TSUI YUN BUN BARRY v. LAW WAN TUNG (formerly known as LAW SIU YI BIBY)

HCA 2596/2017

[2020] HKCFI 3038

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2596 OF 2017

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D E C I S I O N

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A. Introduction

1.  The present matter comes before me as a result of my Decision in this action dated 5 December 2019.[1]

2.  By an Amended Summons filed on 27 March 2019, ES applied to be added as a party to this action for the purpose of declaring her interest in relation to the Charging Order Absolute dated 4 April 2018 granted in relation to the Property, and to set aside or to discharge the Charging Order Absolute, and to vacate the registration thereof as well as the Charging Order Nisi at the Land Registry, on the basis that the creditor of Law, the owner of the half-interest in the Property the subject of the Charging Order Absolute granted in favour of Tsui, would likely to be unduly prejudiced by the making of those Orders.

3.  On 30 July 2019, ES’s application for joinder was dismissed by a Master with costs to Law.  The application to set aside therefore, by implication at least, also failed. 

4.  By a Notice of Appeal dated 13 August 2019, ES appealed against the aforesaid orders of the Master.  The hearing of the appeal was fixed before me to be heard, and was indeed heard, by me on 28 November 2019.

5.  As stated at [14] of the Decision, just before the hearing on 28 November 2019, Law applied for me to recuse myself from hearing the appeal on the ground of apparent bias.

6.  I heard, and dismissed, the application for recusal at the hearing on 28 November 2019 (with reasons to be handed down) and proceeded to hear the appeal (with Mr Ching Ming Yu of Messrs Ching & Co appearing for the defendant, Mr Tony Ko of counsel appearing for ES, and Tsui appearing in person).  I reserved my decision on the appeal after hearing the parties on 28 November 2019.

7.  In the Decision, I:

(1)  gave my reasons for dismissing the recusal application.  See [14]-[28] of the Decision;

(2)  found that it was not necessary for ES to be joined as a party for her to have the locus to apply to set aside the Charging Order Absolute.  I made no order on paragraph 1 of the Amended Summons of ES applying to join this action as a party.  See [29]-[41] of the Decision;

(3)  made an order discharging the Charging Order Absolute and vacating the registration of the Charging Order Nisi and the Charging Order Absolute (together “the Charging Order”) at the Land Registry.  See [42]-[60] of the Decision.

8.  By Summons dated 18 December 2019, Law applies for:

“leave to appeal against the Decision of the learned Recorder handed down on 5^th December 2019, if required, on the ground that the learned Recorder erred in not having recused himself on the ground of apparent bias; and that the learned Recorder erred in law in ruling that the Interested Party had standing to apply for a discharge of the Charging Order Absolute in question, and that the learned Recorder erred in making an order to set aside the Charging Order nisi and Charging Order Absolute in question on the ground of material non-disclosure”.

No draft Notice of Appeal is attached. 

9.  It is to be noted that while I found that there was material non-disclosure by Tsui when applying for the Charging Order Nisi ex parte, I did consider whether I should nevertheless not set aside, or should re-grant, the Charging Order, by considering if Tsui has shown that ES would not be unduly prejudiced by the making of a charging order, and that in all the circumstances of the case it was appropriate to maintain or re-grant a charging order over Law’s share of the Property in favour of Tsui thus giving him a priority over other unsecured creditors of Law, including ES.  See [54]-[58] of the Decision.  In effect, I dealt with the merits of whether a charging order ought to be granted in favour of Tsui.

10.  The disposal of this application for leave to appeal has been delayed for two reasons: (i) the COVID-19 pandemic which resulted in the General Adjournment Period; (ii) Law’s application for legal aid.  As I understand, the application for legal aid was refused by the Director of Legal Aid and an appeal to the Master was heard on 20 October 2020 but the judgment is still outstanding.

11.  In the meantime, by letter dated 14 October 2020, solicitors for Law suggest that leave to appeal the Decision may not be required, and write in to ask for my direction, pursuant to Order 59, rule 21(3), of the Rules of the High Court[2], whether leave to appeal is required.

12.  Those acting for Law and ES have filed written submissions on this issue pursuant to my directions, while the plaintiff has not.  In particular, while ES adopts a neutral stance, Mr Ko files submissions to assist me in considering the question under Order 59, rule 21(3).  I am grateful to both Ching & Co and Mr Ko for their assistance.

13.  This is my ruling on whether leave to appeal from the Decision is required.

B.  Discussion

14.  For Law, Ching & Co argues, in considering whether leave to appeal is required, one should focus only on my order discharging the Charging Order Absolute, which is what she is seeking to appeal against. She is not, it is submitted, seeking to appeal against my refusal to recuse myself although “the error of refusing to recuse” is relied upon as a “ground of appeal” against my order discharging the Charging Order Absolute.  By that, I take it to mean that there is only one order she wants from the Court of Appeal, namely the setting aside of my order discharging the Charging Order Absolute, which she can achieve by succeeding on any one of her arguments on recusal, or on the locus of ES, or on the question of whether I erred in discharging the Charging Order Absolute.

15.  I disagree.

16.  There were in fact three separate applications (two of which came as appeals from the Master on a hearing de novo) before me on 28 November 2019: (i) the recusal application by Law; (ii) the joinder application by ES; and (iii) the application to discharge by ES.  I ruled on all three applications, against all of which Law intends to appeal. 

17.  The fact that the three applications were heard at the same time, and were considered in the same Decision (the rulings for two and the reasons for the ruling for the other), does not mean that they were not, and did not remain, three separate applications, which had to be, and were, dealt with separately.  In theory, they could have been heard on three separate occasions, with three separate written reasons for decision.  Each of them raised separate issues that had to be considered, with different consequences.  If Law succeeded on the recusal application, that would only mean that I would direct that the appeal from the Master was to be heard by another judge.  The other two applications would remain and not dealt with by me.  If ES succeeded on establishing locus, whether by way of joinder or otherwise, that does not follow that she would necessarily succeed in discharging the Charging Order.  Thus, the recusal application and the joinder application would not, by themselves, deal with the merits of the question of the propriety of the making of the Charging Order, but were steps towards the proper consideration or otherwise of that question, even though if Tsui and Law were the successful parties on the recusal application and the joinder application, the propriety question did not arise.

18.  If all three matters, i.e. recusal, locus and the propriety of the making of the Charging Order are taken before the Court of Appeal as proposed, and if the Court of Appeal finds that I should have recused myself, then it is possible that the Court of Appeal will immediately set aside my order discharging the Charging Order Absolute without considering the other two matters, and remit the case back to another judge in the Court of First Instance to consider the appeal from the Master afresh.  To this extent, Law has succeeded, and the order discharging the Charging Order Absolute is gone. But the fact remains that the Court of Appeal, on this scenario, has not dealt with the merits of the other two matters.  The questions of the locus and the propriety of the making of the Charging Order are not dealt with on their merits by the Court of Appeal and have to be argued again before another judge.

19.  Of course, the Court of Appeal may, having decided that I should have recused myself, instead of remitting the case back to another judge, decide the other two matters on their merits.  It may, for example, also hold in favour of Law on those matters and so set aside my order without remitting the case back.  Or it may hold against Law on both matters and therefore maintain the discharging of the Charging Order. 

20.  The above shows that the three matters remain three separate applications, with different possible consequences, requiring three separate rulings by me and with three separate appeals, but all heard and dealt with together.  They are not merely grounds of appeal towards the same result. What Law can achieve from each of them from me, or from the Court of Appeal, if successful, is different.

21.  In my view, the question of leave to appeal has to be considered for each matter separately. 

22.  Regarding the question of leave to appeal, Law and ES are not in dispute on the principles involved.

23.  Under section 14AA(1) of the High Court Ordinance[3]:

“Except as provided by rules of court, no appeal lies to the Court of Appeal from an interlocutory judgment or order of the Court of First Instance in any civil cause or matter unless leave to appeal has been granted by the Court of First Instance or the Court of Appeal”.

24.  Order 59, rule 21(1) provides as follows:

“Judgments and orders to which section 14AA(1) of the Ordinance (leave to appeal required for interlocutory appeals) does not apply and accordingly an appeal lies as of right from them are the following –

(a)  a judgment or order determining in a summary way the substantive rights of a party to an action”.

25.  It is common ground that none of the specific cases mentioned in Order 21, rule 21(1)(b)-(l) and (2) applies.

26.  The test for deciding whether a judgment or order is interlocutory or final is what is called “the application test”, i.e. whether the issue raised in the application is one which, whatever the outcome, will finally determine the whole action or a crucial or substantive issue in the cause or matter on the merits and not simply a matter concerning a procedural step for bringing or preparing a case before it is presented to the court for final determination on the merits[4].

27.  Applying this test, in my judgment it is clear that the decisions on both the recusal application and the joinder application are interlocutory decisions.  Neither application would determine, whatever the outcome, a substantive issue between the parties on the merits, in this case, Tsui’s entitlement to a charging order.  They only concerned matters for the bringing about the proper determination of that substantive issue between Tsui, Law and ES, and not the substantive merits of that issue.[5]

28.  For the same reason, the decisions on the recusal and joinder applications are not decisions “determining in a summary way the substantive rights of a party to an action”, within the meaning of Order 59, rule 21(1)(a).  As explained by Au J (as he then was) in Lo King Yeung v Eddie Chu Hoi Dick[6], the application must deal with the substantive rights of a party, but not to any procedural order even though it has the collateral effect of summarily determining the substantive rights of a party. 

29.  However, in my judgment, my decision on the propriety of the making of the Charging Order is not an interlocutory decision, as the application by ES did involve me deciding, finally (subject to any appeal therefrom, of course) and substantively, one way or another, the substantive right of Tsui as a judgment creditor of Law to be granted a charging order over Law’s half-share of the Property.  The final judgment having already been entered between Tsui and Law, the only lis as between Tsui, Law and ES was indeed the issue of propriety of the making of the Charging Order in favour of Tsui. 

30.  For the above reasons, I rule that leave to appeal is required in relation to my decisions on the recusal application and the locus of ES, but not the decision discharging the Charging Order on the merits, on the two grounds I refer to in [9] above.

31.  The consequence of the above ruling means that the Summons of 18 December 2019 taken out by Law remains live in so far as the decisions on recusal and locus are concerned.  It is up to Law to decide if she wants to pursue the same.  I direct that Law is to inform my clerk in writing within 7 days of the handing down of the decision on her legal aid appeal (i) the result of the appeal and (ii) whether she still wishes to pursue her application for leave to appeal against the decisions on the recusal application and locus.  If she does, I shall give further directions therefor.

32.  As for the appeal against the decision discharging the Charging Order on the merits, since leave to appeal is not required, that means that the time limit for the appeal has now expired (long before Law raised the question on 14 October 2020): see Order 59, rule 4(1)(c).  It is up to Law and those advising her as to what further steps, if any, are to be taken in relation thereto.

33.  I should also mention that in its submissions for Law, Ching & Co submits, “incidentally”, “it seems that there may be an additional ground of appeal”, namely that the appeal from the Master ought to have been made to the Court of Appeal instead of to a single judge in the Court of First Instance.  This appears to be a challenge to my jurisdiction to hear the appeal in the first place. It is up to Law and those advising her what and how she intends to do about this ground, but this is not a point taken before me at any time until now, I have made no ruling on it, and it is beyond what I can deal with under Order 59, rule 21(3), which is only to direct whether my decisions is one that is referred to in Order 59, rule 21(1)(a).  I say no more about this.

34.  As to costs, since this application is taken out properly by Law, my rulings can properly be seen as having “mixed” results for Law, and as ES remains neutral and Tsui not making submissions at all, in all the circumstances in my judgment the fair order is that there is no order as to costs between Law, Tsui and ES on this application for direction.  I so order. ES’s own costs are to be taxed in accordance with the Legal Aid Regulations (with certificate for counsel if necessary).