LO KING YEUNG v. EDDIE CHU HOI DICK

HCMP 482/2017

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 482 OF 2017

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AND

HCMP 483/2017

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 483 OF 2017

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J U D G M E N T

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A.  Introduction

1.  These are two originating proceedings commenced by the plaintiff on 3 March 2017 respectively against Mr Chu (under HCMP 482/2017) and Mr Cheng (under HCMP 483/2017).  Mr Chu and Mr Cheng have both been elected in the same Geographical Constituency in the election held in September 2016 to be a member of the Legislative Council (“the LegCo”).

2.  These actions are brought under section 73 of the Legislative Council Ordinance (Cap 542) (“the LCO”).  In these actions, the plaintiff seeks declarations that Mr Chu and Mr Cheng have since 12 October 2016 been disqualified to act as a member of the LegCo and are therefore not entitled to act or claim to be entitled to act as such.

3.  Under sections 73(5) and (6) of the LCO, these actions are stayed unless and until the plaintiff has given security for costs in the amount (which should not be more than $20,000) and manner as directed by the court.

4.  By way of a letter dated 17 July 2017 (ie, some four months after the actions have been commenced), the plaintiff’s solicitors sought directions from the court for the payment of such security for costs.

5.  The court then directed this hearing of the respective applications for directions for payment of security to determine whether the court should still by now (four months since the commencement of the actions) permit the plaintiff to give security.

6.  The plaintiff is represented by Mr Lawrence Ma together with Mr Kacee Ting.  Opposing the applications, Mr Chu is represented by Mr Jeffrey Tam, while Mr Cheng acts in person.  Mr Cheng relies on and adopts the submissions of Mr Tam.

B.  Should the court exercise its discretion to give directions for payment of security

7.  Section 73 of the LCO provides as follows:

“73. Proceedings against persons on grounds of disqualification

(1) An elector, or the Secretary for Justice, may bring proceedings in the Court against any person who is acting, claims to be entitled to act, as a Member on the ground that the person is disqualified from acting as such.

(2) Proceedings under this section may not be brought after 6 months from the date on which the person concerned acted, or claimed to be entitled to act, as a Member.

(3) If, in proceedings brought under this section, it is proved that the defendant acted as a Member while disqualified from acting in that office, the Court may—

(a) make a declaration to that effect; and

(b) grant an injunction restraining the defendant from so acting; and

(c) order the defendant to pay to the Government such sum as the Court thinks appropriate, not exceeding $5,000 for each occasion on which the person so acted while disqualified.

(4) If, in proceedings brought under this section, it is proved that the defendant claimed to be entitled to act as a Member while disqualified from acting in that office, the Court may—

(a) make a declaration to that effect; and

(b) grant an injunction restraining the defendant from so acting.

(5) Proceedings brought under this section by a person other than the Secretary for Justice are to be stayed until the person has given security for all costs that the person may be ordered to pay to any witness giving evidence in the proceedings on that person’s behalf or to a defendant.

(6) The amount of security to be given under this section—

(a) is to be determined by the Court, but must not exceed $20,000; and

(b) is to be in such manner and form as the Court directs.

(7) Proceedings against a person on the ground that the person has, while disqualified from acting as, or claimed to have been entitled to act, as a Member may be brought only in accordance with this section.

(8) For the purposes of this section, a person is disqualified from acting as a Member if the person—

(a) is not qualified to be, or is disqualified from being, a Member; or

(b) has ceased to hold office as a Member.”

8.  Thus, under section 73:

(1)  An action against a person on the ground that that person has been acting or claimed to have been entitled to act as a LegCo Member while disqualified can only be brought in accordance with section 73 (section 73(7)).

(2)  A section 73 action can only be brought by the Secretary for Justice or an elector (section 73(1)).

(3)  However, any such action can only be brought within six months (which is a short period of time) from the time when the defendant is alleged to have first started to act or claimed to act as a LegCo Member while disqualified[1] (section 73(2)).

(4)  Further, the action will be stayed unless and until the plaintiff has given security for costs in the amount and manner as directed by the court (sections 73(5) and (6)).

9.  Notwithstanding that it has been four months since the plaintiff commenced these actions on 3 March 2017, Mr Ma raises a number of contentions to say why the court should give directions to permit the plaintiff to give security.

10.  First, Mr Ma submits that since there is no specific time expressly imposed by section 73 on when the plaintiff has to give security for costs, in principle, there is no reason why the plaintiff cannot apply for directions now.  Moreover, as the plaintiff is clearly in a position and willing to give the security up to the maximum amount of $20,000 in each of these actions, there is also no reason why the court should not give directions to enable him to do so.

11.  I am unable to accept these submissions.

12.  Although section 73 has not expressly imposed or specified a definite timeframe for the plaintiff to give security for costs as required under sections 73(5) and (6), on a proper and purposive construction in its proper context, it is obvious to me that the objective legislative intention is that the plaintiff should provide the security promptly and expeditiously after he has commenced the action.  I will explain why.

13.  As rightly pointed out by Mr Tam, in the absence of a specific timeframe being provided in section 73 of the LCO, the security must still be given by the plaintiff without unreasonable delay.  This is so as section 70 of the Interpretation and General Clauses Ordinance (Cap 1) (“IGCO”) provides that “Where no time is prescribed or allowed within which any thing shall be done, such thing shall be done without unreasonable delay, and as often as due occasion arises.”

14.  In this respect, what is within a reasonable time for the present purposes must be viewed against the following objective context of section 73:

(1)  Given that a section 73 action in nature and effect challenges a LegCo Member’s qualification and his entitlement to validly and legally act and to continue to act as a LegCo Member, it is necessary that such action should be commenced and proceeded with expeditiously to avoid any prolonged uncertainty hanging over the validity of that LegCo Member to act as such, and to limit the disruption of the work of the LegCo.  As observed by the Court of Final Appeal in Mok Charles v Tam Wai Ho (2010) 13 HKCFAR 762 at paragraphs 51(1) and 67:

“51. …:

(1) Given the importance of elections to the Legislative Council, and the work and duties of that institution, it is of course of the utmost importance that any dispute over the propriety or legality of a member of the Council, should be speedily determined.

…

67. Whatever might be the position of judicial review proceedings in relation to elections for the Legislative Council, the LCO does provide for another means of challenging the qualification of a member of the Legislative Council, namely, s.73 (see para.15 above). The precise ambit and applicability of that provision, and whether or not there is any overlap between proceedings under that provision and proceedings under the election petition procedure under Part VII of the Ordinance, do not fall to be decided in this case. The point of importance for our purposes is that, whether under s.73 or under the election petition procedure of the LCO, common to both may be a challenge to the qualification or eligibility of a member of the Legislative Council, whether to be elected to or remain in the Council. One would have thought the urgency in having to determine such issues ought to be the same under both procedures.” (emphasis added)

(2) The short 6-month time limit provided under section 73(2) for a plaintiff to bring a section 73 action also clearly and objectively reflects and underlines the legislative intention to have any such challenge against the qualification of a LegCo Member to remain in the LegCo to be determined urgently and expeditiously.

15.  In the premises, when sections 73(5) and (6) of the LCO are construed purposively and objectively together with section 70 of the IGCO, section 73(2) of the LCO and the context that an action brought under this section concerning the qualification of a LegCo Member to remain as such should be dealt with and resolved expeditiously and quickly, it is clear that it is the objective intention of sections 73(5) and (6) of the LCO to require the plaintiff to give the security promptly, and in any event within a short period of time, after the commencement of the action.  This is particularly so as the maximum amount that a plaintiff is required to pay under this provision is $20,000, which is not a large amount.  Hence, unless it is otherwise shown, it would not be expected that a plaintiff would need a lot of time to prepare the necessary fund to be in a position to pay it.[2]

16.  Bearing the above construction and principle in mind, in the present cases, applying directions to give the security for costs four months after the commencement of the actions on any objective view is clearly beyond a reasonable time to give security so as to proceed with the actions. There is thus an unreasonable delay on the part of the plaintiff to comply with the requirement under sections 73(5) and (6) to give security for costs.

17.  Secondly, Mr Ma then submits that, even if the court finds that the 4-month period is beyond a reasonable time, there are good reasons to explain the delay in the present cases.  As such, the delay is excusable or is not unreasonable, and the court should exercise its discretion to give the directions so as to allow the plaintiff to give the security.

18.  In relation to this, the plaintiff’s former solicitor, Mr Chin (who acted for the plaintiff until 29 May 2017) has filed an affirmation to explain why the plaintiff had not sought directions from the court to give the security for costs soon after commencing the action.  Mr Chin explains at paragraphs 6 - 8 as follows:

“6. As per section 73(6)(a) of the Legislative Council Ordinance, Cap 542 (the ‘Ordinance’) which requires that a total amount of not more than HK$20,000 is to be deposited into the Court as security, on 24^th March 2017 I instructed a clerk of C&A to prepare a cheque in the sum of HK$20,000.00 (dated 20^th march 2017) drawn in favour of The Government of the HKSAR (the ‘Cheque’) as security for costs of the captioned proceedings. There is now produced hereto and shown to me marked ‘CBCY-2’, a copy of the letter dated 24 March 2017 from C&A to the Registrar of the High Court of HKSAR.

7. A few days afterwards, I revisited the Ordinance and observed that the Cheque is to be given in a manner and form as the Court directs under section 73(6)(b) of the Ordinance and I have discussed with the counsel in this regards. My understanding was that an order for security for costs is governed generally by O 23 of the Rules of the High Court and it is usually a defendant’s application rather than a plaintiff’s application. I also discovered the relevant practice directions 26.1 for the Constitutional and Administrative Law List and SL3 Constitutional and Administrative law List Directions did not specifically address s.73 security for costs matters. After seeking counsel advice, I formed the view that section 73 proceedings should continue on foot and would only be stayed once a security for costs payment order not complied with. Section 73 proceedings was different to an election petition proceedings under s. 66 of the Ordinance where security for costs has to be paid with 5 days of commencement of proceedings. I contemplated an application to this Court in this regard during a call-over hearing to be fixed at a later date.

8. The Defendant filed an acknowledgment of service of originating summons dated 31 March 2017. A copy of Acknowledgment of Service of Originating Summons of the defendant dated 31 March 2017 is produced and shown to me marked as ‘CBCY- 3’. The Solicitors of the Defendant did not raise this matter of security for costs during the currency of the Plaintiff’s engagement of C&A.”

19.  Further, the plaintiff’s present solicitors have also filed an affirmation by Hoo Hiu Yan (who is a clerk of that firm) who deposes at paragraphs 3 ‑ 5 as to why the plaintiff only sought directions from the court to give security on 17 July 2017:

“3. I was directed by Ms. Lau Yuk Kuen, Principal Solicitor of YKLC on 17^th July 2017 to file a letter to Registrar, High Court, Hong Kong dated 17^th July 2017 enclosing a cheque drawn by YKLC in the amount of HK$20,000.00 being the amount of security for costs given by the Plaintiff for these proceedings. I went to the Accounting Office at LG2 of the High Court in the afternoon on 17^th July 2017 and approached the staff at the counter for payment of the said HK$20,000.00 together with the said letter. There is now produced and shown to me marked ‘HHY-1’ copy of the said letter to the Registrar dated 17^th July 2017, enclosing a cheque of $20,000.00 issued by YKLC.

4. The staff at the Accounting Office did not accept the cheque for payment of the security for costs because there was no court order. She further told me that (1) the cheque should be made payable to ‘Registrar, High Court’ instead of ‘The Government of the HKSAR’ and (2) I was required to complete Court Form No. 25A (Notice of payment into court under order or certificate (O.22 r.27(1)) (‘Form 25A’) and then the staff returned the said letter and the cheque to me and give me a blank form of Form 25A. There is now produced and shown to me marked ‘HHY-2’ copy of the Form 25A.

5. I reported the matter in paragraph 4 above to the Principal Solicitor Ms. Lau Yuk Kuen immediately and I was then directed by her to file another letter to the Registrar dated 17^th July 2017 seeking the Court’s direction in respect of the security for costs. There is now produced and shown to me marked ‘HHY-3’ copy of the said letter to the Registrar dated 17^th July 2017.

20.  In substance, what the plaintiff says as the reason for the delay is that his former solicitor had formed a (mistaken) view of the legal requirements under sections 73(5) and (6) of the LCO that it was for the defendant (but not the plaintiff) to apply for directions to require the plaintiff to give security for costs, and before any such directions as sought by the defendants had been given, the present actions were not stayed and remained on foot to proceed.

21.  Mr Ma submits that the plaintiff should not be “penalised” by his solicitor’s mistake.

22.  With respect, I am unable to accept that this “explanation” amounts to a good reason to justify or excuse the delay.

23.  As Mr Ma fairly accepts, ignorance of the law generally does not amount to a good excuse to justify a default in time. Hence, in Yip Yiu Shing Chris v Chan Yuk Ming (unreported, HCAL 8/2016, 26 February 2016, To J), where the petitioner in an election petition case sought an extension time to ask for directions to give security for costs, To J observed at paragraph 13 as a general principle in guiding the exercise of discretion to grant an extension of time that “[i]gnorance of the procedures and time limits under the Rules is not a good reason…”.

24.  If ignorance of the law cannot be regarded as a good excuse or reason, I cannot see how a mistake of law as alleged in the present cases can be accepted as a good reason to excuse a delay.  The mere fact that the mistake was made by the solicitor but not the plaintiff personally does not by itself amount to a sufficiently good reason to justify an exercise of discretion to extend time to the plaintiff.[3]

25.  In any event, I do not find this explanation of mistake of law a good reason for the delay when considered in the circumstances of the present cases:

(1)  First, if the plaintiff’s former solicitor did attempt to tender the cheques in the High Court to give security for costs on 24 March 2017 as apparently deposed to at paragraph 7 of Mr Chin’s affirmation,[4] his staff would and should in all ordinary course of events be told that they needed a court direction to make the payment (as in fact demonstrated in Hoo’s affirmation at paragraph 4 as quoted above).  As such, there could not be any good excuse for him not to then apply to the court for directions to give security in late March 2017.

(2)  Second, after at first rightly regarded that there was the need for the plaintiff to make security for costs as required under section 73, even if for whatever reasons the plaintiff’s former solicitor subsequently felt it necessary to “revisit” the LCO and came to a fresh mistaken view that the actions were not stayed and continued to be “on foot” until the defendants had obtained an order directing the plaintiff to give security, the plaintiff should then have proceeded with the actions promptly by taking out a summons for directions on the conducts of these actions in late March or early April 2017.  However, there were no good reasons (and the plaintiff has not provided any) as to why the plaintiff had not proceeded with the actions notwithstanding the (mistaken) view in law that the actions had not been stayed.

(3)  In these circumstances, even recognising that the mistaken view in law was formed by the plaintiff’s solicitor, the plaintiff himself is also guilty of an unexplained delay in seeking to prosecute the proceedings expeditiously,[5] which, had he done so (as he should have), would have prompted him to have to apply for directions to give security for costs much earlier.

(4)  In the premises, I cannot accept that the explanations offered by the plaintiff amount to a good reason to justify the delay and the exercise of the court’s discretion to allow him to give security for costs now after a 4-month delay.

26.  For all these reasons, I conclude that there has been an unreasonable delay by the plaintiff to apply for directions to give security for costs under sections 73(5) and (6) of the LCO, and there are no good reasons to justify an exercise of discretion to allow him to do so now.

C.  Conclusion

27.  In the premises, I would dismiss the plaintiff’s application for directions to give security for costs under sections 73(5) and (6) of the LCO.

28.  Given that the plaintiff would not be able to give security for costs, pursuant to section 73(5) of the LCO, these actions would continue to be stayed.

29.  There are no reasons why costs should not follow the event.  I further order (on a nisi basis) that costs of these respective applications for directions to give security for costs be to the respective defendants, to be taxed if not agreed.

30.  Finally, I thank counsel for their assistance in these matters.