NEWLY RISE INTERNATIONAL LTD v. YANG XIAOQIU AND ANOTHER

HCA 1186/2020

[2022] HKCFI 1517

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1186 OF 2020

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D E C I S I O N

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Decision on admissibility of “Additional Appeal Bundle”

1.  By a letter dated 25 April 2022, the plaintiff served on the 1^st defendant a so-called “Additional Appeal Bundle” consisting of documents from a separate set of proceedings, ie, HCSD 17/2020 (the “HCSD Documents”).  The plaintiff’s Skeleton Submissions have relied heavily on the contents therein (see paragraphs 7 to 9).

2.  The HCSD documents have never been adduced in these proceedings.  They were not referred to in the Affirmation of Wang Xiao filed on 30 December 2021 in support of the summons to join the 2^nd defendant as a defendant in this case (the “Joinder Summons”).  Their inclusion in the appeal bundle has also never been brought to the 1^st defendant’s attention, even when the plaintiff’s legal representatives proposed the draft bundle index for this appeal.

3.  The Additional Appeal Bundle amounts to further evidence lodged for this appeal, which the plaintiff ought to have sought leave to adduce.  Order 58, rule 1(5)  of the Rules of the High Court, Cap 4A, provides that:

“No further evidence (other than evidence as to matters which have occurred after the date on which the judgment, order or decision was given or made)  may be received on the hearing of an appeal under this rule except on special grounds.”

4.  In my view, further evidence must include such evidence that was in existence at the time of the hearing below, yet such evidence was not produced before the Master.

5.  Where a party seeks to admit new evidence, the Ladd v Marshall conditions apply:

(1)  The evidence could not have been obtained with reasonable diligence for use at the hearing below;

(2)  The evidence must be such that, if given, it would probably have an important influence on the result of the case, though it need not be decisive; and

(3)  The evidence must be such as is presumably to be believed.

(see Practice Note 58/1/3 of the Hong Kong Civil Procedure 2022)

6.  In the present case, the plaintiff clearly fails at the first hurdle.  The HCSD Documents were in the possession of the plaintiff since as early as March 2020, ie before the present proceedings were even commenced.  There is simply no reason why the plaintiff could not have relied on the same evidence before the Master, but has to now ambush the 1^st defendant at the substantive appeal hearing.

7.  The plaintiff’s reliance on paragraph 4(c)  of Practice Direction 10.1 is misplaced.

8.  Paragraph 4(c)  provides that court documents, such as affidavits or pleadings should never be exhibited to an affidavit, office copies of such documents prove themselves.

9.  Paragraph 4(a)  cannot have the effect of rendering admissible at an appeal, all court documents ever filed in any proceedings when the same had not been referred to the court below.  A reference should at least be made in the affidavit evidence filed in support of the Joinder Summons.

10.  I would in fact go further to say that the plaintiff has also failed to satisfy the second Ladd v Marshall condition.

11.  In paragraphs 4 and 15 of the said Affirmation of Wang Xiao filed in support of the Joinder Summons, Mr Wang, the sole shareholder and sole director of the plaintiff, deposed to the fact that the 2^nd defendant was not initially made a defendant in these proceedings solely because he had been declared bankrupt on 25 November 2019.

12.  In other words, the plaintiff had not relied on what the 1^st defendant had stated in the HCSD Affirmation as a reason or part of the reason for not joining the 2^nd defendant. The so-called “change of stance” between the 1^st defendant’s HCSD Affirmation and her Defence and Counterclaim cannot be relevant to the question of costs.

13.  For the reasons stated above, I would refuse to receive the Additional Appeal Bundle as further evidence on the hearing on this appeal.

Decision on the Appeal

14.  Notwithstanding my earlier ruling, the plaintiff proceeds with the appeal.

15.  Mr Lau told the court that he will only rely on paragraph 12 of the plaintiff’s Skeleton Submissions, which states that in any event, even in the Defence and Counterclaim alone (and without referring to the HCSD Affirmation), the 1^st defendant makes admissions which render her attempted distancing of herself from the 1^st defendant incredible.

16.  The argument is that the 1^st defendant’s defence pleaded in the Defence and Counterclaim is so incredible that the Master ought to have applied the principle that this is an unanticipated position.

17.  I do not accept the plaintiff’s submissions.

18.  It is trite that a judge in chambers will not allow an appeal from a Master’s costs order unless it is unreasonable or the Master erred in law, ie if he either failed to take into account proper matters or took into account matters that should not have been taken into account.  See Practice Note 58/1/6 of the Hong Kong Civil Procedure 2022.

19.  The position remains that the plaintiff has not obtained the reasons for the Costs Order under appeal.  Neither did the plaintiff write to the Master to ask for reasons, adduce the transcript of the 10 January 2022 hearing, nor depose to the circumstances of the hearing and/or reasoning of the Master by way of affirmation evidence.

20.  This court is simply not in a position to say that the Master had acted unreasonably or erred in law in the sense set out above.

21.  In any event, I do not agree that the plaintiff’s argument is sustainable.  A court dealing with the question of costs and only provided with the evidence filed in support of the Joinder Summons would in no way be able to come to a view on the alleged lack of merits of the 1^st defendant’s defence to enable it to come to a view that such a defence can no way be anticipated.

22.  For the brief reasons stated above, the plaintiff’s appeal is dismissed.

(Submissions re costs)

23.  Costs of the appeal be paid by the plaintiff to the 1^st defendant forthwith.

24.  Taking into account the comments by the plaintiff on the Statement of Costs and taking a necessarily broad-brush approach, I would summarily assess costs at $46,000, to be payable within 21 days.