PICO INTERNATIONAL (HK) LTD v. PALACE DREAMS LTD

DCCJ507/2007

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 507 OF 2007

D E C I S I O N

1.  The plaintiff seeks leave to appeal against my decision of 2 May 2008, whereby I dismissed an appeal against the Order of Master Lee made on 2 applications before him on 4 March 2008.

2.  For the record, the Notice of Appeal heard before me on 2 May 2008 sought, in place of the order of Master Lee, that I should, first, make an order that the order for examination made by Master Pang on 10 October 2007 be amended to refer to O.48 instead of O. 49B; and further, that I should dismiss the application made by the directors of the Defendant that the order for examination be set aside.

3.  On 2 May 2008, I refused the amendment and dismissed the appeal.

4.  The plaintiff now seeks leave to appeal on the ground that (1) I had erred in setting aside the order for the examination of the 2 directors of the defendant under Order 49B ; (2) I had erred in not varying the said order for examination under Order 32 rule 6; and (3) I had erred in holding that Order 20 rule 11 does not apply to allow an amendment of the order for examination.

5.  On ground (1), counsel for the plaintiff who appeared at the hearing on 2 May 2008 had accepted at the outset that if the amendment of the order for examination is not allowed under O.20 r.11, the order for examination of 10 October 2007 ought to  be set aside, as examination of directors of the Defendant company obviously cannot take place under Order 49B.  That was a reasonable and fair concession made by experienced counsel acting for the plaintiff.  Having ably and persuasively argued the application for amendment, which I did not allow, the application for setting aside was not dealt with by the plaintiff at all.

6.  The question therefore is not simply whether the plaintiff is bound by the concessions made by counsel if the concession is wrong in law, as counsel now appearing for the plaintiff submits.  The application before me today is not a rehearing of the 2 applications placed before Master Lee.  Whether or not the examination order should be set aside was not argued on 2 May 2008.  Since it was not argued at all, the plaintiff in seeking leave to appeal has to overcome the hurdle of being able to persuade the court of appeal to permit this new point to be argued afresh, in addition to showing that there is a realistic prospect of success of appealing on this ground.

7.  In any event, not having granted leave to amend on 2 May 2008, there was no way in which the order for examination of directors under O.49B could have stood, as it is clear from paragraph 49B/1/2 of the Hong Kong Civil Procedure that O.49B is only applicable to individual judgment debtors, and not to body corporates.

8.  Similarly, there was no application at the hearing before me on 2 May 2008 for variation of the order for examination, whether under O.32, or otherwise.  An application for variation of an order is wider than an application for amendment under O.20 r.11.  There were no arguments raised at all on 2 May 2008 to support such application for variation.

9.  I am therefore not satisfied at all that there is any realistic prospect of success of an appeal on grounds (1) and (2), and I do not allow leave to appeal on these grounds.

10.  Nor do I accept that there is a question raised for clarification by the Court of Appeal, as counsel for the plaintiff submits.  It is argued that solicitors need to be guided on whether, after making a mistake in applying for and obtaining an order, the solicitor should concede to the setting aside of the order, apply for another order, or seek variation or amendment of the order.  On this question, any solicitor with some good or common sense would appreciate that it all depends on the particular facts and circumstances of each case whether an amendment or variation is appropriate and justified to be made, or whether it is right technically or for practical or costs reasons to set aside the order, or whether to seek other appropriate form of relief or remedy.

11.  As for the application to amend under the slip rule, the substance of the application before me on 2 May 2008 was that, as stated in counsel's Skeleton Arguments put before the court on 2 May 2008, “every substantive indication” is that the court had intended to make an order under O.48 (paragraph 16 of the Skeleton) and whether there are clerical or accidental mistakes, turning on the true intention of the court making the order (paragraph 12 of the Skeleton).

12.  As explained in paragraphs 5 to 7 of the Decision, I did not accept that it was the manifest intention of the court to make an order under O.48, and not O.49B.

13.  It was also argued on 2 May 2008 that it was “beyond doubt” that the plaintiff's solicitor was asking for an order under O.48.  However, in considering whether the solicitor had indeed made a mistake by a slip in referring to O.49B instead of O.48, (and not in construing the intention of the court in making the order, as counsel for the plaintiff now contends) I referred in my Decision to the solicitor's letter after the order was made and sealed, which referred to her reliance on O.49B.

14.  Nevertheless, I accept that it is arguable on appeal that the court had erred in law in not granting leave to amend the examination order under O.20 r.11 by relying on the alleged error of law made by the plaintiff's solicitor, and not holding that O.20 r.11 can be invoked even in such a case of error or even ignorance of the solicitor as suggested in the present case, and as now argued by counsel for the plaintiff in reliance on the case of Re Brian Sheridan Cars Ltd. [1996] 1 BCLC 327 which was not cited at the hearing on 2 May 2008.  I accordingly give leave to appeal on this ground only.

15.  The plaintiff's appeal is allowed on this limited ground, with costs in the cause of the appeal.

Mr. Tony Ko, instructed by Ip Kwan & Co., for the Plaintiff

Mr Michael Chai, instructed by Messrs Alfred Lam, Keung & Ko, for Mr. Loo Fong Shum and Miss Yung Yeung Ngai Joko, the directors of the Defendant.