VER, ROGER KEITH v. OKEX FINTECH CO LTD (formerly known as KIND CASTLE TRADING LTD) AND ANOTHER

CACV630/2020

[2022] HKCA 1632

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 630 OF 2020

(ON APPEAL FROM HCA 2439 / 2016)

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J U D G M E N T

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Hon Barma JA (giving the Judgment of the Court):

1.  By a judgment dated 28 March 2022 (“the Judgment”), this court (Barma and Au JJA)  allowed the defendants’ appeal against the judgment of Deputy High Court Judge Le Pichon (“the Judge”)  dated 14 May 2020 by which the Judge dismissed an appeal from an order of Master Suen dated 19 November 2018, which in turn dismissed an application by the defendants seeking to set aside Master Chow’s ex parte order dated 9 August 2017 granting the plaintiff leave to serve a concurrent writ of summons in respect of these proceedings on the 2^nd defendant out of the jurisdiction. The appeal was allowed on the basis of a further revised undertaking proffered by the defendants on 9 February 2022, after the hearing of the appeal, in the light of discussions between the court and counsel during the hearing.

2.  The facts and issues in the substantive appeal, as well as the court’s reasons for allowing it, are set out in the Judgment ([2022] HKCA 468).  We will not repeat them here. 

3.  The plaintiff subsequently applied, by a Notice of Motion filed on 25 April 2022, for leave to appeal to the Court of Final Appeal.  The application for leave is opposed by the defendants.

4.  The plaintiff lodged written submissions in support of the application on 6 May 2022, following which the defendants lodged their submissions opposing the application on 20 May 2022, after which the plaintiff’s reply submissions were lodged on 27 May 2022.

5.  Having considered the Notice of Motion and the parties’ written submissions, we see no reason to depart from the usual practice of determining an application of this kind on the papers.  We have therefore determined the plaintiff’s application on the basis of the documents before us.

The present application

6.  The Notice of Motion puts forward two questions which are said to be questions of great general or public importance (“GPI”), namely:

(1)  What is the test that an appellate court (the Court of Appeal)  should adopt on appeal when the issue is whether a case falls within one of the gateways under Order 11, rule 1(1)  of the Rules of the High Court (Cap 4A)  for service out of jurisdiction: is the decision an exercise of discretion or “evaluative assessment” (as contended by the plaintiff), to which the appellate court must defer save on limited grounds as set out in Hadmor Productions Ltd & ors v Hamilton & anor [1983] 1 AC 191 at 220A-F, or a question of law (as contended by the defendants)  in respect of which the appellate court is as well placed as the lower court to decide the matter? (“Question 1”);

(2)  On what grounds may an appellate court (the Court of Appeal)  set aside a decision of a lower court (the Court of First Instance)  when the former has accepted (at paragraphs 21, 26 and 28 of its Judgment)  that the latter had, in fact, correctly determined the matter in issue (namely, in this case, whether the application came within the relevant gateway (of necessary or proper party)  for leave to serve out of the jurisdiction)?  Specifically, on what basis can the limited grounds under which an appellate court is entitled to disturb the decision of a lower court be expanded to include cases in which it may be suggested that there has been a “change of circumstances” since the lower court’s decision, in particular when such change was attributable to the change of position adopted by the appellant himself? (“Question 2”).

Question 1

7.  The plaintiff’s submissions and reply submissions set out detailed submissions by Mr Andrew Lynn (and Mr Adrian Lo)  as to why a decision granting leave to serve a writ of summons out of jurisdiction under the Rules of the High Court (Cap 4A)  (“RHC”)  O.11 r.1(1)  should be regarded as an exercise of discretion by the judge rather than as the determination of a question of law.

8.  When considering the proposed Question 1, it is pertinent to note the following material aspects of this court’s reasoning in the Judgment when allowing the appeal:

(1)  the issues in the substantive appeal were within a narrow compass, and the appeal itself turned on whether or not the Version 8 Agreement remained in issue in the proceedings, and if so, whether the 2^nd defendant was a necessary or proper party to the proceedings (the Judgment at [19]; see also [3]);

(2)  while we agreed with the Judge (and the plaintiff)  that the undertakings proffered by the defendants in the court below did not suffice to remove the Version 8 Agreement from consideration in the proceedings altogether, we were satisfied that the further revised undertaking put forward by the defendants following the hearing (and which the plaintiff had the opportunity to comment on)  was sufficient to address the plaintiff’s and the Judge’s concerns (the Judgment at [21] to [24]);

(3)  in particular, we were satisfied that the further revised undertaking served the purpose of removing any possible issue as to the Agreement and the Version 8 Agreement which would require the plaintiff to disprove the Version 8 Agreement (the Judgment at [24]);

(4)  on the sole basis that by reason of the defendants’ further revised undertaking (as set out in [23] of the Judgment)  there was no longer any issue in relation to the Version 8 Agreement which needed to be addressed by the plaintiff in the proceedings below, we allowed the appeal and set aside the Judge’s order granting leave to the plaintiff to serve out (at [25] & [29]);

(5)  we emphasised that but for the defendants’ further revised undertaking, we would have agreed with the Judge that the 2^nd defendant was a proper party to be joined in the proceedings (the Judgment at [26]);

(6)  we did not consider it necessary to determine the issue raised by the parties in the appeal that is now formulated as Question 1, as we agreed with the Judge that the present case fell within the relevant gateway of necessary or proper party under O.11 of the RHC (the Judgment at [28]).

9.  As the appeal was allowed solely on the basis of the defendants’ further revised undertaking proffered at the hearing, we do not consider the answer to Question 1 to have any practical impact on the outcome of the appeal.  We agree with the submission of Mr Edward Chan SC (and Mr Clark Wang)  that, by reason of the matters set out at [8] above, Question 1 does not arise in the present case.

10.  It is well established that the Court of Final Appeal will not expend its time and resources on academic appeals which have no practical impact on the outcome of proceedings.  In Deacons v White & Case Ltd Liability Partnership & ors (2003)  6 HKCFAR 322, Ribeiro PJ explicitly stated (at [34])  that leave to appeal to the Court of Final Appeal will not be granted where the question said to arise, however important it may seem to be in its formulation, is academic as between the parties.  See also Tin Lik v Deutche Bank AG & ors, unrep., CACV 145/2016, 20 October 2017 at [21]-[22]; Securities and Futures Commission v Yiu Hoi Ying Charles & ors, unrep., CACV 154/2016, 23 August 2017 at [9]; Re PCCW Limited, unrep., CACV 85/2009, 26 August 2009 at [3].

11.  For these above reasons, even if it were to be assumed (which is not necessarily the case)  that Question 1 involves a point of GPI and is reasonably arguable, it has been rendered academic by reason of the defendants’ further revised undertaking (which was the only basis on which the appeal was allowed).  We accordingly decline to grant leave to appeal on Question 1.

Question 2

12.  Mr Lynn submitted (at [6] of the plaintiff’s reply submissions)  that it was procedurally unfair for this court to entertain the defendants’ further revised undertaking at the conclusion of the appeal hearing while not allowing the plaintiff to raise certain points mentioned in his respondent’s notice. 

13.  The new points raised by the plaintiff (set out at [18] of the Judgment)  were not permitted to be raised for the reasons stated at [27] of the Judgment, including the fact that they were not relied upon before the Judge.  On the other hand, the possibility of resolving the dispute between the parties in relation to the application for leave to serve out of the jurisdiction by way of an undertaking had been explored and considered in the court below, albeit the wording of the undertaking then put forward proved insufficient to alleviate the concerns of the Judge and the plaintiff.  The two matters thus bear no relation to each other.

14.  Further, as noted above, the plaintiff did not in fact address the court on the further revised undertaking when it was put forward by the defendants, despite it being open to the plaintiff to have done so.

15.  In any event, any possible prejudice caused to the plaintiff by reason of this court having allowed the appeal on the basis of the defendants’ further revised undertaking was, in our view, adequately addressed by the award of costs of the appeal to the plaintiff.

16.  The principles which govern the circumstances in which an appellate court may interfere with a lower court’s exercise of discretion, namely that the appellate court will only interfere if it can be shown that the judge has proceeded on the wrong principles, has failed to have regard to a relevant matter (or has taken account of an irrelevant matter), or has exercised his discretion in a manner that is plainly wrong, are in any event well established.

17.  Question 2 cannot therefore be said to be one of GPI, and leave to appeal on this question is accordingly refused.

The “or otherwise” ground

18.  The plaintiff also sought leave to appeal to the Court of Final Appeal on the “or otherwise” ground.

19.  As pointed out by the defendants at [7] of their submissions, it is the consistent practice of this court to leave it to the Appeal Committee of the Court of Final Appeal to consider for itself whether leave to appeal should be granted on the “or otherwise” ground.  We therefore do not deal with that ground here.

Disposition and costs

20.  For the reasons given above, we dismiss the plaintiff’s application for leave to appeal to the Court of Final Appeal.

21.  The application having been dismissed, we see no reason why costs should not follow the event, and therefore order that the plaintiff is to pay the defendants’ costs of this application.  Having considered the Statement of Costs lodged by the defendants on 20 May 2022, we are of the view that the engagement of two senior solicitors was unnecessary for the purpose of this application.  We also have reservations as to whether the engagement of two counsel was really necessary.  In the circumstances, we are satisfied that the costs claimed by the defendants should be reduced, and assess such costs, on a gross sum basis, in the amount of HK$184,650.