NG SEW HOI AND ANOTHER v. CHONG YIN SING AND ANOTHER

HCA 15070/1998

[2021] HKCFI 599

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 15070 OF 1998

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D E C I S I O N

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1.  The writ of summons of the present action was first issued on 4 September 1998. More than 22 years have elapsed, and there is not yet a final conclusion in these proceedings. This is most unfortunate.

2.  The matters before me today are as follows:

(1)  an appeal lodged by the 1^st plaintiff (“P1”) on 16 November 2020 (“the appeal”) against the Order of Master Hui dated 13 June 2018 (“the Security Order”); and

(2)  a summons taken out by the 1^st defendant (“D1”) on 2 March 2021 (“the 2021 Summons”) for a direction to restore the hearing of D1’s summons dated 16 February 2017 (“the 2017 Summons”).

3.  There is no dispute that the appeal can only be heard if leave to appeal out of time is granted to P1.  P1 is seeking such leave.

4.  By the 2017 Summons, D1 is seeking an order to strike out P1’s claim against D1.  By the Order of Master J Wong dated 4 September 2018, the 2017 Summons has been adjourned sine die with liberty to restore.  By the 2021 Summons, D1 was seeking a direction to restore the hearing of the 2017 Summons.  For the reasons set out below, I would grant leave to D1 to withdraw both the 2017 Summons and 2021 Summons, with no order as to costs.

Background

5.  At the beginning of these proceedings, the plaintiffs were Chong Chween Hin and his wife, Ng Sew Hoi.  D1 was (and still is) Chong Yin Sing.  The 2^nd defendant (“D2”) was (and still is) D1’s son, Chong Lai Kin.

6.  The disputes herein concern a property known as Flat 5 on the 8^th Floor of Block G, Luk Yeung Sun Chuen, Nos. 22-66 Wai Tsuen Road, Tsuen Wan, NT, Hong Kong (“the Property”).  At the beginning of these proceedings, the original plaintiffs were the registered joint tenants of the Property.  D1 has been in possession or occupation of the Property since its purchase on or about 26 October 1983 in the consideration of HK$385,440.

7.  The original plaintiffs were legally represented, but D1 had not been legally represented until legal aid was granted to him in 2014.  Before 2014, D1 (together with D2 who has all along been not legally represented) had filed and served various home-made Defences and Counterclaims in Chinese.

8.  On 2 May 2002, by a deed of assignment (“the 2002 Assignment”), Chong Chween Hin and Ng Sew Hoi assigned the Property to their son, Ernest Chong Kian, as a gift.  Chong Chween Hin passed away on 26 June 2002.

9.  On 29 October 2003, pursuant to the leave granted by Master K Wong, Ng Sew Hoi has been named as P1, and Ernest Chong Kian has been joined in these proceedings in substitution for the late Chong Chween Hin and named as the 2^nd plaintiff (“P2”).

10.  Insofar as P1’s case is concerned, the present states of pleadings are:

(1)  Re-Amended Statement of Claim dated 16 June 2016;

(2)  Re-Amended Defence and Counterclaim of D1 dated 5 July 2016; and

(3)  Amended Reply to Re-amended Defence and Amended Defence to Re-Amended Counterclaim of D1 dated 2 September 2016.

11.  Save and except the period between 16 March 2017 and 22 July 2019, P1 has been legally represented in these proceedings at all times.

12.  On 16 February 2017, D1 took out the 2017 Summons.

13.  After the revocation of P1’s legal aid, on 29 August 2017, D1 took out a summons for security for costs against P1.  The summons was heard by Master Hui on 13 June 2018.  P1 did not attend that hearing.  At the end of that hearing, the master allowed D1’s application for security for costs and made the Security Order.  That order provides the following:

(1)  P1 do give security for costs to D1 in the sum of HK$702,000, by way of payment into court within 28 days after the service of this order and in the meantime all further proceedings between P1 and D1 be stayed;

(2)  Should P1 fail to pay the security for costs as aforesaid, P1’s claim against D1 be dismissed with costs with no further order and P1’s reply and defence to D1’s reply and counterclaim be struck out;

(3)  D1 be at liberty to enter judgment against P1 upon D1’s counterclaim.

14.  No security for costs has ever been provided by P1.

15.  On 25 July 2018, there was a case management conference before Mr Registrar KW Lung (“the CMC”).  P1 and P2 did not attend the CMC.  The Registrar made an order under Order 25 rule 1C to strike out the plaintiffs’ case on a provisional basis (“the Registrar’s Order”).

16.  On 22 July 2019, P1 obtained legal aid again.  On 30 July 2019, the solicitors for P1 filed a Notice to Act in these proceedings.  It is P1’s case that she only discovered the Security Order and the Registrar’s Order in or about late July 2019[1].

17.  On 16 November 2020, P1 lodged the appeal.  The subject matter in P1’s notice of appeal is the Security Order.

18.  In her affirmation dated 3 November 2020, although P1 mentioned that she intended to challenge both the Security Order and the Registrar’s Order, no appeal against the Registrar’s Order has ever been lodged by P1.

19.  There is no dispute that both P1 and P2 are ordinarily resident in Singapore at all times.

P1’s claim and D1’s counterclaim

20.  P1’s case is that D1 and his family was in wrongful occupation of the Property since about 1984.  P1 claims for, inter alia, an injunction restraining the defendants from occupying the Property and for damages.  P1 says that she is no longer a registered owner of the Property after the 2002 Assignment, and hence she would not claim for an order requiring the defendants to deliver vacant possession of the Property to her.  Such a claim is now being made by P2 alone.

21.  D1’s case is that he is the sole beneficial owner of the Property and is entitled to occupy the same.  Alternatively, he has acquired a possessory title to the Property by adverse possession.  Based upon his case, he has raised a counterclaim against P1 and P2.

Leave to appeal out of time - the principles

22.  As to whether leave to appeal out of time should be granted, the court has to consider all relevant factors, including the length of the delay, the reasons for the delay, the merits of the proposed appeal and the degree of prejudice to the other party[2].

23.  The court has to look at all relevant matters and consider the overall justice of the case.  In Astro Nusantara International BV v PT Ayunda Prima Mitra[3], Ribeiro PJ said (footnotes omitted):

“53. It has often been emphasised that the discretion to extend time conferred by Order 3 r 5 is broad and unrestricted, designed to enable justice to be done between the parties. Thus, in Kwan Lee Construction Co Ltd v Elevator Parts Engineering Co Ltd, Litton VP in the Court of Appeal, stated:

‘The court's jurisdiction to extend time, as conferred by O 3 r 5, is as broad as it can come and, in the exercise of that discretion, the court would, generally speaking, have some regard to what might ultimately be in issue.’

54. In Costellow v Somerset County Council, dealing with the equivalent provision in England and Wales, Sir Thomas Bingham MR noted that the discretion involves the intersection of two principles. The first promotes the enforcement of time limits for the expeditious dispatch of litigation in the public interest and the second recognises that a plaintiff should not ordinarily be denied adjudication of his claim on the merits because of a procedural default “unless the default causes prejudice to his opponent for which an award of costs cannot compensate”. His Lordship noted that the second principle “is reflected in the general discretion to extend time conferred by Ord 3, r 5, a discretion to be exercised in accordance with the requirements of justice in the particular case.”

55. The approach advocated on First Media’s behalf as formulated by the Court of Appeal in The Decurion, is in line with the foregoing authorities. Citing Costellow, Cheung JA acknowledged the intersecting principles and stated:

‘It is clear that the applicable principle in deciding whether time should be extended is to look at all relevant matters and consider the overall justice of the case.  A rigid mechanistic approach is not appropriate...’”

Discretion against extending time

24.  I am of the view that as a result of the Registrar’s Order, it would not serve any meaningful purpose if leave to appeal out of time is granted to P1. 

25.  Order 25 rule 1C provides:

“(1)   Where the plaintiff does not appear at the case management conference or pre-trial review, the Court shall provisionally strike out the plaintiff’s claim.

……

(3)   Where the Court has provisionally struck out a claim … under paragraph (1) … the plaintiff … may, before the expiry of 3 months from the date of the case management conference or pre-trial review, as the case may be, apply to the Court for restoration of the claim or counterclaim.

(4)   The Court may restore the claim or counterclaim subject to such conditions as it thinks fit or refuse to restore it.

(5)   The Court shall not restore the claim or counterclaim unless good reasons have been shown to the satisfaction of the Court.

(6)   If the plaintiff or the defendant does not apply under paragraph (3) or his application under that paragraph is refused, then—

(a)  the plaintiff’s claim … stands dismissed upon the expiry of 3 months from the date of the case management conference or pre-trial review, as the case may be; and

(b)(i)  in the case of the plaintiff’s claim, the defendant is entitled to his costs of the claim

……”

26.  P1 and P2 have never made an application pursuant to Order 25 rule 1C(3) to restore their claim within 3 months after the CMC.  In fact, P1 and P2 have never made any application to restore their claim at any time.  They have also never lodged an appeal against the Registrar’s Order.  Accordingly, by the operation of Order 25 rule 1C(6)(a), the plaintiffs’ claim must be deemed as having already been dismissed.

27.  I further observe that:

(1)  According to P1’s own evidence, she was fully aware of the CMC before the CMC taking place.  In [13] of her affirmation dated 3 November 2020, she said that her absence in the CMC was due to her impecuniousness.  Due to her limited financial ability, she was unable to buy an air ticket to travel to Hong Kong to attend the CMC, or retain a lawyer to represent her in the CMC.  Further, she was afraid of travelling by plane.  In other words, P1 was aware of the CMC before that hearing taking place, but because of the matters as alleged in her affirmation, she was not able to attend the CMC.

(2)  As said in the above, according to her own case, P1 was aware of the Registrar’s Order in about late July 2019.  She also obtained legal representation at about the same time.

28.  In view of all these, P1’s inaction towards the Registrar’s Order is inexcusable.  There is no reason why P1 should not be bound by the Registrar’s Order.

29.  Since P1 is bound by the Registrar’s Order, by the operation of the Registrar’s Order, P1’s claim has already been struck out.  Further, P1’s claim is also her defence to D1’s counterclaim.  I am of the view that as a result of the Registrar’s Order, P1 is not allowed to pursue her defence to D1’s counterclaim in these proceedings in any event.

30.  The Security Order has the effect of, in the absence of provision of the security stipulated in the order by P1, striking out P1’s claim and debarring P1 from defending D1’s counterclaim.  For the reasons set out in [25] to [29] above, since P1 is bound by the Registrar’s Order, even if the Security Order is set aside, that would not change the fact that P1 is not entitled to pursue her claim and her defence to D1’s counterclaim in these proceedings.  Accordingly, granting leave to appeal out of time to P1 would not serve any meaningful purpose at all. 

31.  Further, the delay in bringing the appeal against the Security Order is substantial and inexcusable.

32.  There cannot be any doubt that there has been a substantial and inordinate delay in taking out the appeal.  The Security Order was made on 13 June 2018.  The time for P1 to lodge an appeal against that order expired on 27 June 2018.  However, P1 only lodged the appeal on 16 November 2020, ie more than 2 years and 4 months after the deadline stipulated in the statute.

33.  In my view, the delay is inexcusable.  I am aware of the fact that P1 did not attend the hearing on 13 June 2018.  There is no evidence before me showing when the Security Order was served on P1. However, there is evidence before me showing that the documents concerning D1’s application for security for costs had been served on P1 before the hearing on 13 June 2018.  P1 does not dispute this.  In any event, according to P1’s own evidence, she discovered the Security Order in about late July 2019.  She has been legally represented again since 30 July 2019.  Even taking P1’s case at its highest, there is no satisfactory explanation as to why an appeal against the Security Order was not lodged shortly after 30 July 2019, but was only lodged more than 1 year and 3 months later, ie on 16 November 2020.

34.  I have taken the following matters which are in P1’s favour into account.

(1)  For the sake of discussion, if the Registrar’s Order has never been made and P1’s appeal against the Security Order is lodged in time, P1 may have a reasonable prospect of success in the appeal.

(a)  P1 is ordinarily resident in Singapore.  Given the regime for reciprocal enforcement of judgments between Singapore and Hong Kong under the Foreign Judgments (Reciprocal Enforcement) Order, the court may consider that it would not be necessary to make a security for costs order against P1[4].

(b)  The Security Order has the effect of debarring P1 from defending D1’s counterclaim against her if no security is provided by P1.  Arguably, this is incorrect.  No security for costs should be ordered against a defendant[5]. P1 is a defendant in D1’s counterclaim.

(c)  It is also arguable that P1’s claim and P1’s defence to D1’s counterclaim are the two sides of the same coin.  Applying the Crabtree principle[6], P1 should be allowed to pursue her claim and her defence to counterclaim at the same time, without being required to provide any security for costs.

(2)  Although there has been substantial delay on P1’s part in these proceedings, D1 has also failed to take steps diligently to bring these proceedings to a conclusion.  An example on this point is although based upon the Security Order, D1 is entitled to apply for entering judgment against P1 upon D1’s counterclaim, D1 has never made this application.

35.  Taking all the aforesaid into account and balancing all the relevant factors, I would exercise my discretion against P1’s application for leave to appeal out of time.  The most crucial factor in my consideration is the Registrar’s Order.

Disposition

36.  I refuse to grant leave to appeal out of time to P1, and I also dismiss the appeal.  Costs should follow the event.  I order that costs of the appeal be paid by P1 to D1, to be taxed if not agreed.  Both P1’s own costs and D1’s own costs are to be taxed in accordance with the Legal Aid Regulations.

37.  I grant leave to D1 to withdraw the 2017 Summons and the 2021 Summons.  Time spent on these summonses is minimal.  I make no order as to costs on these summonses.  P1’s and D1’s own costs concerning these summonses are to be taxed in accordance with the Legal Aid Regulations.

38.  I also grant leave to D1 to withdraw his counterclaim against P1.  Since P2 is the sole registered owner of the Property after the 2002 Assignment, D1’s counterclaim should be made against P2 alone. Maintaining the counterclaim against P1 would not serve any useful purpose. Since P1’s claim is her defence to D1’s counterclaim, P1 should not have incurred any additional costs as a result of D1’s counterclaim.  There be no order as to costs on D1’s counterclaim against P1.  P1’s and D1’s own costs concerning this counterclaim be taxed in accordance with the Legal Aid Regulations.

39.  As a result of the ruling as set out in the above, everything concerning P1 in these proceedings has been concluded.  From now onwards, P1 is out of the picture.  The remaining parties are P2, D1 and D2.  These proceedings have dragged on for more than 22 years.  All the remaining parties must take reasonable steps to bring these proceedings to a conclusion as soon as practicable.

40.  In order to bring these proceedings forward, I direct that P2, D1 and D2 do file and serve their respective proposed directions for the further conduct of these proceedings within 42 days. After considering these proposed directions, I may give directions on paper, or I may direct that there be a hearing for directions.

41.  I note that P2 is residing in Singapore.  I direct D1 to serve a copy of this decision and a sealed copy of the order made by me today on P2 as soon as practicable, and leave to serve these documents out of the jurisdiction is hereby given.  P2 is not legally represented in these proceedings.  P2 may retain legal practitioners in Hong Kong to represent him, or he may choose to act in person in these proceedings.  However, if he chooses to act in person, he has to file and serve a Notice to Act in Person as soon as practicable.  The address provided in the Notice to Act in Person must be an address in Hong Kong[7]. Documents in these proceedings would be served on P2 by delivering the same to this address.

42.  Lastly, it remains for me to thank counsel for the assistance rendered to the court.