ACTION RICH INVESTMENT LTD v. MIDLAND CORPORATE LEASING (XXXIV) LTD

HCA 171/2020

[2020] HKCFI 565

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 171 OF 2020

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DECISION

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1.  On 25 March 2020, I handed down a decision (“the Decision”)[1], in which I allowed P’s application for an interlocutory injunction. On 27 March 2020, D issued a summons (“D’s Summons”), in which D made the following applications:

(1)  leave to appeal against the injunction order made on 25 March 2020;

(2)  stay of execution of the said order until the determination of the appeal or a further order made by the Court;

(3)  if the aforesaid is refused, the time stipulated in the injunction order be extended from “noon on 31 March 2020” to “noon on 27 April 2020”.

2.  This decision should be read together with the Decision.  For ease of reference, the abbreviations used in the Decision are adopted herein.

LEAVE TO APPEAL

3.  The principles concerning leave to appeal are trite. Leave would only be granted if the appeal has a reasonable prospect of success (which means that the prospect of success is reasonable and more than fanciful, without having to be probable), or there is some other reason in the interests of justice why the appeal should be heard[2].  In respect of an appeal from an exercise of a discretion by the court below, the appeal would not be entertained unless it can be shown that the discretion was not exercised at all, or the discretion was exercised under an error of law, in disregard of a principle, under a misapprehension of facts or the conclusion reached was “outside the generous ambit within which a reasonable disagreement is possible”[3].

4.  Mr Brian Lee on behalf of D has put forward the following grounds of appeal:

(1)  failure to take into account and/or give sufficient weight to relevant considerations;

(2)  erroneous finding that D could be adequately compensated by damages;

(3)  erroneous finding that P could not be adequately compensated by damages; and

(4)  failure to take into account the oppression and/or onerous effect that the interlocutory injunction would impose on D. 

5.  With respect, I am of the view that there is no merit in these grounds, and the appeal does not have a reasonable prospect of success.

Ground 1

6.  Mr Lee submits[4]:

“8. D’s case has always been that the vast majority of the representations were made, and the common assumption shared, orally. Accordingly, that there was no “clear and unequivocal representation of fact made by P in those [written Whatsapp] exchanges” comes as no surprise and ought not to detract from the force of D’s case on estoppel.

9. The Judge ought to have taken into account and/or given more weight to other non-documentary evidence, namely that (a) the parties had conducted the renewal of tenancies on the basis of oral assurances in the past; and (b) the multiple representations and the parties’ common assumption were precisely to waive the formality of writing, i.e. the very formality that the Judged required to be shown.

10. Had the above been taken into account, there is a reasonable prospect that the Judge would conclude that, without a mini trial on affidavits (which is impermissible) or a trial, there was no high degree of assurance that P would succeed at trial.”

7.  I have not given detailed comments on the merits of the parties respective cases in the Decision.  However, that does not mean I have not considered or have not duly considered the evidence adduced by the parties before making the Decision.  In [12] of the Decision, I have explained that since there would be a trial in the near future, I would refrain from commenting the merits of the parties’ respective cases in detail.  I have considered all the materials before the Court, and for the reasons set out in the Decision, I am of the view that D has not put forward a strong case on estoppel.

8.  Lack of contemporaneous documentary evidence in support of the representation and the common assumption alleged by D would certainly have a negative impact on D’s case.  Mr Lee submits that I have not taken into account or have not sufficiently considered the fact that the parties had conducted the renewal of tenancies on the basis of oral assurances in the past.  With respect, the factual basis of Mr Lee’s submissions is in doubt.  As rightly submitted by Mr John Yan SC (together with Ms Shannon Leung) for P, according to the documentary evidence produced by Tse in his 2^nd affirmation, the parties in fact have never renewed tenancies on the basis of oral assurances in the absence of any written confirmations. 

9.  I am not persuaded that I have erred in any aspect in making the ruling that D has not put forward a strong case on either estoppel by representation or estoppel by convention, and there is a high degree of assurance that P would succeed at the trial.  There is no merit in Ground 1.

Grounds 2 to 4

10.  I would first dispose of Ground 3.  For the reasons set out in [16] and [18] of the Decision, I am of the view that it is highly unlikely that D would be able to compensate P the losses suffered by P if the interlocutory injunction claimed is not granted.  With respect to Mr Lee, D has not put forward anything with substance showing that I may have erred on this point.

11.  As to Grounds 2 and 4, D is arguing that:

(1)  Each piece of land is unique.  D’s losses would not be purely monetary in nature if the injunction sought by P is granted but D succeeds at the trial.

(2)  D’s losses are by nature uncertain and it would be difficult to quantify or assess those losses.

(3)  D has to incur costs to reinstate the Property before returning possession of the same to P.  If D succeeds at the trial, D can only regain possession of the Property after the New Tenant leaving the Property, and would have to incur further costs to renovate the Property.  All these are onerous burden to D.  In view of all these, the injunction claimed by P should be refused and D should be allowed to stay in the Property until the conclusion of the trial.

12.  With respect, I am unable to accept these submissions.

(1)  The Property is a commercial unit.  D was and is doing business in the Property.  D has no sentimental or personal attachment to the Property.  In these circumstances, I do not see why damages could not be an adequate remedy to D if the injunction order is held to be wrongly granted at a later time.  Further, if there is any substance in the point that every piece of land is unique, this would be true to both P and D.  This point itself cannot tilt the balance of convenience.

(2)  I do not accept that it would be difficult to assess or to quantify the losses suffered by D if it is held that the injunction is wrongly granted at a later time.  From time to time, the Court would consider valuation evidence and assess damages in various cases.  I am not persuaded that the losses suffered by D as a result of the injunction order is something which cannot be quantified.

(3)  As to the moving-out and the moving-in costs mentioned by D, these costs can certainly be compensated by monetary compensation.  Further, P in fact does not require D to reinstate the Property to its original condition (see below).  The moving-out expenses would be minimal.

13.  There is no merit in these grounds.

No leave to appeal

14.  In my judgment, D’s appeal does not have a reasonable prospect of success.  I also do not see any other reason why in the interests of justice the appeal should be heard.  I dismiss D’s application for leave to appeal.

STAY OF EXECUTION PENDING APPEAL

15.  Since I have refused to grant leave to appeal to D, the application for stay of execution pending appeal must also be refused.

EXTENSION OF TIME SOUGHT BY D

16.  D says that under the TA, D has the obligation of reinstating the Property to its original condition before returning possession of the same to P.  It would not be possible for D to finish the reinstatement work before noon on 31 March 2020.  Hence, D is seeking an extension of time to allow D to comply with the injunction order by noon on 27 April 2020.

17.  P is most concerned to be able to recover possession of the Property as soon as possible, and P is prepared to waive the requirement of restoring the Property to its original condition.

18.  In the light of the wavier given by P, there would be no need to consider the extension of time raised by D.

DISPOSITION

19.  I dismiss D’s Summons.

20.  I have asked Mr Lee whether D would take this matter to the Court of Appeal.  If so, I would hear submissions on whether there should be a short-term interim stay of the injunction order to allow D to have some time to make an application to the Court of Appeal for leave to appeal.  After taking instructions, Mr Lee has told me that D would not take the matter to the Court of Appeal.  That being the case, I have no need to consider a short-term interim stay. 

21.  Costs should follow the event and be summarily assessed on paper.  Since P has to prepare submissions to meet the applications made in D’s Summons on an urgent basis, I would grant a certificate for 2 counsel.  Mr Yan SC submits that costs should be assessed on an indemnity basis, for the criticisms made by D against the Decision are unjustified and there is no merit in any of the applications made in D’s Summons.  I agree that the applications made in D’s Summons are unmeritorious, and that is why I have to dismiss the summons.  However, I do not think there are special circumstances justifying indemnity costs.  I would only order that costs be assessed on a party and party basis.

22.  There be leave to P to provide to the Court and serve on D a bill of costs for summary assessment on or before 6 April 2020, and leave to D to provide to the Court and serve on P a written reply to the said bill on or before 15 April 2020.  The said documents can be provided to the Court through the designated no-reply email during GAP by the stipulated deadlines. Further, those document should properly be filed to the Court for record within 14 days after the reopening of the Registry of the Court.

23.  The parties shall jointly submit an agreed draft order to the Court for approval by 3 pm today.  In the absence of an agreement between the parties, each party shall submit its own draft order to the Court for my consideration by the same deadline.  All the submissions should be done through the designated no-reply email.

24.  Lastly, it remains for me to thank counsel for the assistance rendered to the Court.