MARK RICHARD CHARLTON SUTHERLAND v. CRB (a firm)

HCMP 2285/2019

[2023] HKCFI 960

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2285 OF 2019

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D E C I S I O N

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A.  Introduction

1.  By a Judgment and an Order dated 4 November 2022, given after substantive arguments, this Court ordered that:

(1)  8 out of 9 Bills issued by CRB be taxed subject payment of the full amount of the 1^st to 7^th Bills to CRB; and payment of 60% of the 9^th Bill to CRB and the balance into Court, all within 21 days of the Order (“Payment Terms”);

(2)  failure to comply with the Payment Terms shall bar Mr Sutherland from taxation of the relevant Bill(s) and that part of the originating summons (“OS”) shall be dismissed with costs to CRB (§6 of the Order);

(3)  Mr Sutherland do pay CRB costs, on a nisi basis, of the OS up to the hearing on 5 May 2022 to CRB, summarily assessed at HK$500,000.

2.  Before me are 2 summonses taken out by Mr Sutherland:

(1)  The Costs Summons taken out on 18 November 2022, asking for variation of the costs order nisi;

(2)  The Stay Summons taken out on 25 November 2022, asking for stay of execution of the Payment Terms pending final determination of:

(a)  his counterclaim against CRB in the Writ Action;

(b)  his ancillary relief hearing on 15 May 2023 in FCMC 9088/2018;

(c)  the Costs Summons; and

relief from the sanction imposed pursuant to §6 of the Order.

3.  Mr Sutherland’s applications are supported by his 5^th and 6^th affidavits. His evidence in reply was due on 17 January 2023, but time was extended to 26 January 2023.

4.  Beyond the due date for filing, on 22 February 2023, Mr Sutherland has filed a summons for leave to file and serve his 8^th affidavit, on the ground that he was seeking leave to appeal against the Order (I believe he meant seeking leave to appeal out of time) and to stay the taxation proceedings and Writ Action pending mediation. I have declined to give a date for hearing of that late summons since the schedule for lodging submissions had taken effect and new evidence should not be allowed at all.

5.  Both Summonses are opposed by CRB as being unmeritorious.

B.  Costs Summons

6.  Mr Sutherland’s grounds for variation of the costs order are that:

(1)  He was successful in obtaining an order to tax on all 9 bills, except the 8^th one despite having certain terms imposed.

(2)  He was successful in obtaining a stay of stage 2 of the OS, ie the taxation itself on terms that he should take out a case management summons in his counterclaim for damages in negligence against CRB in the Writ Action and that the Writ Action be disposed of.

(3)  CRB was not successful in a number of issues it pursued.

(4)  He had made an offer on 26 April 2022 to vacate the hearing of the OS if CRB was agreeable to a stay of the OS pending final determination of the Writ Action, but CRB ignored the offer.

(5)  CRB’s statement of costs was grossly excessive, unreasonable and disproportionately high.

7.  I disagree with Mr Sutherland. What he had sought was an order to tax in the OS, but he disavowed his own OS and simply wanted a stay of the OS altogether at the hearing which led to the Judgment. That was why the Court held that he was not successful in resisting the making of an order to tax (Judgment, §82).

8.  As Mr Hughes and Mr Baker, counsel for CRB, submit, CRB was the real winner under the Judgment:

(1)  CRB obtained a finding that there was a retainer by conduct (Judgment, §36), contrary to Mr Sutherland’s submission;

(2)  CRB could have recovered rates on a quantum meruit basis and its rates would have been granted by the Court absent a retainer (Judgment, §37);

(3)  The Court ruled that the 7^th to 9^th Bills were final bills (Judgment, §46); and

(4)  The Court imposed terms of payment under a strict timeframe, sought by CRB, non-compliance with which would bar taxation. (Judgment, §§81(4)(a) and 5(a)).

9.  Costs are in the discretion of the Court. Mr Sutherland has had the opportunity to object to the amount of costs to be summarily assessed. He or his lately instructed counsel have not pointed out how this Court has erred in principle in the broad brush approach when summarily assessing costs. I see no ground for varying the costs order nisi and I make it absolute.

C.  Stay Summons

10.  The application for stay is made under Order 45, rule 11, Rules of the High Court and inherent jurisdiction of the Court.

11.  Order 45, rule 11 provides that:

“Without prejudice to Order 47, rule 1, a party against whom a judgment has been given or an order made may apply to the Court for a stay of execution of the judgment or order or other relief on the ground of matters which have occurred since the date of the judgment or order, and the Court may by order grant such relief, and on such terms, as it thinks just.”

12.  The words “on the ground of matters which have occurred since the date of the judgment or order” require the applicant to invoke matters going to the validity of the judgment which, if established, might justify the court in saying that this is not a judgment which on the new material it will allow to be executed: China Citic Bank International Ltd v Durrant Simon Patrick Michael, CACV 127/2014, 21 July 2014, §29 (CA).

13.  If matters do not go to the validity of the judgment, there is no jurisdiction under Order 45, rule 11 and the application must be dismissed: Tam Ho Man v Wong Kwok Tai, HCA 4736/1985, 20 October 1986, pp 2-3, Hunter J (as he then was).

14.  Mr Sutherland’s grounds for seeking stay of execution have been set out in his 6^th affidavit:

(1)  That there ought to be a stay pending resolution of the Writ Action because the result of that Action could reduce or negate CRB’s entitlement to fees;

(2)  That there ought to be a stay pending resolution of the ancillary relief proceedings in FCMC 9098/2018 as Mr Sutherland’s assets will not be available until then;

(3)  That in any event, there is an outstanding application to vary the costs order; and

(4)  There have been new developments since the Order which the Court can take into account under Order 45, rule 11.

15.  Mr Wing So (counsel for Mr Sutherland instructed to lodge the reply submission) concedes that it is wrong in principle for the Stay Summons to be made under Order 45, rule 11. It is a right concession as none of the matters in the preceding paragraph are “new developments” since the Order was made.

16.  Ground (1) is an attempt to resurrect an argument that has been substantively decided against Mr Sutherland in the Judgment (§§76-80). It should not be allowed.

17.  Ground (2) concerns ancillary relief proceedings commenced before the Judgment. Change of its hearing date to May 2023 does not make it a new development.

18.  Mr Sutherland asserts in his 6^th affidavit that his assets are “tied up” in the matrimonial pot in the ancillary relief proceedings. There is no proof of this. Ancillary relief proceeding, in itself, would not restrain a person from discharging his legal obligations. There is no substance in this ground.

19.  Ground (3) is disposed of in the section titled “Costs Summons” above. There is no substance in this ground.

20.  Ground (4) relies on Mr Sutherland’s filing of a purported notice of appeal dated 29 December 2022 and a request to engage in mediation with CRB, which may avoid the costs of 3 sets of proceedings, ie the appeal, the taxation and the Writ Action. These matters were stated in the 8^th affidavit of Mr Sutherland, the filing of which has not been allowed by the Court.

21.  In any case, the purported notice of appeal was lodged out of time. As of this Decision, ie about 5 months since the Order, no leave to appeal out of time has yet been granted.

22.  The reply submission for Mr Sutherland mentions that there is an application for filing the notice of appeal out of time (“Appeal Summons”) and asks for a short stay to bridge the period between the reply submission and disposal of the Appeal Summons “on a case management basis and/or inherent jurisdiction”. Mr Wing So relies on the authority of Midtown Acquisitions LP v Essar Global Fund Limited [2018] EWHC 2545 (Comm).

23.  Reliance on Midtown Acquisitions is misconceived. The facts concern an application for stay of enforcement of foreign judgments and are far removed from the present case. Mr Wing So has not identified the relevant principle in that authority. Even on his own submission, the “case management stay” application in Midtown Acquisitions failed due to failure of the applicant to pursue the appeal after it was lodged (§§69-71).

24.  Mr Sutherland’s case is even worse because there is not even an appeal lodged. It is not open to him, through counsel, to ask for a stay without a proper application or notice to CRB. One cannot even assess how “short” the case management stay Mr Wing So has in mind.

25.  In respect of mediation, it is not a valid reason for staying the Order which is valid and subsisting.

26.  None of the grounds for stay call into question the validity of the Judgment or Order. Jurisdiction under Order 45, rule 11 is not established.

27.  With regard to inherent jurisdiction, it exists to prevent abuse, to preserve the dignity of the court or to facilitate the administration of justice: Credit Lyonnais v SK Global Hong Kong Limited [2003] 4 HKC 104, §3, Ma CJHC (as he then was). Mr Sutherland has not identified any ground to invoke the inherent jurisdiction of the Court.

28.  With regard to the application for granting “relief from sanction” under §6 of the Order, Mr Sutherland has not explained how Order 2, rule 5, RHC should apply.

29.  There being no valid ground in support, the application for stay of execution is dismissed.

30.  Mr Hughes asks for an order from the Court pursuant to §6 of the Order that the OS be dismissed with costs to CRB in view of Mr Sutherland’s non-compliance with the Payment Terms. Having regard to the terms of §6, I do not think a further order is necessary.

D.  Costs of the 2 Summonses

31.  The Summonses are entirely devoid of merits. I have additionally taken into account the following matters:

(1)  CRB has been vexed with the same question about staying the OS without the Payment Terms twice;

(2)  Mr Sutherland has attempted to put in his 8^th affidavit only after the timetable for lodging submission has taken effect; and the 8^th affidavit in fact did not contain new developments as he had wanted the Court to believe;

(3)  He repeated his mode of alternating between acting in person and having legal representation in midst of ongoing applications; and

(4)  He continued to file draft affidavits through Ms Janice Li, followed by formal affidavits, using the repeated excuse that he had to visit the UK on short notice for a family emergency and was in UK to deal with a family emergency. As pointed out by CRB, this explanation has been repeated across a period of over 22 months in the 1^st affirmation of Tsang Wai Yee dated 3 May 2021, the 4 affidavits of Janice Li between February 2022 and 20 January 2023, and the undated affirmation of Lee Chi Tung Christina. It is cost and time wasting to have to verify his formal affidavits against his drafts.

32.  Taking into account the litigation conduct of Mr Sutherland, this is an appropriate case for the Court to order him to bear CRB’s costs on indemnity basis and I so order. Even so, the Summonses are not complex and do not warrant the engagement of 2 counsel. I only grant certificate for one counsel.

33.  The costs are summarily assessed and allowed for both Summonses at HK$120,000.

34.  I thank Mr Hughes, Mr Baker and Mr Wing So for their assistance.