LAU CHUN MING v. MA KOON SIK AND ANOTHER

cacv 299/2006

in the high court of the

hong kong special administrative region

court of appeal

civil appeal no. 299 of 2006

(on appeal from HCMP NO. 5570 of 2001)

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J U D G M E N T

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Hon Rogers VP:

1.  This is an appeal against the judgment of Deputy High Court Judge Gill, given on 28 July 2006.

2.  At the commencement of the hearing of this appeal, Mr Chan, very sensibly, indicated that he could not pursue the two grounds of appeal which were before the court but he argued that the full costs of the trial, which took some seven days, should not be visited against his client.

3.  The simple point is this: the 2nd Defendant was resisting the claim of the Plaintiff to possession on the basis that it had a licence to use the particular premises.  The Plaintiff’s case was, first of all, that the licence was of no proprietary effect and, secondly, it was entered into fraudulently.  The Plaintiff took the point right at the beginning that the licence would do the 2nd Defendant no good and did not constitute a defence as a matter of law.

4.  Now, it is Mr Chan’s argument this morning that six days out of the seven days of the trial were wasted because they were involved with evidence as to fraud.  All the judge said, at the end of the day, was:

“34.   I have to say I view with some scepticism the coming into being of the Chinese Agreement.  It was not an arm’s-length transaction - Mr Ma’s wife signed on behalf of MSY Piling (that is the 2nd Defendant) - and the timing was to say the least highly suspicious. 

35.    There is evidence that payments referred to in the Chinese Agreement were made or at least debited to MSY Piling, but there are significant gaps in the documentation and only a bare assertion that they found their way to Mr Ma as landlord/vendor. 

36.   However, in the end, the issue of whether or not Mr Lau is entitled to the relief he now seeks is determined on an application of legal principles without resort to the findings of fact on disputed matters.”

5.  Now, that, as it has turned out, was quite right and is really a course which should have been taken on the first day of trial.  It would have taken half a morning to dispose of and the rest of the seven days would not have been wasted in court, with an adjournment, vast amounts of transcript and all the rest of it.

6.  Mr Chan says that it was the Plaintiff’s fault that that happened.  It should have taken Order 14A proceedings or it should have asked for the matter to be determined but unfortunately, looking at the transcript, there were passages where Mr Chan himself resisted any such course and he, at one stage during the course of the opening, said:

“My Lord, as a matter of principle I am entitled to argue in the alternative.  I am entitled to say that a contractual licence - there are two views to it: that a contractual licence has no interest in the land, or alternatively, if that’s wrong, the contractual licence in the circumstances amounts to an interest in the land and that...”

7.  At that point the court stopped him.  It would have been, of course, far better if the argument had been heard then and there as it should have been, but it was not and, unfortunately, I do not see that it now lies in the mouth of the 2nd Defendant to say that all the costs should now be visited on somebody else.  That is a stand, which they took.  Unfortunately, the judge followed it and that is the end of that. 

8.  At the end of the day, the 2nd Defendant lost the case and has had to pay the costs.  I, therefore, do not see that this court can interfere with the judge’s exercise of discretion as to costs.

Hon Le Pichon JA:

9.  I agree.

Hon Barma J:

10.  I also agree.