ASTRO NUSANTARA INTERNATIONAL B.V. AND OTHERS v. PT A YUNDA PRIMA MITRA AND OTHERS

CACV 251/2013
CACV 253/2013
CACV 66/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 251 OF 2013, NO 253 OF 2013 AND NO 66 OF 2015

(On appeal from HCCT 45/2010)

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(Heard together)

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DECISION
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Introduction

1.  This is a directions hearing for three appeal cases.  They are all appeals from HCCT 45/2010.

2.  In HCCT 45/2010, the respondents/plaintiffs (“Astro”) registered five Singapore arbitral awards (the “Awards”) in Hong Kong as a judgment against the appellants/defendants on 9 December 2010 (the “Judgment”) and obtained a garnishee order to show cause against the appellant/garnishee (“AAL”) on 22 July 2011 which was made absolute on 31 October 2013 (the “Garnishee Order”).  In the garnishee order proceedings, the appellants/defendants were represented by the 2^nd defendant (“FM”).

3.  On 27 November 2013, AAL filed notice of appeal against the Garnishee Order in CVCA 251/2013 (the “AAL Appeal”).

4.  On 28 November 2013, FM filed notice of appeal against the Garnishee Order in CACV 253/2013 (the “FM Appeal”).

5.  I shall refer to the AAL Appeal and the FM Appeal together as the “Garnishee Order Appeals”.

6.  On 18 December 2013, Astro filed the respondents’ notices in the Garnishee Order Appeals.

7.  No further steps were taken by AAL and FM in their respective appeals since the end of 2013 until recently when AAL filed its supplementary (amended) notice of appeal in the AAL Appeal on 4 March 2015.  Artro have not amended their respondents’ notice in the AAL Appeal.

8.  On 18 January 2012, FM also represented the defendants to apply for leave to apply to set aside the Judgment out of time (the “Setting Aside Application”).  The Setting Aside Application was refused by Chow J on 17 February 2015 (the “Setting Aside Judgment”).  On 18 March 2015, FM filed notice of appeal against the Setting Aside Judgment in CACV 66/2015 (the “Setting Aside Appeal”). Astro have not filed respondents’ notice in the Setting Aside Appeal.  There were disputes on whether FM required leave to lodge the Setting Aside Appeal.  FM took out a summons (the “FM Summons”) for determination of this issue.  The hearing for the FM summons is scheduled for 20 October 2015.

9.  On 19 March 2015, AAL informed Astro and FM that it would apply to fix hearing date for the AAL Appeal with the estimated length of hearing being one day.

10.  By a letter dated 30 March 2015, Astro’s solicitors proposed that the three appeals to be heard together and consolidated into one 4-day appeal hearing and the fixing of a hearing date for the “Consolidated Appeal” to take place after determination of the FM’s Summons.  AAL did not agree to the aforesaid proposal of Astro but agreeable to the Garnishee Order Appeals to be heard at the same time with an estimate of two days.

11.  Astro’s solicitors did not agree to AAL’s proposal and by their letter dated 28 May 2015 sought a hearing before the Registrar of Civil Appeals for directions to be given as to the fixing of hearing dates for these appeals and in particulars whether the appeals should be consolidated or heard together.

12.  FM’s solicitors agreed that the Garnishee Order Appeals should be heard at the same time.  However, they were of the view that the Garnishee Order Appeals should not be heard until the determination of the Setting Aside Appeal and that it was inappropriate to consolidate the two sets of appeal.

13.  On 3 June 2015, I directed that a preliminary directions hearing be fixed for these three appeals before me.

14.  On 5 June 2015, AAL applied to fix a date for the hearing of the AAL Appeal.

Case summary

15.  Before I discuss the various contentions put forward by the parties, it will be useful for me to briefly set out the background of these appeal cases.

16.  The disputes leading to these appeals arose out of a joint venture between the plaintiffs and the defendants for provision of multimedia and television services in Indonesia.  The joint venture collapsed in 2007-2008.  In October 2008, the plaintiffs commenced arbitration proceedings against the defendants in Singapore.  From 2009 to 2010, the plaintiffs obtained the Awards against the defendants for more than US$130 million.  Under the Judgment, the defendants are liable to pay to Astro US$81,865,542.54, £940,024.00, RM139,412,160.00 and S$3,918,049.13.

17.  As stated above, Astro registered the Awards as the Judgment in Hong Kong on 9 December 2010.  The plaintiffs further obtained the Garnishee Order on 31 October 2013 for a sum of US$46,774,703 due from AAL to FM (the “Debt”).  After the garnishee order to show cause was granted on 2 July 2011, FM took out the Setting Aside Application on 18 January 2012.  On 21 March 2012, the court ordered AAL to pay the Debt into court.  AAL did not make payment into court but applied on 24 September 2012 to discharge the garnishee order nisi and to discharge the payment into court order.  AAL’s aforesaid applications were all dismissed by DHCJ Mayo on 31 October 2013 when His Lordship made the garnishee order absolute.

18.  Before the garnishee order was made absolute, on about 30 August 2012 FM commenced arbitration proceedings in Indonesia in respect of the Debt and obtained an arbitral award against AAL on 12 September 2012 (the “Indonesian Award”).  In March 2013, FM commenced insolvency proceedings in Indonesia against AAL to enforce the Indonesian Award.  AAL was put into liquidation by the Indonesian court since then.

19.  On the day when the garnishee order was made absolute (ie 31 October 2013), the Singapore Court of Appeal delivered its judgment (the “Singapore CA Judgment”) refusing an application from Astro to enforce a substantial part of the Awards in Singapore.

20.  On 24 January 2014, M Chan J ordered stay of execution of the Garnishee Order pending determination of the Setting Aside Application.  The stay expired upon delivery of the Setting Aside Judgment.  Both FM and AAL applied to extend the stay of execution of the Garnishee Order (the “Further Stay Applications”). The Further Stay Applications will also be heard on 20 October 2015 together with FM Summons.  Interim stay of execution of the Garnishee Order was granted on 16 March 2015 by consent of the parties.

Astro’s case

21.  Although Astro’s solicitors referred to a “Consolidated Appeal” for these three appeals in their letter dated 30 March 2015, Mr Man SC representing Astro submitted that the Setting Aside Appeal and the Garnishee Order Appeals should be directed to be heard one immediately after another in a 4-day hearing.  In such case, Astro was not seeking a direction to consolidate the three appeals but a direction for the Garnishee Order Appeals to be heard immediately after the Setting Aside Appeal before the same division of the Court of Appeal.

22.  Mr Man contended that the three appeals were in part factually and procedurally connected as they all arose from the Judgment.  There was material overlap of background, key facts and evidence which justified having all the three appeals to be heard together one immediately after another.  In this respect, he said that the “collusive” conduct of FM and AAL in seeking to frustrate Astro’s attempts to enforce the Awards and FM’s bad faith in the conduct of the Singapore arbitration was relevant to all the appeals.  He submitted that in both the Setting Aside Application and the application to make the garnishee order absolute, the court had considered the conduct of FM and AAL before the court decided on both applications.  Mr Man further submitted that these matters should be considered by the Court of Appeal on a single occasion to save time, costs and efforts of the parties and the court.  He further pointed out that many of the court documents, affirmations and underlying documents were used in both the application for the Garnishee Order and the Setting Aside Application.

23.  Mr Man submitted that the court had an unfettered discretion to consolidate actions.  The power was to be exercised in a flexible way with regard to the particular circumstances of the situation. The objective of such an order was to save time and costs.  He referred to Big Island Construction (HK) Ltd v Wu Yi Development Co Ltd (unrep, HCA 1957/2005, 10 April 2008, Chu J [as she then was]) to submit that where there was a substantial overlapping of issues and parties, it was desirable to resolve the disputes in different actions on one occasion by the same judge.

24.  He contended that all these three appeals were interrelated and procedurally intertwined such that it would be desirable to have them heard one immediately after another.  He submitted that the Setting Aside Appeal sought to attack the Judgment which was the underlying judgment for the Garnishee Order, subject matter of the other two appeals.

25.  He further submitted that FM and AAL had applied to stay the execution of the Garnishee Order pending determination of the Setting Aside Application on the basis that if FM succeeded in the Setting Aside Application, the Garnishee Order would also be set aside.  In the Further Stay Applications, both FM and AAL again relied on the link between the Setting Aside Appeal on the one part and the Garnishee Order Appeals on the other part.  He said that this amounted to acceptance on the parts of FM and AAL of the interconnectedness between the two sets of appeal and that the validity of the Garnishee Order would depend on the result of the Setting Aside Appeal.

26.  He submitted that it was contrary to the interests of procedural convenience and economy to have the appeals against the Garnishee Order proceeded before and independently of the Setting Aside Appeal.

27.  Mr Man further submitted that AAL’s primary ground of appeal as reflected in its amended notice of appeal filed in the AAL Appeal was that the Awards were nullity or void because the Singapore Court of Appeal had held that they were not enforceable against FM.  This issue would also be relevant to the Setting Aside Appeal since the Judgment was based upon the Awards.  Mr Man submitted that given the relevance of this issue to all the three appeals, it was desirable for all the appeals to be heard one immediately after another before the same division of the Court of Appeal on the same occasion, so that the court could receive submissions from all parties in one go, resolve the aforesaid issue of the Awards being null and void once and for all, and avoid the possibility of having inconsistent and conflicting decisions on the same issue.

28.  Mr Man submitted that it would be grossly unfair to Astro if the appeals were not heard on a single occasion in that if any one of the appeals was successful, Astro would not be able to enforce the Awards against the Debt.  He contended that if the appeals were heard separately, FM and AAL were in effect getting two bites at the cherry (by going before two different divisions of the Court of Appeal, or the same division on two different occasions).  This would delay Astro’s entitlement to the fruit of the Judgment as Astro would have to win all these appeals before Astro could see real result in the Hong Kong enforcement efforts.

29.  Mr Man submitted that the advantage of having the Garnishee Order Appeals heard immediately after the Setting Aside Appeal was that the Court of Appeal would have the benefits of the full background fresh in its mind and the benefits of hearing submissions on all issues including the issue on nullity of the Awards.

FM’s case

30.  Mr Strachan SC representing FM agreed that it was appropriate for the Garnishee Order Appeals to be heard at the same time but contended that the Setting Aside Appeal should be heard first and the other two appeals should be heard thereafter.

31.  He submitted that if the Setting Aside Appeal succeeded, the garnishee proceedings naturally fell away.  Hence it was sensible that the Setting Aside Appeal be heard and resolved first, and that the Garnishee Order Appeals be heard thereafter.

32.  He submitted that the consolidation proposed by Astro would inevitably lead to the incurring of all costs by all the parties in respect of the three appeals and FM’s proposal would have the effect of saving the time and costs of the Garnishee Order Appeals should FM succeed in the Setting Aside Appeal.  He further submitted that AAL was not a party to the Setting Aside Appeal and should not be forced to spend time and costs on the Setting Aside Appeal.

33.  Mr Strachan contended that if the Garnishee Order Appeals were heard immediately after the Setting Aside Appeal at one continuous appeal hearing, the Setting Aside Appeal would not be heard before the other two appeals in any meaningful sense as there would be no resolution of the Setting Aside Appeal before the appeals against the Garnishee Order were heard.  All parties including the Court of Appeal would have to prepare for all three appeals at the consolidated appeal hearing.  The parties would gain no benefit from having the Setting Aside Appeal heard and resolved first, in particular the benefit of the garnishee proceedings falling away in circumstances where FM succeeded in the Setting Aside Appeal.

34.  Mr Strachan contended that the conduct of FM considered by the court in the application for the Garnishee Order and the Setting Aside Application was not the same conduct.  In the garnishee proceedings, the court was concerning about whether AAL would suffer double jeopardy if the garnishee order was made absolute and the court considered the conduct of FM and AAL in that context.  In the Setting Aside Application, the court was concerning about FM’s conduct in not challenging the jurisdiction issue within time in the arbitration proceedings in Singapore and not applying to set aside the Judgment within time.  He submitted that there was no overlap of factual issues between the Setting Aside Appeal and the Garnishee Order Appeals.  He further submitted that the factual background shared between these three appeals did not justify consolidation of the two sets of appeal as Astro proposed.

AAL’s case

35.  AAL’s position was that it was not a party to the underlying Singapore arbitration or Singapore proceedings or the Setting Aside Application.  There was no factual overlap between the Setting Aside Appeal and the AAL Appeal.  AAL submitted that the litigation in Hong Kong had stifled its ability to operate normally and it was not good case management to postpone the AAL Appeal to an unknown date to be consolidated with an appeal to which AAL was not a party.  AAL contended that the AAL Appeal and the Setting Aside Appeal involved different legal principles, different facts and different issues.

36.  AAL said that it was unlikely that the three appeals could be disposed of in one hearing as it could not reasonably be supposed that the Court of Appeal would be ready to proceed immediately to the other appeals after hearing the Setting Aside Appeal.

37.  Mr Beresford representing AAL submitted that it was manifest from a comparison of the notices of appeal in the Setting Aside Appeal and the AAL Appeal that there was no or no significant factual overlap between these two appeals.  Although both appeals arose out of the Judgment, the issues for the appeals were distinct and depended upon different facts.

38.  Mr Beresford submitted that AAL was not a party to the Setting Aside Application and was not bound by any of the findings of the court in that application.  The conduct of FM considered by the court in the Setting Aside Application was not binding on AAL and the Court of Appeal in the AAL Appeal would not receive evidence that was not before the lower court in the garnishee proceedings.  If the appeals were consolidated, the Court of Appeal would have to keep all these matters disentangled.

39.  Mr Beresford further submitted that AAL’s position was not contingent upon the outcome of the Setting Aside Appeal.  Even if FM was unable to set aside the Judgment, it did not follow that the Garnishee Order had to stand or be enforced.  Mr Beresford contended that regardless of whether FM was estopped from challenging the Judgment based on the Awards, AAL was not estopped and there were good grounds for refusing enforcement of the Garnishee Order made on the basis of the Awards that was void ab initio.

40.  He submitted that the “logic” worked the other way, because if the Garnishee Order could not be enforced, there was in practice nothing else against which the Judgment could be directed.  He contended that far from the Setting Aside Appeal being logically prior to the AAL Appeal, the AAL Appeal could be seen to be entirely independent of the Setting Aside Appeal.

41.  Mr Beresford submitted that the AAL Appeal was much simpler than the Setting Aside Appeal at least as it was predicated upon the contention that the whole proceedings were based upon an award that was void ab initio.  He submitted that one option from the court’s point of view might be to hear the AAL Appeal on the issue of invalidity of the Awards first.

42.  Mr Beresford submitted that there were contingencies in the Setting Aside Appeal to which AAL was not a party.  These contingencies included uncertainty as to whether leave to appeal was required; if required, whether leave would be granted; if the appeal could proceed, whether the Court of Appeal would interfere with an exercise of discretion of the lower court on extension of time; and whether FM might succeed in the substantive appeal arising from its involvement in the Singapore arbitration.  AAL might be kept waiting while the aforesaid issues which did not concern AAL were to be decided by the court and AAL was not a party to the proceedings concerned.

43.  If the appeals were consolidated, AAL had to instruct solicitors and counsel to attend the Setting Aside Appeal in which AAL could play no part.  The Court of Appeal might adjourn after hearing the Setting Aside Appeal to write its judgment in that appeal.  Mr Beresford submitted that there was a real danger that a consolidated order would achieve nothing other than to cause more costs and delay.

44.  Mr Beresford contended that to have the AAL Appeal to be dealt with after disposal of the Setting Aside Appeal as proposed by FM would occasion significant delay to the resolution of the AAL Appeal with no corresponding benefits to AAL.  He submitted that AAL would be kept in limbo with its business in Indonesia in receivership and unable to operate normally.  He submitted that AAL remained prejudiced by the risk of being compelled to pay twice over and was doubly prejudiced given that the Awards had now been found to have been made without jurisdiction by the Singapore Court of Appeal.  He further submitted that following the Singapore CA Judgment, the Supreme Court of Indonesia had also held that the Awards were unenforceable in Indonesia.  Most of AAL’s assets were in Indonesia.  The continuance of these proceedings was obviously prejudicial to its business.

45.  Mr Beresford said that Astro had made it clear that in spite of their opposition to proceeding with the AAL Appeal, they strongly opposed AAL’s Further Stay Application.  He submitted that Astro’s proposal would on the one hand delay the AAL Appeal and on the other hand allow Astro to continue to use the proceedings to exert pressure on AAL to pay the Debt.

Discussion

46.  There are three appeals pending in the Court of Appeal from the same action (ie HCCT 45/2010) albeit relating to orders and judgments granted at different stages of the action. The parties have different views on how these appeals shall be managed.  Astro proposed that the three appeals should be heard together one after the other. FM proposed that the Garnishee Order Appeals should be heard together but after disposal of the Setting Aside Appeal.  AAL asked for hearing date for the AAL Appeal to be fixed now, alternatively for the issue of the invalidity of the Awards in the AAL Appeal to be heard first.

47.  The parties did not have much disagreement for the Garnishee Order Appeals to be heard together. This is only sensible as the two appeals involved the same parties and arose from the same decision of the court dated 31 October 2013 (the “GO Decision”). However, they disagreed on whether the Setting Aside Appeal should also be heard at the same hearing.  If the three appeals are to be heard at the same hearing one immediately after another, there is no suggestion that the Garnishee Order Appeals shall go first.  Accordingly, the issues for me at the directions hearing are:

(1) whether I shall direct the Garnishee Order Appeals to be heard immediately after the Setting Aside Appeal at the same hearing; and

(2) if the two sets of appeals are not to be heard at the same hearing, whether I shall now give directions to fix the hearing date for the Garnishee Order Appeals.

48.  Before I discuss the various proposals of the parties, I shall briefly set out the grounds of appeal in these three appeals to put the discussion in context.

49.  In the Setting Aside Appeal, FM put forward the following grounds of appeal:

(1) the learned judge erred in ruling that by not challenging the Awards on preliminary issue of jurisdiction, FM should not be permitted to rely on section 44(2) of the Arbitration Ordinance (Cap 341) to resist the Awards;

(2) the learned judge erred in concluding that FM acted in breach of the good faith or  bona fide principle;

(3) the learned judge erred in refusing to grant FM an extension of time; and

(4) the learned judge erred in ruling that Astro satisfied the pre-conditions of enforcement set out in section 43 of the Arbitration Ordinance.

50.  In the FM Appeal, FM put forward the following grounds of appeal:

(1) DHCJ Mayo erred in finding Hong Kong was the situs of the Debt;

(2) the Deputy Judge erred in finding collusion between FM and AAL without requisite stronger and more cogent evidence or inferences properly grounded in the primary facts found; and

(3) the Deputy Judge erred in finding that there was no risk of AAL suffering double jeopardy if the garnishee order nisi was made absolute or that the same was self-inflicted.

51.  In the AAL Appeal, AAL’s grounds of appeal as set out in its supplementary (amended) notice of appeal are as follows:

(1) DHCJ Mayo erred in finding FM under the control of AAL and there was collusion between FM and AAL as the Deputy Judge erred in misapprehending the evidence and in misunderstanding the law;

(2) there was material post-judgment developments in that the Singapore Court of Appeal had after the handing down of the GO Decision, handed down a judgment holding that the Awards were not enforceable against FM save to the extent of a sum of around US$700,000 and as such the Hong Kong court lacked jurisdiction to order registration of the Awards as the Judgment; to make the Garnishee Order; or to order AAL to pay the Debt into the Hong Kong court;

(3) as a matter of law, the repayment of the Debt should be governed by Indonesian law instead of Hong Kong law;

(4) the bankruptcy of AAL in Indonesia was not an act in breach of the anti-suit injunction granted by the Hong Kong court on 24 January 2013; and

(5) the Deputy Judge erred in finding that there was no risk of AAL suffering double jeopardy if the garnishee order nisi was made absolute.

52.  From the notices of appeal, it can be seen that the grounds of appeal in the FM Appeal and the AAL Appeal are overlapping to a substantial extent whereas the grounds of appeal in the Setting Aside Appeal are different to the grounds of the Garnishee Order Appeals.

53.  The issues for the Garnishee Order Appeals are control of AAL over FM, conduct of AAL and FM in the Indonesian arbitration, the situs of the Debt, whether AAL suffered double jeopardy and the impact of the Singapore CA Judgment on the Hong Kong court’s jurisdiction.

54.  The issues for the Setting Aside Appeal are the conduct of FM in the Singapore arbitration and the application of the section 43 of the Arbitration Ordinance to this case.

All appeals heard at the same hearing

55.  The main purpose of having two or more cases heard at the same hearing one after the other is to save costs and time.  The court will usually not give such directions unless there is common question of law or fact bearing sufficient importance in proportion to the rest of the subject-matter of the actions to render it desirable that the whole should be disposed of at the same time. (See para 4/9/2 of Hong Kong Civil Procedure 2015 Vol 1 at p 66)

56.  The first thing I shall consider is whether there is common question of law or fact bearing sufficient importance in proportion to the rest of the subject-matter of the three appeals to render it desirable that the three appeals should be disposed of at the same time.

57.  Mr Man submitted that there was material overlap of background, key facts and evidence between the two set of appeals.  In particulars evidence in relation to the conduct of FM and AAL.

58.  DHCJ Mayo in the GO Decision stated that:

“ 18. One of the main issues in this application is whether AAL and FM did indeed operate at arm’s length and independently.

19. Closely associated with this is whether the action taken by FM to enforce the BANI Award [ie the Indonesian Award] was a genuine attempt to recover the moneys they claimed were due owing to them or as is claimed by Astro that it was a charade calculated to frustrate Astro’s attempts to enforce their HK judgment.” (Original emphasis)

59.  From the above, it can be seen that the conduct of FM and AAL concerning DHCJ Mayo in the application to make the garnishee order absolute was that relating to the arbitration in Indonesia commenced by FM against AAL and the enforcement of the Indonesian Award.  His Lordship was of the view that FM and AAL had colluded to enable AAL to make representations to the Hong Kong court that AAL was unable to comply with the Hong Kong court order ordering AAL to pay the Debt into the Hong Kong court and to frustrate the garnishee proceedings in the Hong Kong court.  (See paras 81-83 of the GO Decision)

60.  In the Setting Aside Application the conduct of FM referred to by Astro in support of its contention relying on the principle of good faith was the fact that FM did not challenge the Singapore arbitration tribunal’s preliminary ruling on jurisdiction rendered on 7 May 2009 within specified time after having received notice of that ruling.  Although Astro also referred to the conduct of FM subsequent to the making of the Awards, it was clear from the oral submission of Astro’ leading counsel made in the Setting Aside Application that Astro relied principally on the conduct of FM in conducting the Singapore arbitration.  It was FM’s conduct in handling the Singapore arbitration which Chow J considered was in breach of the good faith principle.  (See paras 66, 68 and 91 of the Setting Aside Judgment)

61.  When dealing with the extension of time issue in the Setting Aside Application, Chow J in considering factors relevant in the exercise of the court’s discretion to extend the time had considered FM’s conduct.  The conduct considered by His Lordship was FM’s delay in taking out the application.  His Lordship was of the view that it was the result of a deliberate and calculated decision not to take action in Hong Kong.  His Lordship saw no reason for the court to assist FM to get out of its self-inflicted predicament.  (See para 129(2) of the Setting Aside Judgment)  The alleged “collusion” between AAL and FM in frustrating Astro’s enforcement actions was not the reason for the court dismissing FM’s Setting Aside Application.

62.  Although all these three appeals arose out of the Judgment and shared some common background, they were appeals against decisions made by the court at different stages of the proceedings.  The subject matters for the decisions leading to the two sets of appeal were different.  The conduct considered by Chow J and the conduct considered by DHCJ Mayo in reaching their respective decisions was not the same.  In terms of overlapping factual evidence, not much saving in costs and time can be achieved by having the two sets of appeals heard at the same hearing one immediately after the other.

63.  There was also no common legal issue in the two sets of appeal.  Mr Man submitted that in both sets of appeal, the Court of Appeal would have to consider the legal significance of the Singapore CA Judgment.  The issue on the Singapore CA Judgment raised in the Setting Aside Application is very different from that raised in the AAL Appeal.

64.  In the Setting Aside Appeal, the Singapore CA Judgment was referred to in the context of the court’s ruling on FM’s conduct being in breach of the principle as set out in China Nanhai Oil Joint Service Corporation Shenzhen Branch v Gee Tai Holdings Co Ltd [1955] 2 HKLR 215 and Hebei Import & Export Corp v Polyteck Engineering Co Ltd [1999] 2 HKCFAR 111 and the issue estoppel against Astro.   FM also referred to the Singapore CA Judgment in the context of whether the requirements of section 43 of the Arbitration Ordinance had been fulfilled.  (See paras 14(4), 14(5), 17 and 28(1) of FM’s notice of appeal for the Setting Aside Appeal)

65.  From the supplementary (amended) notice of appeal in the AAL Appeal, it can be seen that the Singapore CA Judgment was relied on to dispute the jurisdiction of the Hong Kong court.

66.  At appeal hearings, the issues are well defined.  Issues not previously raised in the lower court will not be allowed to be raised at the appeal.  In the circumstances of these appeals, I am of the view that no material saving of time and costs due to common question of law would be achieved in having the two sets of appeal heard at the same hearing one after the other.

67.  The parties did not dispute that if the Judgment was set aside, the Garnishee Order would fall away.  In other words, if FM should succeed in the Setting Aside Appeal, the Garnishee Order Appeals would be allowed as a matter of logical consequences and substantial costs could be saved for the Garnishee Order Appeals.

68.  Mr Man suggested that if the three appeals were heard at the same hearing with the Garnishee Order Appeals to be heard immediately after the Setting Aside Appeal, AAL could choose not to participate in the Setting Aside Appeal hearing but to participate only in the Garnishee Order Appeals hearing.  I do not consider this suggestion of Mr Man as a preferred arrangement.  The proposed arrangement has the advantage of allowing the Court of Appeal to consider the Garnishee Order Appeals with the background of the case still fresh in mind.  However, as pointed out above, the overlapping factual matters in the two sets of appeal were not substantial. The background of this case had been referred to in various judgments and decisions delivered by the Court of First Instance and the Court of Appeal when the courts ruled on various applications previously made by the parties relating to HCCT 45/2010, some of them were referred to in the earlier part of this decision.  I have no doubt that the same can be summarized in a few pages by capable counsel of the parties in their submissions to the Court of Appeal. The proposed arrangement can only avoid AAL incurring costs to participate in the Setting Aside Appeal in which AAL does not have a role to play although the outcome of that appeal may have the effect of disposing of the whole AAL Appeal.  Save as aforesaid no time and costs of the parties or the court can be saved by the proposed arrangement.

69.  Of course, if the Court of Appeal will decide on the Setting Aside Appeal before it proceeds to hear the Garnishee Order Appeals and the result of the Setting Aside Appeal is in favour of FM, the time and costs for the Garnishee Order Appeals hearing (but not the preparation time and costs of the parties and the court) may be saved.  However, I am of the view that it is unrealistic to expect the Court of Appeal to rule on the Setting Aside Appeal immediately after the hearing and before the commencement of the Garnishee Order Appeals hearing if the latter is going to take place immediately after the former.  Under Mr Man’s proposed arrangement, it is more than likely that there would be no saving in time and costs for preparation as well as hearing of the three appeals.

70.  In the premise, I do not consider that significant saving in time and costs will be achieved through Mr Man’s proposed arrangement.  I decline to direct the two sets of appeal to be heard at the same hearing with the Garnishee Order Appeals to be heard immediately after the Setting Aside Appeal.

Directions to fix hearing date for the Garnishee Order Appeals

71.  As I do not agree to Astro’s request to have the two sets of appeal heard at the same hearing one after the other and the parties are agreeable to have the Garnishee Order Appeals heard together, I shall now consider whether I shall give directions to fix the hearing date for the Garnishee Order Appeals.

72.  All parties to the Garnishee Order Appeals had filed and served their respective notices of appeal and respondents’ notices.  The Garnishee Order Appeals are prima facie ready to proceed to hearing and AAL had applied to fix hearing date for the AAL Appeal. In usual cases, I shall direct FM also to apply to fix a hearing date for the FM Appeal and give further directions for hearing date to be fixed.  However, in the circumstances of these cases, I agree with Mr Strachan’s view that the sensible sequence in which the Setting Aside Appeal and the Garnishee Order Appeals should be heard was that the Setting Aside Appeal should be heard first and the Garnishee Order Appeals should be heard thereafter.

73.  As pointed out by Chow J in para 60 of the Setting Aside Judgment that “once the order granting leave [to register the Awards as the Judgment] is set aside, the judgment entered pursuant to the order (and further orders made in consequence of the judgment such as a garnishee order nisi or absolute) would logically fall away.”  If FM were successful in setting aside the Judgment, there would be no basis for maintaining the Garnishee Order and the same must also be set aside.

74.  I agree with Mr Strachan that for the Garnishee Order Appeals to go first would be putting the cart before the horse.  It does not further the underlying objectives of the Civil Justice Reform (the “CJR”) to increase the cost-effectiveness of the practice and procedure, to promote a sense of reasonable procedural economy in the conduct of proceedings, and to ensure that the resources of the court are distributed fairly.

75.  Mr Man submitted that if the two sets of appeal were not heard at the same hearing, FM and AAL would have two bites of the cherry.  I agree that Astro will have to pass all the hurdles set in the three appeals before they may enjoy the fruit of their victory in these litigations.  However, this does not mean that FM and/or AAL will gain any advantages if the appeals are not heard at the same hearing.  Whether the appeals are disposed of at one hearing or two hearings, Astro will still have to overcome exactly the same hurdles.  FM and AAL will not have two bites of the same cherry because of the arrangement that the Garnishee Order Appeals will be dealt with after disposal of the Setting Aside Appeal.

76.  I note that AAL is now ready to proceed with its appeal whereas whether FM will require leave to commence the Setting Aside Appeal is still in dispute.  To postpone the AAL Appeal to after disposal of the Setting Aside Appeal will inevitably postpone the disposal of the AAL Appeal.

77.  According to the evidence placed before DHCJ Mayo, FM was the only remaining subsidiary of AAL and the interests of the two companies were closely intertwined.  (See paras 124-126 of the GO Decision)  FM is still operating and is in fact the one who petitioned to bankrupt AAL.  However, DHCJ Mayo was of the view that AAL was clearly in a position to exercise control over FM.  (See paras 131 and 182-183 of the GO Decision)  AAL is a company incorporated in Cayman Islands, having its principal place of business in Hong Kong, and listed on the Growth Enterprise Market of The Stock Exchange of Hong Kong.  AAL has been under liquidation in Indonesia for more than two years.  According to the evidence of Mr Albert Say Chuan Cheok, chairman of the board of directors of AAL, given at the application to make the garnishee order absolute, AAL could continue to operate outside Indonesia.  (See para 119 of the GO Decision)  I agree that to require AAL to wait for disposal of the Setting Aside Appeal before AAL may proceed with the AAL Appeal will cause delay in the disposal of the AAL Appeal.  DHCJ Mayo found that the business of AAL was essentially to be a holding company and its income was derived from dividends payable by its subsidiary and associated companies.  Evidence adduced before DHCJ Mayo by AAL showed that AAL’s core business interest was its shareholding in FM.  (See paras 175 and 239 of the GO Decision)  FM’s business operations are not affected by the liquidation of AAL in Indonesia and FM is still in operation.  I do not accept that postponing the disposal of the ALL Appeal to after disposal of the Setting Aside Appeal will have the serious impact on the operations of AAL as alleged.

78.  The outcome of the Setting Aside Appeal may have the effect of wholly disposing of not only one but both of the Garnishee Order Appeals.  Time and costs saving will be substantial.  Of course, I also bear in mind the possibility that FM may fail in the Setting Aside Appeal one way or the other (ie FM may fail in the leave to appeal issue or in the substantive appeal).  In such case, the aforesaid saving will not be materialized.  However, after balancing all the relevant factors, I agree that the proposal of Mr Strachan is a more logical and costs efficient arrangement to manage these appeals.

79.  Mr Beresford suggested that the Court of Appeal may hear the AAL Appeal on the issue of the invalidity of the Awards first.  He referred to para 52.11.3 of the English Civil Procedure 2012 Vol 1 which provides that:

“Any appellate court will seek to use its resources in the most efficacious manner and may take any proper “short cut” which becomes available.  This is in accordance with the overriding objective (CPR Pt 1).

If the appellant has to succeed on two grounds in order to overturn the first instance judgment, the appellate court may decide to hear argument first on one ground only (e.g. because that ground will take less time or because it poses particular difficulties for the appellant).”

80.  The overriding objective of the English Civil Procedure Rules 1998 (“CPR”) as stated in para 1.1(1) of CPR Pt 1 is to enable the court to deal with cases justly and at proportionate costs.  In Hong Kong, the objectives of the CJR are set out in Order 1A, rule 1 of the Rules of High Court and are described as “underlying objectives” instead of “overriding objective” as in the English CPR.  Proportionality and procedural economy although not overriding is one of the underlying objectives of the CJR.

81.  Under Order 59, rule 9(3) of the Rules of High Court, the Registrar of Civil Appeals may give such directions as to matters incidental to the conduct of the appeal as appear best adapted to secure the just, expeditious and economical disposal of the appeal.

82.  An order for separate trial of separate issues is a departure from the general rule that all disputes should be tried together and such order should only be made in exceptional circumstances or on special grounds.  In Telford Development Ltd v Shui On Construction Co Ltd [1990] 2 HKC 110 Bokhary J (as he then was) in delivering the judgment of the Court of Appeal stated at 117A-C that:

“The general rule is that all the issues in a case are to be tried at one and the same time. There is power to order that different issues in a case be tried at different times. But that departure from the general rule is ordered only if it is just and convenient. And it is, of course, for the party who seek such a departure to demonstrate that it is indeed just and convenient.”

83.  As I have pointed out above, the result of the Setting Aside Appeal may wholly dispose of the Garnishee Order Appeals which include the AAL Appeal.  Furthermore, the Singapore CA Judgment only refused to enforce part of the Awards in Singapore. It did not render the Awards invalid.  I am not persuaded that it is just and convenient to have the issue raised by AAL in its supplementary (amended) notice of appeal in relation to the Singapore CA Judgment to be dealt with separately in an earlier hearing before disposal of the Setting Aside Appeal. I decline to make the direction proposed by Mr Beresford.

Conclusion and costs

84.  I direct that AAL’s application to fix hearing date for the AAL Appeal to be dealt with after disposal of the Setting Aside Appeal or until further order with liberty to apply in the event that there are changes of circumstances.

85.  As this is a directions hearing for case management, the usual costs order will be costs in the cause.  I make an order nisi that costs of this directions hearing be costs in the cause of the respective appeals with certificate for one counsel.  With no disrespect to the learned counsel attended before me, I am not satisfied that it is necessary for two counsel to attend this directions hearing.  For the parties involving in more than one case as in the cases of Astro and FM, their costs incurred shall be apportioned equally between the cases concerning them.