HAU KWAI CHOI AND ANOTHER v. HAU WAI KEUNG

DCCJ4285/2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 4285 OF 2012

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REASONS FOR DECISION

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Introduction

1.  On 23 April 2014, I dismiss the defendant’s application for leave to file and serve witness statements of Hau Wai Kin and Kuk Kong Sang, to amend the Amended Defence and Counterclaim and to adjourn the trial of the present action (“the Trial”) commencing from 23 April 2014 with 3 days reserved by way of summons dated 22 April 2014 (“the Decision”) for the reasons set out in the Reasons for Decision dated 24 April 2014 (“the Reasons for Decision”).

2.  Right after the making of the Decision, the defendant’s counsel applies for leave to appeal against the Decision to the Court of Appeal.

3.  After having heard counsel’s submissions, I dismiss the defendant’s application for leave to appeal to the Court of Appeal.  I shall set out my reasons below.   

Appeal against case management decision

4.  In making the application for leave to appeal to the Court of Appeal, the defendant has not identified the relevant provision or submitted on the applicable test.

5.  Section 63(1) of the District Court Ordinance (Cap 336) (“the DCO”) provides that an appeal can, with leave of a judge or the Court of Appeal, be made to the Court of Appeal from every judgment, order or decision of a judge in any civil cause or matter. 

6.  Leave to appeal shall not be granted unless the judge hearing the application for leave is satisfied that (a) the appeal has a reasonable prospect of success; or (b) there is some other reason in the interests of justice why the appeal should be heard: section 63A(2) of the DCO.

7.  The test for granting leave to appeal under section 63A(2) of the DCO was explained by Fok JA in KNM v HTF, HCMP 288/2011 (unreported, judgment dated 7 September 2011):-

“8. Leave to appeal shall not be granted under section 63A of the District Court Ordinance unless this court is satisfied that the appeal has a reasonable prospect of success or there is some other reason in the interests of justice that the appeal should be heard.

9. The relevant test of whether an appeal has a reasonable prospect of success under section 63A is whether the applicant for leave can show that he has an arguable case with reasonable chances of success on appeal. A reasonable prospect of success therefore means an appeal with prospects that are more than “fanciful” but which do not need to be shown to be “probable”.

10. Where an application for leave to appeal has been refused by the Judge below, a further application for leave may be made to this court within 14 days of the date of refusal: RDC Order 58 rule 2(4A)”.

8.  I bear in mind that it is well established that an appellate court should not interfere with the exercise of a judge’s discretion unless it is satisfied that the judge has erred in law or in principle, or if she has taken into account some matter which she should not have taken into account, or has left out of account some matter which she should have taken into account, or if the decision was so plainly wrong that it must have been reached by a faulty assessment of the weight of the different factors which have to be taken into account: Tai Fook Futures Ltd v Cheung Moon Hoi, CACV 103/2005 (unreported, judgment dated 23 October 2006) perYuen JA at paragraph 15; Carlos Manuel Kwong v Lo Kam Wing & Others, CACV 128/2005 (unreported, judgment dated 3 November 2005) per Yuen JA at paragraph 28.

9.  When a matter of case management comes before the Court of Appeal, there is a very high hurdle for those seeking to challenge the order to succeed on appeal. Rogers VP in Lee Tak Yee v Chen Park Kuen & Others [2011] 1 HKLRD 401 held at 403D:-

“Now that is a matter of case management and, of course, orders which are made in respect of case management are in their nature provisional. It is open to the judge on a later occasion to make further orders and to give further directions as to the proper progress of the action. When a matter of case management comes before the Court of Appeal, it is a very high hurdle for those seeking to challenge an order made by a judge below to succeed on an appeal. The Court of Appeal is not the court which will be hearing the case; it is the judge below who will be hearing the case. It is the responsibility of the judge below to order affairs and to order the way in which the case is going to be conducted in the manner which appears best suited to the judge to come to a proper and fair judgment in the matter. The judge below cannot carry out that task if the Court of Appeal is going to direct this, that and the other as to how issues are going to be decided, what issues should be decided first and in what order matters are going to be taken. Those were essentially matters for the judge to decide. Only if the judge has gone clearly wrong and made orders which will clearly involve either an injustice or an inability for the trial court to carry out its task will the Court of Appeal interfere in matters of case management of this sort” (emphasis added).

10.  Case management decisions are only subject to appeal in rare circumstances. Kwan JA in Wong Kar Gee Mimi v Severn Villa Ltd [2012] 1 HKLRD 887 confirmed this at paragraph 31:-

“It must also be borne in mind that the orders made by the Judge in the intended appeal are case management decisions in the exercise of the discretion of the Trial Judge. Case management decisions are only subject to appeal in rare circumstances. The appellant faces a ‘very high hurdle’ and must show that the Judge ‘has gone clearly wrong and made orders which will clearly involve an injustice or an inability for the trial court to carry out its task’, or if the Judge ‘erred in principle or the order was irrational having regard to the issues that had to be resolved’. It need hardly be emphasized that generally, an appellate court will not interfere with a judge’s exercise of discretion unless the Judge has misunderstood the law or the evidence or the exercise of his discretion was plainly wrong such that it was outside the generous ambit within which a reasonable disagreement is possible”.

11.  The defendant’s counsel submits that I have not given sufficient consideration to the circumstances leading to the defendant’s application for leave to file and serve the witness statement of Hau Wai Kin and the witness statement of Kuk Kong Sang and to amend the Amended Defence and Counterclaim.  I disagree.  With respect to my reasons for the Decision, I have set them out in the Reasons for Decision.

12.  I am not satisfied that the defendant’s appeal has reasonable prospect of success.  Neither has the defendant shown any other reason in the interests of justice that the appeal should be heard.

13.  I accordingly refuse the defendant leave to appeal.

Stay

14.  In view of my decision above, the defendant’s counsel forthwith applies to adjourn the Trial pending the Defendant’s application to the Court of Appeal for leave to appeal.  I ascertain from him whether he means to apply for stay by that.

15.  As a result of the Decision, the defendant is not allowed to file and serve the witness statement of Hau Wai Kin and the witness statement of Kuk Kong Sang and to amend the Amended Defence and Counterclaim and the Trial shall immediately proceed as scheduled.  Pursuant to Order 58 rule 3 of the RDC, an appeal under the order should not operate as a stay of the proceedings in which the appeal is brought except so far as the court may otherwise direct.  In the event that the application for stay pending application to the Court of Appeal for leave to appeal is acceded, it would effectively mean that the Trial has to be adjourned.

16.  Ma J (as he then was) set out in Star Play Development Ltd v Bess Fashion Management Co Ltd [2007] 5 HKC 84 at paragraphs 6 to 10 as follows:-

(1)   It is in the court’s discretion whether or not to grant a stay.  A stay of execution will not be ordered unless the defendant can justify a stay, and the practice of the court is that justification can be demonstrated only if good reasons exist;

(2)   Good reason can exist in a variety of forms.  It will be wrong to set out any exhaustive definition of what would constitute good reasons, but, commonly, reference is made to factors such as merits of the appeal and whether the appeal will be rendered nugatory are matters which may go to whether good reasons exist;

(3)   The existence of an arguable appeal (that is, one with reasonable prospects of success) is the minimum requirement before a court would even consider granting a stay.  However exceptional the circumstances may be otherwise justifying a stay of execution, if the court is not convinced that there exist arguable grounds of appeal, no stay will be granted.

(4)   It is impractical and undesirable for the court to go deeply into the merits and strengths of an appeal but it must form a preliminary view of these aspects.  Where there is only an arguable appeal, then the appellant will have to provide additional reasons for a stay, for example that without a stay the appeal would be rendered nugatory.  Without such additional reasons, strong grounds of appeal, or a strong likelihood of success would be required;

(5)   In determining the question whether or not an appeal would be rendered nugatory, the court must first have regard to the nature of the order that is the subject matter of the appeal;

(6)   Whatever the nature of the order or judgment appealed from, the court will still require evidence as to why an appeal will be rendered nugatory in the event of a stay not being granted.  The requisite quality of the evidence will, of course, depend on the nature of the order or judgment appealed against; and

(7)   The court must not at any stage forget the position of the successful party.  It is always relevant to consider the prejudice that would be caused to the successful party (the respondent in the appeal) in the event a stay is granted and if necessary, to impose conditions so as to minimize the prejudice caused to him.  A fortiori, the court must consider any contention that the appeal would be rendered nugatory to him (in the event the appeal is dismissed) should a stay of execution be imposed.

17.  The defendant’s counsel submits that the appeal would be rendered nugatory if the Trial is allowed to proceed.  In the event that the defendant succeeds the appeal, he would have two more witnesses, namely, Hau Wai Kin and Kuk Kong sang, to give evidence for him at the Trial and the defendant would be able to rely on a new cause of action being the time bar argument under the Limitation Ordinance.  In the premises, the Trial would be quite different from what it is now.  But all these would serve no useful purpose if no stay is granted and the Trial is not adjourned.

18.  I see force in the argument.  But existence of an arguable appeal (that is, one with reasonable prospects of success) is the minimum requirement before a court would even consider granting a stay.  I have stated my view why the appeal does not have reasonable prospect of success above.  On the other hand, the defendant’s counsel stresses that the defendant should not be faulted for the delay in taking out the application as the stance of Hau Wai Kin is beyond his control.  For the purpose of stay, the defendant’s argument in respect of the witness statement of Hau Wai Kin is not to be dismissed as being “fanciful” right away.

19.  On the bases above, I accede, albeit with reluctance, to the defendant’s request to stay and to adjourn the Trial pending his application to the Court of Appeal for leave to appeal with liberty to restore.

20.  In the interest of the plaintiffs, I impose as a condition the undertaking that the defendant shall prosecute the application for leave to appeal expeditiously: Igal Dafni v CMA CGM SA, HCA 1185/2008 and 1429/2012 (unreported, judgment dated 4 April 2014).

21.  Under Order 58 rule 2(4A) of the RDC, after the judge refuses an application for leave to appeal made under rule 2(4) of the same Order, a further application for leave may be made to the Court of Appeal within 14 days from the date of refusal.

22.  In the event that the defendant does not proceed to apply to the Court of Appeal for leave to appeal within the 14-day period, the Plaintiffs shall forthwith take step to restore the Trial.

Conclusion

23.  In the premises, I dismiss the defendant’s application for leave to appeal to the Court of Appeal with costs to the plaintiffs.  The Trial shall be adjourned with liberty to restore.  Cost of the application for stay and adjournment be reserved for argument.