LAI KIM MING JOSEPH TRADING AS JOE LINES CO v. MACROTECH SECURITY & MANAGEMENT SERVICES LTD

DCCJ 3647/2014

[2021] HKDC 727

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 3647 OF 2014

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DECISION

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Introduction

1.  These are two applications by the defendant, one for leave to appeal against the decision on costs made on 11 February 2021 (“Decision”) and another for stay of execution of the Decision. 

2.  There was a trial between the plaintiff and the defendant under two actions, DCCJ 3392/2014 and DCCJ 3647/2014, which were heard together.  By a judgment handed down on 4 September 2020 (“Judgment”), with respect to this action DCCJ 3647/2014, I made a costs order nisi that the plaintiff should pay the defendant 50% of its costs with certificate for one counsel (“costs order nisi”).

3.  Then, by a summons filed on 16 October 2020, the plaintiff applied for leave to apply out of time to vary the costs order nisi and to vary that costs order nisi with costs.  By the Decision, I granted leave to the plaintiff to apply out of time to vary the costs order nisi and varied the costs order nisi to the extent that the defendant should pay the plaintiff 50% of the costs of the action DCCJ 3647/2014, with certificate for counsel, to be taxed if not agreed[1]. 

4.  By a summons filed on 25 February 2021, the defendant applied for leave to appeal against the Decision on costs (“Leave to Appeal Application”). By another summons filed on 4 March 2021, the defendant applied for stay of execution or enforcement of the Decision and/or the taxation proceedings. The defendant now confirmed in the written submission that the application for stay of execution would not be pursued[2]. 

5.  The Leave to Appeal Application is opposed by the plaintiff.

6.  For ease of reference, I first set out the chronology of some relevant events which are not disputed by the parties:-

4 September 2020	Judgment, with the costs order nisi, was handed down
18 September 2020	costs order nisi became absolute upon expiry of 14 days
12 October 2020	Judgment was sealed
16 October 2020	plaintiff’s solicitors filed a summons to vary the costs order nisi

7.  The plaintiff, for the purpose of this Leave to Appeal Application, in addition to the above events, also seeks to refer to the following events (which are not accepted by the defendant) [3]:-

17 September 2020	plaintiff’s solicitors lodged a signed summons (“September Summons”) and counsel’s diary with Listing Officer
18 September 2020	discussions between plaintiff’s solicitors and Listing Officer on return date of  September Summons
21-29 Sep 2020	discussions among Listing Officer,  parties’ solicitors and the Court
12 October 2020	plaintiff’s solicitors lodged a signed summons (“October Summons”) and counsel’s diary with Listing Officer
12-16 Oct 2020	discussions between Listing Officer and plaintiff’s solicitors on return date of October Summons

The relevant principles for leave to appeal

8.  The starting point is that, under s.63A(2) of the District Court Ordinance, Cap. 336, leave to appeal to the Court of Appeal shall not be granted unless this Court or the Court of Appeal is satisfied that the appeal has a reasonable prospect of success, or that there is some other reason in the interests of justice why the appeal should be heard.  Leave to appeal is not lightly granted.  Reasonable prospect of success involves the notion that the prospect of succeeding must be “reasonable” and therefore more than “fanciful”, without having to be “probable”^[4]. The burden of proof is on the applicant (here the defendant)^[5].

The parties’ contentions 

9.  The only ground of appeal relied upon by the defendant concerns issue of jurisdiction.  The defendant argues that I erred in finding that I had the power and jurisdiction to revisit and vary the costs order nisi (after having become absolute) when the Judgment had been sealed[6].

10.  In essence, the defendant argues that once a court order has been drawn up, entered or otherwise perfected by way of being sealed, the Court is functus officio and has no further jurisdiction over the case, relying on the authorities of Andayani v Chan Oi Ling^[7] and RTX Products Hong Kong Limited v Li Yiu Fai^[8] as well as O. 20, r. 1. 

11.  It is therefore argued by the defendant that, when I ruled that I still had power or jurisdiction to revisit the costs order nisi in the Decision, my reliance on Ma Wan Farming Ltd v Chief Executive in Council & Anor^[9] was misplaced, that I erred in finding the decision in RTX on the jurisdiction point as obiter comment and that I misunderstood the analysis of the “statutory cases” in  Poon Ching Man v Lam Hoi Pun^[10].

12.  For these reasons, the defendant argues that my granting of leave to the plaintiff to apply out of time to vary the costs order nisi was wrong in law, so was the consequential variation of the costs order nisi. 

13.  On the other hand, the plaintiff, when opposing to this Leave to Appeal Application, argues that the undoubted discretion of the Court was correctly exercised in this case.  It is argued that the “sealing” of the Judgment did not take away the jurisdiction of the Court to consider either an extension of time for an application for variation of the costs order nisi or the variation of the costs order nisi, relying on a recent authority Balram Chainrai v Kushnir Family (Holdings) Limited & ors[11] which followed Ma Wan Farming Ltd and another Court of Appeal’s decision (by majority) in Tang Man Kit & Anor v Hip Hing Timber Company Limited^[12].    

14.  It is now also argued by the plaintiff that there was in fact a summons taken out on 17 September 2020 (the “September Summons”, when the costs order nisi had not yet become absolute) which was a valid invocation of the Court’s jurisdiction to vary the costs order nisi for which no time extension was required[13].  Also, it is now argued that there was another signed summons taken out on 12 October 2020, on the same day but before the sealing of the Judgment, which eventually became the relevant summons filed on 16 October 2020 with the confirmation of the return date[14].

My analysis

15.  At the outset, it is noted that the defendant now only seeks to argue on the lack of jurisdiction of the Court (or in other words, the Court being functus officio) in revisiting and varying the costs order nisi, without arguing that the Court’s discretion (if having jurisdiction and not being functus officio) was wrongly or improperly exercised in granting an extension of time and eventually varying the costs order nisi.  

16.  This intended ground of appeal on this particular jurisdiction issue was in fact the main ground of objection relied upon by the defendant when the plaintiff sought to vary the costs order nisi.  I had carefully considered all the arguments before I made my Decision and set out all my reasons on that particular jurisdiction issue at paragraphs 13 to 29 thereof.

17.  On that jurisdiction issue, it was my conclusion, which was set out at paragraphs 28 and 29 of the Decision, as follows:-

“28. Having carefully considered all the above authorities, I am in full agreement with the detailed analysis of Deputy District Judge Winnie Tsui (as she then was) on the jurisdiction issue in Poon Ching Man, except that, with respect, I do not share her view that the decision on the jurisdiction issue in RTX is binding as I find it to be comments as obiter for the reasons stated above.

29.  In any event, I am of the view that I should follow the Court of Appeal’s decisions in Ma Wan, Tang Man Kit (the majority’s decision) and in particular, Re Good Idea (where a consent order was the subject matter) on this very jurisdiction issue.  The starting and fundamental point for consideration is that, O. 3, r. 5(1) should be given a natural interpretation, it is wide enough to cover stipulations as to time contained in final as well as interlocutory judgments, this rule explicitly confers the widest measure of discretion and draws no distinction whatsoever between various classes of cases^[15]. I therefore come to conclude that this Court have power or jurisdiction to revisit, and vary if needed to, the costs order nisi even when the Judgment containing it has been sealed.”

18.  Before I came to the above conclusion, I quoted respectively the relevant paragraphs of Ma Wan Farming Limited[16], Tang Man Kit[17] and Re Good Idea International Ltd[18].  While there was no clear mentioning about whether the respective costs order absolute in question had been perfected in Ma Wan Farming Limited and Tang Man Kit, such issue did not arise in Re Good Idea International Ltd where the subject matter was one of a consent order.

19.  Also, I had relied upon what Deputy District Judge Winnie Tsui (as she then was) in Poon Ching Man had observed from the decision of Lady Hale SCJ in Re L and B (children) (care proceedings: power to revise judgment) [2013] UKSC 8, and in particular, I quoted and expressed my entire agreement with the comments of Lady Hale SCJ that, “Where there is a power to vary or revoke, there is no magic in the sealing of the order being varied or revoked.  The question becomes whether or not it is proper to vary the order. (para. 37)”[19].    

20.  Now I also express my entire agreement with the recent decision and its reasoning by Lisa Wong J in Balram Chainrai[20], which was made after the Decision in this case.  In that case, the learned Judge, when forming the view that the Court had not become functus officio insofar as the costs order in that case was concerned, departed from the decision of Anthony Chan J in RTX and followed the binding authorities of Ma Wan Farming Ltd and Tang Man Kit[21]. 

21.  In particular, it was observed by the learned Judge at paragraph 20 of the judgment in Balram Chainrai that,

“…Let us consider the case where a judgment incorporating an order nisi as to costs is sealed before the expiry of the 14-day period for the making of an application to vary the order, which is certainly possible. In such a situation, would the early perfection of the order nisi extinguish a party’s built-in right under Order 42, rule 5B(6) to apply to vary the order nisi? The answer is clearly negative. And given that the time for an application to vary a costs order nisi can (in an appropriate case) be extended, I fail to see how the timing of the perfection of such an order can take away the court’s jurisdiction, where proper, to extend time under Order 3, rule 5 and to vary the order under Order 42, rule 5B(6).”

22.  I entirely agree with that apposite remark.

23.  I also bear in mind what I quoted in the Decision[22] the Court of Final Appeal’s comments in Astro Nusantara International B. V. v PT Ayunda Prima Mitra^[23] that it had often been emphasized that the discretion to extend time conferred by O. 3, r. 5 is broad and unrestricted, which was designed to enable justice to be done between the parties, and held that the proper test involves looking at all relevant matters and considering the overall justice of the case, eschewing a rigid mechanistic approach^[24].

24.  I noted that the defendant now argues that O. 3, r. 5 only permits an extension of time for “performance of an act by a party” but does not provides for “any amendment of an order”[25].  If a party is permitted to do an act under the rule, namely to apply out of time to vary an order, but the order in question cannot be varied under the rule, then what is the purpose of permitting the party to do that act in the first place? The rule if given such interpretation would simply become meaningless and futile.  I am not convinced that the defendant’s argument is a proper or reasonable interpretation of the rule, as it is too restrictive and artificial which does not accord with common sense. 

25.  On the other hand, it is noted that, the plaintiff now also seeks to argue that the September Summons was a valid invocation of the Court’s jurisdiction to vary the costs order nisi for which no time extension was required, so was the October Summons[26].  The details of these matters contained in the relevant affidavit by the plaintiff’s handling solicitor[27], which were summarised in the Decision[28].

26.  For the sake of completeness, I reiterate my factual finding in the Decision[29], where I accepted that the plaintiff’s solicitors’ litigation clerk attended the District Court, intending to issue a summons and secure a later date for applying for varying the costs order nisi, on 17 September 2020.  It was my finding that, if the clerk went to the District Court on that day, i.e. a day before the costs order nisi had become absolute, but for the fact that I was at that time sitting in another Court and therefore the Listing Officer did not have my diary, the plaintiff would have filed the summons with a return date fixed on that particular day.

27.  Notwithstanding the defendant’s arguments in this Leave to Appeal Application, I maintained my conclusion and the reasoning in the Decision on this jurisdiction issue.  I am not convinced that, for the present purpose, there should be a differentiation between an order which was “perfected” or “sealed” and an order which was not.  I therefore do not find the defendant’s intended ground of appeal reasonably arguable.

28.  Having carefully considered the ground of appeal advanced by the defendant and all the written submissions by both parties, I am not satisfied that the appeal has a reasonable prospect of success, or that there is some other reason in the interests of justice why the appeal should be heard. 

Disposal

29.  The Leave to Appeal Application is refused and that the relevant summons filed on 25 February 2021 is hereby dismissed. 

30.  As it is no longer pursued by the defendant, the summons filed on 4 March 2021 for stay of execution or enforcement of the Decision and/or the taxation proceedings is also hereby dismissed.

31.  There is no reason why costs should not follow the event.  The plaintiff asks for but I do not consider this to be an appropriate case for costs to be awarded on indemnity basis.  I make an order nisi that costs of these two summonses be paid by the defendant to the plaintiff on party and party basis, with certificate for counsel, and to be taxed if not agreed.