The District Court
On 1st September 2000, the District Court (Amendment) Ordinance 2000 (“the Ordinance”) came into force and the extension of its jurisdiction, particularly at the time of economic recession in Hong Kong, is welcomed by all solicitors. The introduction of the new Rules of the District Court, which bear the same Order number as the Rules of the High Court, is good news for all litigation lawyers, although Lord Woolf in England has already recommended major changes in civil litigation process to improve access to justice. Basically, there are two major changes in the old ordinance - jurisdiction and procedures.
Common Law Jurisdiction
As far as the common law jurisdiction is concerned, the Ordinance gives the District Court power to hear and determine cases where the amount of the Plaintiff’s claim does not exceed HK$600,000 after taking into account any set-off or counterclaim which the Defendant may have against him or after abandoning part of his claim to fall within the jurisdiction. One of the outcomes of the extension of its jurisdiction is the creation of the Personal Injuries List identical to the one in the High Court and paragraph 8 of the Practice Direction 27 provides that the Practice Directions together with the amendments in relation to High Court Personal Injuries List, namely, Practice Directions 18.1 and 18.2 shall apply to the personal injuries cases in the District Court. So far as land recovery or title dispute is concerned, the District Court has power to hear those cases where the annual rent or the rateable value or annual value of the land does not exceed HK$240,000, as opposed to HK$100,000 previously.
As far as the equity jurisdiction is concerned, the District Court has the power of the High Court to hear and determine proceedings if either the amount or value of the subject matter or relief sought does not exceed HK$600,000, where the proceedings do not relate to or partly relate to land and the part not so related is more than HK$600,000; or the amount or value of the subject matter or relief sought does not exceed $3,000,000, where the proceedings wholly or partly relate to land and the part not so related is not more than HK$600,000. In the past, the jurisdiction was limited to HK$120,000 regardless of whether the case wholly or partly related to land and hence, the jurisdiction has in fact been further relaxed.
Procedurally, the current Rules of the District Court, which have great resemblance with the Rules of the High Court, supersede the then District Court Civil Procedure (General) Rules, District Court Civil Procedure (Costs) Rules, and District Court Civil Procedure (Forms) Rules. Although the District Court has now adopted most of the High Court procedures in its civil jurisdiction, it still has its own distinctive features, which can be briefly summarised below.
Issue of writ
Paragraph 1 of the Practice Direction 27 requires the Writ of Summons to state (i) whether the relief sought in the action falls within the jurisdiction of the District Court, and (ii) which section(s) of sections 32 to 39 applies/apply to the case.
Right to act in person by corporation
Unlike the Rules in the High Court, a body corporate can be represented by its director in the District Court proceedings as of right without having obtained leave of the court. However, the director so authorised by the company should file in the Registry an affidavit stating that he has been duly authorised by the Board to act for the company and exhibiting a copy of the said Board resolution duly certified by the company secretary [Order 5A, rule 2].
The District Court may at any stage of the proceeding either of its own motion or upon the application of any party transfer the action to the Court of First Instance where the action commenced is beyond its jurisdiction but within the jurisdiction of the High Court. In that case, the District Court may either :-
a. of its own motion or upon the application of any party order the transfer of the action to the Court of First Instance; or
b. upon the application of the Defendant order the action be struck out if it appears that the Plaintiff knew or ought to have known that the District Court has no jurisdiction to deal with his claim [section 41(1)(2)].
If the counterclaim exceeds the jurisdiction of the District Court, it may either of its own motion or upon the application of any party order that :-
a. the whole proceedings be transferred to the Court of First Instance;
b. the proceedings on the counterclaim be transferred to the Court of First Instance and the proceedings on the Plaintiff’s claim be heard and determined in the District Court; or
c. the matter be reported to the Court of First Instance or a judge of it if the District Court considers that the whole proceedings should be tried by it [section 41(3)].
Upon receipt of such a report from the District Court, the Court of First Instance may order that :-
a. the whole proceedings be transferred to the Court of First Instance;
b. the whole proceedings be heard and determined in the District Court; or
c. the counterclaim be transferred to the Court of First Instance and the proceedings on the Plaintiff’s claim be tried the District Court [section 41(4)].
If, however, the District Court does not make any such report, the whole proceedings can still be tried by it notwithstanding any enactment to the contrary [section 41(6)].
If judgment on the claim is given to the Plaintiff and the counterclaim is transferred to the Court of First Instance either by the order of the District Court or the Court of First Instances, execution of the judgment shall be stayed unless and until the Court of First Instance or a judge of it otherwise orders or the counterclaim has been disposed of there [section 41(5)].
Similarly, the Court of First Instance may at any stage of the proceedings order the transfer of an action or proceedings to the District Court in the following manners :-
1. It may by its own motion or on the application of any party order that all or part of the action or proceedings, other than a counterclaim, shall be transferred to the District Court if it appears that the action or proceedings is likely within its jurisdiction unless, by reason of the importance or complexity of any issue or for any other reason, that action or proceedings should remain in the Court of First Instance [section 43].
2. It may upon the parties’ consent order the transfer of all or part of the action including the counterclaim insofar as it is within the District Court jurisdiction but for the monetary limits specified in sections 32, 33, 35, 36 and 37 [section 44].
The court ordering the transfer may either make an order for costs of the proceedings prior to and of the transfer or leave it to the court to which the proceedings are transferred. Subject to that, the costs of the whole proceedings before and after the transfer are decided by the court to which the proceedings are transferred [section 44A(2)(3)].
The costs of the whole proceedings shall be taxed in the court to which the case is transferred, which has power to order costs and order the scales on which the costs of the several parts of the proceedings (before and after the transfer) to be taxed [section 44A(4)].
In an action founded on contract, quasi-contract or tort which was commenced in the Court of First Instance, the District Court may allow costs on the High Court scale if there was sufficient reason for commencing that action in the Court of First Instance [section 44A(5)]. If, however, proceedings within the District Court jurisdiction was commenced in the Court of First Instance, the District Court shall order costs of those proceedings to be allowed on the District Court scale unless those proceedings were brought with the leave of the Court of First Instance or the Court of First Instance otherwise orders [section 44A(6)].
Procedures Following the Close of Pleadings
Upon the close of pleadings, the parties have to choose what sort of directions they intend to seek and the manner of seeking such directions for the further conduct of the case.
Subject to the overriding power of the Court to call for a directions hearing [Order 23A, rule 6(3)], the parties have to (i) agree with each other the directions they would like to seek [Order 23A, rules 2 and 4], (ii) follow the automatic directions [Order 23A, rule 5], or (iii) take out a Summons for Directions to apply for further directions [Order 23A, rule 7].
Where the parties have agreed with each other the directions for further proceedings and the only direction is a direction that the Plaintiff shall apply for a pre-trial review within 3 months of the close of pleadings or the directions and orders agreed include a direction as to the time within which the Plaintiff shall apply for a pre-trial review, the Plaintiff should draw up a memorandum setting out the agreed directions and forward the same to the all other parties who shall indorse their consents thereon as soon as practicable [Order 23A, rule 4]. It is the duties of every party to consider what directions and orders are required for the conduct of the proceedings and try to reach an agreement with the other parties as to the directions and orders required [Order 23A, rule 2].
If upon the expiry of 21 days after the close of pleadings, no memorandum has been filed and no summons for directions has been issued, the automatic directions under Order 23A, rule 5 shall apply.
The parties may apply to the Court for directions by way of summons for directions [Order 23A, rule 7]. If, however, the Court finds that the directions hearing was rendered necessary because of the unreasonable refusal or failure of a party to agree directions or take any step required to proceed with the case in accordance with the automatic directions or a party acted unreasonably in taking out the summons for directions, the Court may orders that party to pay all the costs wasted by his unreasonable conduct including the costs of the directions hearing [Order 23A, rule 14(1)].
If the parties or one or more parties is/are not legally represented, the Court will of its own motion call for a directions hearing after the close of pleadings [paragraph 7.10 of the Practice Direction 27].
Unlike the Court of First Instance where the parties should make discovery by exchanging lists of documents within 14 days after the close of pleadings [Order 24, rule 2 of the Rules of the High Court], the parties in the District Court proceedings are required to make discovery pursuant to (i) the agreed directions between them under Order 23A, rule 4, (ii) the automatic directions under Order 23A, rule 5, or (iii) order made upon the summons for direction issued under Order 23A, rule 7.
The application for pre-trial review should be lodged (i) within the time limit prescribed in the agreed directions between the parties under Order 23A, rule 4, (ii) within 3 months where the automatic directions under Order 23A, rule 5 are adopted, or (iii) in accordance with the time limit prescribed in the order made in the directions hearing under Order 23A, rule 7.
The obligation is on the Plaintiff to apply for the pre-trial review. If the Plaintiff fails to do so within the time limit, the Defendant may apply for the pre-trial review himself or apply to the court for dismissal of the action for want for prosecution [Order 34, rule 2].
Unless the Court directs otherwise, the application for pre-trial review shall be made by a notice of application filed in the Registry, copies of which shall be served on the other parties within 2 days of its filing [Order 34, rule 3(1)]. The notice shall contain the following information :-
a. whether all the previous directions or orders have been complied with, if not, reasons for non-compliance;
b. whether the applicant requires any further direction or order for the conduct of the proceedings;
c. whether the applicant intends to call any factual witnesses, if so, the number of witnesses to be called and the languages to be used when they testify at the trial;
d. where expert reports have been served, whether those reports have been agreed, if not, what steps have been taken to secure the agreement;
e. the estimated length of trial;
f. whether a date should be fixed for the trial, if not, the reasons; and
g. all other matters which the applicant regards as material for the pre-trial review [Order 34, rule 3(2)].
The applicant should also lodge in the Registry a bundle containing copy of the writ, pleadings, orders made upon summons for directions/memorandum of agreed directions, legal aid documents required to be filed, witness statements, expert reports and all material correspondence between the parties relevant to the pre-trial review [paragraph 7.7 of the Practice Direction 27].
The parties served with the notice of application shall within 14 days of the receipt of the said notice file in the Registry his notice in response, copy of which shall be served on the applicant and all other parties within 2 days of its filing [Order 34, rule 4(1)]. The notice in response shall contain the types of information which is required to state in the notice of application [Order 34, rule 4(2)]. If any party fails to serve his notice in response within the prescribed time or such further time as may be agreed between the parties or allowed by the Court, the applicant may apply to the Court to dismiss the action or strike out the defence as the case may be [Order 34, rule 5].
The pre-trial review can be conducted with/without the parties’ attendance. An oral hearing shall be called for either if the court so orders of its own motion or any of the parties requests it within 7 days after the filing of the notice in response by written notice to the Registrar and all other parties [Order 34, rule 6(1)]. It is the Court’s practice that where the parties or one or more parties is/are not legally represented, the Listing Judge/Master will call for an oral hearing of the pre-trial review [paragraph 7.12 of the Practice Direction 27].
At the pre-trial review (whether or not the oral hearing being called for), the Court may either :-
a. grant leave to set down the action for trial or fix a date of trial if it is satisfied that the action is ready for trial [Order 34, rule 7(1)].; or
b. adjourn the pre-trial review to a fixed date and give further directions and make such orders, as if the pre-trial review were a directions hearing under Order 23A, rule 9, in order to get the action ready for trial if it is not satisfied that the case is ready for trial [Order 34, rule 7(2)(3)].
If a party unreasonably requests for an oral hearing of the pre-trial review, the Court may order that party to pay all the costs wasted by his unreasonableness including the costs of the oral hearing [Order 34, rule 8(1)]. If the pre-trial review is adjourned as a result of the action being not ready for trial and the Court finds that it is due to the failure of any party to comply with any direction or order, the Court may order that party to pay the costs of the pre-trial review and make such other order as to costs as the court thinks fit having regard to the failure of that party to comply with the direction or order [Order 34, rule 8(2)].
IMPORTANT POINTS TO LOOK OUT FOR IN PRACTICE
1. Pursuant to paragraph 1.2 of the Practice Direction 27, to specify in the originating process under which Section (i.e. Sections 32 to 39 of the Ordinance) the proceedings are instituted.
2. Although the rateable value for the recovery of land action exceeds HK$240,000 but the monthly rent falls below HK$20,000, the proceedings should be issued in the District Court.
3. The new Rules of the District Court have repealed and superseded the old District Court Civil Procedure (General) Rules, District Court Civil Procedure (Costs) Rules and District Court Civil Procedure (Forms) Rules in their entirety;
4. The Court of First Instance may, under Section 43 of the Ordinance, at its own motion, transfer suitable cases to the District Court. At the moment, any transfer from the High Court to the District Court will result in delay and additional costs, and are not advisable to do so;
5. Under Order 62, Schedule 1, Part II paragraph 2(3) of the new Rules, Counsel’s fee will not be allowed unless Certificate for Counsel is granted by the Court or the amount recovered exceeds HK$150,000. Therefore, it is important to apply for Counsel Certificate at the end of the trial, if appropriate.
George YC Mok
Ricky YK Tam
George YC Mok & Co
Copyright © GYC Mok 2000