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CACV 320/2018
[2019] HKCA 402
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF APPEAL
CIVIL APPEAL NO 320 OF 2018
(ON APPEAL FROM HCA NO 2448 OF 2014)
________________________
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BETWEEN
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CHINA MEDICAL TECHNOLOGIES, INC.
(In liquidation)
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Plaintiff |
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and |
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BANK OF CHINA (HONG KONG) LIMITED |
Defendant |
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| Before: Hon Lam VP, Cheung JA and Kwan JA in Court |
| Date of Hearing: 22 March 2019 |
| Date of Judgment: 22 March 2019 |
| Date of Reasons for Judgment: 2 April 2019 |
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REASONS FOR JUDGMENT
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Hon Lam VP:
1. I respectfully agree with the reasons given by Kwan JA for the dismissal of the appeal. Notwithstanding the direction of Au‑Yeung J given on 13 July 2018 that no leave is required, we granted leave to appeal pursuant to Section 14AA of the High Court Ordinance at the beginning of the hearing. To understand the grant of leave, I need to set out briefly the relevant chronology concerning the question of leave.
2. Shortly after the decision of Au‑Yeung J of 20 June 2018, the Plaintiff decided to appeal against the same. On 29 June 2018, solicitors for the Plaintiff wrote to the judge informing her that they regarded the case as falling within Order 59 Rule 21(3) and thus leave to appeal was not needed. For the avoidance of doubt, they sought a direction from the judge to confirm that position.
3. As the judge did not give any direction before the expiration of the prescribed period for application for leave, the solicitors took out a summons seeking leave on 4 July 2018 returnable on 31 August 2018.
4. On 4 July 2018, the judge replied by indicating that subject to arguments from the Defendant it appeared that no leave to appeal was required.
5. The judge was also mindful that if no leave was required the appeal period would expire on 18 July 2018, the judge gave directions on 12 July 2018 to expedite the processing of the summons of 4 July 2018 prescribing that the Defendant to lodge their submissions by noon on 13 July 2018.
6. On 13 July 2018, solicitors for the Defendant wrote to inform the judge as follows,
“We confirm on behalf of the Defendant that it does not take any issue in respect of whether leave is required for the Plaintiff to appeal against the Judgment, and has no objection to an order that the Plaintiff shall have leave to withdraw the Leave Summons with no order as to costs.”
7. In light of the stance adopted by the Defendant, the judge directed on 13 July 2018,
“No leave to appeal is required. Leave to the Plaintiff to withdraw the Leave Summons with no order as to costs.”
8. The Plaintiff brought the appeal by serving the notice of appeal on 18 July 2018.
9. Since the directions of 13 July 2018 and the history leading to the making of such directions were included in the appeal court file, the question of leave was brought up again by Lam V‑P on 20 February 2019. Parties were invited to include submissions on the requirement of leave under Section 14AA of the High Court Ordinance in their submissions in the appeal.
10. In a letter of 27 February 2019, solicitors for the Defendant advanced the submission that leave was required and it was a matter which went to the jurisdiction to entertain the appeal. They indicated that they were prepared to address the question of leave in advance of the hearing of the appeal and invited the Court to rule on the issue on the papers. There was however, no reference to the directions of 13 July 2018 in that letter.
11. The Plaintiff was silent on the question of leave and did not bring to the Court’s attention of the directions of 13 July 2018. Lam V‑P therefore gave direction on 1 March 2019 requiring the Plaintiff to indicate its position on Section 14AA leave by 5 March 2019. References were also made to some recent cases.
12. On 5 March 2019, solicitors for the Plaintiff wrote a 3‑page letter setting out their position regarding Section 14AA leave. Their primary position was that leave was not required and the case fell within Order 59 Rule 21(1)(a). They also alluded to the history leading to the directions of 13 July 2018 and the absence of challenge to those directions by the Defendant. The solicitor also submitted that the recent cases were distinguishable.
13. After reading these correspondence, the Court made a direction on 7 March 2019 that in light of the directions of 13 July 2018, the Plaintiff was not required to seek leave to appeal.
14. On 8 March 2019, solicitors for the Defendant wrote to the Court attaching a substantive set of submissions on jurisdiction signed by Mr Huggins SC, Mr Khaw SC and Ms Cheng (which addressed the question of leave). They informed the Court that the Plaintiff had actually issued and served a fresh writ in a new action including the same substantive claims. They invited the Court to reconsider the question of leave as it is a matter of general importance and counsel felt duty‑bound to draw the Court’s attention to some authorities and material facts on the issue.
15. On 15 March 2019, the Court received a set of reply submissions from Ms Chan SC and Mr Tang, counsel for the Plaintiff. Paragraphs 1 to 5 of that set of submissions replied to the submissions on jurisdiction.
16. Having considered the submissions of counsel, we accepted that there are issues of general importance which should be addressed in connection with the question of leave. For this reason, we should and did reconsider this question in the context of this appeal before we decided, as announced at the hearing, to grant leave to appeal. We are grateful for the assistance of counsel in this respect.
17. We agree with Mr Huggins that the directions of the judge of 13 July 2018 cannot bind this Court. The requirement of leave, being a matter which goes to the jurisdiction of this Court in entertaining an appeal, has to be addressed by us if we have doubts notwithstanding that a direction had already been given and the parties did not take step to challenge the direction, see Ho Kang Yau v Ho Chun Wing [2011] 3 HKLRD 491; Kwan Chui Kwok Ying v Tao Wai Chun [2008] 2 HKLRD 63; White v Brunton [1984] 2 All ER 606.
18. In the present appeal, the issue of leave requirement was raised by the Court on 20 February 2019. It is a point of jurisdiction which must be addressed notwithstanding the directions of the judge.
19. Thus, we reject Ms Chan’s submissions that the Court should not entertain Mr Huggins’ submissions on leave in view of the lack of challenge brought by the Defendant against the directions of 13 July 2018. However, as explained below, such lack of challenge is relevant in this Court’s consideration if leave should be granted after deciding leave is necessary.
20. We respectfully differ from the judge on the need to seek leave. We note that the judge did not have the benefit of the assistance of counsel and the recent authorities on the question when she gave the directions o 13 July 2018. The proper approach for deciding if leave is required has recently been discussed by another division of this Court in Bright Shipping Ltd v Changhong Group (HK) Ltd [2019] HKCA 246. In that case, it was held that the proper approach to determine if an appeal is final or interlocutory is the application approach explained in B + B Construction Ltd v Sun Alliance & London Insurance (2000) 3 HKCFAR 503 and Shell Hong Kong Ltd v Yeung Wai Man Kiu Yip Co Ltd (2003) 6 HKCFAR 222. An appeal brought against a judgment which did not finally determine an issue on the substantive rights between the parties is an interlocutory appeal, for which Section 14AA leave is required.
21. In that judgment, references were made to some cases where it was decided that decisions on service outside jurisdiction and stay of action on the ground of forum non conveniens were interlocutory decisions. This was so notwithstanding that such decisions had the practical effect of debarring further proceedings in the actions.
22. Another instance of decision having similar effect is a decision to refuse to extend time. Kwok Cheuk Kin v Leung Chun Ying [2018] 4 HKC 440 concerned a refusal to extend time for an application for judicial review and the application was dismissed as a result. The Court of Appeal held in that case that the decision was interlocutory and Section 14AA leave had to be obtained before an appeal could be entertained. At [38] to [39] of that judgment, the Court held that Order 59 Rule 21(1)(a) did not apply to such decision because it did not determine the substantive right of an applicant though it has the collateral effect of preventing an applicant from proceeding further with the application.
23. The same analysis is applicable to the subject decision in the present appeal. The setting aside of an order extending the validity of writ by the judge did not determine finally any issue on the substantive rights between the parties. Order 59 Rule 21(1)(a) is not applicable to this decision and on the application approach it is an interlocutory decision. Thus, notwithstanding the collateral effect of such decision is that the action had to be dismissed (as in the case of Kwok Cheuk Kin), the Plaintiff should obtain leave under Section 14AA before the appeal can be entertained.
24. It was therefore necessary for us to consider if leave should be granted in the present context.
25. I have set out the developments since the decision of 20 June 2018 leading to our consideration of Section 14AA leave. In light of the directions of 13 July 2018, the stances adopted by the parties since then and the imminence of...
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