HUANG LIDONG v. KWONG WING CHUNG

DCCJ 70/2021

[2023] HKDC 1488

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 70 OF 2021

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DECISION

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Introduction

1.  By Summons dated 13 July 2023, the defendant applied for (1) leave to appeal out of time to the Court of Appeal against the Order and Decision of this court dated 21 April 2023 (“Decision”) and the Judgment of Master Maurice Lam dated 29 September 2022 (“Judgment”); (2) stay of execution on the Judgment pending disposal of the defendant’s said Summons.

2.  A brief procedural chronology of this case is as follows. On 15 August 2022, Master Maurice Lam refused the plaintiff’s application for summary judgment and gave conditional leave to defend (“Master’s Order”). The condition imposed was payment of HK$600,000 into court on or before 5 September 2022 (“Condition”). The defendant did not comply with the Condition, did not seek any time extension for compliance nor any stay of execution. Final Judgment was sealed and perfected on 29 September 2022; there was no appeal against the Judgment. The defendant’s appeal against the Master’s Order (“Appeal”) was heard by this court on 31 March 2023 (“Appeal Hearing”). By Decision dated 21 April 2023, the defendant’s Appeal was dismissed, on the ground that this court had no jurisdiction to entertain that Appeal after final Judgment was sealed and perfected. If this court had jurisdiction, the defence was shadowy and conditional leave to defend would be given.

3.  By Originating Summons in DCMP 2780/2023, the plaintiff sought to enforce the Judgment by seeking an order for sale of the defendant’s property. The defendant then changed her legal team and filed the present Summons on 13 July 2023.

Leave to appeal out of time - principles

4.  The defendant submits that leave to appeal should not be granted unless the court 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: s 63A(2) of the District Court Ordinance (Cap 336). A reasonable prospect of success involves the notion that the prospects of succeeding must be reasonable and therefore more than fanciful, without having to be probable: SMSE v KL [2009] 4 HKLRD 125 at §17.

5.  The defendant further submits that there are four factors which the court would take into account in considering an application for leave to appeal out of time: The Incorporated Owners of Kai Tak Garden (Choi Hung Road) v Woo Tak Yan & Ors [2020] 1 HKLRD 736 at §13:

(1)  the length of the delay;

(2)  the reasons for the delay;

(3)  whether the intended appeal has reasonable prospects of success; and

(4)  prejudice to other parties if leave to appeal out of time is granted.

6.  The plaintiff does not dispute these principles. Although not referred to me by counsel, I bear in mind the principles set out by the Court of Appeal in Lee Chick Choi v Best Spirits Co Ltd (HCMP 371/2015, 21 May 2015), §19 that the merits threshold regarding an application to extend time for an appeal is “real prospect of success” when the delay is substantial and not wholly excusable: Secretary for Justice v Hong Kong & Yaumati Ferry Co Ltd & Anr [2001] 1 HKC 125 at 127D to 128D, 132F; KNM v HTF, HCMP 288/2011, 7 September 2011, §§2, 19, 20; YN v NA [2014] 5 HKC 49 at §§16, 17. Where the delay is substantial and not wholly excusable, the applicant must demonstrate a strongly arguable case, not merely a reasonable prospect of success.

7.  I have also reminded myself what the Court of Final Appeal stressed in the judgment of Astro Nusantara International BV v PT Ayunda Prima Mitra (2018) 21 HKCFAR 118 at §55 and §62 that in deciding whether time should be extended, the court has to look at all relevant matters and consider the overall justice of the case. Therefore, the merits of the intended application and a reasonable prospect of success are important considerations: The Incorporated Owners of Kai Tak Garden (Choi Hung Road) v Woo Tak Yan & Ors [2020] 1 HKLRD 736 at §21.

Length and reason of the delay

8.  On the defendant’s own calculation, the length of the delay with respect to the proposed appeal against the Decision is 55 days (more than 7 weeks). The length of the delay with respect to the proposed appeal against the Judgment is about 9 months. In my view, the delay is substantial.

9.  The defendant filed an affirmation on 13 July 2023 in support of her Summons. She explained that her former solicitors, Jal N Karbhari & Co (“JNK”) was introduced to her by her common law husband, Mr Peter Liu, that “almost all communication with JNK related to this action were made through Peter Liu”. I quote what she said at paragraph 4 of her affirmation:

“On about 25 June 2023, I received an Originating Summons in DCMP 2780/2023 which was posted at the entrance of my residential home, in which the plaintiff applied for an order for sale and vacant possession of my residential home to enforce a Charging Order Absolute registered against my residential home. I was surprised and I asked Peter Liu what happened. He then revealed that my appeal against the [Master’s] Order was dismissed. Only until then did I realize that my appeal against the [Master’s] Order was already dismissed by the Decision… JNK never notified me that my appeal against the [Master’s] Order was already dismissed on 21 April 2023. I then sought legal advice from my present solicitors who advised me that I have to apply for leave to appeal against the Decision and the Judgment out of time.”

10.  Assuming what the defendant said to be true, she did not make effort to find out the result of her own Appeal against the Master’s Order (which hearing took place on 31 March 2023), and only learnt about the Decision in late June. It then took her about 3 weeks to take out the Summons. Dereliction by the defendant in the handling of her own litigation does not appear to me to be a good or sufficient reason to justify the substantial delay.

11.  Furthermore, the defendant did not explain why she only sought to appeal against the Judgment about 9 months after the time prescribed. There is no allegation that she was not aware of the Judgment. In counsel’s submissions, it was only submitted on her behalf that “it is strictly speaking not necessary for the defendant to appeal also against the learned Master’s Judgment”, which argument appears to be contradicted by the last sentence of paragraph 4 of the defendant’s own affirmation quoted above.

12.  It is clear to me that the defendant’s substantial delay is not excusable, let alone wholly excusable.

Merits of the intended appeal

13.  The defendant instructed a new legal team and filed a 9‑page long draft notice of appeal with the Summons, advancing four proposed grounds of appeal. She filed two sets of written submissions and cited 17 authorities in support of her Summons.

14.  The first proposed ground of appeal was that although final Judgment had already been sealed and perfected, this court was not functus officio but still had jurisdiction to hear the defendant’s appeal against the Master’s Order. The crux of the defendant’s argument is as follows.

(1)  An appeal from Master under RDC Ord. 58, r. 1 is an actual rehearing of the application, hence “whether the order under appeal has been sealed or otherwise perfected has no effect on the jurisdiction of the learned Judge to hear the appeal.” This argument is wrong as it conflated the Master’s Order with the final Judgment. This is a salient confusion on the part of the defendant which is repeated in the draft notice of appeal and the defendant’s submissions.

(2)  The defendant says that “the concept of functus officio is only applicable to scenarios where an application to vary or set aside an order or judgment is made to the same judge or master who made the order or judgment after the same has been sealed or otherwise perfected.”

(a)  The defendant cited Ampittia Inc v B‑Tech (Holdings) Limited & Ors [2001] 2 HKC 574, p 579, which does not support what she argues. In Ampittia, the court refused to order further fortification of an undertaking as to damages because that would amount to variation of a perfected order imposing a stay; the court held that any variation must be made by a court of appellate jurisdiction. It is true that in that case, the perfected order happened to be made by the same judge hearing the variation application, but nowhere in the reported decision stated the sweeping proposition argued by the defendant.

(b)  If (as the defendant has to accept) a master or judge is functus officio after a judgment he or she made is perfected, it is illogical and unprincipled that another master or judge (not of appellate jurisdiction) can reopen that same judgment (which is what the defendant contends). Had the defendant’s argument been correct, if a judge went on sick leave after he gave judgment which was then perfected, the parties could still apply to reopen that judgment due to the mere coincidence that the same judge was not available to hear the subsequent application. It appears to me wrong in principle that whether a court is functus officio depends on the identity of the judicial officer hearing the matter (which may be determined by administrative factors such as court diary).

(c)  In her reply submissions, the defendant raised a new argument that “it is strictly speaking not necessary for the Defendant to appeal also against the learned Master’s Judgment during the appeal hearing” because “if the learned Master’s Order was set aside or overturned on appeal, the learned Master’s Judgment cannot stand.” The defendant relied on Chan Ping Che v Gao Gunter [2014] HKEC 2097 §8 for this argument. In my view, this argument takes the remark of the Court of Appeal out of context. Unlike the present case, the defendant in Chan Ping Che (who was given conditional leave to defend) made an application for leave to appeal as well as stay of execution of the order imposing the condition well before any final judgment was sealed and perfected. The present issue concerning jurisdiction was not considered by the Court of Appeal.

(d)  Moreover, to adopt the defendant’s present approach would mean that a defendant subject to a conditional leave to defend imposed by a Master could freely ignore the condition. It also leads to the abnormality (as in the present case) where the defendant bypassed the mandatory requirement of RDC Ord. 58, r.1(1) which provides that an appeal from the Judgment shall lie to a Judge in chambers. As pointed out in the brief procedural chronology above, the defendant in the present case never lodged any appeal from the Judgment to a Judge in chambers, but directly seeks leave to appeal (out of time) to the Court of Appeal.

(3)  The defendant says that this court misapplied the decision of Quentin Keith Hills v Marlene Rita Wittman HCA 2149/2006 (6 February 2008). That argument is premised on the repetition of argument (2) above, which has no reasonable prospect of success, let alone real prospect of success.

15.  The second proposed ground of appeal is that the Statement of Claim was defective, hence the plaintiff’s summary judgment application ought to be dismissed or unconditional leave to defend ought to be granted to the defendant. Many cases were cited by the defendant to demonstrate the trite (and undisputed) principle that summary judgment can only be given on the pleaded case, and that any defect or omission in the statement of claim cannot be corrected or supplemented by the affidavit supporting the summary judgment application.

16.  This ground has no merit because this court has thoroughly considered the pleadings (including their respective shortcomings) together with the evidence filed and came to the conclusion that, assuming this court had jurisdiction to hear the Appeal against the Master’s Order notwithstanding final Judgment had been sealed and perfected, (1) summary judgment would not be given; (2) the defence was shadowy, hence conditional leave to defend ought to be given.

17.  The defendant suggested that this court did not apply the trite principles governing applications for summary judgment because certain passages now relied on by the defendant were not cited by the defendant’s then counsel at the Appeal Hearing or referred to in the Decision. That argument is misconceived. It was not necessary to repeat those well-established principles. As the defendant placed particular emphasis to Li Chuen Kwai v Po Lam Construction Development Limited HCA 2376/2013 (24 September 2014), §11 in relation to the plaintiff’s burden in an Ord. 14 application, it suffices to point out that those trite principles were applied in reaching the conclusions set out in the preceding paragraph.

18.  The third proposed ground of appeal is that the court “erred in law in failing to consider or take into account material discrepancies between the SOC and Huang’s Affirmation and material discrepancies between the allegations within Huang’s Affirmation casting doubt or suspicion on the validity of the Plaintiff’s case which would detract the Plaintiff’s right to summary judgment or lead to the result that Huang’s Affirmation has failed to verify the facts as pleaded in the SOC”.

19.  The fourth proposed ground of appeal is that this court erred in failing to take into account certain “unexplained and disturbing features of the Plaintiff’s claim and evidence which clearly show that there are triable issues on the evidence as to the identity of the contracting party”.

20.  I do not see reasonable (let alone real) prospect of success in either of the above grounds, for the following reasons. (1) The “material discrepancies” or “disturbing features” are regurgitation of the defendant’s arguments in the Appeal Hearing. The court had considered all matters in the round in coming to the conclusions in the Decision. (2) There was no jurisdiction to entertain the Appeal against the Master’s Order after final Judgment was perfected (there was no appeal from the Judgment). (3) No summary judgment was ever granted.

21.  Having considered the proposed grounds of appeal, I come to the conclusion that the defendant has failed to show any reasonable prospect of success in the intended appeal, even if the lower merits threshold is applied.

22.  The defendant argues that the proposed appeal is concerned with an important jurisdictional issue, hence an appeal ought to be heard by the Court of Appeal. I disagree. The resolution of this matter requires application of established principles. Further, in respect of the proposed appeal (out of time) to the Court of Appeal from the Judgment, I have pointed out that the defendant has failed to lodge any appeal to a Judge in chambers.

Prejudice

23.  The defendant submits that (1) “the prejudice to the Plaintiff is minimal and can be compensated by interest accrued on the learned Master’s Judgment”; (2) the plaintiff has delayed for more than 5 years in commencing this action; (3) the plaintiff has obtained and registered a charging order absolute against the defendant’s property hence his interest is protected.

24.  The plaintiff submits that he should not be deprived of the fruits of a judgment properly obtained and any further delay is prejudicial.

25.  I agree that granting leave to appeal out of time will occasion at least some prejudice to the plaintiff. It is well-settled principle that once the time for appealing has elapsed, the party who was successful in the court below is entitled to regard the judgment in his favour as being final.

26.  Considering the overall justice of this case, including the lack of merits in the proposed appeal, the lack of good reason for the substantial delay on the part of the defendant, and prejudice to the plaintiff, I dismiss the defendant’s application for leave to appeal out of time.

Interim stay of execution

27.  As the defendant’s application for leave to appeal out of time is dismissed, the application for interim stay of execution pending the disposal of the Summons dated 13 July 2023 is academic. That application is dismissed.

Order

28.  I make the following order:

(1)  The defendant’s Summons dated 13 July 2023 be dismissed.

(2)  Costs of and occasioned by the defendant’s Summons including all costs reserved be paid by the defendant to the plaintiff to be taxed if not agreed.