LEE KWOK TUNG ALBERT v. CHIYU BANKING CORPORATION LTD

DCCJ 2736/2016

IN THE DISTRCT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO.2736 OF 2016

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D E C I S I O N

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1.  This is a hearing of the plaintiff’s summons dated 23 January 2017 for transfer of the proceedings herein to the Court of First Instance (“CFI”) with a view to be consolidated or dealt with together with HCA168/2016 (“the said HC action”) instituted by the same plaintiff against the same defendant. The defendant opposes the proposed transfer.

Brief Background

2.  Put very briefly, the defendant was a bank carrying on business in Hong Kong. In 1999, it advanced money to the plaintiff and one Madam Lee on the security of a landed property jointly owned by them. They defaulted. The defendant then exercised its mortgagee power. After the sale of their security, there was still a shortfall of slightly less than $1.8 million as at 2008. The defendant and the plaintiff (for reason not apparent from the affirmation evidence, without joining Madam Lee) entered into a written compromise dated 19 January 2009 whereby the plaintiff agreed to pay a total sum of $500,000 by instalments the last to be paid by end of 2010 in full and final settlement of all his liability under the loan agreement. All payments under the said compromise were duly paid. A written release dated 6 January 2011 was signed by the defendant, discharging the plaintiff (but not Madam Lee) from all liabilities under the original loan agreement.

3.  It is the plaintiff’s case that despite the said discharge, the defendant had failed and/or refused to update the plaintiff’s credit information provided to a consumer credit reporting company, namely, TransUnion Limited (“TransUnion”) despite repeated requests and demands. It was not until 16 July 2015 that the credit information was updated. After the update, his credit rating was improved from Grade G to Grade C. It is the Plaintiff’s case that there was a delay of 4½ years on the part of the defendant to correct the information provided. The plaintiff said the defendant’s failure and/or delay to update his credit information with TransUnion has caused him loss and damages. He has to pay interest at a higher rate when borrowing money from financial institutions and friends during this period. The total loss quantified by him amounts to about $5.4 million.

4.  By HCA168/2016, the plaintiff instituted the said HC action against the defendant in the CFI. So far as can be discerned from the Amended Statement of Claims, the plaintiff founded his claims in the CFI on breach of Principle 2 of the Personal Data (Privacy) Ordinance, Cap 486 (“PDPO”), the Code of Practice issued by the Privacy Commissioner for Personal Data in exercise of a power conferred on him under the PDPO, implied terms under the said written compromise, law of tort/negligence for allegedly breach of various duties of care[1].

5.  The defendant basically denies the alleged breaches and liabilities. Prior to the amendment of the statement of claims in the said HC Action, the defendant has raised in its Defence of 1 March 2016 that any claims under the PDPO and the Code of Conduct should be raised in the District Court in accordance with section 66(5) of the PDPO. However, no application has been taken out in the CFI to strike out or stay the parts relating to PDPO breaches on jurisdictional grounds. Neither is there any application to strike out the other parts of the claims for want of causes of action.  

6.  The plaintiff issued a Writ of Summons in the District Court on 7 June 2016 based on the same set of facts. According to the statement of claims filed herein, the causes of action were apparently limited to breaches of the PDPO and the related Code of Practice. Exactly the same amount of damages and loss as in the said HC Action was claimed.

7.  By the said transfer summons, the plaintiff requests this Court to transfer the action herein to the CFI under section 42 of the District Court Ordinance, Cap 336 (“DCO”). It is the plaintiff’s case that the 2 proceedings arose out of the same background and transactions and should be heard together in one go by the same judge. The reasons for filing 2 sets of proceedings, according to Mr Victor Chiu, counsel for the plaintiff, are that the claims in the CFI are based on contract, tort and breach of statutory duties whereas those in the District Court are for breach of s.66(1) of the PDPO against the defendant as a “data user”. Under s.66(5) of the PDPO, any claim for compensation has to be commenced in the District Court. However, there is a possibility that the plaintiff may not be successful to prove the defendant being a “data user”, thus necessitating the plaintiff to issue a fresh set of proceedings in the CFI founded on other causes of action.

8.  After reading and hearing submissions by Mr Adonis Cheung, counsel for the defendant, it is fair to say that he opposes the transfer on only one major ground, namely, on a proper construction of s.66(5) of PDPO and s.42 of the DCO, the CFI simply does not have jurisdiction over the claims under s.66(1) of the PDPO. He relies on the first instance decision by DHCJ Yee in Lee Chick Choi v Best Spirits Company Limited[2] and its appeal decision in the Court of Appeal (“CA”)[3].

Discussion

9.  No doubt the claims, no matter made herein or in the CFI, arose out of the same facts or transactions. It is fair to say that the defendant does not pitch the plaintiff’s claims being so bad as to be liable to be struck out otherwise applications to that effect should have been taken out herein or in the CFI. Merits of the plaintiff’s claims aside, it is the different causes of action based upon by him that give rise to different claims in different venues. Although there appears to be a better way of going about it: see the observation of Cheung JA at [9.3] and [9.4] in Wong Chi Ching v Bocom International Holdings Company Limited[4] relying on Dataprep (H.K.) Limited v Kuo Chi-yung, Peter[5], in the interest of justice the plaintiff should be allowed to ventilate his genuine claims, and in an efficient way. In my judgment, the crucial questions for determination are:

i)   Whether the CFI has no jurisdiction over any claims for compensation under s.66(1) by virtue of s.66(5) of the PDPO; and

ii)   If the CFI has jurisdiction, whether it is appropriate after considering all relevant circumstances to transfer the present proceedings to the CFI for it to be considered to be dealt with together with the HC action.

10.  So far as can be discerned from Mr Cheung’s argument, it basically boils down to this. Section 42 of the DCO stipulates:

“The Court may, either of its own motion or on the application of any party, order at any stage the transfer to the Court of First Instance or the Lands Tribunal of all or part of any action or proceedings before it which are within the jurisdiction of the Court of First Instance or the Lands Tribunal, as the case may be.” (emphasis added by Mr Cheung)

11.  His first point is that s.42 of the DCO empowers transfer of an action to the CFI only if the action is in the first place one which is within the jurisdiction of the CFI. If the CFI does not have any jurisdiction over the matter in the first place, since transfer cannot confer jurisdiction, no transfer can be made under s.42 of the DCO.

12.  Section 66(1) and (5) of the PDPO provides:

“(1) Subject to subsection (4), an individual who suffers damage by reason of a contravention—

(a) of a requirement under this Ordinance;

(b) by a data user; and

(c) which relates, whether in whole or in part, to personal data of which that individual is the data subject,

shall be entitled to compensation from that data user for that damage.

…

(5) Proceedings brought by an individual in reliance on subsection (1)    are to be brought in the District Court but all such remedies are obtainable in those proceedings as would be obtainable in the Court of First Instance.”

(Emphasis supplied by Mr Cheung)

13.   The second point taken by Mr Cheung is that by stipulating under s.66(5) that the proceedings are to be brought in the District Court, the District Court assumes an exclusive jurisdiction over any claim under s.66(1) of the PDPO, even to the exclusion of the CFI. Accordingly, the CFI lacks jurisdiction over any s.66(1) claims. S.42 of the DCO, according to Mr Cheung, therefore cannot help and is not engaged at all. The PDPO case has to remain in the District Court.

14.   Mr Cheung relies on [17] of the first instance decision in Lee Chick Choi in which DHCJ Yee has this to say:

“In my view, the District Court has exclusive jurisdiction over all claims in reliance on section 66(1) including those involving monetary claims in excess of its jurisdiction. It means that Mr Lee’s new claim albeit involving more than HK$1 million allegedly should be dealt with in the District Court.” (Emphasis of Mr Cheung)

15.   Lee Chick Choi concerns an application to strike out the draft statement of claims. In short, the unrepresented plaintiff in that case abandoned the original statement of claim and proposed to adopt a draft statement of claims pleading breaches under the PDPO. It was a new claim suggesting that the breach of certain principles concerning use of data affected, inter alia, the plaintiff’s prospect of securing a job similar to the one prior to his dismissal. The learned judge rejected the proposed amendment and struck them out. He also refused to transfer it to the District Court. He considered the plaintiff’s proposed case “doomed to fail”.

16.   On appeal, the CA upheld the “doomed to fail” ground and considered there is no conceivable causal link between the defendant’s alleged breach of the relevant date protection principles and his dismissal. The CA also considered far-fetched the plaintiff attributing his failure to secure a job to the breach of the PDPO.

17.   Mr Cheung therefore submitted that since the first instance decision of Lee Chick Choi was upheld by the CA, there is direct authority to support his proposition that the District Court has exclusive jurisdiction over s.66(5) PDPO application to the exclusion of the CFI.

18.   With respect I disagree.

19.   Section 3 of the High Court Ordinance, Cap 4 (“HCO”) stipulates:

“(1) There shall be a High Court of the Hong Kong Special Administrative Region consisting of the Court of First Instance and the Court of Appeal.

(2) Subject to the provisions of this Ordinance, the High Court shall be a court of unlimited civil and criminal jurisdiction.”

(Emphasis added)

20.   It is fair to say that the HCO contains no provisions excluding the jurisdiction of the CFI over any PDPO claims. It is also trite that a court will not lightly give up its jurisdiction unless there are compelling reasons. Accordingly, the starting point, according to s.3 of the HCO, is that the CFI has jurisdiction over all matters, necessarily including s.66(1) PDPO claims apparently, unless there are clear and unequivocal provisions stating the otherwise.

21.   Concerning [17] in the first instance decision of Lee Chick Choi, it is noted that the learned deputy judge did not have the benefit of full argument before him as the plaintiff there was unrepresented. Further the decision is premised on the lack of merits of the proposed amendments, i.e. the doomed to fail ground. To that extent the view expressed on jurisdiction is only obiter.

22.   Further and I think more importantly, the CA has refrained from expressing a view to confirm the jurisdictional view so expressed. In the CA decision of Lee Chick Choi, it is stated in [24] the following:

“It is unnecessary to consider if the District Court does have exclusive jurisdiction in respect of a claim brought under section 66(5) of the PDPO. The Judge refused to transfer the claim to the District Court because he was convinced it was “doomed to fail….” (Emphasis added)

23.   In light of the reserved position of the CA regarding the jurisdictional issue, Lee Chick Choi, whether its first instance or its CA decisions, cannot be regarded as authority to support the proposition that the District Court has exclusive jurisdiction over claims under s.66(1) of PDPO to the exclusion of the CFI. In my judgment, section 66(5) only requires s.66(1) PDPO proceedings are to be brought in the District Court. It is only a procedural requirement. It does not preclude the CFI, by virtue of s.3 of the HCO, to assume jurisdiction over s.66(1) PDPO claims. No prohibition whatsoever can be derived from the said provision. On a proper construction of s.66(5) of the PDPO, nothing therein has the effect of taking away the jurisdiction of the CFI conferred on it under s.3 of the HCO.

24.   There are other enactments in Hong Kong which apparently have given exclusive jurisdiction to a certain court. One example can be found in the Labour Tribunal Ordinance, Cap 25 (“LTO”). Section 7(2) of the LTO provides:

“Save as is provided in this Ordinance, no claim within the jurisdiction       of the tribunal shall be actionable in any court in Hong Kong.”

25.   Section 10(1) and (2) of the LTO further provide:

“(1) The tribunal may, at any stage of proceedings, if it is of the opinion that for any reason the claim should not be heard and determined by it, decline jurisdiction.

(2) The tribunal may, when it declines jurisdiction under subsection (1), transfer the claim to the Court of First Instance, the District Court or the Small Claims Tribunal, in such manner as may be prescribed.”

26.   It was held by Seagroatt J in Yu Hoi Po v Act International Ltd[6] that even if there was a transfer from the Labour Tribunal to the CFI, the CFI may still lack the jurisdiction to deal with the claims. At p.379 of Yu Hoi Po, he said:

“When Section 10 of the Labour Tribunal Ordinance is invoked to transfer a claim to the High Court it is a transfer of jurisdiction. The claim itself remains confined to that which the Tribunal has jurisdiction to entertain in the first instance and although it becomes subject to the jurisdiction and rules of the High Court for the purposes of its progress and resolution, it does not change its character. The schedule to the Ordinance continues to govern the nature and extent of the claims permitted.”

27.   Mr Cheung’s submission is basically similar to that of Seagroatt J expressed above. However, it was held that the construction by Seagroatt J in Yu Hoi Po to be an unduly restrictive view of the jurisdiction of the High Court (comprising the CFI and CA) which has unlimited jurisdiction and was wrong: see [1] by Lam V-P and [9.6] by Cheung JA in Wong Chi Ching (supra).  It is noted that the wordings of s.7(2) of LTO is much more restrictive and prohibitory than those used in s.66(5) of the PDPO. Yet it is still considered that the CFI, which has unlimited jurisdiction, assumes jurisdiction over labour matters when transferred to it. In the Court’s judgment, s.66(5) of PDPO only provides that the proceedings are to be brought in the District Court. This is akin to a statutory case management direction directing the venue where s.66(1) claims should first be lodged. It will be doing violence to the language of s.66(5) by enlarging it to mean that at the same time it takes away the CFI’s jurisdiction given to it under s.3 of the HCO. In the judgment of this Court, the CFI has jurisdiction over s.66(1) PDPO claims, and in appropriate cases, these claims can be transferred from the District Court to CFI by virtue of s.42 of the DCO.

28.   The next question is whether, upon a proper exercise of discretion, this action should be transferred to the CFI.

29.   I think the conclusion is obvious. The facts based upon which the plaintiff pleads his various causes of action are in fact the same. All claims arose out of the same alleged defaults on the part of the defendant. There are common issues of facts and law. Although I consider there is no practical difference between the 2 sets of claims, it will be a matter for trial as to whether all these claims are in fact one and the same under s.66(1) PDPO or other causes of action are also available to the plaintiff. It will be more appropriate for the 2 actions to be dealt with together in one go or by the same judge.

30.   I do not consider it appropriate to make direction other than directing a transfer to the CFI. It will be for the CFI, in exercise of its case management powers, to direct further as to whether to consolidate the 2 actions or for them to be heard together or otherwise.

Disposition and Costs

31.   The Action herein be transferred to the CFI. All costs incurred herein prior to the transfer be on the District Court scale.

32.   As the defendant is unsuccessful in resisting the transfer summons, I make a costs order nisi that the plaintiff’s costs of this transfer application be in the cause, and be on the District Court scale with certificate for counsel. This order nisi will be made absolute if no application is made to vary it in 14 days.