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Safe Castle Ltd v China Silver Asset Management (Hong Kong) Ltd

Judgment Cited authorities 2 Cited in Precedent Map Related
Vincent
Judgment Date09 July 2021
Neutral Citation[2021] HKCA 983
Judgement NumberCACV69/2020
Subject MatterCivil Appeal
CourtCourt of Appeal (Hong Kong)
CACV69A/2020 SAFE CASTLE LTD v. CHINA SILVER ASSET MANAGEMENT (HONG KONG) LTD

CACV 69/2020

[2021] HKCA 983

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 69 OF 2020

(ON APPEAL FROM HCCW NO 69 OF 2019)

________________________

IN THE MATTER of China Silver Asset Management (Hong Kong) Limited

and
IN THE MATTER of section 177(1)(d) of the Companies (Winding up and Miscellaneous Provisions) Ordinance (Cap 32)

________________________

BETWEEN
SAFE CASTLE LIMITED Petitioner
and
CHINA SILVER ASSET MANAGEMENT (HONG KONG) LIMITED Respondent

________________________

Before: Hon Kwan VP and Chu JA in Court

Dates of Written Submissions: 27 April 2021, 5 and 11 May 2021

Date of Judgment: 9 July 2021

________________________

J U D G M E N T

________________________

Hon Kwan VP (giving the Judgment of the Court):

1. On 19 March 2021, this court made an order for security for costs of an appeal brought by China Silver Asset Management (Hong Kong) Limited (“the Company”) against an order for its winding up made by Harris J on 11 March 2020. We ordered the Company do procure Mr Patrick Maloney, Mr Frank Dominick and/or China Silver Asset Management Limited (“the parent company”)[1] within 28 days thereof (by 16 April 2021) to give security by making payment into court of $605,000 for the costs of and occasioned by its appeal. Our order provided for automatic dismissal of the appeal in default of security being given within the time as stipulated.

2. The Company failed to make payment into court pursuant to our order. On 19 April 2021, one working day after 16 April, it issued a summons under Order 3 rule 5 of the Rules of the High Court and the inherent jurisdiction of the court, seeking an extension of time to give security for costs to 23 April 2021.

3. The summons issued by the Company is plainly defective. By the time of its summons, the appeal has been dismissed in default of security being given as ordered by this court. The Company could not simply ignore the dismissal of the appeal and just ask for time to give security for costs of an appeal which has been dismissed. In its summons, the Company should have asked for relief from the sanction imposed by the court order of 19 March 2021 and sought the reinstatement of the appeal pursuant to Order 2 rule 4 of the RHC, in addition to seeking an extension of time to comply with the court order upon the reinstatement of the appeal[2].

4. The Company is apparently aware of the need to apply for relief from sanction, as its counsel Mr Leon Ho made submissions on this. At the time his submissions were lodged on 27 April 2021, the Company was still within the 14-day period to make an application for relief from sanction pursuant to Order 2 rule 4. But nothing was done to rectify the summons to put its application on a proper footing.

5. The court has power to entertain an application for relief from sanction as the Company has, through its counsel, expressly sought such relief even though there is no proper summons before this court. The shortcomings in its summons will go to the issue of costs[3].

6. The petitioner has opposed the application for relief from sanction.

7. Order 2 rule 5(1) provides that on an application for relief from sanction, the court shall “consider all the circumstances” including –

“(a) the interests of the administration of justice;

(b) whether the application for relief has been made promptly;

(c) whether the failure to comply was intentional;

(d) whether there is a good explanation for the failure to comply;

(e) the extent to which the party in default has complied with other rules and court orders;

(f) whether the failure to comply was caused by the party in default or his legal representative;

(g) in the case where the party in default is not legally represented, whether he was unaware of the rule or court order, or if he was aware of it, whether he was able to comply with it without legal assistance;

(h) whether the trial date or the likely trial date can still be met if relief is granted;

(i) the effect which the failure to comply had on each party; and

(j) the effect which the granting of relief would have on each party.”

8. The Company filed the 2nd affidavit of Mr Maloney to depose to the action that had been taken in an attempt to comply with the order to provide security. Mr Maloney had discussed with Mr Dominick and their legal advisers on whether security should be provided and they concluded on 16 April 2021 that this should be done so as to proceed with the appeal. Mr Maloney claimed he was only able to communicate the confirmation to pay the security and wire the funds to the Company’s solicitors, K&L...

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