NG YEE WAH v. LAM CHUN WAH AND ANOTHER

cacv 309/2008

in the high court of the

hong kong special administrative region

court of appeal

civil appeal no. 309 of 2008

(on appeal from HCA NO. 2457 of 2007)

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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.  The case is primarily put on the basis that it comes within s.22(1)(a) of the Hong Kong Court of Final Appeal Ordinance, Cap. 484.  What is said is that the appeal involves, directly or indirectly, claims or questions to or representing property or civil rights amounting to or of the value of $1 million or more, namely:

(1)  (a)   the proceeds of HK$7 million of the first defendant’s purported disposal on or about 12 September 2005 of 28,000 issued shares of June Just Company Limited (“June Just”) to Pacific Bright Limited (“Pacific Bright”), which shares were registered in the name of and beneficially owned by the second defendant immediately before the said disposal, and which proceeds have since been held or retained by the first defendant on trust for the second defendant;

(b)  the Plaintiff’s civil right to claim the same or its value for or on behalf of the second defendant.

(2)  The value of the said proceeds of the said civil right is clearly quantifiable as a value of more than $1 million; and

(3)  The Court of Final Appeal’s order made upon disposing of the proposed appeal would take effect by immediately conferring or imposing on the Plaintiff a financial benefit or detriment to the quantified amount of $7 million by e.g. restoring the whole of the learned judge’s judgment and order or, alternatively, paragraph 1 of the learned judge’s judgment, awarding the plaintiff, for and on behalf of the second defendant, the payment and/or restitution by the first defendant of the said sum of HK$7 million, as aforesaid.

2.  The matter arises in this way.  Before the judge below there was an application under Order 14A, the order that the judge made was that he gave judgment against the first Defendant:

(i)  the sum of HK$7 million;

(ii)   damages to be assessed;

(iiii)  an account of all dealings between the first defendant, purportedly on behalf of the second defendant, and Pacific Bright Limited;

(iv)  an injunction restraining the first defendant for acting in breach of his fiduciary duties and/or breach of trust;

(v)  an account of profits, or alternatively, equitable damages for breach of fiduciary duties and/or breach of trust;

(vi)  interest on the sums found due as pleaded above; and

(vii)  costs of the action.

3.  So what can be determined from that, at any rate, was that that judgment was by no means the conclusion of the action.  But the matter before the judge was on the basis of an Order 14A summons; the questions posed therein were:

“(a)  Whether the 1st Defendant is estopped from relitigating the issue (the “first issue”) as to whether the 1st Defendant is the beneficial owner of the Plaintiff’s 50% shareholding in the 2nd Defendant by reason of the doctrine of res judicata; and

(b)   Whether the 1st Defendant is estopped from relitigating the second issue as to whether the 1st Defendant is the beneficial owner of the 2nd Defendant’s 35% shareholding in June Just by reason of the doctrine of res judicata.”

4.  The arguments on res judicata were raised on the basis of a consent order which had been made.  After the Order 14A summons was taken out, but before the hearing of the summons, High Court Action 1324 of 2008 had been commenced to set aside that order.  In the face of that, Stone J, who gave the judgment with which the other members of this court agreed, said:

“I am unable to share the opinion of the learned judge that in the circumstances prevailing it was appropriate to proceed with the Order 14A application.”

5.  In other words, the decision taken by this court was not a determination of the Order 14A application, but a determination of the procedural requirement as to whether the Order 14A application should actually be heard at all.  In those circumstances the order that this court made was that not only would the appeal be allowed and the judgment be set aside, but the Plaintiff’s Order 14A summons filed on 11 March 2008, as amended by the summons for amendment of the said Order 14A summons filed on 28 August 2008, should be dismissed.

6.  So what this court, in effect, decided is that the Order 14A summons should never have been heard, and that was a procedural matter.  It was not a determination or final order at all.  In those circumstances, in my view, the matter does not fall within s.22(1)(a) at all because this was not a final order.  It was a procedural order and, therefore, an interlocutory order or decision to which this court came.

7.  In relation to the other matters which are sought to be raised, in my view this court should not give leave on any other basis.  Therefore, I would dismiss this application for leave to appeal.

Hon Le Pichon JA:

8.  I agree.

Hon Stone J:

9.  I agree with the judgment of the Vice President.