PROGETTO JEWELLERY CO LTD v. LAU CHIU YING AND ANOTHER

CAMP 61/2020

[2021] HKCA 604

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 61OF 2020

(ON AN INTENDED APPEAL FROM HCA 2548/2014)

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(by original action)

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JUDGMENT

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Hon Lam VP (giving the Judgment of the Court):

Introduction

1.  There are three applications in these proceedings before this Court, all issued by the 1^st Defendant, Ms Lau Chiu Ying (also known as “Joy” in the court below) by way of summonses filed on 23 June 2020, 3 July 2020 and 21 October 2020[1].  In these respective applications, Joy seeks essentially: (1) an extension of time to appeal against the judgment given by Deputy High Court Judge MK Liu (“the Judge”) on 22 January 2020 (“the Judgment”), (2) leave to appeal the order for costs made by the Judge on 24 June 2020 when he dismissed her application for extension of time to appeal, and (3) leave to appeal the Judge’s order made on 3 August 2020 in which, amongst other things, he refused a stay of execution.

2.  The factual background was set out in the Judgment ([2020] HKCFI 209) at [2] – [14].  In the Judgment, the Judge found for the plaintiff, Progetto Jewellery Company Limited (“PJ”) on most of its claims and dismissed the counterclaim by Joy Design Company Limited (“JD”).  The Judge also ordered Joy and JD to pay 98% of PJ’s costs of the proceedings.

3.  Subsequently, on 21 May 2020 Joy issued a summons applying for an extension of time to appeal the Judgment.  By a decision of 12 June 2020 ([2020] HKCFI 1196), the Judge dismissed that summons and ordered that the costs of that summons be paid by Joy to PJ.  By order dated 24 June 2020, the Judge assessed the costs of the 21 May 2020 summons at HK$39,000.

4.  On 7 July 2020, Joy issued a summons applying for stay of execution of the Judgment pending determination of her application to this Court for extension of time to appeal the Judgment.  On 3 August 2020, the Judge dismissed that summons and ordered that the costs of that summons be paid by Joy to PJ assessed at HK$38,000, with reasons for decision issued on 6 August 2020 ([2020] HKCFI 1835).

5.  (a) By another summons of 12 August 2020, Joy applied to the Judge for leave to appeal against the refusal of stay and the order for costs in that decision.  (b) By a further summons of 17 August 2020, she applied to the Judge for leave to appeal against the costs order of 24 June 2020.  The Judge dismissed both summonses on 9 October 2020 ([2020] HKCFI 2179), with costs to PJ in the amounts of HK$5,800 and HK$6,380 for the 12 August 2020 and 17 August 2020 summonses respectively.

Application for extension of time to appeal the Judgment

6.  The Court’s approach in considering an application to extend time to appeal is well settled.  In Tang Chai On v Tang Sing Ki, [2016] 5 HKLRD 104, this Court held at [9] (citing Lee Chick Choi v Best Spirits Co Ltd, HCMP 371/2015, [2015] HKEC 899 (CA) at [19]):

“ The legal principles regarding an application to extend time for an appeal are well established. In the exercise of its discretion, the court will take into account the length of the delay, the reasons for the delay, the chances of the appeal succeeding if an extension of time is granted, and the degree of prejudice to the other party of the application is granted. Where the delay is substantial and not wholly excusable, the applicant must show a real prospect of success on the merits, not merely a reasonable prospect of success.”

7.  Pursuant to Order 59, rule 4(1)(c) of the Rules of the High Court, (Cap 4A), the time limit for serving a Notice of Appeal is 28 days from the date of judgment.  In the present case, the deadline for Joy to serve a Notice of Appeal expired on 19 February 2020.  As she did not do so, she needed an extension of time before she could bring an appeal.

8.  Joy did not apply for an extension of time to appeal until 21 May 2020, i.e. more than 3 months late. The delay is substantial.  We reject her suggestion that her appeal period did not expire until 19 May 2020 by reference to Order 3 Rule 4.  As explained below, the time limit for appeal is reckoned by reference to the service of a notice of appeal which is not an act to be carried out at the court.  Order 3 Rule 4 has no relevance in the present context. 

9.  Joy’s explanations for the delay are set out in Appendix 1 to her affirmation of 22 June 2020, in which she deposed that:

(a)  she received an electronic copy of the Judgment from her then solicitors on 22 January 2020;

(b)  she ceased to be legally represented as of 24 January 2020 (the eve before the Chinese New Year public holidays);

(c)  she was unable to commence an appeal within 28 days after the Judgment because the court was closed from 29 January 2020 to 6 March 2020 and from 23 March 2020 to 5 May 2020 due to the courts’ General Adjourned Period (“GAP”) in light of the COVID-19 pandemic.  Though she could have commenced an appeal by serving a Notice of Appeal within 28 days after the Judgment without filing the Notice of Appeal until the court registry reopened, she would not have been able to comply with the requirement to submit the Notice of Appeal to the court within 7 days of serving it;

(d)  she was unable to purchase face masks and so she stayed home as much as possible to avoid infection with COVID-19; and

(e)  she did not receive a sealed copy of the Judgment until 15 May 2020, and she thought she needed to have a sealed copy in order to appeal.

10.  The GAP did not preclude Joy from serving her notice of appeal within time.  The closure of the registry had no effect on the running of time as far as service of notice of appeal is concerned.  By reason of Order 59 Rule 4(1), the time limit for bringing an appeal is explicitly reckoned by reference to the “service” of notice of appeal not the lodging of the document with the Registrar.  Further, as provided under Order 59 Rule 5(5)(1)(b), the notice of appeal so lodged should be endorsed with a certificate of service.  Hence, service of the notice of appeal must have been taken place before the same can be lodged.  Pursuant to Order 59 rule 3 an appeal is actually commenced by serving a Notice of Appeal on the respondent(s), not by lodging or “filing” it at the court, see Law Bing Kee v Person(s) in Occupation of RP, HCMP 672/2013 (CA), 9 May 2013, at [10] – [14].

11.  Regarding the compliance with the obligation of lodging documents under Order 59 Rule 5, they have no effect on the commencement of the appeal, see Keen Lloyd Holdings Ltd v Commissioner of Customs and Excise [2015] 2 HKLRD 909; Chan Tsui Yan v Social Workers Registration Board [2018] HKCA 333.  If the notice of appeal is served in time, the court would be generous in extending time to comply with the obligation under Rule 5 if the sealed judgment is not yet available.

12.  In any event, Joy could have lodged the notice of appeal during the window between 9 and 20 March 2020 but she did not do so.

13.  As for Joy’s assertion that she was unable to purchase face masks, we are unable to accept that as a reasonable excuse for the long delay.

14.  In our view, the delay on the part of Joy to serve the notice of appeal is inexcusable.

15.  Since the delay is both substantial and inexcusable, she must demonstrate a real prospect of success before an extension of time could be granted, see Secretary for Justice v Hong Kong & Yaumati Ferry Co Ltd [2001] 1 HKC 125; Lee Carol v Tong Hung Wai Tommy [2020] HKCA 325.

16.  In assessing the prospect of success on the merits, the Court will bear in mind the following principles:

(a)  An appeal is not a second trial of the case.  What the appellate court has to consider is mainly the evidence at trial, and whether the decision of the trial judge is right or wrong: Tsang Tak Wai v Building Authority [2018] 1 HKLRD 137 at [7]; and

(b)  Accordingly, an appeal is not the occasion for regurgitating arguments advanced and rejected by the judge or for running arguments which could and should have been raised but were not raised before the judge: Ng Shek Wai v Independent Commission Against Corruption [2019] 2 HKLRD 586 at [21(a)].

17.  Joy did not set out her proposed grounds of appeal in the summons of 23 June 2020.  Though there is a document called 「上訴陳述書」produced as Appendix 2 (“the Appendix 2”) to her affirmation of 22 June 2020, this is not a proper draft notice of appeal since its contents are in the nature of submissions and evidence instead of setting out grounds of appeal in a concise and focused manner as required under Order 59 Rule 3(2) and paragraphs 20 to 22 of Practice Direction 4.1. 

18.  Much of Joy’s arguments stated in the Appendix 2 are assertions or her own subjective view of the evidence without reference to any objective admissible evidence.  Her arguments were also advanced on the basis that her evidence should be accepted.  As she did not produce the relevant transcript of the trial to support her reference to the evidence, we cannot act upon what she asserted to be the oral evidence at the trial.

19.  She also alluded to evidence that was not admitted as evidence below (because it related to arguments not raised in the pleadings) and rehashed points that the Judge ruled as not being open to her due to the way in which the case had been conducted on her behalf at the trial and the agreed position in the Amended Agreed Facts and Agreed CCTV Facts.

20.  The merits of the intended appeal were analyzed by the Judge at [5] of his reasons for decision of 6 August 2020 for refusal of stay.  We agree with the Judge’s observations.

21.  The criticism of Joy about the independence of the Judge is wholly unfounded.  She alleged that the Judge had copied from the Plaintiff’s closing submissions.  However, the paragraphs in the judgment which she referred to specifically (paragraphs 32 to 33 and 35 to 36) were relatively insignificant parts in the context of the whole judgment (which is a document of 93 pages with 134 paragraphs).  Those paragraphs only summarized parts of the evidence which were rather neutral.  The Judge’s analysis of the evidence and assessment is to be found in other paragraphs.  It is clear to us (and indeed it should be clear to any reasonable reader of the judgment) that the Judge had exercised independent judgment and assessed the evidence meticulously. 

22.  We also do not see any basis for suggesting that the Judge was biased.  Without production of the transcript and setting out the background and context to the case management decisions on admission of evidence, Joy has not discharged the high threshold for showing that this Court should come to the view that such exercise of discretion was plainly wrong when her former lawyers did not demur from such decisions.  Neither can she rely on her own assertions and views about such case management decisions as evidence of bias on the part of the Judge. 

23.  In reading the judgment, one must bear in mind the observation of Lord Hoffmann in Biogen Inc v Medeva Plc [1997] RPC 1 at p.45:

“ The need for appellate caution in reversing the trial judge's evaluation of the facts is based upon much more solid grounds than professional courtesy. It is because specific findings of fact, even by the most meticulous judge, are inherently an incomplete statement of the impression which was made upon him by the primary evidence. His expressed findings are always surrounded by a penumbra of imprecision as to emphasis, relative weight, minor qualification and nuance ... of which time and language do not permit exact expression, but which may play an important part in the judge's overall evaluation.”

24.  As the courts have often stated, the assessment of evidence and credibility of witnesses were primarily the task of a trial judge.  The Court of Appeal would not re-assess the evidence afresh on its own unless an appellant can show that there were palpable errors in the assessment or the trial judge had gone plainly wrong in his assessment: see Ting Kwok Keung v Tam Dick Yuen [2002] 3 HKLRD 1; Singh Harjit v Determination Business Ltd CACV 68/2015, 24 November 2015; China Gold Finance Ltd v CIL Holdings Ltd CACV 11/2015, 27 November 2015.  In our judgment, Joy had failed to put forward any reasonably arguable ground for contending that the Judge had made any palpable error or was plainly wrong.

25.  In her statement of 22 October 2020 in support of her application, Joy said she disagreed with the way in which her counsel conducted the case at the trial and she alleged that her lawyers had misled her.  She said she did not have a fair trial due to the mishandling of the case by her lawyers.

26.  In Chong Ching Yuen v HKSAR (2004) 7 HKCFAR 126 at 143, the Court of Final Appeal quoted with approval the judgment of Gleeson CJ in R v Birks (1990) 48 A Crim R 385:

“ As a general rule, a party is bound by the conduct of his or her counsel, and counsel have a wide discretion as to the manner in which proceedings are conducted. Decisions as to ... what lines of argument to pursue and what points to abandon, are all matters within the discretion of counsel and frequently involve difficult problems of judgment. ...”

27.  There is an exception in criminal cases when flagrant incompetence of counsel which has the effect of depriving a party of a fair trial is established.  We are not aware of any authority applying the same principle in private civil disputes.  Generally, a litigant in a civil litigation is confined to remedies against her own lawyers if she has lost a case due to mishandling by her lawyers.

28.  In any event, even assuming such exception can be relied upon in civil cases, it must be shown by cogent evidence that counsel had in fact been guilty of such flagrant incompetence.  Counsel’s exercise of forensic judgment in adopting a particular course during litigation which fails to achieve the expected outcome is not sufficient to make out a case of flagrant incompetence.  As held by the Court of Final Appeal in Chong Ching Yuen v HKSAR, supra, at [49],

“ The expression ‘flagrant incompetence’ rightly underlines an appellant’s need to show much more than a mistake, an error of judgment, or a decision to follow one course when in hindsight another would have been preferable. But it should not deflect attention from the most critical point, namely given that there was a significant error of some kind, what will be decisive is the effect of the error on the trial.”

29.  Having considered the matters set out in Joy’s statement of 22 October 2020, we do not see any reasonably arguable case of flagrant incompetence being made out by Joy against her counsel.

30.  In our judgment, Joy has not been able to persuade us that the Judge’s assessment that she is not a truthful or reliable witness is plainly wrong.  In her grounds of appeal and her statement, she did not substantially engage with or address the Judge’s reasons for finding that she was not truthful or reliable.

31.  Regarding the Judge’s findings on the critical events of 27 and 28 January 2014, Joy failed to address the inconsistencies between her oral testimony at trial, her written witness statement and the CCTV recording that were set out at [54] – [56] of the Judgment.  The CCTV recording did not show she returned the unsold items to the Safe in Ruby’s presence as alleged in her witness statement.

32.  In our view, there was ample evidence before the Judge to support his assessment of the witnesses’ credibility and his finding that Joy was not a reliable witness.

33.  It was not disputed that Joy had taken out items from the Safe for the Italian exhibition.  In the circumstances, Joy bore the evidential burden to show that all unsold items had been returned.  Joy did not discharge such burden as her evidence on returning the items on 27 or 28 January 2014 had been rejected.  The Judge was therefore entitled to make the finding that Joy had not returned all the unsold items to the Safe.  In view of such finding, it matters not that Ruth also had access to the Safe in February 2014.  Ruth could not have taken away items which Joy had not returned to the Safe. 

34.  For these reasons, we do not see any real prospect of success in the intended appeal.  Accordingly, this application for extension of time to appeal the Judgment of 22 January 2020 is dismissed.

Application(s) for leave to appeal against costs orders

35.  Joy’s summonses of 3 July 2020 and 21 October 2020[2] sought leave to appeal against the Judge’s costs order of 24 June 2020. 

36.  The threshold for reversing discretionary decisions on costs, as in the case at bar, is high.  As this Court pointed out at [34] in Poon Ching Man v Lam Hoi Pun, [2016] 3 HKLRD 815:

“ 34. This court has stressed repeatedly that costs is very much a matter of discretion for the trial judge and the Court of Appeal would be very circumspect in intervening with such a decision with high discretionary content: see Ho Shu Kwong v Chiang Chun Yuan [2002] 3 HKLRD 419; IO of King Yip Factory Building v Kwun Wah Flower and Plant Manufactory Ltd CACV 128/2003, 13 November 2003; Hung Fung Enterprises Holdings Ltd v Agricultural Bank of China [2012] 3 HKLRD 679; Bonnie Blair Ltd v Witmore Ltd HCMP 1546/2015, 7 August 2015; Chan Shun Kei v Hong Kong Construction (HK) Ltd CACV 192/2014, 7 March 2016. In the last case, the court said at [22]:

‘  22.     It must be stated at the outset that this court should acknowledge that costs is very much a matter of discretion of the judge and we should be circumspect in interfering with the same.  The established approach is that this court will only interfere when it is satisfied that the decision of the judge is either wrong in principle or plainly wrong, see Ho Shu Kwong v Chiang Chun Yuan [2002] 3 HKLRD 419.  The rationale for this approach was explained by Woo JA (as he then was) in Ho Shu Kwong.  The trial judge is the best person to exercise the discretion on costs because he is most familiar with the conduct of the case at the trial and the impact of the success and failure on each issue canvassed before him.  In a way it is like an appeal against findings of fact.  As explained in numerous judgments (see e.g.  China Gold Finance Ltd v CIL Holdings Ltd CACV 11 of 2015, 27 November 2015), an appellate court is institutionally disadvantaged from re-assessing a decision of this nature as if it is hearing the matter in the first instance.  Thus, this court should examine whether a primary judge committed any palpable error in the exercise of the discretion on costs.  In the absence of such an error, the mere fact that the appellate judges might have exercised the discretion in a different manner is not a sufficient ground to warrant interference with the decision of the primary judge.’ ”

37.  In her affirmation of 21 October 2020 and written statement dated 22 October 2020 in support of her summons of 21 October 2020 Joy complained that the costs claimed by PJ were unnecessary, unreasonable, inaccurate, excessive and involved duplication of work and overqualified personnel for the level of complexity of the work. However, Joy did not identify any specific error or unreasonableness in the Judge’s assessments of costs.

38.  As noted above in Poon Ching Man, supra, costs are very much a matter of discretion, and this Court will only interfere when it is satisfied that the decision of the first instance judge is either wrong in principle or plainly wrong.  In other words, in the absence of any palpable error in the exercise of discretion on costs, the mere fact that appellate judges might have exercised the discretion differently is not sufficient to interfere with the decision of the judge below.

39.  In our judgment, there was no palpable error by the Judge in the award of costs under the order of 24 June 2020 and its quantum.  The summonses of 3 July 2020 and 21 October 2020 concerning that costs order are dismissed.

Stay of execution

40.  Given that we refuse to grant extension of time to Joy to appeal, there is no basis for granting any stay of execution of the Judgment.  The summons of 21 October 2020 in respect of the refusal of stay is dismissed accordingly.

Disposition

41.  As there is no prospect of success in the intended appeal, we dismiss Joy’s summonses of 23 June 2020, 3 July 2020 and 21 October 2020.  We shall also order Joy to pay PJ’s costs of these summonses.

42.  As for the amounts of PJ’s costs, PJ claims $39,165, $1,740, $9,220 and $24,114 for its costs for the summonses.  Since there is only one set of proceedings, we would do a global assessment for all the summonses.  We summarily assess PJ’s costs for all the summonses at $65,000.

43.  As the applications of Joy are totally without merit, we also order pursuant to Order 59 rule 2A(8) that no party may request this determination be reconsidered at an oral hearing inter partes.

44.  Since this judgment is written in English and Joy acts in person, should she need assistance concerning the interpretation of this judgment, she can make an appointment with the clerk of Lam V-P to arrange for her to come to the High Court Building for an oral interpretation of the same by a court interpreter.