THE REAL ESTATE DEVELOPERS ASSOCIATION OF HONG KONG v. BUILDING AUTHORITY

HCMP 1746/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 1746 OF 2014

(ON AN INTENDED APPEAL FROM HCAL NO. 95 OF 2011)

________________________

________________________

________________________

REASONS FOR JUDGMENT
AND
DECISION ON COSTS

________________________

Hon Lam VP (giving the Reasons for Judgment and Decision on Costs of the Court):

1.  The Real Estate Developers Association of Hong Kong [“REDA”] seeks leave to appeal out of time in this application in respect of the judgment of Au J in HCL 95 of 2011 on 11 June 2014 dismissing the application for judicial review to challenge the Building Authority [BA]’s policy on the requirement to provide particulars of proof of ownership or realistic prospect of control in submitting plans for approval.

2.  By the time of the hearing before Au J, because of the two judgments of the Court of Appeal in CACV 19 of 2012 and CACV 113 of 2012, REDA’s counsel acknowledged that they would fail in the application.  REDA however wished to pursue the matter to a higher level and suggested a leap frog appeal to the Court of Final Appeal. 

3.  Au J dismissed the application accordingly. However, BA did not agree to the leap frog procedure.  Hence, in order to pursue the matter further, REDA has to come to this court.  Mr Yu SC took us to a letter of 16 July 2014 from the Department of Justice to the solicitors for REDA explaining why BA did not agree to a leap frog appeal to the Court of Final Appeal.  

4.  REDA acknowledged that the judgments in CACV 19 and 113 of 2012 are binding on this court and they could not succeed in this court.  This was confirmed in a letter dated 20 January 2015 from the solicitors for REDA.  They accepted that substantive arguments on the points raised in the intended appeal could only be ventilated in the Court of Final Appeal.  They said, justifiably, that it had always been their intention to pursue that course and such intention was all along known to BA.

5.  In the course of REDA’s pursuit of its appeal, there was a procedural slip which necessitated the present application.  Whilst Au J only handed down his reasons for judgment on 30 June 2014, he had actually dismissed the application orally on 11 June 2014.  Unfortunately, solicitor acting for REDA was under the misapprehension that Au J had reserved his judgment pending the handing down of the written reasons.  

6.  According to Order 59 Rule 4(1)(c), time for service of notice of appeal starts to run from the date of the judgment.  In the present context, time started to run from 11 June. 

7.  The rule gives a litigant 28 days to serve his notice of appeal.  When Au J handed down his reasons for judgment on 30 June (which clearly stated that the judgment was given on 11 June), REDA’s solicitor should have realised his mistake.  At that time, REDA still had 9 days to serve the notice of appeal. 

8.  At that stage, BA had yet to make clear their position on the leap frog procedure.  It was only on 16 July 2014 that BA through the Department of Justice communicated to REDA its unwillingness to consent to that course.

9.  That said, there was nothing to prevent REDA from serving a protective notice of appeal in the meantime.  Apparently, solicitor for REDA had not disabused himself from his mistaken belief as to the effective date of the judgment until sometime after the expiration of the appeal period on 9 July 2014. 

10.  As soon as he realised the mistake, counsel was instructed to draft the notice of appeal and the application for extension of time.   The summons seeking extension of time to appeal was filed on 17 July 2014, 8 days after the expiration of the appeal period.

11.  BA, through leading counsel, opposed the application for extension of time on the following grounds:

(a) The delay is inexcusable, mistake on the part of legal advisors is not a good ground for extension of time;

(b) The proposed appeal is bound to fail at the Court of Appeal level; and

(c) It is entirely unclear why it is said that the 2 Court of Appeal judgments, applying the judgment of Lord Fraser in the Privy Council on appeal from Hong Kong in AG v Cheng Yick Chi [1983] HKC 14, are wrong in law.

12.  In an ordinary case, it is well established that this court would not grant extension of time to appeal in respect of an intended appeal which cannot succeed.  We would uphold that as a general proposition and we do not wish anything said in this judgment be regarded as casting doubt on the same.  However, a special feature in the present case is that it had all along been acknowledged by REDA that the appeal cannot succeed in this court as the ultimate aim of REDA, as it is well known to BA, is to challenge the 2 Court of Appeal judgments (and the relevant dicta of Lord Fraser) in the Court of Final Appeal. 

13.  Ms Cheng SC, appearing for REDA, submitted that the court should not adopt a mechanistic approach in exercising a broad discretion in the context of an application for extension of time, citing Palata Investments Ltd v Burt & Sinfield Ltd [1985] 1 WLR 942 at p.947E; Tridant Engineering Co Ltd v Mansion Holdings Ltd [2001] 1 HKLRD 783; Unison Knitwear Ltd v Rich Easy Ltd [2001] 1 HKLRD 856 and Chen v Whirlpool [2006] 1 HKLRD 171.  Regards must be paid to the specific circumstances of the case. Thus, the four factors commonly cited as relevant considerations in applications of this nature[1] are neither exhaustive nor mandatory. 

14.  In our judgment, whilst the discretion to extend time to appeal has to be exercised judicially and consideration of the four matters in Norwich & Peterborough Building Society v Steed [1991] 1 WLR 449 would usually be sufficient in most cases, we agree with Ms Cheng that it remains a broad discretion which must be exercised by reference to the special facts of the case.  As observed by Ackner LJ in Palata Investments Ltd v Burt & Sinfield Ltd supra:

“ We wish to emphasise that the discretion which feel to be exercised is unfettered, and should be exercised flexibly with regard to the facts of the particular case.”

15.  We also agree that in the present context, it is relevant for us to take account of the ultimate aim of REDA which BA had all along been aware of.   But we are not saying that this would be sufficient to procure extension of time to appeal to be granted.  Other important matters must also be weighed.  In the present context, we would place more weight on the arguability of the intended appeal in the Court of Final Appeal than its arguability in the Court of Appeal.   In other words, we do not think it right to pre-empt REDA’s application simply on the basis that the appeal must fail before us.  In the special circumstances in this case (where the whole point of the proceedings is to challenge binding Court of Appeal authorities), it would in our view be a too restrictive approach in testing the merit of a case.

16.  Before we turn to the question of arguability, we shall review the other relevant matters.  In terms of the length of delay, it was a short period of 8 days.  The reason for the delay was due to the mistake of REDA’s solicitor.  We have already commented on the explanation for such mistake.  Whilst we would not describe it as an excusable mistake, we accept it is not an intentional flouting of the rule.  Be that as it may, we do not regard it as determinative in the present context.  It is accepted by Mr Yu that BA did not suffer any prejudice as a result of the delay.  Again this is not determinative.  As it should be clear from our overall approach in this judgment, the exercise of the discretion is a multi-facet balancing process paying regard to all relevant circumstances in the case.

17.  Coming back to arguability, though there are authorities cited by Ms Cheng in which extension of time was granted without embarking on the merit of the intended appeal, we do not think it is right to do so in the present instance.  If we do not see reasonable arguability in the arguments to be advanced or other good reasons for allowing the matter to go the Court of Final Appeal, we would not grant the requested extension.  In that respect, we agree with Mr Yu that BA was not acting unreasonably in refusing to give the consent to a leap-frog appeal in light of the materials before them.

18.  At the same time, we should not allow this application to become an occasion for counsel to rehearse substantially their arguments on the merits.  In this connection, we wholeheartedly endorse what was recently said by Moore-Bick LJ as Vice-President of English Court of Appeal in R (Hysaj) v Secretary of State of the Home Department [2014] EWCA Civ 1633 at paragraphs 46 and 47 in the context of the English rules:

“ 46. If applications for extensions of time are allowed to develop into disputes about the merits of the substantive appeal, they will occupy a great deal of time and lead to the parties' incurring substantial costs.  In most cases the merits of the appeal will have little to do with whether it is appropriate to grant an extension of time.  Only in those cases where the court can see without much investigation that the grounds of appeal are either very strong or very weak will the merits have a significant part to play when it comes to balancing the various factors that have to be considered at stage three of the process.  In most cases the court should decline to embark on an investigation of the merits and firmly discourage argument directed to them.  Here too a robust exercise of the jurisdiction in relation to costs is appropriate in order to discourage those who would otherwise seek to impress the court with the strength of their cases. 

47. Support for that conclusion can be found in the recent decision of the Supreme Court in HRH Prince Abdulaziz Bin Mishal Bin Abdulaziz Al Saud v Apex Global Management Ltd [2014] UKSC 64, in which the court had to consider the extent to which the merits of a claim or defence were relevant to granting relief from the sanction of striking out in default of compliance with an "unless" order.  Lord Neuberger, with whom Lord Sumption, Lord Hughes and Lord Hodge agreed, held that, even in a case of striking out, the merits of the claim or defence were relevant only when they were so strong that there was no real answer to them, in other words, in cases where an application for summary judgment could be expected to succeed.  In Lord Neuberger's view (paragraph 30):

“ ... it would be thoroughly undesirable if, every time the court was considering the imposition or enforcement of a sanction, it could be faced with the exercise of assessing the strength of the parties' respective cases: it would lead to such applications costing much more and taking up much more court time than they already do. It would thus be inherently undesirable and contrary to the aim of the Woolf and Jackson reforms.” ”

19.  Similar sentiment was expressed by another division of this court in Keen Lloyd Holdings Ltd v Commissioner of Customs and Excise HCMP 203 of 2015, 11 May 2015 at paragraphs 31 and 33.

20.  We therefore invited Ms Cheng to address us succinctly and broadly on the arguments that REDA intended to run in the Court of Final Appeal.  Having considered the submissions of counsel, we are satisfied that the intended appeal of REDA is reasonably arguable at the Court of Final Appeal level.  Quite properly, Mr Yu (without conceding its arguability) had acknowledged that the question raised is a question of great general and public importance. 

21.  We are satisfied that in the rather unusual circumstances of this case, after weighing all the relevant matters, we should grant the extension of time sought by REDA in the interest of justice and we ordered accordingly.

22.  We have come to the above conclusion without reference to what Mr Yu called the HLF factor[2].  For the present purposes, we do not find it necessary to resolve the HLF question which Mr Yu submitted should not be relevant at this stage of the proceedings.

23.  We also make a costs order nisi that REDA shall pay the costs of BA in this application.  First, the application is necessitated by BA’s failure to serve a notice of appeal within time.  Second, we do not regard BA’s opposition to extension to be frivolous and vexatious. Nor do we regard it as opportunistic in view of the concern raised in the letter of 16 July 2014 and such concern was only adequately addressed in the course of the hearing by Ms Cheng.  Third, counsel have not been able to refer to another case where extension of time was sought in similar situation and we have clarified in this judgment that a liberal approach should be adopted with regard to the consideration of the merit.