LO SIU LAN AND ANOTHER v. HONG KONG HOUSING AUTHORITY

CACV 378/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 378 OF 2004

(ON APPEAL FROM HCAL NO. 154 OF 2004)

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J U D G M E N T

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Hon Stock JA:

1. When an application for legal aid is made to the Director of Legal Aid for the purposes of a proposed appeal, all proceedings in the action are by reason of statutory provisions stayed for a period of 42 days, unless a court orders otherwise.  The application before me by the Housing Authority is for me to order otherwise, namely to lift the stay.

2. The history of these proceedings is well-known.  They started with an application for judicial review of the Housing Authority’s decision to sell retail and car parking facilities to Link Properties Ltd in connection with which sale the Housing Authority has proposed to offer for purchase by the public in Hong Kong and to certain international investors units in a unit trust called the Link Real Estate Investment Trust (“REIT”).  Dealing in REIT units was originally planned to commence on 16 December 2004 but as a result of litigation that was postponed, initially to 20 December 2004.

3. Put very broadly, the case for the applicants was that the Housing Authority was bound to provide amenities ancillary to housing with the suggested concomitant responsibility to retain control over the retail and car parking facilities; and that, by selling those facilities to a commercial concern, the original object of benefiting tenants of public housing estates with the provision of such facilities would be frustrated and the Authority ‘s duty breached.

4. On 14 December 2004 the first instance judge refused the application for judicial review.  On 15 December 2004 the Housing Authority succeeded in an application before the Court of Appeal for an abridgement of time for appealing against the first instance decision and an order was made that time be abridged to 1 p.m. on 16 December.  The appeal was heard that day and dismissed.  Reasons were handed down on 17 December 2004.

5. Anxious that the postponed deadline of 20 December for commencement of dealing should not be put at risk – assuming of course that its case was sound – the Housing Authority applied to the Court of Final Appeal to abridge the time available to the applicant to appeal to the Court of Final Appeal against the Court of Appeal’s judgment.  That application was dismissed because the Court of Final Appeal has no jurisdiction thus to abridge time.

6. It was decided by the Authority that the launch date would not further be postponed but given, it said, the perceived uncertainty caused by the litigation, the IPO was cancelled, although the cancellation is not final in that it is proposed to proceed with the divestment and the IPO so soon as litigation has concluded; this assuming, on the Housing Authority’s part, that it will conclude in the Authority’s favour.

7. On 3 January 2005, after consultation with her legal advisors, the applicant applied to the Director of Legal Aid for legal aid to launch an appeal against the Court of Appeal’s dismissal of the judicial review appeal as well as against the Court of Appeal’s order of the 15 December abridging time.

8. Sections 15(3) and (4) and (7) of the Legal Aid Ordinance, Cap. 91 read as follows:

“(3) Where any … person … makes an application for legal aid to prosecute an appeal …, 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 or tribunal against whose judgment or order it is intended to appeal, a memorandum of such notification.

(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.

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(7)   The time during which proceedings are stayed by virtue of this section may be reduced or extended by order of the court in which the memorandum is filed.” (Emphasis added).

9. In that subsection (4) provides for the prescription of a minimum stay period, subject to an order of the court to the contrary, the period in fact prescribed is 42 days: see regulation 7A, Legal Aid Regulations, Cap. 91.

10. The Director’s memorandum was filed, according to the evidence placed before me, on 3 January 2005 and it follows that by reason of the statutory provisions, proceedings have automatically been stayed for a period of 42 days, a period that expires on 14 February 2005.  In the meantime, however, namely on 11 January 2005, the application for legal aid was refused by the Director.

11. The only other statutory provision that may be relevant is section 26A of the Legal Aid Ordinance which provides that a refusal by the Director to grant legal aid for an appeal (or for an application for leave to appeal) to the Court of Final Appeal may be the subject of a review before a committee.  The only time frame stipulated by that section is that the review shall be initiated by a notice in writing within 28 days of the decision that it is sought to review.  A notice initiating a review must be accompanied by a certificate by counsel stating that the person aggrieved has a reasonable prospect of success in the appeal, and the grounds for that opinion.  There is no time set for the review itself.

12. What has happened in this case thus far, in this particular regard, is that Madam Lo has applied for a certificate but the issue of that certificate has, for reasons which are not entirely clear to me, not resolved itself.  In correspondence between solicitors, those acting for Madam Lo have said that “in the event that the appeal under section 26A cannot be heard within the period of 42 days … our client will seek an extension of the stay and further extension of this period.  In our experience legal aid appeals can last 6 months or longer”, although the suggestion in submissions to me today was that, whilst it is not a speedy process, it may not last that long.  There is however – this is to be stressed – no application before this Court today for an extension of stay.  I am solely concerned with the Housing Authority’s application to lift the stay.

13. It is against that background that the present application is made; and it would mean that from the moment of such an order, were I to make one, time for appeal would resume its run.  The time for appealing would then expire, I am told, on 12 February, rather than on 25 February were I not to abridge the time.

14. The basis of this application is the Housing Authority’s desire, from its perspective, to avoid such wastage of time as reasonably can be avoided.  It is said on behalf of the Authority that the need for funds which the IPO was, and still is, designed to satisfy, remains; and that the passage of time continues to cause prejudice to the Authority, so long as the transaction is not concluded, because of continued operational expenditure of the Link Management Ltd, the continued deployment of staff to work on the re-launch of the IPO, the need for updated property surveys which may well become more complex over time, and the need to conduct the re-launch whilst market conditions remain favourable.

15. I have seen certain correspondence between solicitors aimed at a possible resolution of the legal aid difficulties and at expedition; but these have come to naught.

16. Madam Lo opposes the application to lift the stay.  There is a lengthy affirmation before me, filed yesterday, which gives a number of reasons.

17. The application to lift the statutory stay cannot in the present factual context be divorced from two facts arising since legal aid was refused for the appeal; the second somewhat more important today than the first.  The first is the fact that Madam Lo has put in train an application for a review under section 26A; and the second, the fact that she has received favourable advice from counsel as to the prospect of success in the appeals, upon the basis of which advice, which is a joint advice of Leading and Junior Counsel, she has asked the Director of Legal Aid to review his decision.  The Director has agreed to do so, but has yet to make a decision.  This second factor was not known to the Housing Authority at the time that this stay application was initiated.  Counsel’s opinion was only received by Madam Lo on 25 January, and communicated to the Director of Legal Aid on 28 January.  Mr Chong, Principal Legal Aid Counsel, from the office of Director of Legal Aid, has kindly appeared this morning in order to assist the Court, for which I am grateful.  He tells me that, in accordance with procedures laid down (whether in this case or generally I know not), these new opinions are being placed before Senior Counsel in Hong Kong who has been advising on the question of legal aid in this case, and he (Mr Chong) hopes to have a decision by the end of this week although, of course, he does not tie himself down to any particular date.  But that is the basis on which I shall proceed.

18. It is obvious that the purpose of the statutory stay is to give to the Director of Legal Aid sufficient time in which to determine an application for legal aid.  But for the recent development, by which I mean the new opinion from counsel and the request for a reconsideration of the Director’s decision, there would seem to be little point in doing other than lifting the stay.  There is before me no application for a further stay under section 26A, whether to cater for the proposed statutory review or for any other reason.  Mr Dykes, on behalf of Madam Lo, tells me that if legal aid is not granted, there will be such an application.  But that then would call into play a new factual scenario with which I am not now dealing.  The fact that a prolonged progress of a section 26A review may be against the extension of stay, were there to be such an application, is not to the point in dealing with this thirteen day issue which is now before me. 

19. There are, so it seems to me, good grounds for refusing this application:

(1)	The matter is under reconsideration by the Director and given the fact that he is faced with a favourable opinion from Leading Counsel, I must for today’s purposes assume that there is some prospect that legal aid will be granted;
(2)	The stay has but thirteen days to go.  I note the daily costs to which the Authority makes reference, and I note also the references to the damage that would be caused by “an extended delay”.  However I do not see that a further thirteen days constitutes, in full context, extended delay.  Once the Director of Legal Aid makes his decision, say at the end of the week, we are then after all only talking about a period of something like eight or nine days and, in the context of the whole procedure, that seems to me to be not very much.  On the other hand, the difference to Madam Lo of a further thirteen days is not in practical terms to be sneezed at, if I may use that expression.  If I were today to lift the stay, she would have to draft and file a notice of intended application for leave to appeal and a notice of appeal within a limited time indeed without, I must assume, the advantage of representation.  The thirteen days also give the Director time to consider the new material before him.  If he makes a decision, hopefully a speedy one, to grant legal aid, then those acting for Madam Lo will have time to put the papers in proper order.  If, on the other hand, he makes a decision not to grant legal aid, and assuming such a decision also, if it goes that way, is made speedily, then Madam Lo at least has those few extra days in which to organize her application.

I do not think that the thirteen days makes such a difference to the Housing Authority as to outweigh these considerations.  It seems to me therefore that the balance of the matter is in favour of refusing the application, which I do.