GEORGE Y C MOK & CO (A FIRM) v. NEW LAND PROPERTIES DEVELOPMENT LTD AND ANOTHER

HCMP 1572/2022

[2023] HKCFI 2055

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1572 OF 2022

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DECISION

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1.  By the Summons taken out by on 10^th March 2023 (as amended on 9^th June 2023), the Defendants seek to set aside the consent order made by Master David Chan on 7^th November 2022 (hereinafter the “Consent Order”).

2.  The Consent Order was granted pursuant to a consent summons dated 4^th November signed by the parties’ solicitors, and has been sealed already.

3.  As summarised by Mr Ian Chu (who represented the Defendants) in his skeleton submissions, it is the Defendants’ case that:-

(1)  Due to some unfortunate miscommunication, the Defendants’ solicitors inadvertently signed the Consent Summons without the actual consent of the Defendants.

(2)  In the light of the findings made by Deputy District Judge Jonathan Wong (as he then was) in the Decision dated 22^nd May 2020 under DCCJ 505/2019 ([2020] HKDC 240), the Plaintiff’s application for leave to commence taxation in the present proceedings is abusive, and impermissible under the doctrine of res judicata. Further, it is not open to the Plaintiff to rely on s 67(2) of the Legal Practitioners’ Ordinance (Cap.159).

4.  Mr Chu helpfully refers me to Siebe Gorman & Co Ltd v Pneupac Ltd [1982] 1 WLR 185, 189E-G and 192F-H (per Lord Denning MR) and Taibao Investment & Management (Hong Kong) Co Ltd v Kary Enterprise (Holdings) Ltd (HCA 642/2011, 16 April 2012), para 21 (per DHCJ Lok, as he then was). In short, these authorities suggest that if a consent order falls within the “no objection” category and that there is no real contract between the parties, it can be altered or varied by the court. Mr Andrew Mak and Ms Jennifer Tse (who represent the Plaintiff) sensibly do not dispute the legal principles.

5.  However, even assuming that the Consent Order in the present case falls within the “no objection” category and that there is no real contract between the parties, I am of the view that this Court is functus officio, and hence has no jurisdiction to set aside the same.

6.  The legal principles regarding functus officio are well established. As explained by Keith JA in Andayani v Chan Oi Ling [2000] 4 HKC 233, 237D:-

“There must, of course, come a time in any proceedings when the court must be regarded as having completed its task. When that time is reached, the court is said to be functus officio. Once that stage has arrived, the court has no further jurisdiction over the case. But when does that stage arrive? The answer given by the common law is when the judge’s order has been drawn up, entered or otherwise perfected. As Slesser LJ said in Millensted v Grosvenor House (Park lane) Ltd [1937] 1 KB 717 at 722:

‘It was not sought to be disputed ... ... ... that it is within the power of a judge at any time before judgment is entered and perfected to alter its terms. This is the effect of two judgments, the case of In re St Nazaire Company (1879) 12 Ch D 88, in which the case it was held, following in In re Australian Direct Steam Navigation Co Millers’ case (1876) 3 Ch D 661, that a judge can always reconsider his decision until the order has been drawn up, and the case of In re Suffield & Watts ex parte Brown (1888) 20 QBD 693, to the effect that ‘so long as the order has not been perfected the judge has a power of reconsidering the matter, but, when once the order has been completed, the jurisdiction of the judge over it has come to an end’ ... ”

7.  Moores Rowland (a firm) v Grant Thornton (a firm) & Ors (HCA 1126/2010, HCA 1837/2010 and HCMP1284/2011, unreported, 8^th June 2012) is a highly pertinent authority. Like the present case, that case concerned a consent order. In para 27-30, DHCJ Lok (as Lok J then was) stated:-

27. …… Firstly, the English Court of Appeal in Craig v Kanseen, supra only held that the order there was a nullity owing to the failure to comply with the essential provision relating to the service of the process, and the court was entitled to set aside the judgment under the circumstances of that particular case. In fact, failure to effect proper service is an established category where the court can set aside its own previous order. In other scenarios, even a judgment or order has been obtained by fraud or with the lack of authority of the solicitor, the proper way to impeach the judgment or order is to start a fresh action to set aside the same. In fact, this is the proposition of law stated in Ainsworth v Wilding, supra and Ng Shui Hing v Lai Hang, supra and Mr Wong’s submission is simply not in line with such proposition.

28. Secondly, the principle of functus officio is equally applicable to an order made without any judicial determination or exercise of judicial discretion. As I see it, whether the consent order is approved by the judge or master or entered pursuant to O 42 r 5A, the most important issue here is that there must “come a time in any proceedings when the court must be regarded as having completed its task”, beyond that the court has no further jurisdiction over the case. For this purpose, why should there be a distinction between a case concluded by a consent order endorsed by the court and one concluded by way of a consent order under O 42 r 5A? In my judgment, there should be no distinction between the two so far as the application of the principle of functus officio is concerned.

….

30. In my judgment, it is clear from the above authorities referred to me by Mr Chang, counsel for the majority partners, that the court is functus officio and has no jurisdiction to declare that the perfected Consent Orders are null and void. The only proper way to impeach the Consent Orders is to start a fresh action to set aside the same…….”

8.  It is important to note that Siebe Gorman (supra) and Taibao Investment (supra) (which the Defendants rely on) were not concerned with a scenario where the court set aside its own order. Whilst Siebe Gorman (supra) concerned the courts’ powers to grant time extension in respect of a consent order pursuant to the English equivalent of Order 3, rule 5 (see pp 190H and 191D-E), Taibao Investment (supra) concerned an appeal against a consent order made by a master that was heard before a judge (see para 24-40).

9.  In the premises, even assuming that the contentions raised by the Defendants are to be accepted, the correct procedure is to seek setting aside the Consent Order by way of bringing an appeal (or starting a fresh action). In my view, it is not open to the Defendants to ask the same court at the same level to set aside its own order. I have no jurisdiction to do so, and this is against the doctrine of functus officio.

10.  At the hearing, Mr Chu fairly conceded that I have no jurisdiction to set aside the Consent Order.

11.  It follows that I have no alternative but to dismiss the Defendants’ application for want of jurisdiction.

12.  Since there are other procedural routes for the Defendants to pursue substantive justice, I do not propose to express any view on other aspects of the Defendants’ case. The less I say, the better.

13.  I order that the Amended Summons dated 9^th June 2023 taken out by the Defendants be dismissed.

14.  The Plaintiff, being the successful party, is entitled to costs.

15.  Mr Mak invited me to order indemnity costs against the Defendants. He made submissions along the line that the Plaintiff caused delay deliberately with a view to depriving the Plaintiff of the fruits of their labour, and this is evidenced by the fact that the Defendants once changed the grounds for seeking to set aside the Consent Summons. Mr Chu denies the accusations. He invited me to note the findings made by the District Court in DCCJ 505/2019 as well as the evidence from the Defendants’ solicitors.

16.  Although the Defendants failed to use the correct procedure, I am unable to conclude that they abused the Court’s process in bad faith. Bearing in mind the chequered history that led to the present dispute, I am also unable to conclude, based on the materials before me, that the Defendants have been playing games to cause delay deliberately. I cannot make findings of bad faith lightly without cogent evidence.

17.  In the premises, I decline Mr Mak’s proposal that costs be assessed on an indemnity basis. I am of the view that costs shall be assessed on a party-to-party basis. I order the Defendants to pay the Plaintiff’s costs in respect of the Amended Summons dated 9^th June 2023 forthwith, summarily assessed at HK$150,000.

18.  Lastly, I express my gratitude to Mr Chu, Mr Mak and Ms Tse for their helpful assistance.