THEONE CREDIT LTD (formerly known as THE ONE PROPERTY CREDIT EXPRESS LTD) v. LEUNG CHI WING

DCMP 1422 /2017

[2018] HKDC 552

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 1422 OF 2017

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REASONS FOR DECISION

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Introduction

1.  At the hearing before me on 16May 2018 (“the Hearing”), I dealt with 3 applications, all made by the Defendant, as follows: -

(1)  An application, made by a summons filed on 4April 2018 (“the Stay Application”), to stay the execution of the order for sale made by me on 9March 2018 (“the Order for Sale”);

(2)  An application, made by a summons filed on 7 May 2018 (“the Leave Application”), for leave to appeal against the Order for Sale; and

(3)  An application, made via Mr Dan Leung, Counsel for the Defendant, orally at the Hearing, for retrospective time extension vis-à-vis the Leave Application (“the Time Extension Application”), as the Leave Application was obviously out-of-time.

2.  At the end of the Hearing, I dismissed all 3 applications, ordered the Defendant to pay the costs of all 3 applications to the Plaintiff immediately, summarily assessed those costs at HKD 18,215 (“the Decision”), and indicated I would be handing down my full reasons in writing, which I hereby do.

3.  These Reasons for Decision must be read in conjunction with my Reasons for Judgment dated 9 April 2018 (i.e. [2018] HKDC 368), in which I explained why I made the Order for Sale in the first place.  For consistency, I shall continue to use the same abbreviations.

The Time Extension Application

4.  Under Order 58 rule 2(4)(b) of the Rules of the District Court (Cap 336H), the Leave Application should have been made within 28 days from 9March 2018 (the date of the Order for Sale), i.e. before 6 April 2018.

5.  However, the Defendant did not make the Leave Application until 7 May 2018.  The Leave Application was thus 31 days late.

6.  The first hurdle faced by the Defendant was therefore the Time Extension Application.

7.  The relevant legal principles had been accurately summarized in Hong Kong Civil Procedure 2018 at Volume 2, page 1136, paragraph P3/58/31, as follows: -

“When the Court decides whether to exercise its discretion to grant an application for leave to appeal out of time, relevant factors include: (1) whether there are adequate reasons supporting the delay; (2) the length of the delay; (3) the possible prejudice caused to the other side; and (4) the prospect of success of the appeal…”

8.  For factor (1) above, Mr Dan Leung, Counsel for the Defendant, submitted the delay was caused by the “inadvertence” of the solicitors for the Defendant, as opposed to any fault on the part of the Defendant personally.  He further said those instructing him accepted full responsibility for the delay, and that the delay was the result of a “genuine and honest” but obviously wholly mistaken belief that the Defendant must wait for my Reasons for Judgment (i.e. [2018] HKDC 368) before he could take out the Leave Application.

9.  I accepted that submission as true.  The false advice given by those instructing Mr Leung made its way into paragraphs 7 to 9 of the 2^nd Affirmation of the Defendant dated 3April 2018 (“D’s 2^nd Affirmation”), where he falsely deposed that he was “unable to” take out the Leave Application as my Reasons for Judgment (i.e. [2018] HKDC 368) had not been handed down yet, when the true position, as now accepted by Mr Leung and those instructing him as correct, was that time started to run on 9 March 2018, when I made the Order for Sale orally in Open Court.  It was irrelevant that the full reasons were not available. If the Defendant was minded to seek leave to appeal, he could simply take out a protective summons first, and then supply his amended proposed grounds of appeal after the full reasons were made available.  It was completely false that he was “unable to” do so.  Given that D’s 2^nd Affirmation was drafted and filed by the Defendant’s solicitors, I accepted as true that the aforesaid false assertion was a result of false advice given to the Defendant by the Defendant’s solicitors.  But for my consideration under factor (4), which I will elaborate below, I would have acceded to the Time Extension Application, as in my view the Defendant should not be “penalized” by the fault of his solicitors.

10.  For factors (2) & (3) above, the length of the delay was about 31 days and Mr Dan Leung, Counsel for the Defendant, submitted the delay caused no prejudice to the Plaintiff because even if the Defendant took out the Leave Application within time, it would still have been heard on 16May 2018, as that date had already been marked for the Stay Application, and one would expect the Leave Application and the Stay Application to be heard together.  In that sense, the 31 days delay made no practical difference whatsoever.

11.  I also accepted that submission as true.  But for my consideration under factor (4), which I will deal with hereinbelow, I would have acceded to the Time Extension Application, as in my judgment it was true the delay made no practical difference whatsoever.

12.  In relation to factor (4) above, as had been sensibly acknowledged by Counsel for the Defendant, the Defendant was attempting to appeal against the exercise of a discretion.  Unless it would be reasonably arguable that I had taken irrelevant matters into account, or had failed to take relevant matters into account, or had plainly exceeded “the generous ambit within which reasonable disagreement is possible”, it would appear the intended appeal would have no prospect of success.  See: Tsang Loi Fat v Sun Fook Kong [2011] 4 HKLRD 344 at 348(paragraph 9, per Cheung JA) and RK v YS (HCMP 1969/2012, 1 November 2012, paragraphs 5 & 6, per Kwan JA).

13.  Counsel for the Defendant alleged I erred in saying the Defendant created his own predicament as I supposedly failed to appreciate the reality that a litigant in person (as was the Defendant before he was referred to his current solicitors) may not appreciate the importance of protecting his interests. With respect, that argument was wholly unmeritorious.

14.  The points made in paragraphs 21 to 26 of [2018] HKDC 368 were to the effect that the Defendant was under a legal obligation to pay the Plaintiff in full and plainly could have done so.  That was unchallenged and obviously true.  One does not have to be a lawyer to understand a debt is a debt, and that when a court of law orders a person to pay up [B/94], that person should comply with that court order and pay up.  The Defendant did not comply with that court order [B/94]. D’s Affirmation [A/49], dated 10 October 2017, was drafted and filed by solicitors, so the Defendant must have consulted lawyers on or before that date.  However, even as of the date of the Hearing (i.e. 16 May 2018), long after the Defendant consulted lawyers, the Defendant was still refusing to pay the Plaintiff in full despite the court order [B/94].  The Defendant’s refusal to pay was therefore a choice he made, as opposed to a truly involuntary event (as would be the case if he was, for example, left stranded in a third world country by accident, or in a coma because of a medical condition, so that operating his HSBC bank accounts or dealing with his bankers was literally impossible).  As the Defendant was plainly in the position he found himself by reason of a choice he made, he plainly created his own predicament.  There was no error.

15.  Counsel for the Defendant then further alleged the unwillingness to settle for less (on the part of the Plaintiff) was not conducive to the resolution of this case. With respect, that argument was wholly unmeritorious.  Our laws do not force judgment creditors to accept less than they deserve.

16.  Finally, Counsel for the Defendant alleged I had failed to take into account the fact that D’s Flat was a Home Ownership Scheme flat.  Again, that argument was wholly unmeritorious.

17.  As I had mentioned in paragraphs 32 to 34 of [2018] HKDC 368, it was the Defendant who suggested to me that he had received HKD 340,000 by way of settlement sums from DCEC 2623 / 2016, and that he had a claim to HKD 999,465 in common law damages, and that those sums would be over and above the HKD 500,000 net proceeds of sale the Defendant would be receiving from the sale of D’s Flat.  I was aware that even with HKD 1,839,465 in cash, the Defendant may still have to live in rented units, but in my judgment, having to rent instead of buy was a common and normal phenomenon in Hong Kong and should not be regarded as “hardship”.

18.  The fact that D’s Flat was a Home Ownership Scheme flat did not make paragraphs 32 to 34 of [2018] HKDC 368 false.  The laws of Hong Kong did not in any way guarantee that once a person had bought a Home Ownership Scheme flat, his living quality or living standard would never drop.  Our laws did not in any way guarantee that every living person must be given a perfectly comfortable, perfectly spacious and self-owned property.  In any case, the mere fact that a person’s living quality or living standard may drop did not and would not without more amount to a “good reason” not to make the Order for Sale.

19.  All things considered, I could see no prospect of the Defendant’s intended appeal succeeding at all.

20.  It was for all of the above reasons that I had, after due and careful consideration, dismissed the Time Extension Application.

The Leave Application

21.  Having dismissed the Time Extension Application, I should also dismiss the Leave Application itself, which I did.

22.  Even if I were to grant the Defendant an extension of time, I would still have dismissed the Leave Application, as the intended appeal would have no prospect of success, for the reasons set out hereinabove.

The Stay Application

23.  I could see no reason why there should be a stay.  The Defendant’s intended appeal had no prospect of success.  There was simply no reason why the Plaintiff should be deprived, permanently or temporarily, of the full benefits of the existing court orders.  By the terms of the Order for Sale, the Defendant had been given 28 days to redeem D’s Flat by full payment.  He chose not to redeem D’s Flat by full payment.  The Defendant must accept the consequence of the choice he made.

Costs

24.  The Plaintiff was clearly the overall winner.  Costs should follow the event.  I ordered the Defendant to pay costs to the Plaintiff accordingly.

25.  I read the Statement of Costs lodged by the Plaintiff.  I heard full oral submissions by both parties on each item.  The parties were in agreement that by reason of what was said in Law Society Circular 17-1017(PA) dated 11 December 2017, which took effect from 1 January 2018, Ms Sonam Ho of the Plaintiff’s solicitors, being newly admitted, should generally be allowed HKD 1,730 per hour only in District Court inter-partes taxation or assessment, though the guidance was never binding on me and was for my reference only.  I adopted that rate as the starting point.  I further agreed with Counsel for the Defendant that only the costs of one junior solicitor should be allowed, as the applications made by the Defendant were not so complicated as to reasonably require work to be done by two solicitors, or by a solicitor admitted in 2005.

26.  For “Conference with Client”, I agreed the Plaintiff was entitled to receive advice from its solicitors on the applications made by the Defendant, and the Plaintiff’s solicitors must of course take instructions from the Plaintiff.  A Conference lasting 1.5 hours (or multiple Conferences adding up to 1.5 hours) attended by a junior solicitor was reasonable.

27.  As to other preparation work for the Hearing, the Plaintiff claimed 8 hours of preparation work by Ms Ho and Counsel for the Defendant suggested that that was wholly excessive. In my judgment, that was slightly excessive.  I considered 7 hours of preparation work by Ms Ho to be reasonable and proper.

28.  Counsel for the Defendant observed Ms Ho lodged and served her skeleton submissions late. That observation was correct, but I did not consider the delay to be so bad as to justify depriving the Plaintiff of the drafting costs.

29.  Solely for the purposes of assessing inter-partes costs, and without disrespect, I disallowed the time spent by Mr Alexander Leung, for the reasons set out in paragraph 25 hereinabove.  The applications made by the Defendant were not so complex as to reasonably require work to be done by two solicitors, or by a solicitor admitted in 2005.

30.  The Hearing itself lasted 2 hours and it was obviously reasonable for Ms Ho to be in attendance throughout the Hearing itself.

31.  Having considered the above and having done the calculations, in my judgment it was reasonable and proper to allow a total sum of HKD 18,215 as the Plaintiff’s inter-partes costs for the 3 applications made by the Defendant, inclusive of the costs of the Hearing itself, and I ordered accordingly.

Final Remark

32.  I thank both advocates for their able assistance.