The Court of Appeal recently had the opportunity to review some important points of practice regarding appeals against first-instance judgments – in particular, with respect to applications to extend time to appeal and to stay execution of judgments pending an appeal. While a short delay (which can be adequately explained) in serving a notice of appeal may not be fatal, a substantial delay of weeks or months is another matter. Further, an appeal does not operate to stay the execution of a court order or judgment and a stay will not usually be granted unless an applicant can show that the grounds of the proposed appeal are sufficiently strong.
In Progetto Jewellery Co Ltd v Lau,(1) the plaintiff company commenced proceedings in 2014 against one of its directors (the defendant) and a company with which she had been involved, to recover certain alleged unauthorised withdrawals from the plaintiff's bank accounts. The trial took place over the course of several days towards the end of 2019 and at the beginning of 2020. On 22 January 2020 the plaintiff succeeded in obtaining judgment for most of its claims against the defendant.(2)
In terms of an appeal, nothing much appears to have happened until May 2020 when the defendant applied for an extension of time to appeal the judgment. The time to appeal the judgment (as of right) had expired on 19 February 2020 – 28 days from 22 January 2020. On 21 May 2020 the defendant applied to the judge to extend the time to appeal the judgment. This was refused by the judge, who also refused to stay execution of the judgment pending determination of the defendant's application to the Court of Appeal for an extension of time to appeal.
In June 2020 the defendant applied to the Court of Appeal for an extension of time to appeal and in October 2020 she applied for permission to appeal the judge's refusal to stay execution of the judgment.
The defendant offered the following reasons for her delay:
- While she had received an electronic copy of the judgment from her legal representatives on the day on which the judgment was handed down (22 January 2020), she had not received a sealed copy until 15 May 2020. She mistakenly thought that she needed a sealed copy of the judgment in order to appeal.
- She had ceased to be legally represented as from 24 January 2020 (just before the Chinese New Year public holidays).
- For most of the time between 29 January 2020 and 3 May 2020 the courts had been closed, save for urgent and essential court business (the 'general adjourned period'), because of the first wave of the COVID-19 pandemic in Hong Kong. Therefore, while she could have served a notice of appeal within the 28-day period, she was (so the argument went) unable to lodge it with the court registry.
- The time for her appeal did not run during the general adjourned period, so the period of the delay (before her application for an extension of time to appeal) should be ignored.
- She had stayed at home as much as possible during the first wave of the COVID-19 pandemic, particularly because she had been unable to purchase face masks.
As for the grounds of her appeal, the defendant raised the following points (among others):
- The judge had been plainly wrong in his assessment of the parties' evidence at trial.
- The defendant disagreed with the way in which her legal representatives had conducted the case at trial.
Two principal issues arose for determination by the Court of Appeal.
First, whether the defendant should be allowed to appeal the judgment out of time. Second, if so, whether execution of the judgment should be stayed pending an appeal to the Court of Appeal.
The Court of Appeal dismissed both applications.
Application for an extension of time to appeal The Court of Appeal noted its established practice regarding applications to extend time to appeal. An appellate court will consider all of the circumstances, considering (for example) the length of and reasons for the delay, the prospects of success of the appeal and the prejudice to the other party.
In this case, the delay had been substantial and inexcusable. The deadline for service of the defendant's notice of appeal had expired on 19 February 2020. The general adjourned period did not extend the time to appeal. An appeal is commenced by serving a notice of appeal on the other party – not by lodging the notice of appeal with the court registry (albeit this is also required within seven days of service).(3) The priority is service of the notice of appeal and, if this is done in time, the court could be more generous in extending the time to lodge the notice of appeal with the court registry.(4)
Therefore, the deadline to appeal had expired on 19 February 2020 and the defendant's application to the judge for an extension of time to appeal (on 21 May 2020) had been more than three months late. This constituted substantial and inexcusable delay in all of the circumstances. The defendant's concerns about COVID-19 and not having face masks to leave her home were not relevant to the issue of delay.
Prospects of success Given that the delay had been substantial and inexcusable, the defendant also had to demonstrate an appeal with a real prospect of success (and not merely a reasonable prospect) before being granted an extension of time to appeal.
None of the defendant's grounds for an appeal raised a real prospect of success. The judge had given a fully reasoned and detailed judgment and there was no evidence to suggest that he had failed to evaluate the evidence before him at trial. This was particularly the case given that the Court of Appeal has repeatedly stressed (in other cases) that it should exercise caution when asked to review the evidence presented at trial or the credibility of the witnesses, which the trial judge was best placed to assess.
With respect to whether the defendant's purported disagreement with the way in which her legal representatives had conducted her defence provided a ground for appeal, the Court of Appeal observed as follows:
There is an exception in criminal cases when flagrant incompetence of counsel which has the effect of depriving a party of a fair trial is established. We are not aware of any authority applying the same principle in private civil disputes. Generally, a litigant in a civil litigation is confined to remedies against her own lawyers if she has lost a case due to mishandling by her lawyers.(5)
In any event, the Court of Appeal could not see any reasonably arguable case to support the defendant's criticism of her legal representatives' conduct of the case.
Therefore, the Court of Appeal dismissed the defendant's application for an extension of time to appeal.
Stay of execution of judgment Given that the application for an extension of time to appeal was dismissed, there was no basis for granting a stay of execution of the judgment. The Court of Appeal has stressed (in other cases) the basis for such a stay – the most important considerations being whether the appellant can demonstrate that the grounds of the proposed appeal are sufficiently strong or whether, in the absence of a stay, the appeal would be rendered worthless ('nugatory').(6)
The Court of Appeal's judgment is a useful review of the general principles relevant to an application to extend time to appeal a lower court's judgment. The judgment follows on from recent appellate court clarification concerning the general principles relevant to the grant of a stay of execution pending an appeal.(7)
These general principles are not controversial, although the Court of Appeal appears to have used the opportunity to remind parties and their legal representatives of the importance of commencing appeals within time and that stays of execution are not the norm – indeed, in practice, satisfying the test to obtain a stay of execution of a judgment pending an appeal may be more difficult than satisfying the 'prospects of success' for an appeal.(8)
The judgment also serves as a reminder of good practice as regards civil appeals to the Court of Appeal and of the need to comply with Practice Direction 4.1 (Civil Appeals to the Court of Appeal).(9) Appellate court practice requires particular care and prompt action – a delay of more than a few days or a week can be fatal (particularly where the prospects of success for an appeal are poor).
Finally, the judgment confirms the high threshold that an appellant needs to satisfy to overturn a lower court's costs order – short of a 'plain or palpable' error on the part of a lower court in exercising its discretion as to costs, an appeal court is unlikely to interfere.(10)
Endnotes
(1) [2021] HKCA 604, 5 May 2021.
(2) [2020] HKCFI 209, 22 January 2020.
(3) Rules of the High Court, Order 59, Rules 4(1) and 5(1).
(6) Ng Yuk Pui v Estate of Dung Wai Man (deceased) [2021] HKCA 134.
(8) Hong Kong Civil Procedure 2021, Order 59, Rule 13 (Commentary, 59/13/1).
