By Olivia Kung, Associate
Many people find litigation a daunting experience, especially the first timers. This series of Questions & Answers can hopefully provide litigants with some basic understanding of this area of law.
Q1. Can I settle the dispute without going to trial?
First of all, the majority of cases settle before trial. Further, under the Civil Justice Reform, parties are encouraged to explore alternatives to litigation e.g. mediation. If a party unreasonably refuses to attempt mediation, the court can make adverse costs order against that party irrespective of the outcome after trial.
What is mediation?
Mediation is a voluntary, informal, flexible and confidential dispute resolution process conducted by a trained and impartial person. The mediator assists and encourages the parties to reach a settlement. He/she has no power over the parties to compel a settlement and he/she does not give any opinion on the relative legal merits of the case. The parties retain control of the process and decisions. Once settlement has been reached, it will be reduced into writing and will be legally binding and enforceable. Mediation is the most common alternative to litigation.
Advantages of mediation
• Time and cost efficient;
• Parties can make their own decisions and reach agreements with which the parties may be more willing and ready to comply;
• Settlement terms can be kept private and confidential;
• Mediation can result in terms of settlement of greater flexibility and in more practical ways going beyond the legal remedies that the court is empowered to grant. The solutions developed by the parties can be unique to the dispute and are ones that the court cannot provide; and
• Mediation is conducted in a more relaxed and informal manner which parties tend to be more open to compromise.
Q2. Which court will my case be assigned to?
This depends on the type and value of your claim.
Civil courts in Hong Kong consist of the following:-
1) District Court;
2) The High Court; and
3) The Court of Final Appeal.
The District Court
District Court has limited jurisdiction over both criminal and civil matters. For criminal matters, the District Court deals with indictable offences transferred to it from the Magistrates' Court. The District Court may try all serious criminal cases except murder, manslaughter and rape. The maximum term of imprisonment it can impose is 7 years.
For civil matters, the District Court hears claims in respect of the following:
1) Contract , quasi-contract or tort claim (including personal injuries claims) over HK$50,000 but no more than HK$1 million;
2) Recovery of land or premises where the annual rent or rateable value or the annual value does not exceed HK$240,000;
3) Tenancy cases;
4) Under equity e.g. administration of estate, trust, mortgage, specific performance, maintenance of infant, dissolution of partnership, relief against fraud or mistake. Where proceedings do not relate to land, the maximum value involved shall not exceed HK$1 million. Where proceedings do relate to land, the maximum value involved shall not exceed HK$3 million. For proceedings in relation to the recovery of land or title to land, the ratable value of the land must not exceed HK$240,000;
5) Recovery of less than 12 months of rental arrears only;
6) Employees' compensation cases (there is no limit on the amount claimed);
7) Sex discrimination, disability and family status discrimination cases; and
8) Matrimonial cases including divorce, maintenance, custody and adoption of children (the court which handles these types of cases is also known as the Family Court).
The High Court
The High Court comprises of two divisions - the Court of First Instance of the High Court and the Court of Appeal. The Court of First Instance is the principal court for civil matters in Hong Kong. It has jurisdiction over the following claims:
1) Money claims HK$1 million or above;
2) All other claims falling outside District Court jurisdiction;
3) Claims to be exclusively started in the Court of First Instance of the High Court (including judicial review, winding up, bankruptcy, certain statutory appeals);
4) Appeals from the Small Claims Tribunal on a point of law; and
5) Serious criminal offences
The Court of Appeal hears both civil and criminal appeals from the District Court and the Court of First Instance.
The Court of Final Appeal
The Court of Final Appeal is the highest appellate court in Hong Kong. It hears civil appeals from any final judgment of the Court of Appeal if the matter in dispute is in relation to an amount HK$1,000,000 or above. It also hears other civil and criminal appeals with leave if the matter is of great general or public importance or otherwise ought to be submitted to the Court of Final Appeal for decision.
Tribunals in Hong Kong:
a) The Small Claims Tribunal;
b) The Labour Tribunal;
c) The Lands Tribunal; and
d) The Market Misconduct Tribunal.
Small Claims Tribunal
The Small Claims Tribunal handles civil claims up to HK$50,000 for contract, quasi contract and tort claims.
The Labour Tribunal has exclusive jurisdiction over claims arising under the Employment Ordinance.
The Lands Tribunal
The Lands Tribunal has jurisdiction over miscellaneous claims relating to land. (It Tribunal) has a discretion to transfer matters to the District Court or to the Court of First Instance.
The Market Misconduct Tribunal
The Market Misconduct Tribunal handles disciplinary matters in relation to market misconduct e.g. insider dealing, false trading, price ragging, stock market manipulation etc.
Criminal Court in Hong Kong:
The Magistrates Court only handles criminal matters. The Magistrate Court’s power of punishment is generally restricted to a maximum of two years' imprisonment or a fine of HK$100,000.
Q3. What can I do if the defendant ignores my claim?
If the defendant fails to file an acknowledgment of service or a defence within the time frame, the plaintiff can apply for a default judgment i.e. a judgment in favour of his/her claim.
If the claim is related to a debt or liquidated damages where the amount of the claim is fixed and ascertainable, the plaintiff may enter judgment for the amount claimed together with his/her legal costs.
Where the claim is for “unliquidated damages”, in other words, where the amount of damages needs to be assessed by the court, an interlocutory judgment will be entered into instead. In such circumstance, the plaintiff will still have to appear in court to assess the amount of damages he/she will be entitled to.
Q4. Does “speed trial” exist in Hong Kong?
Provided that the facts of the case are straightforward, and there is no credible defence, the length of the case can be “shortened” by applying for a summary judgment.
What is a summary judgment?
A summary judgment is where a case is commenced at the Court of First Instance at the High Court without a full trial. It normally takes 3-4 months to obtain a summary judgment.
The benefit of a summary judgment is that it can shorten the length of the case and reduce the legal costs incurred. However, it is only applicable where there is no credible defence to the claim, and the facts of the case are straightforward.
What if the defendant contests the summary judgment?
On the assumption that the defendant’s contest of the summary judgment is successful, the case has to follow the normal procedure to trial. Subject to the diary of the court, and on the assumption that the trial would not take more than 4 days, it should take approximately 1.5 years to obtain judgment.
What if the case is appealed?
In the event that the case is appealed, subject to leave being granted, it will take approximately 3-4 months. Further time will be incurred if the case is further appealed, but unless there is a good reason, enforcement of judgment will not be hampered by any appeal.
Apart from summary judgment, the court has also got the power to order speedy trial where it considers the matter to be of urgency and will be better dealt with this way. Where the court makes such an order, the court will determine the mode of the trial.
Q5. Can I enforce a Hong Kong judgment overseas and vice versa?
Foreign judgments (excluding PRC judgments)
Judgments of the Hong Kong High Court and above may be enforced in most common law jurisdictions or as a result of international agreements and arrangements in a number of foreign countries including Belgium, France, Germany, Italy, Austria, Netherlands and Israel.
Equally, if a foreign judgment for the payment of debt is obtained in the superior court of a country listed under the Foreign Judgments (Reciprocal Enforcement) Ordinance (the “Ordinance”), an application can be made to the Hong Kong Court to register the foreign judgment. Once leave is granted to register, the foreign judgment can be enforced in the same way as a Hong Kong judgment.
What if the foreign judgment is not from a country listed under the Ordinance?
If the foreign judgment cannot be registered under the Ordinance, it can only be enforced at common law. This means that the foreign judgment itself will form the basis of a cause of action as the judgment will be treated as a debt between the parties.
To be enforceable at common law, the Hong Kong court will need to be satisfied that:
1. The foreign judgment was for a debt or a definite sum of money;
2. It was final and conclusive;
3. It was not obtained by fraud;
4. It was not contrary to Hong Kong rules of public policy or notions of natural justice; and
5. The foreign court had jurisdiction over the defendant according to Hong Kong rules.
What about PRC judgments?
In respect of enforcement of PRC judgments in civil and commercial matters, it is governed by a separate regime, known as the “Arrangement on Reciprocal Enforcement of Judgments in Civil and Commercial Matters” and the Mainland Judgments (Reciprocal Enforcement) Ordinance (Cap 597) (the “MJREO”). The MJREO makes provision for mutual enforcement in Hong Kong and the PRC judgments in civil or commercial matters.
The Ordinance only applies to enforcement of money judgments on disputes arising out of commercial contracts. Therefore, non-commercial contracts such as matrimonial matters, employment contracts, bankruptcy and insolvency matters, injunctions, orders for specific performance etc will be excluded.
In order to register a PRC judgment in Hong Kong, the judgment must satisfy the following:
1. The judgment is given on or after the date of the commencement of the Ordinance;
2. It is from a court which is a designated court under the MJREO;
3. It is final and conclusive;
4. It is enforceable in the PRC;
5. Judgment orders the payment of a sum; and
6. Application is made within 2 years from the date of the judgment.
In order to register a Hong Kong judgment for enforcement in the PRC, the judgment creditor will have to register both the Hong Kong judgment together with a certificate that the judgment is enforceable in Hong Kong.