LEE SHIU MING v. YEO HIAP SENG (HONG KONG) LTD.

1993, No.39
(Civil)

IN THE COURT OF APPEAL

(On Appeal from the High Court Labour Tribunal Appeal No.52 of 1992)

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J U D G M E N T

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Nazareth, J.A.

1. The appellant ("Mr Lee") appealed against the order of Deputy Judge J. Chan made on the 16th December 1992 by which he lifted a statutory stay of proceedings and dismissed Mr Lee's application for leave to appeal to the High Court against a decision of the Labour Tribunal "for want of prosecution". Having heard counsel's submissions we allowed the appeal, set aside the order and remitted the matter to the High Court for the application for leave to be heard by a different judge.

2. The matter arose in the following way. Mr Lee was employed by the respondent as Chief Costing Clerk. On 3rd July 1992 he was dismissed by letter upon grounds he disputes, more or less about the same time that he submitted a letter of resignation. He then filed a claim in the Labour Tribunal which was dismissed on the 9th November 1992. He decided to appeal and went to the Legal Aid Department on 16th November 1992 to apply for legal aid. He was interviewed and advised to file an application for leave to appeal. That he did the next day, 17th November 1992. He was on the same day, given by the Supreme Court Registry notice that the hearing of his application was fixed for the 16th December 1992, at 9:30 a.m.

3. On the 18th November 1992, the day following the filing of his application, the Legal Aid Department delivered a memorandum of notification to the Supreme Court Registry giving notice that Mr Lee had applied for legal aid. That was done to meet the requirements of s.15(2) of the Legal Aid Ordinance, (Cap.91):

"15. Stay of proceedings upon making of application for legal aid

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(2) Where an action has been commenced or where an appeal has been lodged in respect of any proceedings and any party, or any person who wishes to be joined as a party, makes an application for legal aid, the Director shall, as soon as practicable after the application is made, notify the other party or each of the other parties, and file in the court in which the action is commenced or in the court in which the appeal is lodged, as the case may be, a memorandum of such notification."

4. The result of the filing of such a memorandum is a statutory stay of the proceedings unless otherwise ordered by the court. This is provided in s.15(4):

" (4) Where any memorandum is so filed, then, unless otherwise ordered by the court in which the memorandum is filed, all proceedings in the action or in the appeal or in both the action and the appeal shall, by virtue of this section, be stayed for such period, being not less than 14 days, as may be prescribed, and during such period (unless otherwise ordered by any such court) time fixed by or under any law or otherwise for the doing of any act or the taking of any step in the proceedings shall not run."

5. The prescribed period during which proceedings are stayed is 42 days under reg.7A of the Legal Aid Regulations.

6. Reverting to the facts, Mr Lee returned to the Legal Aid Department on 9th December 1992 to enquire about the progress of his application. In his affidavit he says he was informed by a female officer that the hearing of his application for leave to appeal had been postponed to 19th December 1992. It has not been possible for the Legal Aid Department to trace that female officer. However, Mr Lee came to the Supreme Court on the 19th December only to find that his case was not listed; indeed he was told applications for leave to appeal were not listed on a Saturday which the 19th December 1992 turned out to be. He went back to the Legal Aid Department and informed them, but it was not until the 28th December that the Legal Aid Department learned of the dismissal of Mr Lee's application. Meanwhile on the 24th December 1992, Mr Lee was granted a legal aid certificate. On the 10th March 1993 a notice of appeal against the deputy judge's order of the 16th December 1992 was filed. On the 16th March the order was perfected upon the initiative of the solicitors representing Mr Lee in pursuance of the legal aid granted to him. On the 31st March 1993 the deputy judge delivered reasons for his decision of the 16th December 1992. On the 10th June 1993 a supplementary notice of appeal by Mr Lee was filed.

7. From his reasons for decision it appears that the deputy judge on the 16th December 1992 waited for 17 minutes and when neither of the parties had yet appeared, lifted the stay and dismissed the application. He gives for lifting the stay the following four reasons. First "the failure of the [Legal Aid Department] and the claimant to take action within a reasonable time to put themselves in a position for a proper consideration and determination of the claimant's application". He arrived at that conclusion by looking at the High Court and Labour Tribunal files which did not reveal any action by the Legal Aid Department to secure the court records and exhibits. It is now clear that the files were not complete; indeed the Labour Tribunal file could not have been kept up to dates as it had been sent to the High Court in connection with the appeal. The deputy judge thereby misdirected himself in fact, for the Legal Aid Department had on the 23rd November requested notes of proceedings and reasons for decision from the Labour Tribunal.

8. Second, the deputy judge relied upon "the failure on the part of the claimant to have the hearing date properly vacated thereby causing a wastage of judicial time". I pause here to mention that the deputy judge's reasons for decision run to 11 rather dense pages of typescript. I do not find it necessary to recount his somewhat lengthy reasons for holding that it was the duty of the claimant if not also of the Legal Aid Department "to inform the listing officers in charge of the court's diary to vacate the listing of the hearing on 16th December 1992 and to arrange for a new hearing at a date subsequent to the period of statutory stay". Affidavits put in by the Legal Aid Department show that there is no such arrangement in place. For myself I am quite unable to accept that there is any such duty on the part of the claimant or of the Legal Aid Department, save, for instance, where the application for legal aid is made so shortly before the hearing of an application or other proceedings that the court might not learn in time of the stay. However it is apparent from the affidavits that the Legal Aid Department, in the terms of s.15(2) of the Legal Aid Ordinance, does "as soon as practicable after the application is made, notify the other party ... and file a memorandum of such notification" in the manner required of it in the Supreme Court Registry. Furthermore, where time is short, the Legal Aid Department telephones the judge's clerk. In the present case, as indicated, the memorandum was delivered on the day after the application for legal aid was made, i.e. the 18th November, 1992.

9. It was then for the Supreme Court Registry staff to direct it to the appropriate quarters. Clearly it did reach the deputy judge before the date of the hearing, even if only by being placed in the court file. I myself do not have any personal knowledge nor before me any material to enable me to conclude that the practice is for the listing clerk, as apparently assumed by the deputy judge, to arrange for vacation of the hearing date or even if that is the appropriate course. In the case of an ex parte order, the respondent might wish to use the hearing date to have it discharged. However that may be, it manifestly cannot be the duty of the Legal Aid Department to take action for the hearing date to be vacated. In my view the deputy judge misdirected himself in proceeding upon the basis that there was a duty and a failure to discharge it on the part of the claimant.

10. Third, the judge relied upon "the failure of the claimant or any representative to attend the hearing without being excused by the court". It is now clear that the non-attendance of the applicant is entirely excusable. I would add, having regard to the deputy judge's strictures upon the Legal Aid Department, that it did instruct the applicant to attend, although one of its staff appears to have given him the wrong date.

11. Fourth, the deputy judge relied upon "the unlikelihood of any real prejudice to the claimant" as the hearing was ex parte and could be set aside upon application to him, with a review of the application for leave at the same time. It does not seem to me that such unlikelihood of prejudice could warrant the exercise of discretion in a manner that was not justified in the first place. Moreover, as the deputy judge himself indicates, it would not have been possible for him to review the matter once his order was perfected. The foregoing misdirections clearly vitiate the deputy judge's exercise of his discretion. Above all, the lifting of a stay in such circumstances is calculated to frustrate the very object of s.15, the more so when the heating of the application for leave is immediately proceeded to and dismissed peremptorily for want of prosecution before the applicant's application for legal aid has been determined. For myself I have no doubt whatever in the light of all the material before the deputy judge, a fortiori before me, that properly exercised, the discretion under s.15(4) should have required the stay to remain in place. The deputy judge's order lifting the stay had therefore to be set aside, and with it the dismissal of the application for leave to appeal.

12. It remains to be said that Mr Nicholas Pirie for the Respondent very properly took a neutral stance in the matter, and did not oppose the appeal. Indeed, with the object of assisting the court, he suggested that the court might consider, upon the basis of page 561 of Vol 1 of the Supreme Court Practice 1993, that the deputy judge had no jurisdiction to deal with the matter ex parte. However that may be, for the reasons I have already given I did not find it necessary to pursue Mr Pirie's suggestion, nor Mr Merry's alternative submission that the dismissal of the application for leave should be set aside as the deputy judge was wrong in not affording Mr Lee more time, in dismissing the application summarily for want of prosecution, and, in dismissing it before the application for legal aid, which he knew had been made, was decided.

13. The parties having come to terms as to costs and agreed that no order be made, it is not necessary for this court to concern itself with that matter. However we were informed by Mr Merry, with reference to the lien that the Legal Aid Department will ultimately have upon any amount recovered by Mr Lee, that the amount of his claim, some $19,000, would be swallowed up entirely by the costs and fees of the Legal Aid Department. Having regard to the unfortunate manner in which Mr Lee's appeal became necessary, through the workings of the judicial process rather than any fault on his part, it would be most unfortunate if he does lose the total amount of his claim. Clearly, therefore, that this would be a particularly appropriate case for the costs of the Legal Aid Department to be met out of public funds rather than recovered out of the applicant's modest claim.

14. Having regard to the matters raised before us, I would add the following. If the existing procedures in question do indeed result in wastage of judicial time, that is not apparent from the material before us. As to whether the listing clerk should have been informed, or was not informed, or should himself be expected to arrange for the vacation of pending hearing dates, again there is insufficient evidence before me to take a view. However what is clear is that there was no delay on the part of the Legal Aid Department in delivering the memorandum of notification to the Supreme Court Registry. Likewise on the evidence, Mr Lee was told to attend the hearing of his application, so that there was no discourtesy to the court on the part of the Legal Aid Department.

15. The statutory stay of proceedings, notwithstanding its necessity and laudable object, is a potentially grave and damaging encroachment upon the opposing litigant's rights, despite the court's discretion to lift the stay. It imposes in my view a corresponding duty upon the Legal Aid Department to act expeditiously and to terminate the period of stay as early as practicable. Again, in the present case there is no evidence to suggest that it did not approach the matter in that way.

16. Finally in my view, although there will be cases that require them to lift a stay under s.15, the courts should be slow to do so before the application for legal aid is determined, a fortiori where it is sought by a layman, as here, to enable him to contend with matters of law. That said, I feel bound to add again that there is no evidence that the courts do otherwise.

Litton, J.A.:

17. I agree entirely with the judgment of my Lord Mr Justice Nazareth J.A. and the orders he proposes, and wish to add only a few words.

18. The deputy judge appears to have lost sight of the primary function of the court in civil proceedings which is to do justice between the parties. There will, of course, be circumstances where, to achieve this object, the court in the exercise of its discretion lifts the statutory stay imposed by s.15(4) of the Legal Aid Ordinance. My Lord has cited one instance: when the continuation of an ex parte injunction might do irreparable harm to the defendant; upon good cause shown, and particularly if it appears that the application for legal aid by the plaintiff is simply to obtain an advantage through the statutory stay, and thus the automatic continuation of the injunction, the court will intervene. Such circumstances are remote from the facts of this case.

19. The deputy judge, at one point in his reasons, referred to his lifting the stay "to prevent an abuse of its process". Like my Lord I can see no basis whatever for the judge holding that the claimant and the Legal Aid Department have failed in their "duty" by not attending upon him to prosecute the application for leave to appeal; far less can I see the justification for saying that what had occurred was "an abuse of process". The stay of the proceedings, for the statutory period of 42 days, could not conceivably have harmed the interests of the respondent. There were simply no reasons of justice for the stay to be lifted.

20. The judge had plainly not exercised any discretion under s.32(1) of the Labour Tribunal Ordinance as regards the application for leave to appeal. He said so in plain terms. He stated in his reasons that the application was not dismissed upon the merits, but merely for want of prosecution. Accordingly the matter remains on foot, to be dealt with by a different judge.

Liu, J.:

I agree that for the reasons given by my Lord Nazareth J.A., the deputy judge's order lifting the stay had to be set aside and, as my Lord said, with it the dismissal of the application for leave to appeal.