PROSPEROUS NURSING CENTRE LTD v. MAK SIU CHUN AND ANOTHER

CACV 159/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 159 OF 2005

(ON APPEAL FROM HCA NO. 3810 OF 2002)

BETWEEN

	Prosperous Nursing Centre Limited	Plaintiff
	and
	Cheung Yuk Ying	1st Defendant
	Yek Tak International Holdings Limited	2nd Defendant
	(By Original Action)

AND BETWEEN

	Yek Tak International Holdings Limited	Plaintiff
	and
	Mak Siu Chun	1st Defendant
	Prosperous Nursing Centre Limited	2nd Defendant
	(By Counterclaim)

Before : Hon Cheung JA, Yuen JA and Waung J in Court

Date of Hearing : 6 January 2006

Date of Judgment :   6 January 2006

 

______________________

J U D G M E N T

______________________

Hon Cheung JA (giving judgment of the court) : 

The appeal

1. This is an appeal against a decision of Deputy High Court Judge Barnabus Fung.  The judge ordered :

1.  leave be granted to the 1^st and 2^nd defendants (by original action) [i.e. Cheung Yuk Ying (‘Madam  Cheung’) and Yek Tak International Holdings Ltd. (‘Yek Tak’)] to add two more defendants, Mr. Wong and Mrs. Wong, the son and daughter-in-law of Madam  Mak Siu Chun in the counterclaim [Mak Siu Chun (‘Madam Mak’) is the 1^st defendant in the counterclaim];

2.  leave be granted to Madam Cheung and Yek Tak to adjourn sine die the original action and the counterclaim herein, with liberty to any party of the original action and the counterclaim to restore;

3.  trial be declared de novo for the original action and the counterclaim herein;

4.  costs of and occasioned by the amendment, all costs up to today and all costs thrown away (if not included in the costs up to today) be paid forthwith by Madam  Cheung and Yek Tak to the plaintiff (by original action) [i.e. Prosperous Nursing Centre Ltd (‘Prosperous’)].

The order was made on the fifth day of a trial.

The agreed terms

2. The parties had reached terms on the appeal which were approved and they were as follows :

1)  Madam Cheung’s appeal against the costs order made against her by the judge on 8^th April 2005 be allowed;

2)  The said costs order against Madam Cheung be set aside;

3)  There be no order as to costs of this appeal between Madam Cheung on the one part and Prosperous Nursing Centre Limited and Madam Mak on the other part and also between Madam Cheung on the one part and Yek Tak on the other part.

4)  All the Orders made by the judge on 8^th April 2005 be set aside.

5)  The trial of these proceedings be remitted to continue before the judge.

6)  Yek Tak International Holdings Ltd do forthwith pay Prosperous Nursing Centre Limited and Madam Mak’s costs of, thrown away and occasioned by :

a)  the application for joinder and amendment before the Deputy Judge Fung, including the costs of the application for security for costs,

b)  the adjournment on 8^th April 2005,

c)  this appeal, and

d)  the provision of a draft Amended Defence and Counterclaim.

The two grounds

3. We would have allowed the appeal in any event.  Mr. Chain, counsel for the Madam Cheung and Yek Tak (who did not appear in the court below) made two points on his appeal :

1.  Madam Cheung should not be ordered to bear costs because she had not applied to join the additional parties.

2.  In any event, Yek Tak will abandon the addition of new parties hence the orders imposed by the judge should be rescinded.

The position of Madam Cheung

4. Madam Cheung and Yek Tak were represented by the same counsel at the court below.  It was said that he did not make it clear when he made the application that the joinder was sought by Yek Tak only.

5. While this may be so, the original pleading showed that it was only Yek Tak who had lodged a counterclaim in the proceedings.  The addition of parties would only be relevant to Yek Tak who has lodged the counterclaim.  This is further confirmed by a draft amended Defence and Counterclaim that was provided after the order was made.  Since the joinder of new parties would only be relevant to Yek Tak, the costs order should only be visited upon Yek Tak and not Madam Cheung.  We will allow Madam Cheung’s appeal.

6. We do not consider it is necessary for Madam Cheung to obtain leave to appeal against the costs order because the decision was one that goes to jurisdiction and not discretion.  However, we would be prepared to grant leave if it is indeed necessary to do so. 

The position of Yek Tak

7. Since Yek Tak no longer wishes to add the new parties, the need to abort the trial and start afresh is no longer necessary. 

Re-listing of the case

8. We accordingly allowed Yek Tak’s appeal and set aside all the four orders both against Madam Cheung and Yek Tak.  The case should be relisted for hearing as soon as possible.

Properly formulated amendment

9. We would like to observe that when counsel applied to join the new parties, he did not even have a properly formulated claim against them.  Where a trial had proceeded for four days, the court should not even begin to hear such an application unless a draft amended pleading was before it.  It is regrettable that this had not been done in the present case which resulted in a total waste of costs and time in the prosecution of this case.

 

 

(Peter Cheung) Justice of Appeal

(Maria Yuen) Justice of Appeal

(William Waung) Judge of the Court of First Instance

 

Mr. Kenny C P Lin and Mr. Paul Yip, instructed by Messrs Y.C. Lee, Pang & Kwok for the Plaintiff in Original Action and the 1^st and 2^nd Defendants in Counterclaim

Mr. Benjamin Chain, instructed by Messrs Alvin Cheng & Rosaline Choy for the 1^st and 2^nd Defendants in Original Action and the Plaintiff in Counterclaim

 

CACV 159/2005

 IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 159 OF 2005

(ON APPEAL FROM HCA NO. 3810 OF 2002)

BETWEEN

	Prosperous Nursing Centre Limited	Plaintiff
	and
	Cheung Yuk Ying	1st Defendant
	Yek Tak International Holdings Limited	2nd Defendant
	(By Original Action)

AND BETWEEN

	Yek Tak International Holdings Limited	Plaintiff
	and
	MAK SIU CHUN	1st Defendant
	Prosperous Nursing Centre Limited	2nd Defendant
	(By Counterclaim)

Before : Hon Cheung JA in Chambers

Date of Hearing : 16 November 2005

Date of Decision : 16 November 2005

 

__________________

D E C I S I O N

__________________

The orders

1. On the fifth day of a trial, Deputy High Court Judge Fung gave the following orders :

1.	leave be granted to the 1st and 2nd defendants (by original action) [i.e. Cheung Yuk Ying (‘Madam Cheung’) and Yek Tak International Holdings Ltd. (‘Yek Tak’)] to add two more defendants, Mr. Wong and Mrs. Wong, the son and daughter-in-law of Madam Mak Siu Chun in the counterclaim [Mak Siu Chun (‘Madam Mak’) is the 1st defendant in the counterclaim];
2.	leave be granted to Madam Cheung and Yek Tak to adjourn sine die the original action and the counterclaim herein, with liberty to any party of the original action and the counterclaim to restore;
3.	trial be declared de novo for the original action and the counterclaim herein;
4.	costs of and occasioned by the amendment, all costs up to today and all costs thrown away (if not included in the costs up to today) be paid forthwith by Madam Cheung and Yek Tak to the plaintiff (by original action) [i.e. Prosperous Nursing Centre Ltd (‘Prosperous’)].

Security for costs of appeal

2. Madam Cheung and Yek Tak lodged an appeal against the orders.  Prosperous now seeks security for costs of the appeal on the ground that Madam Cheung and Yek Tak are impecunious and would be unlikely to pay for the costs of an unsuccessful appeal.

Madam Cheung

3. The evidence that was relied upon against Madam Cheung was that she had applied for legal aid.

4. Her application in fact was rejected by the Legal Aid Department.  In my view it is not necessary to decide whether Madam Cheung is impecunious or not because I would not order security against her in any event.  While there are paragraphs in the Defence and Counterclaim which may suggest that she was also seeking a counterclaim, the prayer confirms that it was only Yek Tak who was seeking a counterclaim.  In the absence of other evidence which may show that when counsel for Madam Cheung and Yek Tak asked for the joinder of the new parties, he was asking for Madam Cheung to be included in the counterclaim as well, then clearly it can be strongly argued that the costs order imposed by the judge should not be made against Madam Cheung.  On the merits of the appeal, I would not order security against her.

Yek Tak

5. As to the position of Yek Tak, it is a limited company with an issued capital of $2.00.  A search of its registered address showed that the premises of the registered address did not belong to Yek Tak. 

6. According to the audited accounts for the year ended 31 March 2003 disclosed by Yek Tak, its principal operation was an old age home which had stopped operation in October 2002.  The retained profit for year ended 31 March 2003 was about $66,000.  There was no other known assets of Yek Tak.  Despite the denial that it is impecunious, Yek Tak has not disclosed its current financial position at all.  In my view from the available evidence an inference can be drawn that Yek Tak is indeed impecunious.

7. It is said that Yek Tak’s impecuniosity was caused by the wrongful act of Madam Mak and Prosperous and by the two newly joined parties and the content of draft Amended Defence and Counterclaim was relied upon in support of this contention.  I should refrain from expressing an opinion on this matter as these are matters contained in the pleadings which the court has not made any adjudication.  

8. As to the merits of the appeal in question if Yek Tak only applied to join two new parties in the middle of a trial, I am not prepared to say that the orders imposed by judge was wholly wrong.

9. In my view Yek Tak should be ordered to pay security in the sum of $120,000.

10. This amount is to be paid into court within 28 days.  In the meantime the appeal is stayed.  In default of payment, the appeal will be dismissed with costs to Prosperous and Madam Mak.

Costs and other orders

11.	1)	Madam Cheung is entitled to the costs of the application.
	2)	As between Prosperous and Yek Tak, the costs of the application will be in the cause of the appeal.
	3)	Leave to Prosperous to withdraw the 2nd Affidavit of Ip Chak Sum Sammy filed on 11 November 2005.
	4)	Costs of and occasioned by the aforesaid Affidavit be to the Madam Cheung and Yek Tak.
	5)	The Summons to adjourn today’s hearing is dismissed with no order as to costs.

(Peter Cheung) Justice of Appeal

Ms Chung La Fontaine, instructed by Messrs Y.C. Lee, Pang & Kwok for the Plaintiff in Original Action and the 2^nd Defendant in Counterclaim

Mr. C.T. Lee, instructed by Messrs Alvin Cheng & Rosaline Choy for the 1^stt and 2^nd Defendants in Original Action and the Plaintiff in Counterclaim.