TSANG WING KWAI v. TSANG WING FAI

CACV 239/2018

[2018] HKCA 759

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 239 OF 2018

(ON APPEAL FROM HCMP 3186/2016)

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JUDGMENT

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

Introduction

1.  In this appeal, the Defendant sought to reverse the judgment of W Chan J on 21 May 2018.  In the judgment, the Judge granted relief to the Plaintiff as follows (“the Order”):

“ H. Conclusion

46. For the reasons set above, I order as follows: –

(1) The defendant do within 14 days provide the plaintiff with a true and perfect inventory and account of the Estate (“the Account”) as verified on affirmation.

(2) The defendant do within 14 days thereafter allow the plaintiff and/or his legal representatives to inspect all supporting documents in relation to the Account and allow the plaintiff to take copies thereof.

(3) The defendant shall be removed as the executor of the Estate of the Deceased.

(4) The parties may within 14 days and in writing submit their respective nominations of professional accountant, if any, for appointment as the executor of the Estate of the Deceased (together with their curriculum vitae and normal level of charges) for the Court’s consideration.

(5) Sub-paragraph (3) above shall take effect upon the actual appointment of the new executor of the Estate by the Court, which shall be made on paper.

47. Further, I order that the defendant shall personally pay the plaintiff the costs of and occasioned by these proceedings, which shall be taxed, if not agreed.

48. The above order as to costs is nisi and shall become absolute in the absence of any application within 14 days to vary the same.”

2.  The Defendant served the notice of appeal on 19 June 2018.  A few days later, on 22 June 2018, the Defendant took out a summons seeking a stay of the Order (“the June Summons”).

3.  The June Summons (together with another summons concerning costs) came before the Judge on 27 June 2018.  Counsel for the Defendant described the hearing of 27 June 2018 in his skeleton submissions (26 June 2018) as a call-over hearing and proposed certain directions.  Accordingly, the Judge adjourned the June Summons to a date to be fixed for 3 hours’ substantive argument with directions for the filing of evidence.

4.  Counsel for the Defendant then made an application for an interim stay pending the hearing of the substantive argument.  That application was opposed and counsel for the Plaintiff offered undertaking to indemnify the estate for the costs and reasonable expenses for engagement of professional accountant as executor in place of the Defendant and to fortify such indemnity by paying $1.5 million into court.  The Judge refused to grant such a stay (other than a short stay of 21 days to give time to the defendant to apply for similar relief before this Court).

5.  On 13 July 2018, the Defendant issued a summons in this appeal seeking an interim stay pending the substantive determination of the stay summons by the Judge (“the July Summons”).  There was no application to this Court seeking an expedited hearing of the July Summons.  It was therefore processed in accordance with the procedures in PD 4.1 paragraph 36.

6.  In the meantime, the short interim stay granted by the Judge expired on 18 July 2018.  Though the Defendant had issued a summons on 18 July 2018 (scheduled to be heard on 10 September 2018) seeking extension of that interim stay, that application was withdrawn by a consent summons of 5 September 2018. 

7.  Based on nominations provided by the parties, the Judge appointed Ms T Wong of KPMG as the executrix of the estate on 13 August 2018.  Thus, since that date, the substantive relief granted by virtue of Order (except the provision for costs) have been fully implemented and the estate has been under the administration by the new executrix.

8.  On 18 July 2018, representatives of the parties attended the Listing Officer to fix a date for the hearing of substantive argument of the June Summons before the Judge.  Notwithstanding that dates in December 2018, January, February and April 2019 were offered, the parties could only agree to have the June Summons heard on 11 June 2019.

9.  As for the progress of the appeal, on 14 August 2018 the appeal was fixed to be heard on 11 January 2019 with the agreement of the parties.

10.  Submissions were lodged by counsel in accordance with PD 4.1, the last round of submissions being those of Mr Man SC (together with Mr Wong) on behalf of the Defendant of 28 August 2018.  Previously, Mr Man lodged one set of submissions on 8 August 2018 and a set of supplemental submissions on 17 August 2018.  Mr Ho SC (together with Mr Yuen) lodged submissions on behalf of the Plaintiff on 21 August 2018.

11.  Solicitors for the Defendant also wrote to the Court on 21 and 28 August 2018 attaching additional documents: transcript of the hearing before the Judge on 4 April 2018 and skeleton argument at the call-over hearing.  For reasons below, we do not find it necessary to refer to the transcript though we take note of the skeleton argument of counsel for the Defendant at the call-over hearing.

12.  It is against the above background that the July Summons is considered by this Court.  Having read the submissions and the papers, we are of the view that the application is suitable for being processed on the papers without any oral hearing pursuant to Order 59 Rule 14A.

Disposal of the July Summons

13.  From the procedural history of the case recited above, it is plain that the Defendant is trying to ask this Court to re-examine the decision of the Judge on 27 June 2018 refusing to grant interim interim relief.

14.  There is disagreement between counsel as to the proper approach to the July Summons that this Court should adopt.  Mr Man submitted that this Court should approach it on the basis that it was a renewed application for stay of execution in the exercise of our concurrent jurisdiction under Order 59 Rule 13, Rules of the High Court.  On the other hand, Mr Ho submitted that this Court should not interfere with a decision on interim interim relief unless it is extremely plain that the Judge had erred in his decision to withhold such relief.  In this respect, Mr Ho relied on a line of recent authorities: NPYJ v SMRC [2018] 1 HKLRD 573; China Shanshui Cement Group Ltd v Zhang Caikui [2018] HKCA 409; Symphony Partners Ltd v Fullerton Bay Investment Ltd [2018] HKCA 505.

15.  In our judgment, for the following reasons, the proper approach in the present circumstances is the one set out in NPYJ v SMRC [2018] 1 HKLRD 573 and China Shanshui Cement Group Ltd v Zhang Caikui [2018] HKCA 409:

(a)   Though in those cases the applications were brought before this Court by way of seeking leave to appeal against the lower court decisions, the rationale for the approach is that it involves an interim interim relief which is meant to cover the situation pending the opportunity for full consideration of the substantive application;

(b)   The relief sought in the July Summons is for interim stay pending the determination of the June Summons.  The latter Summons is still extant before the Judge;

(c)   Whilst we would have further things to say about the listing of the June Summons for hearing on 11 June 2019, it remains the position that the Defendant is not seeking to have this Court to determine the substantive stay application.  As the application presently before us, this Court is not asked to exercise its concurrent jurisdiction on a stay application as that decision is reserved (by the extant application by virtue of the June Summons) for the Judge.  The relief sought is clearly an interim interim measure;

(d)   Hence, the rationale of NPYJ v SMRC, supra and China Shanshui Cement Group Ltd v Zhang Caikui, supra, is applicable;

(e)   Order 59 Rule 13 gives this Court the concurrent jurisdiction to entertain a substantive stay application.  Such jurisdiction, in accordance with Order 59 Rule 14(4), should not be made in the first instance to this Court.  It is only when there are special circumstances which make it impossible or impracticable to apply to the court below that this Court will entertain the application without a decision from the judge below;

(f)   The Defendant has been able to apply and has in fact applied to the Judge for a stay.  In light of what we shall say regarding the procedure for processing such application in the Court of First Instance, we are not persuaded that the unexpected listing of the substantive hearing in June 2019 in the present case can be regarded as the special circumstances within the scope of Rule 14(4);

(g)   Whilst there is still an extant substantive application for stay at the court below, it is an abuse of process for the Defendant to come to this Court to ask for the same relief;

(h)   Hence, this Court will not entertain the present application as if it were a renewed application for stay after the dismissal of the same application at the court below.    

16.  As held in the authorities cited by Mr Ho, the proper criteria for determination of interim interim relief is balance of fairness.  Further, this Court will not interfere with the assessment of the Judge unless it can be demonstrated that he was plainly wrong.

17.  In the present case, in light of the undertakings from the Plaintiff, we are in agreement with the Judge on his assessment.  His refusal to grant interim interim relief is plainly right, not plainly wrong.  With respect, having regard to the assets of the estate (see [8] of the judgment of 21 May 2018) , we do not accept the potential prejudice relied upon by the Defendant at paragraph 2 of Mr Man’s submissions of 8 August 2018 (that significant time and effort for the transfer of executorship and costs of the new executrix) was so substantial to swing the balance of fairness in favour of the Defendant. 

18.  Moreover, by now, all the substantive relief granted by the Judge in the Order has been executed.  The Defendant had been removed as executor and the new executrix has assumed duties in the administration of the estate.  In terms of the Order, there is nothing to be stayed.  The Defendant in the latest round of submissions sought to restrain the new executrix from further performing her duties until the determination of the appeal.  It is doubtful if such relief is appropriate as a matter of law.  In any event, this is not the relief sought in the summons of 13 July 2018 and the executrix (who had not been joined as a party to the summons) is entitled to be heard on such an application.  

19.  We have also had regard to the merit of the appeal.  Since the July Summons is only about interim interim stay, and in light of what we have said above, we will be brief.  It suffices for present purpose for us to say that though the appeal is arguable, we do not find the merit to be so strong as to merit a stay without consideration of other factors.

20.  We do not accept that the appeal would be rendered nugatory if a stay is not granted.  The unfortunate fixing of a very late date for the substantive hearing of the June Summons cannot by itself be a ground for granting a stay.  But for the implementation of the Order (thus there is nothing more to be stayed), those acting for the Defendant could have written to the Judge to seek an earlier 30-minute appointment in line with the measures suggested below.

21.  For these reasons, we dismiss the July Summons with costs.

Suggested procedure for stay application below

22.  The procedural history of this application illustrates the need for tighter case management and more flexible use of modern procedural techniques in processing interlocutory applications.  With due respect, and perhaps with the benefit of hindsight, it is plainly undesirable to list a stay application for hearing on a date almost one year after the issue of the summons.

23.  A stay application should be processed with some degree of expedition and to achieve that procedural economy is required.  We are quite certain that had the Judge known that an order for the summons to be adjourned to a date to be fixed would result in such an unsatisfactory state of affairs, he would not have allowed it.

24.  In the recent case of ZJ v XWN [2018] HKCA 436, this Court (Lam V-P and B Chu J) had commented upon the failure of the parties to have proper case management regard for an application for leave to appeal which resulted in substantial delay in processing such application. Some proposed measures were suggested at [66] of that judgment:

(a)   Short of exceptional circumstances, the judge processing the leave application should be the same judge who have made the subject decision in respect of which leave to appeal is sought;

(b)   As the judge would be familiar with the case and the arguments advanced, and given that an unsuccessful party can renew the application in the Court of Appeal, leave application can be processed on the papers without any oral hearings.  Hence unless the judge directs otherwise, no appointment should be given for such hearing when the summons is lodged;

(c)   Directions should be given for skeleton submissions to be lodged(with deadlines and page limits) and the judge shall read the same before deciding if oral hearing is necessary;

(d)   Non-compliance with the direction to lodge skeleton submissions by an applicant should be sanctioned by the striking-out and dismissal of the application on the ground of failure to prosecute the application with due diligence; 

(e)   Unless the judge considers that there are matters which calls for clarification or there are other good reasons requiring an oral hearing to be held, the application shall be processed on the papers;

(f)   The application shall not be an elaborate process and filing of evidence should only be permitted when there is good justification for the same. If the process can be completed within a short period, usually there will not be any justification for putting in fresh evidence on the pretext of up-dating developments;

(g)   Costs of the application should be assessed summarily.  The parties should also lodge costs statement at the same time to facilitate summary assessment;

(h)   If the judge directs for an oral hearing, such hearing should not be long.  Parties should not be allowed to repeat what has been set out in the written submissions.  The purpose of the hearing should be confined to clarification of matters and to assist the court on specific issues that the court invites the party to address.  Usually, a 30-minute appointment should be sufficient;

(i)   This practice should equally be applicable to litigants in person.  There is no reason why such litigants should have more claims on the use of court’s time and other judicial resources.

25.  Since then, those measures have been adopted by the Family Court as standard procedure in processing application for leave to appeal. 

26.  Likewise, in respect of leave to appeal and stay applications in the Court of First Instance, there is room for adopting similar measures to facilitate the timely, proportionate and fair disposal of such applications.  Judges are familiar with the processing of applications relating to costs on the papers.  In the Court of Appeal, most interlocutory applications are now processed on the papers without any oral hearings.

27.  Whilst we appreciate that in stay applications there could be a greater need for evidence to be filed, similar case management techniques in applications for stay of execution pending appeal and applications for leave to appeal (including applications for extension of time to appeal) could be adopted by judges in the Court of First Instance. These applications are interlocutory in nature and made by summons. For the purpose of due process, the hearing of such applications can include paper hearing, see Chow Shun Yung v Wei Pih (2003) 6 HKCFAR 299 at [37.4]. Subject to the overriding requirement of fairness, the process by which an application is to be disposed of is a matter of case management: see Chow Shun Yung v Wei Pih (2003) 6 HKCFAR 299 for a discussion of the requirement of fairness.

28.  Order 1A rule 4 of the Rules of the High Court sets out the court’s duty in case management to further the underlying objectives in Order 1A rule 1. Order 1A Rule 4(j) and Order 1B Rule 1(2)(l) authorises the Court to exercise its case management power in a way to deal with the case without the parties needing to attend court.  The following considerations related to the underlying objectives point favourably to the disposal of these interlocutory applications without an oral hearing or, if oral hearing is required, a limited oral hearing as explained below:

(a)   Increase cost-effectiveness: leave and stay applications are usually made to judges who have heard the parties at the substantive hearings or trials. They are not intended to be a second run for arguments which had already been fully canvassed at the earlier hearings. The grounds of appeal should be clearly set out in the summons and the draft notices of appeal. In such context, usually not much advantage would be gained by another oral hearing or a lengthy oral hearing;

(b)   Expeditious process: as illustrated in the present case, there can be unintended but prolonged delay in fixing an oral hearing before the same judge in consultation with counsel’s diaries;

(c)   Sense of proportion and procedural economy: given the purpose of these interlocutory applications and the considerations discussed in (a), in most of the cases it may not be proportionate to hold another oral hearing or a lengthy hearing. This is particularly so when the unsuccessful applicant can renew the application in the Court of Appeal;

(d)   Fairness: there can be exceptional cases where the judge, after reading the papers, finds it useful in the interest of justice to have a short oral hearing. It depends on the facts and circumstances of the case;

(e)   Fair distribution of court’s resources: the context and purpose of these interlocutory applications should be borne in mind in allocating judicial resources for disposal of the same.

29.  If a judge regards it appropriate to adopt the procedure for paper disposal, he can give directions to facilitate the same. If a date has already been fixed, he can adjourn it before the hearing date for paper disposal. Alternatively, the Registry or the parties can consult the judge when a summons is taken out to see if directions for paper disposal should be given.    

30.  We make the above observations and suggestions without levelling any criticism against the Judge or counsel involved.  As we said, the Judge was most probably unaware of the problems associated with the fixing of dates.  So were counsel.  However, we would highlight that with the above case management techniques in place, a 3-hour hearing for this kind of stay application would not be necessary in most cases.  The purpose of an oral hearing, if any, is not for counsel going through the written materials again. Nowadays, judges would have read the papers before the hearing.  At the oral hearing of an application of this nature, the purpose is to clarify points and to address areas on which the judge needs more assistance.  Thus, usually a 30-minute to 1-hour appointment should be sufficient.

31.  We hasten to add that for applications of this nature it is certainly open to a judge to give oral decision instead of a full written judgment reciting all the facts and backgrounds and arguments.  Reasons for the decision can be brief.  In some cases, even bullet point reasoning will suffice.  If a written judgment is delivered, it can equally be brief and concise.

32.  This brings us to another aspect of the problem: the fixing of dates in consultation with counsel’s diaries.  As mentioned, the Listing Officer has offered earlier dates which were not accepted.  There is always a tension between expeditious disposal of cases and fixing a date which suits busy practitioners.  Whilst the court acknowledges the wish of litigant to have counsel of his own choice and to have a hearing fixed on a date which accommodates counsel’s diaries, fair and efficient administration of justice does not require the progress of judicial proceedings being dictated by counsel’s diaries. 

33.  By nature, short of exceptionally complicated cases, applications for stay can be handled by counsel of reasonable seniority.  Hence, if the price for accommodating counsel’s diaries is that the hearing cannot take place without substantial delay, the public interest in fair and efficient administration of justice necessarily outweighs the private interest of a litigant to have a counsel of his choice to represent him at the hearing.  Further, it is always open to a litigant to engage counsel of his choice to participate in the preparation of written submissions which would play a significant role in the process.  Given that the purpose of the oral hearing, as discussed above, is limited, the court would usually only give limited accommodation to counsel’s diaries.  If a date within a reasonable timeframe cannot be agreed, the hearing should take place on the first available date. 

34.  With these measures, it is unlikely that a call-over hearing is necessary.  It is also unlikely that a 30-minute or 1-hour slot within a reasonable timeframe for hearing an application for stay pending appeal (if oral hearing is considered necessary) in the judge’s diary cannot be located.

Order

35.  We make an order dismissing the July Summons with costs.  In the statement of costs of the Plaintiff of 21 August 2018, a sum of $452,790 is sought by way of costs (of which $230,000 is counsel fees). Having assessed the costs summarily, we would make an order nisi that the Defendant shall pay the Plaintiff’s costs of the summons at $300,000.