CHU YIN FAN v. INTER RIVERS LTD

HCMP 1021/2017

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 1021 OF 2017

(ON AN INTENDED APPEAL FROM DCCJ NO 4314 OF 2012)

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J U D G M E N T

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Hon Kwan JA (giving the judgment of the Court):

Introduction

1.  This is the renewed hearing of an application for leave to appeal to the Court of Appeal by the plaintiff, Madam Chu Yin Fan. She had entered into a preliminary agreement with the defendant, Inter Rivers Limited, to purchase a property in Taikoo Shing.  The transaction fell through and she brought an action in the District Court to recover the deposits paid of $618,000.  She applied for summary judgment pursuant to Order 86 rule 1 of the Rules of the District Court. On 19 August 2016, the judge granted unconditional leave to defend, holding that the defendant has raised an arguable defence on points of law and on the evidence (“the Decision”).

2.  The plaintiff sought leave from the judge to appeal against the Decision.  She also sought leave to make her application out of time as her summons was filed one day late.  The judge found her delay insubstantial and excusable and went on to consider her application on the basis she was required only to show a reasonable prospect of success.  On 19 April 2017, he refused to extend time as he was not satisfied she has met that requirement (“the Leave Decision”).

3.  On 2 May 2017, the plaintiff issued the summons in the present proceedings seeking leave to appeal from the Court of Appeal.

4.  Paragraph 2 of the summons sought an extension of time to apply for leave to appeal.  This is misconceived.  Her application to the Court of Appeal for leave to appeal was made within time.  If we are satisfied that this is an appropriate case to grant leave to appeal under section 63A(2) of the District Court Ordinance, Cap 336 (that the appeal has a reasonable prospect of success or that there is some other reason in the interests of justice why the appeal should be heard), we do not need to extend time to apply for leave to appeal.

5.  Under Order 59 rule 2A(5)(a) of the Rules of the High Court, the Court of Appeal is empowered to determine this application without a hearing on the basis of written submissions only.  We think it entirely appropriate to determine this application on paper.

6.  We do not propose to give a narrative of the relevant facts, which have been set out in the Decision at §§3 to 20.

7.  In a nutshell, on the question whether the defendant has failed to show, prove and/or give good title to the Property pursuant to sections 13 and 13A of the Conveyancing and Property Ordinance, Cap 219 and/or has failed to answer the requisitions satisfactorily, the judge found that the defendant obviously has an arguable defence to this part of the plaintiff’s claim[1].  The judge applied the law concerning missing title documents as decided by the Court of Final Appeal in De Monsa Investments Ltd v Whole Win Management Fund Ltd (2013) 16 HKCFAR 419, and hence the real point arising from the missing original assignment sought by the plaintiff is whether there was a real risk of a successful assertion against the purchaser of an encumbrance on title and that is a matter of degree depending on the circumstances of the case[2].  On the facts, the judge considered it arguable there was no real risk of the plaintiff’s title being blemished by a prior encumbrance arising from the missing original assignment and accordingly there was no place for a statutory declaration or any other conveyancing evidence as requested in the requisitions[3].

8.  As to the other broad issue arising out of the “subject to finance” clause in the clause 1 of the annexure to the preliminary agreement, the judge was inclined to accept, for the purpose of the application for summary judgment, that there should be an implied term the plaintiff should use her best endeavours to obtain a mortgage loan and whether she had done so deserves to be tested at trial when all the evidence shall become available[4].  Further, he found that the effect of certain words in clause 1 (that the vendor and purchaser shall not claim against each other) less than clear and it may be arguable that no restitutionary claim for the return of the deposits can be made in the event of a rescission under clause 1 and that is another issue which should be allowed to go to trial[5].

9.  The decision whether to dismiss an application for summary judgment, or to grant unconditional leave, or conditional leave is a matter within the discretion of the judge.  In an appeal against the granting of unconditional leave, the Court of Appeal will examine whether the judge’s reasons disclose any errors of law or misapprehension of material fact, or whether it can be said that the order granting unconditional leave was so plainly wrong that an appeal court had to interfere with the judge’s exercise of discretion (Shek Sau Mui v Poon’s (Sun Kee) Co Ltd, HCMP 1397/2008, 13 August 2008, Yuen JA).

10.  Where the triable issue is on a question of fact (as opposed to a question of law), it would be most unlikely for the Court of Appeal to interfere (Ng Lung Sang Anita v Lam Yuk Lan [1999] 4 HKC 106 at 109I to 110F; Treewell Development Ltd v Tsang Chun Wah [2003] 4 HKC 401 at §§10 to 11), as an appellate court would rarely disturb the decision of a lower court on matters of fact as long as a judge had arrived at a reasonable view and it had to be an exceptional case before an appellate court would disturb the order.

11.  Here, the judge found there are triable issues on questions of fact as well as of law.

12.  The grounds of appeal (there are twelve in the draft notice of appeal) are the same as the grounds placed before the judge in the leave application.  They have been fully considered by the judge.  As far as we can discern, the arguments advanced to this court are substantially the same as those made by the same counsel before the judge, perhaps some additional authorities are cited to us, which do not make any material difference.

13.  On the questions of fact which the judge found to be triable, the high threshold to justify appellate intervention is plainly not met.  This is not an exceptional case, nor can we say the judge was plainly wrong.  It is not necessary to say anything further about the evidence as the matter should go to trial.

14.  On the questions of law that the judge found to be arguable (bearing in mind the judge was not required to and did not make a firm ruling on the questions of law), the plaintiff would need to satisfy us that the judge was wrong in law in his rulings.  It would suffice for us to say that we fail to see any clear error of law on the plaintiff’s arguments, for the reasons given in the Leave Decision, with which we agree.  The judge could not be faulted in taking the view that the issues of law should be deferred for mature consideration.

15.  We agree with the judge that the defendant has raised an arguable defence on points of law and on the evidence so it is not appropriate to give summary judgment to the plaintiff.  And we agree with him there are no reasonable prospects of success in the intended appeal.

16.  As the application is wholly without merit, we dismiss the summons and pursuant to Order 59 rule 2A(8) further order that no party may under rule 2A(7) request the determination to be reconsidered at an oral hearing inter partes.

17.  Costs of this application should follow the event.  We order the plaintiff to pay the defendant’s costs of this application. We have considered the statement of costs submitted by the defendant.  As this application was handled by the same legal team throughout and the same arguments were raised in the leave application in the court below, we assess the reasonable costs of the defendant on a gross sum basis at $56,430.  The gross sum assessment is an order nisi.  Any party seeking to vary the assessment shall lodge a written submission within seven days hereof, failing which the order shall become absolute.

18.  We register our concern at the serious delay in the conduct of this litigation, the blame for which cannot be laid wholly on the parties.  The writ was issued in December 2012.  The application for summary judgment was issued almost two years later.  It was heard in March 2015 and the Decision was handed down 17 months later.  The leave application was heard in October 2016 and the Leave Decision took six months to be handed down.  We are approaching five years from the issue of the writ and the action is nowhere close to trial.  The plaintiff and her legal advisers should take stock of the situation and make a decision whether to proceed with this litigation (taking into account the amount sought to be recovered and the amount of costs already incurred and will be incurred) and if so how best to proceed with procedural economy and as expeditiously as reasonably practicable.

19.  If the plaintiff should decide to proceed with this litigation, we direct her to issue a case management summons in the District Court within 14 days of the handing down of this judgment and bring our judgment to the attention of the District Court so that a date for the case management conference would be fixed as soon as possible.