ELITE CONSORTIUM LTD AND OTHERS v. YIM WAN POR AND OTHERS

HCA 66/2022

[2024] HKCFI 1783

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 66 OF 2022

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REASONS FOR DECISION

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1.  This was an application of the defendants by summons dated 21 May 2024 (“the Leave Summons”) for leave to appeal against my order dated 7 May 2024 (“the Refusal Order”) and for an interim stay of execution pending the determination of the defendants’ intended appeal. At the end of the hearing, I dismissed the Leave Summons with written reasons to be handed down which I now do.

2.  The Refusal Order was made in respect of the defendants’ summons for their application for a stay of execution of the order of a master dated 15 March 2024 (“the Discovery Order”) pending the hearing of their appeal (“the Stay Summons”).

3.  This court disposed of the Stay Summons at the first hearing of the Stay Summons on 7 May 2024 (“the Stay Hearing”). After hearing the submissions of Ms Lin, for the defendants, and, Mr Yan, for the plaintiffs, I made an ex tempore decision to dismiss the Stay Summons with reasons orally given. My reasons as shown in the transcript of the Stay Hearing have subsequently been converted into a written form by way of a written decision (“the Stay Decision”)[1] made available to the parties.

4.  I shall refer to the Stay Decision for all the background facts. My conclusion in the Stay Decision is, in a nutshell, that by adopting a broad-brush approach, I fail to find any arguable ground of the defendants’ appeal to set aside the Discovery Order.  Thus, I conclude that the defendants’ appeal is not arguable.

5.  A draft Notice of Appeal (“the draft NOA”) is annexed to the Leave Summons. Ms Lin confirms that the defendants, for present purposes, do not rely on all the grounds set out in the draft NOA.  

6.  My attention was drawn to the fact that subsequent to the hearing of the Stay Summons, the hearing date for the appeal against the Discovery Order had been fixed and the defendants had filed purportedly in compliance with the Discovery Order.

Applicable legal principles

7.  Before assessing the merit of the Leave Summons, I find it to be of assistance to refer to the applicable legal principles relating to the present application.

8.  The starting point is section 14AA(4) of the High Court Ordinance, Cap.4, which provides that unless the court is satisfied that the appeal has a reasonable prospect of success or there is some other reason in the interests of justice why the appeal should be heard, leave to appeal from an interlocutory judgment or order should not be granted.

9.  In SMSE v KL [2009] 4 HKLRD 125, Le Pichon JA explained that 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”.

10.  In Techtronic Product Development Limited and Anor. v. Fauteux, Denis Gaston [2024] HKCFI 949, DHCJ MK Liu gave a convenient summary of the legal principles germane to the present application as follows:

“7. What is required is a reasonably arguable appeal. Merely showing that an appeal is “arguable” and “not fanciful” is insufficient.^[2]

8. The Feb 2024 Order is made by me as a result of an exercise of discretion of this court. In order to succeed in the intended appeal, D has to overcome a very high hurdle. It is well established that the Court of Appeal would not interfere merely because it would have reached a different conclusion had it been hearing the application at first instance.[3] The Court of Appeal would only interfere where (a) the court below has misunderstood the law or the evidence, or (b) the exercise of discretion by the court below was plainly wrong such that it was outside the generous ambit within which a reasonable disagreement is possible.[4] The Court of Appeal is not to exercise an independent discretion of its own – its initial function is one of review only.[5]

9 …

10. The mere fact that certain matters relied on by counsel were not mentioned in the judgment does not mean that the judge had not taken them into consideration.  Nor is the judge required to address all the points made by counsel, whether legal or factual.[6]”

Discussion

11.  In the draft NOA, I am said to have given insufficient weight or consideration to certain matters raised by the defendants. At the hearing, Ms Lin mostly rehashed the arguments advanced at the Stay Hearing, which had already been dealt with or rejected in the Stay Decision. I do not think I need to add anything to what I have said in the Stay Decision.

12.  Ms Lin submitted that I erred in considering the entirety of the plaintiffs’ application for specific discovery afresh as if it was an appeal proper when I should have taken a broad-blush approach only in forming a preliminary view as to the merit of the defendants’ appeal.

13.  I saw no merit in this submission. In the Stay Decision, I stated that I had adopted a broad-brush approach only. I merely looked at the pleadings of the parties to see what the issues were. I was referred to one single sentence in the witness statement of the 1^st defendant by Ms Lin, which was said to be consistent with the defence case. Though I have read the detailed written decision of the master, I did not find it necessary to refer to any part of it for the purpose of the Stay Summons. I am unable to understand how my approach could be faulted.

14.  Ms Lin submitted that the major problem with the Stay Decision is that I had overlooked the necessity issue. She submitted that this court should continue to consider whether discovery was necessary even if the documents sought to be discovered were relevant.

15.  The only submission that Ms Lin made about necessity at the Stay Hearing was set out in paragraph 7 of the Stay Decision. I dealt with the same in the following paragraph. Though I did not use the exact word “necessity”, clearly I considered the relevant submissions and determined the issue of necessity.

16.  I found no substance in this complaint too.

17.  Ms Lin repeated her submissions about the non-existence of certain documents and the intrusiveness of the Discovery Order. Though in the Stay Decision, my focus was on the relevance of the documents in question, I expressly mentioned Ms Lin’s relevant submissions and they were duly taken into account. Everything being considered on the whole, I formed the preliminary view that such documents should be discovered and hence the appeal against the Discovery Order was not an arguable one.

18.  In the absence of an arguable appeal, the minimum requirement for a stay cannot be met. It was, strictly speaking, unnecessary to go on to consider Ms Lin’s submission as to whether the appeal would be rendered nugatory if it turned out to be successful. 

19.  At the Stay Hearing, I indicated to Ms Lin that I was unable to accept her submission on the irreversible effect of the Discovery Order. For those documents which the defendants truly believe to be non-existent, they could simply make an affirmation that such documents did not exist. Indeed they have done so.

20.  For those bank statements of the defendants, I observed in the Stay Decision that protective measures could be agreed by the parties to avoid any unfair prejudice caused to the defendants when they were disclosed pursuant to the Discovery Order. It is one of the grounds of appeal that this suggestion had not been raised with the parties and I did so for the first time when I gave my reasons orally.

21.  This ground has no merit. I cannot accept that this court was obliged to explain to counsel why a particular submission would be rejected in the course of their submissions.

22.  Nor could I accept that I should have made it clear to the parties what protective measures I had in mind. They are just obvious. Litigation lawyers should know very well how to deal with discovery of documents containing sensitive but irrelevant information.

23.  For the reasons given, I was unable to accept that I had erred in my refusal to exercise my discretion to grant a stay pursuant to the Stay Summons. I had no hesitation in reaching the conclusion that the intended appeal against the Refusal Order has no reasonable prospect of success. Leave to appeal must be refused.

24.  It follows that there is no reason to grant an interim stay pending the intended appeal against the Refusal Order. The Leave Summons was dismissed in its entirety.

25.  I heard the parties’ submissions on costs. It should follow the event. I summarily assessed the costs of the plaintiffs of and occasioned by the Leave Summons at HK$20,000 to be paid by the defendants. The amount was agreed by the defendants.