WONG WAH ON v. TSUNG TSIN ASSOCIATION AND OTHERS

CAMP 124/2019

[2019] HKCA 795

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 124 OF 2019

(ON AN INTENDED APPEAL FROM HCMP 2056/2018)

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REASONS FOR JUDGMENT

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

1.  Having heard and considered the submissions (both written and oral) of the parties, we refused to grant leave to appeal and dismissed the summons of 13 June 2019 and awarded costs against the 2^nd to 10 Respondents on indemnity basis. These are our reasons for our decision.

2.  The intended appeal is in respect of the refusal by Recorder Linda Chan SC on 15 May 2019 to grant an interim interim stay pending the hearing of the summons to set aside the judgment of Harris J of 10 January 2019.  The summons (taken out on 6 March 2019) will be heard by Harris J on 24 July 2019.  One of the reliefs sought in the summons is an interim stay of the judgment pending the determination of the setting aside application. 

3.  Notwithstanding a second summons issued on 26 April 2019 (seeking interim stay pending the summons of 6 March 2019), there was no application to amend the summons of 6 March 2019 to delete the relief for interim stay.   

4.  Thus, the application for interim stay is still extant and pending before Harris J.

5.  If the Respondents wished to accelerate the hearing of the stay application, they should have written to the clerk to Harris J to seek an expedited hearing or even paper disposal of the same, see Tsang Wing Kwai v Tsang Wing Fai [2018] 5 HKLRD 350 at [22] to [34]. What they should not have done was to issue a second summons seeking the same relief and listed it before another judge. As it had been said in Tsang Wing Kwai v Tsang Wing Fai, supra, (at [24(a)] being read with [27]), the interim stay application should normally be processed by the judge who gave the substantive judgment as that judge would be familiar with the case and the background leading to the judgment.

6.  In light of the above, the Recorder quite correctly understood that the application before her was for interim interim relief, particularly when Mr Koo (who appeared on behalf of the 2^nd to 10 Respondents at the hearing on 15 May 2019) repeatedly confirmed at the hearing that he was seeking an interim interim stay.     

7.  Hence, we reject Mr Khaw SC’s submission that the Recorder decided an application for interim stay. In our view, the present application is an application for leave to appeal against an interim interim stay.    

8.  The learned Recorder refused leave to appeal in her Decision of 31 May 2019.

9.  As held in Tsang Wing Kwai v Tsang Wing Fai [2018] 5 HKLRD 350, this Court will not interfere with the exercise of discretion in respect of interim interim order unless the judge is plainly wrong.

10.  In the present case, we are not satisfied that the Recorder is plainly wrong in refusing an interim interim stay.

11.  The first ground of appeal proceeds on the assumption that the Recorder did not consider herself to have any jurisdiction to entertain the application for interim interim stay.  This is a false assumption.  The Recorder clearly explained in her Decision of 31 May 2019 at [7] that she did not proceed on that basis.

12.  Insofar as it is suggested that the Recorder had misconstrued Order 45 Rule 11, we are not persuaded by Mr Khaw that such contention is reasonably arguable.  We agree with the Recorder that the making of an application to set aside the judgment does not by itself bring the case within that rule, see Tam Ho Man v Wong Kwok Tai HCA 4736/1985, 20 Oct 1986 where Hunter J traced the origin of this rule to the historical form of proceedings by way of audita querela. It was only available when a defendant sought to recall or prevent execution on account of “some matter occurring after the judgment amounting to a discharge and which could not have been and cannot be taken advantage of otherwise”. We do not find anything in Credit Lyonnais v SK Global Hong Kong Ltd [2003] 4 HKC 104 and Garry Law Man Kai v Austciti Property Ltd HCA 14750/1998, 6 Nov 1998 to cause us to doubt the approach of Hunter J.

13.  In the present case, the judgment of Harris J was given after a trial of the petition which the 2^nd to 10^th Respondents chose to be absent and filed no evidence in opposition. Mr Khaw readily accepted that it was a regular judgment. There was no reason why these Respondents could not have filed the evidence (which they now relied upon in the setting aside application) to oppose the petition before the hearing before Harris J on 10 January 2019.

14.  In our judgment, the Recorder did not misapply the relevant authorities in this regard.

15.  The Recorder had duly considered the exercise of discretion in the context of inherent jurisdiction and decided that the respondents did not show any exceptional circumstances to justify the grant of interim interim stay: see [9] and [10] of the Decision of 31 May 2019.

16.  We are not satisfied that the Recorder was mistaken in her assessment of the effect of not granting any interim interim stay.  According to the sealed judgment of 10 January 2019, the corporate records and instruments of the Association had to be handed over and the 2^nd to 10^th Respondents would be restrained from holding themselves out as directors or officers of the Association (which they should have refrained from doing since the making of the order).  They also had to vacate from the office (which they should have done soon after the order).

17.  The Respondents did not file any evidence to explain what irreparable prejudice or damage would be caused by giving effect to the judgment. This was so notwithstanding that the judgment was dated 10 January 2019 and the setting aside application was only made on 6 March 2019, almost two months later. The hearing before the Recorder took place on 15 May 2019, another two months later. If there was any actual adverse effect or any real possibility of any adverse impact occasioned by giving effect to the judgment, the Respondents should have been able to depose to the same in the evidence filed before the Recorder. 

18.  Mr Khaw alluded to the passing of management of the Association to those in the camp of the Petitioner. He also referred to cases on the maintenance of status quo in shareholders’ dispute. However, those were cases decided in the context of interlocutory application. We are dealing with a regular judgment after trial. In the judgment of 10 January 2019, Harris J considered the evidence before the court and was satisfied that the extraordinary general meeting of 22 May 2018 had been duly convened and the necessary quorum was present and resolutions removing the respondents from office and reconstituting the board were duly passed.

19.  Further, it does not follow from a change of control of the management of the Association that irreparable damage or prejudice would be occasioned. Whoever in control in the board shall owe fiduciary duty to the Association, including the duty to exercise the power of management in the interest of it.  

20.  The evidence of the respondents (filed in the application for setting aside the judgment) which was placed before us consisted mostly of assertions and bare statements.

21.  The Recorder rightly observed at [13] of the Decision that there is no evidence to support the assertion of counsel that without an interim interim stay the application to set aside the judgment would be rendered nugatory.

22.  Mr Khaw submitted that the Recorder did not address the merit of the setting aside application. This was hardly surprising in light of the way in which the case was argued by Mr Koo before the Recorder. According to the transcript, Mr Koo did not advance any substantive submissions on the merit. In any event, as we have seen above, we do not see any strong merit in the setting aside application.

23.  We do not see any reasonable prospect of success in the intended appeal.  We also see no other reason for leave to be granted in the interest of justice. Actually, it is difficult to see how the intended appeal would serve any purpose in view of the impending hearing before Harris J on 24 July 2019. As acknowledged by Mr Khaw, in light of the time constraint, even assuming leave is granted, it is not likely to have the appeal being heard before 24 July 2019. Mr Khaw belatedly made a request for a rolled-up hearing in the supplemental submissions lodged on 8 July 2019. We refused to entertain the request as it would be unfair to the Petitioner when the Respondents’ solicitor and junior counsel did not inform Mr Singh of the engagement of leading counsel on their parts and the intention to seek a rolled-up hearing until less than 24 hours before this hearing on 9 July 2019.     

24.  We therefore dismissed the summons of 13 June 2019 at the hearing on 9 July 2019.

25.  In light of the Decision of the Recorder in refusing leave, we are of the view that this renewed application for leave to appeal should not have been brought.  In the circumstances, in line with the approach of this court as set out in Compania sud Americana de Vapores SA v Hin-Pro International Logistics Ltd HCMP 1932/2014, 16 October 2014; Good Form Co Ltd v Cheung Wai Han HCMP 3153/2014, 16 January 2015; Ricoh Hong Kong Ltd v Wallbanck Brothers Securities (Hong Kong) Ltd HCMP 2228/2015, 13 May 2016, we ordered the 2^nd to 10^th Respondents to pay the costs of the Petitioner in this application on indemnity basis.