ERIC EDWARD HOTUNG v. HO YUEN KI AND OTHERS

HCA 571/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 571 OF 2003

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BETWEEN

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AND

HCMP 2820/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 2820 OF 2002

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______________________

BETWEEN

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AND

HCMP 4511/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 4511 OF 2002

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______________________

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(Consolidated by the Order of Deputy High Court Judge To dated10^th April 2003)

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J U D G M E N T

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Introduction

1.  Certain important formalities need to be observed before an affidavit or affirmation can be adduced into evidence.  When such an affidavit is sworn overseas there are additional requirements to be observed.  This is an appeal from an order of Master de Souza on 5 October this year refusing the 3^rd Defendant leave to make use of an affirmation affirmed by him in New York State, USA on 20 April 2006.  The 3^rd Defendant had sought leave from the Master to allow him to dispense with some of the requirements of O.41 r.(1)(4) of the RHC, this Order being the one that governs the formalities and the use of affidavit evidence.  Before I embark on the issues which fall to be determined by me it will be helpful if I briefly set out the background which has given rise to the appeal.

Background

2.  Over a number of days in January 2005, Tang JA, (as he then was) sitting as an additional Judge of the Court of First Instance, tried a consolidated action between the Plaintiff and four of his eight children, as well as an individual trustee and a trustee company.  The Plaintiff who had set up certain trusts in favour of his children, asserted that these trusts were subject to conditions including the power of revocation, exercisable by him.  It is not necessary for me to rehearse the matter further save to record that the Plaintiff substantially failed in the action and now has to face up to orders for costs made against him in favour of the 2^nd, 3^rd and 5^th Defendants, in addition to the costs of the 1^st, 4^th and 6^th Defendants.

The Costs Dispute

3.  At the trial, the firm of Oldham, Li and Nie (“OLN”), solicitors, represented the 2^nd, 3^rd and 5^th Defendants.  The matter which I am required to determine only relates to them and the Plaintiff, represented by Sit, Fung, Kwong and Shum (“SFKS”).  It does not involve any of the other Defendants.  The Plaintiff’s case is that he has come to a separate agreement on costs as between himself and the 3^rd defendant to settle the 3^rd Defendant’s costs and those of the 5^th Defendant, whose interests have, throughout these proceedings, been represented by the 3^rd Defendant.  Affirmations purporting to demonstrate that this is so have been filed by Mr Alex Chan of SFKS.  Included in the evidence is a letter from the 3^rd Defendant dated 15 March 2006 to OLN which, on its face, unequivocally confirms this agreement.  Given its importance I propose to set out its contents in full:

“Re:  Taxation HCA 571/2003

1. I hereby confirm I have reached an agreement with the Plaintiff of HCA 571 with regard to mine and Sheridan Shea’s part of the costs.  I, therefore will not be proceeding with taxation.

2. Please adjust the Bill of Cost accordingly.

3. In light of the above, please take this as notification that Oldham, Li & Nie’s services in all matters regarding Sean Hotung is hereby terminated.

4. Please, hereafter, direct any queries to Ms Catherine Por of Stevenson, Wong & Co. who will be acting on my behalf.  Any and all e-mails and or post sent to me shall be forwarded to Ms Catherine Por without being opened.”

4.  Having regard to this agreement SFKS wrote to OLN and asked them to present their bill of costs excluding any reference to the 3^rd and 5^th Defendants’ costs.  OLN have declined to do so.  They wish to see some evidence that the Plaintiff has in fact paid the 3^rd Defendant in respect of his and the 5^th Defendant’s costs.  SFKS say that they are unable to do so because the Plaintiff and the 3^rd Defendant have had a further falling out which has resulted in the 3^rd Defendant bringing a further action against the Plaintiff.

5.  The present position therefore is that OLN has presented a bill of costs which represents the costs of all three of the successful Defendants which it represented at the trial and not just the costs of the 2^nd Defendant as SFKS had expected.  A taxation hearing has been appointed but adjourned because SFKS have taken out a summons on behalf of the Plaintiff to strike out so much of OLN’s bill of costs as relates to the 3^rd and 5^th Defendants.  In support of this summons they have had prepared an affirmation by the 3^rd Defendant [see pages 48-55] which they would wish to adduce in evidence.  This affirmation serves to confirm the agreement on costs that he has arrived at with the Plaintiff.  Objection has been taken to its admissibility by OLN for want of proper form in a number of respects.  This being so SFKS took out a summons [pages 7-9] with a view to obtaining leave from Master de Souza to make use of the affirmation notwithstanding its irregularities.  The Master having refused leave the Plaintiff now appeals to me.

The Defects

6.  There are four irregularities which OLN say are apparent, the first two of which, as I will list them in a moment, are accepted by the Plaintiff but which are said to be of no moment and which the Master was prepared to overlook, the third of which the plaintiff says has, as a matter of requirement, been complied with and the fourth as a matter of form is not required at all and so cannot arise as a matter to which objection can be taken.

7.  The defects complained of are the following:

(i)      The affirmant’s address and occupation does not appear in the affirmation;

(ii)     The exhibit ‘SEMH-1’ referred to in paragraph 2 of the affirmation has not in fact been exhibited;

(iii)    The jurat by the affirmant has not been completed because it does not say before whom and where it has been affirmed; and

(iv)    Having been purportedly affirmed in New York, it lacks an apostille.

The Master’s Reasons

8.  In deciding this matter the Master held that he would have been prepared to overlook the first two defects but he considered that the incomplete jurat was a “crucial and substantial omission” and that he also considered that the affirmation required an apostille.  In the circumstances, there being a number of defects, he was not prepared to allow the affirmation to be used in evidence.

9.  Mr Egan in responding to this appeal has invited me to give due weight to the Master’s reasoning whilst accepting, as he must, that this appeal is a complete rehearing of the summons.  Whilst any decision of Master de Souza is one to be accorded considerable respect, these things do strike different people differently and where this is a rehearing before me I must approach this matter afresh and come to my own decision in resolving this appeal.

The Appeal

10.  There is a sense of unreality about these proceedings.  On the one hand Mr Chain, who appears for the Plaintiff, says that he does not need this affirmation having regard to OLN’s letter of 31 March 2006 [page 42] in which they acknowledged receipt of the 3^rd Defendant’s letter of 15 March 2006 [ibid.] to them that he has reached agreement on costs with the Plaintiff and, on the other hand, nothing could be simpler than for SFKS to ask the 3^rd Defendant to affirm another affirmation free of the technical irregularities that have beset the present one.  Mr Chain tells me that he is only here, because the Master suggested an appeal in respect of whether an apostille is required in these circumstances with the result that I must now rule on all of the irregularities.  I say that despite the fact that the Master had said that he would have been prepared to overlook the lack of the Defendant’s address and occupation and of the failure to produce the exhibit.  This is because Mr Egan, in resisting the appeal, has addressed me on a very broad front.  By way of general submission he says that this affirmation must been viewed with the deepest suspicion.  The summons to have it admitted into evidence is supported by a series of affirmations from Mr Chan, the Plaintiff’s solicitor.  Mr Egan complains that there is not a scrap of direct evidence from the Plaintiff himself about this agreement which he suggests should make me wary about the whole arrangement and secondly, that Mr Chan’s affirmations can only be hearsay evidence which I should not admit.  In this regard Mr Chain says that there is nothing objectionable in having hearsay evidence in interlocutory proceedings.  He relies on O. 41 r.5(2) which says that an affirmation sworn for the purpose of being used in interlocutory proceedings may contain statements of information or belief, with the sources and grounds for such information and belief.  The rubric to the rule says that for the purposes of the rule, interlocutory proceedings are only those which do not decide the rights of the parties.  I have no doubt that this proceeding which, of course, is merely ancillary to the issue of taxation of costs, is plainly interlocutory rather than substantive.  I have no doubt that Mr Chan’s affirmations are admissible in this appeal.  Where Mr Egan has embarked on something akin to a jury speech taking in much of the background to this dispute I am not really assisted by such considerations where what I have to decide are short points on the construction of Order 41 as they bear on the two admitted defects and also whether the jurat provisions have been complied with and whether an apostille is necessary.  I now turn to these issues.

The Address, Occupation and the exhibit

11.  As the Master did, I am of the view that these two defects can be overlooked as points of the highest technical order.  The decision of Tang J (as he then was) in Tsui Koon Wah v Lam King Yuen [2005] HKEC 816 is in point.  There is absolutely no doubt that the 3^rd Defendant is the affirmant.  Equally, as to the exhibit there is absolutely no doubt as to which document the 3^rd Defendant is referring to.  This is made clear from Mr Chan’s 1^st affirmation starting at page 18 of the bundle and referred to at paras 5 and 8.  The document is exhibited to his affirmation and is at page 23.  OLN had been provided with it as long ago as 2002, it having been put in by 3^rd Defendant for the purpose of the action to show that he represented the 5^th Defendant’s interests.  To put the matter beyond doubt I will make clear that these defects fall to be overlooked and the affirmation can be used notwithstanding these irregularities.

The Jurat

12.  The Master held that this was a crucial irregularity which he felt unable to overlook.  The question here is whether this is an irregularity at all.  This issue is dealt with under O.41 r.1.  The note at 41/1/9, page 654 of the current practice, says that the jurat of every affidavit should contain the full address of the place where the affidavit was sworn, sufficient for identification.  The relevant page of the affirmation in this matter is at page 50.  The jurat is signed, together with the stamp of “Chloe Dresser, Notary Public, State of New York, Reg. No. 01DR6016483, Qualified in Ulster County, Commission Expires 11/23/06” [being the 23^rd November 2006].  There are also e-mail communications in Mr Chan’s 4^th affirmation, the important one being that at page 73, from Chloe Dresser providing the address where this was done and confirming her status as a Notary Public empowered to notarise oaths and affirmations.  O.41 r.12(2) says that an affirmation taken in a foreign country before, amongst other officials, a Notary Public may be used in court in all cases where affirmations, or affidavits, are admissible.  Sub-rule 3 says that an affidavit purported to have been sworn in this manner shall be prima facie evidence of the seal or signature of the individual authorized to administer the oath.  I am satisfied that Miss or Mrs Dresser’s (whichever it is) stamp falls within the purview of the rule.  The only remaining question is whether the fact that her address does not appear, either as part of her stamp or, separately forming part of the jurat is fatal.  Mr Chain says that the important thing is that her registration number is there, from which she can readily be identified and located and this should be sufficient.

13.  Mr Egan submits that the overall flavour of this case demands that there be strict adherence with the rule.  There is no way of telling whether she is qualified to administer an oath for this class of document particularly where she appears to be an estate agent or realtor (in the USA), which presumably he gets from her address on her e-mail at page 73.

14.  My view of this is that the jurat as it stands does not strictly comply with the rule because it does not “contain the full address of the place where the affidavit was sworn”.  Mr Chain says, never mind about that because the Notary’s registration number is given, which sufficiently identifies her and no doubt her address, be it her residence or place of work.  Nevertheless, in my judgment this information will not provide an indication of where the affirmation was actually taken.  That only comes later from the e-mail at page 73.  To this extent therefore the affirmation must be defective.  The rule is that such an irregularity cannot be waived by the parties, nevertheless O.41 r.4 is relevant here as it is in relation to the other two irregularities which I have been prepared to waive.  The rule which is of general application says this:

“An affidavit may, with leave of the court, be filed or used in evidence notwithstanding any irregularity in the form thereof.”

The rubric says that the rule is permissive.  If the irregularity can be cured without undue hardship, or is not a matter of substance, or affects its actual contents, then it should be put right.  There is provision to put such matters right ex parte before the practice master.

15.  Insofar as this is an irregularity which has been corrected in substance by the e-mail from the notary at page 73, I am content to exercise my discretion to allow the use of this affirmation notwithstanding the absence of the place of affirmation being identified in the body of the jurat. In attacking this affirmation in an all embracing way Mr Egan has sought to cast doubt on the validity of the Notary’s qualifications and general authenticity.  For my part that is really going too far.  She is not a party to this bitter, hard fought litigation.  All that she was required to do was to authenticate the affirmant’s signature which I am satisfied she has done.  What she has not done was to follow the requirements of O.41 r.1 to set out the address where the affirmation was taken and it is to this extent that the jurat is defective.  That information has now been provided.  The combined effect of O.41 r.(2) and (3) deals with the status of this affirmation, making it admissible in this court.  If OLN wish to demonstrate that matters are not as they purport to be then it would have been open to them to seek out that evidence and put it before the court.  The lacuna, being the address where the affirmation was taken, has now been filled and whilst this simple mistake should not have occurred the relevant information has now come by e-mail.  Mr Egan’s submissions to the contrary do not persuade me that this lady has not notarised the affirmant’s signature as her stamp and signature attests and at the location which her e-mail has provided.  I am content therefore to exercise my discretion to cure this defect as well.

The Apostille

16.  Finally I come to the point that appears to have troubled the Master most of all.  In my judgment, this is a very short point indeed.  It is submitted by Mr Egan, as it was before the Master, that this affirmation requires an apostille as contemplated by the 1961, Hague Convention Abolishing the Requirement of Legalisation for foreign public documents (“The Hague Convention”).  The Master upheld that submission.

17.  In my judgment, there is no requirement for an apostille in this case.  The formalities to be followed before our courts are those contained in O.41 r.12 which have been complied with.  O.41 r.12(2) covers the matter.  This affirmation was taken before a notary overseas which is sufficient.  Sub-rule 3 says that once the affirmation has been taken in purported compliance with sub-rule 2 this will be prime facie evidence of the seal or signature of the notary.  This is the comprehensive regime which our Rules provide.  I respectfully agree with the analysis of Mr Recorder, McCoy, SC in Top Flying Investment Ltd v Open Mission Assets Ltd [2006] 4 HKLRD 83 in this regard.  If confirmation were required, that one need go no further then O.41 r.12, this is amply provided by Article 3 of the Hague Convention which specifically exempts the formalities of the Convention where the laws, regulations or practice in place in the State (the Hong Kong SAR) where the document is produced have abolished, or simplified it, or exempted the document from legalisation (by the affixing of an Apostille).  Hong Kong has its own code in this regard which is O.41 r.12 and that is the end of the matter.

18.  The fact that the judiciary in Hong Kong has its own apostille office cannot assist the argument.  That is there to provide apostille services for countries that require an apostille for the recognition of documents produced from Hong Kong into those countries and that is perfectly understandable.  Nevertheless, Hong Kong has its own provisions and these appear in, as I have already said, O.41 r.12.

Conclusion

19.  For these reasons, I am going to allow this appeal and the affirmation can now be used for the purpose contemplated in the summons.  By way of general comment I wish to say that whilst the Rules of Court are of vital importance for the efficient conduct of proceedings in this  court, where a discretion exists to cure or overlook defects in compliance these will be looked at on a case by case basis having regard to the particular circumstances of the situation which confront of the court.  In

this matter, I have found three defects which I have been prepared to overlook.  It seems to me to be a mistake to have regard to what maybe an accumulation of errors, as in this case, and say that this, of itself, is reason to refuse an application under O.41 r.4.  This is not, after all, an examination or test with a pass mark.  The court will need to look at each defect individually and having regard to its nature it will wish to consider whether it can be cured, as the rubric states, without undue hardship, provided always it is not a matter of substance or affects the content of the affidavit.  None of these defects have fallen into this category.

Costs

20.  The costs before the Master will be to the 2^nd Defendant as the summons contemplates.  As to the costs of the appeal, where the Respondent to the appeal has directed a wholesale opposition to this matter which has failed, it seems to me only right that these costs should follow the event.  They will therefore be to the Plaintiff.  I have already heard provisional argument on the issue of costs and so this will be a final order.