WYNN RESORTS (MACAU) S.A. v. MONG HENRY

HCA192/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 192 OF 2009

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REASONS FOR DECISION

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1.  By summons filed dated 14 July 2009, the defendant applies for leave to appeal against the Judgment of Deputy High Court Judge Bharwaney SC handed down on 29 June 2009.  By another summons dated 5 August 2009, the defendant applies for leave to make the application for leave to appeal out of time.

2.   At the conclusion of the hearing on 5 August 2009, I refused both applications and ordered costs of the applications to be paid by the defendant to the plaintiff to be taxed if not agreed.  My reasons appear below.

Background

3.  Briefly stated, the plaintiff is the owner and operator of a casino in the Macau SAR.  The defendant was a patron of the casino.

4.  The plaintiff claims against the defendant for HK$30,000,000, which was advanced to the defendant pursuant to a Credit Agreement that he entered into in about October 2006.  It is the plaintiff’s case before the Deputy Judge that the claim was brought under the Credit Agreement and also on the basis of a debt evidenced by a Marker signed by the defendant when the money was advanced to him in August 2008.

5.  The Credit Agreement provided that Macau SAR law exclusively governed the terms of the credit line, advances or credit instruments, that the plaintiff could litigate any dispute involving the credit line, the debt or the payee in any court in the Macau SAR and that the defendant submitted to the jurisdiction of any court in the Macau SAR.           

6.  The defendant has no connection with Macau, apart from the fact that he had gambled there and incurred the liability in question.  He, however, has bank accounts in Hong Kong. He also stays in Hong Kong for about 60 days a year and his residence is owned by a BVI company of which he is the sole director.

7.  After the plaintiff has issued and served the Writ herein, the defendant applied by summons to stay the proceedings on the ground of forum non conveniens in that the court in the Macau SAR is the more convenient and appropriate forum for the trial of the dispute.  By judgment handed down on 29 June 2009, Deputy Judge Bharwaney SC dismissed the application with costs.  By summons filed on 14 July 2009, the defendant applied for leave to appeal against the Judgment.  

Leave to apply for leave to appeal out of time

8.  It is not in dispute that the defendant’s application for leave to appeal was not made within the time limit prescribed by Order 59 rule 2B(1) of Rules of the High Court (cap. 4A).  There is also no dispute that the application to extend time was made after the expiration of the 14-day period. 

9.  The defendant’s solicitor had filed an affirmation explaining that the delay was due to an inadvertent slip.  Miss Lam in her submission added that the defendant’s legal representatives were at the time occupied with dealing with the new evidence that emerged after the hearing before the Deputy Judge.  In fact it was upon reading Mr Hunsworth’s submissions that the defendant’s legal representatives came to realise that the leave application was made out of time.  There is no doubt that the delay is not serious. The critical issue, however, is whether the Court of First Instance has power to extend the time when the application to extend time was made after the expiration of the 14-day time limit.

10.  In my view, the starting point is to consider the wordings in Order 59 rule 2B(1), pursuant to which the application for leave to appeal is made.  The material part of rule 2B(1) provides that: “… an application for leave to appeal … may only be made to the Court in the first instance within 14 days from the date of the judgment or order” (emphasis added).  The language suggests that an application to the court below for leave to appeal its judgment or order can only be made within the 14-day time limit.

11.  There is no other provision in Order 59 enabling the court below to extend time for applying for leave to appeal.  Order 59 rule 15, which deals with extension of time, provides that:

“Without prejudice to the power of the Court of Appeal or a single judge under Order 3, rule 5, to extend or abridge the time prescribed by any provision of this Order, the period for serving notice of appeal under rule 4 or making application ex parte under rule 14(3) may be extended or abridged by the court below on application made before the expiration of that period.” 

12.  Previously, the power under rule 15 to extend time might extend to applications for leave to appeal by reason of the reference to “application ex parte under rule 14(3)”.   This is no longer the case as a result of amendments to Order 59 brought about by the Civil Justice Reform.  Order 59 rule 14(2) and rule 14(3), dealing with applications for leave to appeal, had been repealed and applications for leave to appeal are now dealt with under the new rules 2A, 2B and 2C.  The new rule 14(13) further expressly provides that rule 14 does not apply in relation to an application for leave to appeal. Consequently, the reference in rule 15 to “application ex parte under rule 14(3)” can no longer cover an application for leave to appeal, quite apart from the fact that such application is now generally made inter partes: Order 59 rule 2A(2) and rule 2B(5).  It should also be noted that the power under rule 15 can only be invoked by the court below if the application to extend time is made before the expiration of the time limit, which is not the case here.

13.  Having regard to the wordings of rule 2B together with the legislative intent as appeared from the legislative development and the absence of express provision conferring a power to extend the time for applying for leave to appeal, I am of the view that the court in the first instance, which includes the Court of First Instance, only has power to deal with an application for leave to appeal under Order 59 rule 2B(1) that is made before the expiration of the 14-day time limit.  And that the power to extend time under Order 3 rule 5(1) should not apply to an application for leave to appeal. Similarly the power under Order 3 rule 5(2) to extend time notwithstanding the application is made after the expiration of the time limit does not apply to an application for leave to appeal.  Such a construction is also consistent with the underlying objective in Order 1A rule 1(b). 

14.  Additionally, it is instructive to contrast the position in Rules of the High Court with that in Rules of the District Court.  The new Order 58 rule 2(4) of Rules of the District Court (cap. 336H), which was introduced at the same time as Order 59 rule 2B(1) of Rules of the High Court, is differently worded.  It merely states that an application for leave to appeal “must be made” within the time limit specified in the sub-rule.  At the same time, Order 58 rule 2(10) of Rules of District Court expressly empowers the District Court to extend the time for applying for leave to appeal and the power may be exercised at any time and notwithstanding the time limit for so doing has expired.  This reinforces the construction stated above.

15.  For these reasons, leave to apply for leave to appeal out of time is refused.

Application for leave to appeal

16.  It follows that the application for leave to appeal, which was made out of time, has to be dismissed as well.  I therefore only need to deal briefly with the application for leave to appeal.

17.  One of the arguments relates to the threshold for granting leave to appeal. Section 14AA(4)(a) of High Court Ordinance (cap. 4) provides that: “Leave to appeal shall not be granted unless the court hearing the application for leave is satisfied that the appeal has a reasonable prospect of success”.  Mr Hunsworth says that this should receive similar interpretation as rule 52.3(6) of CPR in England, which requires a “real prospect of success”, so that an applicant has to show a realistic, as opposed to fanciful, prospect of succeeding in the appeal: Swain v. Hillman [2001] 1 All E R 91.  Miss Lam, on the other hand, argues that the court should only refuse leave if the applicant has no arguable case, citing Hong Kong Housing Society & Or v. Wong Nai Chung (trading as Sun Chung Flower Shop), DCCJ 3620/2007 (unreported), 24 April 2009. 

18.  The adoption of the “reasonable prospect of success” test, as opposed to the “real prospect of success” test, in our legislation is not accidental.  In the Interim Report of the Chief Justice’s Working Party on Civil Justice Reform (2001), the proposal was to adopt the “real prospect of success” test as the threshold for granting leave to appeal: Proposal 44 and paras.535-539.  In the Final Report (2004), however, the Working Party decided to adopt as the test for granting leave a requirement that the appeal has reasonable prospects of success, as conveying the notion that the prospects of succeeding in the appeal must be “reasonable” and therefore more than “not fanciful”, without having to be “probable”: Recommendation 115 and para.656.                

19.  To meet the “reasonable prospect of success” test, an applicant is required to show more than just an arguable case, but an appeal that has merits and ought to be heard, although he does not have to demonstrate that the appeal will probably succeed.

20.  Turning next to the arguments on the merits of the intended appeal, given that the defendant may apply to the Court of Appeal for leave to appeal, I consider I should not dwell into this aspect other than to indicate that I would have granted the application had it been made within time.  In particular, I have in mind Miss Lam’s submissions on the risk of injustice that may result from the Hong Kong court reaching a wrong conclusion on the central issue of the construction and application of Article 8.2 of Ordinance No.5 of 2004, a matter has thus far not received judicial attention in the Macau SAR and Hong Kong and may involve appreciation of the policy and intention underlying the Ordinance.