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CACV 250/2010
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF APPEAL
CIVIL APPEAL NO. 250 OF 2010
(ON APPEAL FROM DCCJ NO. 1569 OF 2008)
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BETWEEN
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SCHINDLER LIFTS (HONG KONG) LTD |
Plaintiff
(Respondent) |
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And |
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NIKKO SERVICES LTD |
Defendant
(Appellant) |
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Before: Hon Chu JA in Chambers
Date of Hearing: 16 August 2012
Date of Decision: 16 August 2012
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Introduction
1. On 31 July 2012, upon the defendant’s application, I permitted the defendant’s appeal herein to be reinstated[1] on two conditions, namely,
(1) The defendant shall by 4:00 pm on 31 July 2012 comply with paragraph 1 of the Order dated 22 March 2012 by paying $50,000 into court as security for the costs of the plaintiff in the appeal (“1st Condition”); and
(2) The defendant shall within 30 days from 31 July 2012 pay the plaintiff the costs of the summons and the costs thrown away by the non-compliance with the Order dated 22 March 2012, assessed at HK$23,500 on gross sum basis (“2nd Condition”).
2. The defendant had complied with the 1st Condition on 31 July 2012, but has yet to comply with the 2nd Condition.
3. On 7 August 2012, the defendant issued the present summons seeking the following:
(1) By paragraph 1 of the summons, extension of time for complying with the 2nd Condition until 10 November 2012, which will be after the hearing of the appeal on 8 and 9 November 2012.
(2) By paragraph 2 of the summons, “relief from sanction of the Order dated 22 March [2012]”. Mr Lau, who appears for the defendant with leave of the Registrar, explains the defendant is seeking to remove the 2nd Condition altogether.
(3) By paragraph 3 of the summons, the costs of the application.
Grounds for the application
4. In summary, the defendant’s reasons for the application, as appeared by its written submission and Mr Lau’s oral submissions, are: (1) The plaintiff’s submissions for the hearing on 31 July 2012 were inaccurate and unreasonable; (2) The plaintiff acted unreasonably in presenting a winding-up petition against the defendant in HCCW251/2010; (3) It is unreasonable to implement the 2nd Condition before the hearing of the defendant’s appeal; (4) The defendant had a counterclaim for damages against the plaintiff; (5) The defendant was given leave to appeal against the District Court Judgment and a stay of execution pending appeal was also granted; and (6) The shareholder of the defendant was unwilling to pay the $23,500 ordered under the 2nd Condition.
Decision
5. None of the reasons put forward by the defendant is tenable. In respect of the first to third reasons, it should be remembered that as a result of the defendant’s failure to provide by 21 May 2012 the $50,000 security for the plaintiff’s costs in the appeal (as provided by paragraph 1 of the Order dated 22 March 2012), the automatic sanction under paragraph 4 of the same Order took effect and the defendant’s appeal stood dismissed. It matters not that the defendant indicated it was in a position to pay the amount into court a day later[2]. For reasons set out in the Reasons for Decision dated 3 August 2012, I permitted the appeal to be reinstated, but subject to two conditions. The effect of my order is that the appeal remains dismissed and will only be reinstated until after full compliance of both conditions. In seeking to defer the compliance of the 2nd Condition until after the hearing of the appeal or to do away the 2nd Condition, the defendant is effectively trying to re-open its last application and to overturn the order made on 31 July 2012. This is impermissible. Finality is an important aspect of our legal system. An application becomes concluded once it has been heard and adjudicated upon. The order made upon the application then takes effect and should be fully observed and followed. Any attempt to renew the application or to overturn or avoid the effect of the order made by means of further application is an abuse of the process of the court.
6. Turning to the 4th and 5th reasons, they are entirely irrelevant. The defendant’s last application (by summons dated 22 June 2012), the hearing on 31 July 2012 and the wasted costs incurred in HCCW251/2010 would not have been necessary had it not been for the defendant’s failure to comply with paragraph 1 of the Order dated 22 March 2012. Further, in making the last application, the defendant was seeking the indulgence of the court. Objectively viewed, there is nothing unfair or unreasonable in requiring the defendant to pay the plaintiff’s costs and thrown away as one of the conditions for the reinstatement of its appeal. The condition is merely a consequence of the defendant’s failure to comply with the court order. The strength or otherwise of the defendant’s case and/or that there was a counterclaim against the plaintiff are of no relevance; they cannot afford a basis for exempting the defendant from the consequences of its own failing.
7. Likewise, the unwillingness of the defendant’s shareholder to pay the costs is irrelevant. If the shareholder wishes to reinstate the appeal, then he/she will have to see to it that the 2nd Condition is duly complied with.
Order on the defendant’s summons
8. Accordingly, I dismiss the defendant’s summons.
9. The plaintiff seeks costs of the application on indemnity basis. It is submitted by Mr Shaw that the application is vexatious and the attempt to re-argue the 2nd Condition is an abuse of the process, such that the court ought to demonstrate its disapproval by a higher scale of costs. The defendant, through Mr Lau, says that costs should be in the cause of the appeal. It is said that when he presented the summons for filing, he was told the summons had to be referred to me before a hearing date would be given. By letter dated 9 August 2012, the plaintiff’s solicitors indicated it objected to the summons and also provided the available dates of Mr Shaw for the purpose of fixing a hearing date. In short, Mr Lau contends that the court could have refused to hear the summons and the costs of the hearing come about because of the court’s decision to list the summons for hearing.
10. I am bound to say this is an extraordinary argument, which must be rejected. While the court has inherent power to prevent it from being vexed and abused by repeated interlocutory applications, it is an exceptional power that should be exercised sparingly and cautiously. It is not the court’s ordinary business to dispose of summonses without a hearing, still less to refuse listing summonses for hearing. Further, the duty is on a litigant to deliberate carefully, including considering the costs implication, before making any court application. It is not the court’s function to scrutinise summonses and to decide whether the summons is sufficiently meritorious to be listed for hearing. There is, in short, no reason to depart from the usual rule of costs follow event. The defendant’s summons having been dismissed, the defendant should pay the plaintiff the costs of the application.
11. As to the scale on which costs should be awarded, the defendant is coming very close to being vexatious and abusive. Discounting what went before the Registrar for Civil Appeal, this is the second time that the defendant seeks to re-litigate on a matter that had been argued and determined. Previously, it had sought to re-open the issue of security for costs, notwithstanding the application had been heard and an order made. On this occasion, it seeks to re-open the terms upon which the defendant’s appeal may be allowed to be reinstated, after the matter had been argued and adjudicated upon. Having regard to the fact that the defendant is unrepresented, I will not make an indemnity costs order on this occasion, but the defendant and Mr Lau should take note that the court will not hesitate to impose indemnity costs order or other appropriate sanctions on future occasions.
12. In respect of the plaintiff’s costs of this application, I assess it at $8,000 on gross sum basis. This is on account of two hours of Mr Shaw’s time (i.e. 0.5 hour on preparation and 1.5 hours on the hearing) at the hourly rate of $4,000.
13. In summary, the order I make on the defendant’s summons is as follows:
(1) The summons is dismissed.
(2) The defendant pays the plaintiff the costs of the application assessed at HK$8,000.
Oral application to extend time
14. Mr Lau makes an oral application to extend the time for complying with the 2nd Condition. He seeks an extension of two months. Primarily, he says that the defendant is impecunious and two of the three shareholders, who are his family members, are unwilling to finance the defendant. He, being the third shareholder, is hoping to persuade them to provide funds to the defendant and if unsuccessful he will provide money by raising a credit card loan. For these reasons, he needs more time to deal with the 2nd Condition.
15. I accept, in appropriate cases, the court may grant time extension to enable a party to raise funds to meet a court order. I am however not prepared to grant a two-month extension to the defendant. In the first place, Mr Lau should have proceeded promptly to arrange funds for the defendant to meet the 2nd Condition as soon as he is aware the other shareholders are unwilling to put up funds. Had he done so, the 30 days’ period provided by the 31 July 2012 order would have been sufficient. Instead, the defendant chose unwittingly to issue the summons dated 7 August 2012. Secondly, although Mr Lau says the arrangement of credit card loan needs time, there are no materials to show that it requires the two months sought. Thirdly, the defendant’s appeal presently stands dismissed. The plaintiff cannot be expected to incur costs to prepare and instruct counsel for the appeal until it is certain that it will be heard, namely, until such time when the defendant has met both conditions and the appeal is revived. The two-month extension sought by the defendant (i.e. until 15 October 2012) means the plaintiff is put in a state of uncertainty until about three weeks before the date initially scheduled for the appeal. This causes prejudice to the plaintiff in that it will have very limited time to prepare for the appeal or, alternatively, it will be put to the burden of making preparation and incurring costs which may well turn out to be futile. There is, at the same time, inconvenience to the court’s dairy. For these reasons, I will only grant a one-month extension. Accordingly, the time for complying with the 2nd Condition is extended to 15 September 2012.
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(Carlye Chu) |
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Justice of Appeal |
Mr Geoffrey Shaw of Haley & Co for the plaintiff (respondent).
The defendant (appellant), unrepresented, appeared by its director, Mr Lau Chun Ming, with leave of Registrar, High Court.
[1] The appeal was, pursuant to paragraph 4 of the Order dated 22 March 2012, dismissed consequential upon the defendant’s failure to provide security for the plaintiff’s costs in the appeal as ordered by paragraph 1 of the same order.
[2] See paragraph 5 of the Reasons for Decision dated 3 August 2012.
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