FU LOK MAN JAMES t/a LOKIE LEATHERWARE MANUFACTURING CO v. CHIEF BAILIFF OF THE HIGH COURT

CACV 290/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 290 OF 2002

(ON APPEAL FROM HCA NO. 11796 OF 1996)

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REASONS FOR JUDGMENT

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Hon Rogers VP:

1. I agree with the judgment of Le Pichon JA.

Hon Le Pichon JA:

2. This is an application by the plaintiff for leave to appeal to the Court of Final Appeal. The applicant relies on both paragraphs (a) and (b) of section 22(1) of Cap. 484. The background to the appeal is fully set out in the judgment of this court dated 10 December 2002 and I do not propose to repeat it here. At the hearing, the application was dismissed with costs. The reasons appear below.

Appeal as of right

3. For an automatic right of appeal to arise, the applicant has to show that the "matter in dispute" or "appeal" has a value of $1 million or more. The appeal heard by this court and from which the plaintiff wishes to appeal upheld the order of Burrell J making absolute a charging order to enforce the payment of costs by the plaintiff in the trial of HCA 11796 of 1996 (the High Court action) and awarding costs against the plaintiff in favour of the office of the bailiff of the High Court. The plaintiff submitted that he has an automatic right of appeal because (1) the charging order which was made absolute is in law a final order and (2) the amount involved in the appeal is the amount charged under the charging order which now exceeds $1 million.

4. On the question whether a charging order is a final judgment for the purposes of section 22(1)(a), the applicant placed considerable reliance on the decision of the English Court of Appeal in Rainbow v Moorgate Properties Limited [1975] 1 WLR 788 which concerned the construction of Order 58 rule 2 of the Rules of the Supreme Court. The effect of that decision was that any appeal from any order not caught by the words "other than an interlocutory judgment, order or decision" in sub-rule (1) of Order 58 rule 2 would go straight to the Court of Appeal. At the time Rainbow was decided, an appeal used to lie directly to the Court of Appeal from the decisions of a master concerning, inter alia, garnishee orders. Because garnishee orders and charging orders were closely analogous, it made little sense to construe Order 58 rule 2 in such a manner that would result in appeals in charging orders not lying directly to the Court of Appeal. It was in these circumstances that the English Court of Appeal stated that a charging order absolute was a final order for the purposes of Order 58 rule 2. That, as Mr Mok submitted, was an historical quirk concerned with an interpretation of the English rules of court which has since been rectified by amendments to the rules. The long and short of this is that Rainbow is unhelpful and of little relevance in determining whether a charging order is a final order for the purposes of section 22(1)(a) of Cap. 484.

5. The applicant also relied on Ex parte Chinery (1884) 12 QBD 342 where the question was whether a garnishee order absolute was 'a final judgment' for the purposes of subsection 1(g) of s.4 of the Bankruptcy Act 1883. Mr Chiu relied on Cotton LJ's observation (at 345) that

"... a garnishee order is a final order in the proceeding in which it is obtained ..."

He then invited the court to adopt the approach in Rainbow which was to treat garnishee orders and charging orders in the same way given that they were closely analogous procedures and invited the court to treat a charging order as a final order, presumably, on the basis that no distinction was to be drawn between an 'order' and a 'judgment'. However, Mr Chiu's attention had to be drawn to the following passage later on in Cotton LJ's judgment where it is stated that:

"... ["final judgment"] points to a liability of the debtor to the creditor being established in an action, and not to a proceeding of this kind, which is not an action, but a statutory proceeding, for the purpose, not of establishing any liability of the garnishee to the person who obtains the order, but of attaching a debt due by the garnishee to the debtor whose liability to the judgment creditor had been established by the judgment in the action."

Having regard to those observations, the applicant can derive little assistance from that decision.

6. In my view, in determining whether the judgment upholding the making of a charging order absolute was interlocutory or final, the application test is to be applied. See B+B Construction Ltd v Sun Alliance and London Insurance PLC [2001] HK LRD 1 at 4C. Applying that test, there is little doubt that the judgment is interlocutory in nature having regard to the fact that the charging order is a provisional order, there being jurisdiction in the court to discharge or vary the same even after it had been made absolute. See section 20(B)(4) of Cap. 4 and Order 50 rule 7(1) of the Rules of the High Court. It does not finally dispose of any matter in the action. All it does is to render the creditor a secured creditor. Moreover, further proceedings are necessary for the final enforcement of the creditor's rights under the judgment. This conclusion is fatal to the applicant's case that he has an automatic right of appeal under section 22(1)(a).

7. I now turn to the monetary value of the dispute. The amount charged under the charging order corresponds to the amount of taxed costs of the High Court action which had been awarded 'to the defendant'. Suffiad J had found that it was the office of the Chief Bailiff of the High Court rather than an individual holding that office at any time that was being sued. That was the backdrop to the award of costs. The applicant appealed but he never sought to appeal the costs order. When this court dismissed that appeal in July 1999 ("the 1999 judgment"), the costs order made by Suffiad J and the applicant's liability thereunder became final. There was never any appeal from the 1999 judgment.

8. Mr Mok for the respondent submitted that the "matter in dispute" on the appeal is therefore not the taxed costs of Suffiad J's order which had been rendered final by the 1999 judgment, but the charging order made absolute by Burrell J and which this court upheld and, further, that the subject matter of the appeal, being the charging order, is the beneficial interest of the applicant in the asset in question: see High Court Ordinance, Cap. 4, section 20A(1)(a)(i) and (2)(a). Taxed costs are merely a condition precedent for the application for the charging order: see Cap. 4, section 20(1). The respondent adduced evidence to show that the value of the applicant's interest as one of two registered joint tenants of a property in Sha Tin could not, on any view, be of a value of $1 million or more.

9. Mr Chiu for the applicant conceded that there was no evidence to show that the applicant's interest in the property is of a value of or exceeds $1 million but he submitted that the matter in dispute was not whether the charging order should be made absolute but whether the costs order should be enforced by charging it on the property. He relied on Hui Shiu Wing v Cheung Yuk-Lin [1968] HKLR 176 at 183 where Blair-Kerr J cited the following passage from the speech of Lord Chelmsford in Macfarlane v Leclaire (1862) 15 Moore's PC Cases 181:

"In determining the question of the value of the matter in dispute upon which the right to appeal depends, their Lordships consider the correct course to adopt is to look at the judgment as it affects the interests of the parties who are prejudiced by it and who seek to relieve themselves from it by an appeal."

I do not see how this case helps the applicant particularly having regard to the concluding part of the citation (to which Mr Chiu did not refer) where it is stated:

"... it is the immediate effect of the judgment which must be regarded, as the right of appeal arises as soon as it is pronounced."

It is this latter statement that was applied by Blair-Kerr J. The immediate effect of the decision of this court was that the charging order remained absolute and was not discharged. The charging order thus affected, directly or indirectly, the property subject to the charge, namely the applicant's beneficial interest therein.

10. I am inclined to agree with counsel for the respondent that on the facts of this case, it is the value of the applicant's beneficial interest in the property rather than taxed costs which is "the matter in dispute" for the purposes of section 22(1)(a). This is an additional reason why the applicant's case on his having an automatic right of appeal cannot succeed.

A matter of great general or public importance

11. The issue for consideration by the Court of Final Appeal is said to be:

"Whether or not the judgment of the Court of Appeal in CACV No. 141 of 1998 did decide that in law no such person or office exists as the Chief Bailiff of the High Court."

12. The point raised here is no more than the interpretation of the 1999 judgment. How a particular judgment is to be interpreted cannot, it seems to me, involve a question of great general or public importance. Whether the applicant's interpretation of the 1999 judgment is arguable is beside the point: what must be shown is that the appeal raises a matter of great general or public importance. I can discern none. Since this threshold has not been met, I do not propose to address the specific matters raised which only arise should the applicant's interpretation prove to be correct. In any event, these arguments are not new, they have no merit and have been fully addressed by this court in its judgment of 10 December 2002.

"Or otherwise"

13. The applicant also relies on the "or otherwise" limb. Leave under that limb is "is an exceptional course." See per Bokhary PJ in Hui Yiu Wing v The Regional Council FAMV No. 16 of 2002. Only exceptional circumstances would warrant such leave. See, for example, Hui Yiu Wing (where the court below had applied the wrong test) Cheng Lai Kwan v Nan Fung Textiles Ltd (1997-98) 1 HKCFAR 204 (where as a matter of utmost probability unliquidated damages ultimately awarded would reach or exceed $1 million) and Syed Haider Yahya Hussain v The Registrar of Births and Deaths, unreported, CACV 77/2000 (issues involving a matter of immigration which was, at least at that time, a developing branch of the law). In my judgment, no exceptional circumstances exist in the present case to warrant leave under this limb of section 22(1)(b).

Hon Stone J:

14. I agree with the reasons given in the judgment of Le Pichon JA.