FINEWAY PROPERTIES LTD v. SIN HO YUEN VICTOR, THE ADMINISTRATOR OF THE ESTATE OF SIN YAT

CACV 95/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 95 OF 2009

(ON APPEAL FROM LDCS NO. 5000 OF 2007)

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BETWEEN

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REASONS FOR JUDGMENT

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Hon Le Pichon JA:

1.  This was an application by the applicant for leave to appeal to the Court of Final Appeal under section 22(1)(b) of the Hong Kong Court of Final Appeal Ordinance Cap. 484 (“the Ordinance”). At the conclusion of the hearing leave was refused with costs to the respondent. The reasons appear below.

2.  This case is unusual in that on 30 November 2010, on the respondent’s application, the respondent obtained leave pursuant to section 22(1)(b) of the Ordinance to appeal to the Court of Final Appeal on the question:

“whether there is a remedy available to and minority owner after an auction has taken place when it has been held that the reserve price at that auction was the wrong price.”

The respondent’s notice of application filed in June 2010 was for leave pursuant to section 22(1)(a) and (b) of the Ordinance. Prior to the hearing of that leave application, on 9 November 2010 the applicant filed a notice of motion for leave to appeal to the Court of Final Appeal

“in the event and only in the event that the Court of Appeal shall grant leave to the [respondent] … to appeal to the Court of Final Appeal …on ground 1.3 (Reasonable Offer), ground 2 (Lack of Jurisdiction under Cap 545 to substitute the Reserve Price of $75 million by $122 million), ground 3 (Lack of Stay of Execution and/or ground 4 (Justice and Equity) …”

but without specifying the particular provision(s) of section 22(1) of the Ordinance on which it based its application. Nor was any question of great general or public importance formulated either in the applicant’s notice of motion or the written submissions of counsel who appeared for the applicant.

3.  At the hearing on 18 November 2010, Mr Coleman SC who appeared for the respondent abandoned most if not all of the grounds stated in the respondent’s notice of application and formulated the question of great general or public importance upon which leave was eventually granted.  This court did not deal with the applicant’s notice of motion given the course of events and the absence of the formulation of any question(s) of great general or public importance by the applicant.

4.  The present application to consider the applicant’s notice of motion was made by way of summons on 6 December 2010.

5.  In § 16 of his written submissions, Mr Mok (who appeared for the applicant) formulated the following question said to be of great general or public importance:

“Whether the CA erred in ruling that the jurisdiction given by the Land (Compulsory Sale for Redevelopment) Ordinance to the Tribunal to approve the reserve price (which takes into account the redevelopment potential of the lot on its own) was wrongly exercised by the Tribunal (when it decided in December 2008 to reopen the RDV/reserve price after the financial crisis, which caused the drastic market drop from the level of the agreed RDV at $122 million in June 2008, being the median between $111 million assessed by the [applicant’s] expert and $133.5 million assessed by the [respondent’s] expert, to the level of around $70.5 million found by the Tribunal in March 2009) on the ground that such a natural processes (sic) of price fluctuation could not and did not constitute a valid reason for the Tribunal to reopen the RDV/reserve price.”

6.  That the question posed is fact-sensitive is self-evident.  It raises no question of great general or public importance that deserves to go to the Court of Final Appeal.

7.  Undeterred, Mr Mok proferred an alternative question which he formulated on the spot during the hearing:

“Whether the Court of Appeal was correct that the diminution in value of the assets through the natural process of price fluctuation, however dramatic, can have no impact on a concluded agreement on the reserve price and does not constitute a valid reason for re-opening the reserve price.”

The question posed was said to track § 17 of this court’s judgment handed down on 28 May 2010. That statement would not appear to be accurate.

8.  Be that as it may, as I understand it, while accepting the need for finality in proceedings, Mr Mok wishes to put before the Court of Final Appeal the proposition that, under Cap. 545, the tribunal has a ‘gatekeeper’ function to ensure that the reserve price is fair and that therefore the tribunal is entitled, even of its own accord, to reopen the parties’ concluded agreement as to the reserve price.  That is a new argument that was not raised on the appeal to this court.  In any event it does not arise from the question posed.

9.  In Happy Dragon Restaurant Ltd v The Director of Lands, CACV 201 of 2009, unreported, 8 June 2010 this court explained the importance of having the question or questions said to be of great general or public importance properly formulated prior to the hearing of the application and, in the hope that those making such applications in the future will take heed, I reiterate it here:

“5. The discipline is salutary in that it necessarily concentrates the mind of the party making the application by his having to identify and focus on the precise question or questions of great public or general importance said to arise.”

For counsel to attempt to formulate the question during the hearing is a practice that I deprecate.

Hon Cheung JA:

10.  I agree.

Hon Lam J:

11.  I agree.