SOURCE VIEW DEVELOPMENT LTD v. CAFE HAPPY POST LTD AND OTHERS

HCA 2275/2019

[2022] HKCFI 511

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2275 OF 2019

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DECISION

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INTRODUCTION

1.  There are two applications before me this morning.

(1)     The summons filed by Mr Tang Kam Cheung, the 2^nd defendant, on 14 December 2021.  Notwithstanding that its wording apparently seeks an injunctive relief, it is in substance an application to stay the execution of the order for possession of land made by Master Rita So on 22 November 2021 pending his appeal against that decision.

(2)     An application made by Tang by letter dated 19 January 2022 requesting that the above summons be heard by another judge and not by me.  I shall refer to this as “the recusal application”. 

THE RECUSAL APPLICATION

2.  Upon receipt of the above letter, I directed that the recusal application be dealt with at today’s hearing. 

3.  It appears from the letter that Tang’s ground for the recusal application is that I have ruled against him on three previous occasions.  They are:

(1)     On 29 September 2021, in HCA 1611/2019, a related action between the plaintiff and Tang, I dismissed Tang’s appeal against the decision of Master Kent Yee made on 14 May 2021 and made a costs order against him.  See my decision at [2021] HKCFI 2999 at paras 40 to 43. 

(2)     On 12 November 2021, I refused Tang’s application for leave to appeal against the above decision and made a costs order against him.  See my decision at [2021] HKCFI 3476 at paras 17 to 18. 

(3)     By letter dated 30 September 2021, Tang applied for a transcript of the hearing on 29 September for the purpose of pursuing his intended appeal.  He also gave an undertaking to pay the charges.  On 6 October 2021, I refused his application.  I replied to him in writing as follows:

“The written decision will be sent out to parties shortly. The Plaintiff [ie Tang] may refer to that for the purpose of his intended appeal. The request for transcript is refused.”

I had delivered my decision and reasons orally at the conclusion of the hearing on 29 September 2021.  It was later reduced into writing and that was what I was referring to in the above extract.

4.  In his oral submissions today, Tang confirms that those are the grounds in support of his recusal application.

5.  The plaintiff opposes the application. 

6.  Mr Alex Fan, appearing for the plaintiff, refers to the principles governing recusal as recently summarised and applied by Mimmie Chan J in Cosimo Borrelli as Trustee of the SFC Litigation Trust v Allen Tak Yuen Chan [2020] HKCFI 2382. 

(1)     The test is whether the circumstances would lead a fair-minded and informed observer to conclude that there is a real possibility that the tribunal is biased: para 7 citing Deacons v White & Case Limited Liability Partnership (2003) 6 HKCFAR 322. 

(2)     The observer has a number of qualities.  He is not unduly sensitive or suspicious.  He takes a balanced approach to any information he is given.  He takes the trouble to inform himself on all matters that are relevant.  He appreciates that the context forms an important part of the material which he must consider before passing judgment: para 13.

(3)     The party seeking recusal must articulate the reasoning justifying the recusal.  There must be an articulation of the logical connection between the conduct giving rise to the apprehension of bias and the possibility of departure from impartial decision-making: para 8. 

(4)     The mere fact that a judge has decided applications or issues in the past adversely to a litigant is not generally a reason for that judge to recuse himself at further hearings.  The fair-minded and informed observer does not assume that because a judge has taken an adverse view of a previous application or applications, he will approach any future application with a closed mind or will pre-judge or will not deal fairly with all future applications: paras 17 to 18.

7.  Here, Tang points out that I have made rulings against him in three previous applications. 

8.  Applying the well-established principles, that fact, without more, would not lead a fair-minded and informed observer to conclude that there is a real possibility that I am biased or will not deal with the present summons fairly without any pre-judging. 

9.  Hence, Tang fails to make out a justification for my recusal.  The application is refused.

THE STAY APPLICATION

10.  By his summons, Tang seeks a stay of execution pending appeal.  I set out below the relevant procedural history.

Procedural history

11.  The plaintiff and Tang are involved in two actions, ie the present action and HCA 1611/2019.  The subject-matter of the two actions overlap.  I set out a summary of the parties’ cases in the two actions at paras 17 to 26 in my decision given at the hearing on 29 September 2021: [2021] HKCFI 2999.

12.  On 22 November 2021, Master So made a number of orders against Tang in the present action and in HCA 1611/2019.  Relevantly, for today’s purposes, summary judgment was entered against Tang, the 3^rd and 4^th defendants.  The three of them were ordered to deliver vacant possession of Lot No 5059 in Demarcation District 51 and the buildings built on it to the plaintiff within 28 days.  The deadline therefore fell on 20 December 2021.  This possession order is the order which Tang seeks to stay now. 

13.  On 6 December 2021, Tang lodged a notice of appeal against the master’s decision.  The appeal was listed for hearing before a judge on 19 April 2022, with three hours reserved. 

14.  On 8 December 2021, Tang wrote to the clerk to Master So applying for an extension of the time to deliver vacant possession to after the conclusion of two appeals.  First, the intended appeal in CAMP 535/2021.  Mr Fan has informed the court that that is Tang’s renewed application to the Court of Appeal for leave to appeal against my decision in HCA 1611/2019 on 29 September 2021 (see para 3(1) and (2) above).  Second, the appeal against Master So’s decision scheduled to be heard on 19 April 2022.

15.  On 13 December 2021, the master gave the following directions:

“1. 法庭不會處理日期為2021年12月8日以信件方式提出的申請。如原告人(HCA1161/2019)/第二被告人(HCA2275/2019) [ie Tang]打算作出有關申請，應以給各方傳票方式(Inter Parte Summons)提出。

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16.  On 14 December 2021, Tang took out the present summons.  I quote below the reliefs which he seeks:

“(1) 申請禁制令禁止法庭執行聆案官在一宗兩案同堂聆訊即案件編號HCA 2275/2019及案件編號HCA 1611/2019在22/11/2021共同聆訊時，發出的收屋命令。

(2) 申請發給命令給案件編號 HCA 2275/2019的第二被告人，即本人，許可他延期履行聆案官在10:00AM. 22/11/2021，審訊案件編號HCA 2275/2019及案件編號 HCA 1611/2019同堂聆訊時所發出的命令，即本人須於審訊日後28天內遷離物業 LOT NO. 5059 D.D. 51直至該兩案的上訴審訊有最終裁判的日期為止。” (underline added)

17.  In para 1, Tang applies for an injunction to restrain the court from enforcing the possession order made by the master.  In para 2, Tang asks for an extension of time to comply with the possession order until the conclusion of his appeal. 

18.  In his supporting affirmation, Tang stated that he had applied for time extension to the master by his letter dated 8 December 2021 but there was no reply. 

19.  At today’s hearing, Tang confirms that he in fact received master’s directions on 14 December, but only after he took out the summons earlier that day.  He adds that as the deadline for the possession order was approaching, and he was very concerned to have the stay in place. 

20.  The relief sought in para 1 is plainly misconceived.  In substance, what Tang wants is a stay of execution of the possession order pending appeal. 

21.  The summons was listed for hearing three days later on the Friday of that week before the summons judge.  (The date might have been fixed this way because the summons on its face asked for injunctive relief.) 

22.  At the hearing, Mr Fan appeared for the plaintiff and invited the judge to dismiss the stay application primarily on the ground that the appeal is not arguable. 

23.  The judge declined the invitation and adjourned the summons for substantive argument before a bilingual judge with three hours reserved.  That is the hearing before me today.  The judge also granted an interim stay of execution until this hearing. 

The proper course

24.  In my view, Tang’s application for stay pending appeal brought before a judge is procedurally flawed and amounts to an abuse of the court’s process.  It should be dismissed. 

25.  Where a master makes a substantive order and an appeal against that order lies to a judge, if the aggrieved party wishes to stay the execution of the substantive order pending the appeal, generally speaking, the proper course for him to take would be to make the stay application before the master who made the substantive order.  The application should be made by summons.  Any evidence which he proposes to rely on should be adduced by way of an affidavit. 

26.  The master is, generally speaking, best placed to hear the stay application.  When seeking a stay, the applicant will need to demonstrate that he has an arguable appeal as a minimum requirement: see Star Play Development Ltd v Bess Fashion Management Co Ltd HCA 4726/2001, 7 June 2002 at para 9(6).  The master has already heard the arguments and is familiar with them.  Hence, with some refreshing of his memory, at the stay hearing (or on a paper application), he will be able to evaluate the prospect of the appeal on the merits quickly and effectively.

27.  In some cases, the master will also appreciate how a decision on stay may affect the further conduct and progress of the proceedings from a case management perspective. 

28.  If the master refuses the stay application, the proper next step for the aggrieved party is to lodge an appeal against the master’s refusal to stay.  That appeal would lie to a judge under Order 58, rule 1(1).  This appeal framework was confirmed to be the correct procedure by Ma J (as he then was) in Brand, Farrar, Buxbaum LLP v Samuel-Rozenbaum Diamond Limited HCA 5191/1998, 8 May 2002 at para 10.  The judge remarked:

“On the next day (16 April 2002), the claimant issued a notice of appeal against Master Wong’s refusal to stay execution. I would just observe here that this was the correct procedure to adopt.”

29.  In that case, the procedural framework concerning a stay of a master’s decision pending an appeal to the judge was contrasted with the regime governing a stay of a decision of a judge of the Court of First Instance pending an appeal to the Court of Appeal. 

30.  In the latter scenario, if the first instance judge refuses a stay, an application can be made to the Court of Appeal without the need to appeal.  This is because there is concurrent jurisdiction to grant stays of execution.  This exists by reason of Order 59, rule 13(1) which provides as follows:

“(1) Except so far as the court below or the Court of Appeal or a single judge may otherwise direct—

(a) an appeal shall not operate as a stay of execution or of proceedings under the decision of the court below; …” (underline added)

31.  The same wording does not exist in Order 58, rule 1(4).  The text reads:

“Except so far as the Court may otherwise direct, an appeal under this rule shall not operate as a stay of the proceedings in which the appeal is brought.” (underline added)

32.  For these reasons, Ma J observed that where a master refuses a stay of execution of his order pending an appeal against that order to a judge, the correct procedure is to lodge an appeal against the master’s decision against a stay. 

33.  I should add that Ma J did not expressly say that a stay application should in the first instance be made to the master who made the substantive order.  But that must have been the premise on which the judge had proceeded when he made the observation on the “correct procedure”.  Furthermore, at para 27(1) of the decision, when discussing the facts of that case, he was clearly contemplating that that should be the correct way to follow. 

34.  I should also add that there is no express provision in the rules which stipulates that a stay application should be made to the master in the first instance, as opposed to a judge. 

35.  Again, this is different from an appeal to the Court of Appeal from a judge.  Order 59, rule 14(4) expressly provides that where an application may be made either to the Court of First Instance or to the Court of Appeal (which would include a stay application), it shall not be made to the Court of Appeal in the first instance except where there are special circumstances which make it impossible or impracticable to apply to the court below. 

36.  Notwithstanding the absence of any express rule, a party who wishes to stay a master’s order pending appeal should apply to the master in the first instance. 

37.  In SNE Engineering Co Ltd v Chim Kee Machinery Co Ltd CACV 101/2016, 15 July 2016, the Court of Appeal considered the proper interpretation and rationale of Order 59, 14(4).  There are advantages which may be gained from having the judge of the court below hear the stay application in the first instance, as opposed to the Court of Appeal.  This includes the ability of the judge to deal with the stay swiftly and effectively. 

38.  In my view, such advantages apply with equal force in the situation concerning a stay of a master’s decision.  See paras 26 to 27 above. 

39.  All these reinforce the position that a party should apply for stay from the master in the first instance. 

What should be done now?

40.  In the present case, Tang ought to have applied for the stay before Master So in the first instance, whose order it was sought to be stayed.  He tried to do so by his letter dated 8 December 2021. 

41.  However, without waiting for the result, he proceeded to take out the present summons to be heard before a judge. 

42.  If I proceed to hear his summons substantively today, I would be bypassing the well-established procedural framework governing stays of execution pending appeal from a master’s decision.  As far as I can see, there is no reason for me to do so. 

43.  Admittedly, Tang has up to now been allowed to pursue the stay application before a judge.  I therefore ask myself whether the application should be substantively disposed of today, by way of an exception to the general and well-established practice. 

44.  However, there are distinct disadvantages for me to take this course of action. 

45.  In coming to a ruling on the stay application, I would inevitably have to assess the merits of the case and express a provisional view.  I need to be satisfied that Tang’s appeal is at least arguable.  After that is done, the appeal proper will then come before a different judge in about three months’ time in April.  He will then express his own view (and this time a definitive one) on the merits. 

46.  This is undesirable.  First, there is a possibility that two judges may be expressing different or contradictory views on the same matter.  That is generally to be avoided.  Second, it is an unnecessary use of the court’s resources.  Three hours have been reserved for today’s hearing. And three more hours are reserved for the appeal in April.  The use of such time is simply not warranted.

47.  I therefore decline to hear substantive argument on the stay application today. 

Disposal of the summons

48.  To conclude, Tang ought to have applied to Master So for the stay by summons.  He ought not to have applied for an injunction in the present summons.  That is plainly misconceived.  He ought not to have applied for the stay before a judge.  All these procedural flaws have resulted in the court’s time and the plaintiff’s time being used and wasted to no practical effect.  This is particularly undesirable when the master could have and would have dealt with the stay application swiftly if Tang had proceeded in accordance with the well-established practice. 

49.  As such, I am of the view that the taking out and pursuit of the summons is an abuse of the court’s process and the summons should be dismissed. 

50.  By order of the summons judge, the possession order has been stayed on an interim basis until today.  I will not extend it. If Tang wishes to further pursue the stay, he should follow the proper procedure promptly.  In this regard, in view of the approaching Chinese New Year holiday, the plaintiff agrees and undertakes that it will not take steps to enforce the possession order within 14 days from today.

ORDER

51.  For the above reasons, I dismiss both the recusal application and Tang’s summons. 

[Submissions on costs]

52.  Tang submits that the documents prepared by the plaintiff for this hearing are more or less the same as on the previous occasions.  Deduction should therefore be made.  However, as is clear from the statement of costs, the majority of time has been spent by the plaintiff on matters other than the preparation of documents and bundles.

53.  I order that Tang do pay the plaintiff’s costs of the recusal application and the summons.  The costs be summarily assessed at $80,000, payable on or before 10 February 2022.