pull cliff notes

2007 PCLL

Civil procedure Cliffnotes

Follows the SyllabusThe notes are created from syllabus notes, cases and Court rules, so they are almost guaranteed to follow exam guidelines!

Checked for AccuracyCompiled in a period of three months, these notes have been checked for accuracy amongst primary, secondary and tertiary sources!

Tried and TestedCliff has taken these notes into the examination hall, used them and walked out of the examination hall in one piece. Surely these notes are tried and tested!

A compilation of notes by Cliff Lui. All rights expressly reserved, including copyright. All pecuniary loss disclaimed.

Civil Litigation – Preliminary Issues Cliffnotes

A. Describing the Parties: O.15

1. Plaintiffs

(a) Plaintiffs may be joined if there is a common question of law or fact or where the claim arises from the same series of transactions: O.15 r.4(1).

(b) Plaintiffs must be joined with any people jointly entitled to the claim unless the court grants leave.

(i) Joint claims include joint bank accounts, property holders.

(ii) If the other person does not wish to be joined, he must be joined as a defendant. This is so he is bound by the results of the litigation: O.15 r.4(2).

• Partners, however, can be compelled to be joined as plaintiffs without their consent, but will be entitled to seek indemnity from the other partners as to costs –!Kao, Lee & Yip 2002.

2. Defendants

(a) Plaintiff entitle to issue proceedings against only some of all defendants jointly liable for a claim: O.15 r.4(3).

(i) Where the claim is in contract, however, the defendant may apply to the court for the case to be stayed pending joinder of those jointly liable: O.15 r.4(3). That is a discretionary power and might not be exercised where the other partner can not be found etc.

B. Legal Aid

1. Ordinary Legal Aid Scheme

(a) Criteria

(i) $162,300

(ii) Reasonable grounds for taking or defending proceedings.

(b) Scope

(i) traffic accident claims

(ii) breach of contract

(iii) professional negligence

(iv) landlord and tenant disputes

(v) industrial accidents

(vi) matrimonial cases

(vii) immigration matters

(viii) Seamen’s / employees’ wages and severance pay

Civil Litigation – Service of Writ Cliffnotes! Cliff Lui

Page 1 of 3

(ix) employees’ compensation

(x) Mental Health Review Tribunal cases

(xi) Coroners inquests involving interests of public justice

(c) Fees and Contributions

(i) Actual contribution to be paid depends on probable cost of proceedings. Full amount is paid if estimated costs exceed contribution payable.

Finances Rate Contribution

0-20,000 - 0

20,001-40,000 - 1000

40,001-60,000 - 2000

60,001-80,000 5% 3,000-4,000

80,001-100,000 10% 8,000-10,000

100,001-120,000 15% 15,000-18,000

120,001-144,000 20% 24,000-28,000

144,001-162,300 25% 36,000-40,575

(ii)

2. Supplementary Scheme

(a) Criteria

(i) $162,301 –!$450,800

(ii) Reasonable grounds for taking or defending proceedings.

(iii) Claims likely to exceed $60,000. Any amount if claimed under Employee’s Compensation Ordinance.

(b) Scope

(i) Personal injury, death

(ii) Medical / dental negligence

(iii) Professional negligence

(c) Fees and Contributions

(i) $1,000 non-refundable application fee.

(ii) Upon acceptance of legal aid, applicants are required to pay an interim

contribution of $40,575.

(iii) If the proceedings are unsuccessful, the interim contribution paid will be used towards the payment of legal costs incurred for his claim and will not be refunded unless there is a surplus after payment of such costs.


Page 2 of 3

(iv) If the proceedings are successful, 10% of the damages recovered will be deducted and paid into the Supplementary Legal Aid Fund.

(v) If the case is settled before a barrister is instructed for the trial, 6% of the damages recovered will instead be deducted. In addition, the applicant will also be required to pay all legal costs expended on his behalf (including costs which cannot be recovered from the opposite party) out of the damages recovered. However, the total sum deducted will be reduced by the application fee and interim contribution already paid.

3. Application Procedure

(a) Apply at Hong Kong or Kowloon office.

(b) On the day of interview, the applicant should bring along all documents relating to his case and his means (for example, bank books, salary slips, rent receipts, mortgage repayment schedule, salaries tax assessment, proof of Comprehensive Social Security Assistance (CSSA), etc.).

(c) During the interview, the applicant will be means tested. He will also be asked to give a statement concerning his case so that the Department can determine its merits (the merits test). In most cases both the statement taking and means assessment can be done on the same day.

(d) In some cases, it may be necessary to obtain additional information from third parties such as other government departments or public bodies for the purpose of determining the merits of his case. Once all the information has been collected, the lawyer in charge of his case will decide whether legal aid should be granted.

(e) When the applicant is granted legal aid, he should read all the terms of the offer very carefully, especially the part concerning the amount of his contribution and the Director of Legal Aid’s First Charge. If the terms are acceptable, he must sign and date the form and return it to the Legal Aid Department within 14 days.

(f) If he accepts the offer of legal aid, he will be issued with a Legal Aid Certificate which confirms that he has been granted legal aid.

(g) Once he has been granted legal aid, he must not talk to the opposite party or their representative about the case or accept money in settlement of his claim without first consulting the lawyer assigned to represent him and notifying the Director of Legal Aid.

~ ~ ~


Page 3 of 3

Civil Litigation – Service of Writ Cliffnotes

A. Service of Writ

1. General methods of service: O.10

Personal service, service by registered post and service by letterbox insertion

(a) Personal Service: O.65 r.2 and Goggs v Lord Huntingtower 1884.

(i) Satisfied that he has found the right man;

(ii) Hand or leave copy of writ with him, or throw it down in his presence.

(iii) If he does not take it, he should tell him what it contains and leave it within

his control as possible.

(b) Registered post / letterbox insertion: O.10 r.1(2), (3)

(i) D must be physically within the jurisdiction at the time the writ was

posted / inserted and must have been within the jurisdiction when he knew of

the writ –!Barclays Bank v Hahn 1989 HL.

(ii) Service by either of these still requires notice by D to be effective

–!Forward v West Sussex County Council 1995 CA.

(iii) Registered post to: usual address or address last known by P. Either is OK.

No best-endeavour checks need to be made –!Law Kwok Hung 1999.

(iv) Insertion of sealed writ through letterbox of such address.

(v) Deemed date of service is the 7th day after the sending of the writ by

registered post or insertion through the letterbox. That is unless the contrary

can be shown.

• The contrary may be shown by P, e.g. Where P shows D knew of the

writ on some other date, or if D shows that he never knew of the writ.

(vi) Proving such a method of service requires the deponent to state on

affidavit that it is his opinion that the writ will have come to the knowledge

of D within 7 days of posting the writ; and that the writ has not been

returned to the plaintiff: O.10 r.3.

(c) Other Modes of Service

(i) Solicitor’s indorsement and acceptance on behalf of his client: O.10 r.1(4).

(ii) Acknowledgement of service by D is deemed good service on date of

acknowledgement unless the contrary is shown: O.10 r.1(5).

(iii) Agent of overseas principal: O.10 r.2

• Ex parte application, contract within jurisdiction;

• Individual or corporation’s registered office within jurisdiction;

• Agent’s authority not determined or he is still in business relations with

principal;

• Court may authorise service of writ on agent instead of its principal.

Civil Litigation – Service, Default Judgment Cliffnotes! Cliff Lui

Page 1 of 6

• Writ must limit time within which PD must acknowledge service.

• Copy must be sent by post to actual defendant outside jurisdiction.

(iv) Service of Writ pursuant to Contract: O.10 r.3

• Contract may specify how process may be served on a defendant

whether within or out of jurisdiction.

• All you have to do is follow the provisions of the contract.

(v) Writ served out of jurisdiction not deemed served on D unless O.11 is

complied with.

(vi) Service on Limited Company: s.356, Companies Ordinance

• Writ may be serve by leaving it or sending it by post to the registered

office of the company.

• Deemed effected at the time in which the writ would have been

delivered in the ordinary course of post: s.8 Interpretation and General

Clauses Ordinance.

• No knowledge is necessary and service on vacant premises is valid –

Ho Kwok Wah v Group Jewellery Arts 2000.

(vii) Service on Partnership: O.81 r.3

• Modes

- Personally on any one of the partners;

- Personally on person having control or management of the

partnership business, at principal place of business within

jurisdiction;

• Not agent because partnership business cannot be carried out on

agent’s premises –!Baillie v Goodwin 1886.

- Registered post (O.10 r.1(2)) to firm at principal place of business

within the jurisdiction.

- Any other method agreed between the parties: Kenneth Allison v

AE Limehouse & Co. 1992 HL. In that case, service of the

plaintiffs’ writ on the partner's personal assistant with the partner's

express authorisation constituted valid service. Lord Goff said it

was more like estoppel by convention.

• Whether or not any member is out of the jurisdiction.

• Service shall be deemed 7 days after writ is sent to the firm unless the

contrary is shown.

• Affidavit proving due service must state:

- In the plaintiff’s opinion, the writ would have come to the

knowledge of one of the persons mentioned above within 7 days

and the writ has not been returned as undelivered.

• If the plaintiff knows that the partnership has dissolved, he must serve

on every person within jurisdiction sought to be made liable.


Page 2 of 6

• Notice must state whether the recipient is a partner or person with

management and control, otherwise the recipient is deemed to be a

partner.

• Note that for enforcement on personal assets of a partner, personal

service on him is necessary: O.81 r.5 but if no service was effected, P

can apply to the court for leave to do so O.81 r.5(4).

(d) Substituted Service: O.65 r.4

(i) Court an make an order for substituted service if you can show that it is

impracticable to serve a person personally.

(ii) Such service usually involves newspaper advertisement, but must be a way

that will probably bring the writ to the attention of the intended recipient.

(iii) Affidavit must contain:

• Steps taken to locate and serve in the usual way;

• Inquiries;

• Proposed method of substituted service.

(e) Service outside jurisdiction: Order 11

(i) Leave required both for issuing writ under O.6 and for service under O.11.

(ii) Three steps, supported by affidavit –!Seaconsar v Bank Markazi 1994:

• Jurisdiction :: Whether P has a good arguable case that his case falls

within one of the heads listed under O.11 r.1(1)(a)-(p) (facts showing

that case somehow relates to HK).

• Merits :: Whether P’s evidence discloses a serious issue to be tried, no

need for strong prima facie case.

• Discretion :: Whether court should exercise discretion (esp. forum

conveniens) to grant leave.

(iii) Application by affidavit stating above.

B. Default Judgment

1. Judgment for Default of Notice of Intention to Defend: Order 13

Sought only for non-equitable relief.

Where relief is sought against more than 1 defendant, default judgment against one

may, render the claim against the other nugatory, if the basis for the two actions are

inconsistent.

In Bonus Garment v Karl Rieker 1997 PC, The plaintiff sued the 1st defendant for

breach of contract as principal and, in the alternative, the 2nd defendant in damages for

breach of warranty of authority as agent. Majority in the Court of Appeal held

following Morel Bros Co Ltd v Earl of Westmoreland 1903, that the entry of default

judgment by the plaintiff against the 2nd defendant barred the plaintiff from proceeding

against the 1st defendant, the causes of action being in the alternative and inconsistent


Page 3 of 6

with each other. The Privy Council reversed this on the facts only, finding that there was no inconsistent case between the two.

(a) Liquidated Demand: O.13 r.1

(i) Where claim is for liquidated demand and D fails to notify P of intention to

defend, P may, after [14 days after service of writ, including day of service, being the set time for acknowledging writs] enter final judgment for the amount claimed and proceed against any other defendant: O.13 r.1. For more on ‘prescribed time’, see O.12 r.5. Note that writ is not deemed served until 7 days after posting for mailed writs: O.10 r.1 above.

(ii) Costs are as per Part I, Schedule 2, O.62, being fixed and very low ~$505.

(b) Unliquidated Damages Claim: O.13 r.2

(i) The difference for unliquidated claims is that no final judgment may be entered. Only interlocutory judgment may be entered for damages to be assessed as well as costs. Reserves right to proceed against other defendants.

(ii) After getting interlocutory judgment, O.37 is followed (open court, service of notice 7 days before hearing, discovery, expert reports…) before a Master.

(iii) Where default judgment is only obtained against some of the defendants, damages will be assessed at trial: O.37 r.3.

(c) Claim for detention of goods: O.13 r.3

(i) Plaintiff may, after D does not give notice to defend after time:

• get interlocutory judgment for delivery of the goods or their value to be assessed and costs;

• by affidavit, apply by summons for judgment against D for delivery without option to pay equivalent value.

(d) Claim for possession of land: O.13 r.4

(i) Plaintiff may, after D does not give notice to defend after time and on producing an affidavit / certificate by his solicitor saying that he is not claiming under O.88 r.1, enter judgment for possession and costs.

(e) Mixed claims of any of the above: O.13 r.6

(i) As per above

(f) Other claims, including equitable claims: O.13 r.6

(i) Plaintiff may, after prescribed time and upon filing statement of claim and affidavit proving due service of writ on D: Proceed with action as if defendant had given notice to defend.

(ii) If something happens such that P does not have to proceed anymore, P may enter judgment against D for costs. E.g. where D paid money into court after being served.


Page 4 of 6

2. Entering of Judgment

(a) Proof of service of writ: O.13 r.7

(i) Judgment cannot be entered against D unless:

• D has acknowledged service;

• Affidavit is filed by P proving due service on D; or

• P produces writ indorsed by D’s solicitors with statement that they

accept service on D’s behalf.

(b) Writ returned after Judgment: O.13 r.7

(i) If the writ is returned undelivered after judgment, the plaintiff should

immediately request for the judgment to be set aside; or apply to the court

for directions –!see also Fok Chun-hung v Lo Yuk-shi 1995 CA where

judgment, regularly obtained was treated as irregularly obtained after the

plaintiff did nothing after receiving an undelivered writ after judgment.

(ii) Application is by affidavit and shall take place ex parte, stating facts on

which the application is founded and any directions sought. Court may:

• Set aside judgment (maybe with payment into court);

• Treat writ as duly served, if e.g., alleged irregularity is unsupported by

evidence or trivial;

• or any other thing.

3. Judgment in default of Pleadings

(a) Default of Defence: O.19 r.2

(i) Defence is due 14 days after service of statement of claim: O.18 r.2.

(b) Additional requirements: O.19 r.8A

(i) To get default judgment under O.19, you have to give notice that you are

going to do so to a defendant who has given notice of intention to defend or

defend on counterclaim.

(ii) The time limit is 2 days before entering judgment. It does not have to be

given after default, however –!Ho Yuen Tsan v Hop Wing Transportation

1996.

(iii) Service on his solicitor.

(iv) These requirements are dispensed with if the court had made an order to

extend the time for service of the defence; or if the defendant is not legally

represented and did not state an address at which he can be served.


Page 5 of 6

C. Setting Aside Default Judgment: O.13 r.9 and O.19 r.9

! Court may set aside any judgment on terms as it thinks just…

1. Regular Judgment

(a) Setting aside regular judgment usually occurs on some compassionate ground and is

discretionary.

(b) Practice requires an affidavit stating that the defendant has a real likelihood that he

would succeed on the facts if the judgment is set aside – Park Kit Investment v Cheung

Wan Ping 1999 CA.

(c) Costs: setting aside regular judgment » D pay costs in any event. If the court

considers that P should not have resisted the application, it might order costs to D in

the cause.

2. Irregular Judgment

(a) Court has no discretion and must set it aside, save with respect to terms –"Po Kwong

Marble Factory 1996 CA.

(i) Factors include prospects of success and conduct of the parties.

(ii) Condition might be that money is to be paid into court.

(b) Costs: setting aside irregular judgment »"P pay costs in any event.

D. Timeline of proceedings

(a) P issues writ (may be served within 12 months)

(b) P serves writ

(c) D files acknowledgment of service within 14 days of being served writ. Including day

of service.

(d) P must file statement of claim within 14 days D has acknowledged service.

(e) D files defence within 14 days of the time limited for giving notice of intention to

defend (as above), or when the full statement of claim is served, whichever is the later.

Usually, the statement of claim is served later.

(f) P must reply within 14 days of receiving the defence and can submit his defence to any

counterclaim within 14 days of receiving the same.

(g) Pleadings close 14 days

~ ~ ~


Page 6 of 6

Civil Litigation – Summary Judgment and

Interim Payment Cliffnotes

A. Order 14 Summary Judgment

A useful procedure to save time and costs if defendant has no arguable defence.

Usually used for bills of exchange (treated as cash so set off and counterclaims are not

matters to prevent SJ –!Yuen Chak Construction v Tak Son Contractors 1997.

However, sufficiency of consideration and misrepresentation/fraud might be a case for

cheques –!Tong Nai Kan v Cheung King Fung. Dishonoured guarantees are also

eminently suitable for summary judgment where primary facts are not in doubt –!Bank

of Credit and Commerce HK v Quadrutec Hotel Management 1996.

1. Application Procedure: O.14 r.1

(a) Possible for counterclaims: O.14 r.5.

(b) Statement of claim already served on defendant, who has replied with A/S: r.1.

(c) Plaintiff may apply for judgment on grounds that defendant has no defence to part or

whole of the claim sought. See Macmillan Publishers v Thomas Reed Publishers 1993

where court upheld that part of a claim can still use summary judgment if clearly

stated in the summons.

(d) Applies to any action except:

(i) Libel, slander, malicious prosecution, false imprisonment, admiralty.

(ii) Any fraud allegation.

• Fraud means that in the narrow Derry v Peek sense –!<case name>.

• False statement knowingly given.

Excludes ‘fraud on the minority’.

• False accounting might be pursued under breach of resulting and

constructive trust instead of fraud per se to bypass the rule –!Pacific

Electric Wire & Cable v Texan Management 2007.

This is because the above claims are subjective and necessitate the use of witnesses.

(iii) Any specific performance dealing with property and mortgage actions with

under O.86 and O.88.

(e) Rare for negligence actions and only invoked where liability is absolutely not in issue

or no defence for liability –!Wong Tai v Tang Wing Keung 2003. Even conviction is a

matter of weight unsuitable for determination in summary judgment.

(f) Summary judgment possible for declarations and specific performance if clear case

–!Leco Instruments (UK) v Land Pyrometers 1982; Verrall v Great Yarmouth BC 1981.

(i) No SJ, if there remains a triable issue as to whether the defendant’s own

conduct relates to the plaintiff’s sought relief –!Baillieu v FCC HK 2007.

(g) Default judgment against one defendant not a bar against summary judgment against

another where there is joint and several liability (s.5, Civil Liability (Contribution)

Ordinance, Cap. 377).

Civil Litigation – Summary Judgment and Interim Payment Cliffnotes! Cliff Lui

Page 1 of 7

(i) Joint and several liability can be established vs. multiple defendants it there are supporting contemporaneous documents despite no signing of an actual agreement –!Asia Television v Mak Chi Kin 2006.

(h) Summary judgment for certain relief must be pleaded or claim will be dismissed –!Chang Man v Ma Shou Yung 2002 where plaintiff wanted to remove the defendant as administrator of an estate but pleadings only stated that he wanted to revoke the grant of letters of administration. Court held pleadings had to be amended. Plaintiff cannot argue by another way to side-step defective pleadings.

2. Manner in which application under r.1 must be made: O.14 r.2

(a) Supporting Affidavit Requirements:

(i) Verify facts pleaded and relied on in claim.

“… thus the defendant is justly and truly indebted to the plaintiff in the sum of

$[•] for goods supplied on [•] and were so indebted at the commencement of

this action as particularised and appearing in the statement of claim in this

action.” "

(ii) State belief that there is no defence, save that which relates to quantum.

“I verily believe that there is no defence to this action.” "

If the plaintiff knows that there might be a defence but states that there is none, that is an abuse of the court and the SJ may be struck out –!M. Pocock

v A.D.A.C. 1952.

(iii) Belief ought state sources or grounds thereof.

(iv) Service on D #10 clear days before return date.

(v) Made by plaintiff or authorised persons with personal knowledge.

• Solicitors should not make affidavit because the matters affirmed should be within the plaintiff’s own personal knowledge –!Mutual Luck

Investment v Chiu Yim Man 1999 where the court held that the plaintiff should not escape the sanctions of criminal law (perjury) by having someone else make the affirmation for them.

• Multiple affirmations can make up for gaps in the facts.

(b) Summons and interim payment

(i) Alternative relief e.g. under O.14A or interim payment under O.29 may be granted.

(ii) Interim payment may be granted for actions in damages, debt or other sum.

(iii) Interim payment generally granted if conditional leave to defend results –!British Commonwealth Holdings v Quadrex Holdings 1989.

(iv) Interim payment inconsistent with unconditional leave.

(c) Delay

(i) Delay between filing of statement of claim and summons not necessarily fatal, but requires explanation – Resona Bank v Lam Sie 2004

• Plaintiff explained delay, referring to actions brought by the plaintiff against other customers.


Page 2 of 7

• Court allowed SJ despite delay to save trial time.

(ii) Delay will not bar otherwise meritorious application –!Morrison, Son &

Jones v Yui Wing Construction 1989.

3. Manner of Defence

(a) D may object to SJ by affirmation: O.14 r.4. The affirmation requires:

(i) Personal knowledge of the particulars of the defence. General denials do not

suffice –!Murjani v Bank of India 1990.

(ii) Onus is on the defendant – Bank of India.

(iii) Hearsay admissible if sources are stated.

(iv) Should not be inconsistent with documentary exhibits.

(v) Triable issue can be the identity of the defendant.

(vi) Defence not pleaded but supported by contemporaneous documents is

allowed –!Oldham, Li & Nie v Wong Lun Chooi 2006.

(vii) Service 3 days before callover hearing.

(b) Reyes’ Framework:

(i) What are the material facts relied on by D?

(ii) If those facts are proved at trial,, could they support a defence as a matter of

law and logic?

(iii) If those facts are capable of constituting a defence at trial, are any incapable

of belief because of physical impossibility?

(iv) If the facts are incomplete, is it because of the defendant’s failure to give

particulars or are they outside the defendant’s control?

(v) Does the plaintiff’s claim make sense as a matter of law and fact?

(c) Arguable Defence

(i) On an SJ application, the defendant has the burden to show that there is a

triable issue or an arguable defence.

(ii) Very low threshold: defendant’s case has to be almost incredible or

practically moonshine by reason of its implausibility or inconsistency with

the documents –!Murjani v Bank of India 1990. O.14 applications are only

for clear cases.

• If the defendant cannot point to a specific issue which ought to be tried

but shows that there are circumstances that ought to be investigated,

that is enough.

• The defendant’s assertions must be believable against so much of the

background of the case that is beyond reasonable dispute –!Re Safe

Rich Industries 1994.

(iii) Shadowy defence: the court should order payment into court as condition

with the leave to defend.


Page 3 of 7

• Impecuniosity can be argued, but the defendant must provide frank and

full disclosure that payment is absolutely impossible (not merely

difficult).

- Borrowing from relatives, etc. will be considered – Unic v Entus

Developments.

• Court will not impose condition that a defendant is unable to

comply with as that would be the same as reusing him leave to defend

altogether – Wu Cho Mei t/a Mui Far Chung Restaurant v Wang Siau

Yu 1994.

4. Results of Summary Judgment

(a) Judgment for plaintiff: O.14 r.3

(i) Judgment for the plaintiff unless court dismisses action or defendant satisfied

the court: O.14 r.3(1).

(ii) Court may stay execution of any judgment until after trial of any

counterclaim:

O.14 r.3(2).

(b) Leave to defend: O.14 r.4

(i) Defendant may show cause against SJ by affidavit.

(ii) Unconditional leave or conditional leave by giving of security.

(iii) Court may order defendant or officer showing cause to produce any

document or be examined on oath.

(iv) Even if defence is shadowy, court should give leave to defend, albeit with

interim payment.

5. Timeline

(a) P serves writ and statement of claim: O.14 r.1 above;

(b) D acknowledges service and gives notice of intention to defend (else just get default

judgment) (O.14 r.1 above);

(i) Defence served out of time does not preclude SJ, but there is no further

indulgence after a successful application for a speedy trial.

(c) Summons before a Master (unless judge is necessary, e.g. for injunctions) or where it

is likely that there will be an appeal against the Master’s decision in any event and it

would be more expedient to have the matter heard by a judge: O.32 r.12.

(d) Summons must be supported by affidavit: O.14 r.2, see above.

(e) Summons should be returnable before the Master. First hearing is 15 minute

“callover”.

(i) If contested, Master will give directions for filing of evidence and will give

estimate of amount of time required for adjourned hearing.


Page 4 of 7

(ii) If not contested, Master can give judgment unless there is a defect in the plaintiff’s case.

(f) Plaintiff should prove due service of the summons and supporting affidavit in case defendant does not appear.

(g) If foregoing is not satisfied by plaintiff, summons for summary judgment will be dismissed although defects and omissions might be cured by a subsequent affirmation . The court will then look at the overall merits of the claim.

– Judgment –

(h) APPEAL: If order is not granted, plaintiff can adduce new evidence –!Asia Television.

(i) Plaintiff reserves right to proceed with residue of action: O.14 r.8.

(j) If claim is for delivery up of a specific chattel and SJ is for the plaintiff, the court has power to order the defendant to deliver up the chattel without the option to pay the equivalent value thereof: O.14 r.9.

6. Costs

(a) Common Scenarios

(i) Judgment for plaintiff: costs of application to plaintiff.

(ii) Conditional leave to defend: costs in the cause.

• If D does not comply with conditions, costs to the plaintiff.

(iii) Unconditional leave to defend: costs in the cause.

(iv) If case is not within order or if plaintiff knew defendant had a proper defence, court may dismiss application with costs to defendant forthwith: O.14 r.7.

(b) Successful plaintiff entitled only to fixed costs in accordance with Part II of the Second Schedule of Order 62 unless order for taxation of costs is expressly made –!Cobalt

Industrial v Kin Sun Electronics 1997. The costs recoverable are very low ~$650.

(c) In a High Court action where P accepts D’s payment into court under O.22 pursuant to a statutory construction of O.62 r.10(2), 9(1), the plaintiff is entitled to be taxed on the High Court scale even if the accepted payment was within the District Court monetary jurisdiction –!Wellegant Development v Fine Telecom 2007. That will obiter still be the case where the claim and damages sought was trivial, etc.

B. Order 14A Summary Judgment

1. Applicable Law: O.14A r.1

(1) Court may, upon the application of any party or of its own motion,

determine any question of law or construction of any document

at any time where the matter is suitable for termination without

a full trial; and

such determination will finally determine the entire matter

therein.


Page 5 of 7

(2) Court may then dismiss the cause or make any order.

(3) Court will not do this unless the parties either;

! Have had an opportunity to be heard on the issue; or

! Had consented to an order or judgment on such determination.

(4) Executable by a Master.

2. Manner in which application should be made under Rule 1

(a) Application may be made by summons, motion or orally in the course of any

interlocutory application.

(b) Requirements

(i) D has given notice of intention to defend.

(ii) The determination of the question of law will determine the entire cause or

matter – Shell Hong Kong v Yeung Wai Man Kiu Yip 2003.

• Questions of law can be determined without a full trial since the court

is not in any worse position than a trial judge.

(iii) Parties have been heard as to their position on the question of law or they

consent to such a determination.

(iv) Question of law to be stated clearly and precisely. No ambiguity is allowed.

Facts used must be proven or admitted and cannot be hypothetical.

• All relevant facts must be before the court. Especially in a case where

implied terms are involved. The circumstances and background need to

be determined by trial –!Ng Chun Kwong v First Star Development

2007.

C. Interim Payment: O.29 rr.9-12

1. Generally

(a) Interim payment means a payment on account of any damages, debt or other sum,

excluding costs, which the defendant may be held liable to pay to the plaintiff.

(b) It is to help the plaintiff who is suffering from financial difficulties from the time of

application until trial –!Yeung Sek Sung v Cheung For Ming 1991.

(c) Whilst an issue of fact might debar an SJ application, interim payment may still be

granted. That is why where SJ fails, resulting in conditional leave to defend, the

condition is usually interim payment. Where unconditional leave results, no interim

payment should be ordered.

(d) Best suited for debt or damages cases.


Page 6 of 7

2. Procedure

(a) Application under O.29 r.10

(i) P may apply any time after service of writ on D, after time for

acknowledgement of service has expired.

(ii) Application may be made by summons for O.14 (Summary Judgment) or

Order 86 (Specific Performance SJ), or by summons.

(iii) Supporting affidavit:

• Verify amount of relevant damages, debt or other sum.

• Exhibit documentary evidence relied on.

(iv) Serve summons, affidavit and supporting documents !10 clear days before

return day.

(v) Second application possible without leave.

(b) Order under O.29 r.11

(i) Court needs to be satisfied that:

• Defendant has admitted liability; or

• Plaintiff has obtained judgement for damages to be assessed; or

• If action proceeded to trial, plaintiff would obtain judgment for

substantial damages against the defendant…

in order to order D to make a reasonable interim payment not exceeding the

claimed sum the court thinks will likely be rewarded after taking

contributory negligence and any set off and counterclaim which the

defendant is entitled to rely.

(ii) Other scenarios, under O.29 r.12:

• Obtained order for account and for any amount certified due;

• D liable for use and occupation for land in such an action;

• In any event D would have to pay a substantial sum related to anything

to P.

(iii) Where personal injury action, no order is to be made unless (O.29 r.11):

• Driver is insured;

• Public authority;

• Person with ability to pay.

~ ~ ~


Page 7 of 7

Civil Litigation – Security for Costs and

Prohibition Orders Cliffnotes

A. Security for Costs: O.23

For the benefit of the defendant, security of costs discourages frivolous claims and

promotes settlement. Despite the ‘requirements’, it is a fully discretionary exercise.

1. Law: O.23 r.1

(a) Court will exercise discretion.

(b) Requirements

(i) Plaintiff ordinarily out of the jurisdiction; or

• Persons not habitually living within the jurisdiction.

• Company ordinarily out of jurisdiction if its central management and

control is outside HK –!Charter View Holdings v Corona Investments

1997.

- Provisions of objects clause; place of incorporation; where real

trade takes place; where books are kept; where administration is

carried out; where directors meet; where chief office / company

secretary is; where most significant assets are.

• Usually no security for costs where fixed assets in HK (AG v Vianini

Lavori SPA 1991) or where co-plaintiff is in HK –!D’Hormusgee v

Gray 1882.

(ii) Plaintiff is actually a nominal plaintiff suing for the benefit of some other

person AND there is reason to believe that the nominal plaintiff will be

unable to pay the defendant’s costs; or

• Person who has assigned the fruits of the action may be a nominal

plaintiff –!Semler v Murphy 1968.

(iii) The plaintiff’s address is not or is incorrectly stated in the writ or other

originating process. Plaintiff to show innocent omission; or

(iv) Plaintiff has changed address with view to evade consequences of

litigation.

(v) Plaintiff’s claim is not to be stifled by order for security –!Lauria v Le

Salon Orient 1996. In that case, the plaintiff, ordinarily resident outside HK,

was injured on the premises of the defendant. P sued on occupier’s liability

and the judge held that P had a good chance of success. D asked for security

and P argued that his claim would be stifled as he was impecunious.

• Factors that P has to show:

- Whether P has other financial resources with which to continue the

claim e.g. friends relatives… How P manages to pay his current

legal costs is relevant.

- P’s prospects of success.

- Whether P’s impecuniosity was caused by D.

Civil Litigation – Security for Costs, Prohibition Orders Cliffnotes ! Cliff Lui

Page 1 of 6

- Legal aid: money usable upon when certificate is granted. Since

money of legal aid is within the jurisdiction, it would be wrong to

order security for costs incurred after the date the certificate was

granted.

(c) Further criteria under s.357, Companies Ordinance:

(i) Plaintiff is limited company. Note that overseas companies are not

companies for the purpose of the Companies Ordinance;

(ii) Credible testimony that plaintiff will be unable to pay defendant his costs

if successful in defence.

• Matters considered: Wing Hing Provision v Hanjin Shipping 1998.

- Plaintiff to satisfy court that an order for security would stifle its

claim and result in injustice.

- Court will conduct balancing exercise to see who would be more

inconvenienced – prospects of success will be weighed prima facie.

If the plaintiff has a genuine claim, the courts will not want to stifle

it.

- Injustice to the plaintiff will be decided against the full factual

matrix. Esp. whether he can borrow from third parties. If he can,

then he won’t be stifled.

- Oppressive application?

- Whether plaintiff’s impecuniosity due to plaintiff’s acts?

- Delay.

2. Application Procedure

(a) Demand for security by letter… and which is refused.

(b) Any person in the position of defendant to apply only (or plaintiff being

counterclaimed against) in the Court of First Instance: O.23 r.1(3).

(c) At any time (but delay will be taken into account –!Henrik Andersen v Huang Kuang

1997, since costs spent after the point when security should have been ordered will

have been wasted.).

(d) Summons supported by affidavit stating the above requirements and draft bill of costs.

(e) Master will then fix the amount and give directions on the mode and time for security

to be given. The proceedings are also usually stayed until security is given –!Lam Fei

Hong v Wong Kam Fong 1999.

(f) D can re-apply many times but there must be a material change in circumstance

between each –!Henrik Andersen. There, the material changes were: a significant

prolonging of the case; defence witness exceptionally good .

3. Amount of Security

(a) Extend to costs already incurred and future costs –!Henrik Andersen v Huang Kuang

1997.

(b) Calculated usually on a party-and-party basis, not indemnity basis –!Cal-Trade v

Mindo Community Trading 1982. Lawyer’s costs should not be unreasonable.


Page 2 of 6

(c) Any amount may be ordered between substantial and nominal as the court things just.

(d) A draft bill of costs will usually be filed with he affidavit.

4. Manner of Undertaking

(a) Payment into court (common), solicitor’s undertaking, bank guarantee.

5. Default / Dismissal / Appeal of action

(a) If P defaults in payment, there may be an ‘Unless Order’ to give security within a

limited time else the action may be dismissed.

(b) Inherent jurisdiction to dismiss where:

(i) Action not being pursued with diligence;

(ii) No reasonable prospect that security will be paid;

(iii) Time limit has been disregarded.

(c) If an application is made and refused, it should be appealed. A second application will

only be valid where there is a material change in the facts, which is for the applicant to

establish –!Skytruck International v Lau Nai Keung 2004.

B. Prohibition Orders: Order 44 and s.21B, HCO

See more about post-judgment prohibition orders in “Enforcement”.

According to O.44A r.2, a prohibition order is applied for ex parte to prohibit a debtor

from leaving Hong Kong.

1. Procedure

(a) Pre-action Application: O.44A r.1

(i) Judge may order prohibition even if the plaintiff has not commenced his

action.

(ii) Application requires:

• Draft writ;

• Undertaking to judge to issue writ on the next day;

• Draft affidavit;

• Draft order in form: Appendix A, Form 106.

(iii) Judge will approve draft order as he thinks fit.

• That signed order, together with solicitor’s undertaking that the sealed

order will be produced the next day, should be served to the

Immigration Department; police and 4 copies to the Bailiff..

• The Immigration Department will require the details of the debtor’s

travel document to place him on the stop list.

(b) Pre-judgment Application: s.21B(1)(c), High Court Ordinance

(i) Court can make an order stopping a person from leaving HK to help enforce

or secure a civil claim for:


Page 3 of 6

• Payment of money / damages; or

• Delivery of any property; or

• Any other act.

(ii) A civil claim shall be given the widest meaning –!Bunker Holdings v Asia

Pacific Seafood Management 2005 in which ‘any other act’ was held to

include committals for contempt.

(iii) Required documents:

• Writ;

• Affidavit in support;


(iv) Necessary Considerations: s.21B(3), HCO !"#$%&

• Good cause of action; and

• Nexus (person against whom the order is sought)

- Person incurred liability in HK while in HK; or

- Carries on business in HK; or

• Means his ‘own, personal’ business –!Chase Bank International

v Carlos Shalon Sultan Abadi 1986.

- Is ordinarily resident in HK.

• Person is about to leave HK and will therefore obstruct or delay the

obtaining or enforcement of judgment (supplemented by Bank of India

v Murjani Industries 1989 CA).

(c) Post-judgment Application: s.21B(1)(a), (c)

(i) Court can prohibit D from leaving HK to enforce / secure a judgment for

• The payment of a specified sum; or

• The payment of an mount to be assessed; or

• Requiring D to deliver any property; or

• Any other act.

(ii) Considerations: s.21B(2), HCO

• Person is about to leave Hong Kong and will therefore obstruct or delay

the satisfaction of judgment.

(iii) Required documents:

• Writ;

• Affidavit in support;



Page 4 of 6

2. Ex parte nature

(a) Continuing obligation of full and frank disclosure.

(b) Court may discharge PO if it was made without such full disclosure –!Auto Treasure v

Pyramid International 1992.

3. Making and Serving Prohibition Order: O.44A

(a) Court will make an order in Form No.106, Appendix A: O.44A r.3.

(b) Order needs to be served on Director of Immigration, Commissioner of Police, and,

if possible, the judgment debtor.

(i) If JD cannot be found, court should be notified at time of application or

whenever the fact arises.

(ii) JC should not ‘keep the order up their sleeve’ and use it to threaten the JD in

pending negotiations –!Auto-Treasure v Pyramid International 1992. JCs

must serve JD personally immediately if he can be found.

4. Duration and Cancellation: s.21B(5), HCO

(a) Order lasts 1 month, renewable twice for a maximum period of 3 months.

(b) After 3 months, P needs to re-apply.

(c) The renewals can go on until P has exhausted all remedies against D.

(d) P may serve the Director of Immigration and file with the Registrar a notice to cancel

the order and must do so if the order is no longer required.

5. Contravention: s.21B(7), (8), HCO

(a) Under (7), arrest by the immigration, police or bailiff is possible.

(b) Under (8), the person shall be brought to court on the day after the arrest and the court

may:

(i) Examine or imprison him;

(ii) Discharge him with or without conditions.

(c) D contravenes the order when he even attempts to leave the jurisdiction, though

catching him may be difficult –!Sino Wood Investment v Wong Kam Ying 2006 CFA.

6. Discharge under O.44A r.4

(a) Apply with 2 clear days’ notice to judgment creditor.

(b) Judgment debtor himself needs to be present.

(c) If the judgment one for money, the court will assess the amount due to the judgment

creditor and may discharge the order or examine the judgment debtor as under O.49B.

(d) Where a debtor for money, not a judgment debtor…

(i) Consents to judgment being entered against him; or

(ii) Satisfied the court that he has a substantial defence to the claim; or

(iii) Consents both in respect of different parts of the claim…


Page 5 of 6

The court will discharge the order and give judgment accordingly and order

examination for the remaining parts of the claim as under O.49B.

(e) The court may otherwise discharge the Prohibition Order according to such conditions

as it thinks fit.

7. Compensation to Debtor if Wrongful Order: O.44A r.5

(a) If the court thinks the order was applied for

(i) on insufficient grounds;

(ii) Was not caused to lapse by the plaintiff as soon as reasonably possible after

it was no longer required…

It may award the debtor reasonable compensation for his loss according to its

jurisdiction.

That will bar the debtor from proceedings against the plaintiff for extra damages.

~ ~ ~


Page 6 of 6

Civil Litigation – Discovery Cliffnotes

A. The Law of Discovery

1. How do Discovery Obligations Arise?

(a) Automatic Discovery (O.24 r.1, 2):

(i) Parties to actions begun by writ must give discovery of any relevant matters

within 14 days pleadings close: O.24 r.2.

• Pleadings close 14 days after the reply or defence to counterclaim:

O.18 r.20.

• Total realistic time is 28 days after last pleading is served.

• Relevant matters do not include admitted matters.

(ii) There is generally no automatic discovery of documents arising out of

accidents on land, unless the court otherwise orders: O.24 r.2(2).

• Automatic discovery will engage upon documents relating to special

damages only as well as police reports / sketches, etc.: O.25 r.8(1).

(b) Court Order for (O.24 r.3):

(i) Further and better particulars: O.24 r.3;

(ii) Specific discovery: O.24 r.7.

(c) Request from other side to produce for inspection copies of documents referred to in

served documents: O.24 r.10.

(d) Continuing obligation when new documents come into light –!Vernon v Bosley 1997.

(i) These are set out in a Supplemental List of Documents.

(e) District Court: O.23A, 24 RDC.

" * Documents mean any written matter and includes records, tapes and email.

2. Making Discovery

(a) Parties prepare and exchange list of documents: O.24 r.5.

(b) Defendants entitled to co-defendants lists: O.24 r.6.

(c) List of Documents in Form 26, Appendix A:

Civil Litigation – Discovery Cliffnotes ! Cliff Lui

Page 1 of 8

1. The Plaintiff has in his possession, custody or power documents relating to the

matter in question in PART 1 of SCHEDULE 1.

2. The Plaintiff objects to producing the documents in PART 2 of SCHEDULE 1

because: [ … legal advice or litigation privilege … ].

3. The Plaintiff had, but not now, in his possession, custody or power documents

enumerated in SCHEDULE 2.

4. Of those documents in Schedule 2, those numbered [•] in that schedule were last

in the Plaintiff’s possession, custody or power on [•] and the remainder on [•].

They have been [•] and are now in the possession of [•].

5. No one has or ever had, in his possession, custody or power, any document

relating to the matter in question other than those enumerated in the above

Schedules.

(d) Sets of documents having the same nature may be bundled together.

(e) Kind of privilege must be stated.

(f) Where discovery is made pursuant to a court order, the disclosing party might be asked

to verify its list of documents by affidavit (e.g. previous default).

(i) Affidavit must be as per Form 27, Appendix A: O.24 r.5(3).

3. Inspecting Documents

(a) List of Documents may contain a ‘Notice to Inspect’, stating a time and place where

the other party can inspect the documents: O.24 r.9.

(b) Person inspecting is entitled to copies if he pays reasonable charges: O.24 r.11A.

(c) If a party fails to produce documents for inspection or provide copies, the counterparty

may request inspection under O.24 r.11.

(i) Onus on requested party to show that the documents are not: (i) relevant; (ii)

within his possession, custody or power; or (iii)

(ii) Onus will be on requesting party to show that the order is necessary for

disposing fairly of the matter or for saving costs: O.24 r.13.

(d) A party is also entitled to request copies of documents referred to in the counterparty’s

documents: O.24 r.10.

4. Threshold for discovering documents

Relevance, within possession, custody or power, and privilege.

(a) Relevance: O.24 r.1

(i) Relevant matters do not include matters already admitted.

(ii) Peruvian Guano test is very wide:

• Documents that tend to prove or disprove a matter in issue;

• Documents that might enable the other party to advance his own case

or damage the counterparty’s case; and


Page 2 of 8

• Documents which would lead to a train of enquiry which might have

either of those two consequences.

(iii) Issue must be one determined by pleadings –!Paul’s Model Art GMBH & Co.

KG v U.T. 2005.

(iv) Party cannot make something relevant merely by putting it in the pleadings.

It has to be actually relevant to the substance of the case –!Paul’s Model Art,

referring to Allington Investments v First Pacific Bancshares Holdings 1995.

Discovery is not required of documents which relate to irrelevant allegations

in pleadings which even if substantiated cannot affect the result of the action.

(v) A party can redact (censor) irrelevant portions of an otherwise irrelevant

document, but must state the reason for each redaction –!Guess v Lee Seck-

mon 1989 CA.

(b) Possession, custody or power:

(i) Applies to previous or current possession, custody or power.

(ii) Physical control and right to take possession of…

(iii) Legal right to call for the document or control over the entity or individual

holding it –!Sun Yuet Tai v British American Tobacco 1999 CA. These are

questions of fact.

• Excludes any rights under the Privacy Data Protection Ordinance –

Lonhro v Shell Petroleum 1980 because those are only rights to see and

correct.

(c) Privilege:

(i) Privileged documents have to be disclosed as to existence only, but not as to

contents in Part 2 of Schedule 1.

(ii) Can be waived.

• Where counterparty inspects privileged documents:

- Normally, where a party sees a particular document referred to in

the other side’s list without privilege being claimed, and is later

allowed inspection of that document, he is allowed to assume that

privilege has been waived.

- That is the case unless the other party had obtained inspection of a

privileged document by fraud –!Guinness Peat Properties 1987 CA.

(iii) Grounds

• Legal advice privilege

- Confidential communications between solicitor and client in

professional capacity that came into being for the purpose of

giving or obtaining legal advice.

- Litigation need not be contemplated.

- Includes advice as to course of action in the relevant legal context

–!Three Rivers District Council v Bank of England 2004 HL. In that

case, the HL differentiated between employees responsible for

communicating with the legal advisors and those who were not.


Page 3 of 8

• Litigation privilege

- Communication between client and third party…

- When litigation was reasonably in prospect… and

- Dominant purpose (intention of author or person under whose

direction, whether particular or general it was brought into

existence) was to obtain legal advice / assist in litigation –!

Waugh v British Railways 1980 HL.

• Guinness Peat: where intention was derived from the person

asking for the document.

• Test: reasons of equal importance »!dominance.

• Protection from self / spousal incrimination: s.65(1)(a) Evidence

Ordinance.

- Risk apparent to court and appreciated by himself.

- Must be claimed on affidavit by person himself.

- Excepted offence: IP infringement: s.44A HCO.

• Public interest immunity: O.24 r.15.

(iv) Confidentiality not a bar.

• Controlled discovery to lawyers, experts, etc.

• Confidentiality undertakings for e.g. trade secrets –!Atari v Philips

1988.!

(v) “Without prejudice” documents inadmissible as evidence in trial.

• Must still be disclosed in Part 2 of Schedule 1 –!Gross Fortune v Set

Win 1999 CA.

• Usually not an issue because both sides will have had seen it.

5. Inadequate List of Documents!

Get more discovery, apply for specific discovery or strike out!

(a) Further and better discovery: O.24 r.3:

(i) Used where: (i) no list; (ii) list clearly inadequate, where order will be for

service of a further and better list of documents by some specified date.

(ii) Where discovery is not automatic, e.g. originating summons.

(iii) Order may require defaulting party to verify the better list by affidavit.

(iv) Usually combined with order under O.24 r.7 as below.

(b) Specific Discovery: O.24 r.7:

(i) Failure to produce a particular document or class of documents.

(ii) Applicant files affidavit in support and must believe that the documents in

question:

• Exist;


Page 4 of 8

• Are relevant to the matters in question; and

• Are in the other side’s possession, custody or power.

(iii) Burden on applicant to satisfy above on prima facie basis –!Full Range

Electronics 1997.

(iv) Applicant also has to satisfy court that it is necessary for disposing fairly of

the matter or for saving costs.

(v) Applicant should seek an order for the other side to state on affidavit whether

it has or ever had in his custody, possession or power, the documents in

question.

(c) Strike Out: O.24.16:

(i) Extreme cases of default, e.g. fair trial no longer possible –!Pang Po King v

Celestial Securities 2002.

(ii) Contempt is possible.

(d) Limitations on further and specific discovery

(i) Court will not order discovery where:

• Refusing party shows that it is not necessary for disposing fairly of

the matter of for saving costs.

• Fishing expedition where requesting party is seeking discovery merely

in the hope of finding some claim or some defence to raise –!Cathay

Pacific v Cathay Pacific Flight Attendants Union 1996 CA.

• No substantial evidential materiality –!O Company v M Company

1996.

• Oppressive –!AG v Wellcome Foundation 1992, more below.

6. Discovery from Non-parties

(a) Not generally possible unless called as witnesses and issued with a subpena duces

tecum requiring production of documents: O.38 r.14.

(i) If non-party objects, requesting party needs to show:

• Documents exist;

• Relevant and admissible

• Necessary to dispose fairly of the case; and

• No fishing expedition –!Brisilver Investments v Wong Fat Tso 1999.

(ii) *Position is to change around 2009 due to Civil Justice Reforms.

(b) Personal injuries and death

(i) Pre-action discovery only against likely parties, see below.

(ii) During proceedings, on application under s.42, HCO, any party can compel

anyone likely to have or to have had in his possession, custody or power,

relevant documents, to disclose whether he has them and to produce them to

the requesting party’s lawyers or experts.


Page 5 of 8

(iii) Application under O.24 r.7A by originating summons and supporting

affidavit:

• Specify documents sought;

• Identify issue to which documents relate;

• Show documents to likely be in the non-party’s possession, custody or

power: O.24 r.7A(3).

(iv) Norwich Pharmacal l1980 HL rules:

• Independent discovery against third parties who, through no fault of

their own, facilitated in the tortious acts of others.

- Only prima facie case necessary.

• Third party required to disclose identity of wrongdoer and other

information (e.g. bank accounts and destination of funds transferred).

• Discovery only where information sought is necessary for claimant to

bring claim against tortfeasor. Remedy of last resort –!Mitsui v Nexen

Petroleum UK 2005. Other methods should be tried first.

• Cannot be oppressive –!AG v Wellcome Foundation 1992 where

Custom and Excise was asked to arrange and produce tens of thousands

of documents for discovery.

- Whether providing the information would inconvenience the

disclosing party to an extent which cannot be compensated in costs.

7. Pre-action Discovery

(a) Not generally possible.1

(b) Personal injuries and death, prospective party

(i) Apply to court under s.41, HCO by originating summons and supporting

affidavit: O.24 r.7A:

• State why applicant and respondent likely to be parties in personal

injury proceedings;

• Identify documents sought;

• Identify issues to which documents relate; and

• Show documents likely to be in prospective party’s possession,

custody or power.

(c) Non-PI cases under Norwich Pharmacal 1980 HL:

(i) See 6(b)(iii) above.


Page 6 of 8

1 Will soon change under Civil Justice Reforms, extending pre-action discovery to all cases. Applicant will have to show: (i) that he is a likely future party; (ii) that the requestee is a likely future party; (iii) that documents sought are in possession, etc.; (iv) that documents are directly relevant to likely issues to be raised.Direct relevance is if evidence will likely be relied upon or is adverse to either party’s case. The wide Peruvian

Guano test will not apply.

8. Use of Discovered Documents (Implied Undertaking)

(a) Litigants impliedly undertake not to use info obtained for any collateral purpose other

than those necessary for the conduct of the action –!Anex Elextrical v Kingsland

International 1998; Shun Kai Finance v Japan Leasing 2000 CA.

(b) Exception: implied undertaking does not apply to documents referred to in a party’s

pleadings, witness statements, affidavits and those produced under O.24 r.10 –!Shun

Kai Finance.

(c) Breach »!contempt.

(d) Release: O.24 r.14A:

(i) With counterparty consent;

(ii) With leave of court; and

(iii) Any document referred to in open court.

9. Advise client about:

(a) Existence of broad scope of discovery obligation.

(b) Scope includes both documents that support and go against the client’s case.

(c) Expense of discovery, encourage settlement.

(d) Continuing nature of discovery.

(e) All records must be preserved.

(f) Creation of new, prejudicial records should be prevented.

(g) Implied undertaking.

(h) Solicitor duties:

(i) Ensure proper discovery has been given by client.

(ii) Ensure opponent’s list is complete and any claims of privilege are proper.

(iii) Cease to act if client refuses discovery obligations.

B. Interrogatories

1. General

(a) Way to discover facts, as opposed to documents.

(b) Serve written questions to other party about facts within other party’s knowledge and

which are relevant.

(c) Answering party to respond on affidavit.

(d) Obtain admissions on precise points, narrow issues, reduce costs, and encourage

settlement.


Page 7 of 8

2. Scope: O.26 r.1:

(a) Relevant

(b) Necessary either: (i) for fair disposal of matter; or (ii) for saving costs.

3. Procedure

(a) High Court

(i) Can be served twice without court order: O.26 r.3(1).

Third time requires leave: O.26 r.1(2).

(ii) Leave required if service on government: O.26 r.3(3).

(iii) After discovery and exchange of witness statements –!Zhu Kuan Co. v

Brickell 1995.

(iv) Interrogatory requirements (O.26 r.2):

• Time to respond, which must "28 days after service;

• Name of party, officer or member who is to answer;

• Where body, name of officer / member on whom it shall be served.

(v) Response within stated time limit unless servee applies to court: O.26 r.2(2),

3(2).

(vi) Answer on affidavit: O.26 r.2(2).

(b) District Court

(i) Leave required, made by summonses with proposed interrogatories attached.

4. Objection

(a) Application to set aside / vary interrogatories must be made within 14 days of service:

O.26 r.3(2).

(b) Interrogatories disallowed by court where:

(i) Questions irrelevant / fishing interrogatories, e.g. where interrogatories are

designed to establish an unpleaded cause of action;

(ii) Not necessary for disposing fairly of matter or for saving costs;

(iii) Oppressive, i.e. where it places disproportionate burden on answering party.

(c) Privilege –!answer interrogatory with privilege and grounds.

5. Refusal to Answer

(a) Request further and better particulars of interrogatories: O.26 r.5(3).

(b) Apply to court for order compelling other side to answer on affidavit or oral

examination: O.26 r.5(2).

(c) Apply for action to be dismissed or defence be struck out: O.26 r.6(1).

(d) Where interrogatories were ordered by court, contempt: O.26 r.7.

~ ~ ~


Page 8 of 8

Civil Litigation – Injunctions Cliffnotes

A. Introduction

1. Definition and Powers

(a) Equitable remedy under s.21L, HCO and s.52B, DCO:

(1) The Court of First Instance may by order (whether interlocutory or

final) grant an injunction in all cases in which it appears to the Court

of First Instance to be just or convenient to do so.

(2) Any such order may be made either unconditionally or on such terms

and conditions as the Court thinks just.

(b) Only judges can grant injunctions: O.32 r.11(1)(d) unless the parties agree otherwise.

(c) Prohibitory (common) / mandatory (rare)

(d) No injunction against non-parties to an action –!Mercedes-Benz AG v Leiduck 1996

PC.

(i) Transaction occurred outside HK. Defendant was registered in HK.

(ii) Held: Court has no power to make orders against persons outside its

territorial jurisdiction unless authorised by statute. The only way here was

overseas service of documents, which does not include injunctions. The

respondent was not brought before the court by any valid means.

2. Classification

Interim Order ~ 2 days effect.

Interlocutory Injunction Commencement of proceedings until judgment.

Permanent Injunction Obtained after full evidence assessment, usually after trial.

Quia timet Injunction Injunction obtained before any harm is caused –!Morris v

Redland Bricks 1970.

3. Example

(a) “An (ex parte / inter partes) interlocutory prohibitory injunction requiring the

defendant to stop placing any thing, inclusive of the defendant’s vehicle with

registration number AA 1234, on or at the plaintiff’s car park space at 123 University

Road, Flat A, car park space 1.”

B. Permanent injunctions

(a) Discretionary relief. Court may still refuse the plaintiff an injunction as its relief and

be left with damages and or other relief as its only remedy.

(b) Matters that may affect the Court’s discretion in whether to grant an injunction,

permanent or interlocutory, include:

(i) Where relief would instead be properly compensated by damages.

Civil Litigation – Injunctions, Marevas and Anton Pillers Cliffnotes ! Cliff Lui

Page 1 of 10

• One does not obtain an injunction to restrain wrongs for which

damages are the proper remedy, in particular where the wrongs have

ceased and there is no likelihood of its recurring – Proctor v Bayley

1889.

(ii) Unacceptable behaviour, fraud or dishonest conduct.

• Where there is evidence that the plaintiff have been protecting their

secrets by deplorable means and hence do not come with “clean hands”

to the court to protect those secrets – Hubbard v Vosper 1972.

(iii) Acquiescence.

• ~estoppel where the plaintiff knows that the act is being done, is aware

of the legal rights involved yet gives the respondent the idea that he

would not do anything – Armstrong v Sheppard & Short 1959.

(iv) Laches.

• Unreasonable inaction by the plaintiff after the infringement of its

right(s) had already taken place. Normally the length of delay is the

greatest factor to be considered and is a common defence – Legg v

ILEA 1972.

(v) Trivial infringement of plaintiff’s rights.

• Where there is no injury to a landowner and the plaintiff may obtain

nominal damages, the Court considered on those facts the case as a

“petty contest” – Behrens v Richards 1905, or with mandatory

injunctions where it would mean involving substantial expense and

inconvenience which is out of proportion – Sharp v Harrison 1922.

• However, a final mandatory injunction may be sought where there is

encroachment on the property of the plaintiff by a defendant pursuant

to the deed of mutual covenant of the property. Even where a plaintiff

has given consent to occupation, such consent is at best a bare licence

which is terminable at will. Opposing such an order where the merits

of the plaintiff’s case is overwhelming, there might be an award of

indemnity costs against the defendant –!Fan Tony v Incorporated

Owners of Kung Lok Building 2006.

C. Interlocutory Injunctions

1. Introduction

(a) Interlocutory proceedings:

(i) No trial of merits

(ii) No full discovery / inspection of documents

(iii) No full pleadings

(iv) No need to prove any case

(b) Maintain status quo.


Page 2 of 10

2. Law

(a) O.29 r.1

(i) Injunctions do not have to be pleaded and may be made by any party at any

time.

(ii) Ex parte application by affidavit allowed if case is urgent, otherwise, must

apply by summons or motion.

(iii) Application before writ not allowed unless case is urgent. If issue before

writ, writ must be immediately issued.

(b) American Cyanimid Company v Ethicon 1975 HL

(i) Serious issue to be tried. (not frivolous or vexatious)

(ii) Damages inadequate remedy for applicant –!Fellowes & Son v Fisher 1976

where it was held that injunction should not be granted if there is only

financial loss even if it is not capable of precise calculation.

• Irreparable damage occurs with property, reputation, things with a life

expectancy (businesses, patents, etc.).

(iii) Damage to respondent reparable?

(iv) If damage to both seem irreparable, balance of convenience?

• If there is no arguable defence and the plaintiff’s injunction claim was

justified, this step is not necessary –!Yeko Trading v Chow Sai Cheong

2000.

(v) Undertaking as to damages.

• PD.[•]

• Fortification may be ordered even if it wasn’t asked for by the

respondents –!Elegant Jump v Tribune Bridge 2000.

• Allows court to grant injunction without going into the merits of the

case –!Wah Nam Holdings v Excel Noble Development 2000. If an

injunction is ex parte, material non-disclosure of applicant’s financials

may render injunction nugatory.

• Evidence that P has the means to support his undertaking may be vital

to the case where all other factors are finely balanced and where

substantial damages may be ordered –!Andy Lau v Hang Seng Bank

2000.

(vi) *Relative strength of parties’ cases (last resort / main issue / consent).

• Only occurs if all else appears equal since the court is only looking at

affidavit evidence –!Entec Pollution Control v Abacus Mouldings 1992

CA; or

• If the grant / refusal of injunction will dispose of the action – Zheng Lie

Lie v Prosperfield Ventures No.1 2003; or

- Subject of injunction was also subject of LPP;

- “In this matter … the trial of this matter will not occur and that for

all intents and purposes my determination as to whether this


Page 3 of 10

injunction should continue will have the effect of deciding the issue.

If I continue the injunction, the defendants will not be able to use

the document. If I refuse to grant the injunction, the plaintiffs will

be deprived of their plea of privilege.”

• Where there is (i) no real dispute as to the facts; (ii) there is agreement

to hear the application as a trial to the action; and (iii) to make the final

order –!The Incorporated Owners of Viking Garden v Golden Brains

1991.

(c) Exceptions to American Cyanimid:

(i) Where grant / refusal of interlocutory injunction would determine the

action –!Zheng Lie Lie.

(ii) Where cause of action is based on express restrictive covenants, because

the respondent’s promise should be upheld once a serious issue to be tried is

established.

• Injunction will be granted unless the clause is prima facie invalid

–!Fellowes & Son. Some factors to determine validity (Nordenfeldt v

Maxim Nordenfeldt 1984):

- Covenants in restraint of trade are prima facie unenforceable but are

enforceable if they are reasonable with reference to the interests of

the parties and of the public.

- A covenant may lawfully prohibit a former servant from accepting

employment with a competitor so as to be likely to destroy the

employer’s trading secrets and connections by a misuse of his

knowledge such, provided that the covenant is no more than is

reasonable to protect the legitimate interests of the former

employer.

- Covenant must be reasonable in the duration, as to the geographical

area of its operation and as to the restraint it imposes on the

employee in respect of the type of prohibited activities – Susan

Buchanan v Janesville 1981.

• Onus on the employer to establish validity / reasonableness.

• In many cases, the balance of convenience would be in favour of the

defendant because his livelihood is at stake whereas the plaintiff would

just lose a few clients.

• No mandatory injunction of employment contracts –!Beacon College v

Yiu Man Hau 2001.

(iii) Where cause of action based on restraint of trade, length of delay to trial is

a factor –!Lansing Linde v Kerr 1991. If restraint of trade clause

unreasonable at trial, plaintiff may be held liable on its undertaking –!Ho

Wing Cheong v Graham Margot 1990.

(iv) Where cause of action based on defamation and defence is justification /

truth, injunctions are not usually granted because it would infringe upon free

speech –!Holley v Smyth 1998.


Page 4 of 10

(d) Mandatory Injunctions!

(i) Rare and exceptional –!Pfizer v Ultrasound Holdings 1999.

(ii) Strong prima facie case required – TKI v New Happy 1995 CA.

(iii) Take the course of lower risk of injustice –!Films Rover International v

Cannon Film Sales 1987.

3. Procedure (inter partes application)

(a) Practice Direction 5.3

1.1 Friday is summons day. Return dates for all summonses for

interlocutory injunctions and those ex parte will be Friday

mornings 10:00.

2.1 Court Clerk will mark the next summons day for all

injunction applications if 2 clear days’ notice can be given to

the respondent.

2.2 Return date for ex parte injunctions granted less than 2

clear days before a summons day will be the 2nd summons day

following the grant.

Best to file on Tuesday.

(b) Person with equitable interest may apply for interlocutory injunction but cannot obtain

final order until he joins the legal owners –!Takmay Industrial v Wah Sang Industrial

1979.

(c) Permanent injunctions must be pleaded as a form of relief.

(d) Documents required, file by TUESDAY

(i) Writ

(ii) Summons

(iii) Affidavit in support

(iv) Skeleton argument: PD 5.4, 4.2

(v) Draft order (optional)

4. Procedure (ex parte application)

(a) Full and frank disclosure. Else order may be set aside without considering merits to

deprive the plaintiff of any benefits he may have obtained though of that duty

–!Kensington Income Tax Commissioners 1917.

(i) If no full disclosure, costs against applicant forthwith and on an indemnity

basis.

(ii) Applicant must make sufficient enquiries prior to the application.

(iii) Continuing duty to disclose any material change of circumstances while

proceedings remain ex parte –!Hanjin Shipping v Grand King Shipping

1998.

(iv) Material facts are all material matters necessary to enable the judge to

properly exercise his discretion.

(v) Good results of injunction not sufficient to justify lack of disclosure.


Page 5 of 10

(vi) Simply copying large amounts of documents is insufficient –!Rever (AMA)

Salon v Kong Wai For 2001.

(b) Practice Direction 11.1 “Ex parte and general applications”

1.(a) Applications should normally be made on affidavit to a

judge.

4. !In all applications ex parte for the grant, continuance or

discharge of interim or interlocutory injunctions, the papers

(including draft order) should be delivered to the court in good

time.

5.! Usually the issue of a writ or originating summons and the

swearing of an affidavit in support of an ex parte application

for injunction is required before the application is made

(O.29 r.1).

11. The affidavit in support should contain a clear and concise

statement:

(a) facts giving rise to the claim;

(b) facts giving rise to the claim for injunction;

(c) facts justifying the application ex parte; this should

include any details of any notice given to the defendant or

the reasons for giving none;

(d) of any answer either asserted by the defendant or which

he is likely to assert, either to the claim in the action or

to the claim for interlocutory relief;

(e) of any facts known to the applicant which might lead

the court not to grant the relief sought or not to grant it

ex parte; and

(f) of the precise relief sought.

12. !The application should be accompanied by a skeleton argument

setting out precisely and succinctly how it is said that the

case:

(a) meets the requirements for the order sought; and…

13.!The skeleton argument must be served on the counterparty

together with the order and evidence.

14.!Applicants for ex parte relief should prepare and lodge with

the papers relating to the application a draft minute of the

order sought. Such minute should specify the precise relief which

the court is asked to grant. Undertakings include:

(a) to give an undertaking in damages;

(b) to notify the defendant of the terms of the order

forthwith by appropriate means;

(c) in Mareva injunctions, to pay the reasonable costs and

expense incurred in complying with the order by any third

party to whom notice of the order is given;

(d) if proceedings have not been issued, to issue them

forthwith;


Page 6 of 10

(e) if a draft affidavit has not been sworn, or where the

facts have been placed before the Court orally, to procure

the swearing of the affidavit or the verification on

affidavit of the facts outlined orally to the Court.

15.!The order should, as a general rule, contain provision:

(a) for the defendant to apply on notice for discharge or

variation of the order;

(b) for a return date, of an inter partes hearing; and

(c) for the costs to be reserved.

(c) Required Documents:

(i) Issue of a writ;

(ii) Affidavit in support;

(iii) Skeleton argument;

(iv) Draft order;

(v) * as a matter of practice, a draft summons for a return date hearing.

D. Consequential Matters

(a) Duration of injunction

(i) inter partes :

• From issue of order until further order or judgment.

• May be varied after application is made with liberty to apply; material

change in circumstances; or where order was made on erroneous view

of the law –!Regent Oil v JT Leavesley 1966 or where defendant offers

undertakings.

(ii) ex partes:

• From issue of order

• Until successful ex parte discharge application –!London City Agency

JCD v Lee 1970. Successful application by one defendant normally sets

other co-defendants free –!RD Harbottle (Mercantile) v National

Westminster Bank 1978.

(b) Costs

(i) Inter partes injunction: winner’s costs in the cause.

(ii) Successful ex parte injunction: costs reserved, determined later.

(iii) Successfully opposed ex parte application: costs to defendant –!Pickwick

Int’l Ink v Multiple Sound Distributors 1972.

(iv) If infringement to plaintiff’s rights trivial and defendant had offered

reasonable settlement terms, costs may be awarded to defendants despite

having proved liability – Wealthy Plus v Lai Man Ho 2001.

(c) Breach of injunction is contempt of court: O.52.


Page 7 of 10

E. Mareva (Freezing) Injunctions

1. General

(a) S.21L, HCO and s.52B, DCO: restrain any party from removing from the jurisdiction any asset located within the court’s jurisdiction.

(b) Seizure of assets preserves them for the JC but does not give them preference over any particular creditor!– The Mareva 1980 CA.

(c) Mareva should not prevent D from carrying on business as usual and should not impede him in his defence – Derby & Co. V Weldon 1989.

2. Procedure

(a) Any time ex parte application due to need for speed and secrecy.

(b) Affidavit requirements:

(i) Good arguable case, cf. serious issue to be tried –!Nicekind Holdings v Yim

Wai Ning 2000.

(ii) Court has jurisdiction (sums and main basis of action within HK).

(iii) Certain or approximate sums.

(iv) D must have assets within the jurisdiction.

• If Worldwide Mareva, insufficient assets in HK but enough outside –!International Connex Holdings v Wealth Resources Enterprises 2006.

(v) Balance of convenience.

(vi) Full and frank disclosure.

(vii) Risk of dissipation, (evasiveness, fraud, nature of assets, defendant characteristics).

(viii) Willing to give undertaking.

(c) Precluding factors:

(i) No good arguable case;

(ii) Material non-disclosure;

(iii) Insufficient risk of asset dissipation;

(iv) Sums < $300,000.

(v) Delay

(d) Amount frozen equal to prima facie justifiable claim –!Z v A-Z and AA-LL 1982.

(e) Other ancillary orders possible include discovery, delivery up of assets, etc. –!CBC

United Kingdom v Lambert 1983.

(i) Yau Chiu Wah v Gold Chief Investment 2002:

• Court has jurisdiction to order cross-examination of a deponent on any affidavit or affirmation made by him in compliance with an order for discovery under a Mareva injunction.


Page 8 of 10

• Order for cross-examination is to enable a Mareva injunction to be

made more effective. This is also the justification for an order for

discovery as an ancillary order to a Mareva injunction.

(f) Service:

(i) On defendant; and

(ii) Third parties holdings defendant’s assets, incl. banks. Notice must also be

given to notify them of the details and their right to vary the order in as

much detail as possible – Guinness Peat Aviation 1992.

(g) Practice Directions 11.1, 11.2

(i)

3. Effect

(a) Takes effect when pronounced on each of the defendant’s assets it covers and everyone

with knowledge of it must do what the reasonably can to preserve them otherwise they

will be in contempt, especially if they assist in dissipation.

F. Anton Piller (Search) Order

1. General

(a) Court has inherent jurisdiction to require the defendant to permit the plaintiff to enter

the premises and remove and detain items pursuant to orders.

(b) The defendant must grant permission. The plaintiff cannot force their way in.

(c) Alternative under O.29 r.2:

(i) Search and detention of any property, but with inter partes and with notice to

the defendant.

(ii) Not a good alternative. Anton Piller is an ex parte mandatory order with risk

of being found in contempt if defendant refuses.

2. Law

(a) Affidavit requirements – Ng Chun Fai v Tamco Electrical and Electronics 1993:

(i) Strong prima facie case; also of the following factors:

(ii) Actual potential damage to plaintiff;

(iii) Risk of destruction or removal of major evidence before inter partes

application.

(iv) Potential harm of execution must be reasonably proportional to the object

of the order, e.g. where trading stock and commercial documents are seized.

(v) Full and frank disclosure.

(vi) Undertaking as to damages.

(b) AP Order may be applied for multiple times, e.g. once for hard copies and once for

soft copies of documents –!Centaline Property Agency v HK Property Services 2005.


Page 9 of 10

(c) Since the plaintiff may apply ex parte, defendant may discharge order by urgent

application with notice to the plaintiff. Ex parte discharge may also be possible

–!Hallmark Cards v Image Arts 1977.

3. Draft Order (PD 11.2)

(a) Plaintiff has no right to enter unless defendant allows.

(b) If defendant does not allow, he may be in breach of the order.

(c) Defendant may seek legal advice.

(d) Mandatory terms – Columbia Picture Industries v Robinson 1989:

(i) Execution by the named solicitors;

(ii) The number of persons accompanying them and their capacity;

(iii) The premises to be searched clearly identified

(iv) Once copies are taken, originals ought to be returned to the owner;

(v) No material should be taken unless clearly covered by the terms of the order;

(vi) Seized material of which the ownership is in dispute should be retained by

the plaintiffs’ solicitors pending trial;

(e) The order should be executed under a supervising solicitor with experience.

4. Interim Orders (property)

(a) Order 29:

r.2: detention, custody, preservation or inspection of property;

r.3: taking of samples, making of observations, conducting experiments;

r.6: recovery of property subject to lien;

r.7A: inspection, photographing, preservation, custody, detention of property,

taking of samples, conducting experiments before action.

5. Costs

(a) To be reserved.

~ ~ ~


Page 10 of 10

Civil Litigation – Settlement Cliffnotes

A. Procedure

1. Lay Negotiation

(a) Lay persons, sui juris, may conduct negotiations.

(b) Advise clients to make terms of settlement:

(i) “without prejudice”; and

(ii) “subject to contract”

to avoid ambiguous terms being construed against your client.

2. Lawyer Negotiation

(a) Authority

(i) Actual –!express / implied authority given by client.

(ii) Ostensible –!lawyers have ostensible authority that binds their clients even if

they might not have actual authority!–!Waugh v Clifford & Son 1982 CA.

(b) Lawyers should get the actual authority of clients before conducting negotiations to

avoid being sued.

3. Without-Prejudice Letters

(a) These letters contain settlement negotiations, and to encourage settlement between the

parties, are generally inadmissible as evidence. If they do not contain any bona-fide

intention to settle, they are liable to be disclosed.

(b) Exceptions where (Unilever v Proctor & Gamble 2000 CA):

(i) Compromise / settlement is disputed. Letters may be studied to see if a

compromise was actually reached.

(ii) Fraud, misrepresentation and other vitiating factors alleged. Court will study

them to ascertain their effect.

(iii) Estoppel.

(iv) Cloak for unambiguous perjury, blackmail, etc.

(v) Delay, acquiescence needs to be explained

4. Negotiation by Disabled Persons (under-18, mental patient): O.80 rr.10, 11

(a) Approval of settlement before proceedings have begun: O.80 r.11.

(i) Application by originating summons in Form 10, Appendix A, requiring:

• Approval of court for settlement;

• Directions of court for dealing with money agreed to be paid;

• Attached with relevant documents including birth certificate, medical

reports, counsel’s advice, full settlement terms, affidavit of solicitor

setting out position on liability and damages material for the court’s

consideration. Memorandum desired if not settled at the door of the

court – Ablan v Skanska-Shui On-Balfour Beatty Joint Venture 2000.

Civil Litigation – Settlement Cliffnotes ! Cliff Lui

Page 1 of 8

(ii) Acknowledgement of service to be returned.

(b) Approval of settlement at any time: O.80 r.10.

(i) Where money is claimed in any proceedings on behalf of a person under

disability, any settlement must be approved by the court.

(ii) Application by interlocutory summons.

(iii) No agreement is binding until court approval is obtained!–!Dietz v Lennig

Chemicals 1969.

(iv) Court requires explanation as to how the proposed settlement had been

arrived at and why the court should approve it.

• Memorandum by main solicitor setting out position on liability and

damages, attaching latest medical reports and counsel’s advice.

• If at door of court, then inter partes hearing would be sufficient.

(v) If settlement made before trial, apply to the Master; else if settlement made

after trial, apply to the Judge or Master.

(c) If approval is not granted, Master must give directions for appropriate next step.

Appeal is possible to a Judge in chambers.

(d) Ablan v Skanska-Shui On-Balfour Beatty Joint Venture 2000

(i) Court will not rubber-stamp a settlement. Parties should be prepared to

explain why the court should approve it.

(ii) If settlement before writ, court approval should be sought by originating

summons setting out material particulars, including counsel’s advice and

other documents.

(iii) If settlement after writ and if time permits, court approval should be sought

by interlocutory summons in the specified form.

(iv) Counsel’s advice should not be served on the other party.

(v) If settlement was reached shortly before trial, if settlement is not approved,

parties must be prepared to continue.

(e) PD 18.1 and attached note

(i) Practitioners must identify infants and other persons under a disability.

Failure to do so could result in a negligence suit. They may do so my

marking the file ‘infant’ or ‘patient’ as the case may be.

(ii) Practitioner in neglect bears the costs resulting from his neglect.

(iii) Court will not release money even if subject to a first charge by the DLA

until all costs have been quantified. This is to ensure that the claimant’s

money is not held without interest and to enable the court to ascertain what

the real sum for the benefit of the claimant is.

(f) Costs

(i) Proper order is on a common fund basis –!PD 18.1, ¶17.5.

(ii) If a solicitor does not expect he can get his costs from the defendants, he can

charge against a plaintiff’s awarded damages, costs and disbursements, he

must produce for approval at the hearing a statement of the maximum

amount of such costs and disbursements and must justify them.


Page 2 of 8

There is to be no approval unless the court can be told with reasonable

accuracy the maximum amount sought to be deducted from the plaintiff’s

damages.

(g) Mentally Disabled Persons

(i) Part II Proceedings – Re CK 2006 p.29

• Generally not necessary absent special circumstances (substantial

award). A next friend is obliged to act by a solicitor, who has a duty to

protect the interests of the MIP.

• Of course, after the case, the solicitor ceases to act and the court’s

powers over the next friend are limited.

(ii) Committee – Re CK 2006 p.30

• Court can exercise tighter control in terms of selecting and removing

members.

• Committee owes a legal duty to the Court to account for the affairs and

properties administered.

• Court may direct proceedings against former committees to recover

loss by reason of mismanagement.

• May not be cost effective.

(iii) Use of Monies Received –!Re YCK 2004, also see settleemnt sum, below.

• Lawyers acting for a person under disability have a duty to consider

whether reasonable measures are in place to safeguard the misuse of

monies received for the benefit of that person. Instructions from the

next friend cannot override the lawyers’ personal duty owed to the

person under disability. When a lawyer detects some possible conflict

of interest between a next friend and a PUD, he should consider

bringing the matter to the attention of the court and if necessary,

applications should be made under Part II of the MHO.

(iv) Costs

• Where Part II proceedings or a committee is appropriate, the defendant

bears the costs – Sin Kam Hei 2004.

(h) What Happens to the Settlement Sum?

(i) It is paid into court. A large amount of it remains in court to be invested by

the Registrar as suitors funds.

(ii) Applications for future payments out of the fund have to be made to the

Registrar.

(iii) Plaintiff minor gets full access to the funds upon reaching 18 years.


Page 3 of 8

B. Devices for Provoking Settlement

Generally, some pressure needs to be exerted.

1. Payment into court

(a) A payment into court is an offer to settle without admitting liability.

(b) The fact of payment-in must not be disclosed to the court until the issue of quantum

and liability have been decided –!O.22 r.7(1).

(i) It might influence the court’s decision on liability.

(ii) In a split trial, where costs are being decided for the issue of liability,

payment-in may be mentioned, but not the amount –!O.22 r.7(2).

(c) Payment Procedure –!O.22 r.1:

(i) In any action for debt or damages, D may at any time pay into court a sum

of money in satisfaction of a cause of action claimed by the plaintiff.

• If the action includes claims for e.g. equitable relief, those should be

abandoned if P wants automatic rights to his costs under O.62 r.10(2).

This is because acceptance of payment-in only extinguishes the debt

and damages claims.

(ii) On making any payment into court under this rule, and on increasing any

such payment already made, D must give notice in Form No.!23 in Appendix

A to all parties; and P must, within 3 days after receiving the notice, send

the defendant a written acknowledgment of its receipt.

(iii) A notice of payment may not be withdrawn or amended without the leave of

the Court which may be granted on just terms.

(d) Acceptance Procedure

(i) Before trial, payment-in may be accepted within 14 days of receipt of notice

– O.22 r.3(1).

• Leave for late acceptance usually given so long as P pays all of D’s

costs incurred after payment-in.

• If substantial change in the risks of the case in favour of D occur, leave

for late acceptance may not be given. P should not be granted extra

time just because his case has become worse.

(ii) If interim payment after trial but before judgment or summing up to a jury,

P has 2 days – O.22 r.3(2).

• No leave for late acceptance without consent of D.

(e) Effect of Acceptance:

(i) All further proceedings to which the acceptance relates are stayed:

O.22 r.3(4), (5).

• Excludes, e.g. injunctive relief. P can still pursue those claims.

(ii) Costs

• P is automatically entitled to costs up to notice accepting payment-in if

irrelevant claims are abandoned:!O.62 r.10(2).


Page 4 of 8

- If P does not abandon non-monetary claims, he loses entitlement to

taxed costs automatically –!Associated Engineers v Lo Chee Pui

2002 CA. This is because accepting payment-in in full satisfaction of the cause would amount to discontinuance without leave, which under O.21 r.2, can only be done within 14 days of service of defence on P.

• If accepted payment-in < $50,000 in district court claim, then costs should be taxed on the DC scale – Cho Ho Kuen 2001.

• If accepted payment-in < $1,000,000 in high court claim, then the courts has discretion in setting the scale of costs, which would normally be determined by the amount accepted –!Wong Lan 2007, conflicting

with Wellegant 2007.

(f) Effect of Non-acceptance

(i) if payment-in > award then

" Costs before payment-in » P" Costs after payment-in » D

else if payment-in < award then" Costs » P

(ii) Need to include the interest on the principal sum up to the date of payment in determining whether the payment exceeds the award –!O.22 r.1(8).

2. Calderbank Offers (CBO)

(a) Calderbank offers are promises to pay the counterparty with costs consequences if the parties go to trial.

(b) They are made “without prejudice save as to costs” but the nature of the letter will be considered in its entirety –!The National Commercial Bank Ltd. 2000.

(c) They cannot be relied on by a defendant if the costs position could be protected by payment into court –!O.22 r.14(2) and O.62 r.5(d), e.g. a monetary claim. A plaintiff, however, may rely on a CBO. Cf. ‘open letters’ below. This is also because payment into court proves the ability of the settlor to pay.

(d) Costs

(i) CBO shall be taken into account when questions as to costs arise –!O.62 r.5(d).

• if CBO > award (and P ought reasonably have accepted the proposal)

then

" Costs before offer date » P" Costs after offer date » Delse if payment-in < award then

" Costs » P

• The court has a discretion –!Luk Kwan Hung Nelson v Victory Mark

Investment 2004 where it was suggested that the proper question is whether the offeree ‘ought reasonably have accepted the proposal’.

(ii) Notwithstanding an ineffective CBO, if the awarded sum was within the Small Claims jurisdiction and the case was blatantly brought in the District Court, costs may be awarded on the Tribunal scale – Cheung Yu Tin v Ho

Hon Ka 2006 CA where a CBO was ruled ineffective because of the proviso


Page 5 of 8

and because it was reasonable for P to refuse it. There, the costs of the action

had not been dealt with in the CBO. Advice: better to include costs on the

appropriate scale, interest, taxation fees together with the principal.

(a) Open Offers

(i) Choy Bing Wing 1998 –!“… the only way in which D can protect his position

is by means of an open, as distinct from a without prejudice offer.”

• An open, non-confidential letter would escape the problem where a

CBO would be ineffective under O.22 r.14 because the claim is

monetary and a payment into court is otherwise necessary.

C. Settlement by Agreement

1. Without Court Order

(a) Lam Fung Ying v Ho Tung Sing 1993

(i) Oral settlement between solicitors;

P’s solicitors sent draft letter enclosing Consent Summons;

D fired his solicitors and denied solicitors’ authority to settle;

P unsuccessful in obtaining order from Master to enforce settlement;

Chose to continue proceedings by seeking further and better particulars;

Later started fresh proceedings to sue on settlement agreement.

(ii) Held: Election by P when seeking F&BP, settlement abandoned. Estoppel by

representation.

2. With Court Order: O.42 r.5

(a) Consent Judgment for P

(i) In favour of P on terms agreed between the parties (assume jurisdiction).

(ii) If monetary judgment, either settlement or larger sum + stay of proceedings

as long as D complies with settlement terms, see C3(a)(i) .

(iii) If P is injured, he simply enforces judgment by direct execution.

(b) Consent Order for…

(i) Dismissal: P cannot pursue action in fresh proceedings. Can only sue on

settlement agreement.

(ii) Discontinuance / Withdrawal: end original proceedings, but no bar to fresh

action on same cause of action, unless settlement agreement itself discharges

original action.

(iii) Stay: Proceedings are asleep and may be lifted in exceptional circumstances.

(c) Procedure

(i) Within O.42 r.5A –!no leave required, order need only be deposited with the

registrar.

(ii) Outside O.42 r.5A (BB p.531-2) –!take out Consent Summons for leave.


Page 6 of 8

3. Example

(a) Green v Rozen 1955

(i) Terms: agreement by D to pay specified sum of money by specified instalments on specified dates.

• Order: give judgment for total amount agreed to be paid with a stay of execution so long as instalments are paid in accordance with the terms agreed.

• Injured party proceeds to levy execution.

(ii) Terms: less straightforward terms.

• Order: D (maybe also P) shall do the things they have respectively engaged themselves to do.

• The Plaintiff do; the Defendant do…0

• Apply to the court to enforce the order.

(iii) Terms: Tomlin Order.

• Order: “… and the plaintiff and defendant having agreed to the terms set forth in the schedule hereto, it is ordered that all further proceedings be stayed except for the purpose of carrying such terms into effect. Liberty to apply as to carrying such terms into effect.

• Injured party may raise contentions against the enforcement of the order.

(iv) Terms:

• Order: consent order staying all further proceedings in the action on the terms agreed on counsel’s briefs.

• Akin to discontinuance.

(v) Terms:

• Order: none.

• New agreement between the parties supersedes the original cause of action. Anyone injured on the new agreement must seek the court’s assistance afresh.

(b) Assignment FE

(i) Terms: consent judgment to be enforced unless $3M is paid by the designated time and the said customers are not solicited for the stated period.

(ii) Order: consent judgment for P


Page 7 of 8

D. Agreeing Settlement Terms

(a) Parties will stick closely to the enforceable terms of settlement.

(i) Where goods are required to be returned in good condition, they must be so

returned –!Kai Fung Engineering v Plasteel HK 1983.

(b) Potential Claims

(i) To be safe, settlement terms should preclude the plaintiff from suing another

in the same matter, because if P does so, that other person might seek a

contribution from you under s.3(3) of the Civil Liability (Contribution)

Ordinance.

(ii) Alternatively, you can have P indemnify you for any contribution claims that

might be launched against you.

(c) Costs

(i) See who should bear the costs of the proceedings.

E. Court Notification

(a) If case has been set down for trial, if settlement is likely or occurs, the Court Registry

should be informed –!O.34 r.8(2), (3), PD 18.1 section B memorandum.


Page 8 of 8

Civil Litigation – Enforcement Cliffnotes

A. Introduction

1. Effective Date of Judgment

(a) Judgment effective when pronounced. Reasons may be given later: O.42 r.3(3).

(b) Judgment unenforceable until formally drawn up and entered: O.46 r.6(4)(a)(i).

(c) Court may order immediate execution when giving judgment: O.45 r.14.

2. Service of Judgment

(a) Service not necessary for enforcement unless:

(i) order mandatory; or

(ii) Enforcement sought by way of sequestration or committal (contempt):

O.45!r.7.

3. Limitation Periods

(a) Action taken on judgment: 12 years: s.4(4), Limitation Ordinance. (Does not apply to

enforcement by execution – National Westminster Bank v Powney 1990). Interest on

judgment debt cannot be recovered after 6 years.

(b) Enforcement by execution: 6 years, with leave required later: O.46 r.2(1)(a).

(i) In UK, lapse of 6 years is enough to refuse leave.

(ii) In HK, because fresh action may be taken for judgment within 12 years,

courts might just grant leave to avoid wasting time.

B. Methods of Enforcement

1. Judgment / order for payment of money

(a) O.45 r.1(1) enforcement by:

(i) Writ of fieri facias;

(ii) Garnishee proceedings;

(iii) Charging order;

(iv) Appointment of receiver;

(v) Sequestration / committal order.

2. Judgment / order for payment of money into court

(a) O.45 r.1(2) enforcement by:

(i) Appointment of receiver;

(ii) Sequestration / committal order.

Civil Litigation – Enforcement Cliffnotes! Cliff Lui

Page 1 of 12

3. Judgment for possession of land

(a) O.45 r.3 enforcement by:

(i) Writ of possession;

(ii) Sequestration / committal order.

4. Judgment for delivery of goods

(a) O.45 r.4(1) where judgment does not give defendant option to substitute goods with

value:

(b) O.45 r.4(2) judgment may provide option to discharge by paying assessed value of

goods:

(i) Writ of (specific) delivery to recover goods on their assessed value (specific

if ordered upon application by summons);

(ii) Writ of sequestration.

5. Judgment to do / abstain from doing any act

(a) O.45 r.5 enforcement by sequestration / committal order.

C. Post-judgment Provisional Remedies

1. Post-judgment Mareva Injunction

(a) Power under:

(i) s.21L(1), High Court Ordinance

(ii) s.52(1), District Court Ordinance

(b) Establish real risk that judgment debtor will dispose of assets to avoid execution

–!Steward Chartering v C&O Managements 1980. No need to establish merits.

(c) See Mareva Injunctions generally…

2. Post-judgment Prohibition Order

(a) Jurisdiction:

(i) s.21B(1), HCO;

(ii) s.52E(1), DCO.

(b) Court may only make prohibition orders for the following judgments (s.21B(1)

HCO):

(i) Judgment for payment of unliquidated sum;

(ii) Judgment requiring delivery of any property / performance of any act;

(iii) Judgment for liquidated sum.

(c) Person against whom order is sought must s.21B(1) HCO):

(i) Have incurred liability while in HK;

(ii) Carry on on business in HK;


Page 2 of 12

(iii) Be ordinarily resident in HK.

(d) For (b)(i) and (ii), the following must be satisfied (s.21B(2)):

(i) Probable cause for believing that JD is about to leave HK, whether

temporarily or permanently (HBZ Finance v Glory Products); and

(ii) That for the above reason, judgment is likely to be obstructed or delayed.

The above do not apply strictly to (b)(iii), but common law requires that purpose of s.

21B to be satisfied, i.e. that prohibition would not be granted unless judgment would

be impeded for want of a prohibition order –!AVCO Financial Services (Asia) v Topma

Electronics 1999 CA.

(e) Procedure

(i) Ex-parte application by affidavit under O.44A r.2.

(ii) Master has jurisdiction: O.32 r.11(1).

(iii) Continuous duty of full and frank disclosure –!Auto Treasure v Pyramid

International (a firm) 1992 where [•].

(iv) Order subject to discretionary conditions, e.g. that order shall cease to have

effect when JD satisfied judgment: s.21B(4)(b), HCO.

(v) Prescribed form: App A, Form 106.

(f) Service and Duration

(i) Service of sealed draft order to (s.21B(6), HCO):

• Director of Immigration;

• Commissioner of Police;

• Judgment debtor, if he can be found.

(ii) Practical arrangements – Law Society Circular 98-185(PA) and

00-241(PA):

(iii) Duration:

• 1 month, extendable twice for max. 3 months –!s.21B(5), HCO and

s.52B(5), DCO.

• After 3 months, fresh order may be granted if appropriate –!HK

Industrial and Commercial Bank v Wong Siu Leung 1986 CA.

(g) Effect

(i) All attempts and actual success to leave HK are breaches of PO and is

contempt of court –!Sino Wood Investment v Wong Kam Yin 2006 CFA.

(ii) Arrest by any police / immigration officer or bailiff: s.21B(7), HCO;

s.52E(7), DCO.

(h) Discharge

(i) Usually occurs by consent once JD has paid.

(ii) Alternative discharge under O.44A r.4.


Page 3 of 12

D. Oral Examination

1. Introduction

(a) Generally to question about debts owing to the company and what assets the person

has to satisfy judgment.

(b) If body corporate, O.48 only.

(c) If individual, both O.48 and O.49B possible.

2. Comparison

Order 48 (corporate) Order 49B

Ordered for difficulty with enforcement

of any judgment.

Ordered for judgments for liquidated

sums only.

Examination of current and past officers. Examination of the individual JD.

No provision for arrest of JD prior to or

on failure to attend examination.

JD may be arrested prior to examination

if reasonable cause to believe that he

will not comply with EO –!r.1(1)(b).

Also arrest on failure to attend –!r.1(3).

No provision for PO prior to

examination.

Provision for PO prior to examination

–!r.1(2).

Scope restricted to asking what debts are

owed and what property or other assets

he has to satisfy judgment, including

receivables (Bloomsbury International v

Nouvelle Foods 2005).

Wider scope. JD obliged to fully disclose

of all assets, income, expenditure and

disposal of that.

Discovery limited to books or

documents in the possession of the JD

and relevant to the scope above.

Discovery may be ordered by court of

any documents.

No provision for examination of JD on

oath.

JD examined under oath.

Adjourned hearing: no imprisonment, no

PO.

Adjourned hearing: imprisonment under

r.1A(3)(b) or PO under r.1A(3)(a).

3. Procedure

(a) Ex parte application by affidavit against party only.

(b) Sealed copy of order with penal notice and appointment time served on JD.

(c) Initial hearing (call-over): standard directions for disclosure of documents etc. and date

fixed for examination.

(d) Hearing for examination of JD or its officers.


Page 4 of 12

4. Scope

(a) O.48 r.1(1) (corporate), cross examination of the most severe kind –!Republic of

Costa Rica v Stromsbrg 1880 CA.

(i) Whether any debts owing to JD;

(ii) Whether JD has assets or other means (receivables, choses in action, etc.) to

satisfy judgment –!McCormack v National Australian Bank 1992; and

Bloomsbury International v Nouvelle Foods 2005.

(iii) JC may not examine JD simply to get material for future litigation against

others or against JD in an unrelated matter –!Bloomsbury.

(iv) Books relating to the above and belonging to the JD only may be pursued for

discovery – Chung Fai Engineering (a firm) v Maxwell Engineering 2001.

(b) O.49B r.1A(2) (individuals)

(i) Full disclosure of all assets, liabilities, income / expenditure and disposal of

the same.

5. What happens afterwards?

(a) Imprisonment

(i) Under O.49B r.1B(1), the court may order the imprisonment of the debtor for

3 months if satisfied either that the JD (not company officers under O.48

–!Hua Chiao Commercial Bank v Alpha Plus International Development

2001):

• Was able to satisfy the judgment in whole or in part;

• Had disposed of its assets with a view to avoid the judgment debt; or

• Had wilfully failed to make full disclosure or answer questions put to

him.

(ii) The burden of proof is that beyond reasonable doubt –!Bank of India v

Murjani 1991.

(b) Payment by Instalments

(i) Under O.49B r.1B(2), the court may order the JD to satisfy judgment by

instalments if it can.

(ii) If JD defaults, JC can apply with 2 clear days’ notice for imprisonment of

the JD under O.49B r.1B(3)(a).

E. Writs of Execution

" Writs of Fieri Facias; writs for possession; writs of delivery and sequestration.

1. Writ of Fieri Facias (common)

(a) Generally

(i) Writ requires bailiff to seize goods, chattels and other property sufficient to

satisfy judgment together with interest and execution costs. Property liable to

be attached and sold include (s.21D(1), HCO):


Page 5 of 12

• Land, goods, money, cheques, bills of exchange, notes, shares in non-private companies, all property…

• Belonging to JD or held on trust for him.

(ii) No power to seize shares in private companies. Rare for land seizure (O.47 r.7). Allowance for tools of trade and bedding up to a value of $10,000 (s.21D(1), HCO; s.68B, DCO).

(iii) If debtor fails to make payment, goods will be sold by public auction. Any surplus will go back to the JD.

(b) Procedure

(i) Form –!App A, Forms 53-54, 56-57 and 63.

(ii) Prerequisite documents / materials:

• Praecipe (request) for issue of writ

• 3 copies of writ, duly completed

• Sealed copy of judgment

• Filing fee

• Deposit to cover bailiff’s travelling expenses

• Security guard fees

(iii) Writ is issued on sealing by Registrar: O.46 r.6(1). Once issued, JC collects writ and delivers it to the Chief Bailiff.

(c) Third Party Interests

(i) Where a third party claims the seized goods or their proceeds under O.17 r.1, the bailiff may apply by interpleader to see who is entitled to the proceeds to sale.

(d) Stay of Writs of FiFa.

(i) Under O.47 r.1, FiFa Writs can be stayed if

• it would be unjust to use the draconian seizure methods; or

• The JD is unable from any cause to pay the money.

2. Writ of Possession - enforcing judgment for land

(a) Procedure –!O.45 r.3(1)(a)

(i) Form: App A, Form 66, 66A

(ii) Leave of court required except where:

• Judgment or order is a mortgagee action to which O.88 applies; or

• Possession is against trespassers under O.113.

(iii) Application for leave is made ex parte by affidavit: O.47 3.3(3), PD 16.4. Affidavit is to show that:

• Notice of the proceedings in both English and Chinese addressed to all persons in actual occupation of the land had been posted for 3 successive days upon the main door of the premises; and


Page 6 of 12

• Another 4 days had elapsed from that time, i.e. a total of 7 days

minimum.

(iv) May be applied together with FiFa Writ.

(b) Execution

(i) Bailiff executes and has duty to deliver complete and vacant possession to

JC.

• 1st visit: post ‘Notice to Quit’;

• 2nd visit: situational review;

• 3rd visit: break open door with locksmith.

(ii) For abandoned premises, bailiff may execute on first visit provided that JC

had signed pro-forma indemnity undertaking –!Law Soc Circular 06-599

(PA).

3. Writ for Delivery of Goods (O.45 r.4)

…

4. Writ of Sequestration and Committal Proceedings for Contempt

A writ of sequestration is against the property of a JD.

Committal proceedings is against the person of a JD.

(a) Procedure

(i) Main application under O.45 r.5.

(ii) Notice of penal consequences necessary under r.7.

(iii) Personal service of judgment to be enforced.

(iv) Proof beyond reasonable doubt.

(b) Judgments within scope of Contempt Proceedings

(i) Mandatory orders (acts within specified time);

(ii) Prohibitory orders (acts JD must have refrained from doing).

(c) Mens Rea

(i) Not necessary to prove intention to disobey order – Kao Lee & Yip v Donald

Koo 2006 CA. P only needs to prove beyond reasonable doubt that:

• contemptor knew of facts giving rise to the contempt; and

• disobedience was not merely accidental.

- Where ‘accident’ is claimed by D, particulars must be given.

- There is no ‘trivial’ breach. It is a binary result.

(ii) Bona fides in reliance on legal advice not defence!–!Kao, Lee & Yip.

(d) Incorporated Contemptor: O.45 r.5

(i) Officers are liable for contempt under sequestration or committal under

O.45 r.5(b)(ii) or (iii) respectively.


Page 7 of 12

(ii) Aiding and abetting contempt possible but more difficult to prove –!Nicolas

Pappadis v Chan Shing Sheung 1989; Excel Noble Development v Nam Wah

Group 2001.

(iii) Officers not absolutely liable, and are only liable for acts that they could

reasonably take or prevent – Excel Noble.

• Officer to be fully aware of terms of order with which co. must comply;

• Officer must have known those when he had power to secure

compliance; and

• Officer should have been aware of the consequences if he did not

enforce compliance - that steps may be taken against him personally.

(iv) Punishment

• Sequestration against company property

• Sequestration against officer property

• Committal (fine) against company

• Committal (fine or imprisonment) against officers.

(e) Procedure Generally: O.45 r.7

(i) Original judgment / order endorsed with penal notice (i.e. consequences of

failure to obey) in the form per O.45 r.7(4).

(ii) Personal service on JD. Not strict, service may still be effective if the

judgment was one that restrained the JD from doing something and the JD

was present when the order was made; or if he was notified of the terms of

the order by telephone, telegram, etc.: O.45 r.7(6), If other service is made,

then the JD should also be notified of the consequences of failing to comply

–!Citybase Property Management v Kam 2003.

• Court can dispense with personal service –!O.45 r.7(7), as well as the

penal notice if there were some factors that indicated that the

contemptor had knowledge –!Excel Noble.

No evidence that director was unaware of the documents which were

placed in his letterbox.

(f) Procedure and effect, Sequestration:

(i) Apply to judge by motion for leave: O.45 r.5(1)(b) and O.46 r.5(1).

(ii) Notice of motion must state the grounds of the application together with a

copy of the supporting affidavit: O.46 r.5(2).

(iii) Open court hearing: O.46 r.5(4).

(iv) Addressed not to bailiff but to 4 sequestrators nominated by the JC.

(v) Form: App A, Form 67.

(vi) Sequestrators’ duty to enter the contemptor’s property and take possession

of / detain all real and personal property until the contemptor has purged his

contempt. Sequestered property cannot be sold without leave.


Page 8 of 12

(g) Procedure, Committal:

(i) Ex parte application for leave supported by a statement setting out the contemptor’s particulars and grounds with facts verified by affidavit: O.52 r.2(2).

(ii) Usually determined on the papers: O.52 r.2(4).

(iii) Leave » granted, order for committal made by motion to a judge. The notice of motion, accompanied by the earlier statement and affidavit in support must be served personally on the JD but such requirement may be dispensed with: O.52 r.3.

(iv) Open court hearing: O.52 r.6.

5. Writs in aid of execution

…

6. Garnishee Proceedings: O.49

(a) Court orders a third person garnishee to pay the JC using a debt that it owes to the JD. E.g. bank deposits (subject to set-off) are actually debts owed to the depositor.

(b) Conditions: O.49 r.1(1)

Subject to the court’s absolute discretion.

(i) JD owes JC at least $1,000.

(ii) The garnishee owes a debt to the JD.

• ‘Debt’ does not include any transfer of monies that ‘justice’ demands to be returned –!Chung Fai Engineering v Maxwell 2003.

(iii) Garnishee within jurisdiction.

(c) Bank debts

(i) Moneys paid in after order nisi not subject to garnishee order – Heppenstall v Jackson 1939.

(ii) Account held jointly by JD with another cannot be attached by garnishee proceedings –!Hischorn v Evans 1938 CA.

(d) Foreign Debts

(i) Foreign debts are usually not made the subject of a garnishee order.

(ii) That is because the foreign garnishee might not be absolved of its liability towards the foreign plaintiff where global organisations are concerned.

(iii) So a court might still make the order if it can be shown that the garnishee would be discharged of its liability to the JD. However, there is yet to be such a case –!Societé Eram Shipping v Campagnie Intenatioanle de

Navigation 2003 HL.

(e) Debts that cannot be subject of a garnishee order

(i) Wages due to employees: s.66 Employment Ordinance.

(ii) Non-government pensions: s.12 Pensions Ordinance.

(iii) Overdrafts subject to set-off and money paid in after order, per above…


Page 9 of 12

(f) Procedure

(i) Application for an order nisi;

• Ex parte application by affidavit stating (O.49 r.2):

- Name, last known address of debtor; judgment to be enforced and

amount unpaid at time of application; belief that garnishee is within

the jurisdiction and is indebted to the JD together with sources;

name and address of branch at which debtor’s account is believed to

be held.

• File affidavit together with draft order at the Registry. Place with a

Master who will determine whether he will grant a garnishee order nisi

and specify a time and place for further consideration of the matter and

attaching the debt specified in the order.

• Service of order nisi (O.49 r.3(1))

- Order nisi must be served on the garnishee personally at least 15

days before the date appointed for further consideration of the

matter.

- Order nisi must be served on the JD at least 7 days after being

served on the garnishee and at least 7 days before inter partes

hearing.

• Effect of order nisi

- Upon service, the order charges / freezes the debt, preventing the

garnishee from using it to pay the JD or to any other person. –

Gailbraith 1910 HL; Karaha Bodas 2005.

(ii) Inter partes hearing for court to see whether to make order absolute.

• Summary determination of garnishee disputes liability

• Substantial trial if substantial issue: O.49 r.5.

• Court has discretion to decline this equitable remedy if it would result

in injustice of prejudice to some person other than the JD. Burden is on

JD to show the court why the order nisi should not be made absolute

–!Rooke v HV Construction Services 1998 CA.

- A factor to be considered is whether the JD is insolvent or likely to

become insolvent. This is because the effect of an order absolute

may give preference to the JC over other unsecured creditors

–!Roberts Petroleum v Bernhard Kenny 1983 HL.

(iii) Effect of order absolute

• JC gets equitable charge over the attached property over third parties.

• You cannot escape garnishees by waiving dividends made at director

meetings.

• Garnishee becomes liable to pay the JC the amount owed by the JD

including garnishee costs: O.49 r1(1).

• Enforcement of failure to pay same as any order for payment of money:

O.49 r.4(2).


Page 10 of 12

7. Charging Order: O.50

(a) The court can put a charge on specified property to enforce the payment of money

under a judgment: s.20(1), HCO; s.52A, DCO.

(b) What may be charged:

(i) Land; securities; funds in court; interest in property.

(ii) JD must have some beneficial interest in the property. ***

(c) Application Procedure

(i) Ex parte application by affidavit: O.50 r.1(3)(a)-(d):

• Identify judgment / order sought to be enforced;

• State name of JD and all creditors of his;

• Give full particulars of interest sought to be charged;

• Verify that such interest is beneficially owned by JD.

(ii) Master will grant order nisi if satisfied that there is sufficient cause for the

order. Time and date will be specified for the inter partes hearing and a

charge will be imposed on the specified property until that date.

(iii) Form: App A Form 75.

(d) Service

(i) Copies of order and affidavit in support must be served on the judgment

debtor, etc. (O.50 r.2).

(ii) 7 days before inter partes hearing: O.50 rr.2(1)(a), (3).

(iii) Special requirements for charging securities.

(e) Making Order Absolute

(i) Discretionary power to consider all circumstances of a case: s.20(3), HCO:

• Personal circumstances of JD;

• Whether any creditor would be unduly prejudiced.

- E.g. Insolvency – Wardley v Aik San Realty 1985;

- Over-securing a debt –!Chan Miu Cheung v Prague Enterprises

1985.

(ii) JD to show why order nisi should not be made absolute.

(iii) Charging order in Form: App A Form 76.

(iv) Secures judgment debt and interest payable –!Ezekiel v Orakpo 1977 CA.

(v) ~ equitable charge so JC may enforce the order by applying to the court for

sale of the charged property or by appointing a receiver.

(vi) Land and Shares

• Charging orders on land should be registered at the Lands Registry:

s.20B(2), HCO.


Page 11 of 12

• Copy of order including stop notice needs to be served on the person

specified in O.50 r2(1)(b) as may be appropriate: O.50 r.5(3). Including

the company and keeper of the register for onshore listed companies.

• A stop notice can be issued under O.50 r.11. This requires 14 days prior

notice to the JC that the charged shares are to be dealt with. In the

meantime, the JC can apply for a stop order under O.50 r.15 to prohibit

any transfer.

(f) Enforcement by Sale

(i) The JC may apply for an order for the sale of the charged property by

separate proceedings under O.88.

8. Equitable Execution –!Receivership: s.21L(1) HCO, O.51, O.30

(a) This is an equitable remedy that is useful when a body has substantial future income

which needs to be properly managed by a receiver.

(b) Very costly!

(c) Law

(i) A receiver may be appointed in any case where it is just and convenient to do

so: s.21L(1), HCO, s.52B(5), DCO, O.30 r.1.

(ii) A receiver may be appointed for a debt which is due to the JD in the future

–!Soinco SACI v Novokuznetsk Aluminium Plant 1997; Karaha Bodas

Company 2004.

(d) Application may be made without leave by summons or upon motion to a Master.

(e) The Receiver

(i) Receiver applies the incoming debt towards the judgment debt.

(ii) Receiver entitled to remuneration based on scale fee or professional charges:

O.30 r.3.

(iii) Receiver must submit accounts to any parties at any time as the court directs:

O.30 r.5(1).

~ ~ ~

Civil Litigation – Enforcement Cliffnotes Cliff Lui

Page 12 of 12

pull cliff notes

Documents

syllabusthe notes

syllabus notes

compilation of notes

interim contribution

b plaintiffs

contribution payable

issue proceedings

acceptance of legal