CHOI TAK MAN v. CHAN YUK LAN, DIDI AND ANOTHER

HCA 600/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 600 OF 2015

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REASONS FOR DECISION

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A. Introduction

1.  In this action, the plaintiff asks for a declaration that the defendants’ title to the piece of land known as Lot 343 in Demarcation District 110 (“the Land”) has been extinguished by reason of adverse possession.  The defendants are the present joint owners of the Land, which they purchased from their predecessor‑in‑title on 18 December 2014 at $900,000 for leisure farming. 

2.  This action was set down for trial on 23 May 2016.  The trial is scheduled to commence on 18 January 2017, with seven days reserved.

3.  Until recently, the 1^st and 2^nd defendants had been represented in this action by counsel and solicitors.  However, just about a week before the trial, the 1^st and 2^nd defendants filed their respective Notices to Act in Person dated 11 January 2017.

4.  On 13 January 2017, the 1^st and 2^nd defendants respectively applied for legal aid.  Memorandum of Notification of an Application for Legal Aid was issued by the Director of Legal Aid on 17 January 2017 notifying the plaintiff and this Court of the 1^st and 2^nd defendants’ application.

5.  On the first day of the trial, Counsel for the plaintiff, Mr Francis Yip, asked this court to exercise its power under section 15 of the Legal Aid Ordinance (Cap 91) to uplift the stay arising from the 1^st and 2^nd defendants’ belated legal aid applications.

6.  Having heard the submissions of Mr Yip and the 1^st and 2^nd defendants on the matter, I ordered that the stay be uplifted and the trial be adjourned to the coming Friday (i.e. 20 January 2017) so as to give the defendants a bit more time to prepare for the trial (including, to consider engaging their own private lawyers to represent them).

7.  I now give the reasons for my said decision.

B.  History of proceedings

8.  This action was commenced by a Writ of Summons issued on 23 March 2015.

9.  The 1^st and 2^nd defendants filed their Acknowledgement of Service on 2 April 2015 through their then solicitors, Francis Kong & Co (“FKC”).

10.  On 10 June 2015, both the 1^st and 2^nd defendants respectively filed their Notices to Act in Person.

11.  Two days later, on 12 June 2015, both the 1^st and 2^nd defendants applied for legal aid.  Both of their applications were refused by the Legal Aid on 27 July 2015.

12.  On 1 August 2015, the 1^st and 2^nd defendants engaged FKC as their solicitors to represent them in this action.  Since then, and until about a week before the trial of this action, FKC had been the 1^st and 2^nd defendants’ solicitors in this action.

13.  In addition, the 1^st and 2^nd defendants had also engaged Mr Simon SM Yip, an experienced counsel of over 20 years of standing, to advise and represent them in this action.  Mr Simon SM Yip settled both the original and the amended Defence and Counterclaim filed in this action.  He was also briefed to attend the pre‑trial review held on 19 October 2016.

14.  This action was set down for trial on 23 May 2016.  

15.  On 16 June 2016, the parties were notified by the court of the trial dates starting from 18 January 2017.

16.  As mentioned above, the 1^st and 2^nd defendants instructed Mr. Simon SM Yip as their counsel at the pre‑trial review on 19 October 2016.  Having heard counsel for the parties, Deputy High Court Judge Wilson Chan (as he then was) gave directions for the conduct of the trial at the pre‑trial review.

17.  Pursuant to such directions, the parties were required to agree on the index of the trial bundles on or before 2 January 2017, the plaintiff was required to file and serve the trial bundles and opening submissions no later than 9 January 2017, and the 1^st and 2^nd defendants were required to file and serve their opening submissions no later than 13 January 2017.

18.  Within a week before the commencement of the trial on 18 January 2017, the 1^st and 2^nd defendants respectively filed their Notices to Act in Person and made their (second) applications for legal aid.

C.  The plaintiff’s submissions

19.  There is no dispute that under section 15 of the Legal Aid Ordinance (Cap 91) and Regulation 7A of the Legal Aid Regulations (Cap 91A), unless otherwise ordered by the court, the proceedings in this action should be stayed for 42 days.  Consequently, unless this court uplifts the stay, the trial has to be adjourned and re‑fixed to some later dates.

20.  Mr Francis Yip submitted that this court should uplift the stay.

21.  Mr Yip drew to the attention of this Court that the 1^st and 2^nd defendants had previously made applications for legal aid on 12 June 2015 and such applications had been refused on 27 July 2015.

22.  On that basis, Mr Yip submitted that the 1^st and 2^nd defendants knew of the procedures for applying for legal aid and also of the fact that it would take time for the Department of Legal Aid to process their applications.  Since the 1^st and 2^nd defendants undoubtedly knew of the trial dates, Mr Yip further submitted that what the 1^st and 2^nd defendants had done amounted to an attempt to abort the trial and that they had no right to do so.  According to Mr Yip, the 1^st and 2^nd defendants should have made their legal aid applications before or shortly after the pre‑trial review.

23.  Mr Yip also made the point that since the 1^st and 2^nd defendants did not appeal against the refusal of the Department of Legal Aid in July 2015 and there is no suggestion of any change of circumstances, it is unlikely that the recent applications for legal aid would yield a different result.

24.  I also asked Mr Yip to inform the court whether the plaintiff would suffer any prejudice arising from an adjournment of the trial.  Mr Yip could not point to any specific prejudice, but submitted that any adjournment would unavoidably lead to wastage of costs and time.  He also submitted that such adjournment would be unfair to the plaintiff because justice delayed is justice denied, and it would also be unfair to other court users.

D.  The defendants’ explanation and submissions

25.  There is no material before me that sheds light on the issue as to why the 1^st and 2^nd defendants made their legal aid applications so shortly before the trial.  Given that this matter is a matter of some significance to the exercise of the court’s discretion, I made some enquiries with both the 1^st and 2^nd defendants at the hearing in order to understand their version of the events leading to their recent applications for legal aid.

26.  Both the 1^st and 2^nd defendants accepted that they knew that they needed to put their solicitors in funds for the purpose of conducting this action.  They also accepted that they knew from their lawyers that the trial had been fixed to be heard in January 2017.  

27.  They, however, told this court that their solicitors only informed them of the exact amount of the funds for the conduct of the trial in November 2016.  According to the 1^st and 2^nd defendants, their solicitors on that occasion asked them to come up with the funds for the legal costs of the trial by 28 December 2016. They, however, were unable to raise sufficient money for that purpose.

28.  When I asked the 1^st defendant why she did not apply for legal aid immediately on 28 December 2016, the 1^st defendant said that because she had no money to fund the litigation, she did not intend to hold on to the Land anymore.  When I asked the 2^nd defendant the same question, the 2^nd defendant said that she asked the solicitors to give them more time to raise funds but they were unable to raise any money.

29.  In short, the 1^st and 2^nd defendants claimed that they applied for legal aid at such a late stage because they were only informed by their solicitors of the exact amount of the funds that they needed to put up for the trial in November 2016, and they are unable to raise sufficient funds for such purpose.

E.  The legal principles

30.  In considering whether a stay of proceedings imposed by section 15 of the Legal Aid Ordinance (Cap 91) should be lifted, the primary junction of the court is to do justice between the parties.  The court should be slow to do so, particularly if a point of law had to be dealt with by a layman: see Lee Shiu Ming v Yeo Hiap Seng (Hong Kong) Ltd [1994] 1 HKC 18 (CA) at 23E‑H.

31.  However, if the court is satisfied that the application was an abuse of process, then the court should exercise its discretion to lift the stay: see Re Ip Lai Fan HCSD 10/2000 (3 November 2000) per Yuen J (as she then was) at para 8.

32.  In Bank of China Ltd v Fu Ming Kong Michael HCA 7769/2000 & HCMP 3909/2000 (24 June 2005), Recorder Kenneth Kwok SC emphasized (at para 27) that “the statutory stay is an aid in, not an obstacle to, the administration of justice.  It does not mean that a defendant has the right to abort the trial of an action by making a fresh application for legal aid on the eve of every set of dates fixed for the trial of the action”.

33.  Hence, the court in previous cases has exercised its discretion to lift the statutory stay where a litigant only applied for legal aid shortly before the trial: e.g. Bank of China Ltd v Fu Ming Kong Michael HCA 7769/2000 & HCMP 3909/2000 (24 June 2005); 陳韻怡訴陳道奮, HCAP 2/2012 (3 May 2013); 黃吉雲 訴 孫磊, HCA 752/2014 (9 November 2016).

34.  In this regard, I agree with what was said by Deputy High Court Judge Kenneth Kwok SC in The Personal Representative of The Estate of Chan Chuen v Forestside Ltd, HCA 2055/2011 (29 December 2015) about a litigant’s duty to get ready for trial (at para 19):‑

“It is in the interests of litigants to get ready for legal proceedings. If a litigant wishes to be legal represented, it is incumbent on the litigant to (1) instruct privately funded lawyers; or (2) apply for legal aid, and if necessary and appropriate, to appeal against any refusal to grant legal aid, in good time and with due diligence so that the lawyers can properly equip themselves for trial. Litigants have no right to expect the court to grant them indulgence if they do not act”.

35.  The above observation was also endorsed by Chow J in Elijah Saatori v Raffles Medical Group (HK) Ltd HCPI 1114/2006 (2 September 2016) at para 29.

36.  Further, in Elijah Saatori, Chow J (at para 33) added the observation that under Order 25, rule 1B(3) of the Rules of the High Court, a date which the court has fixed for the trial is a “milestone date” and cannot be varied unless there are exceptional circumstances justifying the variation.  As mentioned in para 42 of Practice Directions 5.2, late instructions from a client, a change in the team of lawyers, and the absence of prejudice to the other party which cannot be compensated for by costs, will not be treated as exceptional circumstances. Also, as stated in para 25/1B/1 of Hong Kong Civil Procedure 2017, neither will a last‑minute application by the plaintiff for legal aid, which is not reasonably explained, be considered an exceptional reason.

37.  In my view, when parties engage in litigation, they have every reason to expect that the legal proceedings would be conducted in accordance with the rules, including the rule that a date which the court has fixed for the trial would not be varied unless there are exceptional circumstances justifying the variation.  As Ma CJ said in Wing Fai Construction Co Ltd v Yip Kwong Robert (2011) 14 HKCFAR 935 (at para 34), litigation is not to be treated as a game, but as a serious legal contest. Parties to a litigation and their legal representatives are required to comply with the rules and court orders.  Thus, the legitimate expectation that trial dates would not be varied save for exceptional circumstances is a relevant factor that the court needs to take into account in deciding whether it is just and fair to the parties in all the circumstances to lift the stay.

F.  Discussions

38.  Having regard to all the circumstances, I am of the view that it is just and fair to the parties that the statutory stay should be lifted.

39.  Clearly, as evidenced by their first applications for legal aid in mid‑June 2015 (which were refused in late July 2015), it is beyond argument that the 1^st and 2^nd defendants had concerns that they might need legal aid to fund their litigation, and also that they were at all material times fully aware of their right to apply for legal aid and the application procedures.

40.  During my enquiries with the 1^st and 2^nd defendants, both of them accepted that they knew from the very beginning of this action that they needed to pay for their lawyers for the conduct of this action.  The 1^st defendant further said that as this action progressed, she began to realize that she needed more money than she expected to fight this piece of litigation. 

41.  In these circumstances, it would only be natural for the 1^st and 2^nd defendants (who had previously applied for legal aid) to ascertain the amount of legal costs that they would be required to incur for the trial as soon as this action was set down for trial.  Certainly, they would be interested to know the costs estimate when they were asked to incur costs to brief Mr Simon Yip to appear for them at the pre‑trial review.

42.  I made enquiries with both the 1^st and 2^nd defendants as to why they did not ask their solicitors to give them the fee estimates of the trial before the pre-trial review in October 2016.  The 1^st defendant answered by saying that it was her oversight, whereas the 2^nd defendant claimed that she was not familiar with the procedures.  For the reasons explained above, I find such explanation unsatisfactory and hard to believe. 

43.  Even if I am to accept what the 1^st and 2^nd defendants told this court (as set out in Section D above), I am of the view that as soon as they were informed by their solicitors of the amount of legal costs that they needed to put up for the trial in November 2016, the 1^st and 2^nd defendants should have made their fresh applications for legal aid there and then, or at least shortly thereafter. 

44.  By reason of their previous experience, the 1^st and 2^nd defendants clearly knew that it would take some time for the Department of Legal Aid to consider their fresh applications.  Any reasonable litigant with such knowledge would surely appreciate the risk that if he made his legal aid application too close to trial, he would run the risk of having no legal representation advancing or defending his case at trial.  There is plainly no good reason why the 1^st and 2^nd defendants did not make their legal aid application in November 2016, or at least in early December 2016.

45.  In my judgment, I do not think the alleged deadline of 28 December 2016 for the 1^st and 2^nd defendants to put their former solicitors in funds provides any justification for their failure to make their legal aid applications in good time.  If the 1^st and 2^nd defendants had any concern as to whether they would be able to raise sufficient money to pay their lawyers, the most reasonable thing for them to do would be to apply for legal aid first.  In the event that they were able to raise sufficient funds to engage their lawyers, they could always withdraw their applications for legal aid and retain their lawyers on a private basis.

46.  Further, and without prejudice to my foregoing observations, I also find it difficult to understand why the 1^st and 2^nd defendants did not apply for legal aid immediately after the alleged deadline of 28 December 2016. If they could not raise sufficient money in November and December 2016, on what basis could they believe that they could achieve that target within the time between 28 December 2016 and the commencement of the trial on 18 January 2017?  The 1^st and 2^nd defendants’ conduct, in my view, is simply inexplicable.

47.  In all the circumstances, I am satisfied that there is no satisfactory explanation for the 1^st and 2^nd defendants’ last‑minute applications for legal aid, and that such applications amount to an attempt to sabotage the trial of this action and is an abuse of process.

48.  Even if (contrary to my above ruling) the 1^st and 2^nd defendants’ last‑minute legal aid applications fall short of an abuse of process, I still take the view that justice and fairness between the parties requires this court to lift the statutory stay in the circumstances of the present case.

49.  I, of course, appreciate that the 1^st and 2^nd defendants will suffer some prejudice if they are not legally represented in the trial of this action.  Such prejudice, however, can to a certain extent be compensated by some assistance from the plaintiff’s counsel and this court.

50.  In this regard, in view of the latest time estimate given by Mr Yip at the hearing, I ordered that the trial be adjourned to Friday (20 January 2017) such that the 1^st and 2^nd defendants would have a bit more time to prepare for their case.  I also directed Mr Yip to provide the 1^st and 2^nd defendants (and also this court) with the Chinese version of his written opening submissions by Thursday (19 January 2017), 4pm.  I also indicated at the hearing that the trial (or at least the taking of evidence at the trial) would be conducted in Punti.

51.  Further, at the hearing, I also suggested to the 1^st and 2^nd defendants that they might use the time to consider whether to engage private lawyers to represent them at the trial.  While the 1^st and 2^nd defendants may not be able to afford the costs of retaining a counsel of over 20 years standing to appear for them at the trial, they may have just enough resources to engage competent counsel of suitable seniority to represent them. At the end of the day, according to the 1^st and 2^nd defendants, they purchased the Land at $900,000 for “leisure farming” purpose.  One would naturally expect the 1^st and 2^nd defendants must be persons of some financial means in order to engage in such investment.

52.  Further, while this court has to take into account the prejudice that the 1^st and 2^nd defendants may suffer as a result of having no legal representation at trial, this court also has to bear in mind that such prejudice is the result of their own making. As pointed out above, it is the duty of the 1^st and 2^nd defendants as litigants to get themselves ready for the trial.  The said prejudice suffered by the 1^st and 2^nd defendants is on any view caused by their failure to comply with such duty, without any fault on the part of the plaintiff.

53.  Furthermore, this court has to balance the 1^st and 2^nd defendants’ prejudice against such prejudice that the plaintiff will suffer as a result of the adjournment of the trial.

54.  I accept Mr Yip’s submission that justice delayed is justice denied, though I would qualify this by saying that the weight to be attached to such factor would depend on circumstances.  No doubt, I need to give weight to the plaintiff’s legitimate expectation that according to the rules, the trial dates are such “milestone dates” which would not be varied unless in exceptional circumstances.  That said, in deciding how much weight I should attach to this factor, I have not lost sight of the fact that it does not appear to me that there is pressing urgency for the plaintiff to obtain the relief sought in this action.

55.  However, given the 1^st and 2^nd defendants’ indication at the hearing that they need legal aid to fund their litigation, I have concern that as they are currently not covered by legal aid, if the stay is not uplifted and the trial is adjourned, the plaintiff may not be adequately compensated by any costs order that this court may make in relation to such costs thrown away by the adjournment of the trial.

56.  Applying the relevant legal principles and balancing all the factors, I am persuaded that justice and fairness require this court to lift the statutory stay.

G.  Disposition

57.  Accordingly, I at the hearing ordered that:‑

(a)  there be no stay of proceedings arising the 1^st and 2^nd defendants’ legal aid applications;

(b)  the trial of this action be adjourned and resumed on Friday (20 January 2017), 10pm; and

(c)  costs of today be in the cause of the trial.