DARTON LTD. v. HONG KONG ISLAND DEVELOPMENT LTD.

CACV 146/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 146 OF 2001

(ON APPEAL FROM DCCJ 15672 OF 2000)

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J U D G M E N T

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Hon. Rogers VP:

1. This is an application for leave to appeal to the Court of Final Appeal. It is in respect of a judgment of this Court of 26 July this year. The action concerned the application by the plaintiff for the return of a deposit of some $302,118, plus interest. That deposit had been paid in circumstances where this Court has held that there was no contract.

2. First of all, not only is the amount of the claim small, but this Court is by no means satisfied that a point of great general or public importance arises, as was said in argument. Although it has been said that a situation similar to the present case, where a landlord seeks to retain a sum of money which has been given to it before there is any contract entered into, prevails, there has been nothing drawn to our attention which would satisfy us that that situation prevails to any great extent in Hong Kong.

3. Turning to the point sought to be argued, Mr Mok, who appears on behalf of the applicant in this case, but who did not appear either in the Court below or on the hearing of this appeal, seeks to argue a completely new point. The point which is sought to be raised is that, despite the fact that the documents that were entered into were subject to contract, and it is conceded do not constitute a contract in themselves, there was an understanding between the parties that the sum of money which was paid by the plaintiff to the defendant was intended to be kept by the defendant, "willy-nilly". It is said that, despite the absence of any contract, that money has now become irrecoverable because of the intention of the parties. This point, of course, has not been argued but, for my own part, I do not see that it has merit, or, at any rate, sufficient merit that I would give leave to appeal to the Court of Final Appeal upon it.

4. Mr Mok bases his primary argument on statements made in particular by Pollock MR in the course of his judgment in the case of Chillingworth v Esche [1924] 1 Ch. 97. However, I have to say that those statements, particularly the one at page 108 where the Judge said:

"There was no provision made in the documents which would justify the vendor in declining to return it; though if he had, by appropriate words, made provision for that in the document, such a provision could have been upheld."

were not part of the ratio of his decision. They were observations in relation to facts which the Judge held did not prevail in that case.

5. Moreover, the Judge did not go on to indicate the circumstances or "appropriate words" about which he was talking. What he said, however, was in the context of deciding an appeal from Astbury J. The kernel of that Judge's judgment is recorded at page 99 of the report where it was said that:

"Astbury J. held, assuming (without deciding) that the document of July 10, 1922, was only conditional, and did not constitute a firm contract, that the purchasers were not in the circumstances entitled to recover the deposit, which was a guarantee that they would proceed with the transaction on the vendor tendering a proper contract."

6. In those circumstances, what Pollock MR was dealing with at the time was an appeal in which the Judge below had held that there had been a guarantee. Guarantees are in themselves contracts. In the circumstances, a separate contract from a lease, but a contract nonetheless.

7. In my view, neither the way the matter has been argued today, still less the draft questions which have been put before us, would merit this matter going to the Court of Final Appeal.

Le Pichon JA:

8. I agree and have nothing to add.

Stone J:

9. I also agree and have nothing to add.