LEUNG KWAI LING AND ANOTHER v. FAIRBAIRN CATLEY LOW & KONG ( a firm) AND ANOTHER

HCA 1471/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1471 OF 2013

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J U D G M E N T

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Introduction

1.  This is an appeal by the plaintiffs (“Ps”) by way of a notice of appeal dated 31 July 2015 (“Notice”) against the decision of Master Hui made on that day for the following orders (as set out in the Notice) :

(i) Refusing all orders sought in Ps’ summons of 30 July 2015;

(ii) Giving all orders + charging orders absolute requested by the defendants (“Ds”);

(iii) Fixing costs orders of HK$7,000 and $800;

And Ps sought the following orders:

(i) All orders requested by Ps in their summons of 30 July 2015;

(ii) All orders and charging orders, charging orders absolute, costs orders and the decisions of Master Hui on 31 July 2015 and Master Leong on 8 July 2015 be set aside;

(iii) Time for appealing the said order of Master Leong be extended until after the hearing of the appeal;

(iv) Costs of the appeal be paid by Ds to Ps.

2.  At the hearing on 22 October 2015 before this court, the 1^st named plaintiff Madam Leung Kwai Ling (“Madam Leung”) who appeared on behalf of herself and the 2^nd named plaintiff, handed up further a supplemental notice of appeal.  Leave was granted for her to do so, there being no objection from Miss Tam who appeared on behalf of Ds.

3.  In Ps’ summons of 30 July 2015 (“30.07.15 Summons”),  they were seeking an order “postponing the charging order absolute for 3 months” until :

“(i) Breakdown of the figures of the 3 costs orders;

(ii) Taxation of the D’s 3 bills and the costs orders; within 8 days, Ds to file and serve proof and records of each and all items of work stated in the 3 bills;

(iii) Ds to file the 3 bills as exhibits supported by affirmation;

(iv) Court to conduct inquiry into false and欺詐figures + duplicate + 多餘items in the 3 bills;

(v) Court to order inquiry into the 3 “wrong, unfair + fraudulent costs orders for total around HK$500,000 for total few hours hearing;

(vi) Within 7 days, Ds to submit proper bills for the 2 February hearings to replace previous error + duplicate and confusing bills and to re-do costs orders”

4.  The costs orders referred to by Ps in the Notice and the 31.07.15 Summons originated from the following orders for costs made against Ps:

(i) Orders made on 27 February 2015 and 19 March 2015 by Chung J in respect of Ps’ applications on 10 December 2014 and 23 January 2015 to, among other things, extend  time to appeal against Master K Lo’s directions on 8 October 2014 (“1^st Orders”);

(ii) Orders made on 27 February 2015 and 19 March 2015 by Chung J in respect of Ps’ application on 17 February 2014  to, among other things, postpone the hearing on 4 March 2015 (for various applications including Ds’ application to strike out Ps’ statement of claim) (“2^nd Orders”);

(iii) Orders made on 4 March 2015 and 23 June 2015 by M Chan J in respect of Ds’ application on 26 September 2014 to strike out Ps’ statement of claim and Ps’ various applications (“3^rd Orders”);

(above collectively referred to “Orders”)

5.  On 4 March 2015, in addition to striking out Ps’ statement of claim and the present action, M Chan J had also made a “restricted application order” (“RAO”) and a “restricted proceedings order” (“RPO”) in the terms set out respectively in Attachment 1 and 2 of the Order of 4 March 2015[1].

6.  Under the Orders, Ds’ costs were ordered to be summarily assessed.  Ds then lodged their Statements of Costs under the Orders for summary assessment, and in response thereto, Ps had lodged their List of Objections and stated their various objections and allegations in writing.

7.  The amounts eventually assessed were as follows:

(i) Under the 1^st Orders, the amount assessed to be paid by Madam Leung was HK$63,755 and the amount assessed to be paid by Ps jointly and severally was HK$9,750;

(ii) Under the 2^nd Orders, the amount assessed to be paid by Ps was HK$31,577;

(iii) Under the 3^rd Orders, the amount assessed to be paid by Ps was HK$300,000.

8.  The assessed costs, together with interest at judgment rate were ordered to be paid by Ps under 2 orders dated 19 March 2015 made by Chung J, and an order dated 23 June 2015 made by M Chan J (collectively “3 Costs Orders”).

9.  Ps failed to pay the amounts in the 3 Costs Orders, and Ds, as judgment creditors, applied for a charging order against Ps (judgment debtors).

10.  The charging order nisi for the above summarily assessed costs was granted on 8 July 2015 by Master Leong (“Charging Order Nisi”), and was made absolute at a hearing on 31 July 2015 before Master Hui (“Charging Order Absolute”).

11.  The day before the hearing before Master Hui, P had issued the 30.07.15 Summons.

12.  Thus the decision of Master Hui on 31 July 2015 (“31.07.15 Decision”) was in respect of 2 applications:

(i) Ps’ 30.07.15 Summons

(ii) Ds’ application for the Charging Order Nisi to be made absolute

Grounds of Appeal

13.  The grounds set out in the Notice and in the Supplemental Notice were essentially that the 3 Costs Orders and the Charging Orders were based on 3 “false bills with false + 欺詐 figures” and that Master Leong and Master Hui had made “big and serious errors” in making the Charging Order Nisi and the Charing Order Absolute respectively.

Appeal Against the Dismissal of Ps’ 30.07.15 Summons

14.  Miss Tam, appearing for Ds, submitted that Ps’ appeal by way of the Notice was an “application” which fell within the provisions of the RAO.

15.  The relevant paragraphs of the RAO are paragraphs 1, 5 and 7, which state as follows:

“1. 未經高等法院原訟法庭法官陳美蘭 (“指定的法官”) 的許可，原告人 (即梁桂玲) (Leung Kwai Ling Loretta) 和李耀麒 (Lee Yiu Kei) (共同或各別) 不得在高等法院原訟法庭民事訴訟案件2011年第1568號 (HCA 1568/2011) 及高等法院原訟法庭民事訴訟案件2013年第1471號 (HCA 1471/2013) (“指明的法程序”) 中 (無論在判決作出之前或之後) ，向法庭提出任何進一步的申請；

5. 當原告人獲法庭批予提出實質申請的許可後，必須把批予許可的命令連同實質申請的文件一併送達；而實質申請應由一名法官 (而非聆案官) 負責進行聆訊，但如法官另有指示，則作別論；

7.   如果原告人違反本命令，在指明的法律程序中試圖把申請文件送達予任何擬針對的答辯人，卻沒有把准予發出申請的許可命令的副本一併送達予每一名擬針對的答辯人，則有關申請將會自動撤銷，而擬針對的答辯人或法庭均不須採取任何行動回應[2]。”

16.  Miss Tam referred the court to Mephistopheles Debt Collection Service (A Firm) v Lotay [1994] 1 WLR 1064 in which the plaintiff was a limited partnership firm.  One of the partners of the firm was the subject of an order made under section 42(1) of the Supreme Court Act 1981, which took effect under section 42(1A) of the Act, as amended, as a “civil proceedings order”.  Section 42(1A) provides that “… ‘civil proceedings order’ means an order that … (c) no application (other than one for leave under this section) shall be made by him, in any civil proceedings instituted in any court by any person, without the leave of the High Court …”. The district judge thereupon stayed all proceedings in the action until further order.  One of the partners appealed against the stay by way of a notice of appeal without the leave of the High Court and the appeal was allowed.

17.  On further appeal, Nourse LJ dealt with the construction on the definition of paragraph (c) of the “civil proceedings order” and held that:

“Secondly, any step taken in civil proceedings which amounts to a request to the court for some form of relief, interlocutory or final, is an “application” in those proceedings for the purposes of paragraph (c) of section 42(1A) of the Act of 1981.  Thus the appeal to the judge against the district judge’s order staying the proceedings was an application for this purpose.”

18.  The Notice specifically states that it is “… an application by the said Plaintiff(s) … for an Order that …”.  Miss Tam submitted that this is similar to Mephistopheles case, and that the Ps’ appeal is an “application” and a step taken in this action which amounts to a request to the court for some form of relief as specified in the Notice.  This appeal is therefore an “application” or a “further application” made by the Plaintiffs that falls within paragraph 1 of the RAOs.

19.  In fact, Ds’ solicitors had written to M Chan J’s clerk on 24 August 2015 to enquire whether any leave had been granted for Ps to file the Notice. Her Ladyship had confirmed on 28 August 2015 that no such leave was granted and that it was for Ds to make appropriate submissions/application at the hearing of the Notice[3].

20.  It is clear from the wording of paragraph 1 that Ps have been prohibited from making “any further application” in these proceedings, whether before or after judgment, without leave of M Chan J being first obtained.  Further, under paragraph 5 of the RAO, if Ps issued an application in these proceedings without prior leave of the court, such application should forthwith be referred by the Registry to a Master for such application to be dismissed in accordance with the RAO.

21.  I agree with Miss Tam’s submission that Ps’ appeal by way of the Notice was a “further application” which fell within paragraph 1 of the RAO, and should be dismissed.

22.  Further, an appeal from the master to the judge in chambers is dealt with by way of an actual rehearing of the application which led to the order under appeal, and the judge treats the matter as though it came before him for the first time[4].

23.  So far as Ps 31.07.15 Summons was concerned, there is no doubt that the summons was an “application” or “further application” which fell within paragraph 1 of the RAO, and thus, the 31.07.15 Summons should have automatically stood dismissed and should not have been heard before Master Hui on 31 July 2015.  For this reason alone, I will order that the 31.07.15 Summons be dismissed, and Ps’ appeal in respect of this summons must fail.

Appeal against the Charging Order Nisi and Charging Order Absolute

24.  The summary assessment of costs in the Orders were not orders for provisional summary assessment.  The assessments were made by Chung J and M Chan J respectively after consideration of Ps’ List of Objections and Other Objections, and in any event, there had been no appeals against the Orders, nor the 3 Costs Orders.  The relevant rules and procedures for obtaining and serving a charging order nisi are set out in sections 20 and 20A of the High Court Ordinance (Cap 4) and Order 50 rules 1 and 2 of the RHC.  Miss Tam referred to the affirmation in support of the charging order application filed on 3 July 2015 by Ds and submitted that all the relevant requirements in the above sections / rules had been satisfied / complied with, and the Charging Order Nisi was properly granted by Master Leong.

25.  The relevant rules governing the making of a charging order absolute are set out in section 20(B)(1) of the High Court Ordinance and Order 50, rule 3 of the RHC.  Amongst other things, Order 50 rule 3(1) provides that “[o]n the further consideration of the matter the Court shall either make the order absolute, with or without modifications, or discharge it.”

26.  At the hearing before Master Hui for further consideration of the charging order application, both parties made their respective submissions and there were various documents before the learned Master, namely the Charging Order Nisi, 2 affirmations in support of the charging order applications filed by the Ds, 3 affidavits in opposition filed by the Ps and the Notice of Objections to Charging Order Nisi and Charging Order Absolute were also filed by the Ps.

27.  According to the 3 affidavits in opposition and the Notice of Objections, Ps requested court to set aside the Charging Order Nisi and opposed the Charging Order Absolute to be made against them on the following grounds:

(a) They alleged that the figures in the Statement of Costs and the 3 Costs Orders were “fraudulent” and “false” and many items in the Statement of Costs were “duplicate +多餘”,

(b) They alleged that there were “fraud”, “bias”, “injustice” and “unfairness” on the part of the court and the 2 judges making the Orders and the 3 Costs Orders; and

(c) They had requested the Court to make inquires as to the above matters by way of Ps’ 31.7.15 Summons.

28.  As I have said, there had been no appeal against the 3 Costs Order.  Ps’ allegations were made without any factual basis and the 30.07.15 Summons should have been dismissed in any event.  Ps had not paid any of the costs due under the 3 Costs Orders at the time of the hearing on 31 July 2015.  Therefore, on further consideration of the matter, and pursuant to Order 50, rule 3(1) of the RHC, Master Hui made the Charging Order Absolute.  There was no reason for the Master Hui to “postpone” the Charging Order Absolute as sought in the Ps’ 31.07.15 Summons or to set aside the Charging Order Nisi as requested in the Notice of Objection.

29.  There was no sufficient evidence to support Ps’ allegations that Ds figures in the Statements of Costs were fraudulent and false.  Having considered the above, even if Ds were not restricted under the RAO file the 30.07.15 Summons or to lodge the Notice, I see no merits in Ps’ 30.07.15 Summons to set aside the Charging Order Nisi and the Charging Order Absolute, or the Orders or the 3 Costs Orders.

30.  Ps are also appealing against the costs order in the Charging Order Absolute.  As costs should follow the event, HK$7,000 is in my view just and proper for the charging order application.

31.  There is also no reason to extend time to appeal against the decision of Master Leong.

Conclusion

32.  In light of the above, I dismiss the Ps appeal by way of the Notice filed on 31 July 2015.

33.  As for costs, Ds sought costs on indemnity basis.  In view of Ps’ conduct in continuing to issue applications notwithstanding the prohibitions in the RAO, I find it appropriate to order costs on indemnity basis against Ps.  Such costs to be summarily assessed.  Ds shall file Statement of Costs within 7 days.  Ps may lodge List of Objections within 7 days thereafter.