GRANT THORNTON INTERNATIONAL LTD AND OTHERS v. TANG CHUNG WAH AND ANOTHER

HCCL 17/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMMERCIAL ACTION NO 17 OF 2012

____________

BETWEEN
	GRANT THORNTON INTERNATIONAL LIMITED	1st Plaintiff
	JONATHAN RUSSELL LEONG	2nd Plaintiff
	RINGO CHIU WING CHEUNG	3rd Plaintiff
	ANDREW LAM HUNG YUN	4th Plaintiff
	GARY TERENCE JAMES	5th Plaintiff
	LO NGAI HANG (also known as TONY LO NGAI HANG)	6th Plaintiff
	AU YIU KWAN (also known as ALVIN AU YIU KWAN)	7th Plaintiff
	LI WING YIN (also known as AMOS LI WING YIN)	8th Plaintiff
	NORMAN TWUI KA CHE	9th Plaintiff
and
	TANG CHUNG WAH (also known as ALAN TANG)	1st Defendant
	LEE FUNG YING (also known as ALISON WONG)	2nd Defendant
____________

Before: Hon Ng J in Chambers

Date of Hearing: 13 November 2013

Date of Decision: 11 June 2014

______________

D E C I S I O N

______________

Introduction

1.  The substantive matters before this court were (1) the Plaintiffs’ application to strike out the counterclaim on the ground that it discloses no reasonable cause of action and (2) the Defendants’ application to strike out the 2^nd to 9^th Plaintiffs from these proceedings on the ground that Messrs King & Wood Mallesons (“KWM”) are not duly authorized to issue and conduct these proceedings.

2.  As far as (1) was concerned, Mr Brock informed this court that the Defendants had issued a summons on 7 November 2013 for leave to discontinue the counterclaim and the Plaintiffs were agreeable to paragraphs 1 and 2 of that summons. The only live issue was the question of costs.

3.  Before this court proceeded to deal with either (1) or (2), Mr Cheung, for the Defendants, made an oral application that I ought to recuse myself and that application, by consensus between Mr Brock and Mr Cheung, had to be dealt with first.

4.  This is the court’s decision on the recusal application.

The application

5.  The sole ground of the application was apparent bias which in turn was based on what Mr Cheung described in his skeleton submissions as “past skirmishes” which the Defendants, whilst acting in person, had encountered with this court on previous occasions, including in particular, a hearing which took place on 29 August 2013. The Defendants were said to have developed an acute concern as to whether it was viable for this court to continue presiding over these proceedings.

6.  In an application of this sort, the court applies the reasonable apprehension of bias test ie the court must first ascertain all the circumstances which have a bearing on the suggestion that the judge is biased; it must then ask whether those circumstances would lead a reasonable, fair-minded and well-informed observer to conclude that there is a real possibility that the tribunal would be biased: Re Medicaments and Related Classes of Goods (No.2) [2001] 1 WLR 700; Porter v Magill [2002] 2 AC 357; Deacons v White & Case (2003) 6 HKCFAR 322.

7.  The events which cumulated in the hearing on 29 August 2013 were these.

8.  By a summons dated 10 June 2013, the Plaintiffs applied (i) for summary judgment against the Defendants in the sum of GBP57,500 together with interest, and (ii) to strike out the counterclaim on the ground that it discloses no reasonable cause of action. The sum of GBP57,500 was the subject of a costs order made by Hildyard J of the Chancery Division of the High Court of England & Wales against the Defendants back in November 2012. The summons was returnable on 23 July 2013 at 9:30 am and set down for 15 minutes.

9.  By a summons dated 18 June 2013, the Defendants applied to strike out the 2^nd to 9^th Plaintiffs from these proceedings on the ground that KWM are not duly authorized to issue and conduct these proceedings. The summons was returnable on 29 August 2013 at 9:30 am and set down for 30 minutes.

10.  On 23 July 2013, after hearing Mr Brock for the Plaintiffs and the Defendants appearing in person, this court granted the Plaintiffs’ application for summary judgment in the sum of GBP57,500 together with interest on the ground that the Defendants had failed to show by affidavit or otherwise a defence on the merits.

11.  As there was not enough time to deal with the Plaintiffs’ striking out application, this court adjourned it to be heard together with the Defendants’ striking out application, with two hours reserved. This court specifically asked each of the Defendants whether they had any objection to adjourning the two striking out applications together. They indicated no objection.

12.  On 26 July 2013, the parties were informed that the hearing scheduled on 29 August 2013 had been vacated due to insufficient time and directed to go before the listing clerk to re-fix the hearing of the two striking out applications together. The parties’ representatives went before the listing office on 1 August 2013 and the hearing was re-fixed to 18 September 2013.

13.  On 5 August 2013, the Defendants wrote to this court seeking to re-fix the hearing scheduled for 18 September 2013 on the ground that the 2^nd Defendant would be out of town on that day as she had to attend a business meeting in London. On 12 August 2013, the Defendants were directed to make their application to the court in accordance with the Rules of the High Court or the Practice Directions as appropriate.

14.  On 21 August 2013, the Defendants issued a summons seeking to vacate the hearing date of 18 September 2013. The summons was returnable on 29 August 2013 at 10:00 am and set down for 3 minutes.

15.  At the commencement of the hearing on 29 August 2013, the 2^nd Defendant stood up to address this court that she might not be able to attend the hearing on 18 September 2013 because of her “very important business and family commitment” – she had to go to the UK to attend an international conference and also her youngest daughter was to go to study in the UK for the first time and she had to go with her. The 2^nd Defendant then gave an undertaking to the court that she would definitely be available after October when she came back to Hong Kong and asked this court to protect her interests.

16.  The 1^st Defendant then addressed this court. There was no suggestion that he was not available on 18 September 2013, but upon inquiry from this court, the 1^st Defendant confirmed it was his application too and made submissions accordingly.

17.  Mr Brock, for the Plaintiffs, opposed the application on the ground that the proceedings had been dogged by delays caused by the Defendants. He submitted that it was the 2^nd Defendant’s choice not to be legally represented in these proceedings whereas in other proceedings ie  the bankruptcy proceedings against the Defendants, they were represented by Messrs Joseph Li & Co. He further submitted that this was just another ploy on the part of the Defendants to delay the proceedings. 

18.  In the end, this court made a case management decision to accommodate the 2^nd Defendant’s personal commitments and re-fix the two striking out applications in consultation with the parties’ diaries, with two hours reserved.

19.  This court then heard the parties on costs. Mr Brock asked for costs to be assessed summarily on the basis that the Defendants were seeking an indulgence from this court to vacate a hearing duly given by the listing clerk. The Defendants resisted it and asked for costs from the Plaintiffs. In the end, this court ordered costs be in the cause.

20.  As a result of this court’s order on 29 August 2013, the two striking out applications were further re-fixed to 13 November 2013.

21.  Applying the reasonable apprehension of bias test, I do not consider any reasonable fair-minded and well-informed observer would conclude that there is a real possibility that I would be biased against the Defendants.  

22.  At the hearing on 29 August 2013, the 2^nd Defendant was given the opportunity to address me on her alleged “difficulties” in attending the hearing scheduled for 18 September 2013. The 1^st Defendant, who had no reasonable cause for seeking to vacate the 18 September 2013 hearing, was also given the opportunity to address me in support of what was in substance the 2^nd Defendant’s application.  No complaint was made by either Defendant at the hearing that this court was biased in favour of the Plaintiffs or that they had acute concern about this court’s impartiality in dealing with the application. The application to vacate the September 2013 hearing was decided after considering all the underlying objectives set out in RHC Order 1A. It was more than six weeks later, on 16 October 2013, that the Defendants lodged a complaint to the Chief Judge of the High Court accusing this court of being biased in favour of the Plaintiffs.

23.  As far as previous court hearings were concerned, there were altogether six of them.

24.  On 4 March 2013, this court extended the time for the Plaintiffs to file and serve its Reply and Defence to Counterclaim until the final determination of the Plaintiffs’ summons filed on 19 February 2013.

25.  On 7 March 2013, this court heard the Plaintiffs’ summons filed on 19 February 2013 and

(1) ordered the Defendants to provide to the Plaintiffs an English translation of their Defence and Counterclaim filed herein;

(2) ordered the Defendants to provide to the Plaintiffs an English translation of all further Chinese documents to be filed in court and served by them on the Plaintiffs, at the time of filing and service of the same;

(3) varied the Order this court made on 4 March 2013 such that the time for the Plaintiffs to file their Reply and Defence to Counterclaim was extended to 28 days after the Defendants had provided the English translation of their Defence and Counterclaim to them.

26.  The Defendants failed to provide to the Plaintiffs an English translation of their Defence and Counterclaim within 14 days in accordance with the 7 March 2013 Order. The Plaintiffs applied for an unless order by summons dated 21 March 2013 to compel the Defendants to do so.

27.  On 11 April 2013, this court heard the Plaintiffs’ summons for unless order. The 1^st Defendant was absent, but upon the 2^nd Defendant indicating to this court that she would comply with the 7 March 2013 Order, this court adjourned the Plaintiff’s summons and further extended the time for the Defendants to file and serve an English translation of their Defence and Counterclaim for another 14 days.

28.  The Defendants still failed to comply with the 7 March 2013 Order as extended.

29.  On 29 May 2013, this court, having been satisfied that the Defendants’ failure to comply with the Order made on 7 March 2013 and extended on 11 April 2013 was intentional and contumelious, made an unless order in the following terms:

“Unless the Defendants do within 7 days from today file and serve an English translation of their Defence and Counterclaim dated 4 February 2013, the Defence and Counterclaim be struck out and default judgment be entered in favour of the Plaintiffs in terms of the Statement of Claim herein.”

30.  On 5 June 2013, this court heard four applications by the Defendants:

(1) First, the Defendants’ application by summons dated 20 March 2013 for leave to appeal against the 7 March 2013 Order and stay of execution pending appeal. 

(2) Second, the Defendants’ application by summons dated 13 May 2013 for leave to appeal against this court’s order dated 8 May 2013 whereby a previous costs order nisi made by this court that “costs of and occasioned by the Plaintiffs’ application for an extension of time be to the Defendants” was varied on paper to “costs of and occasioned by the Plaintiffs’ summons dated 22 February 2013 for extension of time to serve their Reply and Defence to Counterclaim, as well as costs of the Plaintiff’s application to vary costs order nisi by summons dated 21 March 2013, be in the cause, to be taxed if not agreed” and stay of execution pending appeal.

(3) Third, the Defendants’ application by summons dated 29 May 2013 for leave to appeal against the Unless Order and stay of execution pending appeal.

(4) Fourth, the Defendants’ application by summons dated 29 May 2013 to compel the Plaintiffs and KWM to submit documentary proof that KWM were duly appointed and authorised by the Plaintiffs prior to the commencement of the present proceedings.

31.  For reasons given in a Decision dated 5 June 2013, this court dismissed all three leave applications and stay applications. This court also dismissed the Defendants’ last-mentioned application by summons dated 29 May 2013 as misconceived.

32.  Lastly, on 23 July 2013, as mentioned in paragraph 10 above, this court granted the Plaintiffs’ application for summary judgment in the sum of GBP57,500 together with interest on the ground that the Defendants had failed to show by affidavit or otherwise a defence on the merits.

33.  Again applying the reasonable apprehension of bias test, I do not consider any reasonable fair-minded and well-informed observer would conclude from this court’s previous decisions that there is a real possibility that I would be biased against the Defendants.  

34.  At all the hearings, each of the Defendants, if they chose to turn up in court, was given the opportunity to address me in the language of their choice. Neither of them complained during or immediately after the hearings about the lack of opportunity to make submissions to this court. Neither of them raised during or immediately after the hearings any concern about this court’s impartiality. The applications before this court were all decided on their merits and strictly in accordance with the law and this court’s powers conferred by the Rules of the High Court.

35.  In the view of this court, a reasonable fair-minded and well‑informed observer would instead conclude the Defendants are litigants disgruntled at not having their way before this court and hope to switch to another judge who may be more sympathetic to their cause. That is not permissible under our legal system.

Disposition

36.  For the above reasons, I would dismiss the recusal application.

(Peter Ng) Judge of the Court of First Instance High Court

Mr Denis Brock, of King & Wood Mallesons, for the plaintiffs

Mr Jeremy Cheung, instructed by Joseph Li & Co, for the defendants

HCCL 17/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMMERCIAL ACTION NO 17 OF 2012

____________

BETWEEN
	GRANT THORNTON INTERNATIONAL	1st Plaintiff
	LIMITED
	JONATHAN RUSSELL LEONG	2nd Plaintiff
	RINGO CHIU WING CHEUNG	3rd Plaintiff
	ANDREW LAM HUNG YUN	4th Plaintiff
	GARY TERENCE JAMES	5th Plaintiff
	LO NGAI HANG	6th Plaintiff
	(also known as TONY LO NGAI HANG)
	AU YIU KWAN	7th Plaintiff
	(also known as ALVIN AU YIU KWAN)
	LI WING YIN	8th Plaintiff
	(also known as AMOS LI WING YIN)
	NORMAN TWUI KA CHE	9th Plaintiff
and
	TANG CHUNG WAH	1st Defendant
	(also known as ALAN TANG)
	LEE FUNG YING	2nd Defendant
	(also known as ALISON WONG)
____________

Before: Hon Ng J in Chambers

Date of Hearing: 5 June 2013

Date of Decision: 5 June 2013

______________

D E C I S I O N

______________

Introduction

1.  On 7 March 2013, after a contested hearing, this court made the following orders (“7 March Order”):

(1) The Defendants do within 14 days from the date hereof provide to the Plaintiffs and file in court an English translation of their Defence and Counterclaim filed herein.

(2) The Defendants do provide to the Plaintiffs and file in court an English translation of all further Chinese documents to be filed in court and served by them on the Plaintiffs.

2.  The Defendants having failed to provide to the Plaintiffs an English translation of their Defence and Counterclaim within 14 days, the Plaintiffs sought an unless order by summons dated 21 March 2013 to compel the Defendants to do so.

3.  The summons came before this court on 11 April 2013. The 1^st Defendant did not turn up. The 2^nd Defendant did, and told this court she would comply with the 7 March Order. On that basis, this court adjourned the Plaintiff’s summons for unless order, and further extended the time for the Defendants to file and serve an English translation of their Defence and Counterclaim for another 14 days (“11 April Order”).

4.  The Defendants still failed to provide to the Plaintiffs an English translation of their Defence and Counterclaim. The summons for unless order was restored before this court on 29 May 2013. On that occasion, having heard both Defendants in person and having concluded that the Defendants’ failure to comply with the 7 March and 11 April Orders were intentional and contumelious, this court made an unless order (“Unless Order”) in the following terms:

“Unless the Defendants do within 7 days from today file and serve an English translation of their Defence and Counterclaim dated 4 February 2013, the Defence and Counterclaim be struck out and default judgment be entered in favour of the Plaintiffs in terms of the Statement of Claim herein.”

The applications

5.  This is the fifth time within the last 3 months that the parties have come before this Court. This time, there are four applications, all by the Defendants.

6.  First, the Defendants’ application by summons dated 20 March 2013 for leave to appeal against the 7 March Order and stay of execution pending appeal.

7.  In that summons, the Defendants also asked this court to deal with the Plaintiff’s application to vary the costs order nisi this court made on the Plaintiffs’ summons dated 22 February 2013 for extension of time to file their Reply and Defence to Counterclaim (“Variation of Costs”). The order nisi was that “costs of and occasioned by the Plaintiffs’ application for an extension of time be to the Defendants”.

8.  This matter, however, has already been overtaken by event. At the hearing on 11 April 2013, this court indicated to the parties present that it would deal with Variation of Costs on paper and gave directions for filing of skeleton submissions. The Plaintiffs filed their skeleton submissions on 16 April 2013. The Defendants failed to file any. On 8 May 2013, this court did vary the costs order nisi on paper to “costs of and occasioned by the Plaintiffs’ summons dated 22 February 2013 for extension of time to serve their Reply and Defence to Counterclaim, as well as costs of the Plaintiff’s application to vary costs order nisi by summons dated 21 March 2013, be in the cause, to be taxed if not agreed” (“Costs Order”).

9.  Second, the Defendants’ application by summons dated 13 May 2013 for leave to appeal against the Costs Order and stay of execution pending appeal.

10.  Third, the Defendants’ application by summons dated 29 May 2013 for leave to appeal against the Unless Order and stay of execution pending appeal.

11.  Fourth, the Defendants’ application by summons dated 29 May 2013 to compel the Plaintiffs and their solicitors to submit documentary proof that the solicitors were duly appointed and authorised by the Plaintiffs prior to the commencement of the present proceedings.

12.  Despite the 2^nd part of the 7 March Order, the Defendants have failed to provide to the Plaintiffs or file in court an English translation of any of the four summonses which are in Chinese. The Defendants’ conduct is nothing short of intentional and contumelious.

Leave to appeal

13.  The three leave applications can be dealt with together.

14.  Under section 14AA(4) of the High Court Ordinance, Cap 4, leave to appeal shall not be granted unless the court is satisfied that the appeal has a reasonable prospect of success or there is some other reason in the interests of justice why the appeal should be heard.

15.  Reasonable prospects of success as envisaged by the section involve the notion that the prospects of succeeding must be reasonable and therefore more than fanciful, without having to be probable: SMSE v KL [2009] 4 HKLRD 125 at §17.

16.  As far as the 7 March Order is concerned, I have considered the Reasons for Decision handed down on 11 March 2013 and each of the Defendants’ grounds of appeal. Grounds 1 to 3 are based on the Defendants’ allegation that the Plaintiffs’ solicitors were and are not duly authorised to commence and conduct the present proceedings. The allegation is unsubstantiated by evidence. In relation to grounds 4 to 10, I wish to reiterate that the 7 March Order was made upon the Plaintiffs’ application, not on my own motion. The legal basis of the Order was not just section 4 of the High Court Civil Procedure (Use of Language) Rules, Cap. 5C, but also the court’s general case management power conferred by RHC O 1B r 1: see para. 29 of the Reasons for Decision dated 11 March 2013. In my judgment, none of the grounds of appeal have any reasonable prospects of success.

17.  As far as the Costs Order is concerned, it is well‑established that the court has a wide discretion in relation to costs. For interlocutory applications, the principle that costs should follow the event is no longer the prescribed usual order, but just an option, and the court can take into account inter alia the underlying objectives of the Rules of the High Court and the conduct of the parties in determining costs: Hong Kong Civil Procedure 2013 para. 62/0/2; RHC O 62 r 3(2A).

18.  Even for applications to extend time, the court has power not to order costs to be borne by the party making the application: Hong Kong Civil Procedure 2013 para. 62/3/3; RHC O 62 r 3(4). 

19.  In the present case, the court has considered and accepted the Plaintiffs’ written submissions filed on 16 April 2013, in particular, those concerning the Defendants’ conduct, before making the Costs Order. The Defendants have chosen not to put in written submissions on Variation of Costs, despite clear directions by this court at the hearing on 11 April 2013. Although the 1^st Defendant was not present at that hearing, the 2^nd Defendant was. It stands to reason that, in all probability, the 2^nd Defendant would have informed the 1^st Defendant of the directions this court made. If not, then the only reasonable inference is that the 1^st Defendant deliberately chose not to ask her.  In my judgment, none of the 10 grounds of appeal have any reasonable prospects of success.

20.  In relation to the Unless Order, I have reviewed the Defendants’ grounds of appeal ie this court has failed to fully consider the 1^st Defendant’s submissions at the hearing, and the Unless Order has directly affected and obstructed the Defendants’ application for leave to appeal the 7 March Order and rendered it meaningless. In my judgment, neither ground has any reasonable prospects of success.

21.  Lastly, in all three cases, the Defendants have failed to demonstrate the existence of some other reason in the interests of justice why the appeal should be heard.

22.  Leave to appeal is refused in all three cases.

Stay of execution

23.  The starting point is RHC Order 59 rule 13(1):

“Except so far as the court below or the Court of Appeal or a single judge may otherwise direct—

(a) an appeal shall not operate as a stay of execution or of proceedings under the decision of the court below;

(b) no intermediate act or proceeding shall be invalidated by an appeal.”

24.  In other words, unless the Defendants can justify a stay of execution, one will not be ordered.  Justification can exist in various forms. The two factors commonly referred to in stay applications are: (1) whether the absence of a stay would render an appeal nugatory, and (2) the merits of the appeal.

25.  On these two factors, Ma J (as he then was) made the following detailed observations in Star Play Development Ltd v Bess Fashion Management Co Ltd. [2007] 5 HKC 84, 87-9:

“(1) In determining the question whether or not an appeal would be rendered nugatory, the court must of course first have regard to the nature of the order that is the subject matter of the appeal. If the order appealed against is a money judgment, the court will require evidence as to why the levying of execution will result in the appeal being rendered nugatory, such as, for example, an appreciable risk that the respondent to the appeal would not be able to repay in the event of a successful appeal. Sometimes, though, the nature of the order will by itself almost be determinative of the question. Where the relevant order is, for example, an injunction (and particularly so if it is a mandatory injunction), it may well be that, without a stay, an appeal would be rendered nugatory in the event of a successful appeal…

(2) That said, whatever the nature of the order or judgment appealed from, the court will still require evidence as to why an appeal will be rendered nugatory in the event of a stay not being granted. The requisite quality of the evidence will, of course, depend on the nature of the order or judgment appealed against…

…

(4) An appeal being rendered nugatory does not mean in all cases that without a stay, the appellant faces financial ruin or the loss of all his property. Demonstrating that the failure to grant a stay would have a serious deleterious effect is enough: see Caine Tai Investment Company Limited v Ayala International Finance Limited [1983] 1 HKC 163, a decision of the Court of Appeal which made reference to Wilson v. Church (No.2) [1879] 12 Ch. D. 454.

(5) How relevant then is the court’s consideration of the merits or strength of the appeal? In my view, while it is impractical and even undesirable for the court in dealing with an application for a stay of execution, to go deeply into the merits and strengths of an appeal, it must however form a preliminary view of these aspects. This I believe to be an inevitable consequence of the starting point I have earlier mentioned in referring to RHC Order 59, rule 13(1).

(6) The existence of merely an arguable appeal cannot by itself amount to sufficient reason to justify a stay. It can be put this way: the existence of an arguable appeal (that is, one with reasonable prospects of success) is the minimum requirement before a court would even consider granting a stay. In other words, however exceptional the circumstances may be otherwise justifying a stay of execution, if the court is not convinced that there exist arguable grounds of appeal, no stay will be granted.” (emphasis added)

26.  As I said earlier, none of the grounds in the three proposed appeals have any reasonable prospects of success. That is, the Defendants have failed to satisfy even the minimum requirement before a court would consider granting a stay of execution.

27.  Further, in my view, even in the absence of a stay, the three proposed appeals would not be rendered nugatory.

28.  This is obviously so with the appeal against the Costs Order. Since the order is costs in the cause, it is not capable of immediate execution. As for the 7 March Order and the Unless Order, the Court of Appeal is quite capable of making appropriate consequential orders, should they decide to allow the appeals. If the Defendants have incurred costs in preparing an English translation of their Defence and Counterclaim, they can be compensated for if they succeed in their appeals.There is hardly any serious deleterious effect on the Defendants even if a stay of execution is not granted.

29.  All three stay applications are refused.

Proof of Authority of the Plaintiffs’ solicitors

30.  The Defendants have, in their Defence and Counterclaim, alleged that the Plaintiffs’ solicitors were not duly authorised to commence and conduct the present proceedings. As I said earlier, the allegation is unsubstantiated by evidence. This court asked the 1^st Defendant at the hearing what proof he had that the Plaintiffs’ solicitors were not duly authorised to institute the present proceedings. The answer was he had no “positive proof” ie a document or affidavit from any of the Plaintiffs that they have not authorised the solicitors in question to commence the present proceedings.

31.  The 1^st Defendant said, however, he had “negative proof”, referring this court to two emails he sent to some of the Plaintiffs on 25 March and 30 May this year. The emails referred to the present proceedings and the allegation that the Plaintiffs’ solicitors were not duly authorised. The 1^st Defendant did not receive any reply to his emails. As far as the evidence before this court shows, the emails did not provoke any response from any of the Plaintiffs recipients. I accept Mr Brock’s point that the Plaintiffs recipients would likely be extremely upset if they found out their names had been misused in the present proceedings without their proper authority and consent. In my view, the emails are not proof of the Defendants’ allegation – they are proof of the opposite.

32.  Further, despite being asked by this court at the hearing, the Defendants have not been able to explain the legal basis of their application. In the summons, the application was purportedly brought under RHC O 59 r 2B which clearly does not support the application.

33.  In my view, if a defendant challenges the lawfulness of legal proceedings on the ground that they have been issued and conducted without authority of the plaintiff, the proper way to do so is by applying to strike out the Plaintiff’s name under the inherent jurisdiction of the court and dismiss the action: Airways Ltd v Bowen [1985] BCLC 355; Kammy Town Limited v Super Glory Corp. Ltd. unrep. HCA 3524 of 2003; 14 January 2005; Hon. A Cheung J (as he then was). It is not for a plaintiff and/or its solicitors to disclose privileged materials, such as a retainer, in order to satisfy a defendant every time the latter chooses to challenge the lawfulness of the legal proceedings.

34.  The application is misconceived and I would dismiss it as well.

[submissions on costs]

35.  I order the costs of and occasioned by the four summonses be to the Plaintiffs, to be summarily assessed on paper. The Defendants are directed to file and serve their comment on the Plaintiffs’ statement of costs or list of objections within 3 days from the date hereof. The 2^nd Defendant is directed to inform the 1^st Defendant of this direction on summary assessment of costs.

	(Peter Ng) Judge of the Court of First Instance
	High Court

 

Mr Denis Brock, of King & Wood Mallesons, for the plaintiffs

The 1^st defendant appeared in person in the morning of 5 June 2013

The 2^nd defendant appeared in person

HCCL 17/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMMERCIAL ACTION NO 17 OF 2012

____________

BETWEEN
	GRANT THORNTON INTERNATIONAL	1st Plaintiff
	LIMITED
	JONATHAN RUSSELL LEONG	2nd Plaintiff
	RINGO CHIU WING CHEUNG	3rd Plaintiff
	ANDREW LAM HUNG YUN	4th Plaintiff
	GARY TERENCE JAMES	5th Plaintiff
	LO NGAI HANG	6th Plaintiff
	(also known as TONY LO NGAI HANG)
	AU YIU KWAN	7th Plaintiff
	(also known as ALVIN AU YIU KWAN)
	LI WING YIN	8th Plaintiff
	(also known as AMOS LI WING YIN)
	NORMAN TWUI KA CHE	9th Plaintiff
and
	TANG CHUNG WAH	1st Defendant
	(also known as ALAN TANG)
	LEE FUNG YING	2nd Defendant
	(also known as ALISON WONG)
____________

Before: Hon Ng J in Chambers

Date of Hearing: 29 May 2013

Date of Decision: 29 May 2013

______________

D E C I S I O N

______________

1.  This is the adjourned hearing of an application for an unless order by the Plaintiffs against the two Defendants.

2.  On 7 March 2013, after a contested hearing, this court ordered the Defendants to inter alia serve on the Plaintiffs and file in court an English translation of their Defence and Counterclaim dated 4 February 2013 within 14 days. This court handed down its reasons on 11 March 2013.

3.  The Defendants having failed to comply with the order, the Plaintiffs issued a summons on 21 March 2013 seeking an unless order against the Defendants.

4.  The matter first came before this court on 11 April 2013. The 1^st Defendant did not turn up. The 2^nd Defendant did, and told this court she would comply with the order of 7 March 2013. On that basis, this court adjourned the Plaintiff’s summons for unless order, and further extended the time for the Defendants to file and serve an English translation of their Defence and Counterclaim for another 14 days.

5.  Today is 29 May 2013, almost 3 months since this court made the order on 7 March 2013. The English translation is still not forthcoming.

6.  The Statement of Claim is a two-page document. The Plaintiffs’ claim is for GBP57,500, being costs ordered against the Defendants and summarily assessed by a court in the Chancery Division of the High Court of England and Wales. The proceedings were initiated by the Defendants.

7.  As I said in my reasons handed down on 11 March 2013, the Defendants are educated professionals conversant with both the Chinese and English languages. The Defence and Counterclaim in this action is also a two-page document. I have little doubt that if they choose to, the Defendants themselves would be able to translate the document into English. If they prefer external translation services, the expenses are unlikely to be substantial.

8.  Court orders are to be complied with, whether or not there is a pending appeal against it. The public interest in the proper administration of justice clearly requires that to be so. If people are free to comply with or ignore court orders, the entire judicial system will collapse.

9.  There is no doubt in my mind that the Defendants’ failure to comply with the court orders made on 7 March 2013 and 11 April 2013 are intentional and contumelious.

10.  I am satisfied that this is a proper case to make an unless order. The order that I am going to make is that

“Unless the Defendants do within 7 days from today file and serve an English translation of their Defence and Counterclaim dated 4 February 2013, the Defence and Counterclaim be struck out and default judgment be entered in favour of the Plaintiffs in terms of the Statement of Claim herein.”

11.  I also order that the costs of the Summons for unless order be to the Plaintiffs, including the hearings on 11 April 2013 and today, summarily assessed at HK$21,000.

	(Peter Ng) Judge of the Court of First Instance
	High Court

 

Ms Amanda Beattie, of King & Wood Mallesons, for the plaintiffs

The 1^st defendant appeared in person

The 2^nd defendant appeared in person

Please refer to CACV193/2013 for the relevant appeal(s) to the Court of Appeal.

HCCL 17/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMMERCIAL ACTION NO 17 OF 2012

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BETWEEN

(1)	GRANT THORNTON INTERNATIONAL LIMITED	1st Plaintiff
(2)	JONATHAN RUSSELL LEONG	2nd Plaintiff
(3)	RINGO CHIU WING CHEUNG	3rd Plaintiff
(4)	ANDREW LAM HUNG YUN	4th Plaintiff
(5)	GARY TERENCE JAMES	5th Plaintiff
(6)	LO NGAI HANG (aka TONY LO NGAI HANG)	6th Plaintiff
(7)	AU YIU KWAN (aka ALVIN AU YIU KWAN)	7th Plaintiff
(8)	LI WING YIN (aka AMOS LI WING YIN)	8th Plaintiff
(9)	NORMAN TWUI KA CHE	9th Plaintiff
and
(1)	TANG CHUNG WAH (aka ALAN TANG)	1st Defendant
(2)	LEE FUNG YING (aka ALISON WONG)	2nd Defendant

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Before: Hon Ng J in Chambers

Date of Hearing: 7 March 2013

Date of Decision: 7 March 2013

Date of Reasons for Decision: 11 March 2013

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REASONS FOR DECISION

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Introduction

1.  At the conclusion of the hearing on 7 March 2013, I made the following orders:

(1)     The Defendants do within 14 days from the date hereof provide to the Plaintiffs and file in court an English translation of their Defence and Counterclaim filed herein.

(2)     The Defendants do provide to the Plaintiffs and file in court an English translation of all further Chinese documents to be filed in court herein and served by them on the Plaintiffs.

2.  In consequence of the order at paragraph 1(1) above, I also varied an Order I made in this action on 4 March 2013 such that the time for the Plaintiffs to file their Reply and Defence to Counterclaim was extended to 28 days after the Defendants had provided the English translation of their Defence and Counterclaim to them.

3.  I told the parties I would hand down my reasons shortly, which I now do.

The Application

4.  This is an application by the Plaintiffs under Section 5(4) of the High Court Civil Procedure (Use of Language) Rules Cap 5C (“the Rules”) for an order that:

a.  the Defendants do within 7 days produce a certified  translation in the English language of their Defence and Counterclaim on  the ground that the 1^st Plaintiff, an English limited company, is not familiar with the Chinese language;

b.  every document to be served by the Defendants on the Plaintiffs be in the English language.

5.  The Defendants oppose the application.

6.  On 4 February 2013, the Defendants filed and served a Defence and Counterclaim in the Chinese language. On the same day, the Plaintiffs’ solicitors made a written request to the Defendants for a certified English translation of it.

7.  The Defendants did not reply within 3 days, as required by Section 5(3) of the Rules.

8.  Instead, by a letter in Chinese dated 15 February 2013, the Defendants asked the Plaintiffs’ solicitors, inter alia, to identify the “Requesting party” in their earlier letter. The Plaintiffs filed the summons for the present application on 19 February 2013. On 20 February 2013, the Plaintiffs’ solicitors informed the Defendants that it was the 1^st Plaintiff which was not familiar with the Chinese language. By a letter in Chinese dated 1 March 2013, the Defendants informed the Plaintiffs’ solicitors that they would not provide the requested English translation.

9.  The evidence originally filed in support of the application consisted of an affidavit of Amanda Joy Beattie of the firm King & Wood Mallesons, the Plaintiffs’ solicitors. The gist of that affidavit was that the 1^st Plaintiff was a private company incorporated in England and Wales and the firm took instructions from Mr Daniel Harry Lichtenstein, the General Counsel of the 1^st Plaintiff, who was not familiar with the Chinese language. On the other hand, both Defendants were familiar with the English language.

10.  Then, on 5 March 2013, the Plaintiffs filed an affidavit of Gary Terence James, the 5^th Plaintiff herein, in further support of the application. The gist of Mr James’ evidence was that he himself, like Mr Lichtenstein, was a native English speaker and not familiar with the Chinese language. Again, he emphasised that both Defendants were formerly partners at Grant Thornton until the partnership changed its name to JBPB & Co and were familiar with the English language.

11.  This court has no reason to doubt the evidence of Ms Beattie or Mr James. Nor does this court doubt the Defendants are educated professionals conversant with both the Chinese and English languages.

12.  In considering this application, the starting point is that both the Chinese and English languages are official languages of Hong Kong for the purposes of inter alia court proceedings. Both languages possess equal status and enjoy equality of use: section 3 Official Languages Ordinance, Cap 5.

13.  Section 5 of the Rules provides that:

“(1) A party to any proceedings who-

(a) is served with a document in an official language with which he is not familiar; and

(b) is familiar with the other official language,

may request the party to the proceedings serving the document to provide him a translation of the document in the other official language.

(2) A request under subrule (1) shall be made-

(a) in writing; and

(b) within 3 days after the service of the relevant document.

(3) A requested party shall-

(a) notify in writing the requesting party within 3 days after receiving the request that-

(i) he will provide the translation as requested; or

(ii) he will not provide the translation;

(b) where he notifies the requesting party that he will provide the translation, provide the translation to the requesting party within a reasonable period of time.

(4) Where a requesting party-

(a) is not notified under subrule (3)(a);

(b) is notified under subrule (3)(a)(ii) that the requested party will not provide the translation…

he may apply to the Court for an order that the requested party shall provide the relevant translation to him.

(5) Upon an application under subrule (4), the Court may –

(a) order the requested party to provide the relevant translation to the requesting party within such period of time as the Court thinks fit if it is satisfied that the relevant request is reasonable;

(b) order that every document to be served by the requested party to the requesting party for the purposes of the relevant proceedings after the date of the order shall either-

(i) be in the official language with which the requesting party is familiar; or

(ii) be in the official language with which the requesting party is not familiar and accompanied by a translation of the document in the other official language; and

(c)   make such order as to the costs of and incidental to the application as it thinks just.”

14.  Notwithstanding section 7 of the Interpretation and General Clauses Ordinance, Cap 1[1], this court doubts whether the legislature, when enacting section 5 of the Rules, intended that it should cover not just natural persons but also legal entities like a limited company. It seems to this court rather unnatural to speak of a company’s familiarity or otherwise of a particular language. But the point has not been fully argued and in any event it is not necessary to come to a concluded view on this question for the purpose of disposing of the present application.

15.  Assuming that Section 5 is intended to cover corporations, in order for the 1^st Plaintiff to be entitled to make a valid request for English translation of the Defence and Counterclaim, it has to show that it is not familiar with the Chinese language but is familiar with the other official language ie English.

16.  In my view, the fact that the 1^st Plaintiff is a private company incorporated in England and Wales is hardly evidence that it is not familiar with the Chinese language. The fact that one person within the 1^st Plaintiff’s organisation ie Mr Lichtenstein is not familiar with the Chinese language does not take the matter significantly further. All corporations conduct their business by their directors, employees and agents. If one or more of the 1^st Plaintiff’s directors, employees or agents are sufficiently familiar with the Chinese language and are reasonably available to be deployed for the purpose of these proceedings, that would in my view be sufficient to take it out of the ambit of Section 5(1).

17.  In the present case, the 1^st Plaintiff did not attempt to establish by evidence that none of their directors employees and agents are familiar with the Chinese language and Mr Brock for the Plaintiffs, advisedly, did not purport to make a submission to that effect before this court.

18.  What is more, the Plaintiffs are represented in these proceedings by an established firm of solicitors. In legal parlance, the firm is the agent of the Plaintiffs for the purpose of these proceedings. This court does not think for a moment that, as a firm of solicitors operating in Hong Kong, it would deny being familiar with both official languages of Hong Kong.  If so, it means that by virtue of the language capability of its agent, the 1^st Plaintiff cannot be regarded as unfamiliar with the Chinese language for the present purpose.

19.  For these reasons, I rule that the 1^st Plaintiff has failed to establish to the satisfaction of this court that it was entitled to make a request under Section 5(1) of the Rules for an English translation of the Defence and Counterclaim on 4 February 2013. It follows that the 1^st Plaintiff was not entitled to make the present application under Section 5(4) of the Rules.  Nor for that matter any of the other Plaintiffs as they had not made a request within three days.

20.  In so far as the Plaintiffs seek to reinforce the present application by the affidavit of the 5^th Plaintiff, Mr James, the short answers are that firstly, it was the 1^st Plaintiff, not Mr James, which made the request for the English translation of the Defence and Counterclaim within three days after the service of the document, and secondly, by virtue of the language capability of his solicitors, the 5^th Plaintiff also fails to establish that he is unfamiliar with the Chinese language for the present purpose. In any event, even disregarding the said difficulties with Sections 5(1) and 5(4) of the Rules, the Plaintiffs still have to satisfy the court that their request is reasonable, in accordance with the terms of Section 5(5)(a) of the Rules. In the present case, in view of the fact that the Plaintiffs are legally represented and in view of the language capability of their solicitors, this court would not regard the request as reasonable  and would not make any order under Section 5(5)(a) or (b) of the Rules.

21.  That is not the end of the matter.

22.  Section 4(1) of the Rules provides that any document which is required by any Ordinance[2] to be filed in the Court or served on any person for the purposes of any proceedings may be in either of the official languages. Section 4(2) of the Rules however empowers a judge to direct a party who has filed a document in one of the official languages to file a translation of it in the other official language.

23.  It is clear from Section 4(1) of the Rules the Defendants are entitled to file and serve any court documents in Chinese. Unless an exceptionally strong case can be made out, this court would not deprive them of the liberty to file a document in these proceedings in the official language of their choice. No such case has been made out. This court would, also for this reason, refuse the Plaintiffs’ application for a direction that every document to be served by the Defendants on the Plaintiffs be in the English language.

24.  As a matter of good case management of the court system and, more importantly, for the purpose of a just and expeditious disposal of this action, I consider it proper and legitimate to direct the Defendants to provide an English translation of their Defence and Counterclaim as well as all further Chinese documents to be filed in court and served by them on the Plaintiffs. Further, I consider that such a direction would not impose an undue burden on the Defendants.

25.  In this regard, I have derived considerable assistance from Cheung Kong Holdings Ltd v Chan Wai Yip Albert [2000] 4 HKC 591. At p 595, Waung J observed that:

“…as a matter of good case management of the court system, where cases can go to various judges (some who are not bilingual) from time to time, as well as for the proper joining and clarification of issues, English translations of these important statements should be ordered. Translations, very often, would highlight the crucial differences between the parties especially when there is a dispute, and translations would allow the court system to operate smoothly so that any judge (whether bilingual or not) taking up the matter at the interlocutory stage would be able to quickly deal with it….”

26.  The same consideration applies in the present case.

27.  As far as undue burden is concerned, on the evidence, it seems to this court quite clear that the Defendants are conversant with both the Chinese and English languages. The Defence and Counterclaim is a two‑page document. If they choose to, the Defendants are quite capable of translating the document into English themselves. If they prefer external translation services, the expenses are unlikely to be substantial. As for the further Chinese documents to be filed and served by them, if any, the Defendants are to a large extent in control of the amount of paperwork they choose to generate for the purpose of these proceedings. They also have a choice of the language they are going to use. 

Costs Order nisi

28.  As far as the present application is concerned, the Plaintiffs have failed to establish a proper basis for their request under Section 5(1) or their application under Section 5(4) of the Rules. It is only fair that they should not have the costs of the application.

29.  While the end result is that the Defendants will have to provide the English translation of the Defence and Counterclaim, as well as any further Chinese documents to be filed and served by them, this is by virtue of the court’s case management power as well as the power conferred on this court by Section 4 of the Rules.

30.  In these circumstances, it seems to this court appropriate to make an order nisi that the costs of and occasioned by the application be in the cause.

31.  On 4 March 2013, this court granted the Plaintiffs an extension of time to file their Reply and Defence to Counterclaim but reserved costs until the conclusion of the present application.

32.  Since the Plaintiffs were seeking an indulgence from the court, I make an order nisi that the costs of and occasioned by the Plaintiffs’ application for an extension of time be to the Defendants.

	(Peter Ng) Judge of the Court of First Instance
	High Court

 

Mr Denis Brock, of King & Wood Mallesons, for the plaintiffs

The 1^st defendant appeared in person

The 2^nd defendant appeared in person

Please refer to HCMP1510/2013 for the relevant appeal(s) to the Court of Appeal.