MVO MANAGEMENT LTD v. THE INCORPORATED OWNERS OF ASCOT TOWER (VILLAGE ROAD)

CAMP 1/2018

[2018] HKCA 177

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 1 OF 2018

(ON AN INTENDED APPEAL FROM DCCJ NO 1311 OF 2015)

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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):

1.  This is an application for leave to appeal to the Court of Appeal from a judgment of the District Court by His Honour Judge M K Liu on 21 June 2017, given after a five‑day trial in that month (“the Judgment”). The judge dismissed the plaintiff’s claim for reimbursement of fees allegedly paid by the plaintiff on behalf of the defendant to four contractors (referred to in the Judgment as “AD”, “ADCBW”, “Coper” and “HR”; collectively, “the Four Companies”) in the total sum of $348,056.06. The plaintiff’s application for leave to appeal was refused by the judge in a decision given immediately after the hearing on 18 December 2017 (“the Leave Decision”).

2.  The plaintiff renewed its application to the Court of Appeal for leave to appeal by a summons issued on 2 January 2018.  The draft notice of appeal annexed to the summons is the same as that considered by the judge in the Leave Decision.

3.  Having read the papers, we have decided to exercise the power under Order 59 rule 2A(5)(a) of the Rules of the High Court to determine this application without an oral hearing on the basis of the written submissions before us.

4.  The principles for granting leave to appeal are well established.  Under section 63A(2) of the District Court Ordinance, Cap 336, leave shall not be granted unless the appeal has a reasonable prospect of success, or there is some other reason in the interests of justice that the appeal should be heard.  Reasonable prospect involves the notion that the prospect of succeeding must be “reasonable” and therefore more than “fanciful”, without having to be “probable” (SMSE v KL [2009] 4 HKLRD 125 at §17).

5.  The judge dismissed the claim in light of his findings of fact that there is no reliable evidence proving: (1) any of the verbal agreements between the plaintiff and the Four Companies for the provision of the general maintenance services to Ascot Tower (“the Building”) as contended by the plaintiff; (2) any services had actually been provided by the Four Companies to the Building; (3) the plaintiff had made any payments to the Four Companies in respect of the services allegedly provided by them to the Building; and (4) there were true transactions for the three written contracts provided by the plaintiff to the defendant’s treasurer in 2013 and referred to in the Judgment as “the HR Contract”, “the AD Contract” and “ASCBW Contract”.  Hence, the plaintiff is not entitled to be reimbursed by the defendant with the sum claimed, nor is it entitled to claim on the basis that the defendant was unjustly enriched at its expense for the provision of general maintenance by the Four Companies to the Building.

6.  The judge first reviewed the documentary evidence[1], he then considered the testimony of the witnesses.  He concluded that as a result of the untrue evidence of Tang Hoi Tung (“Tang”, the plaintiff’s director and shareholder) on the central issues, except for Tang’s admission of his personal interest in the business he introduced to Coper and his personal interest in HR, AD and ADCBW, he had no hesitation in rejecting Tang’s evidence in its entirety[2]. As for Fok Kam Fung (“Fok”, the property management assistant employed by the plaintiff), the judge found him an untruthful witness, that his evidence on two important issues are clearly lies andrejected his evidence[3]. The last witness of the plaintiff, Shum Yi Man (“Shum”, the plaintiff’s accounting officer), was also found by the judge to be an unreliable witness and he refused to accept her evidence[4].

7.  The judge accepted the evidence given by the three witnesses of the defendant in the entirety[5].

8.  The proposed appeal seeks to challenge the findings of fact of the primary judge.  For the appeal court to intervene, it must be shown that the trial judge has fallen in palpable errors of such nature that are sufficiently material to undermine his conclusion and that the findings are plainly wrong.  We do not propose to recite the well‑known relevant principles and rationale for deference to the original finder of fact[6].

9.  As for the plaintiff’s submission that the appeal court should be in as good a position as the trial judge in drawing inferences from primary facts so it may be more inclined to disturb such inferences, the “plainly wrong” test in Ting Kwok Keung v Tam Dick Yuen (2002) 5 HKCFAR 336 is nonetheless applicable, unless the finding of fact is based purely on inferences, or otherwise has nothing to do with the witnesses’ demeanour or the trial judge’s having received the evidence at first hand (Pang Ketian Sally v Tam Yuk Hung Annie, CACV 147/2013, 25 April 2014, §§26 to 32; Ageas Insurance Company (Asia) Limited v Lam Hau Wah Inneo, CACV 65/2014, 9 January 2015, §§29 to 30).  As the findings of fact in the present case are not based on inferences alone without involving any question of credibility or the demeanour of witnesses, the plaintiff would have to satisfy the appeal court that the findings are “plainly wrong” for them to be overturned on appeal.

10.  The grounds of appeal in the draft notice of appeal took up ten pages.  In the Leave Decision, the judge has dealt with each individually.  As we are in broad agreement with him, it is not necessary to set out our views on each ground of appeal in this judgment.  We will simply address what may be regarded as the main points raised by the plaintiff’s counsel, Mr Timothy Harry and Ms Jacqueline Lam, in the present application.

11.  At the trial, the defendant sought to challenge the authenticity of the originals in Exhibit P1 (which comprised 370 pages and contained monthly checklists, slips, as well as monthly invoices, debit notes and receipts purportedly issued by the Four Companies to the plaintiff).  The judge concluded that the defendant had not adduced sufficient evidence to prove its challenge to authenticity[7]. In the proposed grounds of appeal, the plaintiff contended that given that the judge has accepted the authenticity of the documents in Exhibit P1, and as the monthly invoices, debit notes and receipts issued by the Four Companies speak for themselves, the judge should have drawn inferences in favour of the plaintiff that the general maintenance services were provided by the contractors.  It was submitted that the judge has misdirected himself as to the effect of certain evidence which he understood to support his conclusion, and his reasoning is manifestly flawed in that he has ignored the copious documents produced by the plaintiff having accepted their authenticity.

12.  We do not accept this contention.  For one thing, the judge is perfectly entitled to conclude on the totality of the evidence, both oral and documentary, that there is no reliable evidence showing that any services have actually been provided by the Four Companies to the Building.  The mere fact that he had ruled against the defendant on the challenge to the authenticity of the plaintiff’s documents does not mean he should accept, without more, what was stated on the face of those documents.

13.  Moreover, the judge had considered the documents in Exhibit P1.  He came to the view “although there is no sufficient evidence showing that the documents in Exhibit P1 were made up by [the plaintiff] in one go for the purposes of these proceedings, in [his] judgment, those documents cannot prove [the plaintiff’s] case”, and gave detailed reasons in §§73 to 76 of the Judgment.  We have considered the arguments advanced in §5 of the plaintiff’s submission.  They are merely attempts to pick holes in the judge’s reasoning, and are insufficient to undermine his conclusion that the documents cannot prove the plaintiff’s case that the Four Companies had provided services to the Building.

14.  We will mention a few instances why we think the arguments are of no or little substance.

15.  The plaintiff sought to attack the finding in §§33, 34 and 73(g) of the Judgment there is no documentary evidence showing whether the slips (asking the contractor to come to the Building to do maintenance work at the specified time and date) had been sent by the plaintiff to the contractors concerned.  In support of the contention that the finding was wrong, the plaintiff referred to the Fire Services Maintenance Checklist and the Water and Electricity Maintenance Checklist with dates corresponding to the slips and submitted that the “only proper inference” which should have been drawn and which the judge failed to draw is that the slips had been sent to the contractors, as the checklists had set out the relevant works and were signed off by the plaintiff as having been completed.

16.  It cannot be right that the inference as advanced by the plaintiff is the only proper inference to be drawn.  The judge had considered the checklists[8] and noted that they only bore the plaintiff’s name and chop, the name of the contractor (whether this be HR or ADCBW) had never appeared on any checklist.  And we would add there were no signatures on the checklists.  The judge is entitled to decline to draw any inference from the slips and checklists, which all emanated from the plaintiff without any acknowledgment from the Four Companies of their alleged involvement, that the slips had in fact been sent to HR or ADCBW.

17.  The plaintiff criticised the findings in §36(c), (d) and (e) that there was no description of work on any invoice, and pointed to the debit notes issued by the contractors which contained some Chinese characters stating “Ascot Tower – Maintenance Fee”.  The judge apparently did not regard this brief statement would qualify as a description of the work performed.  There is nothing in the criticism.

18.  The judge attached significance to the fact that none of the FS251 certificates for the fire maintenance services had the name of any of the Four Companies on them.  The question of weight is a matter for the trial judge.  It cannot be said he is plainly wrong.  The plaintiff contended whilst the Four Companies had licences to carry out the works, they did not have a licence to give the appropriate certificate and the certificate was given by other entities (referred to as “YIL”, “CF” and “RCCL” in the Judgment) as “duly authorised third party under the appropriate regulation”.  We reject this contention as inconsistent with the wording in sections 8 and 3A of the Fire Service (Installation and Equipment) Regulations (“the Regulations”).  We see nothing to interfere with the judge’s finding in §24 that the FS251 certificates are evidence showing that the plaintiff had arranged some companies to provide some fire services maintenance to the Building, that YIL, CF and RCCL are registered contractors for the purposes of the Regulations, and that, at the same time, the certificates are also evidence showing that Coper and HR were not the providers of these services.

19.  The plaintiff submitted that the judge’s criticism of the plaintiff for not producing the specialist licences of the Four Companies is unfair, contending that whether these contractors held the licences was never an issue and not raised before the Judgment.  There is nothing in this submission.  Tang gave evidence that he engaged the Four Companies to do the maintenance because they had licences.  In assessing this evidence, the judge is entitled to take into account the absence of documentary evidence to substantiate this assertion and to reason that none of these contractors, if they were indeed licensed, had their names and chops on the checklists thereby showing they had the necessary expertise and qualifications to do the works[9].

20.  Likewise, we see nothing in the complaint that the judge had unfairly criticised the plaintiff for not producing the “underlying documents” mentioned in §45(c) of the Judgment.  Tang gave evidence that the payments shown in the Table annexed to the Judgment were not all related to the Building.  It was up to the plaintiff to adduce sufficient evidence to substantiate the testimony of its witnesses.  The judge is fully entitled to take into account the absence of documentary evidence in assessing the oral evidence of Tang that the plaintiff had paid the Four Companies in the amounts as alleged.

21.  The plaintiff further complained that the non‑disclosure of Tang’s personal interest in the Four Companies was not a pleaded issue and it was deprived of an opportunity to explain.  Tang had given evidence as to the disclosure of his personal interest in 1999, this was considered by the judge and rejected in §42 of the Judgment.  We are doubtful if he was indeed deprived of adequate opportunity to explain.

22.  The plaintiff took issue with §80 of the Judgment which reads:

“I have no doubt that [the plaintiff] has provided some services to the Building. The Fire Services Maintenance Checklists and the Water and Electricity Maintenance Checklists show that [the plaintiff] has done some works. Equally, I have no doubt that [the plaintiff] has engaged some registered contractors to do the works required by [the Regulations] and to issue the FS251 Certificates. However, there is no reliable evidence showing that these works or any part thereof were done by the 4 Companies.”

23.  It was submitted that even on the judge’s reasoning, the plaintiff had provided the general maintenance services for which it will not receive payment and the judge erred in ruling that the plaintiff was not entitled to any remuneration on unjust enrichment.  We agree with §§25 and 26 of the Leave Decision that this is misconceived.  The agreed issues Nos 7 and 8 are whether the plaintiff is entitled to reimbursement for the provision of the general maintenance “by the 4 Companies”.  The burden is on the plaintiff to adduce adequate evidence to prove that such services were provided by the Four Companies.  There is no basis to interfere with the judge’s conclusion there is no reliable evidence to prove the main plank in the plaintiff’s case.

24.  As the plaintiff has failed to show its grounds of appeal have reasonable prospect of success, or that there is some other reason in the interests of justice that the appeal should be heard, we dismiss the application for leave to appeal to the Court of Appeal.

25.  Further, as the application is wholly without merit, we make a further order pursuant to Order 59 rule 2A(8) that no party may under rule 2A(7) request the determination to be considered at an oral hearing inter partes.

26.  We see no reason why costs should not follow the event.  We have considered the defendant’s statement of costs for summary assessment and the full submissions as to the amount of costs claimed in the letter of the plaintiff’s solicitors to the court dated 7 February 2018.  We are in broad agreement with the plaintiff’s solicitors.  We also bear in mind that an application for leave was made to the court below on the same grounds and the same team of lawyers was engaged.  We reduce the amount of reasonable costs from $128,834 to $60,000.

27.  The costs order and summary assessment are not in the nature of orders nisi, as we have received submissions on costs.