TANG SIU NAM v. TANG CHI MAN

DCMP 886 / 2015

[2019] HKDC 1099

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 886 OF 2015

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REASONS FOR DECISION

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Introduction

1.  At a substantive hearing on 18 April 2019 (“the Hearing”), I heard an application, made against the Plaintiff (“P”) by way of an Inter Partes Summons (“the Summons”) taken out by the Defendant (“D”) on 22 March 2019, and made the following orders: -

(1) This action be dismissed for want of prosecution;

(2) The costs of this action, including the costs of the Hearing and all costs previously reserved, be paid by P to D on full indemnity basis, to be taxed if not agreed; and

(3) D’s own costs be taxed in accordance with the Legal Aid Regulations.

(Collectively, “the Decision”)

2.  I indicated at the Hearing that I would hand down my reasons for the Decision in writing, which I hereby do.

The Background

3.  P was D’s father.  On 20 February 2001 (date of the relevant sale and purchase agreement), P and D bought the Property as joint tenants. They completed that transaction on 24 December 2001 and registered their joint ownership on 17 January 2002.

4.  On 31 March 2015, P issued an Originating Summons (“the OS”), asking for the compulsory sale of the Property pursuant to Section 6 of the Partition Ordinance (Cap 352).  P did not file or serve his Affirmation in Support until 12 August 2015.  More importantly, P did not do anything after that.

5.  At all material times, P was represented by a firm of solicitors called George Chan & Co (陳浩基律師行) (“GCC”). On 15 August 2017, the Council of the Law Society of Hong Kong passed a resolution pursuant to Section 26A(1)(c) of the Legal Practitioners Ordinance (Cap 159) (“the LPO”) to intervene in the practice of GCC, and to appoint another firm of solicitors called Chui & Lau (“C&L”) to act as its intervention agent.  On 17 August 2017, the Law Society of Hong Kong informed its members of the aforesaid intervention by Law Society Circular 17-675 (COM).

6.  At all materials times, D was on legal aid.  By September 2017 D’s solicitor (on assignment by the Director of Legal Aid) was Ms Kate Li (“Ms Li”) of Raymond Siu & Lawyers (“RSL”).  On 28 September 2017, no doubt because of the aforesaid Law Society Circular, RSL wrote to C&L to make inquiries.  C&L wrote back on 29 September 2017 and said: -

“… Unfortunately, the file is not among the files seized by us from the Firm. In the circumstances, we are not in a position to assist in the matter.”

7.  After some further correspondence, D eventually took out the Summons, and obtained an order for its substituted service.

8.  On 17 April 2019 (i.e. the day before the Hearing), D filed an affirmation to inform this Court that on or about 13 April 2019, he became aware of the death of P (his own father) via social media.  D exhibited what he read.  Apparently, according to “a Facebook post” dated 9 April 2019, P passed away in February 2019.  Prior to his death, P was awanton mee chef in Singapore.

The Law

9.  As pointed out by Ms Li, solicitor for D, the District Court has the same jurisdiction as the High Court to dismiss an originating summonsaction for want of prosecution.  Order 28 rule 10 of the RDC is identical to Order 28 rule 10 of the RHC.  An interesting argument arose as to whether the same test for “want of prosecution” applied irrespective of whether the action was commenced by originating summons or by writ.  I should deal with this first.

10.  Ms Li, in her most able attempt to persuade me different tests applied, helpfully drew my attention to two cases decided in the 1980s.  In United Bank Ltd v Maniar [1988] 1 Ch 109 at 111H to 112D, Millett J (as Lord Millett NPJ then was) said different tests applied, citing the different nature of the originating summons procedure (when compared to the writ action procedure) as the reason.  That was promptly cited with approval in Hong Kong by Godfrey J (as Godfrey VP then was) in Yau Fook Hong Co Ltd v Commissioner of Inland Revenue [1989] 2 HKC 514.  However, in my judgment, the ratio of United Bank was no longer good law (whether here or in England) and should no longer be followed in Hong Kong.

11.  First of all, United Bank had since been expressly disapproved by the English Court of Appeal in Halls v O’Dell [1992] 1 QB 393 at 402-D to 404-G per Balcombe LJ, for good logical reasons, and was no longer good law in England.  Secondly, and a lot more importantly, Ma CJ had in the post-CJR case of Wing Fai Construction Co Ltd v Yip Kwong Robert (2011) 14 HKCFAR 935 restated the principles governing “striking out or dismissal for want of prosecution” applications, and said the following (at 974, paragraph 76): -

“… In the light of the restated principles, I would think that it will seldom be necessary to refer to those authorities that do not take into account the procedural changes under the CJR (or the Woolf Reform).”

12.  In my judgment, by reason of Ma CJ’s restatement, whatever the true position was before Wing Fai Construction, in most cases the only principles which should now be governing “striking out or dismissal for want of prosecution” applications, whether the action was commenced by originating summons or by writ, should be the ones restated in Wing Fai Construction.

13.  And what were those restated principles?  In gist: -

(1)  Striking out is a remedy of last resort and should only be used in plain and obvious cases.  Greater use should be made of other powers of the court, thus avoiding an “all or nothing” approach to dismissal.

(2)  Abuse of process is the foundation for the exercise of the jurisdiction to strike out for delay.  It can take many forms.  Mere delay, without more, does not suffice.  It includes delays which are inordinate and inexcusable and causing prejudice to a defendant, or contumelious conduct.  It may take forms such as “warehousing” of claims, inexcusable non-compliance with or wholesale disregard of an order of the court or the rules of court, and litigation anxiety (Biss prejudice).

(3)  When considering “delay”, it is important that it should be both inordinate and inexcusable, and abuse is shown.  It is not the law that mere delay would be sufficient to justify an order to strike out.

(4)  Where abuse is demonstrated, for example where there was contumelious conduct on the part of the plaintiff, proceedings can be struck out even where prejudice to the defendant cannot be shown.

(5)  The conduct of the parties is relevant both to the critical question of abuse and to the overall justice of the case. Post-CJR, where all parties to the proceedings have the obligation to prosecute the proceedings and assist the court in furthering the underlying objectives it is highly relevant to consider any failure on the part of the parties. There is no place anymore for defendants to adopt the attitude of “letting sleeping dogs lie”.

(6)  The court must take into account the fact that there are other litigants entitled to have their day in court.

(7)  The fact that the limitation period has not yet expired should no longer militate against an order striking out an action.

(8)  Delay caused by legal advisers is not relevant.

(9)  The power to strike out is discretionary.  In exercising its discretion, a court must ask itself whether or not in the circumstances it is just to strike out.  A mechanistic approach in which the bigger picture is lost sight of is to be eschewed.

Applying the Law

14.  Applying the principles restated in Wing Fai Construction, it was in my judgment plain and obvious that I should exercise my discretion to have this action dismissed for (1) abuse; and/or (2) delay and prejudice.  I shall explain.

15.  First of all, the OS was issued on 31 March 2015.  P did not do anything about it after he filed and served his Affirmation in Support on 12 August 2015.  By the time D took out the Summons on 22 March 2019, P did nothing for some 3.5 years.  P’s delay in prosecuting the OS must be inordinate by any standard.  Since P offered no explanation as to why he did nothing to prosecute the OS for 3.5 years, this inordinate delay must be taken as inexcusable as well.

16.  Secondly, credible affidavit evidence had been placed before me which showed P and D had a face-to-face conversation about this action on 25 January 2019, after which P continued to ignore D, and continued to leave this action unprosecuted.  Based on such affidavit evidence (which I accepted as true), I drew the inference that P issued the OS with no genuine intention to prosecute it, and no genuine intention to obtain reliefs, and that P was deliberately leaving this action unprosecuted.  In my judgment, what P did was clearly an abuse of this Court’s process.

17.  Thirdly, the prejudice to D was obvious.  This was not a civil action in personam.  P was asking for an order that the Property be forcibly sold.  For as long as this action remained live, D could not freely deal with the Property, and D would not know for sure what he should or should not be doing with the Property.  D had deposed to his anxiety on affidavit, and I accepted that evidence as true.

18.  Fourthly, whilst P’s conduct in this action was appalling, there was nothing wrong with D’s conduct in this action.  D acted most sensibly and reasonably throughout this action.

19.  Last but not least, looking at all the circumstances of this case, I was satisfied the overall justice in this matter required me to dismiss the OS so that D did not need to have this litigation hanging over his neck any longer than was necessary, and so that D could freely deal with the Property as he pleased.

20.  It was by reason of the above that it appeared clear to me that all factors which I should consider pointed clearly to an order dismissing the OS for want of prosecution, and I made such an order.

Costs

21.  Given my finding above that P commenced this action without any genuine motive to obtain reliefs, the costs of this action, including the costs of the Hearing and all costs previously reserved, should of course be paid by P to D on full indemnity basis, to be taxed if not agreed.

Final Remarks

22.  For completeness, I should also say a few words, obiter, about two side issues which arose in this matter.

23.  The first is the state of the law concerning the intervention of law firms pursuant to Section 26A(1)(c) of the LPO.  In my view, the law as it stands is woefully inadequate, for reasons which I shall explain.

24.  The Hong Kong regime for the intervention of law firms has its origin in the UK Solicitors Act 1941 (and its successor the UK Solicitors Act 1974), which established a similar regime for law firms in England and Wales.  Both regimes provided for the deliver up of “practice documents” to the intervention agent.  Carnwath LJ had in Holder v Law Society [2003] 1 WLR 1059 (paragraph 31) recognized the English regime as draconian but “necessary for the protection of public interest”.  That was adopted by Moylan LJ in Blavo v Law Society [2019] 1 WLR 1977 [2018] EWCA Civ 2250 (paragraph 77). Chadwick LJ had in Sheikh v Law Society [2007] 3 All ER 183 (paragraph 110) recognized the English regime as destroying the practice of the law firms in question, as an intervened firm was treated as having been wound up, at an end, and unable to carry on representing or acting for any client whosoever.  The firm’s original clients would have to seek alternative representation, and the firm’s original staff (if any) would have to seek alternative employment.  Similar if not identical things can be said about the Hong Kong regime.

25.  What does an intervention agent do?  Simply put, in so far as “practice documents” is concerned, an intervention agent seizes them, and then tries to return them to the lay clients in question, by calling up, writing to, or otherwise contacting, the lay clients.  There can be situations where the lay clients simply cannot be found because the firms in question never kept proper records as to how the lay clients could be contacted, or because the records were taken away or otherwise lost before the intervention agent stepped in, or because the lay clients changed their contact details without informing the firms in question.  In such scenarios, an intervention agent typically does not take over those cases or matters at all, as it has no express statutory power, and is under no express statutory duty, to take over the conduct of any case or matter in the absence of specific instructions from the lay clients to act.  That creates problems for our Courts.

26.  The most obvious problem is this.  Order 67 rule 1(1) of the RDC reads as follows: -

“A party to any cause or matter who sues or defends by a solicitor may change his solicitor without an order for that purpose but, unless and until notice of the change is filed and copies of the notice are lodged and served in accordance with this rule, the former solicitor shall, subject to rules 5 and 6, be considered the solicitor of the party until the final conclusion of the cause or matter.”

27.  Similarly, Order 67 rule 6(1) of the RDC reads as follows: -

“Where a solicitor who has acted for a party in a cause or matter has ceased so to act and the party has not given notice of change in accordance with rule 1, or notice of intention to act in person in accordance with rule 4, the solicitor may apply to the Court for an order declaring that the solicitor has ceased to be the solicitor acting for the party in the cause or matter, and the Court may make an order accordingly, but, unless and until the solicitor—

(a) serves on every other party to the cause or matter (not being a party in default as to acknowledgment of service) a copy of the order; and

(b) procures the order to be entered in the Registry; and

(c) leaves at the Registry a copy of the order and a certificate signed by him that the order has been duly served as aforesaid,

he shall, subject to the foregoing provisions of this Order, be considered the solicitor of the party till the final conclusion of the cause or matter.”

28.  The harshness of the above is only mitigated slightly by Order 67 rule 5(1) of the RDC, which reads as follows: -

“Where—

(a) a solicitor who has acted for a party in a cause or matter has died or become bankrupt or cannot be found or has failed to take out a practising certificate or has been struck off the roll of solicitors or has been suspended from practising or has for any other reason ceased to practise; and

(b) the party has not given notice of change of solicitor or notice of intention to act in person in accordance with the foregoing provisions of this Order,

any other party to the cause or matter may apply to the Court for an order declaring that the solicitor has ceased to be the solicitor acting for the first-mentioned party in the cause or matter, and the Court may make an order accordingly.”

29.  It would appear, from reading the LPO, an intervention agent currently has no express statutory power, and is under no express statutory duty, to make any application under Order 67 to remove the intervened and defunct law firm from our Courts’ records of representation.  In fact, it does not even have the express statutory power or express statutory duty to write to our Courts to inform us of the mere fact of intervention.  This appears to me to be wholly unsatisfactory for the effective administration of justice.

30.  Whilst C&L, the intervention agent of GCC, cannot be said to be at fault in our present case as it was just acting pursuant to the law as it stood, and D could not be forced to take out an application under Order 67 rule 5(1) against his will either, all litigants and practitioners should make better use of Order 67 rule 5(1) in the future.  In my view, the intervention of a law firm pursuant to the LPO does bring the situation within Order 67 rule 5(1), as the firm in question should be considered to have “ceased to practise” for the purposes of this rule.  Making sure the Courts’ records of the parties’ representation accurately reflect the reality of the situation is plainly conducive to the effective administration of justice.

31.  Equally importantly, I do hope the HKSAR Government can look into the matter and seriously consider expanding the express statutory powers and express statutory duties of an intervention agent under the LPO so that our Courts shall in the future be promptly informed when a litigant’s representation becomes defunct or non-operational by reason of a statutory intervention.

32.  The second side issue which I should say something about is P’s death prior to the Hearing.  On this, I should say I was aware Order 15 rule 9(1) of the RDC read as follows: -

“If after the death of a plaintiff… the cause of action survives, but no order under rule 7 is made substituting as plaintiff any person in whom the cause of action vests… the defendant… may apply to the Court for an order that unless the action is proceeded with within such time as may be specified in the order the action shall be struck out as against the plaintiff… who has died; but where it is the plaintiff who has died, the Court shall not make an order under this rule unless satisfied that due notice of the application has been given to the personal representatives (if any) of the deceased plaintiff and to any other interested persons who, in the opinion of the Court, should be notified.”

33.  Ms Li, solicitor for D, submitted that notwithstanding Order 15 of the RDC, I retained the power to dismiss this action directly after the death of P.  I agreed with Ms Li’s submission.  The wording of Order 15 rule 9(1) made it clear I should consider whether there were persons who should be given “due notice” of an application for dismissal, but plainly, in a situation where on the evidence placed before me I took the view (as I did in this case) that no person needed to be informed of the application for dismissal, I would still have the power to dismiss the action directly, which was what I did at the Hearing.  Should the personal representatives (if any) of P wish to ask for the compulsory sale of the Property pursuant to Section 6 of the Partition Ordinance (Cap 352), they would be at liberty to start a fresh action, given that the factual circumstances of the application would in any case be completely different after P sadly passed away.

34.  It was for the above reason that I dismissed this action despite the death of P just shortly before the Hearing.

35.  I do thank Ms Kate Li for her most able assistance.