CACV 115/2016
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF APPEAL
CIVIL APPEAL NO 115 OF 2016
(ON APPEAL FROM HCA NO 1257 of 2013)
________________________
BETWEEN
PACIFIC HARBOR ADVISORS PTE LTD 1st Plaintiff
PACIFIC HARBOUR SPECIAL HOLDINGS LIMITED 2nd Plaintiff
and
WINSON FEDERAL LIMITED 1st Defendant
FREDERICK KAN KA CHONG 2nd Defendant
CHO WOON MING VINCENT 3rd Defendant
INTERNATIONAL HOTELIERS & ASSOCIATES LIMITED 4th Defendant
UP SPEED INVESTMENTS LIMITED 5th Defendant
RANMARK INVESTMENTS LIMITED 6th Defendant
FURAMA (SHENYANG) COMPANY LIMITED 7th Defendant
_______________________
Before : Hon Lam VP and Kwan JA in Court
Dates of Written Submissions: 20 and 21 July 2016
Date of Judgment: 22 July 2016
_________________
JUDGMENT
_________________
Hon Lam VP (giving the Judgment of the Court):
1. On 22 June 2016, we handed down our judgment dismissing the appeal of the 3rd Defendant. That appeal was heard on an expeditious basis in light of the fact that the examination of the 3rd Defendant is to take place on 25 July 2016. As we have dismissed the appeal, the examination should go ahead as scheduled.
2. On 19 July 2016, the 3rd Defendant issued a Notice of Motion seeking leave to appeal to the Court of Final Appeal. On the same date, the 3rd Defendant took out a summons seeking in substance a stay of the examination pending the disposal of the leave application.
3. Though the Notice of Motion was issued within time, it is regrettable that the summons for stay was not issued earlier when the 3rd Defendant and those advising him are well aware of the scheduled date of examination and the purpose of having the appeal heard on expeditious basis.
4. There is not a single explanation offered by the 3rd Defendant as to why the summons could not have been taken out earlier.
5. By a letter of 19 July 2016, solicitors for the 3rd Defendant requested the summons to be dealt with on an urgent basis and suggested the matter be processed on paper.
6. The application is opposed by the Plaintiffs on the grounds that there is no arguable appeal and prejudice to the Plaintiffs if the examination is to be delayed further.
7. As this court had stated in Citibank NA v Days Properties Ltd CACV 192 of 2013, 29 November 2013, a litigant and those advising him should proceed with expedition in making urgent applications to the Court of Appeal and those who proceed with dilatoriness cannot expect this court to have the necessary manpower and resources to entertain the matter immediately as and when they apply to the court. This is particularly so when there is no explanation for the delay. Such an applicant may have to bear the consequence of his application not being considered before it being overtaken by other events. See also Li Xiao Yun v China Gas holdings Ltd CACV 38 of 2013, 11 March 2013; Motorola Solutions Credit Co LLC v Kemal Uzan HCMP 1237 of 2014, 26 May 2014.
8. In the present case, given the background leading to the expeditious hearing of the appeal, we cannot see any reason why the 3rd Defendant could not have made his application for stay shortly after the handing down of the judgment on 22 June 2016. On any view, leaving the matter until 19 July 2016 is inexcusable. In the present circumstances, the forewarning to the solicitors for the Plaintiffs by letters of 12 and 15 July 2016 is of no moment as far as the court is concerned.
9. Further, as the examination is to take place on 25 July 2016, lodging the application on 19 July 2016 gives this court very little time to process the matter, taking into account of the time needed for filing and reading the submissions of the parties.
10. All members of the Court of Appeal are usually busily engaged on other cases. This court (Lam VP and Kwan JA) are presently engaged in a three day substantive appeal from 20 to 22 July 2016. In order to entertain this application, we have to find extra time to work on the case and this affects our works on other cases. Judicial manpower, particularly at the Court of Appeal level, is very limited. Bearing in mind the dilatoriness of the 3rd Defendant, there is no reason why litigants in other cases should suffer prejudice. One of the underlying objectives in Order 1A Rule 1 is to ensure that resources of the Court are distributed fairly.
11. In addition, the Plaintiffs had to respond to the application within a very short time when their lawyers should be fully engaged in the preparation for the examination. The urgent application inevitably disrupted such preparation and occasioned additional burden on those representing the Plaintiffs. This is not fair.
12. It appears to us that the 3rd Defendant and those representing him had not pay regard to their respective duties under Order 1A Rule 3. Such dereliction of duties must be reflected in the costs order we shall impose.
13. Whilst we must repeat the warning to the profession (as set out in Citibank NA v Days Properties Ltd , supra) that this court may simply leave the party guilty of undue delay in making urgent applications to suffer the consequence of his own dilatoriness in terms of the application not being entertained before it being overtaken by extraneous event, we decide we can deal with the present application on paper. Directions were given on 20 July 2016 to facilitate such course to be taken.
14. As Barma JA (one of the judges involved in hearing the appeal) is on leave, we cannot deal with the Notice of Motion. That would have to be deferred until His Lordship’s return.
15. In respect of the application for stay, the guiding principles are those set out in Whale View Investment Ltd v Kensland Realty Ltd [2001] 3 HKC 15 and Star Play Development Ltd v Bess Fashion Management Co Ltd [2007] 5 HKC 84. Whilst we appreciate that an absence of stay would mean that the examination would go ahead, we do not accept that this would render the intended appeal wholly nugatory. There are bound to be matters which could be subject for examination without it possibly impinging on PSI relating to tax evasion. In any event, as we explained in our judgment of 22 June 2016, there are sufficient safeguards to the 3rd Defendant in respect of the use that the Plaintiffs could place on the answers obtained in the examination. Further restraints could be put on the use of answers which might attract PSI pertaining to tax evasion if eventually leave to appeal is granted and our conclusions in the judgment of 22 June 2016 were wrong.
16. Mr Au referred to investigation by the CCB. As it had been explained in the judgment of 12 May 2016, as far as that investigation is concerned, the 3rd Defendant is adequately protected by Section 33(1) of the Theft Ordinance.
17. Further, based on what has been placed before us in terms of the intended grounds of appeal, we cannot see any real prospect of success in suggesting that the wrong legal tests had been applied. In respect of the assessment of risk of exposure to prosecution for tax evasion, it does not raise any question of great general public importance.
18. On the other hand, we can see that further delay of the examination would occasion substantial prejudice to the Plaintiffs in light of the purpose of the examination. As pointed out on behalf of the Plaintiffs, the examination had already been deferred for a long time.
19. In our judgment, the potential injustice suffered by the Plaintiffs (if a stay is granted) would be much greater than that suffered by the 3rd Defendant (if a stay is refused).
20. For these reasons, we dismiss the summons of 19 July 2016. In view of our observations on the breach of duty on the part of the 3rd Defendant, we order him to pay the costs of the Plaintiffs in this application on indemnity basis, to be taxed if not agreed.
(M H Lam)
(Susan Kwan)
Written submissions by Mr Edward Chan SC, instructed by Oldham, Li & Nie, for the 1st and 2nd plaintiffs
Written submissions by Mr Au Lut Chi, instructed by Tsang, Chan & Woo, for the 3rd defendant