DR. LEUNG KAM CHUNG KENNETH v. THE AUSTRALIAN CONSULATE GENERAL, HONG KONG

HCSA 19/2020

[2020] HKCFI 2533

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

SMALL CLAIMS TRIBUNAL APPEAL NO 19 OF 2020

(ON APPEAL FROM SMALL CLAIMS TRIBUNAL CLAIM

NO SCTC 26113 OF 2019)

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D E C I S I O N

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A. Introduction

1.  By application dated 13 August 2020, Dr Leung Kam Chung Kenneth applies for leave to appeal against the order made by Mr David Cheung, Adjudicator in the Small Claims Tribunal (“Tribunal”), dated 6 August 2020.  That order was made in relation to a review of the award made by the Adjudicator on 19 December 2019.

2.  Dr Leung was the Claimant in the Tribunal, and The Australian Consulate-General Hong Kong (“Consulate”) was the Defendant.

3.  The application for leave to appeal is brought under section 28 of the Small Claims Tribunal Ordinance Cap 338 (“Ordinance”).  It is supported by written Grounds for Review dated 12 August 2020.

4.  On 27 August 2020, I directed the matter to be disposed of on the papers.  I acknowledged receipt of the written submissions from Dr Leung dated 12 August 2020, and directed that any further written submissions should be filed and exchanged by the parties by 4:30pm on 21 September 2020.  A further written submission dated 9 September 2020 was received from Dr Leung, together with certain documents in various appendices.  No submissions have been received from or on behalf of the Consulate.

5.  This is my Decision.

B.   Procedural History

6.  In his Form of Claim dated 16 June 2019, Dr Leung claimed the sum of AUS$7,316.01 (equivalent to HK$47,554).  He said he had paid sums totalling that amount, as sponsor, in support of applications for Australian residency for three of his children.  Subsequently, he found out that he was not eligible to be a sponsor, since his status of being eligible for Australian social benefits had been cancelled automatically since 2004 because he had not applied for a review in accordance with the standing requirements.

7.  He therefore applied for a “mandatory” refund of the monies, but this was rejected by Australian consular or immigration officers without giving a reasonable or valid explanation.  Dr Leung pleaded that when his children’s applications for Australian residency were submitted together with his application for sponsorship, the officer should have checked whether he was an eligible sponsor or not, and if not, the case should have been rejected at the very first instance.  However, what happened was that the officer took monies from the credit card account and allowed the cases to proceed.  The refusal to refund the application monies was unfair and unjust.

8.  By a letter dated 30 July 2019, the Consulate stated that Dr Leung’s claims related to fees paid as part of Australian visa application processes, and that it was of the view that the Court did not have jurisdiction to hear the matter because of sovereign immunity.  The Consulate asked the Tribunal to dismiss the matter for lack of jurisdiction on that basis.  In a further letter dated 25 September 2019, the Consulate submitted that the doctrine of sovereign immunity was most recently confirmed by the Court of Final Appeal in Democratic Republic of the Congo v FG Hemisphere Associates LLC (No. 1) (2011) 14 HKCFAR 95, holding the doctrine to be absolute, meaning that any act of a State is covered, whether that is sovereign or commercial.

9.  Though the matter proceeded to a hearing on 23 October 2019, it was adjourned part-heard to a hearing on 19 December 2019, for Dr Leung to provide further submissions on the question of diplomatic or sovereign immunity.

10.  At the adjourned hearing, and despite the fact that the Consulate was not present nor represented throughout the hearing, the Adjudicator made an award/order pursuant to section 25 of the Ordinance, dismissing the claim which he considered to be frivolous or vexatious.

11.  In his ‘Brief Reasons for Decision’, the Adjudicator explained why he had dismissed the claim.  He recognized that under section 25 of the Ordinance, the Tribunal may at any time dismiss a specific claim which it considers to be frivolous or vexatious on such terms as to payment of costs as it may think fit, and that it could do so notwithstanding non-participation by the defendant.

12.  The Adjudicator set out the principles relating to striking out applications under RHC Order 18 rule 19, which he considered relevant and applicable to the determination of an application under section 25 of the Ordinance.  He noted Dr Leung’s submission that sovereign immunity concerned only civil litigation between people or companies of the forum state (Hong Kong) and people or companies of the foreign state (in the present case, Australia), and that the taking of money from the credit card account or is theft, a criminal offence.

13.  The Adjudicator expressed his view that, as a matter of law, foreign consuls and members of their staffs are entitled to immunity from suit at common law in respect of their official acts, but not in respect of their private acts.  He pointed to the relevant provisions in Hong Kong as contained in the Consular Relations Ordinance Cap 557 (“CRO”).

14.  Under the CRO, consular officials and consular employees are not amenable to the jurisdiction of the Hong Kong Courts in respect of acts performed in the exercise of consular functions, except in civil actions arising out of the contract made by them in which they do not expressly or impliedly act as an agent of the sending State, or by a third party for damage arising from an accident caused by a vehicle, vessel or aircraft.

15.  The Adjudicator found that, in relation to the acts complained of by Dr Leung, the officials were acting in the course of and performing work in the exercise of consular functions.  Therefore, immunity under Article 43 of the Vienna Convention on Consular Relations done at Vienna on 24 April 1963 (“Vienna Convention”), which by virtue of the CRO has the force of law in Hong Kong, was applicable to the circumstances of the case.  The Adjudicator agreed with the observations made by the Consulate in the letters sent, and rejected the argument advanced by Dr Leung that this was a criminal offence when the consulate staff took the money from his credit card account.

16.  There being no reasonable cause of action against the consulate, and no chance of success on the allegations made by Dr Leung, the Adjudicator dismissed the claim with no order as to costs.

17.  Dr Leung sought a review of that award/order.  The matter was dealt with by way of paper disposal.  The Adjudicator had had the benefit of three sets of grounds or submissions provided by Dr Leung.  There was also a letter from the Consulate dated 8 May 2020, reiterating the points made in its previous correspondence.

18.  In the ‘Reasons for Judgment’ – being that from which Dr Leung now seeks leave to appeal – the Adjudicator canvassed the procedural history and his prior Brief Reasons for the award/order of 19 December 2019 (which he set out in full).  He then noted that Dr Leung stressed and repeatedly re-iterated that the officials from the Consulate office made an illegal action of deliberately taking money out of his credit card account even though they knowingly realized that he is not a qualified sponsor, and the illegal taking money out of the credit card account was an act of theft.

19.  Having set out the basic definition of theft to be found in sections 2 and 3 of the Theft Ordinance Cap 210, the Adjudicator identified that Dr Leung’s point that there was no fact check whether he was no longer an eligible sponsor before the money was received would not alter the nature of the transaction between Dr Leung and the Consulate, that the fees paid were part of the Australian visa application processes.  The official handling the transaction for the visa application processes was acting in the course of and performing work in the exercise of consular functions.  Therefore, that work was within the ambit of consular functions under Article 5.

20.  The Adjudicator took the view that the officials receiving the payment on behalf of the Consulate should not be regarded as receiving or taking money from Dr Leung dishonestly, because the officials have in law the right to deprive him of the amount of the money for the process of visa application.  Even if the allegation is that there was a breach of contract or breach of duty when handling the visa application negligently, the work entrusted to the officials was still within the ambit of consular functions so that those officials were entitled to diplomatic immunity from suit.

21.  Hence, the Adjudicator maintained his earlier decision and dismissed the application for review with no order as to costs.

C.   Grounds of Proposed Appeal

22.  In his letter dated 12 August 2020, Dr Leung suggested that whilst the Consulate claimed to have sovereign immunity, no mention was made of the claim being frivolous or vexatious.  However, he said, the Adjudicator never addressed the issue of sovereign immunity, but “most surprisingly” considered the claim to be frivolous and vexatious, citing section 25 of the Ordinance.  Dr Leung stated that there is documented proof of his application, the payment and the mistakes committed by the staff of the Consulate, so that it is “most unthinkable” to think that the claim is vexatious.

23.  In the review, Dr Leung mentioned that sovereign immunity is not applicable because the Consulate’s staff was doing an illegal action, by unlawfully taking money out of the credit card account, bearing in mind that he only approved such payment if he could act as a sponsor for three of his children in their application for the Australian residency. Because after further due diligent fact checking it was discovered he was not qualified to be a sponsor, the money should not have been taken out of the credit card account in the first instance.  Sovereign immunity, he said, does not cover illegal actions performed by the consular staff, and removing other people’s money or property without the other party’s informed consent is equivalent to an action of theft.

24.  In his letter dated 9 September 2020, Dr Leung gives more detail about the children’s applications for Australian residents and his complaints.  In full, the letter states as follows:

1.  3 of my children would like to apply for Australian Residence and applications dated the 26^th of August 2017 were submitted to the Australian Consulate General in Hong Kong.

2.  I am their father and I would like to sponsor them for their application, believing that I was an eligible New Zealand citizen, based on the Certificate of Residence – New Zealand Citizen issued to me by Centrelink on the 14 June 2001 as well as

3.  The document issued by the Australian Department of Immigration and Border Protection 40CH regarding Sponsorship for child to migrate to Australia.

4.  Centrelink is the name of the statuary authority that administers the payment of financial assistance from the Commonwealth government to individuals.

5.  Please kindly find the above Certificate in the enclosure. (Appendix 1).

6.  Please find in the enclosure (Appendix 2) the First page of 40CH.  In this page, under the title “Who can sponsor?”.

7.  In the first paragraph, it says “The child must be sponsored by the parent ….” And as their father there is no problem.

8.  In the second paragraph, it says “The sponsor must be an Australian citizen, permanent resident or eligible New Zealand citizen aged 18 years or over”

9.  Based on the Certificate issued to me by the Centrelink, I am a Protected SCV (i.e. Protected Special Visa) holder in accordance to the Social Security 1991 Section 7 2C(a)

10.  which says “A person who commenced, or recommenced, residing in Australia during the period of 3 months beginning on 26 February 2001 is a protected SCV holder at a particular time if: (a) the time is during the period of 3 years beginning on 26 February 2001; or …..”

11.  Please find in the enclosure (Appendix 3) copy of the Social Security Act 1991, Section 7.

12.  According to the paper New Zealanders in Australia: a quick guide, under the Heading Special Category Visa, it says “New Zealanders who were already in Australia as SCV holders on 26 February 2001 may continue to apply for citizenship, sponsor family members for permanent residence and access social security payments without being granted permanent visas.”

13.  So by this status, I consider myself as an eligible New Zealand citizen to sponsor my 3 children to apply for Residence in Australia.

14.  Please find in the enclosure (Appendix 4) a copy of the first 3 pages of the paper New Zealanders in Australia: a quick guide.

15.  So I submitted my application for sponsorship together with my 3 children’s applications for Australian Residence in September 2017, and

16.  I also gave the Australian Consulate General in Hong Kong my credit card details for them to get money out for the sponsorship purpose.

17.  The staff at the Australian Consulate sent me 3 receipts after they had diligently checked my eligibility as a sponsor and deducted money from my credit card account.

18.  Please find in the enclosure (Appendix 5) copies of the 3 receipts.

19.  Very shortly afterwards, my children wish to withdraw their applications for Residence in Australia because

20.  They found out from the Internet that quite a number of bad news which revealed that foreigners were killed and Chinese people were abused in Australia.  And as New Zealand citizens they do not really need a resident visa in order to stay in Australia, and they have no intention to apply for Australian citizenship as originally planned.

21.  In the meantime, I also found out from the Internet that I would not be an eligible New Zealand citizen anymore because

22.  According to the paper 3.1.1.10 Residence requirements, page 8 on the copy which I enclosed here (Appendix 6) under the heading Protected SCV holder determination, I needed to apply for a determination by 26 February 2004, which I had not done.

23.  So I wrote to the staff at the Australia Consulate General in Hong Kong to withdraw the 3 children’s applications and requesting for a mandatory refund of the sponsorship money, stating that I was not an eligible New Zealand citizen anymore.

24.  However the staff at the Australian Consulate refused to refund me the money on one hand, and on the other hand I was told that they would not respond to my request anymore for the future.

25.  I have no choice but to go to the Small Claim Tribunal to recover my money and laying out my grievances.  In accordance with the Consulate’s rule, if the money was taken out due to a mistake of its staff, the refund should be mandatory.

26.  What happened was that the Australian Consulate General in Hong Kong had been very rude.  They treated the Tribunal with contempt and never bothered to reply to address to the issue of illegality taking money out of my credit card account.

27.  Instead, they wrote a letter to the Adjudicator saying that they have Sovereign immunity.

28.  They did not say my request for refund was frivolous or vexatious.

29.  On hearing that from the Adjudicator, I wrote a submission to point out that

30.  In my case, the Consulate staff should be aware of my ineligibility after his or her diligent fact checking.

31.  In that case, this person had performed an illegal action by knowingly and deliberately taking money out of my credit card account.

32.  Since it was an illegal action, amounting to a criminal act of stealing or theft whatever, such illegal action is NOT covered by sovereign immunity.

33.  More surprisingly, the Adjudicator Mr. David Cheung in his deliberation, says my request for refund was frivolous or vexatious.  He never addressed to the issue of Sovereign Immunity nor my issue of illegality in taking out the money.

34.  I presume your Lordship would have a copy of Mr. David Cheung’s statement of judgment, so I do not intend to include it here.

35.  I asked for a Review on his decision and yet the Adjudicator Mr. Cheung said more or less the same thing in this Review statement.

36.  I shall most grateful and most obliged indeed if your Lordship would kindly look into the matter.  I believe that I am entitled for a refund given that it was an illegal action by a staff from the Australian Consulate General in Hong Kong and should not covered by sovereign immunity.

25.  It can be seen that, other than a few differences, the points made by Dr Leung in those submissions are essentially materially the same as points previously made to the Adjudicator, both on the original application and on the review.  The differences seem to include: (a) more detail of the question of his eligibility to be a sponsor, (b) the apparently new suggestion that the credit card receipts were provided only after the Consulate staff had diligently checked eligibility (which is a shift from previously saying both that the consular staff did not check, and inconsistently that they knew he was not eligible), and (c) the information that his children’s residence applications were withdrawn in any event for reasons not depending on his own ineligibility to be a sponsor (though that was also discovered at around the same time).

D.  Analysis

26.  Dr Leung’s criticism of the Adjudicator seems to me to be based upon a misconception, though such a misconception may be to an extent understandable where Dr Leung is not a lawyer, nor legally advised.  The misconception arises out of the use of the words “frivolous or vexatious”, where Dr Leung considers that (a) the Consulate had not suggested that his claim was frivolous or vexatious and that (b) the Adjudicator found the claim to be frivolous or vexatious, but did not address the issue of sovereign immunity.

27.  In fact, it is because the Adjudicator considered the circumstances giving rise to the claim to be covered by sovereign immunity that the Adjudicator found the claim to be frivolous or vexatious.

28.  Though Dr Leung may not have focused on that part of the original brief reasons for the decision of 19 December 2019, the Adjudicator did explain the meaning of the words “frivolous and vexatious”.  He did so in the context of addressing the legal principles for striking out a claim.

29.  By reference to the Hong Kong Civil Procedure 2019 – commonly known as the White Book, and which contains the Rules of the High Court as well as commentary on the application of those rules – the Adjudicator identified that: a “reasonable cause of action” means a cause of action with some chance of success when only the allegations in the pleading are considered; a proceeding is “frivolous” when it is not capable of reasoned argument, without foundation or where it cannot possibly succeed; a proceeding is “vexatious” when it is oppressive and/or lacks bona fides; and the expression “frivolous or vexatious” includes proceedings which are an abuse of the process.

30.  The Adjudicator found that there was no reasonable cause of action against the Consulate as there is no chance of success on the allegations made by Dr Leung.  The same finding supports the conclusion that the claim is “frivolous”, as it could not possibly succeed.

31.  Clearly, the Adjudicator did address the issue of sovereign immunity, including whether or not the acts complained of constituted criminality which might not be covered by sovereign immunity.

32.  In other words, the points relating to sovereign immunity and the claim being frivolous or vexatious are one and the same.

33.  Further, I do not think the Adjudicator’s analysis of the question of sovereign immunity can be impugned. He referred to the correct principles under the CRO, which (amongst other things) gives the force of law to the various provisions of the Vienna Convention.

34.  Like the Adjudicator, I think that the activities conducted by the Consulate officials of which Dr Leung makes complaint were acts performed in the exercise of consular functions and so not amenable to the jurisdiction of the judicial or administrative authorities of Hong Kong.

35.  I also agree with the Adjudicator that no illegal or criminal activity was engaged in by the Consulate staff.  It is, of course, unfortunate that Dr Leung’s ineligibility to act as a sponsor was not clarified at an earlier stage.  But, accepting payment of the fees for the applications in those circumstances cannot amount to a criminal act.

36.  On that basis, I agree that the claim has no chance of success, and therefore falls to be dismissed pursuant to section 25 of the Ordinance.

37.  Indeed – though it is not necessary for my view of the merits of the application for leave to appeal – I would have thought that when Dr Leung put himself forward as a sponsor for his children’s applications, relying on his New Zealand citizenship, he was asserting his eligibility (in circumstances where he was unfortunately mistaken, for reasons good or bad).  From what was stated in the original claim made by Dr Leung, the fees were paid on three applications for Australian residency for three of his children.  Copy receipts now provided show the monies were charged to the credit card account on the day of the applications. To my mind, the monies paid on the credit card were fees for dealing with the applications, which fees would probably be payable whether the applications ultimately succeeded or not.  Checking eligibility for sponsoring the applications was likely a part of the application process for which the fees were paid.

38.  Anyway, accepting payment for such applications seems to me to be squarely within the normal legal scope of activities provided by consular staff.  Further, as Dr Leung’s latest submissions seem to suggest, those applications were in any event withdrawn for reasons not connected with any ineligibility of Dr Leung to act as sponsor.

E.   Result

39.  The Adjudicator properly addressed the question of sovereign immunity raised by the Consulate, and he gave detailed reasons supporting his view that the claim as a result had no chance of success or was frivolous and vexatious.  Far from thinking that the Adjudicator was arguably incorrect, I think he was correct.

40.  In those circumstances, there is no reasonable prospect of success on any intended appeal, and I dismiss the application for leave to appeal.

41.  Where Dr Leung was self-represented and the Consulate made no appearance, I make no order as to costs.