YAACOV OZER v. KWAN SIU MAN JOSHUA

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

1997, No. 150
(Civil)

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J U D G M E N T

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Nazareth, V.-P.:

1. We have before us two applications. The first is an application for leave to appeal to the Court of Final Appeal. The second is a notice of motion to vary the costs order nisi made by this Court differently constituted on 10 March 1998.

2. I will deal first with the application for leave to appeal to the Court of Final Appeal. The subject matter of the action and therefore of the appeal is a flat and the value of which is excess of $4m. Accordingly there is a right of appeal as of right under s.22(1)(a) of the Hong Kong Court of Final Appeal Ordinance (Cap. 184). That is not in dispute. Likewise, the applicant here who was the defendant in the original action and the appellant in the appeal to this Court, is content to provide the full amount of the security that is referred to in s.25(3)(b) as the maximum. Accordingly, the only proper course for this Court is to grant conditional leave and to specify the amount of security of $400,000 to be paid within 21 days of today, which I would do.

3. I can now turn to another aspect of this matter. I have already mentioned that there was no dispute as to the applicant being entitled to appeal as of right. That in fact was conceded by the respondent's advisers in correspondence with the applicant's advisers, but the former took the view that it was not appropriate for them to sign any form of consent. They took that view upon the provisions of the Court of Final Appeal Ordinance, presumably ss. 24 and 25. However that may be, it is the Practice Direction of the 21st January 1998 that bears upon this point. What is there provided is this in paragraph 2:

"2 (1) Where the parties have agreed:

(a) that an appeal lies as of right under Section 22(1)(a) of the Ordinance; and

(b) to the conditions which should be imposed under Section 25;

the Notice of Motion for conditional leave should be endorsed with the consent of the parties to the order sought.

(2) If the Notice is so endorsed, the application will be dealt with by a single Judge of the Court of Appeal without the need to fix a date for hearing. No attendance will normally be required by any party."

4. Mr Wong, for the appellant, submits that it was quite unnecessary for him to have had to come to this Court to seek conditional leave to appeal. The matter could have been dealt with by a single judge on paper in accordance with the Practice Direction and that it was only the action of the respondent's advisers that frustrated that course.

5. I cannot see how that submission can be rejected. On the basis of that he asks for the costs thrown away so far as this afternoon's hearing is concerned. In the ordinary way I would have had myself no hesitation in granting that application. It seems to me that the respondent should have had regard to the terms and purpose of the Practice Direction and provided his consent. It was mentioned that what was sent for signature was a consent order and not a consent summons or notice. I do not think that could justify what happened. It should have been apparent that all the respondent needed to do was to convey his consent in writing which would have met with the requirement of the Practice Direction.

6. So much for that. The difficulty I have stems from this consideration. The normal application that comes to this Court does not so far as I am aware seek costs at this stage in relation to application for leave to appeal. That is understandable because, at the very least, conditional leave is normally necessary and therefore a necessary step in the process of appeal. As such, the costs of the application therefor would appropriately be dealt with by the Court of Final Appeal in disposing of the appeal (refusal of leave by this Court apart). Indeed, specific power is given to the Court of Final Appeal in s. 43 of the Court of Final Appeal Ordinance which provides that costs, including costs in the courts below, shall be paid by such party as the Court, meaning the Court of Final Appeal, shall order.

7. As against that express power, counsel have not been able to direct us to any similar express provision in the High Court Ordinance or High Court Rules that provides for the costs in this Court of an application for leave to appeal to the Court of Final Appeal. If the matter was provided for exclusively by the Hong Kong Court of Final Appeal Ordinance or the Court of Final Appeal Rules it could be argued that there is no power for this Court to order costs to be paid. However, if conditional leave were refused and application not renewed in the Court of Final Appeal, that could leave the respondent without an opportunity to apply for costs. In that light, it seems to me that the Court of Final Appeal Ordinance and Rules would not inhibit the general power of this Court under s.52A of the Supreme Court Ordinance to deal with the costs of an unsuccessful application for conditional leave, or indeed a successful application. However that may be, since leave is being granted, it seems to me expedient and proper that this Court should not deal with the matter for costs but leave it to the appellant to seek them in the Court of Final Appeal.

8. Accordingly, I would not make an order for costs in relation to the application for leave to appeal.

9. I turn then to the other application which is the Notice of Motion to vary the costs order nisi made by this Court on 10 March. The order was an order nisi that the respondent was to have his costs of the appeal. It followed the Court's decision upholding the judgment below that there was an enforceable contract for the purchase of the flat and decreeing specific performance in favour of the respondent. The grounds upon which the order nisi is sought to be varied in favour of the appellant are stated in this way:

"(1) That the open contract which the Court of Appeal held to have been validly made between the parties is not the contract sued upon by the Plaintiff.

(2) This Court held that it would grant leave to the Plaintiff to amend although such leave was in fact never sought for by the Plaintiff. No amendments have been made to-date.

(3) The appellant does not agree that he had not been misled or prejudiced. Had an open contract been pleaded, the Appellant would probably have conducted the trial differently. This is so particularly in the light of the Plaintiff's own evidence which the Defendant submits would not support an open contract. The Defendant might not have given any evidence at all if the Plaintiff's case had been pleaded on the basis of an open contract."

In fact all those points relate to the same ground.

10. The relevant part of this Court's judgment is at the bottom of p.10 and top of p. 11 and reads as follows:

"It is plain from the plaintiff's statement of claim that what he pleaded as the oral agreement was the substance of the letter of 18 November 1991. This included averments that 'the oral agreement was part of an agreement between the plaintiff and the defendant for the settlement of" the Lands Tribunal Application; that $425,000 would be paid as a deposit, that completion was to be on or before 21 December 1991; that the parties would enter a sale and purchase agreement within 7 days of the court approving the settlement.

These averments are not wholly consistent with the open contract found to have been made by the judge and accepted by us. More had been pleaded. They clearly did not mislead or prejudice either side. Nevertheless, leave to make the simple amendments necessary should have been sought. Even at this stage, we would grant leave to amend. The shortfall is de minimus, and we would simply treat the pleading as if it had been amended accordingly. We find no merit in this ground."

11. Mr Wong acknowledges that in order to vary the costs order nisi this Court would in effect have to take the view that it was wrong in its decision upon the open contract and the other matters in the passage I have just quoted. That is a matter that has to be decided by the Court of Final Appeal. The short answer to the grounds in support of the Motion is that if it were simply a matter of reviewing the exercise of its discretion on the matter of costs, then that may well have been within the power of this Court. But it does not seem to me to be open to the Court to re-consider its decision upon the pleadings and the entitlement of the plaintiff to succeed upon its averments.

12. In those circumstances it seems to me that the application to vary the costs order nisi must fail. I would add that in any case I am not persuaded that there are any other considerations that would induce me to re-consider the exercise of discretion. I would refuse the application to vary the costs order nisi.

Liu, J.A.:

13. I agree. On counsel's concession, the application to vary the order nisi as to costs would seem to be wholly misconceived. No more need be said.

14. As to the application for leave to appeal to the Court of Final Appeal, the Practice Direction for Civil Appeals to the Court of Final Appeal dated 21 January 1998 has not been observed and the non-observance calls in question costs wasted on today's appearance and, perhaps, the filing of the Notice of Motion. Deferring the question as to costs for consideration by the Court of Final Appeal under section 43 of the Hong Kong Court of Final Appeal Ordinance would sufficiently meet the ends of justice, and it is, therefore, not necessary to decide, this time, whether the Court of Appeal has power to deal with and grant or refuse costs on an application for leave under section 22 of the Hong Kong Court of Final Appeal Ordinance.

Findlay, J.:

15. I agree with the orders proposed and generally what has been said. I would just express a view on this Court's jurisdiction to deal with costs on an application for leave to appeal. It is my view that s.52A of the High Court Ordinance, Cap. 4, which says that the costs of and incidental to all proceedings in the Court of Appeal in its civil jurisdiction shall be in the discretion of the Court, and the Court shall have full power to determine by whom and to what extent the costs are to be paid, deals with this Court's jurisdiction to deal with all costs in matters in which it has jurisdiction, including jurisdiction conferred by the Hong Kong Court of Final Appeal Ordinance, Cap. 484. Although, of course, that Ordinance also provides that the Court of Final Appeal would have jurisdiction to deal with the costs of this matter.

16. It seems to me that there is certainly no injustice done by making an order as proposed by my Lord the Vice-President, leaving the question of costs to the Court of Final Appeal. That Court is as able as we are to deal with that matter especially in the light of the comments made by my Lord the Vice-President. It is only in a case where this Court does not allow an application for leave to appeal that that question would have to be considered and decided. As I say, otherwise, I am in agreement with what has been said and the orders proposed.

Nazareth, V.-P.:

17. Conditional leave to appeal to the Court of Appeal is accordingly granted upon condition that security in the sum of $400,000 is provided within 21 days of today.

18. The motion to vary the costs order nisi is denied.