FALCON PRIVATE BANK LTD v. BORRY BERNARD EDOUARD CHARLES LTD ANOTHER

HCMP 241/2012, HCMP 407/2012 AND HCMP 2693/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NOS. 241, 407 AND
2693 OF 2012

(ON INTENDED APPEALS FROM HCA NO. 1934 OF 2011)

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BETWEEN

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J U D G M E N T

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Hon Fok JA (giving the judgment of the Court):

The procedural history

1.  There are three applications for leave to appeal before the Court today.  The first in time is that in HCMP 241/2012 seeking leave to appeal against the order of To J dated 27 January 2012.  The second in time is that in HCMP 407/2012 seeking leave to appeal against the order of To J dated 22 February 2012.

2.  Both those orders were made by To J in the underlying action, HCA 1934/2011.  The background to that action is very briefly described in paragraphs 7 to 12 of the Reasons for Decision of Yuen JA dated 21 February 2013, to which we shall return in a moment.  On the commencement of the action, the plaintiff obtained an ex parte injunction order and disclosure orders against the defendants.  Aspects of those orders were contested by the defendants, giving rise to the orders of To J sought to be appealed.  To J refused leave to appeal, hence the applications to this Court for leave.

3.  The first and second applications for leave to appeal would ordinarily have been determined long before today but for one reason.  That reason was that, at the time those applications were made, the defendants had taken out a number of other interlocutory applications in the main action, including a summons to strike out the action and to discharge the ex parte injunction order.

4.  If those summonses were successful, it would mean that the orders of To J of 27 January 2012 and 22 February 2012 would simply fall away.  It was presumably for this reason that Tang VP gave directions that the applications for leave to appeal against those orders be heard at the same time and that they be dealt with after the strike out and discharge summonses that were then pending.

5.  In addition to the strike out and discharge summonses, and prior to those applications being heard, the defendants applied by summons for To J to recuse himself from hearing the strike out and discharge summonses.

6.  So it was that in May and June 2012, various interlocutory applications, including the recusal summons and the strike out and discharge summonses, were heard by To J.  On 7 June 2012, To J gave his decision refusing to recuse himself from hearing the strike out and discharge summonses and also dismissing the latter summonses.  His Reasons for Decision were handed down on 9 July 2012.

7.  That has given rise to the third application before the Court today, namely the application in HCMP 2693/2012 for leave to appeal against the various orders of To J dated 7 June 2012.  To J refused leave to appeal and, hence, the defendants now apply to this Court for leave.

8.  The leave application in HCMP 2693/2012 has already been determined by a single Justice of Appeal, namely Yuen JA, who, on 1 February 2013, refused leave on the papers and, on 21 February 2013, gave her Reasons for Decision, to which we have referred.  The defendants have renewed that application for leave before this Court, as they are entitled to do under O.59 r.2C(1) and (2).

9.  Directions were given that at the hearing today, which had been fixed for the hearing of the first and second leave applications, this Court would also hear the renewed third leave application.

10.  That describes the somewhat involved history of the matter and we now turn to deal with the third leave application.

The third leave application

11.  The same logic that led to Tang VP’s direction in respect of the first and second leave applications dictates that the third leave application should be considered before the other two leave applications. The ultimate outcome of that proposed appeal is the striking out of the action or the discharge of the injunction and disclosure orders and if that were to happen, there would be no need to deal with the first and second leave applications because the basis for the orders which are the subject of those applications would fall away.

12.  By the same token, the proposed appeal against the dismissal of the recusal summons is the logically prior part of the third leave application.  That is because, if that summons should have been acceded to by the Judge below, the strike out and discharge summonses would not have been dealt with by him but would have been heard by another judge of the Court of First Instance.  We therefore invited Mr Gerard McCoy SC, leading counsel for the defendants, to address us first today on the application for leave to appeal against To J’s dismissal of the defendants’ recusal summons.

13.  We should add that, as Yuen JA noted in paragraph 5 of her Reasons for Decision, the submissions regarding recusal were not considered by her.  As she there stated, the reason for that is that she noted that the relief sought in the draft Notice of Appeal did not include an order that the matter be fixed before another judge, which would have been the appropriate order had the recusal summons been granted.

14.  Be that as it may, however, it is now apparent from a close reading of the lengthy draft Notice of Appeal (consisting as it does of some 68 grounds of appeal) that the recusal summons is in fact part of the proposed appeal.  The material parts of the draft Notice of Appeal are grounds 56 to 58.

15.  Having heard Mr McCoy and also Mr Douglas Lam, counsel for the plaintiff, we are satisfied that grounds 56 and 58 of the draft Notice of Appeal give rise to an appeal with reasonable prospects of success. We do not propose to say anything further on the merits of those grounds but, since we think there are reasonable prospects of success, we grant leave to the defendants to appeal on those grounds in respect of the Judge’s dismissal of the recusal summons.

16.  Notwithstanding the parties’ other submissions in writing, we are not persuaded that it is appropriate to deal further with the third leave application or the first and second leave applications.

17.  If the appeal in respect of the recusal summons is allowed, the orders of To J dated 7 June 2012 will be set aside and the underlying strike out and discharge summonses (and the other interlocutory summonses that were before him) will have to be heard by another judge and it is not appropriate to anticipate the outcome of that exercise.

18.  If the appeal in respect of the recusal summons is dismissed, To J’s orders dated 7 June 2012 will stand and, at that time, the remainder of the third leave application can then be determined by the Court of Appeal.  The first and second leave applications can also be determined at the same time, since, depending on the outcome of the third leave application, it may be necessary and appropriate to deal with those applications.  Since those applications are otherwise now ready to be heard, we shall direct that they be adjourned to the date fixed for the hearing of the appeal for which we are now giving leave, to be heard (if the Court of Appeal deems appropriate) immediately after that appeal.

19.  The procedure to be adopted will unfortunately mean that there is some delay in the resolution of the remainder of the third leave application and the first and second leave applications but that, we think, is inevitable given the nature of the applications themselves. Procedural economy sometimes requires that a discrete application is dealt with first and other applications made to abide the outcome of that prior application.

Orders today

20.  We therefore make the following orders today:

(1)  Leave to the defendants to appeal against To J’s dismissal of the recusal summons on the grounds set out in paragraphs 56 and 58 of the draft Notice of Appeal annexed to the summons in HCMP 2693/2012, with a time estimate of 3 hours;

(2)  The remainder of the defendants’ application for leave to appeal in HCMP 2693/2012 be adjourned to the date fixed for the hearing of the appeal in (1) above, to be heard (if the Court of Appeal deems appropriate) immediately after that appeal (within the 3 hour estimate);

(3)  The defendants’ applications for leave to appeal in HCMP 241/2012 and HCMP 407/2012 be adjourned and relisted to be heard at the same time as the remainder of the defendants’ application for leave to appeal in HCMP 2693/2012 (similarly within the 3 hour estimate);

(4)  Costs of today’s application in HCMP 2693/2012 be in the cause of the appeal;

(5)  Costs of the applications in HCMP 241/2012 and HCMP 407/2012 be in the cause of those applications.

21.  At the conclusion of the hearing, after we made the above orders, Mr Colin Wright, counsel for the defendants, applied for an interim stay of execution of the costs orders of To J dated 7 June 2012 and 13 November 2012 until the date of the final determination of the third leave application.  This was not resisted by Mr Lam for the plaintiff and we therefore granted an interim stay of execution of those costs orders accordingly.