LI CHIU WAH JOSEPH v. HONG KONG SOCIETY OF NOTARIES

CACV 394/2020

[2021] HKCA 1270

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 394 OF 2020

(ON APPEAL FROM HCAL NO 2658 OF 2019)

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JUDGMENT

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Hon Yuen JA (giving the Judgment of the Court):

1.1.  There is before this court the Applicant’s summons filed on 13 July 2021 (“the summons”) for leave to re-amend the Notice of Appeal by adding a new ground in his appeal from the Judgment of Alex Lee J (“the judge”) given on 30 July 2020 (“the Judgment”)¹.

1.2.  The appeal has been fixed to be heard on 29 October 2021.  On 14 July 2021, a single judge of this court gave directions for the summons to be dealt with on paper, and written submissions were filed by both parties. 

1.3.  Judgment on the summons was scheduled to be handed down on 2 September 2021, but on 1 September 2021, the Respondent’s solicitors wrote to the court saying that it wished to file an affidavit to correct its submissions.  That afternoon, the Respondent filed the 2^nd affidavit of Lau Suk Ying Margaret (“Lau II”), and the court gave leave to the Applicant to file a response, which he did on 3 September 2021 together with an additional statement of costs (for extra works and costs incurred since 18 August 2021).

Background

2.  The Applicant is a notary public who was required by the Respondent, the Hong Kong Society of Notaries (“the Society”), to pay $3,000 as an additional administrative charge (“the charge”) for his late submission of a supporting document for the renewal of his Certificate of Membership for 2019. The decisions to impose the charge and to fix it at $3,000 had been made in 2016 (“the 2016 Decisions”), with members being notified in two circulars².

3.1.  All members of the Society were reminded of the requirement to submit the supporting document by (a) a circular issued in September 2018; (b) a circular issued in October 2018³; and (c) an “Important Notice” sent in December 2018 reminding members that they needed to honour the undertaking to submit the supporting document⁴. 

3.2.  As the Applicant failed to do so, on 11 January 2019 the Society informed him that he was in breach of the undertaking, and that (among other things) he was required to pay the charge⁵.

Application for waiver of the charge and Respondent’s decisions thereon (the 2019 Decision)

4.1.  The Applicant applied for a waiver of the charge.  On 25 March 2019, the Respondent refused to waive the charge⁶.  On 12 June 2019 (“the 2019 Decision”), the Respondent decided again to refuse to waive the charge (referred to in the Judgment as “Part 1") and formulated certain consequences in the event of non-payment (referred to in the Judgment as “Part 2”)⁷.   

4.2.  On 27 June 2019, the Applicant paid the charge under protest.

Proceedings

5.  On 11 September 2019, the Applicant made an application for leave to commence judicial review to challenge the 2019 Decision.  Directions were given on 12 September 2019 for a “rolled-up hearing”, i.e. the hearing of the application for leave to apply for judicial review, and in the event that leave was granted, the substantive judicial review application.

6.1.  On 24 October 2019, the parties filed a Consent Summons for directions on the filing of evidence.  The Respondent through its Secretary General, Lau Suk Ying Margaret filed an affidavit on 9 December 2019 (“Lau I”), in which she:

(a)  exhibited documents including the two circulars issued in 2016 in respect of the charge⁸; and

(b)  explained that the figure of $3,000 was a “general approximation of the extra expense required to process all events”, listing the “scope of the administrative work undertaken by the Society” when the supporting document is not submitted⁹. 

6.2.  The Applicant did not request further documents, or make any application for discovery under the rules of court, or seek to cross-examine Ms Lau at the hearing¹⁰.

The judge’s Judgment

7.  The hearing took place on 24 April 2020, at which the Applicant was represented by senior counsel.  The judge gave Judgment on 30 July 2020. 

-  In relation to Part 1, the judge refused leave to apply for judicial review.

-  In relation to Part 2, he refused leave on all grounds except for what was called the “illegality ground” based on contentions (b) - (d), as set out in §53 of the Judgment¹¹.  However, on this ground, the substantive application for judicial review was dismissed on the merits.

Notice of Appeal

8.  The Applicant filed a Notice of Appeal on 19 August 2020 which was amended by consent on 14 January 2021.  The appeal was set down on 5 March 2021.

Summons to re-amend to add Ground 6A

9.1.  On 13 July 2021, the Applicant filed a summons to re-amend the Notice of Appeal. Grounds 4 and 5 were deleted, to which the Respondent has no objection, and there is an amendment to correct a typographical error in Ground 7. 

9.2.  However, the Applicant also wished to add a new ground, viz. Ground 6A.  In brief, the Applicant asserts under this ground that:

(1)    the Respondent had a duty of candour to the court and to him;

(2)    the Respondent has breached that duty in that it had failed to produce documents regarding the Council’s 2016 Decisions to impose the charge and to fix it at $3,000 (“the 2016 documents”), which he says are relevant to the “question of whether the [charge] was imposed as a disguise for a penalty for the alleged breach of undertaking, as well as whether the sum of the [charge] was irrational ...”; and

(3)    as the Respondent had failed to produce such documents at the hearing before the judge, adverse inferences should drawn against it. 

9.3.  The summons was supported by an affirmation of the Applicant (Li III) in which he said that the “main reason” for introducing Ground 6A was that he has engaged a new leading counsel for the appeal, who wished to add this new ground of appeal.  Pausing here, it should be noted that the Court of Appeal has made it clear that the instruction of a new legal team (or, in this case, a new member) is not a good ground for raising a new issue on appeal¹².

9.4.  The Respondent filed submissions on 11 August 2021 opposing the new ground on the basis that it had not been argued below.  Nevertheless, in the submissions, it also said that “if the Society is given an opportunity to explain (as it would have been if the matter was raised in the Court below), the Society would have adduced affidavit evidence to the effect that the requested documents do not exist, and there would be no credible basis for the Applicant to argue a breach of the duty of candour or to draw any adverse inference against the Society” (emphasis added).

9.5.  However, on 1 September 2021, the Respondent’s solicitors wrote to the court saying that “it has come to the Respondent’s attention that there are matters in the Respondent’s Written Submissions filed herein on 11 August 2021 requiring correction” and asking that the handing down of the judgment be deferred. Nothing was said about the nature or content of the correction.  As mentioned earlier in this judgment, the court gave leave to the Respondent to file an affidavit that day, with leave to the Applicant to file a response (if any) on 3 September 2021.

9.6.  The Respondent then filed Lau II, which said (among other things) the following:

“18. Following receipt of the Applicant’s draft Re-Amended Notice of Appeal, wherein he raises the New Argument [i.e Ground 6A] for the first time, I did a quick check of the Society’s files and records and at that time did not locate any documents relating to the imposition of the charge in the first place and the general fixing of the charge at HK$3,000. The Society therefore informed its solicitors that there were no documents relating to the imposition of the charge in the first place or the general fixing of the charge at HK$3,000.

19. On review, I found that there are in fact minutes for three Council meetings held on 13 July 2016, 10 August 2016 and 9 November 2016 which relate to the imposition of the charge in the first place or the general fixing of the charge at HK$3,000. Unfortunately, due to the Society’s inadvertent omission, these minutes were not retrieved before the filing of the [Respondent’s submissions] on 11 August 2021, and the Society was then under the mistaken belief that these documents did not exist. These minutes were only retrieved by the Society after it had filed its Written Submissions in Opposition”.

9.7.  Before discussing the merits of the summons, this court must express its dissatisfaction with the Respondent’s conduct in the preparation of its submissions.  Irrespective of the issue whether the Applicant should be allowed to argue Ground 6A, or whether the Respondent should have included in its submissions the matters set out in para. 9.4 above, it is most regrettable that a litigant (and particularly a professional legal body) had adopted such a careless attitude (performing only a “quick check”) before giving instructions for the preparation of submissions.  Lau II did not state when the 2016 minutes were retrieved, other than to say that it was after 11 August 2021, but since the Respondent considered it necessary to do a “review”, it should have done so promptly after that date. Yet it was not until 1 September 2021, the eve of handing down, that it informed the court of the need to correct submissions. As a result, the court has had to revisit the papers and reconsider the judgment which had been made ready for handing down.  The court’s dissatisfaction with this conduct will be reflected in the costs order set out later in this judgment.       

Discussion

10.  Coming back to the merits of the arguments over the summons, the Applicant accepts that Ground 6A had not been argued before the judge.  He asserts that it raises “a pure point of law which can and should be decided by the Court without regard to any new evidence at all”. 

11.  Having considered the documents filed by both parties, it is clear that the new ground is not a pure point of law, and that it would be contrary to the Flywin¹³ principle for the ground to be raised only now on appeal.  This principle prohibits new points on appeal unless “there is no reasonable possibility that the state of the evidence relevant to the point would have been materially more favourable to the other side [the Respondent] if the point had been taken at the trial”.

12.  First, it is difficult to see how the Applicant can say that this new ground can be decided now “without regard to any new evidence”.  The fact that the Respondent has now exhibited the 2016 documents does not change the issue, which is whether the Applicant should be permitted on appeal to argue a new point which had not been canvassed before the judge below.      

13.  It is important in legal proceedings to take a principled approach.  The Applicant is now asserting that the 2016 documents are relevant to his argument that the 2016 Decisions imposing the charge and fixing it at $3,000 are a “disguise” for a penalty and are “irrational”.  However, it is clear from his amended Form 86 that these 2016 Decisions were not the decisions that he sought to challenge by way of judicial review.  The decision he sought to challenge was the 2019 Decision in which the Respondent refused to waive the charge and formulated certain consequences in the event of non-payment.

14.  In any event, if the Applicant considered that the 2016 documents were relevant to his “illegality” argument on the 2019 Decision, he could and should have asked for them, or sought discovery of them prior to the rolled-up hearing¹⁴. Lau I had exhibited the two circulars informing members of the 2016 Decisions.  Circular No.11/2016/C referred¹⁵ to the decision to impose an additional administrative charge, and Circular No.19/2016/C referred to the decision to fix it at $3,000.  The Applicant did not apply for discovery of any documents leading to those circulars.

15.  If the Applicant had argued at the hearing before the judge that the 2016 documents should have been produced as being relevant to the 2019 Decision, the Respondent would have been able then to argue their relevance (irrespective of whether it was prepared to produce them). The judge would then have been able to decide on their relevance, and if found to be relevant, to consider the impact of this evidence on the issues before him.  It is inappropriate for this to be done for the first time at the appellate stage.  It is well-established that it is for a judge of first instance, not a 2-3 judge appellate court, to determine evidentiary disputes.  An appeal is not the time for a second round of evidence in respect of a point that the Applicant accepts he failed to take at first instance.

16.  As the Court of Appeal held in Lehmanbrown Ltd v Union Trading Holdings Inc¹⁶ at §10 and repeated in Re Qin Jun, the material concept in considering whether to allow a new point to be taken on appeal is one of fairness. 

“30. This concept of fairness in assessing whether a new point should be permitted to be taken on appeal was further explained in Lehmanbrown Ltd v Union Trading Holdings Inc ... at [10]:

Whilst the Court of Appeal obviously has power to entertain new points in an appeal, it is also clearly and firmly established that new points which are fact sensitive or otherwise affect the course of evidence or conduct of the case at the hearing below should not be allowed. Though this principle is usually applied in situations where the new points necessitate further evidence to be adduced, it is not confined to such scenarios. Very often, the raising of a new point by one party may lead to the other party raising counter arguments and the consideration of such counter arguments may involve factual assessment in a different light from that undertaken by the court below. Sometimes, it may involve a different weighing of factors in the exercise of discretion. Alternatively, the other party may embark on a different course of forensic conduct if the new point were taken earlier. The appellate court, in considering whether the new point would be entertained, is entitled to take these matters into account in order to avoid unfairness to the other party”. (Emphasis added).

Order

17.  For the reasons above, it is not appropriate to permit the Applicant to add Ground 6A only now at the appellate stage.  This summons is therefore dismissed.  As for costs, we would make a costs order that the Applicant is to pay the Respondent’s costs summarily assessed at $60,600.  This represents a reduction from the assessment in the original draft of this judgment and reflects the court’s dissatisfaction with the Respondent’s conduct set out in paras. 9.5 – 9.7 above which also added to the Applicant’s costs.