BILL CHAO KEH LUNG v. DON XIA

FAMV No. 6 of 2004

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 6 OF 2004 (CIVIL)

(ON APPLICATION FOR LEAVE TO APPEAL FROM
CACV NOS. 425 & 427 OF 2002)

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D E T E R M I N A T I O N

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Mr Justice Ribeiro PJ:

1. Section 22(1)(a) of the Hong Kong Court of Final Appeal Ordinance, Cap. 484, so far as material, provides that an appeal shall lie to the Court of Final Appeal -

"as of right, from any final judgment of the Court of Appeal in any civil cause or matter, where the matter in dispute on the appeal amounts to or is of the value of $1,000,000 or more ......"

2. In Cheng Lai Kwan v Nan Fung Textiles Ltd (1997-98) 1 HKCFAR 204, the Appeal Committee adopted the approach of the Privy Council in Zuliani v Veira [1994] 1 WLR 1149, and held that the right of appeal which that section confers does not extend to claims for unliquidated damages.

3. In Shum Kam Fai v Lam Chi Wai FAMV No 38 of 2002, 16 December 2002, it was held that this applies equally to cases where a claim for unliquidated damages had been assessed, resulting in the award of a sum exceeding $1 million.

4. Section 22(1)(b) provides a discretion to grant leave which, as pointed out in Cheng Lai Kwan, the Appeal Committee may exercise if it can be said as a matter of the utmost probability, or even of virtual certainty, that the damages ultimately awarded will be in excess of the threshold amount. This is, however, subject always to the grant of leave being justified by the apparent merits of the appeal.

5. The action to which the present application relates was brought by the plaintiff alleging a breach by the defendant of a contract to sell a parcel of shares in a private company. The claim was for unliquidated damages. Deputy High Court Judge Carlson (HCA 9289/2000, 8.8.02 and 3.10.02) gave judgment for the plaintiff and awarded him damages assessed in the sum in excess of US$500,000. The Court of Appeal (Cheung JA, Ma JA, and Waung J; CACV 425/2002, 13 June 2003) reversed the judge's decision and gave judgment for the defendant. It also refused leave to appeal (on 19 March 2004).

6. Mr John Scott SC, appearing with Mr Paul Carolan for the plaintiff, invites the Appeal Committee to depart from its usual approach to the grant of leave to appeal. The sum assessed by the trial judge obviously exceeds the HK$1 million threshold and it is submitted that we should construe section 22(1)(a) so as to treat the assessed amount as the "matter in dispute". He prays in aid what is said to be earlier Privy Council practice, referring to several cases which are dealt with in the Court of Appeal's decision refusing leave to appeal.

7. We do not accept this submission. Whatever may have been the earlier practice in relation to Privy Council appeals, the modern Zuliani approach was applied in Hong Kong before 1997 in relation to Privy Council appeals, and has, since reunification, continued to be applied in relation to the Court of Final Appeal.

8. The Court's approach is settled and we see no reason for departing from it. It is exceptional for courts of final appeal to entertain appeals as of right and we do not consider that there should be any enlargement to the existing classes of cases falling within that category.

9. It is not submitted that any point of great general or public importance arises. Mr Scott's alternative argument is that the Court's discretion to grant leave on the "or otherwise" ground should be approached on the footing that leave should normally be granted unless the grounds of appeal have no realistic prospects of success. He cites Smith v Cosworth Casting Processes Ltd [1997] 1 WLR 1538 in support. We reject that submission. The words "or otherwise" are found in section 22(1)(b) in the context of the Ordinance laying down, as the usual condition of granting discretionary leave, the high-threshold requirement that the appeal should involve a question of great general or public importance. The construction contended for would wholly subvert that requirement. The Smith case concerns the grant of leave to appeal to the English Court of Appeal in an entirely different and inapplicable context. As Bokhary PJ pointed out in Hui Yiu Wing v The Regional Council, FAMV No 16 of 2002; 24 September 2002, (2002) HKCU Lexis 1538; the granting of leave to appeal under the "or otherwise" limb is an exceptional course.

10. The Court of Appeal unanimously overturned the trial judge on the grounds that the evidence did not disclose either a repudiation of the contract by the defendant or, if there was a repudiation, that it had unequivocally been accepted. On the evidence, that was a course open to the Court of Appeal and we see no basis for exercising the discretion conferred by the words "or otherwise" in the section. Leave to appeal is accordingly refused with costs.