CHAN LAP SHUM formerly t/a LAP SHUN PAO HONG v. CHENG SHING AND CHAN LAP WAH both Formerly t/a YIU WING TRADING CO

DCCJ 4449/2009

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 4449 OF 2009

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BETWEEN

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JUDGMENT

Introduction

1.  This is an application by the Plaintiff for leave to appeal against my Decision dated 15 November 2011 (“the Decision”), where I dismissed the Plaintiff’s application to renew the Writ of Summons (which expired on 13 October 2010).

2.  I shall adopt the same abbreviations used in the Decision for the purpose of the present hearing.

The Principles

3.  Section 63 of the District Court Ordinance, Cap. 336 provides that a party may only appeal from the District Court to the Court of Appeal with leave.  If a judge below refuses leave, the intended appellant may still apply to the Court of Appeal for leave.

4.  Section 63A(2) provides that leave to appeal shall not be granted unless the judge, the master or the Court of Appeal hearing the application for leave is satisfied that :

(a)  the appeal has a reasonable prospect of success; or

(b)  there is some other reason in the interests of justice why the appeal should be heard.

5.  Section 63A(2) test is the same test as laid down by the long line of authorities since Smith & Cosworth Casting Processes Limited [1997] 4 All ER 840 (at 841) as set out in Ma Bik Yung & Ko Chuen HCMP No. 4303 of 1999 :

“(1) The court would only refuse leave if satisfied that the applicant has no realistic prospect of succeeding on the appeal. This test is not meant to be any different from that which is sometimes used, which is that the applicant has no arguable case. Why however this court has decided to adopt the former phrase is because the use of the word ‘realistic’ makes it clear that a fanciful prospect or an unrealistic argument is not sufficient.

(2) The court can grant the application even if it is not so satisfied. There can be many reasons for granting leave even if the court is not satisfied that the appeal has any prospect of success.  For example, the issue may be one which the court considers should in the public interest be examined by this court or, to be more specific, this court may take the view that the case raises an issue whether law requires clarifying.”

6.  The applicant needed to show that there was a good arguable case in respect of the intended appeal that had a reasonable and not a fanciful prospect : Commissioner of Inland Revenue v Nam Tai Trading Co Ltd [2009] 3 HKC 421.

The Plaintiff’s Stance  

Intended Ground(s) of Appeal

7.  The Notice of Application for Leave to Appeal dated 29 November 2011 contains 8 draft grounds of appeal.

8.  Mr. Poon for the Plaintiff (who did not appear on the previous occasion) abandoned the draft grounds at the present hearing and relied only on the ground of “new evidence”. It is said that the Decision would have been a good judgment but for the “new evidence”.

9.  The “new evidence” relied upon by the Plaintiff is a statement of appeal dated 21 November 2011 filed by D1 under the PRC Summons (which the Plaintiff claimed for money due from D1 and D2 formerly trading as the Firm), which is exhibited in the Plaintiff’s supporting affirmation dated 29 November 2011.

10.  It is said that D1 listed the Cheung Sha Wan Flat as his address in Hong Kong while alleging that he was not a regular resident of the PRC.

11.  As pointed put by Mr. Poon, which I agree, since the Plaintiffs intended appeal bases solely on “new evidence”, the Plaintiff has to satisfy the Court with the prospect that the new evidence is admissible on appeal before an arguable case can be established. If the new evidence is bound to be inadmissible on appeal, there will be no basis and no prospect of success for the intended appeal.

12.  Ladd v. Marshall [1954] 1 WLR 1489 laid down 3 conditions to be satisfied before further evidence is admitted by the Court of Appeal:

(a)  the evidence could not have been obtained with reasonable diligence for use at the trial;

(b)  the evidence is such that, if given, it would probably have an important influence on the result of the case, though it need not be decisive; and

(c)  the evidence is apparently credible, though it need not be incontrovertible.

13.  Mr. Poon for the Plaintiff submitted that the “new evidence” satisfied the Ladd v. Marshall test.

14.  Mr. Poon is his skeleton submission stated that the “new evidence” did not exist at time of the last hearing and thus condition (1) is satisfied in that it could not have obtained with reasonable diligence.

15.  At hearing, I expressed my reservation in applying the Ladd v. Marshall test as it seems to me it is more an “evidence as to matters which have occurred after the date of the trial or hearing under O.59, r.10(2) exception: see paragraph 59/10/13 White Book, c.f. Hughes v. Singh, The Times, April 21, 1989.

16.  If that is the case, the Ladd v. Marshall conditions do not apply.

17.  The appropriate test is that the appeal court has to be satisfied that the change that the further evidence sought to show must substantially affect a basic assumption made at the trial.

18.  Mr. Poon argued that the “new evidence” shows D1 maintained connection to the Cheung Sha Wan Flat all along. It does not concern with an event occurred after the date of the last hearing but was there all along. D1 is effectively saying that despite the fact that he sold the Flat in 2003, he still uses the Flat as his correspondence address, and thus service of the WS should have been effective by serving on that address.

19.  It shows that, according to Mr. Poon, that the Plaintiff's belief that the Cheung Sha Wan Flat was D1’s “usual and last known address” was correct.

20.  Since I found in the Decision that the Plaintiff did not provide good reason for renewal nor satisfactory explanation for failure to apply for renewal before expiry of validity, the “new evidence” upsets the factual basis of the Decision.

21.  While not disputing that D1 was out of the jurisdiction at the time of service, Mr. Poon submits that D1 should have been effectively served the WS and  was in a position to defend. It would have been too burdensome to ask the Plaintiff to find out exactly where D1 was at the material time.

22.  Mr. Poon suggests that the “new evidence” shows that D1 was evasive and dishonest, and there is no reason why D1’s allegation that he did not have notice of service of the WS should be believed at all.

23.  Mr. Poon also refers to Bank of China (Hong Kong) Ltd. v. Chen Jianren [2009] 3 HKLRD 163 and Tan Kah Eng v. Tan Eng Khiam, HCA 9640/1999, 14 March 2011 (which were cited in the Decision) where the plaintiffs were allowed to renew their writ, and submits that with the “new evidence”, I would have allowed the Plaintiff’s application to renew the WS.

D1's Stance

24.  Mr. Cheung for D1 submitted the basic principle is that a writ of summons must be served on each defendant by the plaintiff or his agent: O.10, r.1 RHC/RDC.

25.  To be effective service, a defendant has to be physically within the jurisdiction: O.10, r.2. If not, the plaintiff has to go under O.11 for service out of jurisdiction.

26.  The objective fact is that D1 was out of the jurisdiction at the time of the purported service of the WS. Mr. Cheung refers to the Statement of Travel Record issued by the Immigration Department: CS-3, pp.45-47, Bundle.

27.  Mr. Cheung reminds me that I found:

(a)  the Plaintiff had failed to do proper investigation beforeeffecting service of the WS (e.g. conducting a land search); and

(b)  the Plaintiff had failed to apply for leave under O.11, r.1.

28.  The conduct of D1 after the event (in saying that he is not a PRC resident and that his address is the Cheung Sha Wan Flat) does not explain the Plaintiff’s failure to effect proper service and to have the WS renewed within the time limit.

29.  Mr. Cheung further submits that the “new evidence” does not contradict the very basis upon which I refused the Plaintiff’s application, namely, that D1 was as a matter of fact not within the jurisdiction at the time of service and that the Plaintiff had failed to do what he ought to have done.

30.  The relevant question, according to Mr. Cheung, is whether or not the Plaintiff had reasons to believe that the Cheung Sha Wan Flat was good for service. The question can only be answered with reference to the Plaintiff’s knowledge at the time of service, not any after acquired knowledge.

31.  Even if D1 was being dishonest, it is not relevant, unless D1 obtained the Decision in his favour by such conduct.

32.  All the facts put the Plaintiff on enquiry as to whether the Cheung Sha Wan Flat was D1's last known and usual address at the time of service.

33.  It was through no fault of D1 that the WS could not be served or renewed in time. The Plaintiff is unable to point to any conduct on the part of D1 which caused the Plaintiff’s failure to do what he should have done.

34.  Even if the “new evidence” satisfied condition (1) of Ladd v. Marshall, Mr. Cheung submits that it cannot satisfy condition (2) in that there can be no impact on original decision. The subsequent conduct of D1 did not prompt the Plaintiff not to do land search and renew the WS at the material time.

35.  In a nutshell, Mr. Cheung’s argument is that nothing was done by D1 to cause the Plaintiff to believe that the Cheung Sha Wan Flat was the address for service as at 2009.

Discussion

36.  The “new evidence” shows that D1 now chooses the Cheung Sha Wan Flat as his address in Hong Kong in the PRC Proceedings.

37.  The Plaintiff’s argument is that this is different from D1’s previous affirmation dated 19 August 2011 where he said that he left Hong Kong since 2003 and only returned to Hong Kong occasionally and for short period of time.

38.  I can understand the Plaintiff’s sentiment that D1 seems to be changing his stance whenever it suits him.

39.  However, the undisputed objective fact remains that D1 was out of the jurisdiction between 5 December 2008 and 8 August 2011 (as supported by the Immigration Department Record), the time within which the WS was served at the Cheung Sha Wan Flat.

40.  D1’s change of stance, though suspicious, could have no effect on such objective fact that D1 was out of jurisdiction at the material time. I agree with Mr. Cheung’s observation that a defendant has to be within the jurisdiction to effect service under O.10.

41.  The burden is on the Plaintiff to show good reason for the renewal and he must give a satisfactory explanation for his failure to apply for renewal before the validity expired.

42.  I have found that the Plaintiff could not simply assume that D1was properly served the WS on the Cheung Sha Wan Flat when he did not conduct a simple land search, and also when he had knowledge of D1’s address in the PRC.

43.  As put by Mr. Cheung, all the facts put the Plaintiff on enquiry as to whether the Cheung Sha Wan Flat was D1's last known and usual address at the time of service.

44.  Even with the “new evidence”, it does not affect my Decision in that the Plaintiff has to substantiate his belief of what the “usual and last known address” of D1 was : Deng Minghui (t/a Tianye Industrial (Hong Kong) Co.) v. Chau Shuk Ling Elaine [2007] 1 HKLRD 905.

45.  I find that the “new evidence”, even if it satisfied condition (1) of Ladd v. Marshall, is unable to have an important influence on the result of the case to satisfy condition (2).

46.  I have expressed my hesitation in applying the Ladd v. Marshall test as the “new evidence” is something occurred after the date of the previous hearing: 59/10/13, White Book.

47.  The discretion in relation to admitting fresh evidence should always be exercised sparingly with due regard to the need for finality in litigation.

48.  The following factors are always material:

(a)  the extent to which the fresh evidence may affect the award of damages; the greater the extent the more likely and ready the Court of Appeal should be to admit the evidence.

(b)  the time element; it is not necessary that the fresh evidence should emerge before the case would ordinarily reach the Court of Appeal, but the closer to the date of trial the more likely it is that the evidence will be admitted.

(c)  the conduct of the parties; any inequitable conduct on the part of a litigant will plainly be relevant, and other conduct may also be relevant.

(c.f. Hughes v. Singh)

49.  It may well be argued that D1’s conduct, if not dishonest, is highly suspicious. But this “new evidence” does not substantially affect the basic presumption made at the last hearing, that the Plaintiff failed to do proper investigation before service and did not substantiate his belief that the Cheung Sha Wan Flat was a proper address for service.

50.  Mr. Poon attempted to seek assistance from Chen Jianren and Tan Kah Eng. However, they are clearly distinguishable on facts.

51.  I am not satisfied that the “new evidence” is likely to be admitted by the appeal court either under Ladd v. Marshall or Hughes v. Singh.

Conclusion

52.  I shall also add that the Decision involves exercise of discretion. The appeal court will be slow to interfere the lower court's exercise of discretion: 59/1/49, White Book.

53.  I concluded that the Plaintiff does not have a realistic prospect of success or an arguable case in the intended appeal.

54.  I also see no basis for granting leave under the second limb of section 63A(2) in the circumstances of the case.

Order

55.  The Plaintiff’s application for leave to appeal is dismissed.

56.  I order costs of the application to D1, with certificate of counsel, to be taxed if not agreed.

57.  I thank you Counsels for their assistance.