FUNG KAM KWONG v. FUNG KAU

CAMP 35/2017

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 35 OF 2017

(ON AN INTENDED APPEAL FROM HCMP NO 1152 of 2015)

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JUDGMENT

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Hon Lam VP (giving the Judgment of the Court):

1.  On 28 January 2016 Deputy High Court Judge Kent Yee granted declaratory relief in favour of the Plaintiff. Though the Defendant had been represented by solicitors, he did not file any evidence opposing the Plaintiff’s application despite an unless order being made on 12 November 2015 concerning the filing of evidence.

2.  The judge granted the relief on the basis that the Defendant did not oppose the application as his then solicitors told the court that he had no instruction in respect of the application, see [2] of the Decision of 28 January 2016.

3.  On 4 October 2017, the Defendant applied by a summons for leave to appeal out of time against the decision of 28 January 2016.  A draft notice of appeal was attached to the summons.

4.  Statement in support of the application and statement in opposition were lodged in accordance with Practice Direction 4.1. Having read the same, we are of the view that the application can be processed on the papers without an oral hearing.

5.  In Tang Chai On v Tang Sing Ki [2016] 5 HKLRD 104, this Court set out the well-established approach to be adopted in an application for extension of time to appeal.  In that case, this Court reiterated that the approach (as applied by Kwan JA in Lee Chick Choi v Best Spirits Co Ltd HCMP 371 of 2015, 21 May 2015) should be adhered to.  The approach involved the consideration of the following factors in the exercise of discretion:

(a)   The length of the delay;

(b)   The reasons for the delay;

(c)   The chance of success of the intended appeal;

(d)   The prejudice to the other party.

6.  Further, where the delay is substantial and not wholly excusable, the applicant must show a real prospect of success on the merits, see Secretary for Justice v Hong Kong & Yaumati Ferry Co Ltd [2001] 1 HKC 125; Chee Fei Ming v Director of Food and Environmental Hygiene [2015] 4 HKC 134.

7.  The delay in the present case is very substantial.  It took the Defendant more than one and half year before the application for extension of time to appeal was made.

8.  The Defendant’s explanation for delay, as set out in his affirmation was that he was elderly, illiterate and sick.  He left it to his younger son KF Fung to handle the litigation and the latter gave instructions to the former solicitors to act for him in these proceedings.  He said his younger son had misled him and he all along believed the litigation was still being contested.  He also said he was not aware of the unless order of 12 November 2015. 

9.  The Defendant said he only found out what happened to the litigation in December 2016 when he was required to pay $80,000 to his former solicitors. 

10.  In his second affirmation, the Defendant further said that the Plaintiff (who is his elder son) was aware of his ill-health.  He made an assertion that the two sons of his were acting in concert against him.  He alleged that the Plaintiff had misled the court when affirming that he was in good health.  He said he had a stroke in 2007 and since early 2015 he had been confined to a wheelchair.  Because of his conditions, he had difficulty in raising fund and in giving instructions to his present solicitors. 

11.  He did not depose to the facts relating to the dispute and his defence.  He simply said he had been advised that there are sound legal reasons that the declarations should not have been made.  

12.  As held by this Court in Li Cheong v Lee Kwan Tai HCMP 3190 of 2016, 13 April 2017, in cases where the court made an order in the absence of a party, an option that the party may pursue was to apply to the lower court to set aside the order and relevant considerations are set out at para 35/2/1 of Hong Kong Civil Procedure 2017.  However, if the party sought to appeal instead of going to the lower court, the Court of Appeal would examine the decision by reference to evidence already before the court below. 

13.  In the present case, the Defendant was represented by solicitors at the hearing of 28 January 2016 who informed the court that he had no instructions to carry on with the litigation.  Further, if he has cogent evidence supporting his allegations of collusion or fraud, he could start another action for the setting aside of the judgment.  However, he chose to come before us by way of application for extension of time to appeal.  We have to examine the application by reference to the established principles on such application set out above.   

14.  In our judgment, the Defendant did not give a good explanation for the delay.  This Court is not minded to accept his general and bald assertions that his younger son was acting in collusion with the Plaintiff and misled him as to the progress of the proceedings.  These are very serious allegations and the mere production of evidence that the Plaintiff was not in good health generally (without any expert evidence on his medical condition from May 2015 to January 2016) is not sufficient to support those allegations.  There is also no evidence from his former solicitors corroborating his claim that he had not been informed of the unless order and the misinformation on the progress of the action.

15.  Further, we agree with Mr Law (who opposed the application on behalf of the Plaintiff) that there was inexcusable delay from December 2016 (when even according to the Defendant himself, he had found out the decision of 28 January 2016) to 4 October 2017 (when the present application was made).  We cannot accept his general assertion of immobility as excuse for not taking action more promptly.  In the present age, immobility is not an insuperable difficulty in giving instructions to solicitors. 

16.  Hence, extension of time should not be granted unless we are of the view that the intended appeal has a real prospect of success.

17.  In the draft Notice of Appeal and the statement in support of this application, Mr Sarony SC and Mr Chu relied on four grounds of appeal.  It was submitted that the merits of the appeal are compelling.  

18.  With respect, we agree with Mr Law that the grounds are misconceived. 

19.  Mr Sarony advanced submissions on the first two grounds together.  Those grounds were based on the premise that the declaration was in respect of title to foreign landed property.  Based on British South Africa Company v Companhia de Mocambique [1893] AC 602, counsel submitted that Hong Kong court has no jurisdiction to grant the declarations in question. 

20.  It is quite plain to us that the judge had not granted any declarations regarding the title to foreign land.  The declarations were made in respect of the interests of a Hong Kong company (which had been struck off by the Registrar) under an agreement of 8 November 1988 and a supplemental agreement of 18 February 1992. The agreements were in respect of the co-operation, construction and management of a park called the Haikou Harbourside Park.  As Mr Law submitted, the declarations bind the Plaintiff and the Defendant.  They have no proprietary effect.  It is a matter for the other parties (who were not parties to the present proceedings) to decide for themselves the weight they could attach to these declarations.  In that regard, the modern view of the so-called Mocambique rule was that accepted by Lord Wilberforce in Buttes Gas and Oil Co v Hammer (No 3) [1982] AC 888 at p.925-6 that there was no absolute prohibition for a court to consider questions which may touch upon foreign land.  The court can decide such issues when it is incidental to dispute between private individuals arising from personal obligations, see Cheshire & North, Private International Law, 11^th Edn p.255-265; Dicey & Morris, Conflict of Laws 13^th Edn Rule 114(3)(a). 

21.  Ground 3 is a non-point.  The arbitration clause only operates in regard to disputes between the parties to the agreements.  We are concerned with disputes between the Plaintiff and the Defendant as to their respective interests over the company’s rights under the agreements.

22.  For the same reason, Ground 4 (the lack of legal interest on the part of the Plaintiff in the agreements vis-à-vis the other parties to the agreements) is a non-point.  As said above, the declarations have no binding effect on third parties.  The extent to which the Plaintiff can rely on such declarations in his dealings with Haikou City is not a matter of our concern. 

23.  We are not satisfied that the Defendant has real prospect of success in the intended appeal. 

24.  Though Mr Law did not address on prejudice that may be suffered by the Plaintiff if extension of time is granted, we are not persuaded that extension of time should be granted in the circumstances of this case.

25.  We therefore dismiss the summons of 4 October 2017.  We also order the Defendant to pay the Plaintiff’s costs in this application.

26.  In breach of para 14 of PD4.1, the Plaintiff did not file any statement of costs.  Having regard to complexity of the matter and the works done on behalf of the Plaintiff, we fix the costs of the Plaintiff at $40,000.  

27.  We are also of the view that the application is totally without merit.  Pursuant to Order 59 Rule 2A(8), we make an order that no party may request this determination to be reconsidered at an oral hearing inter partes.