CHEUNG MOON HOI v. CHAN SING CHUEN

DCCJ 4127 / 2007

 IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 4127 OF 2007

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DECISION

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I.       Introduction

1.  On 27 March 2008, I handed down my decision and ordered that the Plaintiff Mr Cheung’s claim and Statement of Claim be struck out on the basis that (a) the claim amounts to an abuse of process, and (b) the claim is time barred.  Reasons for that decision have been set out in the earlier decision.

2.  This is Mr Cheung’s application for leave to appeal to the Court of Appeal the above order.

II.      Applicable principles

3.  In considering whether to allow leave to appeal to the Court of Appeal, Mr Cheung needs to satisfy the Court that the intended appeal has a realistic prospect of success, in the sense that he has at least an arguable case in the intended appeal:  Ma Bik Yung v. Ko Chuen (unrep., HCMP4303 of 1999, 8 September 1999) per Leong CJHC at paragraph 5, in adopting and approving Smith v. Cosworth Casting Processes Ltd [1997] 1 WLR 1538.

4.  Further, the decision to strike out is an exercise of the Court’s discretion.  An appellate court is generally slow to interfere the lower court’s exercise of discretion, unless it can be shown that the court has clearly wrongly exercised the discretion, such as under a mistake of law or in disregard of principle or misapprehension as to the facts.   See:  Hong Kong  Civil Procedure 2008, para 59/1/49.

5.  For a matter where there has been a trial or hearing on the merits, the Court of Appeal would only admit new evidence if the new evidence satisfies the three conditions laid down in Ladd v Marshall [1954] 1 WLR 1489 per Denning LJ at 1491.  For a matter where there has not been a trial or hearing on the merits, one of the important factors that the Court of Appeal would take into account to decide whether or not to exercise its discretion to admit new evidence, is the reason why the evidence was not adduced in the court below:  Hong Kong Civil Procedure 2008, paras 59/10/10, 59/10/16.

III.    Intended grounds of appeal

6.  The background facts leading to the present claim have been set out in the earlier decision and I do not propose to repeat them herein.  This decision should be read together with the earlier decision, and  I also adopt herein the abbreviations used in the earlier decision.

7.  In support of his present application, Mr Cheung advances essentially the following broad grounds of appeal:

(1)  The Court has erred in law and on the evidence to conclude that the present claim amounts to an abuse of process. 

(2)  The Court was also wrong in concluding that the claim as pleaded (or as pleaded with the proposed amendments at the hearing on 17 March 2008) was time barred.  It is so as the Court was wrong in construing the Statement of Claim on the basis that Mr Cheung’s claim is based on the earlier oral agreements litigated in the earlier action (i.e., DCCJ 15756/2000).  Correctly read, the claim is based on a written agreement entered in June 2003, and Mr Chan’s breach of it in July or August 2007.  As such, there is no question of time bar.

8.  In support of the above grounds of appeal, Mr Cheung also seeks to put in additional and new evidence by way of his affirmation dated 15 April 2008.

9.  The question I have to decide for the present application is, whether any of the above grounds of appeal discloses a realistic prospect of success on appeal.

VI.    Discussion

10.  It must be noted that, as set out in paragraph 21 of the earlier decision, I did not strike out Mr Cheung’s claim on the basis of res judicata, since Mr Cheung was not a party nor a privy to a party to the earlier action, and thus the doctrine does not apply.

11.  I however struck out Mr Cheung’s claim in concluding that the present claim amounted to an abuse of process.  In applying to the evidence before me at the hearing the principles laid down in Bradford v Seddon [1999] 1 WLR 1482 and Ngai Few Fung v Cheung Kwai Heung (unrep., CACV 147/2007, 7 December 2007, Cheung JA and Yam J), I came to the view that it was an abuse of process for Mr Cheung to have adopted a wait and see attitude as to the outcome of the trial of the earlier action vis-à-vis his wife, and then to have brought his present claim at this stage to litigate on the same issues where his wife had lost in the earlier action.   This basis is distinct from and independent of the doctrine of res judicata.  See: paras 16, 17, 22 and 23 of the earlier decision.

12.  Mr Cheung submits that the Court has wrongly interpreted the principles laid down in Bradford and Ngai Few Fung.  He submits that on a proper interpretation, the principles in fact do not support the conclusion that the present claim amounts to an abuse of process.   He emphasizes that those principles require that striking out on the basis of an abuse of process, especially where the claimant is, as in the present case, not a party to earlier proceedings, should only be made in clear and exceptional circumstances.  Further, the onus of proof is on the person alleging abuse.  Mr Cheung particularly prays in aid of parts of Auld LJ’s dicta in Bradford at 1490C – 1496F.

13.  Mr Cheung further submits that in any event, applying those principles, and on the basis of the limited evidence before the Court at the hearing, it is not entitled to come to a clear view (as it did in the earlier decision) that there is an abuse in bringing the present claim.  This is so because:

(1)  Given that the burden is on Mr Chan to prove abuse, the evidence before the Court is simply insufficient to entitle it to come to a clear view that Mr Cheung had adopted a wait-and-see attitude in eventually deciding not to “join” his claim in the earlier action.

(2)  Alternatively, the new evidence shows that there is no such wait-and-see attitude and there is thus no abuse

(3)  Further alternatively, the issues in the present claim are different from the earlier action, since Mr Cheung is now claiming on the basis of the June 2003 agreement but not the earlier agreements.

14.  In my view, the principles laid down by Auld LJ in Bradford clearly show that the Court, in appropriate and clear circumstances can and will strike out a claim which amounts to an abuse of process in raising the same issues already litigated in an earlier action, even though the parties are different.  The categories that could fall under an abuse are not closed and are dependent upon the circumstances and evidence of each case.  As said by Auld LJ at 1491G-H and 1494D-G as follows:

“In my view, it is now well established that the Henderson rule, as a species of the modern doctrine of abuse of process, is capable of application where the parties to the proceedings in which the issue is raised are different from those in earlier proceedings.  Indeed, it is inherent in Sir James Wigram V-C’s reasoning that, as a general rule, all persons who are to be sued should be sued at the same time and in the same proceedings where such a course is reasonably practicable, and whenever it is so and is not take then, in an appropriate case the rule may be invoked so as to render the second action in abuse… Equally, the rule may in an appropriate case apply to a plaintiff who could and should have pursued his claim in an earlier action against the same defendant: see e.g. [various authorities cited]… But there the court was rightly concerned on its facts to emphasise that the mere fact the plaintiff could more conveniently have joined in the earlier action against the defendant did not render her claim an abuse of process…

“I do not consider the references in the Henderson rule and in various modern authorities to the need for a ‘special’ case or circumstances to justify litigating a matter that should have been litigated on an earlier occasion an obstacle to my interpretation of the law relating to abuse of process as distinct from res judicata.  To do so, it seems to me, would undermine the basis of the court’s jurisdiction as it has developed, namely, to look for some element additional to mere ‘re’-litigation, to avoid restrictive rules and to be cautious before barring people from access to the courts – in short, as Lord Diplock and Sir Thomas Bingham MR emphasised in Hunter v Chief Constable of the West Midlands Police [1982] AC 529, 536 and Barrow v Bankside Agency Ltd [1996] 1 WLR 257, 263 respectively, to determine on the facts of the case whether the proceedings before the court are an abuse of process.”

15.  In the premises, I do not think there is any realistic prospect in the intended appeal that, the Court of Appeal will set aside the striking out order on the basis that the Court has wrongly interpreted the law.

16.  However, looking at the affidavit evidence before me at the March hearing in the round, I cannot say it is unarguable that the Court of Appeal, applying the above principles, may come to a clearly different view on this state of evidence that, the evidence is not sufficient to support a conclusion of abuse of process.   I come to this view bearing in mind that the burden is on Mr Chan to prove abuse, and without taking into account of the “new” evidence as now sought to be introduced by Mr Cheung.

17.  For the above reasons, I am satisfied that the intended appeal discloses an arguable case of success, and thus leave to appeal should be granted.

18.  Since I am satisfied to grant leave to Mr Cheung to appeal to the Court of Appeal, and given that the matter will go on appeal, I would not further express my views on the merits of the other intended grounds of appeal. Suffice for me to say that they appear to me to be arguable, and my decision to grant leave to appeal is not dependent upon in any aspects the new evidence Mr Cheung now seeks to adduce for the purpose of the appeal.  I am sceptical as to whether the Court of Appeal would admit the “new” evidence based on the principles set out at paragraph 5 above. 

Conclusion

19.  For the above reasons, I will allow this application and grant leave to Mr Cheung to appeal to the Court of Appeal the striking out order.

20.  I further order that costs of this application be in the appeal.