THE OFFICIAL RECEIVER v. BROWN COLVIN MORTON

CACV 541/2018

[2019] HKCA 174

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 541 OF 2018

(ON APPEAL FROM HCMP 81/2018)

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J U D G M E N T

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Hon Lam VP (giving the Judgment of the Court):

1.  This appeal was brought by the respondent against the decision of Master M Wong of 8 October 2018. The decision was an order prohibiting the respondent, without leave of the court, to be a director of a company, a liquidator of a company, a receiver or manager of a company’s property or in any way, whether directly or indirectly, be concerned or take part in the promotion, formation or management of a company. The order was a disqualification order made pursuant to section 168H of the Companies (winding up and miscellaneous provisions) Ordinance Cap 32.

2.  By a notice of appeal of 31 October 2018, the respondent brought the present appeal in the Court of Appeal.

3.  On 2 November 2018, the Registrar of Civil Appeals queried if it is appropriate to bring such appeal in the Court of Appeal instead of bringing the appeal to a judge of the Court of First Instance in light of Order 58 Rules 1 and 2 of the Rules of the High Court. 

4.  Order 58 Rules 1 and 2 provides:

“ 1. Appeals from certain decisions of masters to a judge in chambers (O. 58, r. 1)

(1) Except as provided by rule 2, Order 5, rule 6, and Order 12, rule 1, an appeal shall lie to a judge in chambers from any judgment, order or decision of a master, irrespective of whether the judgment, order or decision was given or made on the basis of written submissions only or after hearing.

(2) The appeal shall be brought by serving on every other party to the proceedings in which the judgment, order or decision was given or made a notice to attend before the judge on a day specified in the notice or as on such other day as may be directed.

(3) Unless the Court otherwise orders, the notice must be issued within 14 days after the judgment, order or decision appealed against was given or made and must be served within 5 days after issue and an appeal to which this rule applies shall not be heard sooner than 2 clear days after such service.

(4) Except so far as the Court may otherwise direct, an appeal under this rule shall not operate as a stay of the proceedings in which the appeal is brought.

(5) No further evidence (other than evidence as to matters which have occurred after the date on which the judgment, order or decision was given or made) may be received on the hearing of an appeal under this rule except on special grounds.

2. Appeals from certain decisions of masters to Court of Appeal (O. 58, r. 2)

    An appeal shall lie to the Court of Appeal from any judgment, order or decision (other than an interlocutory judgment, order or decision) of a master, given or made—

(a) on the hearing or determination of any cause, matter, question or issue tried before him under Order 14, rule 6(2) and Order 36, rule 1;

(b) on an assessment of damages under Order 37 or otherwise; or

(c) on the hearing or determination of an application under Order 84A, rule 3; or

(d) on the hearing or determination of an application under Order 49B; or

(e) on the hearing of a petition for winding-up or bankruptcy; or

(f) on the trial of an issue under Order 17, rule 11(2).”

5.  The Registrar directed the respondent to lodge written submissions if he objected to this appeal being struck out on the ground that the appeal should have been brought to a judge of the Court of First Instance.

6.  The respondent lodged written submissions on 16 November 2018.  In those submissions, he said he had initially sought advice from the Resource Centre for Unrepresented Litigants and he was told to bring the appeal under Order 58 in the Court of First Instance.  However, when he attempted to file the appeal at the registry, the Deputy Clerk of Court (Civil) told him that the appeal should be filed with the Court of Appeal. 

7.  He further sought advice from the Legal Advice Scheme for Unrepresented Litigants on Civil Procedures (a service provided by the Home Affairs Bureau instead of the Judiciary).  He said he was informed that the correct process was to appeal to the Court of Appeal. 

8.  Thus, he filed the present appeal in the Court of Appeal.

9.  After receiving the letter of 2 November 2018, he again attended the Legal Advice Scheme for Unrepresented Litigants on Civil Procedures on 12 November 2018 and showed them the said letter.  Despite that, he said “the officer” there showed him the court rules and confirmed that the Deputy Clerk of Court (Civil) was correct. 

10.  He did not identify “the officer” of the Legal Advice Scheme for Unrepresented Litigants on Civil Procedures who gave him such advice on 12 November 2018.  Nor did he identify the court rules allegedly shown to him.

11.  He also advanced submissions in respect of his grounds of appeal. 

12.  At this stage, we are only concerned with the proper avenue of appeal instead of the merits of the appeal.  Thus, we would not comment on the merit of his grounds of appeal.

13.  After the submissions had been lodged, the matter was brought to the attention of Lam VP by the Registrar. 

14.  On 22 November 2018, Lam VP lifted the legal aid stay arising from the legal aid application of the respondent of 12 November 2018.  By a letter of 22 November 2018, Lam VP drew the attention of the respondent to two authorities and directed the respondent to lodge further submissions in light of these authorities. 

15.  The respondent lodged further submissions on 3 January 2019 in relation to the two authorities.

16.  Though the respondent is not a lawyer, he is an accountant by profession.  As demonstrated by his submissions of 3 January 2019, he was able to locate the two authorities and read the judgments.

17.  The first authority is Re Forever Wise Investment Limited [2006] 3 HKLRD 884.  Though it was a Chinese judgment, the essential facts of the case and propositions of law were adequately set out in the headnotes and there was an English version of those headnotes in the law report.  The respondent evidently had read the English headnotes before his preparation of the submissions of 3 January 2019. 

18.  That case also concerned an appeal in respect of a disqualification order.  The appeal against the disqualification order was initially brought to a judge of the Court of First Instance.  That judge held that she had no jurisdiction to hear the appeal.  The case was further appealed to the Court of Appeal.  The Court of Appeal held that the judge was wrong in holding that the Court of First Instance had no jurisdiction.  It was further held by the Court of Appeal that on proper interpretation of Order 58, only appeals against a decision specified under Rule 2(a) to (e) had to be brought to the Court of Appeal.  All other appeals against a decision of a master should be brought to a judge of the Court of First Instance.  As a disqualification order was not a decision specified under Rule 2(a) to (e)[1], the appeal should have been heard by a judge of the Court of First Instance.  In the circumstances of the case, the Court of Appeal held that the proper course was to remit the appeal back to the Court of First Instance. 

19.  The second authority is Re Citrend Services Limited [2007] 1 HKLRD 381.  It was a decision by a single judge (Yuen JA) of the Court of Appeal.  The judgment was in English, hence the respondent should be able to read the full judgment.

20.  It was another appeal in respect of a disqualification order made by a master.  The defendant in that case directly lodged an appeal to the Court of Appeal.  The Official Receiver applied to have the appeal struck out on the ground that the appeal should have been brought in the Court of First Instance.

21.  Yuen JA accepted the submission of the Official Receiver, followed the rationale in the judgment in Re Forever Wise Investment Limited, supra and struck out the notice of appeal.  Though Her Ladyship also considered that the Court of Appeal had jurisdiction to hear the appeal, she held that as a matter of discretion, the Court of Appeal should not exercise its jurisdiction in such a way which would undermine the design in Order 58.  Yuen JA explained the implications behind the scheme under Order 58 at [14] to [16] and concluded at [16] that it was not open to a litigant to pick and choose the forum in any individual case and the rules of court do not allow a party to bypass the structure of the courts and insist on having an appeal from a master going straight to the Court of Appeal.

22.  In his submissions of 3 January 2019, the respondent failed to pay proper regard to the effect of these authorities in respect of the inappropriateness of bringing an appeal against a disqualification order directly to the Court of Appeal, side-stepping the avenue of appeal to a judge in the Court of First Instance. 

23.  In our judgment, the present case is indistinguishable from the situations in the two authorities.  An appeal against a disqualification order is plainly not one of those specified exceptions listed in Order 58 Rule 2 (a) to (f).  Thus, the governing provision is Order 58 Rule 1(1) which stipulates that exceptions[2] aside, an appeal shall lie to a judge in chambers from any judgment, order or decision of a master.

24.  Hence, the present appeal should have been brought to a judge of the Court of First Instance.  Insofar as the respondent had been told otherwise by the Deputy Clerk of Court (Civil) and “the officer” of the Legal Advice Scheme for Unrepresented Litigants on Civil Procedures, he had been misinformed.  The Registrar of Civil Appeal was correct in pointing out that the appeal should not have been brought in the Court of Appeal.

25.  Though the respondent has not filed any affidavit or affirmation to substantiate his explanation for filing the appeal in the Court of Appeal as opposed to the Court of First Instance, in the extraordinary circumstances in the present case, we are prepared to take the case advanced in his submissions on its face value and proceeded on the basis that he had been misinformed.

26.  Thus, instead of striking out the appeal, we decide the more appropriate course to adopt is to remit the appeal to a judge in the Court of First Instance for determination as if it had been so brought since his attempt to file the appeal there before 31 October 2018. 

27.  This was the course adopted by the Court of Appeal in Re Forever Wise Investment Limited, supra.  Though the error in the present case was that of the Deputy Clerk of Court instead of a judge in the Court of First Instance (as in Re Forever Wise Investment Limited), we think it is equally apposite and fair to order remittance in the present circumstances. Under Order 59 Rule 10 (4), this Court can make any order on such terms as the Court thinks just to ensure the determination on the merits of the real question in controversy between the parties.  The real question in the appeal should focus on considering if the disqualification order made by the master was correct.  Had the respondent not been misinformed, he would have brought the appeal to a judge in the Court of First Instance within time. 

28.  To facilitate the procedural route for such remittance, we also direct the respondent to issue a notice of appeal in the Court of First Instance within 14 days from the date of the handing down of this judgment. Insofar as necessary, we would grant an extension of time to the respondent to do so.  If the respondent does not issue such notice of appeal within 14 days, he would be deemed to have abandoned his appeal.

29.  The costs of this appeal shall be costs in the cause of the appeal before to the judge of the Court of First Instance.