LINKS INT'L RELOCATIONS LTD t/a LINKS RELOCATIONS V. SWIFT CHRISTOPHER LEE

DCCJ 817/2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 817 OF 2012

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DECISION

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Application for leave to appeal

1.  This is the defendant’s application for leave to appeal against my judgment given on 22 October 2013 in favour of the plaintiff for the sum of HK$27,780 (“Judgment”) and my decision on costs in favour of the plaintiff dated 19 December 2013 (“Decision”).

Proper approach to leave application

2.  Section 63A(2) of the District Court Ordinance provides that:-

(2) Leave to appeal shall not be granted unless the judge, the master or the Court of Appeal hearing the application for leave is satisfied that –

(a) the appeal has a reasonable prospect of success; or

(b) there is some other reason in the interests of justice why the appeal should be heard.

3.  The principles regarding leave application have been further elaborated by District Judge M Ng (as she then was) in Commissioner of Inland Revenue v Nam Tai Trading Co Ltd [2009] 3 HKC 421.  Paragraph 12 of her decision in that case stated that “… all that the [appellant] needs to show is that there is a good arguable case in respect of the intended appeal that has a reasonable and not a fanciful prospect.”  The learned judge cited with approval a passage from Smith v Cosworth Casting Processes Ltd [1997] 1 WLR 1538 by Lord Woolf MR which stated that “The court will only refuse leave if satisfied that the applicant has no realistic prospect of succeeding on the appeal. This test is not meant to be any different from that which is sometimes used, which is that the applicant has no arguable case. Why, however, this court has decided to adopt the former phrase is because the use of the word ‘realistic’ makes it clear that a fanciful prospect or an unrealistic argument is not sufficient.”

The defendant’s arguments

4.  In the defendant’s summons for leave, the defendant set out a number of grounds of appeal. My task in this application is to decide if any of those grounds, individually or in aggregate, have a reasonable prospect of succeeding in the appeal. I shall deal with them as follows.

Contract

5.  It seems from the summons and the skeleton arguments filed by the defendant that he submitted that I was wrong in finding that a contract did exist between the plaintiff and the defendant governing the storage charges payable by the defendant for the Wines. And having found that a contract existed, I erred in finding that there was no express term dealing with the storage charges and then implied a term into the contract that the defendant was to pay reasonable storage charges to the plaintiff.

6.  The defendant points to a section in the Quotation which provides for Storage Services charges both in Origin and Destination per month. According to the rates set out there, the defendant calculated that the maximum amount payable by the defendant is no more than HK$2,700, much smaller than the award I gave. 

7.  However, neither the plaintiff nor the defendant referred me to this section of the Quotation in their pleadings or arguments. None of the witnesses mentioned it in their evidence. Neither party ever mentioned it in all their correspondence (whether by themselves or their solicitors) before or after the action was commenced. There was no explanation in the defendant’s summons or skeleton arguments as to why this was so. Mr. Sheppard for the defendant in his oral submission explained that because it was the defendant’s stance that no contract ever existed between the plaintiff and the defendant, so he did not see fit to plead this section of the Quotation in the defence.

8.  Understandably the plaintiff took strong exception to the introduction of this “New Point”.  Mr Chan for the plaintiffreferred me to the authority of Flywin Co Ltd v. Strong & Associates Ltd [2002] 2 HKLRD 485.  The general principle governing the raising of new point is set out in paragraphs 37 and 38 of the judgment of the Court of Final Appeal:-

37. Mr Michael Thomas SC …cited The Tasmania (1890) 15 App Cas 223 in which Lord Herschell said this (at p225):-

" My Lords, I think that a point such as this, not taken at the trial, and presented for the first time in the Court of Appeal, ought to be most jealously scrutinised.  The conduct of a cause at the trial is governed by, and the questions asked of the witnesses are directed to, the points then suggested. And it is obvious that no care is exercised in the elucidation of facts not material to them.

It appears to me that under these circumstances a Court of Appeal ought only to decide in favour of an appellant on a ground there put forward for the first time, if it be satisfied beyond doubt, first, that it has before it all the facts bearing upon the new contention, as completely as would have been the case if the controversy had arisen at the trial; and next, that no satisfactory explanation could have been offered by those whose conduct is impugned if an opportunity for explanation had been afforded them when in the witness box."

38. Mr McDonnell submitted that what Lord Herschell said was confined to the circumstances of that case and how the Court of Appeal went about reversing the view of the facts taken by the trial judge sitting with nautical assessors.  I am unable to accept that submission.  What is involved is a general principle.  Where a point is taken at the trial, the facts pertaining to it are open to full investigation at the evidence-taking stage of the litigation. That is as it should be. Therefore where a party has omitted to take a point at the trial and then seeks to raise that point on appeal, the position is as follows. He will be barred from doing so unless there is no reasonable possibility that the state of the evidence relevant to the point would have been materially more favourable to the other side if the point had been taken at the trial.

9.  Applying these principles to the present case, I do not think the defendant has overcome the hurdle for raising the new point. The plaintiff’s position is that in the particular circumstances where the Wines were taken into custody from the defendant by the plaintiff in the present case, the Storage Services charges set out in the Quotation did not apply. The plaintiff may be right or it may be wrong. But the way the case was pleaded and argued by the defendant resulted in neither party adducing any evidence or making any submission on the applicability of the Storage Services section in the Quotation. Hence I do not think the hurdle set by Flywin has been overcome by the defendant.  In fact, Mr Sheppard did not address me on this point in his written submissions. If it were thought necessary, I would further rule that Mr Sheppard’s oral explanation as to why this point was not pleaded is not an acceptable one. More so after the Civil Justice Reform than before, pleadings are meant to define the issues before the court and defendants are discouraged from pleading bare denials. If the defendant in this case had confidently taken the stance that no contract existed and that it would not be necessary for him to rely on any alternative case, he took the risk that his alternative case would not be considered by the court, either at trial, or in any appeal.  The plaintiff should not be prejudiced by having to face the New Point in the appeal by not covering it in the trial.

10.  The defendant also argued that I mis-interpreted Interfoto Picture Library Limited v Stitletto Visual Programmes Limited [1987] EWCA Civ. 6 in that I failed to construe correctly the judgment of Bingham LJ, who found that damages were to be assessed upon a quantum meruit basis only and not, as I found, pursuant to a (new and different) implied term or unjust enrichment. I do not think there is any merit in this argument as a ground of appeal. Whether I interpreted Interfoto correctly or not, I do not think there is any other method to assess the damages payable by the defendant in this case other than what a reasonable storage service provider would have charged, as I found in my judgment.  Apart from the New Point, the defendant had not suggested any other measures of the storage charges.

Lien

11.  The defendant argued that I misunderstood or mis-applied the law of lien to this case. It was argued that no valid lien existed as the plaintiff purported to impose a lien based on exorbitant invoices which had no commercial, contractual or factual foundation whatsoever.

12.  I do not see any legally arguable point put forward by the defendant to challenge my finding on this point. The plaintiff’s demand may be excessive, but a salient feature of this case is that the defendant had all along refused to offer any payment at all. In these circumstances, fairness lied with the plaintiff being entitled to exercise a lien.

Pleadings and amendment of pleadings

13.  In paragraphs (9) to (10) of the defendant’s summons, the defendant set out a number of alleged factual errors in the Judgment, but did not explain how those errors affected the conclusion of the Judgment.

14.  The more substantial challenge is to paragraph 16 of the Judgment. In that paragraph I commented on the defendant’s denial of liability to pay any charges to the plaintiff all along. Mr Sheppard contended (again) that I was wrong and the defendant was all along willing to pay reasonable charges, but not the exorbitant charges demanded by the plaintiff. I am afraid I (again) see no merits at all in this argument. Suffice it for me to say that up to this moment, Mr Sheppard has not been able to point to me any email, letter or any other document from the defendant or his former and present solicitors making any unequivocal offer to pay reasonable charges. In any event, if the defendant were ever willing to pay the plaintiff anything, he could have easily done so by making a payment into court after the action was commenced. Such failure is particularly blatant in light of the fact that the defendant himself is a senior commercial lawyer, and that he has been successively represented and advised by two well established firms of solicitors and a very experienced counsel. I found it extremely hard to believe that none of them had ever advised the defendant on the payment into court mechanism. In light of these, the defendant’s assertion that he was all along willing to pay reasonable storage charges is one of zero credibility.

Conduct of trial

15.  Paragraphs 13 to 15 of the defendant’s summons challenge the manner in which I conducted the trial. First, it was argued that I should not have invited the plaintiff to amend the statement of claim by adding the cause of action in unjust enrichment. Then I further erred in not ruling that, having allowed the amendment, I did not rule that the plaintiff should pay costs up to the time of the amendment, and I failed to adjourn the trial as requested by the defendant so as to let the defendant appeal against my decision before proceeding with the trial.

16.  Such arguments of the defendant have been fully dealt with in paragraphs 5 to 7 of my Judgment.  There is no merit at all in them.

17.  I was then criticized in paragraphs 14 and 15 of the defendant’s summons for having adopted an inquisitorial approach at the trial and that my interventions at cross-examinations of the witnesses have resulted in prejudice to the defendant. I totally fail to understand such arguments. Whilst I might have asked one question or two every now and then, I have obviously maintained a courteous demeanor throughout the trial and given counsel sufficient time and liberty to pursue their lines of enquiry.  No complaint whatsoever of intervention, not to say excessive intervention resulting in an unfair trial, was made during and after the trial, or in the closing written submissions of counsel. I see no realistic prospect of success for this ground of appeal of the defendant.

The decision on costs

18.  Paragraphs 16 to 21 of the defendant’s summons challenge the Decision. The grounds set out there are not much more than regurgitation of the submissions made before, which I have sufficiently dealt with in the Decision.  In short, costs were awarded to the plaintiff primarily because of the defendant’s steadfast denial of liability and failure to make any offer or payment into court all along. It was awarded on indemnity basis on the grounds I set out in the Decision. In light of that, the defendant’s vehement and repeated attacks on the extravagance of the plaintiff’s claims do nothing to assist him.

Conclusion on application for leave to appeal

19.  I see no realistic or reasonable prospect of success of any of the grounds of appeal advanced by the defendant. The defendant has indicated firmly that he would seek leave from the Court of Appeal should I decline leave. This is not a consideration that I should pay any attention to. The defendant’s application for leave to appeal is refused.

Application for stay of execution

20.  The defendant also applied to stay enforcement of the Judgment and Decision pending determination of the application for leave to appeal before me and the Court of Appeal.  The defendant has not stated any serious or irreparable prejudice that he would suffer if execution is not stayed.  Under the general principle of not depriving and delaying a successful claimant of a favourable judgment, I reject the defendant’s application.

Costs of the application

21.  The plaintiff’s behavior and its conduct of the case may not have been entirely beyond reproach (few litigants ever were). Yet it is obvious that the whole matter arose because of the defendant’s failure to properly respond to the plaintiff’s request for instructions to deal with the Wines after he moved to Japan. After a year and a half when the Wines popped up in his mind again, he demanded their return but refused to pay or offer to pay any charges for their storage. The plaintiff was forced to expend very substantial amount of time and costs to recover its entitlement. I suspect the meager award obtained by the plaintiff could easily be wiped out in the taxation of the trial costs. It would be a mockery of our civil justice system if the plaintiff is forced to expend ever more money out of pocket simply because the defendant has the means to keep the proceedings from finally concluding, by presenting and repeating arguments with little merits.

22.  I therefore exercise my discretion to award costs of the application for leave to appeal and stay of execution to the plaintiff on indemnity basis, with certificate for counsel, for the avoidance of doubt.