AIA INTERNATIONAL LTD v. LAM CHE WAH

HCMP 1107/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 1107OF 2016

(ON AN INTENDED APPEAL FROM HCA NO 780 of 2013)

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JUDGMENT

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

1.  On 4 December 2015, Deputy High Court Judge Cooney SC gave judgment after trial in favour of the Plaintiff in the sum of $1,403,476.34 with interest. Belatedly, on 3 May 2016, the Defendant applied for extension of time to appeal. This is our decision on that application.

2.  Though the Defendant made his application in Chinese and filed submissions on 27 May 2016, the judgment was in English and the Defendant also referred to grounds of appeal (drafted by trial counsel appearing for him) in English.  The contractual documents between the parties are in English.  Solicitor for the Plaintiff also filed submissions in English.  We believe the Defendant can read and write English.  We shall give our decision in English.  If the Defendant needs translation service, he could make an appointment with the court interpreter for oral translation of this Decision through the clerk to Lam VP.

3.  As submitted by the solicitor for the Plaintiff, the established approach for considering whether extension of time to serve a notice of appeal should be granted is by reference to the following criteria,

(a)   Length of delay;

(b)   Explanation for the delay;

(c)   The merits of the intended appeal; and

(d)   Prejudice to the other party.

4.  In the present case, the delay is serious.  As reckoned by solicitor for the Plaintiff, even taking account of the legal aid stay, the appeal period expired on 12 February 2016.  The Plaintiff only took out the summons for extension of time on 3 May 2016.

5.  Regarding the explanation for delay, the Defendant said the lapse of time was caused his application for legal aid.  He applied for legal aid on 16 December 2015 and legal aid was only refused on 5 May 2016.  His application for extension of time was made prior to the refusal of legal aid.  He said this showed he did not intentionally delay the process.

6.  However, he did not give us a chronology as to his legal aid application.  We are only informed of the date he submitted an application and the date legal aid was refused.  This court had endorsed the approach of several decisions by the Court of First Instance that if a party wishes to rely on the time taken by his legal aid application to account for the delay in complying with time limits set by the rules, he should give a full chronology verified by a legal aid officer, see BI v Director of Immigration [2016] 2 HKLRD 520 at [131].  The rationale had been explained in the earlier case of Re Ho Mei Ling [2011] 6 HKC 1 at [108].  An applicant for extension of time cannot explain the lapse of time by showing that he has made a timely application for legal aid.  In order to demonstrate his diligence in the process, he also has to show that he had supplied the relevant information (both on the merits of his case as well as documents verifying his financial position) to the Director of Legal Aid in a timely fashion.  

7.  In the present context, the burden rests squarely on the Defendant to show that he has exercised due diligence in the legal aid process.  This burden he failed to discharge.

8.  This delay took place against the background that, as admitted by the Defendant, he had been advised by his former solicitor that he was out of time in his intended appeal.  Further, he managed to file his summons on 3 May 2016 without legal aid and on his own evidence the grounds of appeal had been ready when he applied for legal aid.

9.  We then turn to the merits of the intended appeal.  The intended grounds of appeal (prepared by the former counsel of the Defendant) are as follows:

“ 1.   In holding that the Plaintiff is entitled to claw back the sum of $1,403,476.34 paid to the Defendant under the Letter of Understanding signed by the parties on 30 September 2010 (“the LOU”), the Judge erred in finding that the phrase “for any reason” appearing in Clause 12 of the LOU included the termination of the contract by clause 23(b) of the Career Representative’s contract signed by the parties on 1 November 2010 (“the CR Contract”).  In so holding, the Judge erred by failing to consider fully or sufficiently the following aspects:-

(a)   The LOU was signed before the said the CR Contract;

(b)   The Plaintiff’s entitlement to claw back was governed by the provisions of the LOU not the CR Contract;

(c)   The LOU had had its own provisions as to the Plaintiff’s right to terminate the LOU and claw back;

(d)   The phrase “for any reason” appearing in Clause 12 of the LOU must be the reasons expressly set out in the LOU not any other documents signed after the LOU.

2.   In holding that the Plaintiff is entitled to claw back the sum of $1,403,476.34 paid to the Defendant under the LOU, the Judge erred in attaching no or insufficient weight to consider fully or sufficiently the following aspects:-

(a)   the Preamble of the LOU clearly provides that “THIS Letter of Understanding …, in consideration of the Company agreeing to pay the Applicant a signing fee set forth below and the Applicant agreeing to remain as an insurance agent of the Company for a minimum of five (5) year”;

(b)   Clause of the LOU clearly provides that “the Defendant agrees to faithfully perform all obligations of the Contracts and to remain as a bona fide insurance agent of the Company for a minimum of 60 months from the Commencement Date.”;

(c)   It is the mutual intention of the parties that the Defendant should be entitled not return the Signing Fee, Monthly Bonuses and Production Challenge Bonuses or any part thereof if he has faithfully performed all obligations of the Contracts and to remain as a bona fide insurance agent of the Plaintiff for a minimum of 60 months.

(d)   The implication that the Plaintiff is entitled to claw back only when the Defendant terminates the contract or fails to faithfully perform all obligations of the Contracts and to remain as a bona fide insurance agent of the Company within 5 years is necessary to give effect to the reasonable expectation of the parties.”

10.  We read these grounds in light of the judgment of 4 December 2015 and the relevant contractual documents.  After giving the matter serious consideration, we do not find the intended appeal carry any prospect of success.  Primarily, the Defendant simply wishes to re-argue grounds which had duly been considered and rejected by the judge.  Ground 1 was considered by the judge at paragraphs 18 to 54 of the judgment, in particular paragraphs 31 and 33.  In our judgment, the reasons given by the judge in rejecting the defence case were sound in law and we see no valid basis for this court to differ. Likewise, the matters in Ground 2 were also thoroughly considered by the judge.  It is simply not enough for counsel to assert baldly that those matters were not given sufficient weight or that the mutual intention or reasonable expectation of the parties was different from the effect of the clear wordings of the relevant clause were to the contrary.    

11.  The court would not grant extension of time for an appeal which does not have any merit as it would only needlessly increase the costs of legal proceedings.

12.  This result should follow notwithstanding that the Plaintiff may not suffer any prejudice as a result of the delay (as conceded by solicitor for the Plaintiff).

13.  For these reasons, we dismiss the summons of 3 May 2016 with costs.  The application is eminently suitable for gross sum assessment.  Despite that, solicitor for the Plaintiff did not submit a statement of costs for our consideration.  We have warned practitioners in earlier cases that this court may go ahead to fix the costs as best as we can in making a gross sum assessment when lawyers do not file statement of costs (see Rhonda Jeanine Pohn v Mac Richard Pohn HCMP 3439/2015, 1 Feb 2016).  Having considered the complexity of the matter and the contribution by solicitor for the Plaintiff to the resolution of the present application, it is not justified to have further costs incurred on a further round of submissions.  We shall fix the costs of the Plaintiff in this summons at $20,000.