THE OFFICIAL RECEIVER v. CHAN HING TO

CACV 84/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 84 OF 2006

(ON APPEAL FROM HCMP 925  OF 2005 )

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JUDGMENT

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Hon.  Yuen JA:

1.  This is an application by the Official Receiver to strike out the notice of appeal of Mr Chan Hing To, the Defendant in HCMP 925/2005, on the ground that under the Rules of the High Court, the appeal ought to have been made to the Court of First Instance.

The appeal

2.  Mr Chan’s appeal is from a disqualification order of Master Lung made under s.168H of the Companies Ordinance disqualifying him for a period of 4 years commencing 21 days after 25 January 2006.

Rules of court

3.  The procedure for appeals from a master is set out in Order 58 of the Rules of the High Court.  Rule 1(1) provides that except as provided by Order 58 rule 2 (and other exceptions not relevant to this case),

"an appeal shall lie to a judge in chambers from any judgment, order or decision of a master"

(emphasis added).

Order 58 rule 2 provides that an appeal shall lie to the Court of Appeal from any judgment, order or decision (other than an interlocutory judgment, order or decision) of a master, given or made in five specific situations (which do not apply to this case).

4.  Mr Chan’s appeal should therefore have been lodged to a judge in  chambers.  However on 22 February 2006, Mr Chan lodged his notice of appeal in the Court of Appeal.

OR v Leung Hoi

5.  It was held by this court (Yeung JA) in The Official Receiver v Leung Hoi and another CACV 43/2006, 7 June 2006 unrep. that an appeal from a disqualification order made by a master should be lodged to a judge in chambers and not in the Court of Appeal. 

OR’s suggestion and Mr Chan’s response

6.  After the decision in Leung Hoi, the Official Receiver wrote to Mr Chan suggesting that (if he wished to pursue his appeal) he should apply for an extension of time to appeal to a judge in chambers and agree to the dismissal of the appeal to the Court of Appeal.  The Official Receiver indicated that if Mr Chan were to apply for the extension of time, he (the OR) would not object, but he wanted an order that his costs of the aborted appeal to the Court of Appeal be in the cause of the proposed appeal to the judge in chambers.  In other words, if Mr Chan failed in the proposed appeal from the master’s order, the Official Receiver would be entitled to his costs for preparing for the appeal (whether they be incurred preparing for the aborted appeal to the Court of Appeal or for the proposed appeal to the judge in chambers, on the basis of course that costs cannot in any event be duplicated). 

7.  However Mr Chan declined to proceed along the lines suggested by the Official Receiver as he objected to the Official Receiver’s offer being conditional on the proposed costs arrangement.

Application to strike out notice of appeal

8.  The end result was the Official Receiver’s present application, by summons issued on 29 December 2006, to strike out the notice of appeal.  

Does the Court of Appeal have jurisdiction?

9.  The Official Receiver submitted that the notice of appeal must be struck out as this court has no jurisdiction to hear the appeal.  Mrs Sit referred to the judgment of this court (Ma CJHC, Stuart-Moore V-P and Stock JA) in So Wing Keung v Sing Tao Ltd and another [2005] 2 HKLRD 11in which the court considered the scope of the Court of Appeal’s jurisdiction.  The court held that the Court of Appeal, being a creature of statute (the High Court Ordinance Cap. 4), was restricted, as far as its jurisdiction was concerned, by that piece of legislation and that whilst the Court of Appeal does have inherent jurisdiction, that is confined to doing whatever is necessary within the jurisdiction it already had (paras. 31(1)-(6)). 

10.  Mrs Sit submitted that as the Rules of the High Court are subsidiary legislation, the mandatory language of Order 58 rule 1(1) stipulating that an appeal from a master (save in the situations immaterial to this appeal) "shall lie to a judge in chambers" meant that the Court of Appeal has no jurisdiction to hear the appeal. 

11.  Although not necessary to this decision for the reasons set out below, I am not inclined to accept that argument.  The Court of Appeal’s jurisdiction is provided for, as far as civil matters are concerned, in s.13(2) High Court Ordinance which provides:

"(2) The civil jurisdiction of the Court of Appeal shall consist of -  

(a) appeals from any judgment or order of the Court of First Instance in any civil cause or matter;

(b) appeals under s.63 of the District Court Ordinance (Cap. 336); and

(c) any other jurisdiction conferred on it by any law".

Subject to the relevant rules, a master exercises the jurisdiction of a judge in chambers and his judgment or order is a judgment or order of the Court of First Instance.  Therefore an appeal from such a judgment or order would come within the Court of Appeal’s jurisdiction under s.13(2)(a).  Although Order 58 rule 1 requires the appeal in the present situation to be made to a judge in chambers and the Rules of the High Court have the effect of subsidiary legislation, it is important to note that the rules do no more and no less than regulate practice and procedure, and as such cannot affect the substantive jurisdiction of the court.  Section 54(1) of the High Court Ordinance provides:     

"(1) The Rules Committee constituted under section 55 may make rules of court regulating and prescribing the procedure (including the method of pleading) and the practice to be followed in the High Court in all causes and matters whatsoever in or with respect to which the High Court has jurisdiction (including the procedure and practice to be followed in the Registries of the High Court) and any matters incidental to or relating to that procedure or practice". 

12.  For those reasons, I would not be inclined to accept the Official Receiver’s argument that the Court of Appeal has no jurisdiction to hear appeals from a master’s order other than those specified in Order 58 rule 2.

Exercise of discretion not to hear the appeal from the master 

13.  However it is not necessary for me to decide this issue one way or the other because in any event, I take the view that this court should not hear the appeal from the master’s order.

14.  The Rules Committee has decided that appeals from a master (apart from specific exceptions) should in the first instance be heard by a judge in chambers.  Obviously that rule has been made for good reason and should be respected.  Masters have a heavy workload and orders often have to be made without detailed reasons being given; an appeal from a master to a judge is by way of re-hearing, so it is to an unsuccessful litigant’s advantage that he has another chance when he appeals to a judge in chambers; and a litigant who is unsuccessful before a master may, upon considering the reasoned decision of a judge in chambers, realize that he has to be content with the result and thereby spare both sides the time and costs of a further appeal to the Court of Appeal. 

15.  In this respect it is notable that security for the costs of an appeal cannot be ordered on an appeal from a master to a judge in chambers but may be ordered on an appeal from a judge to the Court of Appeal.  Therefore the appeal to a judge in chambers is not purely a privilege that a litigant enjoys and which he can "waive" by going straight to the Court of Appeal. 

16.  Although the master in the present case gave a reasoned judgment, the other considerations discussed above apply.  Consequently Mr Chan cannot as he says "insist" on the Court of Appeal hearing his appeal directly simply because he says he has more confidence in it.  It is not open to the litigants (let alone one litigant) to pick and choose the forum in any individual case.  Even if both parties consented, the rules of court do not allow the parties to bypass the structure of the courts and insist on an appeal from a master going straight to the Court of Appeal.

17.  Mr Chan also argued that because he had lodged his appeal in February 2006, when the Court of Appeal’s judgment in Leung Hoi had not yet been given, he should not suffer as a result of a change of rules.  The problem with this argument is that there has been no change in the rules themselves.  Order 58 rule 1(1) has applied throughout.  The situation is simply that one judge’s interpretation of it has been overruled by the Court of Appeal.  Mr Chan says the Court of Appeal’s interpretation may be wrong as it is not the Court of Final Appeal, but having considered Yeung JA’s decision in Leung Hoi, I take the view with respect that it is correct, and to date it has not been overturned on appeal to the Court of Final Appeal.

18.  Mr Chan’s further argument was that if he were to pursue his appeal to the judge in chambers, that would require him to obtain an extension of time.  Although the Official Receiver has indicated that he would consent to an extension of time, that is on certain terms as to costs which Mr Chan regards as "disrespectful" and has therefore rejected.  I do not think the terms offered by the Official Receiver have caused any prejudice to Mr Chan or should cause him to feel aggrieved.  Those terms have been set out in para. 6 above.  The proposed costs arrangement appears to me to be fair and reasonable and exactly the sort of order that would have been agreed to if both parties had been legally represented.  The Official Receiver’s proposals were made in July 2006, soon after the decision in Leung Hoi was given, and the time that has elapsed between then and the present application was due to Mr Chan’s unwillingness to agree to the proposals.

Order

19.  For the above reasons, I would give an order in terms of para. 1 of the Official Receiver’s summons. 

20.  I would give an order nisi that the costs of the application should, in accordance with the general rule, follow the event, i.e. the Official Receiver having succeeded, Mr Chan should pay the costs. 

21.  As for other costs in CACV 84/2006 (referred to in para. 3 of the summons), I would indicate that should Mr Chan be willing to undertake within 7 days of this judgment to apply for an extension of time to appeal the master’s order to a judge in chambers, I would be prepared to order that the other costs incurred in CACV 84/2006 be costs in the cause of that proposed appeal. 

22.  I give liberty to apply in respect of my order.