BANK OF CHINA (HONG KONG) LTD v. LEUNG SHIU KEE AND OTHERS

DCCJ 1208/2009

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 1208 OF 2009

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DECISION

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Introduction

1. On 17 June 2014, I allowed the appeal by the plaintiff against the Master's decision and gave summary judgment ("the judgment") in favour of the plaintiff against the 5th Defendant ("D5").

2. There are now 4 summonses before me for disposal :-

(1) summons taken out by D5 on 14 July 2014 for leave to appeal out of time ("leave to appeal summons");

(2) summons taken out by the plaintiff on 20 August 2014 for payment out of the 2 sums of money totalling $400,000 paid into court by D5 pursuant to the Order of Deputy District Judge SP Yip dated 30 May 2013 in part   satisfaction of the judgment ("payment out summons");

(3) summons taken out by the plaintiff on 11 August 2014 for leave to amend the summons filed on 9 March 2013 and also for an Order for payment of the sum of $127,413.08 held by the Official Receiver to the plaintiff in part satisfaction of the judgment ("amendment summons");

(4) summons taken out by the plaintiff on 11 August 2014 under Order 18 rule 19 to strike out D5's counterclaim ("striking out summons").

Leave to appeal summons

Legal principles on leave to appeal out of time

3. Section 63A(2) of the District Court Ordinance provides :-

  "(2) Leave to appeal shall not be granted unless the judge, the master or the Court of Appeal hearing the application for leave is satisfied that ---

  (a) the appeal has a reasonable prospect of success; or

  (b) there is some other reason in the interests of justice why the appeal should be heard."

4. The test of whether an appeal has a reasonable prospect of success under the new statutory provision is the same test as applied before the amendment to Cap. 336, ie whether the applicant for leave can show that he has an arguable case with reasonable chances of success on appeal as in laid down in Ma Bik Yung v Ko Chuen [2009] 3 HKC 359. A reasonable prospect of success means an appeal with prospects that are more than "fanciful" but which do not need to be shown to be "probable": see Wing Tat Haberdashery Co Ltd v Elegance Development & Industrial Co Ltd, HCMP357/2011, 8/7/2011, unreported.

5. Order 58 rule 2(10) of the Rules of the District Court (“DCR”) provides :-

"(10) The Court or the Court of Appeal may, at any time, and notwithstanding that the time for an appeal or an application for leave to appeal may have already expired, extend the time for the appeal or for applying for leave to appeal."

6. In considering an application for leave to appeal out of time, the following factors are to be taken into account :-

(a) the length of the delay;

(b) the reasons for the delay;

(c) the chances of the appeal succeeding if time for appealing is extended; and

(d) the degree of prejudice to the potential respondent if the application is granted.

The court must consider all the circumstances and decide whether the overall justice of the case requires the exercise of the discretion to extend time: see Hong Kong Civil Procedure 2014 Vol 1 at 59/4/9.

Discussion

Length of the delay and the reason therefor

7. D5 is a resident of the United States.  In his 7th affirmation, he stated that after the hearing on 9th June 2014, he stayed in Hong Kong.  On 13th June 2014, upon his enquiry, he was informed that the decision might not be available for a few weeks.  Also, he was required to consult his family doctor and laboratory tests were ordered to be taken on 19th and 20th June 2014 in the States.  He therefore booked a return flight departing on 17th June 2014.  On 16th June 2014, he obtained advice from The Office of the Pilot Scheme to Provide Legal advice for Litigants in Person ("the Office") whereby he was told that he would not be able to do anything until the decision is handed down.  At about 4.00 p.m. on the same day, he was told that the decision would be available at 11.30 a.m. on 17th June 2014.  Due to the schedule of his flight, he was able to collect the written decision at 9.30 a.m. on 17th June 2014, after which he took the flight back to the States.

8. D5 said he was advised by the Office that the time limit for appealing was 28 days from the date of the decision.  However, when he filed the application for leave to appeal on 14th July 2014, he was told that the time limit was 14 days only.

9. I accept there are special circumstances leading D5 to file his application for leave to appeal out of time.  The length of the delay of 13 days is not lengthy at any rate.  I also accept that he was not fully informed of the actual time limit of appealing against an interlocutory judgment.

Degree of prejudice to the potential respondent

10. As the delay is a mere 13 days, I do not find any prejudice to the plaintiff as the potential respondent in the event leave is granted.

Prospect of success

11. The most crucial factor to be considered both in relation to the leave of appeal and leave to appeal out of time application is the prospect of success of the intended appeal.

12. Mr Kong, counsel for D5, only made submission on the reasons for the delay.  

13. In the 7th affirmation of D5, he complained that he was not served with the document bundle.

14. For the purpose of the plaintiff's Order 14 application, D5 had filed 2 lengthy affirmations in opposition.  On top of that, he had also filed a Defence and Counterclaim.  He must have been well versed with the documents.  I do not think he had suffered any disadvantage for not having the document bundle.

15. D5 also sought to explain the various areas which I found to be unbelievable at paragraphs 10, 11, 16, 17, and 19 of my decision. 

16. I do not think the explanations so given have altered my assessment of D5's case.  In my view, therefore, D5 has failed to show a reasonable prospect of success of his intended appeal.

Validity of Writ

17. At the hearing, Mr Kong submitted that the summary judgment was irregular in that at the time when judgment was given, the validity of the writ of summons was not extended.  Mr Kong cited the case of Chan Lap Shun formerly trading as Lap Shun Pao Hong v Cheng Shing and Chan Lap Wah both formerly trading as Yiu Wing Trading Co, DCCJ4449/2009, 15/11/2011, unreported.

18. First and foremost, this argument has never been raised by D5 previously.

19. If D5 was to take issue on the validity of the writ, he should have made an application under Order 12 rule 8 of the DCR, which provides that :-

  "(1) A defendant who wishes to dispute the jurisdiction of the Court in the proceedings by reason of any such irregularity as is mentioned in rule 7 or on any other ground shall give notice of intention to defend the proceedings and shall, within the time limited for service of a defence, apply to the Court for ---

  (a)  an order setting aside the writ or service of the writ on him; or

  (b)  an order declaring that the writ has not been duly served on him

   ..."  

20. No such application was made by D5.

21. Rather, D5 filed a Defence and Counterclaim on 12 May 2014 thereby submitting to the jurisdiction of this Court.

22. Chan Lap Shun is a case on an application under Order 6 rule 8 of the DCR extending the validity of the writ.  It does not assist D5.

23. I see no substance in this argument.

Conclusion and Order

24. In my view, D5 has not shown a reasonable prospect of success in his intended appeal.  Therefore, his application for leave to appeal out of time must be refused.

Payment out summons

25. Pursuant to the order of Deputy District Judge S.P. Yip dated 30 May 2013, D5 paid into court a total sum of $400,000 as a condition for the setting aside of the default judgment dated 17 April 2009.

26. As summary judgment is now entered against D5 and his leave to appeal out of time application is refused, the plaintiff is entitled to the fruit of the judgment.  There is no objection from Mr Kong for D5.

Conclusion and Order

27. I see no reason that an Order for payment out of the said sum of $400,000 should not be made in part satisfaction of the judgment against D5 and I so order.

Amendment summons

28. The Official Receiver who acted under a Bankruptcy Order which was made against D5 previously had recovered a sum of $127,413.08.  The Bankruptcy Order was subsequently annulled.  However, the money is still held by the Official Receiver.

29. Based on the previous default judgment dated 17 April 2009, the plaintiff on 9 March 2013 issued a summons under Order 77 rule 16 of DCR, applied for the payment of the said sum in part satisfaction of the said judgment.

30. In view of the fact that after the setting aside of the default judgment, summary judgment was entered on 17 June 2014, the plaintiff applied to amend the said summons and for an order of payment.

31. The Official Receiver took a neutral stance in the plaintiff's application.

32. There is no objection from Mr Kong for D5.

Conclusion and Order

33. I see no reason that an Order for the payment of the said sum of $127,413.08 by the Official Receiver to the plaintiff should not be made and I so order.

Striking out summons

Legal principles on striking out

34. To exercise the court's power under this rule, the claim must be obviously unsustainable, the pleadings arguably bad and it must be impossible, not just improbable, for the claim to succeed before the court will strike it out: see 18/19/4 of Hong Kong Civil Procedure 2014 Vol 1

35. The term "an abuse of the process of the court" connotes that the process of the court must be used bona fide and properly and must not be abused. The court will prevent the improper use of its machinery: see 18/19/10 of Hong Kong Civil Procedure 2014 Vol 1

Discussion

36. By his counterclaim, D5 is claiming travelling costs between the United States and Hong Kong for the purpose of attending court hearings of this case.

37. Such claim falls within the ambit of costs and does not in itself constitute a cause of action.

38. The counterclaim of D5 is obviously unsustainable.

39. Mr Kong for D5 does not oppose the application.

Conclusion and Order

40. Accordingly, the counterclaim of D5 must be struck out and I so order.

Costs

41. Costs should follow the event. I order that D5 do pay the plaintiff costs of the 4 summonses.

42. By summary assessment, I order that D5 do pay the plaintiff costs in the sum of $30,000.