldson Lufkin & Jenrette Inc & anor[54] and Dynasty Line Ltd v Sukamto Sia[55] was misplaced as those cases did not concern the direct/indirect damage distinction.[56]
(c)	By placing primary reliance on the “ordinary and natural” meaning of “damage”,[57] this court failed to appreciate the historical context and value of the jurisprudence on Article 5(3) of the Brussels Convention for the construction of Order 11 rule 1(1)(f) of the RSC upon which Gateway F is based,[58] and in particular the CJEU in Netherlands v Rüffer[59] (decided before the introduction of Order 11 rule 1(1)(f) of the RSC) did directly draw a distinction between damage sustained by the interest which the law protects, and the expenditure which measures that damage.[60]
(d)	This court failed to appreciate the distinct functions of the jurisdictional gateways and forum conveniens.[61]

34.  On the other hand, Mr Wong submitted D3’s above criticisms should be rejected because the proper interpretation of “damage sustained within the jurisdiction” under Order 11 rule 1(1)(f) of the RHC had been thoroughly considered in paragraphs 211-260 of the Judgment:

(a)	It was said Lord Sumption’s equation of damage in the rule with damage that completes the cause of action has been similarly recognised and explained by Baroness Hale in paragraph 52 of Brownlie (SC), and for reasons given by Baroness Hale and this court, this court could not be said to be wrong. Further, “damage”, which should be contrasted with “injury”, includes “all the detriment, physical, financial and social which the plaintiff suffers as the result of the tortious conduct of the defendant”,[62] so this court’s analysis on Metall und Rohstoff and Dyansty Line Ltd was correct, and the other authorities do not draw distinction between direct, indirect and consequential damage.[63]  Thus, the 2nd Limb of Gateway F should be construed according to established legal as well as natural and ordinary meaning.[64]
(b)	For reasons given by Lord Wilson at paragraphs 61-65 in Brownlie (SC), the CJEU jurisprudence has little bearing, and the Brussels Convention, of which Hong Kong has never been part, should have no role in the construction of the RHC in the Hong Kong context.
(c)	The majority’s construction in Brownlie (SC) will not confer universal jurisdiction on the court as there are still safeguards of (i) the “significant damage” threshold and (ii) the robust application of the principles of forum non conveniens.[65]

35.  In any view, as Intended Ground 9 involved a pure point of law with different majority/minority obiter opinion in the English Supreme Court and with no local authority binding on this court, it is plainly a circumstance in which it can be said there is some other reason in the interests of justice why the appeal should be heard on this intended ground. In my view, this is a matter of general principle to be decided for the first time, and a question of importance upon which the wisdom of the Court of Appeal will shape guidance on gateway considerations for service of proceedings out of jurisdiction in relation to a foreign tort where the injured party is within the jurisdiction and one or more tortfeasor(s) is/are outside the jurisdiction. I am of the view that leave to appeal ought to be granted in respect of Intended Ground 9 under section 14AA(4)(b) of the HCO.

(d)  Material non-disclosure

36.  The challenge raised by D3 in this respect was against this court’s adjudicatory and fact-specific exercise of discretion.

37.  Established material non-disclosures (Intended Ground 8)  Mr Wong SC submitted this court wrongly exercised its discretion not to discharge the Yu Order despite having found material non-disclosures on P’s part in relation to Ds’ presence and P’s then residence in Mainland China notwithstanding the general rule that the court should discharge an ex parte order obtained in breach of the duty of full and frank disclosure.[66]  Further,  it was plainly wrong for this court to hold the established material non- disclosures were not too important or significant given its conclusion on forum conveniens[67] when such established material non-disclosures were recognised as being relevant to the issues of the governing law of the Employment Contract and forum conveniens.[68] As to the extent of P’s culpability for the established material non-disclosures, it was said this court erred in taking into account irrelevant considerations[69] and in failing to take into account relevant considerations,[70] and also erred in principle.[71]  In any event, undue weight was placed on the fact that the Yu Order would have been granted if disclosures were made.[72]

38.  On the other hand, Mr Wong submitted this court had gone through the requisite assessment exercise and concluded the established material non-disclosures would not have affected the conclusion on the merits, and thus the outcome, of P’s application for service out,[73] which reasoning was logically different from the objectionable reasoning in Excel Courage Holdings Ltd.[74] Mr Wong next submitted D3’s criticism against this court’s views as to the culpability of the established non-disclosures, ie that this court erred in principle, failed to take into account relevant considerations and took into account irrelevant considerations, was unfair:

(a)

Mr Wong argued D3 took the matters out of context[75] as (a) the fact P deposed to various material matters which showed his claim’s connection with Mainland China at the ex parte stage must be relevant to the assessment of whether the material non-disclosures were deliberate (especially in light of D3’s submissions that “…… the P 1st/2nd Affs were tailored to avoid disclosure of any legal/factual matter that might prejudice P’s ex parte leave application, so connections with Mainland China were downplayed or concealed ……”),[76] and (b) the “additional information”, in the P 6th Aff, which was to rebut D3’s complaint that even by the time of the Summons P still failed to volunteer information,[77] was plainly relevant.

(b)

Mr Wong submitted this court did take into account the issue of explanation, which was expressly mentioned and addressed with reference to the P 6th Aff,[78] but there could be no objection in principle to the use of inter partes stage materials on the issue of explanation for non-disclosure given that such explanation could not have logically existed in the ex parte stage materials,  and P explained on oath the need for mentioning the established undisclosed matters did not cross his mind at the time.[79]

39.  In my view, as regards the criticism that this court found the established non-disclosures as not too important or significant given their relevance to (a) the governing law of the Employment Contract and (b) forum conveniens, this court has found that the established non-disclosures were relevant to (a)-(b) above otherwise this court would not have accepted them to be “material” non-disclosures.[80]  But in the analysis on Sub-ground 3 of Gateway D (ie the governing law of the Employment Contract), this court did take into account Ds’ presence and P’s then presence in Mainland China,[81] but in all the circumstances still found there was a good arguable case that the relevant law of the Employment Contract was Hong Kong law.[82] In the analysis on forum conveniens, this court also took into account D2’s presence in Mainland China,[83] but it was not easy to see the relevance of P’s then residence in Mainland China on the issue of forum conveniens when P had returned to Hong Kong 4 days after the Accident and stayed in Hong Kong ever since.  Nevertheless, in all the circumstances,  this court still found Hong Kong to be the forum conveniens.

40.  On the matter of P’s culpability for the established non- disclosures:

(a)	It was suggested that P failed to address the established non-disclosures because the disclosed materials at the ex parte stage was to advance his own case and the further materials disclosed at the inter partes stage were in response to the Li 2nd Aff (see footnote 69 above). In my view, the materials disclosed by P were of course insufficient otherwise there would not have been established material non-disclosures at the ex parte stage, but what this court highlighted was the fact P did not in his affirmations hide the fact he had connections with Mainland China at the time.[84]
(b)	It was suggested this court failed to take into account P did not have valid explanation for the established non-disclosures. But P did offer and this court did take into account his explanation on affirmation and D3’s objection thereto.[85]
(c)	It was suggested this court should not seek to excuse the established non-disclosure as to where the Employment Contract was concluded by P’s unpleaded allegations in the P 6th Aff as explained in paragraph 122 of the Judgment.[86] Although the countervailing argument put forward by Mr Wong in paragraph 38(b) above is tempting, D3 may have a reasonable prospect of carrying his argument in this respect on appeal, but Mr Wong may have a point in querying whether this would impugn the overall exercise of discretion to continue ex parte leave or re-grant leave to serve out.

41.  This brings me to a point of law in which I consider may be sufficient to invoke the “some other reason in the interests of justice” ground for leave to appeal.  Mr Wong SC cited Excel Courage Holdings Ltd v Wong Sin Lai[87] for the proposition that as a general rule the court should discharge an ex parte order obtained in breach of the duty of full and frank disclosure, and that even though there is no hard and fast rule any exercise of discretion to overlook non-disclosure and/or to re-grant the order should be exercised with great caution, and on such basis it was said this court placed undue weight on the fact that the Yu Order would have been granted if disclosures were made.  But in the context of long-arm jurisdiction of the court to serve proceedings outside jurisdiction, Pacific Electric Wire & Cable Co Ltd v Texan Management Ltd & ors suggested that to punish a party by preventing him from ever obtaining an order for service outside the jurisdiction on the basis that there had been material non-disclosure on the first application for service out “would be a punishment and not a matter of protection of the court’s own process”, so whilst such plaintiff has to bear the costs of the application to set aside and costs thrown away, “it is appropriate that the proceedings are served outside jurisdiction”[88] if the case is a proper one for service out anyway (see also the approach adopted by DHCJ Coleman SC (as he then was) in Pacific Aerosupplies Ltd v Dakota Air Parts International Inc[89]and Kwan J (as she then was) in SFC v A[90]).  Clear guidance from the Court of Appeal as to the proper approach to adopted in how to deal with material non-dusclosures in the context of service of proceedings outside jurisdiction will inform the vitality of this intended ground of appeal raised by D3.  In my view,  leave should be granted for Intended Ground 8 to invite enlightenment by the Court of Appeal.

42.  Other alleged material non-disclosures (Intended Grounds 1-7) As regards the other alleged material non-disclosures that D3 relied on, Mr Wong SC raised 3 essential arguments.

43.  First, Mr Wong SC argued this court failed to appreciate the materiality of such other material non-disclosures.  It was said that in holding there was no material non-disclosure of P’s job duties (on the basis that the P 2^nd Aff disclosed he was “assigned to work in various cities in Mainland China”),[91] this court failed to recognise P had exclusively rendered his duties under the Employment Contract in Mainland China and never carried out any projects for D2 in Hong Kong.[92]

44.  On the other hand, Mr Wong submitted there was no material non-disclosure as regards the fact that a substantial part of P’s work and job duties was in Mainland China. After all, P made clear that he was frequently assigned to work in various cities of Mainland China, and the Employment Contract’s connection with Mainland China was obvious. It was further said that (a) the matters raised by D3 in footnote 92 above “did not demonstrate definitively that P worked exclusively in Mainland China”[93] and so was consistent with P’s case in the P 1^st/2^nd Affs, and (b) the Employment Contract did not stipulate that only D2 could instruct P at work.

45.  In light of the discussions in the Judgment on Gateway C and Sub-ground 3 of Gateway D (which took into the account and analysed P’s job duties[94] against the relevant circumstances but nevertheless concluded in favour of P on such Gateways), and my preliminary views on the Intended Grounds against the conclusions in relation to these 2 Gateways, I do not find it easy to see the vitality of D3’s contention that there was materiality in respect of the other non-disclosures which I have rejected.

46.  Secondly, Mr Wong SC argued this court’s rejection of Sub-ground 1 of Gateway D due to the absence of information on how P was notified of D2’s acceptance of the Employment Contract and how the signed contract was sent to him[95] clearly demonstrated its materiality, which should necessarily have been considered.[96]  Further, it was said that because this court failed to appreciate the relevance of such information to the governing law of the Employment Contract[97] (and thus forum conveniens), this court erred in holding it was immaterial for the matter of forum conveniens.  On the other hand, Mr Wong submitted this court was correct in holding that no issue of material non-disclosure arose when in the first place P failed to discharge his burden in showing a good arguable case that the Employment Contract was concluded in Hong Kong for Sub-ground 1 of Gateway D. Further, given that the Employment Contract was sent to the United States for D2 to sign, the place for its conclusion could not have been Hong Kong. So there was no material non-disclosure on the issue of the governing law of contract. In any event, Mr Wong suggested that alleged impact on the issue of forum conveniens was extremely remote and could not have been regarded as material.

47.  In my view, since the test of materiality must be context specific, the focus of the inquiry would be the impact of the non-disclosure as to how P was notified of D2’s acceptance of the Employment Contract and the ultimate destination of the signed contract on Sub-ground 1 of Gateway D.  Since I have found P could not rely on Sub-ground 1 of Gateway D at all, I am unable to see how the non-disclosure could have any material impact. As regards the relevance of the non-disclosure as to Sub-ground 3 of Gateway D (ie the governing law of the Employment Contract) and the matter of forum conveniens, I reiterate what was said in paragraph 39 above.

48.  Thirdly, Mr Wong SC submitted this court misunderstood the relevance of the information described in paragraph 275 of the Judgment about P’s alleged employment relationship with D1, which was not concerned with whether there was a “serious issue to be tried” against D1,[98] but with the applicability of Gateway C (ie whether D1 was an “anchor” defendant).  To that end, the lack of such an employment relationship was said to be a defence that could “reasonably be expected to be raised in due course” by D1,[99] which was not denied by P,[100] and so should have been disclosed.  Mr Wong SC submitted that in any event, this court applied the wrong test for materiality by referring to its finding that such information was “not so clear as to definitively demonstrate D1 was not P’s employer” (my emphasis).[101]

49.  On the other hand, Mr Wong submitted there was no misunderstanding on the part of this court. It was said the alleged non-disclosure relied on by D3 was on a matter of merits, and the court held that for non-disclosure of merits to be material, it has to be of such weight which may mislead the court in exercising its discretion,[102] or in other words, which may render the claim completely groundless,[103] and “[this] is so regardless of whether it is on the question of serious question to be tried or of the real issue between P and the anchor defendant” (see paragraph 7 of the written submissions by Mr Wong). On such basis, it was said this court adopted the appropriate standard of “definitively demonstrate D1 was not P’s employer” as the defence must be “very likely to affect the claim to the extent that there may be no serious issue to be tried”,[104] or if D3 preferred, no real issue.

50.  I only need to deal with this shortly. In paragraph 276 of the Judgment, I said as follows:

“……. Bearing in mind the context/focus of the Order 11 inquiry before the ex parte master, which essentially is to decide whether the Hong Kong court is to assume jurisdiction (and which must be quite a different exercise from that for an application for ex parte restraining injunction), I find that the court in considering whether to grant ex parte leave for the plaintiff to issue/serve concurrent originating process out of jurisdiction is not concerned with the merits of the case or the defences to be raised save that it should be satisfied that there is a serious question to be tried. ……”

There was no suggestion from the above the “serious question to be tried” merely concerned the claim against D1. Rather, the question was whether there was a serious issue to be tried on the merits of P’s claim for the applicability of Gateway C, which covered whether there were genuine proceedings against D1 within the jurisdiction and whether D2 outside the jurisdiction was a necessary or proper party.[105] This was why this court in paragraph 56 of the Judgment noted it was explained in Hady v Bazar[106] that “failure in such context to refer to arguments on the merits which the defendant may raise in answer to the claim will not amount to material non-disclosure unless they are of such weight that their omission would mislead the court in exercising its jurisdiction/discretion whether or not to grant leave”.  Lord Sumption in Nilon Ltd v Royal Westminster Investments SA[107] explained that the test in relation to D1’s claim was whether it was “bound to fail”, which echoed what Mr Wong said in the above paragraph and the standard adopted by this court of “definitively demonstrate D1 was not P’s employer”.  More importantly, Lord Sumption in Nilon Ltd went on to say that as follows:

“(6) The question of the merits of the claim is relevant to the question of whether the claim against D1 is ‘bound to fail’ and to the question whether there is a ‘serious issue to be tried’ in relation to the claim against D2; and there is no practical difference between the two tests, and they in turn are the same as the test for summary judgment.” (my emphasis)

51.  In the circumstances, while I need not come to any firm view, I do not find it easy to see cogency for Intended Grounds 1-7.

IV.  CONCLUSION

52.  Even though I can see the force of a number of Mr Wong’s arguments, and (as seen from the above discussion) I have reservations about a number of the Intended Grounds, I have come to the view that it is inappropriate for this court to stand in the way of an appeal that, among other considerations, will hopefully bring enlightenment on some important points of law.

53.  In the circumstances, I grant leave to appeal against the Order.  I therefore grant an order in terms of paragraph 1 of the Leave Summons.  I also grant a costs order nisi that costs of and occasioned by the Leave Summons (including all costs reserved, if any) be costs in the cause of the appeal.