LI CHEONG v. LEE KWAI TAI also known as LI KWAI TAI

HCAP 32/2012
[2018] HKCFI 969

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PROBATE ACTION NO. 32 OF 2012

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D E C I S I O N

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Introduction

1.  This court handed down a decision dated 5 March 2018 (“the Decision”) whereby this court exercised its discretion to accede to Ms Li’s application for, among other matters, leave to file acknowledgment of service of the Writ herein out of time. The defendant now applies for leave to appeal against the Decision. The plaintiff continues to take a neutral stance and has been excused from attending the hearing.

2.  The background facts have been narrated in detail in both the Decision and the Reasons for Judgment dated 13 April 2017 handed down by the Court of Appeal (“the CA Judgment”) whereby the plaintiff’s application for leave to appeal out of time against my judgment given on 8 June 2016 after trial in his absence (“the CFI Judgment”) was dismissed. I see no reason to repeat any of such facts here and this decision should be read in conjunction with the Decision and the CA Judgment. Furthermore, the abbreviations used in the former will be adopted in this decision.

3.  In a nutshell, this court by the CFI Judgment granted a declaration to the effect that the defendant is the only surviving issue of the Deceased. Ms Li now claims to be the sole surviving issue of the Deceased. For the purpose of this application, Mr Yau appearing for the defendant (for the first time) together with Mr Poon, in his skeleton submissions, indicates that his submissions are made on the basis that the documentary evidence put forward by Ms Li purportedly in support of her claim in the New Action discloses a bona fide claim.

Relevant legal principles

4.  Section 14AA(4) of the High Court Ordinance provides that leave to appeal shall not be granted unless the court hearing the application for appeal is satisfied that (a) the appeal has a reasonable prospect of success; or (b) there is some other reason in the interests of justice why the appeal should be heard.

5.  Leave to appeal under Order 59 rule 2B is not lightly granted. Reasonable prospects of success involve the notion that the prospects of succeeding must be “reasonable” and therefore more than “fanciful” without having to be “probable”: SMSE v KL [2009] 4 HKLRD 125 at §17 per Le Pichon JA.

The proposed grounds of appeal

6.  Mr Yau has advanced a number of grounds in the draft Notice of Appeal. In addition to this document, Mr Yau has also lodged with this court a document entitled “Statement in Support of Application for Leave to Appeal” (“the Statement”) made pursuant to paragraph 8 of Practice Direction 4.1, which provides that such a statement is required in every application for leave to appeal to the Court. Mr Yau submits that although Practice Direction 4.1 governs applications to the Court of Appeal, it also covers applications to the court below for leave to appeal to the Court of Appeal.

7.  I cannot agree with him. In paragraph 1 of Practice Direction 4.1, the Court is expressly defined to be the Court of Appeal and the practice direction makes it clear that it governs the conduct of the civil business of the Court of Appeal only. In any event, this court has considered the contents of the Statement regardless of its necessity and it facilitates better understanding of Mr Yau’s submissions.

8.  As rightly pointed out by Mr Lam, appearing again for Ms Li, the draft grounds can be broadly classified into two categories. First, the defendant argues that this court has no jurisdiction to grant leave to Ms Lee to file her acknowledgement of service out of time by reason of the fact that this court became functus officio. Second, the defendant argues that in any event, this court was plainly wrong in the exercise of its discretion.

Jurisdiction issue

9.  Paragraphs 7 and 8 of the Statement explain the jurisdiction issue in the following terms:

“The court should have approached Ms Li’s application on the footing that she had her day in court pursuing her cause if she wanted to and she was in effect trying to appeal from the CFI Judgment out of time. Based on that approach, what the Court could have done at the most was to grant Ms Li extension of time to appeal, assuming there was such application on foot (but there was no such relief sought in the Notice of Application). It would be a matter for the Court of Appeal to decide if in these circumstances Ms Li should be relieved from the binding effect of the CFI Judgment. It is not the function of this Honourable Court to limit the binding effect of the CFI Judgment. In other words, the court is effectively functus officio.

The court, having rejected Ms Li’s explanation for the delay, was wrong in principle to treat her Notice of Application as an application for extension of time to acknowledge the service of the Writ herein. There was a 10-month delay between the CFI Judgment and the Notice of Application. This extension of time sought could not turn back the clock. The CFI Judgment has been sealed. The time for appeal has long expired. The plaintiff’s application for leave to appeal out of time has also been rejected by the Court of Appeal.”

10.  I do not think that this jurisdiction argument has a reasonable prospect of success. I believe the correct analysis is this. The CFI Judgment and the CA Judgment were binding on Ms Li not because she was a party to the action. Nor has it even been alleged that she was bound as a result of estoppel by conduct as explained by CJHC Cheung in Si Tou Choi Kam v Wealth Credit Limited [2018] HKCA 250 at §§27-30 (handed down after the hearing). Ms Li had not appeared in neither this court nor the Court of Appeal before the two Judgments were given. There is no evidence that she had ever been given notice of the hearings. Ms Li was bound merely because of her failure to acknowledge service of the Writ herein within 14 days after the Notice was served on her at the office address of KCC. By the operation of Order 15 r.13A(4), Ms Li should be bound by any judgment given in the action as if she was a party thereto. Thus, she remained to be a non-party when her application came before this court though she was bound by such judgments.

11.  In other words, the CFI Judgement was binding on Ms Li on a default basis. It is, in my view, as far as Ms Li is concerned, akin to a default judgment entered against a defendant having failed to a Notice of intention to defend or his defence and did not take part in the proceedings. If the defendant is able to show sufficient cause, the court may set aside the default judgment and let the defendant make amends such as filing of his defence.

12.  Further, Order 35 r.2 provides that any judgment obtained where one party does not appear at trial may be set aside by the court upon an application made within 7 days after the trial. Thus, an absentee can apply preferably to the trial judge to set aside a judgment obtained after trial rather than bringing an appeal to the Court of Appeal: see also §36 of the CA Judgment.

13.  In the present case, I am unable to understand why I ceased to have a discretion to allow Ms Li to file the acknowledgement out of time despite the CFI Judgment. Against the background facts including the procedural history, I do not accept Mr Yau’s submission that this court should have treated Ms Li’s application as her appeal against the CFI Judgment out of time and at most this court could have granted leave to her to appeal out of time. In fact, this court has no jurisdiction to grant such leave after the expiry of the applicable period at all: Order 59, r.15.

14.  At the hearing, Mr Yau confirms to this court the exact time when I ceased to have any jurisdiction in this matter is upon the handing down of the CA Judgment.

15.  I fail to understand this submission. Though the Court of Appeal made the observation that this court was entitled to proceed with the trial notwithstanding the commencement of the New Action (§34 of the CA Judgment), on which Mr Yau places a lot of emphasis, the Court of Appeal was not dealing with Ms Li at all and she was not privy to the plaintiff’s application before the Court of Appeal. The Court of Appeal cannot be taken to have decided that Ms Li could no longer intervene in the present action. 

16.  Moreover, I do not accept Mr Yau’s submission that once this court rejected the explanation for the lateness of the application of Ms Li, this court ceased to have any jurisdiction in this matter. It appears to me that this is a question of discretion rather than jurisdiction.

Discretion Issue

17.  This court has explained the reasons why my discretion was eventually exercised in favour of Ms Li in view of her seemingly bona fide claim despite all the severe criticisms levied on her and KCC. I need no elaboration here. Suffice it to say, this court had taken into account all the attacks on KCC and Ms Li now repeated by Mr Yau in the weighing exercise. I cannot accept there is any merit in the submission that I was plainly wrong in my exercise of the discretion.

18.  Mr Yau submits that this court should not have regard to my oversight of the Notice and hence the binding effect of the CFI Judgment on Ms Li.

19.  This court expressly stated in the Decision (§31) that irrespective of whether or not this court was aware of the binding effect, the CFI Judgment remains binding on Ms Li.

20.  However, such a binding effect should have been brought to the attention of this court. This must be something which should have been taken into account when this court exercised its discretion to make the declaration sought by the defendant. This is particularly so when Ms Li’s relationship with the Deceased is apparently supported by the birth certificate of Ms Li and the residence record of the Deceased issued by the Singaporean authorities. These documents were, as pointed out by Mr Lam, indeed received by HN on 18 December 2015. From then till the trial on 8 June 2016, there was no challenge to the authenticity of such documents by the defendant. I find it disturbing that the defendant did not see fit to disclose these documents at trial when asking this court to make a declaration that she is the only surviving daughter of the Deceased. The complete picture to this court was not shown to this court at trial and a mere fleeting reference to the New Action could hardly suffice.

Other matters

21.  I cannot agree with Mr Yau that the intended appeal raises any issue of general public importance. The New Action is not the subject matter of the CFI Judgment at all and the question posed by him in the Statement does not really exist, let alone bearing any general public importance.

22.  For completeness, I should deal with one matter. In the CFI Judgment, I stated that upon Ms Li’s filing of her acknowledgement of service thereby becoming a party to this action, the CFI Judgment should cease to be binding on her. Mr Yau submits, with the agreement of Mr Lam, that this cannot be right as the CFI Judgment should continue to be binding on Ms Li until she could set it aside pursuant to Order 35 r.2.

23.  I do not agree with both counsel. A proper reading of Order 15 r.13A(4) shows that the binding effect is created only by reason of Ms Li’s default of filing an acknowledgement of service.  Once she files the acknowledgement of service, the first part of the provision is engaged and she shall become a party. The latter part of the provision is no longer relevant and the binding effect of the CFI Judgement on her created should vanish.

24.  This being the case, there is no need for me to order that her application to set aside the CFI Judgment out of time after she has become a party should be heard together with or after the conclusion of the trial of the New Action by the same judge. She no longer needs such an application.

25.  This has however little practical effect on the parties and there is no need to set aside this part of the CFI Judgment by the Court of Appeal in my judgment.

Conclusion and order

26.  For the reasons given above, I am not convinced that the intended appeal of the defendant can meet the thresholds.  Accordingly, I dismiss the application of the defendant.

27.  There is no reason why costs should not follow the event. I make an order nisi that the defendant should pay Ms Li her costs of and occasioned by this application forthwith, to be taxed if not agreed and I make no order as to costs in regard to the plaintiff.

28.  Lastly, I thank all counsel for their assistance.