CHOY BING WING v. OFFICIAL RECEIVER & TRUSTEE OF NG YAT CHI, DISCHARGED BANKRUPT AND ANOTHER

HCA667/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.667 OF 2003

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J U D G M E N T

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1. The defendants apply for the plaintiff's Statement of Claim to be struck out under Order 18, rule 19 of the Rules of the District Court on the grounds that it discloses no reasonable cause of action, is scandalous, frivolous or vexatious, or is otherwise an abuse of process of the court, and that the plaintiff's action be dismissed. They also apply for a Grepe v. Loam order (Grepe v. Loam (1887) 37 Ch D 168) to prohibit the plaintiff from commencing any further new legal proceedings in respect of the same claim or subject matter in High Court Bankruptcy Proceedings No.242 of 1992 ("HCB242/1992") or the Writ and/or the Statement of Claim in these proceedings, and if notice of any such proceedings shall be given to the defendants without such leave being obtained, they shall not be required to appear in such proceedings which shall be dismissed without being heard.

2. The plaintiff's case as it appears from his Statement of Claim is as follows. He was a substantial creditor in the bankruptcy of one Ng Yat Chi, the bankrupt in HCB242/1992. The 1st defendant was the trustee in bankruptcy. The plaintiff was a member of the Committee of Inspection in that case. He found the conduct of the 1st defendant improper and very suspicious. The details of what he considered suspicious are set out. In brief, he says that there was a fraud in respect of a transaction or transactions relating to shares in one Alljean Investment Ltd ("Alljean"). When he pointed out these matters, he was removed from the Committee of Inspection.

3. The plaintiff therefore applied to the court under section 84 of the Bankruptcy Ordinance, Cap.6 for the 1st defendant to disclose full details and documents regarding the prima facie fraudulent sale of Alljean shares and for the Court to make an inquiry into the matter. The 2nd defendant was instructed to act for the 1st defendant in the said application. The matter came before Yuen J (as she then was), and on 15 February 2001, she dismissed the application and ordered costs against the plaintiff.

4. The plaintiff considered that the court has no jurisdiction to order costs against a bona fide creditor in proceedings under section 84. He therefore came back before Yuen J on 5 March 2001 and asked her to vary her order, to the extent that there be no order as to costs. Yuen J refused to vary her order, and made a further order as to costs.

5. The plaintiff then filed a Notice of Appeal. The question arose whether leave was required. Master B. Kwan heard the matter on 22 May 2001. She found that it was. The plaintiff appealed and Kwan J refused his appeal on 7 June 2001. Costs were ordered against the plaintiff, on appeal and below.

6. The plaintiff further appealed the order of Kwan J to the Court of Appeal. On 24 May 2002, Woo JA and Chu J dismissed the appeal and ordered costs against the plaintiff. He then sought leave to appeal to the Court of Final Appeal, and on 19 July 2002, Woo JA and Chu J refused leave, with costs.

7. The plaintiff then applied for leave to the Court of Final Appeal. On 17 September 2002, the Appeal Committee refused leave and ordered costs against the plaintiff.

8. On 7 February 2003, the 2nd defendant served a sealed Charging Order to Show Cause on the plaintiff.

9. The plaintiff says that the 2nd defendant has repeatedly demanded that he pay all the costs ordered by the courts and he had repeatedly indicated that the costs orders were unlawfully, fraudulently and therefore invalidly made, and have no effect.

10. The plaintiff continues, at paragraph 24 onwards of his Statement of Claim :

24. In the premises, the Plaintiff has suffered loss and damage due to the wrongful conduct of the Defendants in conspiring to procure and induce the Courts into making unlawful, fraudulent and unjust Orders against the Law.

By reason of matters set out in Paragraphs 6 to 13 hereinabove, there has been a prima facie case of fraud and/or conspiracy of fraud involving the 1st Defendant, Sin Hua Bank and Lintax in the sale of the Alljean shares.

Yuen J. has failed in her administrative duty to oversee bankruptcies in asking for cogent evidence without a proper regard to prima facie evidence properly laid before her.

Yuen J. further erred in concluding that S.84 of Cap.6 could be equated with S.83 giving rise to a power for the Court to order costs against creditors in bankruptcies.

The Court of Appeal has not been honest in refusing leave to appeal to the Court of Final Appeal since the issues raised by the Plaintiff have critical and widespread public importance in Hong Kong and such issues are plainly arguable and can never be thrown out without a full and thorough analysis and examination by the Full Court of Final Appeal.

The Appeal Committee has not been honest in refusing leave in a reckless manner when no reasonable Court could ever find that the questions involved as set out in (a), (b) and (c) herein can be said to be of no merit or no public importance, which quite to the contrary are questions of utmost public importance and are plainly arguable. Further, upon the proper construction of r.7(2) of Cap.484, there can be no power for the Appeal Committee to order costs in the circumstances.

In any event, the Courts have acted in a manner to create gross injustice and ruin to the rule of law in Hong Kong.

25. The Plaintiff therefore says all the Costs Orders made by the Courts are void in law and the Defendants have been party to a conspiracy to procure such Costs Orders.

AND THE PLAINTIFF CLAIMS:-

1. A Declaration that the Orders as far as costs against the Plaintiff in favour of the Defendants are concerned, being Orders made on :

a) 15/2/2001 by Yuen J., 2/5/2001 by Yuen J.,

b) 22/5/2001 by Master B. Kwan,

c) 7/6/2001 by Kwan J.,

d) 24/5/2002 by Court of Appeal,

e) 19/7/2002 by Court of Appeal,

f) 17/9/2002 by Appeal Committee of CFA

are all void and unenforceable in law.

2. A Declaration that the 1st Defendant be subject to an inquiry as to the transaction in disposing the shares of Alljean.

3. Costs; and

Such further or other relief as this Honourable Court shall deem fit."

11. The first prayer seeks relief on the basis of "the wrongful conduct of the Defendants in conspiring to procure and induce the Courts into making unlawful, fraudulent and unjust Orders against the Law." There are two problems here. The first is that while the plaintiff avers that the defendants' conduct was in fraudulent they defrauded the courts fraud must be specifically pleaded and particularised. Here no particulars of the fraud are given. The second problem is, of course, that the costs orders are res judicata. The plaintiff's only recourse against any of them was to appeal it. This he did. He sought to appeal the order of Yuen J, and Master B. Kwan, on ascertaining that it was her costs order against which his appeal was brought, found that leave was necessary. He appealed that to Kwan J, who upheld the Master. He appealed to the Court of Appeal which upheld Kwan J, and refused him leave to appeal to the Court of Final Appeal, so he took the matter himself to the Appeal Committee, which found against him.

12. The second prayer of the plaintiff's claim is for the same relief as was sought before Yuen J. She heard the application and refused it. The plaintiff's recourse was then to appeal to the Court of Appeal, against that refusal, on the merits. But the plaintiff did not appeal on the merits. He only appealed on costs. The order of Master B. Kwan makes that clear; it recites the fact that the Master ascertained the same before finding that leave was necessary, is it is for an appeal against costs, but not for an appeal on the merits. The order of Yuen J is res judicata and the merits of it cannot be argued before another judge at first instance; the only possible recourse which the plaintiff has is to appeal, and this he has not done.

13. The plaintiff is much concerned by the fact that he has not been able to air his grievances before the Court of Final Appeal. He is aggrieved that the Appeals Committee has decided that he cannot do this. He considers that the question of law, decided by Yuen J, as to whether the court may, under section 84 of the Bankruptcy Ordinance, order costs, is an open question until the full Court of Final Appeal closes it. In his view it is not res judicata until the full Court of Final Appeal has pronounced on it. That is not what res judicata means. In any event, there is no way that this issue can be taken before the Court of Final Appeal. Section 18(3) of the Hong Kong the Court of Final Appeal Ordinance, Cap.484 provides that the decision of the Appeal Committee shall be final and not itself subject to appeal.

14. Quite simply the plaintiff has exhausted all his avenues of appeal in respect of the costs orders, and there is simply no way that he can start again at the bottom, so to speak, by attempting to re-litigate at first instance the basis on which the orders were made. There is simply no cause of action on which this head of claim may be brought. It is an abuse of process to seek to re-litigate this matter at first instance. So far as the merits of the matter were concerned, the only proper course for the plaintiff was to appeal against Yuen J's order on the merits. Again he cannot seek to re-litigate this matter at first instance.

15. The plaintiff's claim discloses no reasonable cause of action. It is frivolous or vexatious. To seek to re-litigate matters already decided is an abuse of process. The plaintiff's Statement of Claim must accordingly be struck out.

16. I turn to the defendants' application for a Grepe v. Loam order. Such an order is intended to guard against future abuse of process. Per Kwan J in Chan v. Chan & Others, HCMP2921/2001 :

"... The effect of this type of order is to prohibit a litigant from initiating proceedings likely to constitute an abuse of the process of the court. The order is made under the inherent jurisdiction of the court and is narrower than an order made in respect of a vexatious litigant on the application of the Secretary for Justice under section 27 of the High Court Ordinance. A section 27 order applies to any legal proceedings brought by the vexatious litigant in that no proceedings may be brought or continued without the leave of the court. A Grepe v Loam type of order is made in respect of existing proceedings or in relation to anticipated but unidentified proceedings of the same claim or subject matter."

17. The question is therefore whether the plaintiff is likely to abuse the process of the court in future.

18. I have no doubt that the plaintiff feels aggrieved. He thinks that something dishonest was done by the Official Receiver. In 1992, he wrote letters about this to a number of officials, making serious allegations about the handling of the matter by Mr Brown, the Assistant Official Receiver. Mr Brown sued him for libel, in HCA3509/1994. The plaintiff points to the fact that when Mr Brown tried to get his defence of justification struck out, Keith J refused him, on the basis that the defence was not incurably bad; so there must be something in it. That does not, of course, necessarily mean that justification existed. In any event, the plaintiff thinks that something dishonest has been done, and it is his duty to expose it.

19. In pursuance of this view the plaintiff has made wholesale allegations in correspondence of fraud and other improprieties on the part of the other parties as well as the judges. He has made various allegations against the 2nd defendant of "dishonesty and cheating conduct in misleading and/or conspiring with the Courts"; "cheating the Courts and the connivance by the local judges in the fraud depriving my right to appeal to the Full Court of the Court of Final Appeal which has an Overseas Judge on a crucial question of law of public importance"; and the like. He has accused various judges of cheating him of his rights, and the like, particularly Woo JA, Chu J and the Appeals Committee and indeed the Chief Justice. While this conduct may be regarded primarily as an expression of the plaintiff's frustration, it shows an intention to pursue the matter, even though the judges have ruled on it up to the highest level.

20. The plaintiff and those connected with him have also taken a similar approach in other proceedings.

21. In HCA334/2003, the plaintiff and nine others, all acting in person, sued the Building Authority, the Director of Civil Engineering and Ove Arup and Partners, Hong Kong Ltd. As in the instant case the plaintiffs seek a declaration that orders made by other courts are void and unenforceable in law. The Statement of Claim makes various allegations against personnel of the defendants of lying before a magistrate. It goes on to accuse Woo JA of fabricating a fact, in his hearing of the appeal from the magistrate, and later to accuse the Appeal Committee of the Court of Final Appeal of "stealing the statutory power of the Full Court of Appeal".

22. In Phoon Lee Piling Co. Ltd & Anor v. The Hong Kong Housing Authority, CACV303/2002, Mr Choy, who had represented the 1st plaintiff, was vigorously criticised by Rogers JA, who said :

"... The plaintiffs have consistently heaped abuse on the master and judge. In the notice of motion seeking to disqualify and discharge myself from hearing the appeal, reference is made to the appeal being 'against the crookery acts of the judges below.' There is not one iota of justification for such an attack on their integrity. They can, however, take some consolation from the fact that they are not alone in the abuse which has been heaped upon them. Similar abuse would appear to have been directed at every judge who has given a decision with which Mr Choy did not agree. Even the Chief Judge of the High Court was accused in the letter of 11 December 2002 of having failed in his duty either incompetently, recklessly or dishonestly.

25. Whilst judges are prepared to overlook outbursts from litigants in person, not least because it can be appreciated that they may well have a considerable emotional involvement in the cases, in the present case Mr Choy's conduct has gone well beyond a mere emotional outburst. Indeed, his conduct both in this court and in the court below has been directed to invective and abuse, disregarding entirely the need to address the issues involved.

26. It is appreciated that proceedings in court can be extremely stressful. That stress might build up over a period of years. As the judgment of Chief Justice Li of 18 May 1998 demonstrates, Mr Choy had been actively involved in relation to Max Share Limited since April 1992. It may well be expected that Mr Choy was disappointed by the outcome of the Companies (Winding Up) No. 321 of 1996. However, Mr Choy's conduct in this court and in the court below cannot be condoned on the basis that it is attributable to such disappointment on the part of a litigant in person.

27. It should be noted that in the court below Mr Choy and the 2nd plaintiff left the court when invited to address the court on the issues relating to the pleading of the statement of claim which had been held by the master to be defective. He did the same in this court. Mr Choy's conduct has not been directed to dealing with the issues in the case. It has already been noted that by ex parte order dated 6 February 2002 Mr Choy, who had recently been appointed a director the 1st plaintiff, was given leave to represent the 1st plaintiff in these proceedings. In view of Mr Choy'' conduct it would be clearly appropriate for that decision to be reviewed.

28. This matter will be referred to the Secretary of Justice with a view to consideration of the commencement of contempt proceedings in relation to Mr Choy's conduct."

23. I have set out the above matters, not to criticise the plaintiff further, but because they indicate the attitude which he takes when the courts do not give him what he wants. This attitude is relevant to the decision as to whether or not a Grepe v. Loam order should be made.

24. In Ng Yat Chi v. Max Share Ltd & Another [2002] HKLRD 735, the same bankrupt, Ng Yat Chi, sought to re-litigate before the Court of First Instance matters which had been raised by him in a winding-up order against the defendant, Max Share Ltd and litigated, as in this case, all the way to the Appeals Committee. The present plaintiff, Mr Choy, represented Mr Ng at the hearing before Deputy Judge Carlson of an identical application to the instant one, i.e. for striking out and a Grepe v. Loam order, both of which were granted.

25. In that case the learned judge in considering the application for a Grepe v. Loam order said that he was concerned that since this was the first unmeritorious action brought by Mr Ng, it might be going too far to suggest that there might be more to come. He wondered whether it might be premature to make the strong order applied for. His Lordship went on :

"But given the nature of the correspondence and the allegations to the effect that the highest courts of Hong Kong and their judges have conducted themselves fraudulently and have played fast and loose with the legal system since 1 July 1997, which it seems to me are allegations made without any pause for reasoned reflection by the plaintiff, that there is every prospect that he will seek to revisit again the issues raised in this action and in the action tried by Yuen J. Some restraint should be applied now so that at least he has to show merit before the defendants are required to expend time and costs to defend and the wider public interest should also be addressed in the sense that the court's time and lists should not be burdened with thoroughly unmeritorious claims."

26. With this approach I respectfully agree. In the instant case, however, regard may be had, not only to the plaintiff's conduct in connection with this single case, but with the other cases as well. If the courts do not give him what he wants, he lashes out against the judges. That is perhaps not the main consideration for the purposes of these proceedings. What is more important is that, if he does not get what he wants, he tries to re-litigate when the law does not allow him to do so. Others associated with him follow suit. It is therefore highly probable that he will in future seek to initiate proceedings likely to constitute an abuse of the process of the court in respect of the same claim or subject matter of HCB242/1992 or the Writ and/or the Statement of Claim in these proceedings. A Grepe v. Loam order will therefore be made.

27. I have considered whether to order costs on the indemnity basis. To be fair, the plaintiff did not specifically address this point before me. But I think there can only be one answer. The plaintiff is no beginner in this field; he is an experienced litigant in person. He must have known, if he had ever stopped to consider it properly, that an attempt to re-litigate orders already made, otherwise than by appeal, was completely without merit. He had seen that in the case of Ng Yat Chi, in which he represented the plaintiff. For him to bring or continue such a case in his own right cannot be excused as the product of a combination of frustration and ignorance, for he cannot be ignorant. So an order for indemnity costs is appropriate.

28. There will be an order in terms of paragraphs 1, 2 and 4 of the defendants' summons.