AU WING CHEUNG v. ROSERIC LIMITED

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J U D G M E N T

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Nazareth, J.A.:

1. This is the judgment of the Court.

2. The Respondent by motion seeks the leave of this Court to appeal to Her Majesty in Council. The application comes about in the following way. On 13th February 1991 the Appellant, the Respondent and an estate agency known as Kinwell entered into a provisional agreement for the purchase by the Appellant through Kinwell of certain property from the Defendant. Six days later the Appellant's solicitors wrote to the Defendant's solicitors under the heading "Subject to Contract". They stated they had received instructions from the Appellant on the purchase of the property "on major terms and conditions as set out in the Schedule annexed ... subject to contract". The Schedule contained most but not all the terms of the provisional agreement. They asked the Defendant's solicitors to take the Defendant's instructions and let them have their draft agreement for sale and purchase (which the provisional agreement provided for) for their approval on behalf of the Appellant; also to let them have the relevant title deeds and documents. They added that "Nothing herein shall bind our client unless and until the agreement for Sale and Purchase relating thereto has been signed by our client and all parties concerned". The Defendant's solicitors replied next day stating that "our client agrees to your client's interpretation of the events that negotiation is still going on and no agreement has been reached before the signing of the agreement for Sale and Purchase. Our client hereby notify your client ... that it had withdrawn from further negotiation with your client ... we enclose our client's cheque in the sum of HK$80,000.00 being refund of the money received from your client. This transaction will be regarded as fallen through".

3. The Appellant's solicitors protested that the Provisional Agreement was a binding agreement and that the Respondent could not terminate it in that way, but to no avail. Ultimately, the Appellant sought specific performance and other related relief by his writ issued on 12th March 1991. This he followed on 29th April 1991 with his summons under Order 86 of the Rules of the Supreme Court for summary judgment. About 3Y₂ months l.ater, on 19th August 1991, the Defendant took out a summons under Order 18 rule 19 to strike out the Plaintiff's Statement of Claim. Both applications came before Master Jones on 29th August 1991. He dismissed the Defendant's summons to strike out and granted the Plaintiff an order for specific performance together with other associated relief. The Defendant appealed to the High Court and on 19th December 1991, Kaplan J. allowed the appeal, and set aside the order for specific performance. The Plaintiff appealed to this Court against the order made by Kaplan J., and on 17th July 1992 this Court allowed that appeal, set aside the order made by Kaplan J., save as to costs, and ordered that judgment be entered for the Plaintiff for specific performance of the Provisional Agreement.

4. Mr Allman-Brown, who appears for the Respondent, seeks leave to appeal against that order of this Court under both limbs of rule 2 of the Rules in the Order in council regulating appeals from this Court to Her Majesty in Council. First, he submits that the Respondent is entitled to leave as of right under paragraph (a) of rule 2, the judgment of the Court being a final judgment upon a matter in dispute of the value of $500,000 or more. However, the practice of this Court as to whether a judgment is final or not for the purposes of rule 2(a) is governed by the "application" approach as most recently held by Fuad, V-P in Fong Yee Lan v Yiu Yan Ping (1991 No. 128 on 7th May 1992, as yet unreported) following reference to earlier decisions of this Court.

5. Not being unaware of that judgment, it having been listed as one of his authorities in this matter by Mr Edward Chan, Q.C. for the Appellant, Mr Allman-Brown nonetheless sought to rely upon First Pacific Bank v Robert Fung [1990] 1 HKLR 527, 531 in particular the passage there quoted from the judgment of Bingham LJ in White v Brunton, to the effect that a broad common sense test should be applied. However, it is plain from that passage that it relates to the separate trial of different issues, which does not arise in this case. Mr Allman-Brown also submitted that if no Order 85 application had been made, the matter would have had to be disposed of in the ordinary way. We cannot see that this in any way displaces the application approach. Indeed, what Mr Allman-Brown seeks to advance seems to be exactly what Mr Oderberg submitted in Fong Yee Lan and must be rejected for the same reason. Moreover what he really seeks to do is to persuade this Court to reverse the well-established practice I have referred to. This we see no reason to do.

6. Turning to Mr Allman-Brown's application on his second ground under paragraph (b) of rule 2, i.e. seeking the exercise of this Court's discretion, he submits that the Respondent's case has been seen by the succession of his legal advisors in the wrong light. The Respondent does not, he says, dispute the validity of the Provisional Agreement as a binding agreement. His case on the contrary is that the Appellant's solicitors' letter of 19th February 1991 was in the nature of a trap, constructed by assembling phrases from solicitors' letters used in this sort of situation, with the object of converting a binding provisional agreement into one that was subject to contract. In pursuance of that submission, not without some difficulty, he formulated the question of great general or public importance (which in this regard, in breach of the good practice commended in First Pacific Bank was not set out in the Respondent's application) in the following way:

"Can an offer to vary an existing binding agreement be made subject to contract".

On its face we cannot see that there is any difficulty about answering that question. Likewise we cannot see that it is a question of great or public importance. Indeed, on the very basis upon which Mr Allman-Brown makes his submission, such a question would appear to arise only in the particular circumstances of the present case and not in the context of the sort of solicitors' letters exchanged in Hong Kong. It is also not clear what purpose the question would serve or indeed whether it can be fairly posed on the facts.

7. Plainly there are no merits whatsoever in the Respondent's application which we dismiss. In the circumstances, in handing down this judgment (as we indicated we would, the time allocated for the hearing of the motion having been exceeded) we think it appropriate to deal with the matter of costs by order nisi. Prima facie, the application being so utterly devoid of merit, we think the Appellant should have his costs upon a basis more generous than the party and party basis; and furthermore, having all along been represented by leading counsel, that he should have a certificate for two counsel. Accordingly we make an order nisi that the Appellant is to have his costs of the application upon the common fund basis; with a certificate for two counsel.