Introduction of Civil Procedure PDF

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MMU LLBCivil ProcedureLecture 1Julienne Jen7 January 20201Resources Textbooks: Civil Procedure in Hong Kong –A Guide to the Main Principles, 4t h Edit ion, Dave Lau (t he “ Text book” ) Civil Procedure in Hong Kong, 6t h Edit ion, Wilkinson, Cheung & M eggit t Hong Kong Civil Court Practice(...

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MMU LLB Civil Procedure Lecture 1 Julienne Jen 7 January 2020 1

Resources • Textbooks: • Civil Procedure in Hong Kong –A Guide to the Main Principles, 4th Edition, Dave Lau (the “Textbook”) • Civil Procedure in Hong Kong, 6th Edition, Wilkinson, Cheung & Meggitt • Hong Kong Civil Court Practice (2016 Desk Edition), Clarke

• Ordinances: • The updated High Court Ordinance (Cap. 4) and Rules of the High Court (Cap. 4A) • The updated District Court Ordinance (Cap. 336) and Rules of the District Court (Cap. 336H)

• Practice Directions • Case Law

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Civil Procedure

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Case Study A • A purchased 500 Blueberry telephones (the “Telephones”) from B at a price of $6,000 each. A paid B $3,000,000 for the Telephones and B delivered the Telephones to A as agreed. A later found out that batteries in the Telephones were faulty, rendering the Telephones defective. A was not able to sell the Telephones on to its customer and suffered a loss. • Should A commence a civil case against B to recover its losses? • Is it a civil case? • What is involved in a civil case? What steps have to be taken before a case can procced to trial?

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Appendix of the Textbook Pre-action

Issuance of Writ & Service

Pleadings

Discovery

Timetabling & Case Management

Witness Statements & Experts’ Reports

CMC / PTR / Setting Down 5 Trial

Jurisdiction of the HK Courts - Small Claims (revised from 3 December 2018) • Small Claims Tribunal • Exclusive jurisdiction over any monetary claim not exceeding $75,000 founded in contract, quasi-contract and tort • Excludes defamation, action by licensed moneylender for the recovery of money lent, action falling in the jurisdiction of the Labour Tribunal and action in respect of matrimonial maintenance agreements

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Jurisdiction of the HK Courts – District Court (revised from 3 December 2018) • District Court • Non-exclusive jurisdiction over any monetary claim above $75,000 but not exceeding $3,000,000 founded in contract, quasicontract or tort (s.32 District Court Ordinance (Cap. 336)(“DCO”) • Non-exclusive jurisdiction over any action for recovery of land where the annual rent, rateable value or annual value (whichever is the least) does not exceed $320,000 (s.35 DCO) • If the claim involves the title to an interest in land, then the rateable value or the annual value (whichever is the less) should not exceed $320,000 (s.36 DCO) • Non-exclusive equity jurisdiction where the amount or value of the subject matter does not exceed $3,000,000 (for the part not relating to land) and $7,000,000 (for the part relating to land)(s.37 DCO) • Discretionary interest is excluded in the calculations (s.49(7) DCO) • Note the District Court is also the Family Court

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Jurisdiction of the HK Courts – High Court (revised from 3 December 2018) • High Court / Court of First Instance • Superior court of record • Unlimited civil jurisdiction • But action falling within the exclusive jurisdiction of other tribunals cannot be commenced in the High Court • E.g. Labour Tribunal, Lands Tribunal

• Exclusive jurisdiction to hear judicial review and habeas corpus proceedings

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Case Study A – Which Court? • A paid $3,000,000 for the Telephones • He was not able to sell the Telephones on to its customer and suffered a loss • Depending on the amount of his claim – likely High Court • Note s. 34 DCO – A can abandon part of its claim in excess of $3,000,000 so as to bring his claim in the District Court

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Transfer of Proceedings • The District Court shall transfer an action to the Court of First Instance (“CFI”) if the claim (not being a counterclaim), is outside its jurisdiction • But it may strike out the action on the defendant’s application if it appears that the plaintiff knew or ought to have known that the District Court has no jurisdiction (s. 41(1) and (2) DCO) • Even if the claim is within the District Court’s jurisdiction, it may transfer proceedings to the CFI if there is good reason (because of the importance or complexity of the case)(s.42 DCO) • The CFI is required to transfer any claim (other than a counterclaim) which appears likely to be within the District Court’s jurisdiction unless it is of the opinion that the case is important or complex or for other reason, the case ought to remain in the CFI (S.43 DCO) • If the parties consent, CFI may transfer to the District Court any action whose monetary limit exceeds the District Court’s jurisdiction (s. 44 DCO)

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Civil Justice Reform 2009 (“CJR”) • The Hong Kong civil justice system needed reform because: • • • • • •

Too expensive Too slow Lack of equality Too uncertain and incomprehensible Too adversarial with too much party autonomy and lack of court control Court rules often ignored by the parties and not enforced

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Main Approaches of CJR • Drawn heavily from Lord Woolf’s Reform of the Civil Procedure Rules (CPR) in the UK • Focused on active case management, tighter control, stricter compliance of court rules/orders, encouraging settlement and greater use of ADR (primarily mediation)

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Underlying Objectives • Order 1A, Rules of the High Court (“RHC”)/Rules of the District Court (“RDC”) • Rule 1: • Increasing cost-effectiveness of any practice or procedure to be followed in proceedings • Ensure a case is dealt with expeditiously as reasonably practicable • Promote a sense of reasonable proportion and procedural economy in conduct of proceedings • Ensure fairness between the parties • Facilitate settlement of disputes • Ensure fair distribution of court’s resources:

• Rule 2: • When giving effect to the underlying objectives, the court shall always recognize that the primary aim in exercising the powers of the Court is to secure the just resolution of disputes in accordance with the substantive rights of the parties.

• Rule 3:

• Parties and their legal representatives shall assist the court in furthering the underlying objectives

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Active Case Management • Order 1A rule 4: • The Court shall further the underlying objectives of these rules by actively managing cases, which include: • encouraging the parties to co-operate with each other in the conduct of the proceedings; • identifying the issues at an early stage; • deciding promptly which issues need full investigation and trial and accordingly disposing summarily of the others; • deciding the order in which the issues are to be resolved; • encouraging the parties to use an alternative dispute resolution procedure if the Court considers that appropriate, and facilitating the use of such a procedure; • helping the parties to settle the whole or part of the case; • fixing timetables or otherwise controlling the progress of the case; • considering whether the likely benefits of taking a particular step justify the cost of taking it; • dealing with as many aspects of the case as practicable on the same occasion; • dealing with the case without the parties needing to attend at court; • making use of technology; and • giving directions to ensure that the trial of a case proceeds quickly and efficiently.

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Case Management Powers • Order 1B RHC/RDC: • Set out some express powers of case management, including in particular: • Power to control procedural timetables and time limits; • Power to decide the issues to be determined and how they are to be determined; • Power to impose conditions, including a condition to pay money into court, when making an order; • Power to make order on court’s own motion with or without first hearing the parties (in the latter case the parties have a right to apply to set aside the order), and • Power to give procedural directions on its own motion without first hearing the parties by way of order nisi if the court thinks the parties will unlikely object to such directions

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Case Study A – Cause of Action • Should A commence a civil case against B to recover its losses? • First consideration: • What is/are A’s cause(s) of action? • Does A have a meritorious claim?

• Claim in contract • Breach of the implied term under s.16 of the Sale of Goods Ordinance that the Telephones should be of merchantable quality • How would A prove his case? • • • •

What are the essential ingredients for a contract claim? How to show that there is a contract? How to show that the batteries were defective? How to prove A’s loss? (the price of the Telephones and loss of profit as he was going to sell the Telephones to his customer)

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Pre-action considerations • Should you act for the client? • Conflict of interest • Are you able to act with reasonable skill and diligence? • Does the person who is giving you instructions have authority to represent the client? • • • •

If A is a natural person If A is a sole proprietorship business If A is partnership business If A is a company

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Pre-action considerations – Limitation (1) • Check the contract for any terms which might limit the action • Limitation Ordinance (Cap. 347) – limitation periods for some more common claims • Contract under seal – 12 years • Simple contract – 6 years from the date of accrual of the action (i.e. upon breach) • Tort (apart from personal injury and death) – 6 years from the date of accrual of the cause of action (i.e. upon damage being sustained as a result of the tortious act) • Latent damage in a negligence action (apart from personal injury or death) – the usual 6 year period can be extended by 3 years from the date on which the plaintiff first had actual or constructive knowledge required for bringing the action – subject to an overriding time limit of 15 years from the date of the alleged negligent act (See Kensland Realty Ltd v Tai Tang & Chong (2008) 11HKCFAR 237)

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Pre-action considerations – Limitation (2) • Personal injury – 3 years from the date of accrual of the cause of action or the date of the plaintiff’s actual or constructive knowledge (if later) of the injury being significant and attributable to the defendant’s negligent act/omission as well as the identity of the defendant* • Death claims under the Fatal Accidents Ordinance (Cap. 22) – 3 years from the date of the death or the date of the actual or constructive knowledge of the beneficiary of the claim, whichever is later* • * both limits subject to section 30 of the Limitation Ordinance – the court has discretion to override the 3 years’ limit by balancing the respective prejudices to the plaintiff and to the defendant having regard to all the circumstances of the case and the following factors: • the length of, and the reasons for, the delay on the part of the plaintiff; • the extent to which, having regard to the delay, the evidence adduced or likely to be adduced by the plaintiff or the defendant is or is likely to be less cogent than if the action had been brought within the time • the conduct of the defendant after the cause of action arose e.g did he respond to requests reasonably made by the plaintiff for information or inspection for the purpose of ascertaining facts which were or might be relevant to the plaintiff’s cause of action against the defendant; • the duration of any disability of the plaintiff arising after the date of the accrual of the cause of action; • the extent to which the plaintiff acted promptly and reasonably once he knew whether or not the act or omission of the defendant, to which the injury was attributable, might be capable at that time of giving rise to an action for damages; • the steps, if any taken by the plaintiff to obtain medical, legal or other expert advice and the nature of any such advice he may have received.

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Pre-action considerations – Limitation (3) • For examples of the court exercising its discretion under s. 30 of the Limitation Ordinance - See Horton v Sadler [2006] UKHL 27; Chau Chui Ping Winky v Cathay Pacific Airways Ltd HCPI261/2003; Cheung Yin Heung v Hang Lung Real Estate Agency Ltd [2010] 3 HKLRD 67; Pang Kwok Lam v Schneider Electric Asia Pacific Ltd [2011] HKEC 1797; Mok Lai Fong v Ng Po Sui [2011] 3 HKLRD 67;

• Persons under disability (i.e. infants or persons of unsound mind) – limitation period does not run until that person ceases to be under disability or died • Actions based on fraud (or any action deliberately concealed from the plaintiff by the defendant or the action is for relief from the consequences of a mistake) – limitation period does not begin to run until the plaintiff has discovered the fraud/concealment/mistake or could, with reasonable diligence discovered it

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Pre-action considerations – Limitation (4) • Claim against trustee – 6 years from the date of the breach of trust for an action by the beneficiary to recover trust property or in respect of any breach of trust • BUT note: there is no limitation if the claim by the beneficiary is in respect of any fraud or fraudulent breach of trust to which the trustee was a party or privy; or to recover from the trustee trust property or the proceeds thereof in the possession of the trustee, or previously received by the trustee and converted to his use

• Recovery of land – 60 years for action by the government and 12 years for action by an individual, calculated from the date of adverse possession

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Pre-action considerations – Legal Aid (1) • Available to any natural person in HK, resident or non-resident • Ordinary Scheme: • Available for any person whose financial resources do not exceed $307,130 • Covers civil proceedings except those listed in Part 2, Schedule 2 of the Legal Aid Ordinance (Cap. 91) • E.g.: • defamation; • proceedings where the only question to be brought before the court is as to the time and mode of payment by him of debt (including liquidated damages) and costs; • proceedings involving money claims in derivatives of securities, currency futures or other futures contracts (unless the person seeking legal aid was induced to deal in the derivatives of securities, currency futures or other futures contracts by fraud, deception or misrepresentation; • proceedings for the recovery of a loan made in the ordinary course of a business conducted by the person seeking legal aid; • proceedings involving disputes between limited companies or their shareholders regarding the respective rights of the company and the shareholders; • proceedings arising out of disputes over partnerships; • proceedings for the taxation of costs, unless the person seeking legal aid was previously aided in the action for which an order for costs was made. • ….

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Pre-action considerations – Legal Aid (2) • Supplementary Scheme: • Available to those whose financial resources exceed $307,130 but do not exceed $1,535,650 • Limited to: • Employees’ compensation claims; • Personal injuries or death claims; • Medical, dental or legal professional negligence claims with an amount exceeding or likely to exceed $60,000 • And from November 2012, will also cover the following cases if the claim is likely to exceed $60,000: • Professional negligence claims against certified accountants, registered architects, registered professional engineers, registered professional surveyors, registered professional planners, authorised land surveyors, registered landscape architects and estate agents • Negligence claims against insurers or their intermediaries in respect of taking out of personal insurance products • Claims against vendors in relation to sale and purchase of first-hand residential property

• Representation for employees in appeals against awards made by the Labour Tribunal (irrespective of amount of dispute)

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Pre-action considerations – Legal Aid (3) • Merits test: • S. 10(3) Legal Aid Ordinance: • A person shall not be granted a legal aid certificate in connection with any proceedings unless he shows that he has reasonable grounds for taking, defending, opposing or continuing such proceedings or being a party thereto, and may also be refused legal aid where it appears to the Director that— • only a trivial advantage would be gained by the applicant from such proceedings; • on account of the simple nature of the proceedings a solicitor would not ordinarily be employed; • it is unreasonable that the applicant should be granted legal aid in the particular circumstances of the case; • since making the application the applicant has departed Hong Kong and remained outside Hong Kong for any continuous period of 6 months; • the applicant has failed to comply with a requirement of the Director made under section 9(b) or (c) (i.e. requirement to furnish documents or attend personally before the Director of Legal Aid); • the applicant has allowed an offer or legal aid to lapse or has indicated that he wishes to withdraw his application; or • there are other persons concerned jointly with, or having the same interest as, the applicant in seeking a substantially similar outcome of the proceedings unless the applicant would be prejudiced by not being able to take his own or joint proceedings.

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Pre-action considerations – Legal Aid (4) • reasonable grounds for taking, defending, opposing or continuing such proceedings = there is a reasonable, as opposed to fanciful, chance that a court of trial would decide the issue in the applicant’s favour (Nguyen Trong Son v Director of Legal Aid (unreported) LAA No. 20 of 1999 (unreported) and adopted in Ng Ai Kheng Jasmine v Master M Yuen and Legal Aid Department (HCAL 46/2003, 8 March 2004)

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Pre-action considerations – Legal Aid (5)

• Means test – calculation of the applicant’s financial resources to see if the applicant is eligible for legal aid • Ordinary Scheme: $307,130 • Supplementary Scheme: exceeding $307,130 up to $1,535,650 • The financial resources of the applicant’s spouse would also be counted, unless they have separated or have opposing interests in the proceedings • Ng Ai Kheng Jasmine v Master M Yuen and Legal Aid Department (HCAL 46/2003, 8 March 2004 – negative equity property could not be taken into account in reducing the value of applicant’s financial resources but would be given a zero value • Shem Yin Fun v Director of Legal Aid [2003] 1 HKC 568 – outstanding debt owed by the applicant cannot be taken into account in reducing the applicant’s disposable income • Applicant can re-apply if financial circumstances change

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Pre-action considerations – Legal Aid (6) • Contributions: • Aided persons with financial resources not exceeding 12.5% of the financial eligibility limit are exempted from making contribution under the Ordinary Scheme. For those with financial resources exceeding 12.5% of the financial eligibility limit, they will need to contribute 2%-25% of their financial resources, according to Schedule 3 of the Legal Aid (Assessment of Resources and Contributions) Regulations • For the Supplementary Scheme – an interim contribution is payable and the amount of contribution would depend on the type of proceedings – see sections 18 and 32 of the Legal Aid Ordinance • See: https://www.lad.gov.hk/eng/las/lac/slas.html

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Pre-action considerations – Legal Aid (6) • Legally aided person’s liability for costs: • As a plaintiff, if he loses, his costs will be borne by the Director of Legal Aid • As a defendant, if he loses and is ordered to pay the plaintiff’s costs, neither he nor the Director of Legal Aid would be liable for such costs unless he (the legally aided party) had paid a contribution to the Director of Legal Aid and the contribution exceeds the legal costs spent by the Director of Legal Aid on behalf of the legally aided party) and in such case the amount of the excess (up to the contribution made) will be paid to the plaintiff (s. 16 Legal Aid Ordinance) • ...