ANGELA HO & ASSOCIATES (A FIRM) v. KWONG KA YIN t/a PHYLLIS KY KWONG & ASSOCIATES

CACV 32/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 32 OF 2015

(ON APPEAL FROM HCMP NO 1794 OF 2014)

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REASONS FOR DECISION

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Hon Barma JA (giving the Reasons for Decision of the Court):

1. This was an application by the respondent plaintiff seeking to strike out the Notice of Appeal filed by the appellant defendant on 9 February 2015 on the basis that it was filed out of time.

2. At the conclusion of the hearing, we dismissed the application and made no order as to costs.  We also indicated that we would hand down our reasons for doing so in due course.  This we now do.

3. For present purposes, it suffices to note that the proceedings below concerned a claim by the plaintiff against the defendant (both of whom are solicitors) based on written and oral undertakings allegedly given by the defendant to the plaintiff to put the plaintiff in funds to the extent of some HK$1,695,000 in respect of counsel’s and the plaintiff’s own fees in HCA 2232/2013.  The defendant had earlier acted for some of the parties in HCA 2232/2013, but was replaced by the plaintiff as the solicitors on the record, although the defendant continued to act as a “co-ordinator”, in which capacity she gave instructions to the plaintiff.  The plaintiff having incurred liability to counsel for their fees and having done work of its own for which it was entitled to be paid, sought to enforce the undertakings against the defendant when the ultimate client failed to pay such fees.

4. Following a trial of the claim on 19 November 2014, Deputy High Court Judge Lok reserved judgment.  On 2 December 2014, judgment was handed down in which the Deputy Judge found the defendant liable under the undertakings, which he found that she had given.  However, at the end of the judgment, the Deputy Judge did not make a final order in respect of the plaintiff’s claim.  Instead, having noted at paragraph 46 of the Judgment that he had indicated to the parties that he would give them an opportunity to make submissions on the precise terms of the order to be made, he made what he described as an “order nisi” dealing with both the substantive relief to be granted and the costs of the action.

5. Both parties sought to vary the “order nisi”, both as to the substantive relief and as to costs.  In the event, the part of the “order nisi” as to the substantive relief was varied but the part dealing with costs was not, following a further hearing before the Deputy Judge on 12 January 2015.

6. It is common ground that, pursuant to RHC Order 59 rule 4(1)(c), if the defendant wished to appeal, the Notice of Appeal had to be served within 28 days of the judgment, order or decision concerned.  The dispute between the parties is as to the date of that judgment, order or decision.  The defendant says that the relevant judgment, order or decision is that of 12 January 2015, when the “order nisi” was varied and a final order made.  The plaintiff, however, contends that the relevant judgment, order or decision is that of 2 December 2014, in which the Deputy Judge determined the issues in the proceedings below in the plaintiff’s favour.  If the defendant is right, the present appeal was brought within time.  However, if the plaintiff is right, the appeal would have been brought some 70 days after the judgment, and would thus be out of time, so that it would be necessary for the defendant to have sought an extension of time for appealing.

7. Mr Clark, appearing for the plaintiff, contended that as the Notice of Appeal states that it is an appeal against the decision of the Deputy Judge given on 2 December 2014, as varied by the judge on 12 January 2015, the relevant decision is that of 2 December 2014.  He points out that all of the grounds of appeal set out in the Notice of Appeal go to that decision, and do not touch on the variation to the “order nisi” made on 12 January 2015.  Therefore, he says, the appeal is against the earlier decision.

8. Mr Wong, for the defendant, says that this is not so.  He submits that, although it could be said that the Deputy Judge resolved the question of liability in principleby his judgment of 2 December 2014, the proceedings were not in fact finallyresolved until the final form of the order was made following the hearing on 12 January 2015, so that the latter was the relevant judgment, order or decision from which the appeal lies.

9. In our view, Mr Wong is correct.  We do not think that the Judgment of 2 December 2014 can be said to have resulted in a final resolution of the plaintiff’s claim. The “order nisi” was no more than the Deputy Judge’s suggestion as to a possible form of the order to be made, which was put forward for the parties’ consideration.  Although the Deputy Judge described it as an “order nisi”, it was not really an order at all.  The actual order to be made was left open until after further argument had taken place, unless the parties were able to agree on the terms of the order, or accepted the suggested order put forward by the Deputy Judge.  The position was thus very similar to one in which the Deputy Judge had adjourned the proceedings for further argument as to the terms of the order before finally disposing of the proceedings.  It was not, as sometimes happens, a case in which a judge resolves proceedings without spelling out the precise terms of the order to be made – in such a case, the parties are left to work out what the judge had in mind, which may result in competing forms of orders being placed before the judge for him to decide which best reflects the order he has made.  In that situation, the order is made when the judgment is pronounced, and the subsequent discussions or disputes as to its terms are as to what order has already been made.  By contrast, here, it was expressly envisaged that the “order nisi” was not the final order, but might be subject to revision by the judge.

10. We also note that theforms of order nisi that the court can make under the RHC are orders nisi as to costs, which are provided for in RHC Order 42 rule 5B(6) and orders giving procedural directions under RHC Order 1B rule 3.  In both of these cases, the order made is provisional in nature, and may be the subject of alteration on application being made by one of the parties.  The rules also refer to garnishee orders nisi, but these are of a somewhat different character.  There is, however, no provision, and thus (we think) no power, for the court to make “orders nisi” as to the substantive disposition of proceedings before it.  We therefore think that Mr Wong was right to say that all that the Deputy Judge did in paragraph 46 of that Judgment was to leave it to the parties to try to agree the precise form of the order to be made, failing which they could come back to the court to deal with the matter.  As it happened, the parties had to come back to court for the matter to be dealt with, and it was resolved on 12 January 2015, when an order was made disposing substantively of the proceedings below.

11. It therefore follows that the time for the defendant to bring this appeal ran from 12 January 2015, and that the Notice of Appeal served on 9 February 2015 was served within time.  However, in order to avoid similar problems as have arisen in this case recurring, we would suggest that judges refrain from making “orders nisi” as to matters not provided for in the RHC.  If it is necessary to have further argument as to the precise terms of the relief to be granted, this should be done at a further hearing, and orders should be made only after such further hearing.  There is, of course, no reason why judges should not put forward a form of order for the parties’ consideration if they think it appropriate or helpful to do so, so long as it is understood that no order is in fact made until the matter is ultimately resolved.

12. We would add that, even if we had come to the conclusion that the time for appealing ran from 2 December 2015, the course of action adopted by the defendant was entirely understandable, and we would have allowed the defendant to apply for an extension of time for appealing, and would have granted such an extension.  Attempting to come to an informed view of the prospects of success of the appeal would, in our view, involve a hearing equivalent to the hearing of the appeal itself, and particularly given the circumstances in which an extension of time would have been required (had we come to a different view on the main point in this application), we would have concluded that the appropriate course would be to grant such an extension without detailed consideration of the merits.  In fairness, Mr Clark readily accepted this, and did not suggest otherwise.

13. For the reasons explained above, the application was dismissed.  However, as it seemed to us that the plaintiff was not in any way at fault in relation to the situation which had arisen, the confusion having arisen as a result of the making of the “order nisi” by the Deputy Judge and the way in which the defendant had described the order appealed from in the Notice of Appeal, and also because the point was neither clear-cut nor altogether straightforward, we concluded that, in relation to costs, the fairest course to take would be to make no order as to costs.