SEAN ERIC MCLEAN HOTUNG v. HILLHEAD LTD AND OTHERS

HCMP 2590/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 2590 OF 2009

(ON AN INTENDED APPEAL FROM HCA NO. 1738 OF 2006)

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DECISION

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1.  I have before me a summons issued by the plaintiff on 14 December 2009 for leave to appeal out of time against the judgment of Reyes J on 11 March 2008 in HCA No. 1738 of 2006, pursuant to O. 59 r. 14(1) of the Rules of the High Court.  The judgment was given in the application of the 1^st and 2^nd defendants to strike out the plaintiff’s claim for disclosing no reasonable cause of action.

2.  Reyes J ordered the plaintiff’s claims against these defendants to be struck out.  He held that the claims against these defendants could not be maintained as the claims were based on reflective loss and there was no good reason for departing from the reflective loss principle.  This is a ruling on a pure question of law.

3.  The plaintiff’s present summons is supported by his 1^st affidavit in which he exhibited a draft Notice of Appeal with 8 grounds of appeal.  In addition, he served his written submission of 9 pages and enclosed with it a bundle of documents not exhibited to his supporting affidavit.

4.  I have considered the additional materials he sought to produce.  They are in my view irrelevant.

5.  Having considered each of the grounds in the draft Notice of Appeal, it is clear to me that leave to appeal out of time should be refused, applying the established principles cited by the defendants’ counsel Mr Bernard Man in paras. 11 to 15 of his submission and the authorities cited therein (Secretary for Justice v. Hong Kong & Yaumati Ferry Co. Ltd. & Anor [2001] 1 HKC 125; Chiu Sin Chung v. Yu Yan Yan Angela [1993] 1 HKLR 225; Hong Kong Civil Procedure 2010, vol. 1, para. 59/4/14).

6.  I will state my reasons succinctly.

7.  The delay here in lodging the appeal is 21 months.  No good reason has been given by the plaintiff to explain the whole of the delay since time expired.  He informed the court at the hearing today that from 2007 to 2009, he was out of Hong Kong as the defendants are aware and because of this he has not been able to pursue the appeal.  I do not accept this as a good reason.

8.  On the plaintiff’s account, he became aware of new items of evidence he sought to rely on in June, July and November 2009.  In the 9^th affidavit he made in HCMP No. 2757 of 2005 filed in March 2009, he had already asserted that Reyes J was “misled” into entering judgment against him in HCA No. 1738 of 2006 and that judgment should not have been entered for a number of reasons.  He did not issue the summons to appeal out of time until December 2009, after the conclusion of the hearing of his 2 summonses taken out in taxation proceedings to tax the costs awarded by Reyes J, which was heard before Master Ng in November 2009.  There is no or no acceptable excuse for the delay.

9.  Where the delay is inexcusable, it is incumbent on the applicant to show a real prospect of success of the proposed appeal on the merits.  The plaintiff is unable to do so. 

10.  I agree with the analysis in the statement filed by the defendants under O. 59 r. 2A(4) on 31 December 2009 that grounds 1 to 5 of the draft grounds of appeal are merely criticisms of certain denials pleaded in the defence of the defendants, and have no bearing on the type of loss claimed, which was ruled by the judge to be reflective loss.  Ground 6 challenges the locus of the solicitors to represent the 1^st defendant in the proceedings.  This has no merit.  In any event, the same arguments were ventilated by the plaintiff in the hearing of the summons he issued in the taxation proceedings and were fully answered by Master Ng in the comprehensive decision she handed down on 31 December 2009, paras. 34 to 72.  Grounds 7 and 8 are wholly without merit, for the reasons submitted by Mr Man.

11.  The plaintiff is now in control of the 2 companies in question and has caused one of them to issue a writ in November 2009 against the same 3 defendants in a new action being HCA No. 2376 of 2009, making a claim in respect of one of the matters which he claimed against these defendants and which was struck out by Reyes J.  This shows clearly if these 2 companies have any legitimate grievance or cause of action against the defendants, whether as a result of the materials allegedly recovered by the plaintiff in 2009 or otherwise, the plaintiff would now be in a position to cause them to sue.  And any loss suffered by the plaintiff is clearly reflective, as such loss would be made good if there is recovery by the companies. 

12.  As for the plaintiff’s argument that the judgment of Reyes J was obtained by fraud, on any view this allegation is wholly irrelevant to the determination of the judge which is on legal issues.  Any appeal from his decision is a pure matter of law.  The judge did not consider the merits of any factual defence raised by the defendants, having arrived at the conclusion that the claims are bad as a matter of law.  Whether the plaintiff is now able to establish factually any of his pleaded allegations as a result of further evidence he now relies on is irrelevant.  The plaintiff’s allegations of fraud, wilful concealment and perversion of the course of justice have no bearing whatsoever on the reasoning of the judge or on the appeal proposed to be brought.  This argument was also advanced before Master Ng in the taxation proceedings, and was rejected by her, see paras. 91 to 93 of the decision, with whose reasoning I agree.

13.  For these reasons, the plaintiff’s summons for leave to appeal out of time is dismissed.

14.  I order the plaintiff to pay the costs of the 1^st and 2^nd defendants of this application, to be taxed if not agreed.