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How will a case be conducted differently under the CJR? Illustration through a case study . Eric TM Cheung Assistant Professor, Faculty of Law, HKU 17 October 2008. Case Scenario.

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how will a case be conducted differently under the cjr illustration through a case study

How will a case be conducted differently under the CJR? Illustration through a case study

Eric TM Cheung

Assistant Professor,

Faculty of Law, HKU

17 October 2008

case scenario
Case Scenario
  • Mr Mo Gu has bought Lehman Brothers mini-bonds through the introduction of Mr Wan Bun, sales manager of the Unscrupulous Bank Ltd (“the Bank”) in a total sum of HK$4 million. With the collapse of Lehman Brothers, eventually the mini-bonds were realised for HK$1 million.
  • The Bank has told Mo that upon receiving Mo’s complaint it has carried out thorough internal investigation and concluded that there was no fault on its part. Mo has also complained to the Monetary Authority, which has interviewed a number of witnesses, including Mo, Wan and a number of other staff of the Bank. Both the Bank and the Monetary Authority refuse to provide Mo with the relevant witness statements or investigation reports (except Mo’s own statement).
  • Mo knows that taking legal action against the Bank can be very costly and risky, and so he wants to have your advice on the merits of his claim before deciding whether to take action.
  • Q: What can you do to obtain more information for your advice?
pre action and pre trial discovery
Pre-action and Pre-trial discovery

Before CJR: only apply to PI cases;

  • Under CJR: apply to all cases
  • Against the Bank: O 24 r 7A and s 41 HCO on pre-action discovery against likely party (note possible objection on the ground of privilege)
  • Pre-action discovery only confined to “directly relevant” documents
  • S 41 (2) For the purposes of subsection (1), a document is only to be regarded as directly relevant to an issue arising or likely to arise out of a claim in the anticipated proceedings if: (a) the document would be likely to be relied on in evidence by any party in the proceedings; or (b) the document supports or adversely affects any party’s case.
  • Against Monetary Authority: O 24 r 7A and s 42 HCO on pre-trial discovery against non-party
  • N.B. Pre-trial discovery not restricted to “directly relevant” documents
  • Both s 41 and s 42 discovery shall not be made “unless the Court is of the opinion that the order is necessary either for disposing fairly of the cause or matter or for saving costs.”: O 24 r 8(2).
Assume that after lengthy correspondence, investigation and negotiation without commencing any action, the Bank and Mo eventually agree to settle Mo’s claim for HK$2m and the Bank is willing to pay Mo’s reasonable legal costs. Mo has incurred $300,000 legal costs and wants to recover at least $250,000 from the Bank, but the Bank says Mo’s reasonable legal costs should not have exceeded $100,000.
  • Q: Can Mo ask the court to decide the proper amount of legal costs payable by the Bank (and if so, how)?
costs only proceedings
Costs-only Proceedings
  • See S 53A DCO (similar to s 52B HCO) on costs-only proceedings
  • S 53A (1) This section applies where –
  • (a) the parties to a dispute have agreed on all the issues in dispute, including who is to pay the costs of and incidental to the dispute;
  • (b) the agreement has been made or confirmed in writing;
  • (c) no proceedings relating to the dispute have been commenced; and
  • (d) the parties have failed to agree on the amount of the costs of and incidental to the dispute.
  • O 62 r 11A: Commenced by OS procedure, Master may make a summary assessment of costs or order taxation
The parties cannot settle before action, and Mo issues a Writ of Summons against the Bank claiming for damages in the sum of $3m.
  • Mo bought the mini-bonds on two occasions. Assume the Bank takes the view that Mo did not fully appreciate the risk when he first bought $2m of the mini-bonds, but he should have fully understood the risk by the time he bought the remaining $2m mini-bonds.
  • Hence the Bank is willing to accept liability but would only be agreeable to pay Mo’s damage to the extent of $1.5m. It also prefers to settle by 10 monthly instalments (as it also needs to pay many other customers and so wishes to maintain its cashflow liquidity).
  • Q: What new option is available to the Bank in response to the Writ?
admissions under o 13a
Admissions under O 13A
  • Apply to cases where the only remedy that the plaintiff seeks is the payment of money (liquidated or unliquidated claims)
  • The Defendant may make admission in the prescribed form (Form 16 for liquidated claim and Form 16C for unliquidated claim) before the deadline for filing defence (with or without a request for time to pay)
  • The Plaintiff may then obtain judgment by filing a request in the prescribed form. If no request is filed within 14 days of service of the admission, the claim is stayed until the Plaintiff files the request.
If the claim is liquidated, the defendant may admit the whole or part of the claim, and may further make a request for deferred or instalment payments.
  • If the claim is unliquidated, the defendant may (1) admit liability without offering any specified sum (ie to allow damages to be assessed), or (2) admit liability and offer a sum in satisfaction of the plaintiff’s claim, and in both cases with or without making any further request for deferred or instalment payments.
  • Why should D use O 13A rather than sanctioned payment or simply allows default judgment under O 13?
  • No advantage to D if he is not requesting for deferred or instalment payment
  • If deferred or instalment payment is requested, D needs to provide details of financial information and make a declaration; the rule is silent on the principles to be adopted by the court for resolving any dispute between the parties on the deferred or instalment payment
  • => rather unattractive to many Ds
  • N.B. As Order 13 has not been amended or made subject to Order 13A, D should still state an intention to defend
  • In theory, the Bank may admit liability and offer to pay $1.5m with a request to settle by 10 monthly instalments under O 13A
  • But not practical or attractive to the Bank
The Bank refuses to settle at this stage and the proceedings go on.
  • Q: What procedures will then follow?
  • 1. Within 14 days of service, the Bank must file the A/S (same as before)
  • 2. Mo must serve Statement of Claim w/i 14 days after A/S filed by the Bank: O 18 r 1 (same as before); but S/C (and other pleadings and witness statement and expert reports) must be verified by a statement of truth in accordance with O 41A: O 18 r 20A
  • Anyone who makes a false statement without an honest belief in its truth may be liable for contempt of court.
  • May either be signed by the party or his legal representative: O 41A r 3(1)(b). If it is signed by the legal representative, must be signed in his own name instead of the name of the firm: O 41A r 3(10).
  • But in general, the lawyer should not sign it unless it cannot conveniently be signed by the client, as the lawyer will unlikely have direct knowledge of the relevant facts.
  • Mo should therefore sign at the end of the S/C: “I believe that the facts stated in this Statement of Claim are true”
Can Mo make the statement of truth if he is putting forward alternative but inconsistent claims in the S/C?
  • Yes. New O 18 r 12A added
  • “12A. Pleading with inconsistent alternatives (O. 18, r. 12A)
  • A party may in any pleading make an allegation of fact which is inconsistent with another allegation of fact in the same pleading if –
  • (a) the party has reasonable grounds for so doing; and
  • (b) the allegations are made in the alternative.”
3. Within 28 days (instead of 14 days) after S/C or time limited for A/S (whichever is later), the Bank must file the Defence (with a statement of truth): O 18 r 2
  • As the Bank is a corporation, must be signed on its behalf by a person holding a senior position such as a director, manager or secretary of the corporation: O 41A r 3(2) and (4) (or by its lawyer).
  • Should read: “The Defendant believes that the facts stated in this Defence are true”.
  • New rules on traverse:
  • (1) Cannot plead bare denial: O 18 r 13(4): “… the party who denies the allegation shall… (a) state his reasons for doing so; and (b) if he intends to put forward a different version of events from that given by the claimant, state his own version” (N.B. D may still plead non-admission w/o stating a positive case)
  • (2) May avoid unnecessary repetition of non-admission: O 18 r 13(5): “A party who (a) fails to deal with an allegation; but (b) has set out in his defence… the nature of his case in relation to the issue to which that allegation is relevant, is to be taken to require that allegation to be proved.”
4. Any Reply and Defence to Counterclaim must be served w/i 28 days (instead of 14 days) after service of Defence (and Counterclaim): O 18 r 3(4) (N.B. If no Reply is filed => implied joinder of issue operating as non-admission (instead of denial in the past) of every material allegation: O 18 r 14).
  • 5. Close of pleadings: 14 days after Reply or Defence to Counterclaim (same as before); or if none is served, 28 days (instead of 14 days) after Defence
  • 6. Mutual discovery without order within 14 days after close of pleadings: O 24 r 1 and 2 (same as before) (N.B. RDC O 24 is amended to align with RHC)
  • Q: Given that the Bank may have massive documents relevant in the Peruvian Guano sense and it cannot possibly comply with the mutual discovery obligation within 14 days, what option is open to it?
new o 24 r 15a
New O 24 r 15A
  • 15A. Order for limiting discovery (O. 24, r. 15A)
  • For the purpose of managing the case in question and furthering any of the objectives specified in Order 1A, the Court may make any one or more of the following orders –
  • (a) an order limiting the discovery of documents which the parties to the case would otherwise be required to make to each other under rule 1(1);
  • (b) an order directing that the discovery of documents required to be made under this Order to any party to the case shall, notwithstanding anything in this Order, be made in the manner specified in the order; and
  • (c) an order directing that documents which may be inspected under this Order shall, notwithstanding anything in rule 9 or 10, be inspected at a time or times specified in the order.
N.B. Draft PD for Order 25 on Case Management para 6:
  • “The parties should proceed with discovery without the need to wait for an order of the court and try to agree on the directions for modifying discovery obligations (e.g. limiting discovery to specified issues) or on the manner of their implementation (e.g. exchanging copy documents without the need to prepare lists of documents) with a view to achieving economies in respect of discovery.”
Given that the Bank may have massive documents relevant in the Peruvian Guano sense, it may therefore wish to seek an order:
  • (1) Under O 24 r 15A (a) to limit the scope of discovery
  • e.g. to directly relevant documents only;
  • to specific issues only (e.g. on liability only; or on the main issues identified in the pleadings)
  • to exclude documents which are already accessible by the public such as reports published by government or professional bodies
  • (2) Under O 24 r 15A (b) to modify the manner of discovery
  • e.g. instead of listing out certain documents, the Bank only makes them available for inspection by Mo’s lawyers; (or exchanging documents without listing them out)
  • instead of listing out documents stored in computer, to make them available in a floppy disk;
  • instead of making discovery in one go, to first discover core documents which the Bank will rely on or those which are adverse to the Bank’s case
  • (3) Under O 3 r 5 for an extension of time
7. Within 28 days after close of pleadings, each party must serve and file the Timetabling questionnaire: O 25 r 1(1)
  • The parties should seek to reach an agreement on the case management directions or a timetable for the steps to be taken between the date of the giving of those directions and the date of the trial. If such an agreement can be reached upon completion of the questionnaire, then they can procure a court order by taking out a consent summons: O 25 r 1(1A)
  • N.B. Draft PD for O 25 para 13 requires P to procure and file a consent summons w/i 14 days after receiving all Timetabling questionnaires
  • If the parties cannot reach agreement, each party shall in the questionnaire make a proposal on the matter and P shall, within the time specified in the PD, take out a case management summons for the court to give directions: O 25 r 1(1B)
  • N.B. Draft PD for O 25 para 17 requires P to take out the summons within 14 days after receipt of the questionnaires from D or the expiry of the period for filing the questionnaire in cases involving litigants in person; But the draft PD is silent on the time for legally represented cases.
contents of the timetabling questionnaires
Contents of the Timetabling Questionnaires
  • Governed not by RHC, but by PDs
  • Annex A of draft PD for O 25 shows that the questionnaires will cover confirmation or information on the following:
  • First on ADR (whether the parties have attempted ADR; whether willing to settle by ADR and so request for a stay of ?? Weeks while trying settlement; to confirm that he has filed the ADR certificate; and ADR Notice/Response)
  • In the ADR certificate:
  • (1) the solicitors shall expressly conform that they have explained to their client the availability of ADR and “the respective costs positions for the ADR as compared with the costs of the litigation”;
  • (2) that the client “fully understands” the ADR PD and the availability of ADR;
  • (3) Whether the party intends to explore ADR to settle or mediate, and if so, what is the form of ADR it intends to engage. If not, state why he believes it is premature to do so at this stage or inappropriate at any stage. If the parties have already attempted an ADR procedure w/o success, state the mode of ADR attempted and whether they are willing to attempt another mode of ADR.
  • If a party wishes to invoke any ADR procedure, he should serve an ADR Notice on the other party giving various details (proposed rules, mediator or neutral, estimated costs, timetable and minimum level of participation).
  • Q: Are the lawyers ready for ADR next April??
Other contents of the Timetabling Questionnaires:
  • Parties (any intention to add another party)
  • Pleadings (any intention to amend or request for F&BPs)
  • Evidence (whether list of docs filed or when it will be filed; number and names of factual witnesses, and when witness statements can be exchanged)
  • Expert Evidence (any intention to adduce expert evidence, and names and fields of expertise, and when expert reports can be exchanged; whether agreeable to appoint a single joint expert or a joint report by the parties’ experts)
  • Interlocutory applications (any outstanding directions to be complied with, any intention to seek interrogatories, security for costs or other interlocutory applications, and if so when the applications will be made)
  • Case management Conference/Pre-trial Review (whether or not one asks for a CMC or for a PTR, and why)
  • Trial (whether it is appropriate to set down for trial and why; whether Running List appropriate and why; whether to be tried before a bilingual judge and why; estimated length of trial; the earliest date that the case be ready for trial)
  • Proposed directions/timetable to be attached.
Assume that the parties cannot reach agreements on the case management directions after completion of the questionnaires.
  • Q: What will happen next?
  • O 25 r 1A(1) : “…as soon as practicable after the completed questionnaire has been filed, the Court shall, having regard to the questionnaire and the needs of the case” do one of the three:
  • (a) give case management directions and fix the timetable for the steps to be taken between the date of the giving of those directions and the date of the trial (which must include either the date for a PTR or the trial date/period, if no CMC is ordered);
  • (b) fix a CMC and give case management directions and fix the timetable for the steps to be taken between the date of the giving of those directions and the date of CMC; or
  • (c) direct P to take out a case management summons if he has not done so.
  • At the CMC, the court shall fix the timetable for the steps to be taken between the date of CMC and the date of the trial (which must include either the date for a PTR or the trial date/period): O 25 r 1A(2)(b)
The court may give the above-mentioned case management directions and fix timetable (1) at the hearing of the case management summons, or (2) by an order nisi based on the parties’ questionnaires without a hearing of the case management summons (either party may however apply within 14 days to vary the order nisi, in which case the court shall hear the case management summons): O 25 r 1A(4)-(6).
  • Draft PD for O 25 para 20: “Unless it appears to the court that a hearing is necessary, the court will make orders nisi giving management directions and fix a timetable for the proceedings in the light of the Timetabling Questionnaires and other documents filed/lodged and without a hearing.”
  • At the determination of the case management summons, the court will generally need to consider whether all other interlocutory applications can be dealt with at the same time or to adjourn the consideration of all or any of theses until a later stage: O 25 r 2 and r 7 (similar to the summons for directions procedure before)
Assume that at the hearing of the case management summons, the Master gives the following directions;
  • (1) Discovery limited to directly relevant documents be given within 21 days;
  • (2) Factual witness statements be exchanged within 42 days;
  • (3) Expert reports on the level of risks involved in the mini-bonds be exchanged within 42 days
  • (4) A CMC be held 4 months later
  • Assume that the Bank cannot give discovery within 21 days, but asks Mo for an extension of time for another 21 days
  • Q: What can Mo do?
milestone and non milestone dates
Milestone and Non-milestone dates
  • The court may of its own motion or upon application give further case management directions or vary any timetable fixed: O 25 r 1B(1)
  • The dates fixed for the case management conference, pre-trial review or the trial (or trial period) are regarded as milestone dates; and other dates/period fixed by the court are non-milestone dates: O 25 r 1B(8)
  • The Court shall not vary a milestone date unless there are exceptional circumstances justifying the variation: O 25 r 1B(3).
  • Draft PD for O 25 para 38: “late instructions from client, change in the team of lawyers, the absence of prejudice to the other party which cannot be compensated for by costs will NOT be treated as exceptional circumstances.”
variation of non milestone date
Variation of Non-milestone Date
  • “A non-milestone date may be varied by procuring an order to that effect by way of consent summons.” O 25 r 1B(4).
  • N.B. Seem to override O 3 r 5(3): “The period within which a person is required by these rules, or by any order or direction, to serve, file or amend any pleading or other document may be extended by consent (given in writing) without an order of the Court being made for that purpose.”
  • If there is no consent, the requesting party may apply for variation, but the court shall not vary any non-milestone dates “unless sufficient grounds have been shown” by the applicant: O 25 r 1B(5) and (6).
  • But if the variation will necessitate a change to the trial date/period, the court shall not vary the non-milestone date whether or not sufficient grounds have been shown: O 25 r 1B(7)
Assume that Mo does not consent, and the Bank takes out a summons to extend time for discovery.
  • Q: What may happen?
  • If sufficient grounds have been shown, the Master will grant an extension, likely subject to an unless order with a stipulated sanction, and award costs against the Bank and assessed summarily to be paid forthwith (though it may penalize Mo on costs if it considers Mo’s refusal unreasonable).
  • Draft PD for O 25 para 37: “An application for extension [without consent] will only be granted, if at all, on the basis of an immediate unless order prescribing a suitable sanction should there be any further non-compliance”
  • O 32 r 11B(2): Where the Court makes an order on an interlocutory application after the case management summons has been taken out or case management directions given, “it shall, unless there are special circumstances which render it inexpedient to do so, specify the consequences of failing to comply with the Order”.
  • But such consequences must be appropriate and proportionate in relation to the non-compliance: O 32 r 11B(3)
Final Report of Working Party on the Civil Justice Reform at para 513 and 514:
  • “Where the non-compliance is such as to make a fair trial impossible, the claim or defence may be struck out. However, that should be a last resort. As Lord Woolf MR pointed out in Biguzzi v Rank Leisure Plc [1999] 1 WLR 1926, other sanctions often enable a case to be dealt with justly without the draconian step of striking the case out. Some sanctions will naturally suggest themselves. Thus, failure to serve ordered particulars of a pleaded paragraph may carry the natural consequence of that paragraph being struck out. Failure to serve a witness statement or expert report in time might naturally lead to the exclusion of the evidence of that witness or that expert at the trial. Other less obvious sanctions might include orders for costs to be paid forthwith; for costs to be paid on a special basis; for subsequently depriving a successful plaintiff of interest or part of the interest otherwise payable; for awarding interest at a higher rate against a defendant subsequently found liable; and for money to be paid into court.”
Q: Should Mo consent to the Bank’s request for extension?
  • Should note that extending discovery for 21 days will impact on the time for exchange of witness statements and expert reports
  • Unlikely to impact on the CMC date four months later
  • Should assess whether the Bank has shown sufficient grounds for the delay
  • If yes, may consent by summons stipulating some terms e.g.:
  • (1) consequential extension of time for exchange of witness statements and expert reports
  • (2) unless the Bank provides discovery within the extended time, its Defence be struck out and judgment entered;
  • (3) costs of the application at a specified sum be paid by the Bank
Assume that extension is granted subject to an unless order of striking out the defence.
  • Q: What will happen if the Bank cannot comply with the extended deadline?
  • Sanction stipulated is self-executing in nature
  • O 2 r 4: the stipulated sanction ‘has effect unless the party in default applies to the court for and obtains relief from the sanction within 14 days of the failure.’
  • O 2 r 5(2): In order to obtain relief from the self-executing sanction, the Bank must make an application to the court with supporting evidence within 14 days of the non-compliance.
  • Q: How will the Court deal with the Bank’s summons for relief from sanction?
O 2 r 5(1): the Court shall consider all the circumstances including [10 factors listed therein] (e.g. the interests of the administration of justice; whether the failure was intentional; any good explanation for the failure; in the case where the party in default is not legally represented, whether he was unaware of the rule or court order, of if he was aware of it, whether he was able to comply with it without legal assistance)
  • Save with the additional factor relating to litigant in persons, O 2 r 5 is basically the same as the English Civil Procedure Rules 3.9.
  • Relevant English decisions: e.g. Woodhouse v Consignia [2002] EWCA Civ 275, [2002] 1 WLR 2558 (CA); Stolzenberg and Others v CIBC Mellon Trust Company Ltd and Others [2004] EWCA Civ 827 (CA);Flaxmann-Binns v Lincolnshire County Council [2004] EWCA 424(CA); CBR (Wakefield) Ltd and others v Puccino's Ltd and another (No.2)[2006] EWHC 2994 (QB).
principles governing relief from sanction
Principles governing relief from sanction
  • The court must consider each of the ten factors listed in Order 2 rule 5 (insofar as they are relevant to the case), carrying out the necessary balancing exercise methodically, and explaining how the ultimate decision has been reached
  • “…although the court must go through each of the matters in the list in CPR 3.9 as a separate and distinct exercise the result is not ascertained by adding up the "score" of either side on each point.” Stolzenberg and Others v CIBC Mellon Trust Company Ltd and Others
  • Once the court has taken into account all the factors set out in O 2 r 5, it is required to have regard to all the circumstances of the case. The court is required to stand back and form a judgment to the aggregate of the relevant circumstances. This involves giving effect to the underlying objectives set out in Order 1A rule 1, with a recognition of the primary aim of securing the just resolution of disputes in accordance with the substantive rights of the parties, as mandated by Order 1A rule 2.
  • Relief from sanctions should not be granted lightly and any party who fails to comply with the unless order runs a significant risk that he will be refused relief. It is vitally important to the administration of justice that the rules of procedure are observed.
  • On the other hand, the Court must bear in mind that, where the effect of the sanction is to preclude a trial on the merits, the effect is to deprive the applicant of access to the Court.
What will be the procedure for dealing with the Bank’s Summons?
  • The Summons will generally be listed for hearing in the 3 minutes’ chamber list (same as before).
  • At that hearing, the Master will need to consider whether it can be disposed of immediately (which seems unlikely unless Mo consents); or he may adjourn it for paper determination pursuant to the new O 32 r 11A; or adjourn it for hearing before a Master or a Judge
  • Draft revised PD 5.4 para 23 cites the following as classes of summons “generally considered appropriate for disposal on papers”: Determination under O 13A, request for F&BPs; security for costs; summary judgment, interim payment; setting aside a default judgment, amendment without involving time limitation and case management summons.
  • If paper determination is ordered, the Master will normally fix a date on which he may hand down his determination (the “order date”), and give directions for the filing of further evidence and submissions.
  • Draft revised PD 5.4 para 24: a party who finds it inappropriate for paper disposal may apply for an oral hearing asap and in any event not less than 7 days before the order date. The Master may direct that an oral hearing be held on the order date.
But O 32 r 11A(6): This rule does not apply to an application for relief from sanction under O 2 r 4
  • => Master cannot order paper disposal in this case
  • Assume that oral hearing is fixed and evidence exchanged according to the Master’s directions. The Bank wishes to file a further affidavit three days before the oral hearing.
  • Q: Can the Bank do so?
  • O 32 r 11A(4): Where the determination of an interlocutory application is adjourned for hearing, no further evidence (other than that permitted under the directions given the Master) may be adduced “unless there are exceptional circumstances making it desirable that further evidence should be adduced”
  • But again this rule does not apply to an application for relief from sanction => leave still required but no need to satisfy “exceptional circumstances” requirement.
Assume that at the oral hearing the Master refuses the Bank’s application with costs.
  • Q: Can the Bank appeal without leave?
  • Yes. Right to appeal to a judge in chambers w/o leave (same as before)
  • Q: Can the Bank introduce further affidavit at the appeal hearing before the judge in chambers?
  • Before CJR, the judge in chambers would commonly exercise his discretion to allow further evidence (even if the evidence was previously available but which the party has omitted to adduce before the master) to be adduced for the appeal, subject to costs sanction, unless there are special reasons to exclude it (see e.g. Wong Hung Yu Richard v Wu Ming Fat [2002] 2 HKC 687).
  • However, under the new O 58 r 1(5): no further evidence (other than evidence as to matters which have occurred after the master’s decision) may be admitted in an appeal from a master’s decision except on “special grounds”(see Ladd v Marshall)
Assume that the judge in chambers dismisses the Bank’s appeal.
  • Q: Can the Bank further appeal without leave?
  • Before CJR, an appeal generally lies as of right to the Court of Appeal from every judgment or order of the CFI in any civil cause or matter (whether interlocutory or final)
  • S 14AA HCO: leave generally required for appeal against a CFI Judge’s decision on interlocutory matters.
  • However, exempted from the leave requirement are cases where the interlocutory decision is decisive of a party’s substantive rights (e.g. summary judgment, order striking out an action, an order refusing to set aside a default judgment) and also some specifically exempted cases affecting a person’s liberty (e.g. orders for imprisonment or contempt, refusals of habeas corpus): O 59 r 21
  • O 59 r 21(2)(g): a judgment obtained pursuant to an unless order is regarded as a judgment determining in a summary way the substantive rights of a party
  • => no leave is required (cf leave is still required if the appeal is against such an order made by a DC judge)
  • N.B. Leave is required if it is Mo who appeals against a CFI Judge’s decision to grant relief from the sanction.
Assume that the Bank succeeds in the appeal and the action proceeds further. The Bank then makes a sanctioned payment in the sum of $1.7m. Mo’s counsel advises that Mo should probably succeed on the first transaction and can recover $1.5m. However, Mo has a slightly less than even chance to succeed on the second transaction.
  • Q: What options are available to Mo?
sanctioned payment and sanction offer
Sanctioned Payment and Sanction Offer
  • New O 22
  • P may make sanctioned offer
  • D may make sanctioned offer or sanctioned payment (But sanctioned payment must be used if D’s offer involves a payment of money to P: O 22 r 3)
  • Penalty to P for non-acceptance if D’s sanctioned offer/payment is better or more advantageous than the judgment: unless the court considers it unjust, it shall order P to pay D’s costs after the last date for acceptance (1) on an indemnity basis; and (2) interest thereon at the enhanced rate of up to 10% above judgment rate
  • Penalty to D for non-acceptance if P’s sanctioned offer is better or more advantageous than the judgment: unless the court considers it unjust, it shall order D to pay interest on the whole or part of the judgment sum after the last date for acceptance at the said enhanced rate and costs on an indemnity basis (and interest thereon at the enhanced rate)
mo s options
Mo’s options
  • Accept the sanctioned payment of $1.7m (cons: no risk to pay indemnity costs and enhanced interest; no further legal costs and trouble)
  • Make a sanctioned offer at say $2.5m (N.B. the Bank may be worried of the risk to pay indemnity costs and enhanced interest on the judgment award if Mo succeeds on both transactions)
  • Further negotiate or try mediation etc
  • BUT the BEST ADVICE is:
  • Ask Margaret Ng and her party to help push the Bank for a better settlement!!
  • Good Luck!!