TANG CHAI ON AND ANOTHER v. TANG SING KI AND ANOTHER

HCMP 1632/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 1632 OF 2016

(ON AN INTENDED APPEAL FROM HCA NO 207 of 2013)

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REASONS FOR JUDGMENT

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

1. On 8 May 2015, Chung J [“the Judge”] gave judgment after trial in favour of the Plaintiffs on their claims and dismissed the Defendants’ counterclaim. On 5 June 2015, shortly before the expiry of the appeal period, the Defendants took out a summons seeking extension of time to appeal. The summons was heard by the Judge and on 6 April 2016, he dismissed the summons primarily on the lack of reasonable prospect of success in the intended appeal.

2. On 27 June 2016, the Defendants issued a summons seeking leave to appeal in respect of the decision of 6 April 2016.

3. Whilst technically it is possible to appeal against a decision of the court below in refusing an extension of time, we are of the view that it is not appropriate to do so.  The better and more costs effective practice is to renew the application before the Court of Appeal.

4. Application for extension of time to appeal can be made to the Court of Appeal as well as the Court of First Instance (if it was made before the expiry of the original time limit).  In respect of applications which both the Court of Appeal and the Court of First Instance have jurisdiction to entertain (like applications for extension of time to appeal or applications for stay of execution pending appeal) Order 59 Rule 14(4) requires the applications to be made “in the first instance” to the court below except where there are special circumstances which make it impossible or impracticable to do so.

5. But that rule does not deprive the Court of Appeal to re-entertain a similar application after it has been rejected at the court below.  The reference to application being made “in the first instance” to the court below implies that upon failure in the court below, the party may renew the application in the Court of Appeal.

6. It is cumbersome and not in line with the underlying objectives in Order 1A Rule 1 if the matter has to be proceeded by way of an appeal against the decision of the court below.  The decision, being interlocutory in nature, can only be appealed with leave by reason of Section 14AA of the High Court Ordinance.  Thus, if the matter is proceeded by way of appeal, there has to be application(s) for leave (first made before the court below, if brought within time) and if leave is granted, an appeal to determine whether extension of time should be granted.  It would pile applications upon applications and unduly prolong the process and increase the costs of the proceedings.

7. It is obviously more straightforward to renew the application before the Court of Appeal.  At the discretion of the Court of Appeal, the matter can be processed without any oral hearing since it is interlocutory in nature, see Order 59 Rule 14A.  Since the introduction of this rule, this Court has increasingly been dealing with applications for extension of time on papers. 

8. Hence, in the present instance, notwithstanding the adoption of an inapt route in the summons, bearing in mind the duty of the court and the duties of the parties under Order 1A, we would treat the matter as a renewed application for extension of time to appeal against the judgment of 8 May 2015.  Advanced notice has been given on 19 August 2016 to the parties before the hearing.

9. The approach in considering an application for extension of time to appeal is well settled.  In Lee Chick Choi v Best Spirits Co Ltd HCMP 371 of 2015, 21 May 2015 at paragraph 19, Kwan JA said:

“ 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 if 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.”

10. Mr Barlow SC (appearing with Mr Chu for the Defendants) submitted that assessment of prospect of success could only be made at the hearing of the appeal itself and unless the appeal is either so strong or so weak as to dictate the indisputable view of the outcome merits do not have a significant part to play when adjudicating on an application for extension of time.  He relied on the dicta of Moore-Bick LJ in R (Hysai) v Secretary of State of the Home Department [2014] EWCA Civ 1633 [46] cited by this Court in The Real Estate Developers Association of Hong Kong v Building Authority HCMP 1746 of 2014, 27 May 2015.

11. With respect, it would be wrong to read the judgment of Moore-Bick LJ and this Court’s citation of the same as warranting any departure from the established approach encapsulated in the judgment of Kwan JA.  The only point made by this Court in that citation in The Real Estate Developers Association of Hong Kong v Building Authority, supra, was to remind counsel not to rehearse argument on the merits at length in an application for extension of time.  Thus, Moore-Bick LJ started by saying this at [46]:

“ If applications for extensions of time are allowed to develop into disputes about the merits of the substantive appeal, they will occupy a great deal of time and lead to the parties’ incurring substantial costs….”

12. The point was made clear in The Real Estate Developers Association of Hong Kong v Building Authority, supra, [19], citing from Keen Lloyd Holdings v Commissioner of Customs and Excise HCMP 203 of 2015, 11 May 2015, [31]:

“ In respect of the merits of the appeal, we must emphasize that this application should not be turned into a platform for the pre-running of substantive arguments in the appeal. It suffices to say that as far as we can see, the appeal is not so devoid of merits that this court should summarily pre-empt the same by refusing to grant extension in the present circumstances.”

13. Thus, in The Real Estate Developers Association of Hong Kong v Building Authority, supra, this Court also considered whether the intended appeal was reasonably arguable and for that purpose invited submissions from counsel on the same before the discretion to extend time was exercised, see [17] and [20]. 

14. In the present case, Chung J was entirely correct in embarking on an assessment of the prospect of the intended appeal in his determination the application for extension of time.

15. Coming back to the application of the established approach in the present context, the first two factors can be considered together.  If one considers the lapse of time between the judgment and the date of the summons of 27 June 2016, it is a substantial period. However, a greater part of the period was taken up by the application below.  We are of the view that the right course is to disregard that period.  However, there is still a lapse of more than 2 months from 6 April to 27 June 2016.  During that period, the Defendants applied for leave to appeal against the decision of 6 April 2016 from the court below and leave was refused on 17 June 2016.  As explained above, it was not the appropriate procedure.  Be that as it may, since no objection was taken by counsel for the Plaintiffs or the Judge to such procedure, we are not going to regard the time spent on that application as inexcusable delay.

16. Coming then to the prospect of success, which was actually the main reason the Judge refused the application for extension of time in the first place, we note that the intended grounds of appeal (canvassed in the Annex to the submissions of Mr Barlow on 10 August 2016) are not the same as those canvassed before Chung J.  New grounds (though Mr Barlow referred to them as additional arguments, which we do not agree) were added.  On the original grounds, having read the judgment of Chung J of 6 April 2016, we agree that those grounds have no prospect of success.

17. As regards the new grounds, the Defendants did not explain why they were not advanced in the application for extension of time before Chung J.  This is particularly surprising when a basic premise of the new grounds was that the Judge had misunderstood the letter of 16 January 2013 (which Mr Barlow referred to as the Tso letter) when, as explained below, it was not clear on the face of the judgment that the Judge had made the alleged mistake.

18. This Court had said repeatedly that we would be cautious in dealing with new or additional grounds which had not been canvassed at the court below in a renewed application for leave (and the same should apply to renewed application of other nature): see Jenho Development Ltd v Pensonic Technology HCMP 277 of 2013, 25 March 2013; Kiddie China Ltd v Etech Fire Ltd HCMP 1673 of 2014, 16 Sept 2014; Lehman Brown Ltd v Union Trade Holdings Inc HCMP 977 of 2014, 17 June 2015; Tang Shek Kiu v Tang Lim Kwong HCMP 2643 of 2015, 25 Nov 2015; CCMJ v SSM HCMP 2059 of 2015, 7 December 2015; LWY v HM HCMP 1497 of 2016, 10 August 2016.

19. We have read the judgment and paid particular attention to the paragraphs which Mr Barlow drew our attention to.  With respect, we cannot arrive at the view that the Judge had mistakenly assumed that the Tso letter covered all the lands in question.

20. We do not accept the submission that the Judge did not pay regard to the other letters (which Mr Barlow referred to as the Tong letters) in which the existence of the partnership was denied.  As submitted by Mr Lam (who conducted the trial on behalf of the Plaintiffs), those letters were fully canvassed at the trial and there is simply no reason to support the assertion that the Judge failed to take such into account.  The Judge gave judgment in this case not long after the trial.  Again this Court is entitled to harbour healthy scepticism to a challenge of this nature when counsel for the Defendants (not Mr Barlow who only came into the case after the Judge refused leave), did not even put forward such a ground before the Judge when he had opportunity to do so in the application for extension of time before the Judge. 

21. We have read the Tong letters included in the application bundle.  We agree with Mr Lam that it is quite clear that the Judge was entitled to place greater weight on the Tso letter (as an admission against interest) than the Tong letters.  There is absolutely no merit in the new grounds related to the letters.

22. We agree with Mr Lam paragraph 7 of the new grounds in the Annex did not take the matter further in view of the fact that the case of illegality had not been run at the court below.

23. For these reasons, we are of the view that the intended appeal is completely devoid of merit.  Put in another way, it is so weak that it would only be a waste of time and costs to permit it to be argued on another round.

24. We refused to grant any extension of time and we also dismissed the summons of 27 June 2016 with costs.  After hearing submissions, we fixed the costs of the Plaintiffs at $135,000.