POON CHO FAI v. EAST PACIFIC (HONG KONG) LTD

HCA 1194/2014

[2019] HKCFI 3146

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1194 OF 2014

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D E C I S I O N

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1.  These are the Defendant’s applications for leave to appeal against my decision handed down on 12 November 2019 (“the Decision”) and to stay the proceedings pending the determination of the said appeal.

2.  The applicable test for an application for leave to appeal is not in dispute.  As I have summarized in K&L Gates v Navin Kumar Aggarwal & another [1]:

“(i)  Leave to appeal may only be granted if the applicant can demonstrate reasonable prospects of success, meaning that the prospects of succeeding must be reasonable and therefore more than fanciful. Merely showing that the appeal is arguable and not fanciful is not sufficient.

(ii)  It is a misuse of the appellate process to give a party a platform for regurgitating his arguments again in the hope that the appellate judges may come to a different view. The relevant question for the Court of Appeal is whether the judge has fallen into palpable errors which can give rise to grounds for intervention by the appellate court.

(iii)  Lodging an appeal with ill-considered and unsatisfactory grounds of appeal, particularly those that provide no more than a lengthy critique of the judgment rather than identify a justifiable basis for the Court of Appeal interfering is not acceptable.”

3.  Before dealing with each and every ground of appeal put forward by Defendant, I would reiterate that there is a high threshold for the Defendant to pass in order to demonstrate that the Plaintiff’s claim is liable to be struck out or stayed.  In fact, I have summarized the relevant principles in paragraph 23 of the Decision.  The Defendant does not dispute any of these principles.

4.  There are 5 purported grounds of appeal set out in the draft Notice of Appeal.  I agree with Mr Khaw SC, counsel for the Plaintiff, that the Defendant obviously seeks to re-run the arguments which have been considered and rejected by me in the Decision.

5.  I do not propose to deal with the merits of each ground of appeal, save as to say that I agree with Mr Khaw’s written submissions about the lack of merit in respect of each of such grounds.

6.  In particular for the 1^st ground of appeal, it is clear from paragraphs 23 (iv) and 43 to 58 of the Decision that I did properly and adequately considered the doctrine of res judicata both in its strict and wider sense.

7.  For the 2^nd and 3^rd grounds of appeal, the problem with the Mainland Judgments is that they have not dealt with the possible personal liabilities of the Defendant as agent under the common law principles.  As I pointed out in the Decision, the Mainland Judgments only dealt with the rights and liabilities vis-à-vis the Plaintiff and Tian Qi under the Sale and Purchase Agreement and not vis-à-vis the Plaintiff and the Defendant.  It seems that the Defendant has no answer to such point.

8.  For ground 4, the contention relating to Representation A has no substance at all as we are talking about the legitimacy of the fund flow rather than the legitimacy of using corporate vehicle to purchase the Property.  For Representations B and C, again the Mainland Judgments have not dealt with the possible personal liabilities of the Defendant under the circumstances.

9.  Ground 5 relates to res judicata in the wider sense and whether the Plaintiff should have raised the claim for the personal liability against the Defendant in the Mainland Proceedings.  In the Decision, I have already discussed the matters in some length.  In my judgment, the Defendant up to now cannot provide any satisfactory answers to the points I have set out in the Decision.

10.  For the above reasons, the Defendant’s intended appeal has no substance and I therefore dismiss the application for leave to appeal.

11.  I then turn to the stay application.  It now appears that the Defendant is only asking the court to stay the proceedings pending the appeal rather than staying the execution of the Decision.

12.  The Defendant’s argument is that if the proceedings are to continue in the meantime, substantial works would have to be carried out to prepare the case for trial, and such time and cost would be completely wasted if the Defendant’s proposed appeal is successful.

13.  However, it is well-settled that such argument cannot justify a stay.  As held by Ma J (as he then was) in Wing Sui Company Limited v Goldquest International Limited [2]:

“15. In my view, the defendant has not demonstrated an entitlement to a stay:

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(2)  I have already referred to Mr Wong’s submission that should the Appeal be allowed, the time and costs expended on any further proceedings from now would be wasted.  He also submits that there is a risk of irreparable harm if summary judgment is granted, because even if the Appeal is successful, the summary judgment may nevertheless remain intact.  In my view, no prejudice is demonstrated by these arguments.  As to wasted costs and time, should it transpire that the defendant succeeds in the Appeal, I would have thought that it would in general be entitled to the costs of the action.  If a case of wastage is made out, the defendant would be compensated in a costs order.  As to the risk that despite a wholly successful outcome in the Appeal, any summary judgment granted would remain intact, I cannot envisage any circumstances in which this could occur.”

14.  For this reason, I also refuse the stay application.