楊嬡 v. 南華金融控股有限公司 AND ANOTHER

DCCJ 3374/2022

[2024] HKDC 538

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 3374 OF 2022

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DECISION

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1.  The plaintiff’s application for leave to appeal (“the Application”) against the decision of this court dated 20 October 2023 (“the Decision”) took place on 4 January 2024 (“the Hearing”) where the Decision ordered that the plaintiff’s statement of claim dated 31 August 2022 (and reply dated 9 November 2022) against the 2^nd defendant be struck out.

2.  The matter first came before Master Patrick Siu where the 2^nd defendant successfully struck out the statement of claim (and reply) which then prompted the plaintiff to issue an appeal on 8 May 2023 against the said order. The aforesaid appeal led to a hearing before this court and eventually the Decision.

3.  The plaintiff issued her summons and supporting affirmation against the Decision on 1 November 2023. The plaintiff appeared at the Hearing and Mr Wong Shing Tak appeared for the 2^nd defendant.

Legal principles

4.  Section 63A(2) of the District Court Ordinance provides:-

“(2) Leave to appeal shall not be granted unless the judge, the master or the Court of Appeal hearing the application for leave is satisfied that… (a) the appeal has a reasonable prospect of success; or (b) there is some other reason in the interests of justice why the appeal should be heard.”

5.  It was held in Ma Bik Yung v Ko Chuen [2009] 3 HKC 359 that a reasonable prospect of success is whether the applicant for leave can show that he has an arguable case with reasonable chances of success on appeal. It was thereafter held in KNM v HTF and Ors., HCMP 288/2011, the Court of Appeal via the judgment of Hon Fok JA (as he then was) held at §9 and §23 respectively that:

“§9. The relevant test of whether an appeal has a reasonable prospect of success… therefore means an appeal with prospects that are more than “fanciful” but which do not need to be shown to be “probable”.

§23. By way of preface, however, it is pertinent to note that the proposed grounds of appeal all seek to attack findings of fact made by the Judge after an evaluation of the evidence adduced before him. In the circumstances, unless the applicant can show that the Judge misunderstood the evidence, or failed to appreciate its effect, or overlooked some documentary evidence, or other indisputable evidence, which should have compelled him to a different conclusion, this court will not interfere with those findings of fact.”

6.  Hong Kong Civil Procedure 2024 Vol 1 at 59/0/54 states that:

“There are many authorities for the proposition that an appeal will not be entertained from an order which it was within the discretion of the judge to make, unless it can be shown that he exercised his discretion under a mistake of law… or in disregard of principle… or under a misapprehension as to the facts… or that he took into account irrelevant matters… or failed to exercise his discretion… or the conclusion which the judge reached in the exercise of his discretion was “outside the generous ambit within which a reasonable disagreement is possible.”

7.  As such, it is trite that an appeal must show that the decision was based upon a mistake in the application of law or a mistake in the finding of facts. Where the appeal is based upon a mistake in the finding of facts, it is not enough to show that the judge merely exercised their discretion upon reasonable disagreements of certain arguments or evidence placed before the court but that the finding was totally outside the ambit of any possible reasonable disagreement.

8.  An appeal is not an opportunity for the losing party to repeat the same arguments with the hope that another judge(s) or court may come to a different conclusion.

9.  The background of this case is stated in the Decision and shall not be repeated here.

10.  The Decision struck out the statement of claim against the 2^nd defendant since:

(1)  the plaintiff’s case disclosed no reasonable cause of action by virtue of:

(a)  the plaintiff has not pleaded any cause of action against the 2^nd defendant;

(b)  complaints against the 2^nd defendant were made without pleading what was the specific relationship between the plaintiff and the 2^nd defendant and thus any related duty imposed on the 2^nd defendant to the plaintiff;

(c)  the statement of claim inferred the 1^st defendant owed the plaintiff an explanation and required her consent in dealing with the 2^nd defendant’s shares (especially at an allegedly extremely low price) but there is no or no clear link between the two defendants and more importantly no or no clear duty imposed on the 2^nd defendant in this action;

(d)  the statement of claim pleaded that the plaintiff was holding 70,000 shares of the 2^nd defendant at the time when the 2^nd defendant’s shares were sold on an unspecified date in August 2020 but there is no factual basis for how this equated to a “claimed” amount owed to the plaintiff in the sum of $571,200 from the 2^nd defendant.

(2)  the plaintiff’s case was frivolous by virtue of:

(a)  the 2^nd defendant’s privatization and cancellation of its listing status was in accordance with the relevant rules and regulations of the Securities and Futures Commission with activities being publicly announced;

(b)  the process was known by the plaintiff but she admittedly was busy and unable to attend the relevant EGM dealing with, inter alia, her shares in the 2^nd defendant;

(c)  even if the plaintiff attended the relevant EGM, her presence and vote would not have changed the outcome.

11.  China Gold Finance Ltd v CIL Holdings Ltd, CACV 11/2015, 27/11/2015, unreported, the Court of Appeal stressed that the appellate process is not designed to give unsatisfied litigants an additional opportunity for repeating previous submissions on the evidence and factual aspects of the case hoping appellate judges may come to a different view. Such conduct was seen as unhelpful and a misuse of the appellate process.

12.  The plaintiff submitted her supporting affirmation in relation to the Application which stated various matters previously entertained in relation to the Decision. In any event, the plaintiff made further submissions to allegedly expand on her supporting affirmation in relation to the Application at the Hearing but nothing new or of substance arose since the plaintiff repeated her previous submissions already considered in the Decision. Regretfully the plaintiff used the opportunity at the Hearing to simply repeat her previous submissions at length with consistently vocal vigour.

13.  The plaintiff submitted points at the Hearing which were also made pursuant to the Decision with what I can only characterize as being, at most, thematic variations only but without substantive differences. As such, at the Hearing, the plaintiff submitted that, inter alia:

(a)  The plaintiff never gave authorization to either the 1^st or 2^nd defendant to deal with her shares in the 2^nd defendant;

(b)  The plaintiff was neither consulted nor gave authorization to delist the 2^nd defendant although she was a shareholder of the 2^nd defendant and later the plaintiff did admit at the Hearing she did receive information about the delisting through the mail;

(c)  Listed companies must send circulars to shareholders such as the plaintiff herself although she later admitted at the Hearing she was aware of public announcements relating to the 2^nd defendant;

(d)  The 2^nd defendant made an announcement in accordance with the guidelines of the Hong Kong Stock Exchange but the plaintiff was not aware of the relevant information pertaining to the 2^nd defendant before it was delisted (退市) but later admitted at the Hearing the 1^st defendant informed her of the same;

(e)  It is not known why the 2^nd defendant allowed its stock price to fall to the level that it did;

(f)  The 2^nd defendant needed to inform the plaintiff of the delisting but she later admitted at the Hearing she was so informed and was also informed of the EGM but she was unavailable to attend;

(g)  Shareholders such as the plaintiff must be treated fairly;

(h)  The result is that the 2^nd defendant’s stock price was valued extremely low, a forced result that was unfair against the plaintiff (and other shareholders of the 2^nd defendant).

14.  The finding of facts and ruling by this court in the Decision were explained in detail but the plaintiff failed to identify any error, let alone put forward any grounds to show that the finding(s) was plainly wrong and unreasonable given all the evidence before the court.

15.  In conclusion, this court is not satisfied that the appeal has a reasonable prospect of success. Further, the plaintiff has not shown that there was some other reason in the interests of justice why the appeal should be heard.

16.  The Application is dismissed.

Costs

17.  This court queried Mr Wong about why the 2^nd defendant failed to file a skeleton submission in compliance with Practice Direction 5.4 given the Hearing was set down for 30 minutes before this court. Mr Wong with surprisingly cavalier frankness replied that he chose not to file any skeleton submission since the 2^nd defendant told him that this case was trivial and meaningless and therefore the 2^nd defendant did not want to waste resources and legal costs. Mr Wong then submitted that, in any event, he was prepared to deal with the Hearing via his verbal submissions only and that would be sufficient.

18.  The purpose of Practice Directions is to ensure that, inter alia, the efficient, expeditious and economical dispatch of the court’s business as held by DDJ David Chan in The One Credit Limited v Yeung Yuen Fu (unreported, [2020] HKDC 10, 6 January 2020) citing Kwan Kwok Leung v Wong Hei Yu Winny (unreported, DCCJ 5406/2007, 28 November 2008) from HH Judge M Ng (as she then was).

19.  More specifically, as was held in Falcon Private Bank Ltd v Borry Bernard Edouard Charles Ltd & Anor, (unreported, HCA 1934/2011, 9 July 2012) where To J held at §§28-29 that (and this particular part of the decision was never appealed) the purpose of Practice Direction 5.4 is to, inter alia, ensure the orderly conduct of proceedings in court, is not meant to be a strait jacket, and only prescribe the minimum time for filing and serving skeleton submissions before the hearing of ordinary or usual contested interlocutory summonses listed before a judge and appeals to a judge in chambers and contested interlocutory summonses listed before a master for more than 30 minutes. Practice Direction 5.4 in fact still gives a judge or master in an appropriate case to give such directions which allow for a longer time scale since to do so does not offend Practice Direction 5.4 which prescribes only minimum time requirements. As such, there is no room for legal practitioners formally instructed to appear before the court to simply choose not to comply with Practice Direction 5.4 without reasonable explanation(s) provided to the court.

20.  Whether this court found Mr Wong’s submissions sufficient is beside the point since compliance with Practice Direction 5.4 allows the court to be, inter alia, better and earlier apprised of the key points to be argued at a hearing thus ensuring the orderly conduct of proceedings in court. It bears repeating of consequences of non-compliance under Practice Direction 5.4 is that:

“30. Those not observing or complying with these directions may be called upon to explain such failure and, in the absence of a satisfactory explanation, may be penalized in costs irrespective of whether or not they are the parties who succeed on the application. Parties are warned that to ensure observance of and compliance with these directions, a party who has breached any of such directions may, despite his success in the application or appeal, still be deprived of all or part of his costs of the application or appeal as a penalty. Further, such costs penalty may be imposed irrespective of whether or not the breach has resulted in any adjournment of the hearing or any other forms of wastage of time or costs.”

21.  I order that the plaintiff pay costs of and occasioned by the Application to the 2^nd defendant to be summarily assessed by paper disposal (unless otherwise directed) and that this court will be taking into account §§18-20 hereinabove. The 2^nd defendant do within 7 days from the date hereof lodge and serve its statement of costs.

22.  Should the plaintiff require translation of this decision into Punti, she may contact my clerk to arrange for an appointment for a court interpreter to verbally translate this decision to her at the District Court Building at a mutually convenient time. Furthermore, the 2^nd defendant must serve on the plaintiff a Chinese translation of the sealed copy of the order together with the sealed copy of the order made herein.