THE HONGKONG AND SHANGHAI BANKING CORPORATION LTD v. LAM CHUN HING

HCMP 997/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 997 OF 2016

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REASONS FOR JUDGMENT

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Order made on 29 June 2017

1.  On 29 June 2017, I made an order substantially in terms of the plaintiff’s (“HSBC”) draft Order:

(a)   Lifting the stay of proceedings by section 15 of the Legal Aid Ordinance, Cap 91;

(b)   Granting judgment for the principal secured by the 2 Mortgages executed by the defendant (“Lam Chun Hing”), with interest at various rates and for various periods;

(c)   Ordering vacant possession of the 2 mortgaged properties by 27 July 2017;

(d)   Ordering HSBC to redeliver vacant possession of the 2 mortgaged properties to Lam Chun Hing upon Lam Chun Hing paying the money ordered to be paid; and

(e)   Ordering the defendant to pay the costs of these proceedings on solicitors and own client basis.

2.  My reasons follow.

Relevant background facts

3.  On 21 April 2016, HSBC commenced this mortgage action by issuing the Originating Summons (“Originating Summons”) against Lam Chun Hing.  The Originating Summons contained the express statement that:

(1)   the Originating Summons was a legal document and the consequences of ignoring it might be serious; and

(2)   Lam Chun Hing should consider taking the advice of a solicitor or applying for legal aid.

4.  On 22 July 2016, Lam Chun Hing issued HCA 1918/2016 against HSBC.

5.  Acting in person, Lam Chun Hing issued a summons on 9 January 2017, returnable before the Master on 12 January 2017 asking for an Order that:

(1)   HCMP 997/2016 (“these proceedings”) be heard or tried together with HCA 1918/2016;

(2)   HSBC’s summons in these proceedings to be heard before the Master on 12 January 2017 at 2:30 pm be stayed/cancelled or postponed to another date;

(3)   Alternatively, these proceedings be stayed until after completion of trial in HCA 1918/2016. 

6.  On 12 January 2017, Master Lai disposed of the summons issued on 9 January 2017 by Lam Chun Hing by ordering that Lam Chun Hing’s summons “dated 7 (sic) January 2017 be adjourned sine dine (sic) with liberty to apply”.

7.  By Order dated 27 March 2017, Master Lai adjourned the hearing of the Originating Summons to a date to be fixed before a Judge with 3.5 hours reserved.

8.  Lam Chun Hing had not filed any affidavit evidence in these proceedings in opposition to the Originating Summons.

9.  The Originating Summons was listed for hearing before me on 15 June 2017.

Three letters by Jim & Co, Solicitors, to the Court

10.  Lam Chun Hing had all along been acting in person in these proceedings.

11.  By letter dated 9 June 2017 (“Jim & Co’s First Letter”), Jim & Co, Solicitors, wrote to the Registrar in these terms:

“ Dear Sirs,

Re: HCMP 997 of 2016

We refer to the hearing before a Master on 15^th June 2017 at 10:00 a.m. for the above action.

We write to inform that a bank petition for bankruptcy against our client Lam Chun Hing in HCB 2991/2017 so there be a stay of proceedings pending outcome of bankruptcy proceedings. We therefore request the proceedings herein be stayed pending the outcome of bankruptcy proceedings in HCB 2991/2017 and the hearing scheduled on 15^th June 2017 at 10:00 a.m. be vacated and adjourned to a later date.

Please place this letter to (sic) the learned Master for his consideration about our request for adjournment to a later date.

Thanks for your attention to this matter.”

12.  (1)   If Jim & Co had authority to act for Lam Chun Hing to apply for an adjournment, Jim & Co ought to have filed notice to act.  Jim & Co did not.

(2)   The first sentence in the second paragraph of Jim & Co’s First Letter is convoluted and ungrammatical. 

(3)   There is no automatic stay of proceedings by the mere presentation of a bankruptcy petition.  Under section 14 of the Bankruptcy Ordinance, Cap 6, the court may at any time after the presentation of a bankruptcy petition either stay any action, execution or other legal process against the property or person of the debtor or allow it to continue on such terms as it may think just.  Jim & Co ought to have known better.

(4)   Moreover, HSBC claims to be a secured creditor.

13.  Jim & Co’s First Letter came to my knowledge.  By letter dated 9 June 2017, my Clerk replied with my direction as follows:

“ Please make a formal inter-parte application”.

14.  Jim & Co did not make any formal inter parte application.  Nor did Jim & Co file any notice to act.

15.  Instead, Jim & Co wrote their letter dated 12 June 2017 (“Jim & Co’s Second Letter”) to my Clerk in these terms:

“ Dear Sirs,

Re: HCMP 997 of 2016 – Lam Chun Hing

We refer to the hearing before Deputy Judge Kwok, SC on 15^th June 2017 at 10:00 a.m.

We learn that Mr Lam Chun Hing applied for legal aid so that there will be automatic stay of proceedings under the Legal Aid Ordinance for 42 days. In the circumstances, to save costs and the court’s time, we would seek directions to vacate the hearing on 15^th June 2017 and adjourned (sic) to a later date pending the outcome of his application for legal aid.

We shall be grateful if you could place this letter to (sic) learned DEPUTY JUDGE for his consideration about adjournment to a later date.”

16.  By letter dated 12 June 2017, my Clerk replied with my direction as follows:

“ Please make a formal inter-parte application”.

17.  Jim & Co did not make any formal inter parte application.  Nor did Jim & Co file any notice to act.

18.  Instead, Jim & Co wrote their letter dated 13 June 2017 (“Jim & Co’s Third Letter”) to my Clerk in these terms:

“ Dear Sirs,

Re: HCMP 997 of 2016 – Lam Chun Hing

We refer to the hearing before Deputy Judge Kwok, SC on 15^th June 2017 at 10:00 a.m.

We act for Lam Chun Hing on (sic) another court proceeding but we learn that he had applied for legal aid (Legal Aid Ref No: LA/MLT 17046/2017). We are only instructed by him to inform you that there will be automatic stay of proceedings under the Legal Aid Ordinance for 42 days. In the circumstances, to save costs and the court’s time, he would seek directions to vacate the hearing on 15^th June 2017 and adjourned (sic) to a later date pending the outcome of his application for legal aid.

We shall be grateful if you could place this letter to (sic) learned DEPUTY JUDGE for his consideration about adjournment to a later date.”

19.  Jim & Co’s Third Letter crossed with Mayer-Brown JSM’s letter dated 13 June 2017 stating that:

“ Dear Sir/Madam

HCMP 997/2016

…

Under Section 15 of the Legal Aid Ordinance (Cap 91), there would be automatic stay of the proceedings only upon the Director of Legal Aid filing into Court a memorandum of notification of the legal aid application. Up to the date of his letter, we are not aware that such memorandum has been filed into court. In the event that a memorandum of notification of the legal aid application by the Defendant is filed by the Director of Legal Aid, our client shall consider taking out a summons to be heard on 15 June 2017 to uplift the automatic stay. We take the view that any application by the Defendant for legal aid only a few days before the substantive hearing is no more than a delaying tactic and may well amount to an abuse of court process.

We are also surprised that Messrs.  Jim & Co, solicitors repeatedly wrote to the court on behalf of the Defendant while it has not filed a Notice to Act and has separately confirmed with us that it has no instructions to act for the Defendant in these proceedings.  We humbly ask the court to disregard its letters until it files a Notice to Act to the Defendant in these proceedings.”

The hearing on 15 June 2017

20.  At the hearing on 15 June 2017, Mr Jason Lee, instructed by Mayer-Brown JSM, appeared for the plaintiff.  Lam Chun Hing was absent and unrepresented.  Mr Jason Lee satisfied me that HSBC was entitled to judgment and I made an order in terms of the Originating Summons.

Lam Chun Hing’s application for legal aid

21.  Unbeknown to me on 15 June 2017, the Director of Legal Aid filed on 14 June 2017 in court a memorandum of notification of the legal aid application by Lam Chun Hing. 

22.  Section 15 of the Legal Aid Ordinance, Cap 91, provides that:

“ (2) Where an action has been commenced … and any party … makes an application for legal aid, the Director shall, as soon as practicable after the application is made, notify the other party or each of the other parties, and file in the court in which the action is commenced … as the case may be, a memorandum of such notification.”

“ (4) Where any memorandum is so filed, then, unless otherwise ordered by the court in which the memorandum is filed, all proceedings in the action … shall, by virtue of this section, be stayed for such period, being not less than 14 days, as may be prescribed, and during such period (unless otherwise ordered by any such court) time fixed by or under any law or otherwise for the doing of any act or the taking of any step in the proceedings shall not run.”.

23.  Regulation 7A of the Legal Aid Regulations, Cap 91A provides that:

“ The period during which any proceedings are stayed by section 15 of the Ordinance shall be 42 days.”

Mayer Brown JSM’s letter dated 21 June 2017

24.  After the hearing on 15 June 2017, Mayer-Brown JSM wrote their letter dated 21 June 2017 stating that subsequent to the hearing on 15 June 2017, they received a formal Notice of Application for Legal Aid dated 13 June 2017 and that upon a search of the Court file on 16 June 2017, they discovered a Memorandum of an Application for Legal Aid was filed into court by the Director of Legal Aid on 14 June 2017.  They invited me to fix a 30-minute hearing to hear their application to uplift the automatic stay, citing my judgment in Woo Ming Han Juliana v Woo Koo Ping HCA 2558/2015 (30 November 2015).

25.  By letter dated 23 June 2017, my Clerk replied with my direction as follows:

“ Please issue a summons to fix 30 min hearing to hear the application to uplift the automatic stay on 29 June 2017 at 9:30 a.m. before Deputy High Court Judge Kwok SC”.

The hearing on 29 June 2017

26.  Mayer-Brown JSM issued the summons as directed.

27.  They also invited me to treat the hearing on 29 June 2017 as a substantive hearing of the Originating Summons (to be heard in Open Court) and to make a fresh order in respect of the Originating Summons.

28.  By a Memorandum of Notification that a Party has been Refused Legal Aid dated 28 June 2017, the Director of Legal Aid gave notice that he had refused Lam Chun Hing legal aid.

29.  Lam Chun Hing appeared in person at the hearing on 29 June 2017.

30.  As the Director of Legal Aid had completed consideration of Lam Chun Hing’s application for legal aid and had refused his application, the stay had served its purpose and I uplifted the stay.

31.  As Lam Chun Hing had no defence to HSBC’s claim, I made the order referred to in §1 above.  Lam Chun Hing was given 28 days to vacate the mortgaged properties.  This should put an end to his delaying tactics.