CHEN HONGQING v. ASIA CEMENT CORPORATION

HCA 1304/2017

[2021] HKCFI 2861

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1304 OF 2017

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BETWEEN

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DECISION

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A. The application for leave to appeal

1.  By my decision of 16 March 2021 (the “Decision”), I amongst other matters dismissed the Joinder and Injunction Summons taken out by Chen HQ in HCA 1304.

2.  By summons of 30 March 2021 (the “LOA Summons”), Chen HQ seeks leave to appeal against that decision.

3.  Pursuant to a consent order of 9 June 2021, the application was agreed to be disposed of on the papers. For that purpose, directions on the filing of submissions have been given.

4.  Pursuant to those directions:

(a) Mr Law Man-Chung SC filed his submissions of 9 July 2021 on Chen HQ’s behalf (“Mr Law’s Submissions”);

(b) Mr Simon Westbrook SC and Ms Sharon Yuen filed their submissions of 6 August 2021 in opposition on behalf of the 962 Ds (who are the same as the Intended 2^nd to 5^th defendants in HCA 1304) (“Mr Westbrook’s Submissions”);

(c) Mr Abraham Chan SC and Mr Joshua Chan filed their submissions of 6 August 2021 in opposition on behalf of ACC (“Mr Chan’s Submissions”); and

(d) Mr Law filed his submissions of 20 August 2021 on Chen HQ’s behalf in reply (“Mr Law’s Reply”).

5.  I have considered the submissions. I have considered also the authorities cited before me. For the reasons below, I refuse Chen HQ leave to appeal.

B. Leave to appeal – the applicable legal principles

6.  The Decision being interlocutory in nature, leave to appeal is required — High Court Ordinance (Cap 4), section 14AA, and Order 59 rule 2B(1).

7.  The threshold for granting leave is governed by section 14AA(4) of the High Court Ordinance. It is “a reasonable prospect of success”, or “some other reason in the interests of justice why the appeal should be heard”. Relevant to the interpretation of that section I have been referred to SMSE v KL [2009] 4 HKLRD 125 at §17, Wynn Resorts (Macau) SA v Mong Henry [2009] 5 HKC 515 at §19, Ho Yuen Ki Winnie v Stanley Ho, unrep, HCMP 1009/2009, 24 August 2009 at §16, and Green Laconic Ltd v Fan Chin Wa [2021] HKCFI 1884 at §6, which I have considered.

C. The facts

8.  I refer to the Decision for the relevant facts, which I will not repeat.

D. The revised draft Notice of Appeal

9.  A draft Notice of Appeal is attached to the LOA Summons.

10.  In Mr Law’s Submissions, he seeks leave to revise the same. He attaches to his submissions a copy of the revised draft Notice of Appeal (“Revised NOA”).

11.  The proposed revisions are minor. I grant Chen HQ leave to rely on the Revised NOA.

12.  The proposed grounds set out in the Revised NOA are under two headings:

(a) Heading A, which relates to “The Judge’s refusal of the Plaintiff’s application to amend the Statement of Claim to join the Intended Defendants”; and

(b) Heading B, that “The learned Judge erred in refusing the Plaintiff’s application for interlocutory injunction”.

13.  I consider the grounds under the two headings in turn.

E. Proposed grounds under Heading A

14.  There are 3 proposed grounds under Heading A.

E.1. Proposed ground 1

15.  Proposed ground 1 seeks to argue that Chen HQ should be entitled to amend the Statement of Claim without leave pursuant to Order 20 rule 3(1), and this Court erred in dismissing his application to do so.

16.  Whilst Order 20, rules 1(1) and 3(1) provide respectively that the writ and pleadings may be amended once before deemed close of pleadings, Order 20 rule 1(3) stipulates that Order 20 rule 1 shall not apply in relation to an amendment which consists of the addition of a party.

17.  As explained in §20/1/4 of Hong Kong Civil Procedure 2021:

“ The statement of claim and the writ should correspond in the names of the parties, in the number of the parties, and in the capacities in which they sue or are sued …

…

A plaintiff may not amend the writ after service without leave where the amendment consists of the addition, omission or substitution of a party to the action …”

18.  By §1 of the Joinder and Injunction Summons, Chen HQ sought “leave to amend the Writ of Summons endorsed with the Indorsement of Claim… and the Statement of Claim”.

19.  The purpose of the proposed amendments was to effect the joinder of the 962 Ds.

20.  In my view, given the purpose of the amendments, and given the requirement that the statement of claim and the writ should correspond in the names and number of the parties, Chen HQ could not have relied upon Order 20, rule 3(1). That rule was in fact not relied on by Mr Mak when he argued the matter before me.

21.  Proposed ground 1 in my view is not reasonably arguable.

22.  In Mr Law’s Reply, Mr Law in effect abandons proposed ground 1. It is no longer proposed to be argued that Chen HQ was entitled to amend without leave pursuant to Order 20, rule 3(1). Instead, Chen HQ seeks to argue that this Court erred in dismissing his application to amend the Statement of Claim when “there are serious issues to be tried and the Court cannot resolve the matters on affidavits alone”.

23.  This proposed re-revised ground 1 raises issues which overlap with proposed ground 4, which I for the reasons set out in the latter part of this Decision hold to be not reasonably arguable.

24.  I refuse leave on the proposed ground 1.

E.2. Proposed ground 2

25.  By proposed ground 2, Chen HQ seeks to rely on Order 15 rule 4 to argue that this Court erred in refusing him leave to join the 962 Ds when the joinder should be allowed as of right.

26.  In §20/1/4 of Hong Kong Civil Procedure 2021 referred to above, it is further explained that:

“ If either party desires to add a new plaintiff or a new defendant, he must apply under O.15 rr.6 and 7 unless the amendment is made before the service of the writ on any party to the action.”

27.  I accept Mr Westbrook’s submissions that in light of Order 20 rule 1(3)(a), one would not be allowed to invoke Order 15, rule 4(1) to add a party without leave if a writ has already been issued and served.

28.  In my view, the proposed ground 2 is not reasonably arguable, and I refuse leave on the same.

E.3. Proposed ground 3

29.  By proposed ground 3, Chen HQ seeks to argue that even if leave to amend is required, such leave should be granted under Order 15 rule 6(2)(b).

30.  In Mr Law’s Submissions, Mr Law develops the ground by arguing that this Court erred in §20 of the Decision when this Court, relying upon the cases cited therein, observed that there is no point in granting Chen HQ leave to join the 962 Ds if his case against them is bound to fail or not viable at all.

31.  Mr Westbrook has cited a number of authorities in support of the following proposition, that while there is no requirement for the applicant for joinder to show merits in his case, it is nevertheless open to the proposed defendant to show that it is plain and obvious that the applicant has no properly arguable case against the proposed defendants. Those authorities include Yeung Pui Ying Anna v Day & Chan, unrep, CACV 67/2010, 20 July 2010, at §11 per Ma CJHC (as the ex-Chief Justice then was), Advanced Connection Ltd v Able Technology (Hong Kong) Ltd & Ors [2018] HKCFI 2465 at §§16 to 22, affirmed on appeal in Advanced Connection Ltd v Able Technology (Hong Kong) Ltd & Ors [2019] HKCA 1092 at §§20-21, Pang Kwok Lam v Schneider Electric Asia Pacific Ltd, unrep, HCPI 90/2010, 5 January 2011 at §§73 and 82 per Master Marlene Ng (as Her Ladyship then was), and Green Laconic Ltd v Fan Chin Wa [2021] HKCFI 749 at §46 per DHCJ Paul Lam SC.

32.  In my view, the proposition put forward by Mr Westbrook is supported by the above-mentioned authorities, and is consistent with Wong Shan Shan v The Incorporated Owners of Yue Wah Mansion, unrep, HCA 1086/2013, 28 January 2015 and Koo Ming Kown v Rev Mok Kong Ting & Ors [2018] HKCFI 967, which Mr Law relies upon.

33.  This Court is also said to have erred in applying at §20(a) of the Decision Goldbay Fortis Ltd v Rich Resource Development Ltd [2018] HKCFI 2684.

34.  I do not find it reasonably arguable that this Court erred in referring to Goldbay Fortis:

(a) In Goldbay Fortis, at §15, this Court referred to Natamon Protpakorn v Citibank NA [2009] 1 HKLRD 455 (CA) where Cheung JA observed at §25 inter alia that:

“ Leave is readily granted to amend before the trial unless it can be demonstrated that the new claim based on the proposed amendment is bound to fail (see Hancock Shipping Co Ltd v Kawasaki Heavy Industries Ltd [1992] 1 WLR 1025). While the court is entitled to have regard to the merits of the case, it should only do so when the merits are readily apparent, and are so apparent as not to require prolonged investigation (see eg Kings Quality Homes Ltd v AJ Paints Ltd [1997] 3 All ER 267).

(b) as submitted by Mr Westbrook, Kings Quality Homes was a case on substitution of parties, and Staughton LJ observed at 31G-H that:

“ … a judge … is entitled to have some regard to the merits of the case if they are readily visible to him.”

35.  Mr Law relies on TSB Private Bank International SA v Chabra [1992] 1 WLR 231 for the proposition that a party could be added as a relevant party in an action even though there is no cause of action against that party.

36.  In my view, TSB does not assist Chen HQ. As Mr Westbrook has submitted, that case concerns the Court’s power to join a third party holding assets which may be amenable to enforcement based on the Chabra jurisdiction even if there is no cause of action against the third party. In the present case, Chen HQ does propose to plead a case against the 962 Ds. As I have summarised at §19 of the Decision, the bases and proposed bases of Chen HQ’s case are that the 962 Ds were in breach of the terms under the SPGA, and that the breaches were procured by ACC. I have explained at §§40 and 41 of the Decision why I have formed the view that it is plain and obvious that Chen HQ’s proposed claim against the 962 Ds is not viable at all, and how the contradictory and inherently incredible cases that Chen HQ has run impact directly not just on his case against the 962 Ds but also on his case against ACC.

37.  In my view, the proposed ground 3 is not reasonably arguable, and I refuse leave thereon.

F. Proposed grounds under Heading B

38.  There are 4 proposed grounds under Heading B.

F.1. Proposed grounds 4 and 5

39.  Proposed grounds 4 and 5 both complain that this Court has erred in holding that there are no serious issues to be tried. They may be taken together.

40.  As Mr Chan has submitted, supported by Gu Zhouheng v Huang Wei Cheng [2019] HKCFI 381 at §§67-68, Chen HQ must lay a proper evidential foundation in support of the claim that there is a serious issue to be tried, and bare allegations are insufficient.

41.  I have explained in the Decision why I have formed the view that Chen HQ has failed to show any serious issue to be tried.

42.  As Mr Westbrook has pointed out[1], which is indeed the case, Chen HQ has not challenged this Court’s conclusion that Chen HQ had put forward clearly contradictory cases, and that his case is inherently highly incredible and contrary to written documents, including the various versions which Chen HQ had put forward under oath in his affirmations.

43.  Similarly, Mr Chan points out[2] that critically, in Mr Law’s Submissions, Chen HQ has not even attempted to grapple with the facts and evidence forming the basis for this Court’s findings that Chen HQ has failed to show any serious issue to be tried.

44.  Rather, Chen HQ refers to certain observations made by Mimmie Chan J in her decision in HCMP 962/2017 on 27 June 2017 (“27.6.2017 Decision”), and by G Lam J (as he then was) in his reasons for decision in HCMP 962/2017 on 31 May 2018 (“31.5.2018 Reasons”) in seeking to show that there are serious issues to be tried.

45.  The reliance on those decisions is misplaced. I accept Mr Westbrook’s and Mr Chan’s submissions that the issues in those proceedings were different. More importantly, one of the main reasons why I have reached the conclusion that Chen HQ has failed to show serious issues to be tried is that Chen HQ has put forward different cases before different Courts in different proceedings. For example, as found by G Lam J at §13 of the 31.5.2018 Reasons, Chen HQ presented a misleading case to Mimmie Chan J when applying for interim receivership.

46.  Mr Law submits[3] that certain issues which even ACC says the present action gives rise to have nothing to do with the credibility of Chen HQ’s oral evidence, and given the governing law being Mainland law, this Court erred in holding that there are no serious issue to be tried.

47.  In this regard, I accept Mr Westbrook’s submissions that whatever the governing law, Chen HQ’s case on the facts and the nature of the contractual arrangement between Chen HQ and the 11 Representatives remain important, and that Chen HQ’s case is, as I have observed, inherently contradictory and incredible.

48.  I am not satisfied that proposed grounds 4 and 5 are reasonably arguable. I refuse leave thereon.

F.2. Proposed ground 6

49.  Proposed ground 6 complains that in determining the balance of convenience, this Court erred in taking into account the erroneous rulings that there are no serious issues to be tried and that Chen HQ’s claims against the 962 Ds are doomed to fail.

50.  I repeat the discussions above under proposed grounds 4 and 5. Proposed ground 6 is premised upon my conclusion that there are no serious issues to be tried being erroneous. I am not satisfied that the premise is reasonably arguable.

51.  In so far as it is complained that this Court has made no determination as to where the balance of convenience lies[4], I repeat §§42 to 44 of the Decision.

52.  I am not satisfied that proposed ground 6 is reasonably arguable.

F.3. Proposed ground 7

53.  Proposed ground 7 is just a catch-all ground which adds nothing to the earlier proposed grounds.

G. Disposition

54.  For the above reasons, I refuse Chen HQ leave to appeal.

H. Costs

55.  I make a costs order nisi that Chen HQ shall bear the costs of and occasioned by the LOA Summons, with certificate for 2 counsel for both the 962 Ds and ACC, to be taxed if not agreed. The costs order nisi is to become absolute within 21 days from the date of this Decision, unless any party seeks variation or summary assessment in the meantime, and for that purpose parties are granted liberty to write to my clerk, in which case I will give directions on the papers for further conduct of the same.