ZEBRA INDUSTRIES (OROGENESIS NOVA) LTD – [ZION] v. WAH TONG PAPER PRODUCTS GROUP LTD

HCMP 1503/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 1503 OF 2014

(ON AN INTENDED APPEAL FROM HCMP 436 OF 2013)

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BETWEEN

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D E C I S I O N

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Hon Cheung JA (giving Decision of the Court) :

Leave to appeal

1.  This is the plaintiff’s renewed application for leave to appeal against the judgment of Au J dated 11 April 2014.  Au J refused leave on 9 June 2014.  In his judgment, Au J struck out, among other things, the ‘Reply Affirmation of Elijah Saatori to the Perjurious Affirmation of the Defendant’ (‘the Reply Affirmation’) filed on 7 May 2013 save and except Exhibit 3 of the Reply Affirmation.

Background

2.  The present action is an action by the plaintiff to set aside a consent order that the parties had entered into on 11 December 2012 in HCCT 46/2011.  The present action originally began by Originating Summons.  Au J on 6 June 2013 ordered the proceeding to be continued as if it had been begun by writ and directed the parties to file pleadings and exchange witness statements.  The Reply Affirmation was filed by the plaintiff prior to the order for the filing of pleadings and exchange of witness statements.  The main body of the Reply Affirmation is 17 pages but it contains numerous exhibits and the whole document runs to over 400 pages.  The Reply Affirmation was filed in response to the affirmation of Mr. But filed on behalf of the defendant.

Basis of striking out

3.  Au J held that he struck out the Reply Affirmation save and except Exhibit 3 on the following basis :

‘ 18. I struck out the Reply Affirmation essentially on the following bases as submitted by the defendant:

(1) The defendant would not call Mr But nor rely on Mr But’s Affirmation at the trial.  Thus, the Reply Affirmation is no longer relevant insofar as those parts are made to rebut or respond to Mr But’s evidence made in his affirmation.

(2) Further, most of the other contents of the Reply Affirmation refer to matters on the long and chequered litigation history between the parties, including what had happened in the arbitration between the parties.  They also contain various allegations of fraud practised by the defendant and its legal representatives in obtaining the previous costs order before Burrell J.  These matters are not relevant to the trial.  This is particularly so as (a) the Court of Appeal and this court have repeatedly concluded previously that it is not open to the plaintiff to revisit the propriety of these costs orders; and (b) the plaintiff has in any event already applied for committal against defendant and its solicitors based on the same allegations of fraud.  The committal proceedings are now seized by Mimmie Chan J.

19. On other hand, I also accepted Mr Saatori’s submissions at the hearing that, since Mr But’s assertion that the defendant did not know the alleged impecunious position of the plaintiff at the material time had been repeated in Mr Lai’s witness statement (filed by the defendant for the purpose of the trial), this allegation was thus relevant to the trial on economic duress.  I therefore allowed (accepting Mr Saatori’s submissions) the entire Exhibit 3 to the Reply Affirmation to be admitted and relied on by the plaintiff at trial.  Exhibit 3 consists of documentary evidence which Mr Saatori said would show that the defendant was aware of the plaintiff’s dire financial position at the material time.  For ease of reference, I attach to this decision as appendix the relevant parts of the transcript of the hearing on 11 April 2014 (pp 22F-35I) showing the reasons why I struck out the Reply Affirmation but allowed Exhibit 3 to remain and be relied on as evidence at the upcoming trial.’

Arguments before Au J for leave

4.  The plaintiff relied on two grounds in his application for leave to appeal before Au J.  First, he did not have a proper chance to read the defendant’s skeleton submission and hearing bundle before the hearing on 11 April 2014. Second, the Reply Affirmation was relevant to his case. 

Au J’s refusal

5.  Au J held that the plaintiff has failed to show that it has a reasonable chance of success in its appeal against the striking out.  First it had ample opportunity to consider the defendant’s material for striking out.  Second, it has no merits in its appeal.

The present application

6.  The plaintiff relies on the same grounds for its renewed application before us.  In addition it alleges that it was not legally represented before Au J and was unable to present its case fully.  Further Au J had ‘bullied’ its representative and precluded him from presenting the case fully.

7.  We see no merits at all in the last point.  Au J had dealt with the application in an impartial manner and the plaintiff was not prevented in any way from presenting its case fully.

8.  As to the merits of the appeal we fully agreed with Au J.  Au J was exercising a case management function.  He had to ensure that the issues in the forthcoming trial could be clearly identified and addressed.  Apart from Exhibit 3 which addressed the issue of the defendant’s knowledge of the plaintiff’s impecuniosity, it is not conducive to an efficient and speedy adjudication of the action to rummage through the rest of the Reply Affirmation. Many of the topics referred to in the Reply Affirmation had been adjudicated upon.

9.  Accordingly we will refuse leave.  We also note that the plaintiff which is a limited company not represented by solicitor, has not yet obtained a representation order from the Registrar.  We would, in any event, refuse leave on this ground alone.

10.  This application is without merits.  Pursuant to Order 59, rule 2A(8), we order that the plaintiff is not entitled to apply for an oral hearing to reconsider this application.

Costs

11.  The defendant asked for its costs of the present application and for it to be summarily assessed.  We will so order and assess the amount at $50,000.