WONG CHUN TAK v. THE REGISTRAR OF HIGH COURT

HCAL 67/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO 67 OF 2014

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JUDGMENT
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A. INTRODUCTION

1.  This is an application on the part of the applicant for a certiorari to quash the decision of the respondent (“the Master”) made on 19 March 2014 dismissing the applicant’s legal aid appeal (“the Decision”).

2.  The respondent takes a neutral stance in these proceedings.

3.  The grounds for judicial review are prolix (drafted at a time the applicant acted in person), but they all boil down to one question: whether the learned Master erred in applying the wrong test in dismissing the legal aid appeal.

Factual background

4.  The applicant applied for legal aid twice.  It is the second legal aid application which is the subject of the present judicial review.

5.  In the 1^st legal aid application, the Director initially granted legal aid to the applicant in 2001 for him to take out a claim (“the Action”) against a firm of solicitors (“the defendant”) based on:

(a) A claim in contract against the defendant in that a Ms Lau (solicitor) of that firm failed to exercise skill and care in breach of her retainer in drafting a shareholders’ agreement and in advising the applicant; and

(b) An alternative claim in tort against the defendant in that Ms Lau voluntarily assumed responsibility towards the applicant as his solicitor and was negligent in drafting the shareholders’ agreement and advising the applicant.

6.  The assigned counsel, Ms Cruden had given 2 written opinions on merits of the case.  She gave a 3^rd opinion (section 9 opinion) in relation to the applicant’s Legal Aid Appeal No 548 of 2010 (“the 1^st LAA”). It is not appropriate to go into the details of those opinions as the Action is still pending.  However, all 3 opinions consistently expressed the same views as stated in paragraphs 25, 30 and 39 of her 3^rd opinion. Recognizing the difficulties in the applicant’s case and that much depended on Ms Lau’s credibility, Ms Cruden opined that one head of claim had a better prospect of success than the other.  Even so, the applicant only had a 50:50 or even prospect of success on that head of claim.

7.  For reasons that need not be gone into, the 1^st LAA was dismissed by a Master and no further steps were taken.

8.  On 28 December 2012, the applicant applied for legal aid to continue the Action on the basis of new evidence (“the Second Legal Aid Application”). There was no change to the original factual context but there arose new evidence giving rise to possible claims of breach of contract (i.e. the implied retainer and the ad hoc retainer), negligence, fraud, tort of deceit and economic torts including procuring a breach of contract and unlawful interference or causing loss by unlawful means.  The applicant raised the issue of whether the Shareholders’ Agreements were valid and enforceable. 

9.  On 8 August 2013, Ms Cruden gave a 4^th opinion (another section 9 opinion) based on the new evidence.  Her opinion as regards the original causes of action remained the same.  She further acknowledged that:

“in this Opinion a rather conservative approach has been taken. … That said, and while there are real difficulties with each individual basis of claim, the cumulative effect of all the unsatisfactory aspects of what Miss Lau was doing is cause for concern. The Court could take the view that there are so many unsatisfactory aspects in the documentation she drafted, her role at any given time and her participation in events which require explanation that there comes a point when her credibility is undermined. If the Court were to find Miss Lau dishonest the Plaintiff’s prospects of success are substantially increased. …”

10.  She opined that the applicant would have difficulty proving a specific element of intent, knowledge, recklessness or dishonesty.  Therefore she was unable to opine that the applicant had a reasonable prospect of succeeding on some of the new causes of action.

11.  On 15 August 2013, the Director refused the applicant’s Second Legal Aid Application.

12.  The applicant appealed against the Director’s decision in Legal Aid Appeal No 712 of 2013 (“the 2^nd LAA”).  It is this appeal that is relevant to this judicial review.

13.  The Director’s Reasons for Refusal for the Second Legal Aid Application were that he agreed with the opinion of Ms Cruden.

14.  In the 2^nd LAA, the applicant pointed out that the Director should have applied the correct merits test in Nguyen Trong Son v Director of Legal Aid, HCAA 20/1999, 15 December 2000, Keith JA ; and Chung Yuk Ying v Registrar of the High Court[2013] 5 HKLRD 78.

The Decision made by the Master

15.  On 19 March 2014, the learned Master issued a “Memorandum of Notification that a Party’s Appeal Has Been Dismissed”, stating that:

“… I, having thoroughly considered the said party’s case, have dismissed the appeal, as I agreed with the reasons for refusal of the Director of Legal Aid”.

16.  On 5 May 2014, upon the applicant’s request, the learned Master informed the applicant by letter the following reasons for dismissal:

“Appeal dismissed for the reasons set out in counsel’s opinion. The very detailed discussions about the elements that constitute various heads of claims, the factual and legal analysis carried out, as well as the evaluation of the prospect of success by counsel, are accepted.”

Legal principles

17.  The applicable legal principles have recently been summarized by me in Chung Yuk Ying v Registrar of the High Court [2013] 5 HKLRD 78, paras 9-11:

“9. The criterion for granting legal aid on the merits ground is set out in s.10(3) of the Legal Aid Ordinance (Cap.91) as “reasonable grounds for taking, defending, opposing or continuing such proceedings or being a party thereto”.

10. The Court does not have to be satisfied that it is more probable than not that the issue of fact will be decided in the appellant's favour.  But it has to be satisfied that the appellant has shown that there is a “reasonable, as opposed to a fanciful, chance of the court at trial deciding that issue of fact in his favour”: Nguyen Trong Son v Director of Legal Aid (unrep., HCAA 20/1999, 15 December 2000), Keith JA sitting as an additional Court of First Instance Judge in Chambers.

11. A judicial review application is not an appeal from either the Director or the Master’s Decision.  The court in a judicial review is concerned with legality and not with merits.  Relief will only be granted if the applicant can demonstrate that the Director has committed an error of law or has acted Wednesbury unreasonably in arriving at the conclusion. See Ng Ai Kheng v Master M Yuen, (unrep., HCAL 46/2003, [2004] HKEC 313), Carlye Chu J (as she then was); F v Registrar of the High Court [2012] 2 HKLRD 73, Macrae J (as he then was).”

18.  In Chung Yuk Ying v Registrar of the High Court (supra), the applicant was initially granted legal aid for her common law claim.  However, the Director discharged the legal aid certificate subsequently as he agreed with counsel’s advice that the applicant did not “stand a more than even chance of success” in her intended common law claim against the 3 defendants.  The master dismissed the applicant’s appeal, stating that he agreed with the reasons for refusal of the Director (having applied the correct test).  Leave to apply for judicial review against the master’s decision was granted because it was arguable that in agreeing with the views of the Director and counsel, the learned Master erred in applying the wrong test.

Application of the legal principles

19.  In giving her reasons as set out in paragraphs 15 and 16 above, the learned Master must have adopted the opinion of counsel that the applicant had a no better than even chance of success in one head of claim.

20.  On a true construction of section 10(3) and proper interpretation of Nguyen Trong Son, “reasonable grounds for taking a legal action” may be established even in cases where the “chance” or “prospect” of success is considered less than 51%.  It is not meaningful to use percentages for a case.  The only pertinent question to ask is whether there is a reasonable, as opposed to a fanciful, chance of the court at trial deciding that issue of fact in his favour.

21.  Ms Cruden, did not refer to the test as explained by Keith JA in Nguyen Trong Son v Director of Legal Aid in her section 9 opinions under the 1^st and 2^nd LAA respectively.  Neither the Director nor the learned Master answered that pertinent question.

22.  The Decision was erroneous in law in failing to apply the proper test and ought to be quashed. 

23.  It will be advisable for Masters to state the test they apply when giving the reasons for dismissal of a legal aid appeal in future.

CONCLUSION

24.  For the reasons above, the application for judicial review is allowed. I grant an order of certiorari to quash the Master’s decision and remit Legal Aid Appeal No 712 of 2013 to the learned Master to reconsider it forthwith and reach a decision in accordance with the legal principles set out in paragraphs 17, 18 and 20 above.

Costs

25.  The applicant is successful in this judicial review.  The respondent has taken a neutral stance. 

26.  The Director as an interested party has not contested the judicial review but has tried to adopt the cost-effective course of considering a 3^rd legal aid application by the applicant: 陳紹鈞v 高等法院司法常務官, CACV 209/2014, 2014年12月16日.  It was well-intentioned but that the 3^rd application eventually failed.

27.  Considering all circumstances, it will not be appropriate to make an order for costs against the respondent or the Director.

28.  I make an order nisi for there to be no order as to costs between the parties.  The applicant’s own costs are assessed in accordance with Legal Aid Regulations.  The case is not complex.  I summarily assess and allow costs at $100,000 for counsel, $70,000 for solicitors and $4,300 for the applicant whilst he acted in person.

29.  I thank Mr Pun and Mr Suen for their assistance.