TIONG KING SING v. SAM BOON PENG YEE AND ANOTHER

HCA 1517/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1517 OF 2011

____________

______________________________

REASONS FOR DECISION
______________________________

Introduction

1. This is the Plaintiff’s application for leave to appeal my decision made on 21 January 2015 (the “Decision”) dismissing the Plaintiff’s application by summons dated 30 July 2014, seeking:

(1) to strike out or expunge parts of Cheng’s 12^th Affirmation filed on behalf of the Defendants in support of a statement in an ex parte application for leave to issue committal proceedings against the Plaintiff; and

(2) to set aside the ex parte leave granted to the Defendants on 4 June 2014 to issue the said committal proceedings.  

At the conclusion of the hearing, I refused the Plaintiff’s application and reserved my reasons for the decision. Hereunder are the reasons for my decision.

2. Counsel are in agreement that under section 14AA of the High Court Ordinance (Cap 4), leave to appeal shall not be granted unless “the appeal has a reasonable prospect of success” or “there is some other reason in the interests of justice why the appeal should be heard”. “Reasonable prospect of success” requires more than showing that the appeal is “arguable” and “not fanciful”: see Ho Yuen Ki Winnie v Ho Hung Sun Stanley[1] and SMSE v KL[2].

3. The background of the case is set out at paragraphs 5 to 20 of the Decision.

The draft grounds of appeal

4. The Plaintiff advanced four grounds of appeal. These are:

(1) that I erred in holding that the requirements under Order 41 rule 5(2) of the Rules of the High Court are not applicable to an application for ex parte leave to issue committal proceedings and setting aside of the same; 

(2) that I erred in failing to strike out or expunge parts of  Cheng’s 12^th Affirmation for breach of Order 41 rule 5(2);

(3) that I erred in holding that the Defendants have pleaded sufficient particulars in the Statement; and

(4) that I erred in holding that the matters disclosed in the two letters from Messrs Wilkinson & Grist (“W&G”), the Plaintiff’s solicitors, were not material information which ought to have been disclosed to the court.

Grounds (1) and (2)

5. Mr Shieh SC, counsel for the Plaintiff, deals with these two grounds as one composite ground.  In my view, these grounds are premised on one proposition, which is that the requirements under Order 41 rule 5(2) apply to all affidavits to be used in any interlocutory proceedings, regardless of the purpose for which they are to be used.  The arguments advanced in support of these grounds are based on Mr Shieh SC’s obstinate refusal to accept the purpose of the two stage procedure in committal proceedings under Order 52 rule 2(1) and his misinterpretation of the authorities.

6. In paragraphs 21 to 30 of my Decision, I summarised Mr Shieh SC’s arguments about the application of Order 41 rule 5(2) and my reasons for dismissing the same.  It is very well established by the authorities that Order 52 provides a two stage process in committal proceedings, the ex parte stage in which the applicant seeks leave for issue of motion of committal and the inter parte stage in which the motion is heard in a substantive hearing.  The ex parte stage is a filtering process which filters out oppressive applications, or applications which have “some suspicion of oppression” or those which obviously have no chance of success.  The Statement under the ex parte stage serves as an indictment in criminal proceedings.  It sets out the particulars of the offence: see Grand Union Insurance Co Ltd v Clyde & Co[3] and Aqua-Leisure Industries, Inc and another v Aqua Aplash Ltd[4].  At this stage of the proceeding, the court is not concerned with questions of admissibility of evidence, or proof of the charge, or viability of the defence.  This proposition is supported by two Court of Appeal authorities: Anthony Eric Ryan Hotung v Ho Yuen Ki[5] and Secretary for Justice v Choy Bing Wing[6].  It would be convenient to quote the following passage from paragraphs 61 to 73 of the judgment of Yeung JA in Choy Bing Wing, which set out all the principles relevant to the disposal of this application for leave:

“61.  The supporting statement clearly set out such ground and the facts relied on. The affirmation of Wong Kin Man also verified those facts.

62. …

63.  At this early stage, the court is not concerned with the admissibility of evidence or whether the Applicant can successfully prove her allegations against the Respondent nor is the court concerned with the possible defence of the Respondent or whether such defence will succeed.

64. Order 52 Rule 2 stipulates the requirement to obtain leave to apply for committal in the following terms:

“An application for such leave must be made ex parte to a judge, and must be supported by a statement setting out the name and description of the applicant, the name, the description and address of the person sought to be committed and the grounds on which his committal is sought, and by an affidavit, to be filed before the application is made, verifying the facts relied on.”

65. The purpose of the statement in support of an application for leave is simply to provide the person sought to be committed with enough information to enable him to meet the charge. Sir John Donaldson MR said in no uncertain terms in Chiltern D.C. v Keane [1985] 1 WLR 619 at 622 C:

“Every notice of application to commit must be looked at against its own background. The test, as I have said, is: does it give the person alleged to be in contempt enough information to enable him to meet the charge?”

66. In Aqua-Leisure Industries, Inc and another v Aqua Aplash Ltd HCA 18928 of 1998, it was accepted that “the statement in support of an application is to be treated in similar manner as an indictment in criminal proceedings, having regard to the criminal nature of the sanctions for contempt”.

67. The Indictment Rules under Cap 221 provide under Rule 3 that “every indictment shall contain, and shall be sufficient if it contains, a statement of the specific offence with which the accused is charged describing the offence shortly, together with such particulars as may be necessary for giving reasonable information as to the nature of the charge”.

68. …

69. In the verifying affirmation of Wong Kin Man affirmed on 23 October 2003, court documents such as pleadings, affirmations, judgments and transcripts of hearings were exhibited together with news reports and magazine articles. It is such documents that the Respondent objects to on the basis that they are hearsay documents.

70. Technically, there was no need for the Applicant to exhibit those documents in the verifying affirmation. Order 52 Rule 2(2) only obliges the Applicant to verify the facts relied on, i.e. the contents of the statement containing the information to enable the Respondent to meet the charge.

71. The exhibited documents, including the newspaper reports and the magazine articles, contain further details of the Applicant’s allegations against the Respondent. The Applicant was only trying to provide the Respondent with as much information as possible.

72. How such allegations are to be proved and whether evidence tending to prove those allegations are admissible, as with all evidence in a criminal case, can and should only be dealt with at the substantive hearing.

73. Without commenting on their merits, the suggested defence that he had not been warned not to make the contemptuous remarks; that they were made with the permission of Rogers VP; that he had not been warned by Rogers VP not to make such remarks; that they were made in the course of an application in a judicial proceeding; or that the Respondent was exercising his right of free speech are all matters that can only be properly dealt with at the substantive hearing.”

(My highlighting underlined.)

7. In Choy Bing Wing, similar objection was raised as to the reference to newspaper reports and magazine articles.  As was held by Yeung JA, technically there was no need for the applicant to exhibit those documents in the verifying affirmation as Order 52 rule 2(2) only obliges the applicant to verify the facts relied on, ie the contents of the statement containing the information to enable the respondent to meet the charge.  The same applies in the present case.  The purpose of Cheng’s 12^th Affirmation was to verify the facts relied on in the Statement to enable the Plaintiff to meet the charge.  At that stage, ie the ex parte stage, of the process, I was not concerned with admissibility or otherwise of the allegations in the affirmations.  Hence, the requirements under Order 41 rule 2 have no application to an affirmation used to verify the statement used in support of an application for ex parte leave.  Alternatively, another way of expressing the same is that the requirements were met for the purpose of an affirmation verifying the statement.  It identified the source of Cheng’s belief, which is the employees present at the scene, though not in Mr Shieh SC’s words, “who said what” which is a matter to be determined at the substantive hearing.

8. Mr Shieh SC submits that my Decision that the requirements under Order 41 rule 2 do not apply to an affirmation verifying a statement filed for the purpose of making ex parte leave application totally ignored well established authorities, such as Savings and Investment Bank Ltd v Gasco Investments (Netherlands) BV (No 2)[7]; Citybase Property Management Ltd v Kam Kyun Tak (No 1)[8];and Sino Wood Investment Ltd v Wong Kam Yin[9].  I did not.  Rather and with the greatest respect, it is Mr Shieh SC’s obstinate refusal to acknowledge the filtering purpose which the ex parte application is designed to serve as established by well established Court of Appeal authorities which resulted in his misinterpretation of the above three cases. 

9. First, Savings and Investment Bank was quoted by Mr Shieh SC as a case in support of his proposition that defects in the verifying affidavit can and should be disposed of before the substantive hearing.  While that is absolutely correct, that case was not about striking out an affidavit filed for the purpose of obtaining ex parte leave to issue a notice of motion or setting aside such leave.  Leave had been granted. The respondents were not seeking to set aside the ex parte leave.  The proceedings had entered into the substantive hearing stage.  The short point which was raised as a preliminary point on the motion was whether an affidavit to be used at the hearing of the motion (even thought it might be the same affidavit filed for the ex parte application) complied with the equivalent of our Order 41 rule 2[10]. Properly understood, that challenge was actually part of the substantive hearing. 

10. Second, Citybase Property Management Ltd was a decision at the substantive hearing in which Ma J, as he then was, found the respondent liable for contempt of court by reason of her breach of interim injunction.  It was not a case about striking out an affidavit filed for the purpose of obtaining ex parte leave to issue a notice of motion or setting aside such leave. 

11. Lastly, Sino Wood Investment Ltd was a case which is similar in nature to the present one, in that the respondent sought to strike out or expunge the offending part of an affirmation filed in support of an application for ex parte leave to issue committal proceedings and to set aside the leave granted.  The offending part contained obviously hearsay allegations that the respondent had through others made murder threats to the ultimate beneficial owner of the applicant company.  Andrew Cheung J, as he then was, expunged the offending part of the affirmation but did not set aside the ex parte leave.  Though one of the objections to the offending part was the hearsay nature of the allegation, the principal reason for expunging it was irrelevancy and prejudice, rather than the hearsay nature of the allegation or non-compliance with the requirements under Order 41 rule 2.  The learned judge said at paragraph 10 of his decision:

“To allow the allegations to remain in evidence at this stage would, amongst other things, only serve to widen rather unnecessarily the scope of evidence and controversies that the court may be faced with at the substantive hearing, not to mention the allegations’ obvious prejudicial effect.”

12. The learned judge gave no consideration to the question of hearsay.  The requirements under Order 41 rule 2 was not mentioned at all in the decision.  While the adequacy of the affirmation as a verifying affirmation in support of the statement filed in the application for ex parte was considered, the focal point was relevancy and not credibility or whether the contempt could be eventually established by the evidence in the affirmation.  In striking out the offending part, the learned judge was doing what he would be required to do at the substantive hearing, though he conveniently did it in the course of hearing an application to set aside the ex parte leave.  Though without actually saying so, the learned judge was performing a filtering process, filtering out irrelevant evidence which would tend to make the application oppressive or clothe it with suspicion of oppression.  Thus, Sino Wood Investment Ltd supports rather than undermines the approach I adopted in the present case.

13. In accepting Cheng’s 12^th Affirmation as a verifying affirmation, I was doing no more than what Yeung JA said in Choy Bing Wing that an ex parte judge is entitled to do, ie accepting it as an affirmation verifying the facts relied on in the Statement containing the information to enable the Plaintiff to meet the charge.  For the purpose of the ex parte stage, there is no need for me to satisfy myself that the allegations contained therein are true.  That is something to be decided at the substantive hearing, for which directions will be given, and were indeed subsequently given, as to filing of evidence in support of and in opposition to the application for committal.  At that stage and prior to the actual hearing, the Plaintiff may, as did the respondents in Savings and Investment Bank Ltd, apply as a preliminary issue to strike out such affirmations filed by the Defendants on such grounds as are appropriate; or to renew their application to strike out Cheng’s 12^th Affirmation if no supporting evidence has been filed.  But as the matter now stands, I can see no reasonable prospect of success of an appeal based on these two grounds.

Ground (3)

14. By this ground, the Plaintiff alleges that I erred in holding that the Defendants have pleaded sufficient particulars in the Statement to sustain a reasonable cause of action that the “men” and “males” mentioned therein were acting in concert in pursuing a joint enterprise and under the instructions of the same group of which the Plaintiff formed part.  Mr Shieh SC argues that at the hearing, no argument was advanced by the Defendants on the basis that the Plaintiff and “the Plaintiff’s men” or the “males”, or the “men” were jointly liable on the basis of “joint enterprise” or “concerted” action.  He submits that it is well established that the “common design” itself and the defendants’ knowledge thereof must be pleaded and there is no sustainable plea of joint responsibility on the basis of “joint enterprise” or “concerted action”.

15. In my view, the authorities do not require any magic words to be used in pleading “joint enterprise” or “concerted action”. As submitted by Mr Coleman SC, counsel for the Defendants, the necessary facts have been stated in the Statement and Cheng’s 12^th Affirmation with sufficient detail and particularity to enable the Plaintiff to meet the charge. Those particulars are adequate.  What inferences to be drawn from such facts as will be proved at the substantive hearing are matters to be decided on another occasion.  Whether Mr Coleman SC had used the words “joint enterprise” or “concerted action” at the hearing is neither here nor there, the essence conveyed by these expressions was contained in his arguments and submission.  In my view, this ground of appeal is extremely artificial and has no reasonable prospect of success.

Ground (4)

16. By this ground, the Plaintiff alleges that I erred in holding that the matters disclosed in W&G’s two letters need not be disclosed to the court at the ex parte stage.  In gist, having regard to the nature of the ex parte application, I found that the information contained in the two letters were not material information which needs to be disclosed for the purpose of the filtering process: see paragraphs 39 to 44 of my Decision. 

17. Mr Shieh SC referred to Citibank NA v Express Ship Management services Ltd[11] and submits that the court is not concerned with whether the matters not disclosed would, if they had been disclosed, have caused it to refuse to grant the ex parte order.  The test is whether the court should have those matters in its weighing scale.  I have no quarrel with these legal principles.  Mr Shieh SC then quoted Fabrique Ebel SA v MBO Far East[12] and Anthony Eric Ryan Hotung v Ho Yuen Ki[13] and further submits that in the context of committal applications, one important matter in the “weighing scales” is the chance of success of the application.  The thrust of Mr Shieh SC’s argument is that the Plaintiff’s allegation of his involuntary presence at the Defendants’ office is material information which the Defendants should have disclosed when making the ex parte application.

18. I have no disagreement with the authorities and principles quoted by Mr Shieh SC above, but disagree with how he applies them and his conclusion.  Facts are material if they are relevant to the weighing operation which the court has to make in deciding the issue before it.  But these authorities did not spell out what is material in deciding an ex parte application for leave to issue committal proceedings.  In particular, I am unable to read from the passages in Fabrique Ebel SA v MBO Far East[14] and Anthony Eric Ryan Hotung v Ho Yuen Ki[15] which Mr Shieh SC quoted above that the chance of success of the application is one important matter to be put in the weighing scale.  Indeed, Anthony Eric Ryan Hotung v Ho Yuen Ki provides a good demonstration of how the court approaches an application for leave to issue committal proceedings.  In that case, the Plaintiff made an ex parte application for leave to issue committal proceedings against his trustees.  The application was turned inter parte by an order of the court to be heard before two judges of the Court of Appeal. The trustee opposed the application advancing some defences.  In my view, the fact that the application was heard inter partes has no bearing on the approach of the court in considering an ex parte application.  The considerations are the same.  None of the defences advanced by the trustee were considered by Yuen JA.  They were not put in the weighing scale as suggested by Mr Shieh SC.  Rather, upon satisfying herself that the plaintiff has demonstrated a prima facie case, Yuen JA granted leave to issue proceedings.  She said in paragraph 15 of the judgment:

“As to the points made by counsel for the Trustee, I think first that it is at least arguable that at least those parts of the Gill Order which were varied by this court were orders of this court.  Secondly, the order of this court referred expressly to s152FA proceedings if the companies failed to provide the documents requested by the Trustee.  Thirdly, counsel for the Trustee accepted that she was obliged by order of the court to make a diligent demand for those documents which were not available to her.  Given the trustee’s actions and omissions set out in para. 10 above, I do not think it can be said that the application is “obviously unfounded or oppressive” or which have “some suspicion of oppression about them”.  Whether committal proceedings are “appropriate” or not is a matter to be dealt with on the substantive application.”

This passage in no way suggests that Yuen JA had considered any defence or weighed the chance of success of the application. She was just performing the filtering process, satisfying herself that the application was not obviously unfounded; was not oppressive or had any suspicion of oppression; or was not one which obviously had no chance of success.  That was the approach taken by Yuen JA when considering the application.  I have no reason to depart from that approach.  The alleged defence is usually not anything to be put in the weighing scale.

19. In my view, what is material depends on the nature of the application.  The obligation of disclosure imposed on an applicant in an ex parte application calling for more draconian restraints on the respondent’s right must be more onerous than that on an applicant seeking ex parte leave as part of the filtering process before some other proceedings may be commenced.  In this regard, I am in general agreement with Mr Coleman SC.  Most of these applications for leave are disposed of without a hearing and, if granted, create no restraint on the respondents other than the obligation to answer the allegations upon issuance of the notice of motion. Hence the obligation of disclosure on the applicant must be less stringent than upon an applicant seeking, for example, a Mareva injunction order.  As the application serves as a filtering process, the court’s primary concerns are that the applicant has shown a prima facie case justifying the issue of the motion; that there is no oppression or suspicion of oppression in the making of the application; and that the motion is not one which obviously has no chance of success.  The court is not concerned with whether the respondent has a defence, even a good defence except if it raises suspicion of oppression or shows that the application obviously has no chance of success.  I therefore disagree with Mr Shieh SC’s submission that the chance of success and hence the defence is something to be put in the weighing scale. 

20. Mr Shieh SC also relies on Gee, Commercial Injunctions[16]. He submits that an applicant’s obligation of disclosure is to identify any defences which, although not yet taken, would have been available to be taken by the opponent had he been present at the application.  As the applicant’s obligation of disclosure depends on the nature of the application, the obligation suggested by Gee applies only to ex parte applications seeking some relief or remedies against the respondent, particularly if those remedies impose draconian restrictions on the rights of the respondent.  The obligation does not apply to an ex parte application which seeks no relief or remedy other than requiring the respondent to answer to the allegation.  Thus, the above paragraph provides a complete answer to Mr Shieh SC’s argument based on Gee.

21. Furthermore, insofar as the English position is concerned, according to the learned author, the Practice Direction[17] giving effect to that obligation is no longer in force[18].  In Hong Kong, paragraph 26(4) of Practice Direction 11.1 requires that an affidavit in support of an ex parte application seeking interim and substantive relief should disclose any answer asserted or likely to be asserted by the respondent.  That obligation is imposed on an applicant seeking some interim and substantive relief, such as a Mareva injunction order.  As an ex parte application for issue of committal proceedings does not seek any relief against the respondent, Practice Direction 11.1 does not apply.  Thus, the approach I adopted above is also consistent with the practice direction.

22. In the present case, the defence of involuntary presence falls far short of suggesting oppression or suspicion of oppression or that the application obviously has no chance of success.  It is not material information which needs to be disclosed.  The truth or otherwise of the allegation is a matter to be determined at the substantive hearing.  The Statement as verified by Cheng’s 12^th Affirmation has made out a prima facie case of contempt against the Plaintiff.  He has to answer to the charge.  In my view, this draft ground of appeal also has no reasonable chance of success.

Conclusion

23. For the above reasons, I reach the conclusion that the Plaintiff’s draft grounds of appeal have no reasonable chance of success. Accordingly, I refuse the application for leave to appeal with costs to the Defendants and certificate for two counsel.