SUCCESS LANE DEVELOPMENT LTD v. FERGURSON HONG KONG LTD trading as NEW WORLD MILLENIUM HONG KONG HOTEL

CAMP 48/2024, CAMP 51/2024, CAMP 102/2024 & CAMP 121/2024
(Heard together)

[2024] HKCA 839

CAMP 48/2024

On Appeal from [2023] HKDC 1325

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 48 OF 2024

(ON AN INTENDED APPEAL FROM DCCJ NO 2191 OF 2023)

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CAMP 51/2024

On Appeal from [2024] HKDC 68

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 51 OF 2024

(ON AN INTENDED APPEAL FROM DCCJ NO 2191 OF 2023)

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CAMP 102/2024

On Appeal from [2024] HKDC 482 and [2024] HKDC 509

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 102 OF 2024

(ON AN INTENDED APPEAL FROM DCCJ NO 2191 OF 2023)

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CAMP 121/2024

On Appeal from [2024] HKDC 452

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 121 OF 2024

(ON AN INTENDED APPEAL FROM DCCJ NO 2191 OF 2023)

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(Heard Together)

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J U D G M E N T

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Hon G Lam JA (giving the Judgment of the Court):

1.  This is the decision of this court on 4 applications for leave to appeal (CAMP 48, 51, 102 and 121 of 2024) all of which have arisen from proceedings in the action No. DCCJ 2191/2023 in the District Court.

Background

2.  The action is an unfortunate product of what began as a dispute about a sum of only $5,460.  The plaintiff is a company with two directors, namely, one Ms Yung Mei Chun Jessie and her husband Mr Cheung Moon Hoi Jeff.  From around March or April 2022, the couple had been staying in a guest room (“Room”) of a hotel run by the defendant pursuant to a contract between the plaintiff and the defendant, and had brought certain belongings (“Chattels”) into the Room, including around 200 boxes of various items.  The original room rate, for long-term stay, was $400 per day.  The defendant says this rate was applicable only up to 14 August 2022, and that thereafter the daily rate would be $660 and, from 1 March 2023 onwards, $1,320.

3.  The plaintiff on the other hand says that the applicable daily rate throughout was $400, and that it had made known to the defendant that the Room was no longer required after 4 September 2022.  The plaintiff had paid the charges up to 14 August 2022, but on 4 September 2022 the defendant refused to allow the couple to retrieve the Chattels because they (on behalf of the plaintiff) refused to pay the outstanding room charges at the higher rate of $660.  The difference between the parties, at that point, was therefore only $5,460 ($260 per day × 21 days).  As a result the Chattels remained in the Room, until around 18 May 2023, when they were removed by the defendant from the Room to an area in the underground car park of the hotel for storage.  The defendant claims to have a lien on the Chattels for outstanding room charges.

4.  On 2 June 2023, the plaintiff, acting in person through its director Ms Yung, commenced the action below in the District Court against the defendant, claiming damages in the sum of $2 million for damage to the Chattels, complaining that the storage area was hot, humid, and unventilated, with insufficient security.  On the same day, the plaintiff through Ms Yung applied ex parte to the District Court for an interlocutory injunction requiring the defendant to do certain things or refrain from doing certain things with regard to the Chattels.  This application was heard by HH Judge H Leong who dismissed it, the first and foremost reason being that there was no basis for the application to have been made ex parte.

5.  On 12 July 2023, the plaintiff made another application for an interlocutory injunction in almost identical terms.  The draft order stated that it was an ex parte application “on notice” but, as we now know, no notice was in fact given to the defendant.  After hearing Ms Yung on behalf of the plaintiff, HH Judge Yip made an order essentially in terms of the draft proposed.  The terms of the injunction included orders preventing the defendant from locking the Chattels inside the car park, and requiring the defendant to transfer the Chattels to a hotel guest room of the same standard and condition as the Room, to allow the plaintiff and its loss adjuster access for inspection and assessment of any damage done to the Chattels, and to allow the plaintiff to retrieve the Chattels thereafter.

6.  On 18 July 2023, upon the defendant’s urgent application with notice to the plaintiff (who did not appear), Deputy District Judge M Lam stayed the injunction order.

7.  On 19 July 2023, the plaintiff filed a summons to apply for the continuation of the ex parte injunction granted on 12 July 2023 until trial or further order.  The application was heard by Deputy Judge M Lam on 23 August 2023.  On 25 September 2023, she handed down her decision in writing,[1] dismissing the plaintiff’s summons with costs to the defendant on the indemnity basis with certificate for counsel.

8.  The plaintiff then applied for leave to appeal and also for leave to adduce new evidence for the purpose of an appeal against that decision.  These two applications were dealt with on the basis of written submissions only and were both dismissed by Deputy Judge M Lam in her decision handed down on 1 March 2024.[2] By summons dated 15 March 2024, the plaintiff renews in the Court of Appeal its application for leave to appeal against the decision of Deputy Judge M Lam dated 25 September 2023 not to continue the ex parte injunction granted by Judge Yip.  This is the application in CAMP 48/2024.

9.  Meanwhile, by notice dated 21 September 2023, the court had indicated to the parties that Deputy Judge M Lam’s decision would be handed down on 25 September 2023.  Notwithstanding that, on 22 September 2023, the plaintiff made an ex parte application again to the District Court (albeit on notice) for an interlocutory injunction in substantially the same terms as the one debated before Deputy Judge M Lam.  Upon receipt of the ex parte summons, the court directed that it be heard inter partes on 29 September 2023. On that date, Judge H Leong heard and dismissed the application as well as another ex parte application by the plaintiff for a “stay” of Deputy Judge M Lam’s decision of 25 September 2023.  Oral reasons were given by Judge H Leong at the hearing but upon the plaintiff’s request, written reasons (based on the oral reasons) were handed down on 9 January 2024.[3]

10.  The plaintiff refused to accept the result, and applied to Judge H Leong for leave to appeal.  This was dealt with on paper and dismissed in Judge H Leong’s written decision dated 5 March 2024, with an order of costs in the defendant’s favour summarily assessed in the amount of $50,000.[4] Still dissatisfied, the plaintiff has made in the Court of Appeal a renewed application for leave to appeal against the judge’s refusal of a fresh injunction.  This is the summons in CAMP 51/2024 dated 19 March 2024.

11.  In the action, on 16 November 2023, the plaintiff filed a summons asking for leave to re-amend its statement of claim (“re‑amendment summons”).  On 20 December 2023, the defendant filed a summons seeking orders for mutual and simultaneous discovery of certain documents (essentially the inventories of the Chattels from both sides), joint inspection of the Chattels by experts and expert evidence on causation and quantum (“discovery and expert summons”).  These two summonses were scheduled for hearing on 27 March 2024 with 1 day reserved. 

12.  Just 8 days before the hearing, on 19 March 2024, the plaintiff filed a summons asking for leave to amend its re-amendment summons (but without providing a revised draft re-amended statement of claim) and for the hearing on 27 March 2024 to be adjourned to a date to be fixed.  On 22 March 2024, having heard the parties, Deputy District Judge Gary C C Lam refused the adjournment and dismissed the plaintiff’s summons.[5]

13.  On 27 March 2024, after hearing the parties on the two substantive summonses, Deputy Judge Gary C C Lam gave his decision on the same day.[6]  He granted the plaintiff leave to make certain unopposed re-amendments to its statement of claim but refused leave to make the re‑amendments opposed by the defendant.[7]  He made an order for mutual disclosure and exchange of inventories of the Chattels.[8]  The judge also gave directions for expert evidence from loss adjusters including joint inspection of the Chattels.[9]

14.  The plaintiff asked Deputy Judge Gary C C Lam for leave to appeal against both his decision given on 22 March 2024 refusing the adjournment and his decision made on 27 March 2024 on the two substantive summonses.  Dealing with the matter on paper alone, the judge refused leave to appeal in his written decision dated 23 May 2024.[10] The plaintiff has filed a summons dated 6 June 2024 in the Court of Appeal renewing its application for leave to appeal.  This is the summons in CAMP 102/2024.

15.  In relation to the defendant’s discovery and expert summons, the plaintiff had actually responded with its own summons dated 27 December 2023 seeking a stay of proceedings on the defendant’s discovery and expert summons pending the plaintiff’s appeals against Deputy Judge M Lam’s decision of 25 September 2023 and Judge H Leong’s decision of 29 September 2023.  On the same date of 27 December 2023, Master Stanley Ho dismissed the plaintiff’s summons and refused a stay.  Instead, he gave directions for the conduct of the defendant’s discovery and expert summons including an order that the plaintiff do file and serve an affirmation in opposition on or before 24 January 2024. 

16.  On 16 January 2024, the plaintiff took out yet another summons seeking an order to stay Master Ho’s directions sine die, with liberty to restore.  On 23 January 2024, Master Ho dismissed that summons.  Although the plaintiff did pursuant to those directions file and serve an affirmation in opposition to the defendant’s discovery and expert summons on 24 January 2024, it also filed, on the same day, a notice of appeal against Master Ho’s order of 23 January 2024 which refused to stay those directions.  That appeal was heard by Deputy District Judge Isabella Chu on 23 February 2024, who dismissed it in her written decision handed down on 20 March 2024.[11] The plaintiff applied to Deputy Judge Isabella Chu for leave to appeal.  By her written decision dated 24 June 2024, the judge refused leave to appeal.[12]  By a summons taken out in the Court of Appeal on 8 July 2024, the plaintiff renews its application for leave to appeal in this court.  This is the application in CAMP 121/2024.

17.  As mentioned above, in Judge H Leong’s written decision dated 5 March 2024[13] referred to in §10 above, which refused leave to appeal from his decision dated 29 September 2023 not to grant a fresh injunction in the plaintiff’s favour, the judge also made an order that the plaintiff pay the defendant’s costs forthwith which he summarily assessed in the sum of $50,000.  On 19 July 2024, on the plaintiff’s application, Judge H Leong issued a written decision[14] granting leave to appeal against that costs order on the ground that prior to the order being made, the plaintiff had not been given a chance to submit a list of objections to the defendant’s bill.  This has given rise to an appeal to be heard in the Court of Appeal, numbered CACV 303/2024.  We do not however consider that the existence of this appeal is a reason for giving leave to appeal in any of the 4 applications before us unless there are reasonable prospects of success.

Discussions

18.  Section 63A(2) of the District Court Ordinance (Cap 336) provides:

“ (2) Leave to appeal shall not be granted unless the judge, the master or the Court of Appeal hearing the application for leave is satisfied that—

(a) the appeal has a reasonable prospect of success; or

(b) there is some other reason in the interests of justice why the appeal should be heard.”

19.  Having read the written materials, and despite the plaintiff’s request for an oral hearing if leave to appeal is not granted on the papers, we consider that it is appropriate to determine the applications for leave to appeal on paper without an oral hearing pursuant to RHC Order 59 rule 2A(5).  We shall deal with the 4 applications in turn below.

CAMP 48/2024

20.  This is the plaintiff’s application for leave to appeal against the decision of Deputy Judge M Lam dated 25 September 2023 not to continue the ex parte injunction granted by Judge Yip.  Essentially, Deputy Judge M Lam gave 5 grounds as her reasons, each of which was sufficient on its own to justify her decision: (1) the plaintiff was guilty of material non-disclosure; (2) the plaintiff had abused the ex parte procedure; (3) on the merits, the plaintiff had failed to show a strong prima facie case to give the court a high degree of assurance that the injunction would be justified; (4) the adequacy of damages as a remedy; and (5) the balance of convenience favoured the defendant, especially given that the injunction would extinguish the defendant’s lien. 

21.  The draft notice of appeal, signed by the plaintiff’s solicitors, contains 5 grounds relating to respectively the 5 reasons above.  In addition, in §§13 – 19 of the draft, there are a number of points prefaced by the phrases “according to the plaintiff’s instructions” and “we are specifically instructed that”.  It is unclear what these phrases are intended to mean.  If they are intended to shift or confine the responsibility for raising hopeless arguments to the client itself, then they are misconceived.  It is the legal representatives’ duty to ensure that grounds put forward in a notice of appeal or draft notice of appeal signed and filed by them are properly arguable.  They should not act as, and should not regard themselves as, mere conduit pipes for putting forward allegations or arguments from the client.  Those who do so risk personally bearing adverse consequences.

22.  In our view, the intended appeal has no reasonable prospects of success.  The grant or continuation of an interlocutory injunction is an exercise of the discretion of the court below.  The Court of Appeal will not and indeed cannot intervene unless it is shown that the first instance decision was plainly wrong in the sense that, for example, the court acted on wrong principles, took into consideration irrelevant factors, ignored relevant factors, or that its decision is outside the generous ambit within which reasonable disagreement is possible: see e.g. Agritrade Resources Ltd v Ashok Kumar Sahoo [2022] HKCA 280, §20.  For the purposes of this judgment it is unnecessary to discuss each and every ground and argument raised, because the following points, which the plaintiff has shown no prospects of overcoming, amply justify the decision of the judge.

23.  First, it was wholly wrong for the plaintiff to apply ex parte for the interlocutory injunction.  The principles are well established (see Ho Tak Eng v Fame Brilliant Ltd [2006] 1 HKLRD 34; Brand Farrar Buxbaum LLP v Samuel-Rozenbaum Diamond Ltd (HCA 5191/1998, 8 May 2002; Emperor International Holdings Ltd v Atnext Ltd [2016] 1 HKLRD 77).  They are a basic matter of fairness.  An application should be made ex parte only where there is no time to give even the shortest notice to the defendant or where it has to be kept secret from him such as where he might take steps to frustrate the application if given notice.  In the present case there was no need for secrecy, and no such extreme urgency that there was literally no time to warn the other side of the intended application.  There was no basis at all to apply ex parte.

24.  The plaintiff contends that Deputy Judge M Lam should have found that the failure to give notice was innocent and not deliberate.  The judge carefully considered this and concluded the failure was deliberate.  There is in our view no prospect of the Court of Appeal deciding to interfere with this conclusion.  It is quite clear that the first ex parte application made by the plaintiff was dismissed on the basis that it should not have been made ex parte.  Judge H Leong told Ms Yung as much at the hearing on 2 June 2023.  This is why Deputy Judge M Lam said in §45 of her decision dated 25 September 2023 that “Ms Yung had actual knowledge of the Court’s disapproval of her ex-parte application without notice tactics in the 1^st Ex-parte Application.”  There is no challenge against this conclusion.

25.  What made matters worse is that the draft order submitted by the plaintiff to Judge Yip – in terms of which the judge made the order – stated that an “ex-parte application (on notice) was made”, which was a false statement because no notice had in fact been given to the defendant.  Judge Yip’s order included those words, which shows that the judge was misled into thinking that the defendant had been notified of the application and chosen not to appear.  Ms Yung submitted to Deputy Judge M Lam that the false statement had been caused by the adoption of a template.  The judge noted however that the circumstances of how that came about were unexplained and did not accept that it was an innocent mistake.  There is nothing to undermine this conclusion.  In any event, the plaintiff’s explanation shows that it was at the very least reckless as to what the words meant and whether they were true or not.

26.  Deputy Judge M Lam was also fully justified in finding that there had been material non-disclosure before Judge Yip.  The plaintiff relies on the fact that it was not legally represented at the time.  Whilst the lack of legal representation may justify making allowances in making case management decisions and in conducting hearings, it will generally not justify applying a lower standard of compliance with rules or orders of the court: Barton v Wright Hassall LLP [2018] 1 WLR 1119, §18.  We accept that the lack of legal representation can be relevant to the degree of culpability for the non-disclosure, which in turn is relevant to the question whether the injunction should be discharged and/or re-granted. But an undeniable fact is that the plaintiff’s legal documents show that they had been prepared with some legal knowledge and familiarity with civil litigation.  As Mr Yeung points out on behalf of the defendant, there was no affirmation evidence from Ms Yung that she was unaware of the duty of full and frank disclosure.  Even so, the plaintiff glaringly failed to disclose to Judge Yip that it had made the same application on 2 June 2023 which was dismissed by Judge H Leong on the ground inter alia that the plaintiff should not have proceeded ex parte.  Such non-disclosure is to be deprecated.

27.  On the question of substantive merits, the plaintiff does not appear to attack Deputy Judge M Lam’s decision that the merits of the plaintiff’s claim do not give the court “a high degree of assurance” that the injunctions sought would be found to be justified after trial.  Instead, the plaintiff submits that the judge was wrong to require a high degree of assurance to be shown because the interlocutory injunctions would not give the plaintiff the whole of the relief which it claims. In our view the plaintiff’s approach is misconceived.  The underlying principle for interlocutory injunctions is that the court should take whichever course seems likely to cause the least irremediable prejudice to one party or the other. Instead of putting cases into rigid categories and applying a box-ticking approach, one should focus on the practical consequences of the injunction: see National Commercial Bank Jamaica Ltd v Olint Corp Ltd [2009] 1 WLR 1405, §§19-21.  Here, the judge considered that granting the injunctions sought would permanently deprive the defendant, before trial, of its lien and its statutory right to sell the Chattels under the Hotel Proprietors Ordinance (Cap 158), and was therefore reluctant to do so unless the plaintiff showed stronger merits than simply serious issues to be tried.  The judge’s reasoning cannot in our view be faulted.

28.  For these reasons, the intended appeal has no reasonable prospect of success.  Leave to appeal is accordingly refused.  The plaintiff’s summons is dismissed.  We make an order nisi that the plaintiff do pay the defendant’s costs on the indemnity basis.  The plaintiff may within 14 days lodge a statement of objections to the defendant’s bill of costs.  This court will thereafter summarily assess the costs payable without further notice to the parties.

29.  As the plaintiff’s application is wholly without merit, pursuant to RHC Order 59 rule 2A(8) we make an order that no party may request this determination to be reconsidered at an oral hearing inter partes.

CAMP 51/2024

30.  This is the plaintiff’s application for leave to appeal against the decision of Judge H Leong on 29 September 2023 (referred to in §9 above) dismissing the plaintiff’s application by summons dated 22 September 2023 for an injunction in largely the same terms as that refused by Deputy Judge M Lam on 25 September 2023.

31.  The basis of Judge H Leong’s decision can be seen from his written reasons issued on 9 January 2024.  Essentially, the judge dismissed the plaintiff’s application because it was inappropriate for the plaintiff to have applied ex parte; there was no urgency to take out another application for injunction pending Deputy Judge M Lam’s decision; the defendant had made reasonable proposal for removal of the Chattels from the car park but the plaintiff had superimposed unreasonable conditions; damages would be an adequate remedy; there was nothing to show that the plaintiff would be able to pay damages to the defendant in the event the injunction was found to have been wrongly granted; and there was no material change of circumstances to justify another application.  The judge concluded that the plaintiff’s application was an abuse of process.

32.  In the draft notice of appeal, a number of grounds have been put forward, including: (1) the ex parte application was made with notice to the defendant, and was in any event converted into an inter partes application; (2) the judge failed to take into account that the plaintiff was a litigant in person; (3) the judge erred in taking into account the lack of urgency and failed to take into account the defendant’s 3-day delay in notifying the defendant about the flooding incident; (4) the black rainstorm on 8 September 2023, which occurred after the hearing before Deputy Judge M Lam, was a material change of circumstance; (5) the judge wrongly disregarded the merits of the plaintiff’s case; (6) the judge erred in finding damages to be an adequate remedy; and (7) the judge erred in considering the balance of convenience prior to the question of adequacy of damages as a remedy. 

33.  Finally, under the heading “Other Grounds” in the draft, the plaintiff says that there was a change in the defendant’s stance having regard to its discovery and expert summons dated 20 December 2023 (see §11 above).  This ground is not understood and as it is not referred to in the plaintiff’s written statement in support of the application for leave to appeal, it is assumed to have been abandoned.

34.  Again, for present purposes, it is not necessary to discuss each and every contention made on behalf of the plaintiff, because the reasons below are sufficient to show that there is no reasonable prospect of success in the intended appeal.  It should be borne in mind that the intended appeal is, again, one against an exercise of discretion, and therefore subject to the usual threshold (see §22 above).

35.  It was an extraordinary step for the plaintiff to take out another ex parte application (albeit on notice) for injunction on 22 September 2023 when a very similar application had been argued before the court a month before (with judgment to be handed down on 25 September 2023).  By the time of the hearing on 29 September 2023, the plaintiff’s previous application had been roundly rejected.  Whether to entertain another similar application was a matter of discretion for Judge H Leong.  He proceeded on the basis that the plaintiff had to show a material change of circumstances.  This approach cannot be faulted: see Joint and Several Liquidators of Joy Rich Development Ltd v Chen Muhua [2024] HKCA 122, §§29-33.

36.  The justification put forward by the plaintiff for applying again was the “black” rainstorm on 8 September 2023 leading to flooding in the underground area where the Chattels were stored.  However, the risk of damage by water had already been considered in the application before Deputy Judge M Lam.  Clearly this is what was meant by Judge H Leong in §32 of his Reasons for Decision,[15] and we reject the plaintiff’s argument that the judge mistakenly thought the flooding incident (which occurred after the hearing before her) had been considered by Deputy Judge M Lam.  Further, Judge H Leong also noted that the flooding incident was immaterial to the reasons for Deputy Judge M Lam to refuse the injunction, including that damages would be an adequate remedy and that the balance of convenience was against the plaintiff.  The plaintiff has failed to show how this reasoning was flawed.  As such Judge H Leong cannot be faulted for concluding that there was no material change of circumstances to warrant another application.

37.  Further, after a careful examination of the correspondence between the parties, Judge H Leong noted that the defendant had very reasonably offered an opportunity for any wet boxes to be repacked and relocated, but the plaintiff had raised unreasonable conditions for the exercise.  The judge concluded from this that the plaintiff did not in fact require urgent resolution of her demands (and it was therefore abusive for her to take out the application in the manner she did), and that the plaintiff’s application was based on her own unreasonable conduct shown in that correspondence.  Quite plainly this is a legitimate reason for refusing to grant an injunction.  The plaintiff has failed to identify any error in the judge’s analysis.

38.  For these reasons, leave to appeal is refused.  The plaintiff’s summons is dismissed.  We make an order nisi that the plaintiff do pay the defendant’s costs on the indemnity basis.  The plaintiff may within 14 days lodge a statement of objections to the defendant’s bill of costs.  This court will thereafter summarily assess the costs payable without further notice to the parties.

39.  As the plaintiff’s application is wholly without merit, pursuant to RHC Order 59 rule 2A(8) we make an order that no party may request this determination to be reconsidered at an oral hearing inter partes.

CAMP 102/2024

40.  This is the plaintiff’s application for leave to appeal against (1) the decision of Deputy Judge Gary C C Lam on 22 March 2024 not to adjourn the hearing of the plaintiff’s re-amendment summons and the defendant’s discovery and expert summons, which was fixed for 27 March 2024, and (2) the substantive decision of Deputy Judge Gary C C Lam on 27 March 2024 after hearing those two summonses.

Decision on adjournment

41.  As regards the application for adjournment, the judge noted that it was only supported by a very short affirmation of the plaintiff’s solicitor which essentially said that he had only been engaged on 14 March  2024, had already had to file 2 applications for leave to appeal on behalf of the plaintiff (in CAMP 48/2024 & 51/2024), and needed more time to finalise the plaintiff’s draft re-amended statement of claim, formulate arguments to oppose the defendant’s summons, and engage counsel.  The judge did not consider there was justification for an adjournment.

42.  In seeking leave to appeal, the plaintiff alleges that the judge failed to consider that a refusal of adjournment would cause prejudice to the plaintiff.  With respect, this is a hopeless application.  First, the hearing had taken place and the question whether it should have been adjourned is academic.  An appeal against the refusal of adjournment would be pointless.  The focus should be on the correctness of the substantive orders.

43.  Secondly and in any event, there is no basis for impugning the judge’s decision refusing an adjournment.  The plaintiff chose to instruct solicitors and made an application for adjournment at the eleventh hour.  The judge was fully entitled in his discretion to refuse to adjourn the substantive hearing which was only 5 days away.  The judge had clearly considered the alleged prejudice for the plaintiff, and explained in §10 of his decision why he nevertheless decided to refuse an adjournment.  The plaintiff has come nowhere near the high threshold for challenging a discretionary case management decision of this kind.

Decision on leave to re-amend the statement of claim

44.  On the plaintiff’s re-amendment summons, the judge refused leave for the plaintiff to add the opposed paragraphs (i.e. §§19 – 23, 27 and 38 – 67).  As the judge said in his Decision, those paragraphs were all averments about the history of and the submissions made in the plaintiff’s previous applications for injunctions and the related costs orders as well as some of the plaintiff’s attempted communications with the judges seised of the matter.  As such the judge considered them to be irrelevant.[16]

45.  The plaintiff now complains that the judge solely considered the defendant’s opposition during the injunction as relevant to costs, “without acknowledging its implication on the Defendant’s liability for negligence and knowing receipt of the Plaintiff’s concerns about irreparable harm to their belongings”.  It is also said that the judge failed to apply the correct test by assessing whether the new claim based on the proposed amendments was bound to fail.

46.  In our view there is no merit whatsoever in the intended appeal.  As Order 18 rule 7(1) of the Rules of the District Court (Cap 336H) provides: “every pleading must contain, and contain only, a statement in a summary form of the material facts on which the party pleading relies for his claim …, but not the evidence by which those facts are to be proved, and the statement must be as brief as the nature of the case admits.”  The nature of the paragraphs in question was accurately summarised by the judge.  We fail to see how they can possibly form material facts that can properly be relied on for the plaintiff’s claim.  Their inclusion would simply make the pleading prolix and lead to unnecessarily increased expenditure of legal costs in relation to subsequent steps in the proceedings.

Decision on discovery

47.  The defendant’s application for discovery sought an order for both parties to make discovery by way of mutual exchange of the following documents: (1) from the plaintiff: a detailed inventory, complete with photos and videos, of the items in the Room and their respective values as referred to by the plaintiff in its email to the hotel dated 18 May 2023; and (2) from the defendant itself: a list of the items moved out of the Room on 18 May 2023 as recorded by the defendant.

48.  Deputy Judge Gary C C Lam granted the order sought, with costs in the cause.  He was satisfied that the inventory sought from the plaintiff exists; it is “centrally relevant” to the subject dispute; it is or has been in the plaintiff’s possession, custody and/or power; any privacy concerns were outweighed by the document’s relevance; requiring discovery was not oppressive to the plaintiff; and discovery at that stage was in the interest of justice and necessary for the fair disposal of the matter and for saving costs.[17]

49.  The plaintiff complains only about the discovery order against itself, not the order against the defendant.  It has raised numerous grounds in the draft notice of appeal but we are satisfied that none of them has any reasonable prospect of success.  We shall broadly explain why the main points raised have no merits.

50.  First, the plaintiff argues that the inventory was only referred to in the plaintiff’s email, which was an exhibit to an affirmation of the plaintiff, and submits that RDC Order 24 rule 10 does not apply to require discovery of a document referred to in an exhibit as opposed to in an affirmation.  This argument is misconceived.  The email was referred to by the judge as evidence of the existence of the inventory.  Neither the application nor the order granted was made under Order 24 rule 10.

51.  Secondly, the plaintiff says that the discovery order is wrong because it allows the defendant to attempt to define the plaintiff’s claim for damages.  The plaintiff does not know which items of the Chattels had been damaged and was entitled to plead in general terms, and that the undamaged items would on the judge’s own finding not be relevant to the plaintiff’s claim.  In our view this ground is also misconceived.  The claim is not simply about damages.  The judge did not say that undamaged items would not be relevant.  The plaintiff in fact claims, inter alia, an order for the return of all the Chattels as originally stored in the Room “no matter whether it is damaged or not”.[18]  There is also a complaint and claim for missing items.[19] It is impossible to see how the Judge can be said to be wrong in saying that the plaintiff’s own inventory is of central relevance and is necessary for the fair disposal of the matter.

52.  Thirdly, the plaintiff complains about invasion of privacy.  It relies on Shun Kai Finance Co Ltd v Japan Leasing (Hong Kong) Ltd [2000] 3 HKLRD 539 and argues that no implied undertaking applies to restrict the defendant’s use of the information disclosed.  This argument is misplaced, as the discovery here is not ordered pursuant to Order 24 rule 10 on whichthe decision in Shun Kai Finance is based.  The judge had weighed the relevance of the document with the plaintiff’s claim for privacy and considered that the latter was outweighed.  This is a matter for the judge and we are far from satisfied that there is any reviewable error in his reasoning or that his conclusion lies outside the range of tenable opinion.

53.  Fourthly, the plaintiff argues that the requirements under Order 24 rule 7 are also not satisfied. This argument is baseless.  The plaintiff’s own email to the defendant dated 18 May 2023 stated: “… We have compiled a detailed inventory, complete with photos and videos, of the items in Room 442 and their respective values.  Should you choose to move our belongings due to your unwarranted demands for payment, we are prepared to take legal action for any resulting losses or damages. …”  This is clear evidence of the existence of the document, which was not contradicted by any other evidence from the plaintiff.  There is no substance in the plaintiff’s assertion that the document is not relevant or that the application is a fishing expedition.

54.  The other subsidiary arguments raised by the plaintiff are in our view equally unmeritorious.

Decision on expert evidence

55.  On the defendant’s application, Deputy Judge Gary C C Lam considered that there are relevant questions for expert loss adjusters to opine on and rejected the plaintiff’s grounds of opposition.  In the result he gave directions for each party to engage one loss adjuster as expert, for a joint inspection by the experts of the items moved out of the Room on 18 May 2023, for the filing of expert reports, and for an experts’ meeting and a joint report.  He also set out the issues and tasks for the experts.  The costs of the application were ordered to be in the cause.

56.  Plainly this is the kind of case management decision in which the Court of Appeal will not intervene save in exceptional circumstances: see Hong Kong Civil Procedure 2024, Vol. 1, para 59/0/55.  The plaintiff has raised numerous complaints including that conducting an inspection now would be wasteful as there would need to be a subsequent, comprehensive second round of inspection to re-assess damages.  In our view this is simply a regurgitation of the argument below and wholly insufficient to show the judge was plainly wrong in thinking the work should be done now and an update would be made easier with the ground work already carried out.[20] The plaintiff complains that the experts are only told to assess damage to the Chattels after the removal from the Room in May 2023 and asserts that there might have been damage prior to that date.  As Mr Yeung points out on behalf of the defendant, however, the plaintiff’s complaints in the action concerned the conditions of the storage area in the underground car park, not in the Room.  There are also draft grounds of appeal that challenge the relevance of the expert issues[21] but they are plainly unmeritorious and have not been mentioned in the plaintiff’s written statement in support.  There is a complaint that the directions were impractical and that the judge erred in relying on the “liberty to apply” provision as a remedy.  In our view the plaintiff has failed to make out any impracticalities.  Liberty to apply is a usual provision in similar case management orders.

Conclusion

57.  For these reasons, no part of the intended appeal has any reasonable prospect of success.  Leave to appeal is therefore refused.  The plaintiff’s summons is dismissed.  We make an order nisi that the plaintiff do pay the defendant’s costs on the indemnity basis.  The plaintiff may within 14 days lodge a statement of objections to the defendant’s bill of costs.  This court will thereafter summarily assess the costs payable without further notice to the parties.

58.  As the plaintiff’s application is wholly without merit, pursuant to RHC Order 59 rule 2A(8) we make an order that no party may request this determination to be reconsidered at an oral hearing inter partes.

CAMP 121/2024

59.  As explained in §16 above, this application seeks leave to appeal against the decision of Deputy Judge Isabella Chu dated 20 March 2024 which upheld the decision of Master Stanley Ho dated 23 January 2024 to refuse to stay (sine die with liberty to restore) his order of 27 December 2023 which gave directions for the conduct and hearing of the plaintiff’s re-amendment summons and the defendant’s discovery and expert summons.  The main thrust of the plaintiff’s contention is that the defendant’s summons should have been stayed sine die.

60.  In other words, the decision in question did not impinge upon any substantive or procedural right of the plaintiff, but simply the timing of the processing of an interlocutory application made by the defendant.  As explained above this court will not interfere with such case management decision save in exceptional circumstances.

61.  Further, the defendant’s discovery and expert summons had been heard and determined by Deputy Judge Gary C C Lam on 27 March 2024.  The focus should thenceforth be the correctness or otherwise of that decision, not whether the hearing should have taken place.  What possible point there could have been for the plaintiff to seek leave from Deputy Judge Isabella Chu by summons dated 3 April 2024, and again from this court by summons dated 8 July 2024, to appeal against her decision about the stay is difficult to fathom.  As we have refused leave to appeal from Deputy Judge Gary C C Lam’s decision on the defendant’s discovery and expert summons, we decline to entertain the present application which is utterly pointless.  In any event we have read the materials and are satisfied that none of the intended grounds of appeal has any prospect of success.

62.  Leave to appeal is therefore refused.  The plaintiff’s summons is dismissed.  We make an order nisi that the plaintiff do pay the defendant’s costs on the indemnity basis.  The plaintiff may within 14 days lodge a statement of objections to the defendant’s bill of costs.  This court will thereafter summarily assess the costs payable without further notice to the parties.

63.  As the plaintiff’s application is wholly without merit, pursuant to RHC Order 59 rule 2A(8) we make an order that no party may request this determination to be reconsidered at an oral hearing inter partes.

Post-script

64.  It is a matter of concern that not only had the plaintiff resoundingly failed in various interlocutory steps referred to above, but it had further, almost as a matter of course, made applications to the judges below and then to this court for leave to appeal that are wholly unmeritorious, and in some cases, pointless.  Such baseless and indiscriminate applications are an unwarranted drain on the courts’ limited resources whose fair distribution is one of the underlying objectives of our rules.[22] Firm and robust case management is needed, and unwarranted and baseless interlocutory steps will be treated as such.  Although the plaintiff is a limited company, its directors should beware of the courts’ power to order costs against third parties such as directors (see section 53(2) of the District Court Ordinance, section 52A(2) of the High Court Ordinance, and Order 62 rule 6A of the Rules of the District Court and Rules of the High Court).

[1]   [2023] HKDC 1325.

[2]   [2024] HKDC 336.

[3]   [2024] HKDC 68.

[4]   [2024] HKDC 342.

[5]   [2024] HKDC 482.

[6]   [2024] HKDC 509.

[7]   §§7 – 9.

[8]   §§18 – 25.

[9]   §§26 – 38.

[10]  [2024] HKDC 792.

[11]  [2024] HKDC 452.

[12]  [2024] HKDC 1018.

[13]  [2024] HKDC 342.

[14]  [2024] HKDC 1072.

[15]  The judge stated in §32: “… 現時可能有些物件會有浸濕的情況，本席都同意楊大律師所講，物件浸濕並不是 “material change”，亦都不是有任何證據講法律上有 “material change”，這些已經在林法官席前審理過。”

[16]  Decision dated 27 March 2024, §8.

[17]  Decision dated 27 March 2024, §§18-23.

[18]  See §2 of the Prayer for Relief in the Amended Statement of Claim.

[19]  See §68 of the Re-Amended Statement of Claim, which the plaintiff was allowed to add.

[20]  Decision dated 27 March 2024, §34.

[21]  See page 10 of the draft notice of appeal.

[22]  See Order 1A rule 1(f) of the Rules of the District Court and the Rules of the High Court.