MUTUTAL BRILLIANT LTD v. SHIN HO CABLE (HOLDINGS) CO LTD AND ANOTHER

HCA 2361/2017

[2021] HKCFI 3517

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2361 OF 2017

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BETWEEN

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DECISION

(Leave to Appeal)

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Introduction

1.  This Court handed down a judgment on 30 July 2021 (“Judgment”), dismissing Ds’ appeal against the Master’s decision on 26 February 2021, pursuant to which the Master dismissed Ds’ summons for relief from sanctions imposed under the Unless Order and for leave to Ds to file and serve a re-re-amended defence. Unless otherwise indicated, the Court will follow the nomenclature in the Judgment.

2.  On 13 August 2021, Ds lodged a summons to seek leave to appeal to the Court or Appeal, against the Judgment.

Ds’ Draft Grounds of Appeal

3.  There two draft grounds of appeal, and in summary, they are:

(1) this Court is plainly wrong in the exercise of discretion in refusing to grant relief to Ds against the sanction imposed under the Unless Order on the following bases:

(i) There was no evidence of any explanation by Ds for the withdrawal of the 1^st RRAD at the time of withdrawal (paragraph 78 of Judgment);

(ii) There was no explanation as to why Jeremy Cheung of counsel was not sent a full set of papers prior to the conference on 7 October 2020 and there was also no explanation as to why Jeremy Cheung did not request for a full set of papers prior to the conference (paragraph 77 of Judgment);

(iii) There was no good explanation as to why no prompt action was taken after the substantive hearing before Master Winnie Tsui on 5 November 2020 (paragraph 78 of Judgment). (“Ground (1)”)

(2) This Court is plainly wrong in rejecting (i) the Group 1 Amendments concerning PRC law by holding that PRC law is not relevant (paragraph 89); (ii) the Group 3 Amendments on the point that the Cooperation Agreement is void for uncertainty (paragraphs,107,108); and (iii) the other amendments by dismissing them as mere embellishments not necessary for the just resolution of the parties’ dispute. (“Ground (2)”)

Ground (2)

4.  As pointed out by Mr Wong on behalf of P, the substantive relief sought by Ds is to re-re-amend their defence. I will start with considering Ground (2) first.

5.  In the Judgment, the “impugned amendments” were divided into 3 main groups. Apart from the 3 main groups, there were other amendments which are referred to by Mr Wong as embellishments (“Embellishing Amendments”).

6.  Ds have criticised the Court’s heading “Whether the Proposed RRAD is meritorious” (above paragraph 79 in the Judgment) and that the Court gave wrong reasons for rejecting the proposed amendments. In fact the heading, and similarly what was stated in paragraph 109 of the Judgment, was in response to Mr Li’s then submissions (as set out in paragraph 80 of the Judgment) that Ds’ application to file and serve the RRAD was meritorious.

7.  The Group 1 Amendments essentially turn on what P’s present case is in this action. In paragraphs 84-89 of the Judgment, this Court accepted Mr Wong’s submissions that the present case concerns whether the Cooperation Agreement was concluded on the terms alleged by P. As set out in paragraph 84 of the Judgment, Ds’ case was that there was no meeting of minds at the meeting in September 2016. Thus, this Court is of the same view as the Master, that the main issue at trial would be whether any agreement was concluded on the terms as alleged by P and that PRC law would not be relevant for determining this issue.

8.  Ds seek to argue the relevance of PRC law by putting forward Ds’ interpretation of the ASOC and in his present submissions, Mr Li is merely repeating his arguments and submissions at the hearing.

9.  Ds now no longer pursues the Group 2 Amendments.

10.  As for the Group 3 Amendments, Ds now only pursue the proposed amendments on the uncertainty point. In paragraph 107 of the Judgment, this Court has set out what was submitted on behalf of P at the hearing.

11.  Mr Wong has pointed out that the draft written agreement contained the Essential Terms and the ancillary terms as pleaded in the ASOC and that Ds were to execute the written agreement in around October 2016 or within reasonable time.

12.  This Court has accepted what was then submitted on behalf of P at the hearing and as stated in paragraph 108, this Court thus finds that the plea of the agreement being void for uncertainty not sustainable.

13.  Finally, for the Embellishing Amendments, the Court’s views were based on Ds’ then own submissions.

14.  For all the above reasons, Ds have not been able to persuade this Court that there is a reasonable prospect of success in Ground (2).

Ground (1)

15.  The Court has in paragraph 110 of the Judgment summarised the reasons as to why relief from sanction was not granted. Mr Li has not been able to convince the Court that the exercise of discretion was plainly wrong.

Conclusion

16.  In light of the above said, I decline to grant leave to appeal. Costs of this application to be summarily assessed and to be paid by Ds jointly and severally within 14 days of assessment. P is to submit its statement of costs within 7 days, and Ds to submit their list of objection within 7 days thereafter.