UNIFRUIT LTD v. CAPITAL YEARS INTERNATIONAL LTD

DCCJ 5798/2002

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO.5798 OF 2002

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REASONS FOR RULING

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1. The principle on which applications for leave to appeal are to be decided was set out by Leong JA in Ma Bik Yung v Ko Chuen HCMP 4303 of 1999 as follows:

Both counsel for the applicant and counsel for the respondent have submitted lengthy written skeleton arguments and authorities in support of their respective cases. But I do not think it is necessary for me to consider these details which should better be reserved for the appeal proper. What is required for the purpose of this application is for the applicant to show that he has an arguable case with reasonable chances of success on appeal. The authority on this should be found in the case cited by Mr. Wong for the applicant, the case of Smith v. Cosworth Casting Processes Ltd. [1997] WLR 1538 in which Lord Woolf provided the following guidance:

"1. 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.

2. The court can grant the application even if it is not so satisfied. There can be many reasons for granting leave even if the court is not satisfied that the appeal has any prospect of success. For example, the issue may be one which the court considers should in the public interest be examined by this court or, to be more specific, this court may take the view that the case raises an issue where the law requires clarifying."

2. Section 63 of the District Court Ordinance, Cap. 336, provides that a party may only appeal from the District Court to the Court of Appeal with leave. If the judge below refuses leave, the party may still apply for leave to the Court of Appeal. The application for leave at the District Court level should not be allowed to become a time-wasting and costs-wasting exercise, especially in the situation where, if it is not successful, the applicant can in any event have a second bite at the cherry. The judge should not be required effectively to re-hear the case.

3 This was an Order 14 judgment. With regard to my finding that the defendant's assertions are not believable, this is invariably something on which different judges may take different views of the same assertions. Also there are some quite complicated legal issues involved. I have read counsels' written submissions and it seems to me at the outset that I cannot say that the defendant has no realistic prospect of success on appeal. Therefore I did not hear counsel on that, in addition to what they had put before me in writing. I will grant leave to appeal.

4. I turn to the linked questions of conditional leave to appeal and stay of execution. I do not think that the grounds of appeal are so weak as to require me to make the defendant pay the judgment sum into court. Equally I do not think that the defendant's case particularly on unjust enrichment is so strong as to require me to stay execution. In effect that would be to say that there is a triable issue. So the leave to appeal will be unconditional and there will be no stay of execution.

5. So far as costs are concerned the costs of the summons for leave will be in the cause of the appeal and the costs of the application for stay pending appeal will be to the plaintiff in any event.