BOLD SHINE INVESTMENT LTD v. TSUI YEE KWAN

HCA 1867/1999

HCA 1676/2011

[2024] HKCFI 1471

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1867 OF 1999

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AND

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1676 OF 2011

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(Heard together)

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D E C I S I O N

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Decision

1.  This is my decision on the plaintiff’s application for leave to appeal against the ruling which I made yesterday, namely, the first day of the trial[1].

2.  My ruling was to the effect that the defendants would be allowed to raise the challenge as to the plaintiff’s authority to sue in this trial.

3.  I refuse to grant leave to the plaintiff as I consider that none of the grounds of appeal now proposed are reasonably arguable. They have no reasonable prospect of success. And there is no other reason why the proposed appeal should be heard.

4.  I shall deal with those grounds of appeal in turn.

Ground 1

5.  Under ground 1, Mr Benjamin Chain, appearing for the plaintiff with Mr Tony Chow, contends that as a matter of law, a party is not allowed to raise a challenge to the authority of the plaintiff to sue within a trial. I therefore made an error when I held that the matter was one of case management.

6.  Mr Chain’s contention is to the effect that in law, there is an absolute bar against a defendant to raise the challenge at the trial.

7.  That position is not supported by any of the authorities cited to me by Mr Chain yesterday. It also offends common sense. Mr Damian Wong, appearing with Ms Jenny Lok for the defendant, submits, and I agree, that the principle laid down in authorities such as Kammy Town is not a strict, immutable law, which deprives the court of any power to manage a case or issues arising in a case.

8.  Ground 1 is therefore not reasonably arguable.

Ground 2

9.  Under ground 2, as clarified by Mr Chain in his oral submissions just now, I made an error in interpreting what Mr Chow said at the PTR hearing. Mr Chow was the counsel appearing for the plaintiff at the PTR. He appeared on his own. I was therefore wrong in placing weight on my own misinterpretation.

10.  Towards the end of the PTR hearing, I asked Mr Chow whether he agreed to what was just being discussed. Mr Chow replied,

“Yes, yes. I don’t think I’ll take issue.”

11.  My interpretation of that answer was and remains to be that Mr Chow, on behalf of the plaintiff, agreed that the defendants would be allowed to raise the authority challenge at the trial.

12.  This morning, based on Mr Chow’s express confirmation, Mr Chain submits that that is a wrong interpretation and the correct interpretation is as follows. Mr Chow was simply agreeing that there would no longer be any time limit for the defendants to raise the authority challenge. However, in his mind, Mr Chow considers that the issue as to whether the defendants should be allowed to do so was still left hanging in the air.

13.  I disagree with that interpretation. By now, I myself have listened to the recording of the relevant parts of the PTR hearing at least six or seven times. The issue as to whether and when the defendants should be allowed to raise the challenge at the trial was thoroughly discussed. Mr Chow was physically present throughout that discussion. In the end, it is clear that an agreement was reached by the parties through counsel.

14.  Hence, ground 2 is not reasonably arguable.

Ground 3

15.  Under ground 3, the plaintiff argues that one of the orders which I made at the PTR hearing did not have the effect that the defendants were at liberty to make an application to challenge authority. The actual order read:

“Upon the confirmation of the Defendant set out in paragraph 5 of the Defendant’s solicitors’ letter dated 16^th May 2022, paragraphs 1 to 4 of the order of Madam Justice Au-Yeung dated 25^th April 2022 ceased to have effect.”

16.  That order which I made cannot and should not be looked at in complete isolation from everything else. On its face, when read alone, it may not have the effect of allowing the defendants to raise the authority challenge at the trial. However, one must not disregard what was actually discussed at the PTR hearing.

17.  At the hearing, I specifically and openly acknowledged that the order on its face would not reflect the position. And I specifically asked counsel perhaps the way to deal with it was for parties to come to an agreement and hence there would be no need to spell out everything if an agreement was reached.

18.  What happened next was that parties reached an agreement. Hence, the order did not spell out everything.

19.  Given all these, it is certainly not open for the plaintiff to now challenge or take issue with the actual wording of the order.

20.  Ground 3 is not reasonably arguable. In my view, in light of the express discussion which took place at the PTR hearing, this ground ought not to have been made in the first place.

Grounds 4 to 7

21.  Grounds 4 to 7 can be dealt with together. Under these grounds, the plaintiff mounts a challenge against my exercise of the discretion while denying that I had the discretion in the first place.

22.  It is well known that the threshold to challenge a first instance judge’s exercise of case management discretion is very high.

23.  I am prepared to accept whether the authority challenge would serve any useful purpose is potentially a factor that I should weigh in the overall exercise. This point was indeed raised by me and discussed with Mr Wong in the course of his oral submissions yesterday.

24.  In the overall scheme of things, particularly in light of the agreement reached by the parties at the PTR hearing, this utility point was not considered as a weighty factor. The weight which I gave to this factor is in my view not open to challenge at the appellate level.

25.  Hence, grounds 4 to 7 have no reasonable prospect of success.

Conclusion

26.  To conclude, I refuse to grant leave to appeal to the plaintiff.

(Discussion re costs)

27.  This is my order on costs. Costs should follow the event. The defendants do have costs of the application for leave to appeal, summarily assessed at $33,326, payable by the plaintiff within 14 days from today.