XCHRX LAM FEI HONG v. WONG KAM FONG

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

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REASONS FOR JUDGMENT

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Introduction

1. This is an appeal from an order made by Master Cannon on 3rd February. At the conclusion of the hearing, I made orders varying three orders made by Master Kwan on 14th January. The circumstances were unusual, and since they involve interesting points of practice, I have decided to hand down my reasons. This I now do, though the delay has been due to the fact that I went on leave on the day following the hearing. I give permission for this judgment, though handed down in chambers, to be reported.

The facts

2. The Plaintiff is the plaintiff in three actions. In each of the actions, a summons was issued by the Defendants seeking an order for security for costs. The summonses came before Master Kwan on 14th January. She made orders in each action which were identical save for the amounts of the security. For convenience, I take the order she made in the first of the three actions, HCA 4803/94. She ordered that

"... the Plaintiff DO PAY into Court:

(a) a sum of HK$120,000.00 within 30 days hereof and all further proceedings be stayed until such security is given;

(b) a sum of HK$81,000.00 is to be paid at the date of the Checklist hearing and all further proceedings be stayed until such security is given; and

(c) the remaining sum of HK$81,000.00 is to be paid at the date of Setting down for trial and all further proceedings be stayed until such security is given ..."

The words in italics should be removed because otherwise the order does not make grammatical sense.

3. The Plaintiff filed Notices of Appeal from Master Kwan's orders on 19th January. The appeals are due to be heard on 4th May. However, for reasons which I shall mention shortly, the Plaintiff decided to apply (a) for an extension of time to comply with the requirement to pay the first instalment of the orders, and (b) for the stay to be lifted to enable the appeals to be heard. These summonses came before Master Cannon on 3rd February. She took the view that she had no jurisdiction to entertain the summonses, and dismissed the summonses for that reason. It is from her dismissal of the summonses that the Plaintiff now appeals.

The concerns of the Plaintiff

4. The concerns of the Plaintiff which prompted the application to Master Cannon in each case were these:

(i) If the stay was not lifted, the Plaintiff may not be allowed to pursue his appeal.

(ii) Master Kwan had ordered the Plaintiff to pay money into court. The Plaintiff was concerned that if he did not pay the money into court, he would be in breach of Master Kwan's order.

(iii) His solicitors construed Master Kwan's order as imposing a stay with immediate effect, and providing that the stay would only be lifted if the money was paid into court within 30 days. If the money was not paid into court within 30 days, the stay would not be lifted (unless the order was varied on appeal) even if the money was paid into court after the 30 days had elapsed.

5. The Plaintiff's first concern was not justified. The stay of the proceedings would not have prevented the appeal from being pursued. Otherwise, there could never be an appeal from an order for a stay unless the order expressly permitted it. But I can understand the Plaintiff's other concerns. As for concern (ii), I am unhappy with an order requiring a party to pay money into court by way of security for costs. That party could well think, faced with an order in those terms, that it had to pay the money into court, and would be in breach of the order if it did not. I appreciate that to order a party to pay money into court as security for costs accords with the draft order in Atkin's Court Forms, Vol. 13, 1992 issue, p.219, but I much prefer the order simply to identify the consequences of a party not paying money into court by way of security for costs. Such an order would read:

"In the event of the Plaintiff not paying into court the sum of by , all further proceedings be stayed until such time as such sum is paid into court."

6. As for concern (iii), I can entirely understand the Plaintiff's solicitors construing the order in the way they did, though I have construed it very differently. I construe the order as not imposing a stay with immediate effect. I construe it as providing that if the money is not paid into court within 30 days, the proceedings will then be stayed, and will remain stayed until such time as the money is paid into court. That was the way Mr. Paul Loughran for the Defendants read it. If read in that way, the Plaintiff's concern (iii) disappears. The stay will be lifted when the Plaintiff pays the money into court. Once Mr. Andrew Cheung for the Plaintiff heard how Mr. Loughran and I construed the order, he was content for no order to be made on the appeal.

7. However, I decided to vary the order so as to make clear what it meant, and to avoid any notion that the Plaintiff had to pay the money into court. Thus, for Master Kwan's order, I substituted the following words:

"In the event of the Plaintiff not paying the following sums into the court by way of security for the Defendant's costs by the dates set out below, this action be stayed from such dates until such time as such sums are paid into court:

(a) the sum of HK$120,000.00 within 30 days of the date of this order;

(b) the sum of HK$81,000.00 by the date of the Checklist hearing; and

(c) the remaining sum of HK$81,000.00 by the date of setting down."

The consequence of the Plaintiff not paying the money into court is that the action will remain stayed, until (a) such time as the Plaintiff pays the money into court, or (b) the action is dismissed for want of prosecution.

The jurisdiction of Master Cannon

8. Master Cannon declined jurisdiction because she thought that since Notices of Appeal had been filed from Master Kwan's orders, she had no power to vary them or to extend the time contained in them. There is some support for that view in Halsbury's Laws of Hong Kong, Vol. 5, para. 90.1075. In footnote 9, it is said:

"Extensions of time may be granted by the master before the issue of the notice of appeal, but after its issue or after five days for appealing have elapsed extensions can be granted only by the judge ..."

And in footnote 11, it is said:

"Before the notice of appeal is issued, the master may grant a stay of execution until the notice is issued, and provide in his order that if the notice is issued within a specified time, the stay will continue until the hearing or the disposal of the appeal, but after the notice is issued a stay of execution may be granted only by the judge."

Mr. Loughran argued that if Master Cannon did not have jurisdiction to hear the summonses, then I did not have jurisdiction to hear any appeal from her dismissal of the summonses.

9. I did not find it necessary to rule on this interesting question, because there was a way around it. That was by treating the Notices of Appeal as if they were either (a) summonses to vary Master Kwan's orders pursuant to the liberty to apply contained in her orders, or (b) appeals from her orders. It was by the former of those routes that I varied her orders in the way which I have described.