TOTAL TREASURE DEVELOPMENT LTD AND ANOTHER v. RHT INDUSTRIES LTD

HCA 1746/2024

[2026] HKCFI 1165

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1746 OF 2024

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BETWEEN

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DECISION

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1.  By my Decision herein dated 6 January 2026 (the “Decision”), I allowed D’s appeal from the order of Master Kinsey Kang granting summary judgment to Ps, and granted to D unconditional leave to defend. I adopt the terminology in the Decision.

2.  By summons dated 19 January 2026 (the “Summons”), Ps apply for leave to appeal to the Court of Appeal against the order pronounced in the Decision, and a stay of the proceedings pending determination of the intended appeal.

3.  I gave directions for the Summons to be disposed of on paper, and I now give my decision on the Summons.

LEAVE TO APPEAL

4.  Leave to appeal should only be granted if I am satisfied that: (a) the appeal has a reasonable prospect of success; or (b) there is some other reason in the interests of justice why the appeal should be heard[1].

5.  As submitted by Ps, the first limb means that the prospects of succeeding must be “reasonable” and therefore more than “fanciful”, without having to be “probable”[2].

6.  Where a judge has made an order giving unconditional leave to defend on the basis that there are triable issues of fact, it is exceptional for the Court of Appeal to disturb the finding. The position is different where questions of law are concerned, because the view of the judge below is either correct or not correct, whereas the judge’s views on facts are by their nature capable of a wider spectrum of correctness or reasonableness. Where the judge has arrived at a reasonable view of the facts, the Court of Appeal will rarely disturb the result. See: Cloud Rosy Ventures v Sun Shaofeng & anor [2024] HKCA 250 at §34; Treewell Development Ltd v Tsang Chun Wah [2003] 4 HKC 401 at §§10-11.

7.  My decision to grant unconditional leave to defend rested in significant part on a finding that the question of construction underlying D’s “time bar” argument is fact-sensitive and dependent on more detailed evidence as to the contractual context and the circumstances of Ps’ delay in exercising contractual rights: see Decision §21(2). Given this, I consider that the principles referred to in the previous paragraph come into play and the Court of Appeal would only interfere in exceptional circumstances; or at least would not lightly interfere with the Decision.

8.  For this reason and those elaborated further below, I take the view that Ps’ intended appeal does not have a reasonable prospect of success.

9.  I deal below very briefly with P’s specific grounds of appeal set out in the draft Notice of Appeal which is appended to the Summons.

10.  As to Ground 1:

(1) Grounds 1(a) and (b). I consider that these grounds are premised on a misapprehension as to the basis upon which contractual terms may be implied. There is no requirement that there be express textual basis for an implied term, nor that there be evidence of parties’ discussions in the leadup to the contract providing some basis for the term alleged to be implied.

(2) Ground 1(c) is not understood.

(3) Ground 1(d). I consider that the fact that the May 2022 Letter was issued within the statutory limitation period is irrelevant to (or at least inconclusive on) the question of an implied term on timing.

(4) Ground 1(e). I consider that D has done sufficient to raise a triable issue, and refer to Decision §21(3). The conduct in question was also post-contract.

(5) Ground 1(f). Ps raise estoppel by representation, which is a new argument not previously relied upon. Whilst this may be an arguable point for Ps, I do not see that its merits could sensibly be said to be so clearly in Ps favour that summary judgment is warranted.

(6) Ground 1(g). This rests on a misconception that the implied term which was found to be arguable was an implied duty to act in good faith.

(7) Most importantly, there need only be a triable issue for unconditional leave to defend to be granted. Even if the points raised by Ps in their grounds of appeal have arguable merit, they are in my view to be resolved at trial and do not warrant summary judgment.

11.  As to Ground 2:

(1) Ground 2(a). It is not correct that all other defences were rejected as wholly without merit; and in any event, the “time-bar” argument is, if correct, sufficient to provide a complete defence.

(2) Ground 2(b). I do not accept that the time-bar defence is not “credible” or that there is an arguable case to such effect sufficient to warrant intervention by the Court of Appeal: see principles above.

(3) Ground 2(c). Ps’ suggestion that any leave to defend should have been made conditional on payment into court was not previously made. In any event, the imposition of conditions is discretionary and would not lightly be interfered with on appeal in the absence of an error of principle. Given my view that there was an arguable defence and triable issue, I consider that the order for unconditional leave to defend was correct or at least within the permissible ambit of my discretion.

12.  For the above reasons, I dismiss the application for leave to appeal.

APPLICATION FOR A STAY

13.  Ps apply for a stay of the proceedings, citing Order 1B, rule 1(2)(e) of the Rules of the High Court. Ps argue (very briefly) that pleadings have been filed, and a stay should be granted since the appeal concerns whether summary judgment should be entered.

14.  Even if leave to appeal were granted, I do not think any or sufficient reason has been shown to stay the proceedings with the resulting delay to their progression. An appeal does not, per se, justify a stay. I accordingly dismiss the application for a stay.

DISPOSITION AND COSTS

15.  The Summons seeking leave to appeal and a stay of proceedings is dismissed, with an order nisi that the costs of the Summons be to D to be summarily assessed if not agreed (with D’s Skeleton Bill of Costs to be lodged within 7 days, and Ps’ List of Objections if any within 7 days thereafter).