CHU HSIAO CHIU alias CHU TONY CHU HSIAO CHIU alias CHU HSIAO CHIU, deceased v. MA JINRUI MA MING AND ANOTHER

HCA 2994/2018

[2020] HKCFI 942

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2994 OF 2018

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BETWEEN

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DECISION

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A. INTRODUCTION

1.  This is a case management decision relating to an application dated 21 May 2020 issued by the plaintiff seeking leave to file two affidavits in opposition to various applications taken out by the defendants, which have been fixed to be heard on 15 June 2020 (with one day reserved).

2.  The application is opposed by the defendants on the basis that it is an extremely late application to introduce new evidence on the eve of the coming substantive hearing just three weeks away.

B. BACKGROUND AND CONTEXT

3.  It is necessary to put the application in its proper context.

4.  The action was begun by writ of summons dated 28 December 2018.  The general indorsement of claim identified that the plaintiff – Tarn Dei-Mey – brought the claim on behalf of the Estate of the late Mr Tony Chu Hsiao Chiu 朱曉秋.  Ms Tarn is the mother of Mr Chu.  The claim, made jointly and severally against the defendants, is for sums of approximately HK$30.9 million (“Sum”) held in a private bank account maintained in the name of the 1st defendant for the benefit of Mr Chu.  It is alleged that, following the death of Mr Chu, his assets were wrongfully and systematically liquidated by the 1st defendant and the proceeds were paid to her own benefit and to an account of the 2nd defendant.

5.  It is common ground that the 1st defendant was the long-term girlfriend and/or co-habitee of Mr Chu, and she is the sister of the 2nd defendant.

6.  Also on 28 December 2018, the plaintiff made an application for a Mareva injunction against the defendants, said to have been in support of an international tracing and recovery exercise being undertaken on behalf of the plaintiff to recover the Sum.  That application was led by the affidavit of plaintiff’s solicitor, Mr Jeffrey Lane, to which was exhibited an affidavit made by Ms Stephanie Tang on 21 September 2018 in HCMP 1555/2018, proceedings brought seeking disclosure from the relevant bank about the account in which the Sum was held.  Ms Tang is the half-sister of Mr Chu.

7.  The Mareva injunction order was granted by Mr Recorder Eugene Fung SC on 28 December 2018.  It was later continued by orders of 4 January 2019, 1 February 2019 and 15 February 2020.  The last continuation was until trial or further order.

8.  On 4 February 2019, the writ was amended to change the title of the plaintiff from “Tarn Dei-Mey (in her capacity as the Intended Administratrix of the Estate of Chu Hsiao-Chiu 朱曉秋alias Chu Tony Hsiao-Chiu alias Chu Hsiao-Chiu)” to “Chu Hsiao-Chiu 朱曉秋alias Chu Tony Hsiao-Chiu alias Chu Hsiao-Chiu, deceased”.  As the margin note identifies, the amendment was made without leave.

9.  Also on 4 February 2019, an application was made under Order 15 rule 6A(4) for an order that Ms Tarn be appointed to represent the Estate in the proceedings.  On 5 March 2019, Master Kot ordered Ms Tarn to be appointed to represent the Estate of Mr Chu for the purpose of the proceedings, and for the proceedings to be carried on by Mrs Tarn as if she had been substituted for the Estate.

10.  By summonses dated 17 May 2019, the defendants applied (1) to discharge the Mareva injunction order; and (2) for the plaintiff’s claim to be struck out, or alternatively that the question be determined whether the plaintiff has authority and/or locus standi to bring the present action. By summons dated 12 June 2019, the defendants applied for the ex parte carry-on order granted by the master to be set aside.  By summons dated 17 June 2019, the defendants applied for the amendment to the writ to be disallowed and struck out.

11.  All four summonses (“Summonses”) first came before then DHCJ Keith Yeung SC on 18 June 2019.  He directed the Summonses to be adjourned to a date to be fixed with one day reserved in consultation with Counsel’s diary, and set a timetable for the filing of evidence.  He granted leave to the plaintiff to file evidence in opposition to each of the summonses within 28 days, and leave to the defendants to file evidence in reply within 28 days thereafter.  He also specified that no further evidence shall be filed by the parties without leave of the Court, but granted liberty to apply.

12.  The hearing date fixed was 26 May 2020.  I am told the delay or lateness in that date as fixed was in part due to the availability of the defendants’ Counsel, Mr Alex Fan, in consultation with whose diary the date was fixed.  It seems the date was not fixed by reference to or in consultation with any Counsel for the plaintiff.  For administrative reasons, the 26 May 2020 date was subsequently later moved by the court to the 15 June 2020 date currently fixed (on which date Mr Fang is instructed to appear for the defendants).

13.  No affidavit evidence was filed by or for the plaintiff within the deadline set, which expired on 16 July 2019.  However, on 15 July 2019, the plaintiff’s solicitors proposed delaying the timetable so as to allow the plaintiff to file evidence by 30 August 2019 and for the defendant to reply by 15 October 2019. Following a request by the defendants’ solicitors on 16 July 2019 for further information on which they could take instructions, it seems no further correspondence was exchanged.

14.  Instead, on 19 November 2019 two affidavits were filed on behalf of the plaintiff.  But no extension of time had been agreed, or sought from the court, and no prior leave had been obtained.  Nevertheless, no particular issue has apparently been taken in that regard.

15.  Rather, by summons dated 6 May 2020, the defendant sought leave to file the 4th affirmation of the 1st defendant.  The summons was fixed for hearing on 14 May 2020.  In advance of that hearing, the solicitors for the plaintiff indicated that the plaintiff also wished to file two further affidavits, but the drafts were not produced.  At the hearing, and by consent, I granted leave to file the 4th affirmation of the 1st defendant and leave for the plaintiff to file an affidavit in response on matters regarding related proceedings in Beijing, with a deadline of 22 May 2020.  I also required the plaintiff to issue a summons on or before 22 May 2020 seeking leave to file its further two affidavits, and to provide at least drafts of those affidavits, and I fixed a further hearing on 26 May 2020 to deal with that summons and any consequential matters.

16.  As already indicated, the plaintiff’s summons was issued on 21 May 2020.  It seeks leave to file a further affidavit from each of Ms Tang and Ms Tarn, both dated 20 May 2020.  In broad terms, both affidavits cover their relationship with Mr Chu, the source of his wealth, Mr Chu’s relationship with the 1st defendant, dealings with the 1st defendant (including after Mr Chu’s death) and with the Ma family in general, and responses to the 3rd affirmation of the 1st defendant.

C. APPLICABLE PRINCIPLES

17.  There is no significant dispute as to the principles applicable on an application such as the present application for filing further affidavit evidence. 

18.  It is well-established in the ‘post-CJR era’ that the underlying objectives emphasise not only substantive but also procedural fairness.  Therefore, late or last-minute applications trigger the Court’s expectation that the applicant will provide a full account of the lateness of the application, and full justification as to why the application should be entertained at all at such a late stage.

19.  There is no longer room for the notion that delay, even though inordinate and unexplained, will be forgiven as long as there is no prejudice and costs are paid.  Courts should take into account that there may be an irreparable element of unfair prejudice in unnecessarily delaying proceedings.  Further, the vacation or adjournment of the hearing occasioned by last-minute applications may mean the loss of the hearing day which could have benefited other litigants, and inefficiencies in the use of Court time, which is a public resource.  Hence, late applications can be dismissed on the basis of lateness alone.

20.  Further, whilst the ultimate concern of the court is to achieve a just resolution of the case, it does not mean that a party should be permitted to raise any arguable case at any point in the proceedings, simply on payment of costs.  If a party has been afforded a reasonable opportunity to advance its case, the just resolution of the case does not require that he should be allowed a further opportunity in spite of his own inordinate and inexcusable delay.  Essentially, the applicant making a late application is extremely unlikely to be able to rely upon self-induced prejudice.

21.  Of course, each case turns on its own particular circumstances.  There may also be a real and practical difference between (a) an application to admit new evidence shortly before a trial and (b) an application to admit new evidence in the context of an interlocutory hearing.  But the underlying principles remain the same, and it is only the exercise of the court’s discretion by reference to the particular circumstances which might change.               

D. THE SUBMISSIONS

22.  On behalf of the defendants, Mr Jeffrey Lee of Counsel submits that the plaintiff’s late application should be rejected on three grounds, each of which is fatal.

23.  First, he points out that the application was issued only about three weeks prior to the fixed substantive hearing, when the evidence which the new affidavits seek to oppose/answer was filed as long ago as May and June 2019.  Not only did the plaintiff completely fail to comply with a timetable imposed by the Court, nor was there any application to seek any extension of time.  Essentially, Mr Lee submits, there has been nothing but inordinate delay and inaction on the plaintiff’s part for 10 months.

24.  Secondly, Mr Lee points out that there has still been no explanation from the plaintiff as to why the application is made at such a late stage.  There is no affidavit explaining lateness, and the affidavits sought to be adduced do not explain the lateness either.  Further, the material sought to be adduced was available long ago, probably even before the 16 July 2019 deadline originally imposed.

25.  Thirdly, Mr Lee submits that even assuming that the plaintiff might be prejudiced by not having the late affidavit submitted into evidence, the Court has to balance that prejudice against the prejudice caused to the defendants.  The late provision of the affidavits affords the defendants very limited time in which to gather the material to respond to those matters dealt with, and the original order granted the defendants at least 28 days to reply.  It would be unfair to permit the plaintiffs something approaching 11 months to prepare their affirmations, yet restrict the reply to a period of just 14 days as the plaintiff’s summons suggests.  There will, Mr Lee submits, also be further prejudice in an inevitable derailment and adjournment of the substantive hearing fixed many months ago.  Further, even if the hearing is adjourned slightly (as the Court indicated might be possible), there would be prejudice from seeking to collate the evidence in reply at the same time as generally preparing for the upcoming hearing.

26.  Mr Lee also made the more general – and forceful – submission that, even if it is accepted that the new affidavit material might be relevant, to allow such a late application purely on the basis that the evidence might be relevant would set a very poor precedent.  As he put it, the Court should not condone such practice under the rules, in particular where the delay and its consequences are entirely self-induced.  To do otherwise would undermine the principles.

27.  In response, Mr Ernest Ng of Counsel, submitted that the two broad issues to decide are (1) whether the two affidavits are admissible, relevant and probative to the issues in dispute, and (2) whether, as a matter of the balancing exercise, they ought to be admitted into evidence. 

28.  Mr Ng emphasised that he was not suggesting that the plaintiff had some entitlement to file relevant evidence, because whether the plaintiff might do so was a matter of case management decision for the Court.  But, once it is decided that the evidence might indeed be relevant to the substantive dispute to be determined, the Court might be slow to exclude that material, depending on the other balancing factors.

29.  As to the explanation for delay, Mr Ng reminded me that some explanation had been offered by the plaintiff’s solicitor at the hearing on 14 May 2020.  That explanation, as repeated by Mr Ng, included reference to the need to deal concurrently with the Beijing proceedings, to the need for Ms Tarn to carry on her other work commitments, and to the impact of and difficulties caused by the Covid-19 pandemic (at least in 2020).  I think Mr Ng fairly acknowledged that the explanation might not have been full as it might have been, not least as to the period in late 2019, but nor would it be fair to think that no explanation had been offered at all.

30.  Mr Ng submitted that if the affidavits are not allowed to be filed, not only would the plaintiff be compelled to resist the substantive and technical applications taken out by the defendants without that affidavit material and the opportunity to answer the allegations raised against Ms Tarn and Ms Tang, the Court would be deprived of the full picture of the proceedings where serious allegations have been made by the defendants against the representative(s) of the deceased.

31.  Mr Ng also submitted that there is no hint that the defendants would be unable to address the evidence which the plaintiff seeks to reduce.  There is no suggestion of impossibility; there is merely the suggestion that time would be required.  On whether that necessary time might impact the fixed hearing date, Mr Ng suggested it was a little difficult for the defendant now to claim some urgency when they had been content to have the substantive hearing of their summonses fixed months away so as to accord with the availability of their Counsel.

E. DECISION

32.  Ultimately, it seems to me that I must carefully weigh the relevance and probative value of the proposed two further affidavits against the potential disruption to the fixed hearing date, the prejudice to the defendants, and the objectives of civil justice reform.  This necessitates keeping in sight that the primary aim of the Court is to secure the just resolution of the dispute in accordance with the substantive rights of the parties, but also having regard to other relevant circumstances (including that the ‘just’ resolution has both substantive and procedural aspects).

33.  As I have noted, the two affidavits are from the mother and half-sister of Mr Chu, and each has already filed some evidence which would be or might be deployed on the substantive hearing of the summonses.  Insofar as the two affidavits address the relationship between Mr Chu and the 1st defendant – from the point of view of two persons close to and acquainted with Mr Chu and his thinking – that is also a matter to which the 1st defendant has herself deposed extensively in her 3rd affirmation.

34.  It is also something to be given some weight that the person who might have been best placed to provide material evidence as regards at least some of the matters now in dispute is Mr Chu.  (I recognise, of course, that the technical points are unlikely to have been spoken to by Mr Chu.)  It is his Estate for which the proceedings are brought, but the evidence can now come only from others, including Ms Tarn and Ms Tang.  The greater the range of available evidence, the more information is available to the Court to assess where the merits lie.  Whilst it may be that Ms Tarn is the sole beneficiary, there is a wider public interest in the correct administration of estates.

35.  As it happens, if the current fixed date of 15 June 2020 is lost, as a result of allowing in the two affidavits and permitting sufficient time for a fair opportunity of response, the delay until a hearing is not great in overall context.  By reason of diary openings, I would be available to deal with the substantive hearing of the summonses on various dates in mid-July 2020.  To that end, and as part of assessing the overall possibilities, I asked for the diary availability of Mr Fan for certain particular days in July 2020.  In accordance with meeting that request, the defendants’ solicitors have written to inform the Court that Mr Fan is available on, amongst other dates, 21 July 2020. 

36.  In the exercise of my discretion overall, and balancing the various matters identified above, it seems to me that the appropriate way to deal with the current application is as follows.  I will grant leave to file the two new affidavits, but I will also grant a proper opportunity for the defendants to file any evidence in response to them.  That will be a 6-week period.  The defendants shall have the last word on the evidence filed as regards their summonses.  That will necessitate a short adjournment, but the prejudice in the fact of adjournment and the short period of it is I think balanced by the other factors.

37.  Insofar as it is also appropriate to take into account the effect on the court’s general administration and on other court users, I think vacating the hearing fixed for 15 June 2020 is likely to free up time which can properly be used by others, in the current climate in the aftermath of the GAP.

38.  Nothing in this Decision should be taken to undermine in any way the general principles applicable to applications of this nature.  The Decision is based on my assessment of the particular circumstances of this case, at this time and on the current Summonses, and in the exercise of my case management discretion.

39.  I can also usefully give directions as to the filing of skeleton arguments, slightly earlier than required by the usual Practice Direction, so as to facilitate my preparation and to enable an earlier determination of the summonses than might otherwise be the case.  But it seems to me that the preparation of the skeleton argument for the defendants will follow the preparation and filing of the defendants’ evidence, and will not be adversely impacted by any requirement to do two things at once.

F. COSTS

40.  Mr Ng submitted that I might reserve costs, so as to look at the various evidence that is filed by the plaintiff and the defendants in reply.  I might then, in the context of the actual argument on the Summonses, determine the impact of that evidence.  In that way, I might then best be placed to deal with the costs consequences of the current application.

41.  I disagree.  The plaintiff is seeking a significant indulgence from the court, which I am granting as appropriate in the overall exercise of my discretion (but not without some degree of hesitation).  Granting that indulgence will cause additional costs expenditure to the defendants, at least because (I am informed) the brief has already been delivered to Mr Fan for the hearing fixed for 15 June 2020.

42.  It seems to me in the exercise of my discretion as to costs that the costs of this application, including those costs thrown away by the moving of the argument from 15 June 2020 to 21 July 2020, should be paid by the plaintiff to the defendants.  For the avoidance of doubt, the costs thrown away do not include the costs of the preparation of the defendants’ reply evidence (which costs will likely be costs to be dealt with in the substantive context of the summonses themselves).

43.  The costs to be paid by the plaintiff can be summarily assessed, and the assessment can be dealt with on paper submissions, if not agreed.  Therefore, the defendants shall provide to the plaintiff a statement of costs for summary assessment by 4pm on 5 June 2020.  The plaintiff will provide any comments or objections to that statement of costs by 4pm on 12 June 2020.  The parties will then have until 19 June 2020 to seek to agree the appropriate figure for costs.  The parties are then jointly to inform me by 4pm on 22 June 2020 whether or not agreement has been reached, and if not that I should go on to make the summary assessment.

G. DISPOSITION

44.  Therefore, I order:

(1) Leave to the plaintiff to file the affidavits of Ms Tarn and Ms Tang, both dated 20 May 2020, within 3 days.

(2) Leave to the defendants to file and serve evidence in reply on or before 3 July 2020 (a period of 6 weeks).

(3) No further affidavits to be filed by any party without leave.

(4) The hearing fixed on 15 June 2020 is vacated. 

(5) The substantive argument on the four summonses will be heard at 10am on 21 July 2020 (with one day reserved). 

(6) The defendants will file their skeleton argument by 4pm on 13 July 2020.

(7) The plaintiff will file her skeleton argument by 4pm on 15 July 2020.

(8) The costs of the plaintiff’s application dated 21 May 2020, including the costs thrown away by the vacation of the hearing date of 15 June 2020 and re-fixing of the date for 21 July 2020, will be paid by the plaintiff to the defendants, to be summarily assessed if not agreed.

(9) The summary assessment of costs shall be conducted on paper, as follows:

(a) the defendants shall provide to the plaintiff a statement of costs for summary assessment by 4pm on 5 June 2020;

(b) the plaintiff will provide any comments or objections to that statement of costs by 4pm on 12 June 2020;

(c) the parties will then have until 19 June 2020 to seek to agree the appropriate figure for costs;

(d) the parties will jointly inform the Court by 4pm on 22 June 2020 whether or not agreement has been reached;

(e) if no agreement has been reached, the Court will go on to make the summary assessment.