YIELD SAIL LTD v. LAND MASTER SURVEYORS LTD

DCCJ 579/2023

[2025] HKDC 1998

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 579 OF 2023

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DECISION

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A.  INTRODUCTION

1.  On 20 May 2025, I heard the Plaintiff’s appeal against a Master’s decision to grant summary judgment in favour of the Defendant against the Plaintiff in respect of part of the Defendant’s counterclaim for the sum of $494,000.

2.  On the same day, I, inter alia, dismissed the Plaintiff’s summons to rely on two additional affirmations in support of the Appeal (“the 20/05/2025 Order”). I then proceeded to hear the parties’ arguments on the Appeal.

3.  On 27 May 2025, I handed down my Decision on the Appeal whereby I dismissed the Plaintiff’s appeal with costs (“the 27/05/2025 Order”). I also gave my reasons for making the 20/05/2025 Order. See my Decision [2025] HKDC 876 (“the Decision”).

4.  On 10 June 2025, the Plaintiff took out a summons (“the Leave Summons”) for leave to appeal to the Court of Appeal against the 20/05/2025 Order out of time and the 27/05/2025 Order. Two draft Notices of Appeal were attached to the Leave Summons.

5.  On 11 August 2025, the Plaintiff took out another summons (“the Amendment Summons”) for leave to amend the grounds of appeal. Two draft Amended Notices of Appeal were attached to the Amendment Summons.

6.  I have considered the amended draft grounds of appeal de bene esse.

7.  This is my Decision on the Leave Summons and the Amendment Summons. For the purpose of this Decision, I continue to adopt the the definitions and abbreviations used in the Decision.

B.  THE LEAVE SUMMONS

B1.  Leave to Appeal Against the 20/05/2025 Order Out of Time

8.  The application for leave to appeal should have been made within 14 days from the date of the Order, that is on or before 3 June 2025: Order 58 rule 2(4) of the Rules of District Court. The application was late, by 7 days.

9.  The parties agree that in exercising my discretion on whether to grant an extension of time, I am entitled to take into account factors including the length of the delay, the reasons for the delay, the chance of success of the intended appeal, and the prejudice to the other party if time is extended.

10.  I accept that the length of the delay was short, and that no prejudice to the Defendant has been demonstrated.

11.  I also accept that on the face of the evidence adduced by the Plaintiff, there appears to be a reasonable explanation for the delay, namely that its then solicitors erroneously advised it on the deadline for taking out the application.

12.  I now turn to the chance of success of the intended appeal.

13.  The Plaintiff advanced two grounds of appeal. Ms Tina Mok, counsel for the Plaintiff, summarised the grounds as follows:

(1)  The Court did not assess the degree of reasonable diligence in obtaining the further evidence against the overall circumstances of the case (“Ground 1”).

(2)  Had the respective roles of Fifi and Tim throughout the project been properly considered, the Court would not have concluded that the matters in Tim’s Affirmation could have been addressed in Fifi’s affirmation (“Ground 2”).

14.  Ms Mok submitted that it is at least reasonably arguable that the first condition of Ladd v Marshall was satisfied.

15.  In relation to Ground 1, Ms Mok made the following submissions:

(1)  Rather than focusing on the absence of particulars regarding when and how Fifi invited Tim to give evidence prior to the hearing below, the Court should have considered whether it was realistically possible for the Plaintiff to produce Tim’s Affirmation for use at the hearing below.

(2)  The delay in adducing Tim’s Affirmation stemmed from Tim’s receipt of serious and continued threats from Martin, which led to his withdrawal from the project in December 2023 and refusal to participate in the proceedings.

(3)  Tim reported Martin’s criminal intimidation or threats to the police on 22 November 2023. In the police statement, Tim detailed the threats he received on 7 February 2023, 22 June 2023 and 11 November 2023.

(4)  The difficult in obtaining Tim’s Affirmation arose not from any lack of diligence on the Plaintiff’s part, but from the exceptional circumstances that prevented Tim from making an affirmation until after a partial judgment had been entered against the Plaintiff.

(5)  In Order 14 context, the standard of diligence should be viewed with appropriate leniency.

16.  Ms Terri Ha, counsel for the Defendant, rightly pointed out that my decision on 20 May 2025 involved an exercise of discretion, and the Court of Appeal will not lightly interfere with such a decision unless it is based on some error of principle, or reliance on irrelevant consideration, or disregard of relevant considerations, or the decision is plainly wrong: Wang Yuexian v Xinyang Maojian Group Ltd (formerly known as China Zenith Chemical Group Ltd) [2024] HKCA 660, at §8.

17.  I am afraid Ms Mok has not identified any error that I made. She merely repeated or at most expanded the arguments the Plaintiff had previously made.

18.  In reaching my decision resulting in the 20/05/2025 Order, I have carefully considered all the circumstances including those set out in the draft Amended Notice of Appeal. I did not have to set out in my Decision all the evidence adduced by the Plaintiff, but I have surely not overlooked any of them. On the contrary, I carefully examined them and made the following observations:

(1)  The main explanation for the delay in adducing Tim’s Affirmation was that Tim had received serious and continued threats from Martin, and therefore refused to become involved in these proceedings.

(2)  The Defendant’s O 14 summons was taken out on 27 October 2023. There was no evidence before me on what efforts the Plaintiff had made to request Tim to be a witness thereafter. The brief statement that Tim had refused to become involved was not sufficient for the Plaintiff to show reasonable diligence.

(3)  In the Decision, I pointed out that according to the Plaintiff’s evidence Tim withdrew from the project only in December 2023. Ms Mok argued that Tim indeed reported the threats to the police even earlier, on 22 November 2023. Be that as it may, it does not necessarily follow, and there was no evidence, that he refused to be a witness at that point of time.

19.  As regards Ground 2, Ms Mok argued that the following matters were overlooked by this Court:

(1)  Fifi did not participate fully in all stages of the meeting held in K11 (“the K11 Meeting”).

(2)  Much of Fifi’s knowledge was second-hand, having been relayed to her by Tim. Even if she had attempted to depose on those matters, those were hearsay evidence that would have carried limited weight.

(3)  Tim played a significant and unique role in the subject project.

(4)  Part of Tim’s Affirmation was exclusively within Tim’s personal knowledge and could not have been addressed by Fifi.

20.  In reaching my Decision, I have considered that Fifi was also involved in most of the matters as stated in Tim’s Affirmation. I have summarised them in §20(3) of my Decision. Even assuming that direct evidence from Tim could not be obtained, Fifi herself could also give direct evidence on those matters. I do not accept Ms Mok’s submission that much of Fifi’s knowledge was merely second-hand.

21.  Even further assuming that her knowledge was merely second-hand, Fifi could still depose of what she was told by Tim together with an explanation why Tim could not make an affirmation himself. Such hearsay evidence is admissible in Order 14 applications. Her failure to do so also evidences the lack of reasonable diligence.

22.  Ms Mok cited §12 of Yu Wing Cheong v Yu Wing Yin [2020] HKCA 629 and submitted that the standard of diligence required of a defendant preparing his case in opposition to a summons for summary judgment will not be so high as that required in preparing for trial.

23.  Ms Mok, however, did not go so far to suggest that I have applied a wrong test in exercising my discretion.

24.  In reaching my Decision, I have carefully considered the overall circumstances of this case, and concluded that the Plaintiff failed to satisfy the first condition in Ladd v Marshall. I am not persuaded that I may have committed any error of principle, or that I relied on irrelevant consideration or disregarded relevant considerations. I am also not persuaded that my decision may be considered plainly wrong either.

25.  Accordingly, I am not satisfied that the intended appeal enjoys a reasonable prospect of success. I refuse to grant leave to appeal against the 20/05/2025 Order out of time.

26.  For the sake of completeness, I would mention that in the draft Amended Notice of Appeal, the Plaintiff requests for an order that leave be granted to the Plaintiff also to file Lam’s Affirmation. However, none of the grounds of appeal has any relevance to Lam’s Affirmation, and Ms Mok has made no submissions to pursue this matter any further.

B2.  Leave to Appeal Against the 27/05/2025 Order

27.  Ms Mok summarised and made submissions on the following five grounds of appeal:

(1)  Undue weight was placed on certain pleas and absence of pleas in the Statement of Claim (“Ground 1”);

(2)  The findings on the evidence concerning K11 Meeting contradicted the actual evidence adduced by the Plaintiff (“Ground 2”);

(3)  The holding that the Plaintiff’s pleaded cases in respect of the profits to be paid to the Defendant were in conflict was incorrect (“Ground 3”);

(4)  The Defendant’s pleaded case and its affidavit were inconsistent (“Ground 4”); and

(5)  The Court’s construction of the Consultancy Fee Agreement was incorrect (“Ground 5”).

28.  I pause to note that Ms Mok did not make submissions on or pursue Grounds 4(1) and 4(3) of the draft Amended Notice of Appeal. Hence, Ms Ha also did not make submissions on those grounds. In such circumstances, I do not have to consider those grounds in this Decision.

29.  In Ground 1, Ms Mok submitted that I have overlooked the crux of the Plaintiff’s defence, which has been consistent throughout. The so-called consistent defence is that Martin guaranteed or represented to Fifi that EV charging devices could be installed at the Property, which turned out to be false.

30.  I do not accept that I should focus on the consistent aspects of the Plaintiff’s case and evidence, disregarding the inconsistent parts of it. I think it is proper to focus on how the Plaintiff has addressed the Defendant’s claim under the Consultancy Fee Agreement. In this regard, the Decision outlines the various and inconsistent factual versions put forward by the Plaintiff. I consider that there is nothing wrong for me to consider the discrepancies in the Plaintiff’s case as I did. Those are not minor discrepancies, but significant ones.

31.  Ms Mok submitted that, in particular, I should not criticise the Plaintiff for not putting forward the defence in the Statement of Claim, as the Statement of Claim was filed prior to the Counterclaim. However, in the Decision, I mentioned the Plaintiff’s case as pleaded in the Statement of Claim, because it is not only inconsistent with but also contradictory to the its defence to counterclaim. In short, while the Plaintiff’s latest defence is that the Consultancy Fee Agreement was not an agreement between the parties, but the Agreement (as defined in the Decision) was, the Plaintiff pleaded positively the key terms of Consultancy Fee Agreement in the Statement of Claim.

32.  As to Ground 2, Ms Mok complained that I have overlooked the fact that Fifi did mention in paragraph 4 of Fifi’s Affirmation that she affirmed that all facts pleaded in the Statement of Claim and the Reply and Defence to Counterclaim are true and accurate, and adopted entirely the facts pleaded therein. This matter should be looked at in the proper context. The only possible reference to the K11 Meeting and the telephone calls as pleaded in the Plaintiff’s pleadings is, indirectly, in paragraph 4 of Fifi’s Affirmation. No more factual evidence was given by Fifi. Further and most importantly, Fifi affirmed the validity of the Consultancy Fee Agreement and even went further to explain why she entered into the same.

33.  In relation to Ground 3, Ms Mok submitted that paragraph 35 of the Decision was incorrect, in that this Court has overlooked the key distinctions between the Agreement pleaded in the Amended Statement of Claim dated 21 May 2022, but and the alleged Project Management Oral Agreement that the Plaintiff denied dated 27 May 2022.

34.  I think the submission misses the point. If, as the Plaintiff alleges, there was indeed an oral agreement for the Defendant to be remunerated 10% of the profits, be it on 21 May 202 or 27 May 2022, the Plaintiff would have pleaded the same in its Reply and Defence to Counterclaim, rather than denying it outright. This is a view I was entitled to take.

35.  Under Ground 4, Ms Mok submitted that there are inconsistencies in the Defendant’s case. She submitted that the Defendant’s basis for its entitlement to the alleged consultancy fee has shifted from its alleged provision of consultancy services to a commission akin to that of a real estate agent. She drew my attention to various parts of Martin’s Affirmations where Martin stated that it is very common for consultants and other “middleman” to be remunerated 1% of the acquisition price, and that paying 1% commission on the property price for the person who assists in the acquisition of the property is an industrial purpose; and where Martin exhibited a screenshot showing an article describing the market practice of paying commission to real estate agents in buying, selling or leasing a property.

36.  I am unable to find any inconsistencies. All along, the Defendant’s case is that it is entitled to a payment equivalent to 1% of the purchase price of the Property upon the successful acquisition of the same. The evidence on the market practice was adduced in an attempt to justify the commercial reasonableness of the Consultancy Fee Agreement.

37.  Lastly, under Ground 5, Ms Mok submitted that the Court should not have construed the Consultancy Fee Agreement by merely looking at the document alone. It is submitted that the Consultancy Fee Agreement is a brief, one-page document. It does not reflect the agreed terms or scope of those consultancy services. It is also submitted that the agreement does not contain an entire agreement clause, and lacks detail on the scope of services. Accordingly, there are triable issues as to the terms of the parties’ agreement and whether the Defendant performed in accordance with it.

38.  I do not accept these submissions. There has never been any dispute on the interpretation of the Consultancy Fee Agreement. The Plaintiff has also never pleaded or stated in the affirmation evidence that the Consultancy Fee Agreement contains additional terms. In short, the Plaintiff’s defence never turns on the completeness or the interpretation of the Consultancy Fee Agreement.

39.  Accordingly, I am also not persuaded that the intended appeal enjoys a reasonable prospect of success. I refuse to grant leave to appeal against the 27/05/2025 Order.

B3.  Application for stay of execution

40.  In the Leave Summons, the Plaintiff also asks for stay of execution pending appeal. As I have refused leave to appeal, I see no reason why I should order a stay of execution. The Plaintiff’s application for stay of execution is also refused.

B4.  Conclusion

41.  Accordingly, I dismiss the Leave Summons in its entirety.

42.  I make an order nisi that the costs of the Leave Summons be paid by the Plaintiff to the Defendant, with certificate for counsel, summarily assessed at $80,000. Such costs are to be payable forthwith.

C.  THE AMENDMENT SUMMONS

43.  As none of the amended grounds of appeal has merits, I dismiss the Amendment Summons.

44.  I make an order nisi that the costs of the Amendment Summons be paid by the Plaintiff to the Defendant, summarily assessed at $5,000. Such costs are to be payable forthwith.

D.  COSTS OF THE APPEAL

45.  When I dismissed the Appeal on 27 May 2025, I ordered the Plaintiff to pay the Defendant’s costs of the Appeal. I gave directions for lodging and serving the Defendant’s statement of costs and the Plaintiff’s statement of objection for the purpose of summary assessment of the Defendant’s costs of the Appeal.

46.  I have considered both statements. I summarily assess the Defendant’s costs of the Appeal at $85,000. Such costs are to be payable forthwith.

47.  It remains for me to thank Ms Mok and Ms Ha for their assistance.