SHIH RICK JU-FENG AND OTHERS v. LO YUEH-LI AND OTHERS

HCA 1356/2021

[2022] HKCFI 2249

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1356 OF 2021

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DECISION

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A.  LEAVE APPLICATION

1.  My decision of 3 May 2022 (“the Decision”)  dismissed the Plaintiffs’ interlocutory injunction application. The Plaintiffs now seek to appeal.

2.  The 1^st and 2^nd Defendants oppose leave to appeal. As before, the 4^th and 5^th Defendants remain neutral.

3.  The Plaintiffs accept in the light of the Court of Appeal’s decision in Agritrade Resources Limited v Ashok Kumar Sahoo [2022] HKCA 280 at §§19-20 that:

(1)  For leave to appeal to be granted, the Court must be satisfied that the intended appeal has a reasonable prospect of success or that there is some other reason in the interests of justice for the appeal to be heard.

(2)  The grant or continuation of an interlocutory injunction is an exercise of the original Judge’s discretion. The appeal court is not to exercise an independent discretion of its own. Its initial function is one of review only. It may set aside the Judge’s exercise of discretion if it can be shown that the Judge was plainly wrong in the sense that, for example, he had acted on wrong principles, taken into consideration irrelevant factors, ignored relevant factors or the decision is outside the generous ambit within which reasonable disagreement is possible.

4.  The 1^st and 2^nd Defendants further draw attention to Kwan VP’s judgment in Harbour Front Limited v Money Facts Limited and Ors [2019] HKCA 916 at §9, emphasising that in assessing the merits of a proposed appeal for the purpose of leave:

(1)  The mere fact that certain matters are not mentioned in a judgment does not mean that the judge has not taken them into consideration – the judge is not required to address all the points made by counsel be they legal or factual.

(2)  A mere repetition of arguments at first instance without demonstrating how and why the judge went wrong does not begin to make out a case that the judge’s conclusion was plainly wrong.

B.  GROUNDS FOR LEAVE?

5.  I will start with the Plaintiffs’ claim that the Decision was flawed in considering the risk of harm “in isolation” (Ground 2 of their proposed appeal grounds), since that is said to raise a point of principle. The Plaintiffs’ claim is in my view unviable:

(1)  As noted at §7 of the Decision, it was the Plaintiffs’ own case that to succeed in obtaining interim relief they had to show that, if successful at trial, they “would not be adequately compensated by damages for any loss caused by the refusal to grant the injunction”. That is what the Plaintiffs themselves identified at §23(b)  of their original injunction skeleton as one of the requirements for an injunction within the applicable American Cyanimid framework.

(2)  The Plaintiffs’ own position thus required them to show that the denial of interim relief would give rise to the losses they claimed and that damages would be inadequate to compensate for such losses. Failure to sufficiently establish either of these matters would spell failure for the application as a whole.

(3)  The Plaintiffs’ original stance is plainly correct both analytically and in principle. That is presumably why, as recorded at §8 of the Decision, it was accepted by all counsel before me that the requirements flagged by the Plaintiffs for the grant of an interlocutory damages, including the need to show the inadequacy of damages for relevant loss, are cumulative. There is no suggestion that §8 of the Decision inaccurately records the parties’ common position at the time of the hearing, namely that “a failure to show the inadequacy of damages would itself be fatal to the application”.

(4)  As such, there can be no satisfaction of the requirement as to inadequacy of damages for loss as a basis for interim relief where the Court has determined, on the available evidence, that the harm asserted is not made out in the first place. This goes to the very root justification for interim relief pending trial: avoiding harm to claimants that cannot later be remedied by damages should they ultimately prevail at trial.

(5)  For similar reasons, the Plaintiffs’ complaint that the Decision wrongly failed to rule on whether their claim gave rise to serious issues to be tried is misdirected.  If, as I have held, the Plaintiffs have failed to show any inadequacy of damages for losses resulting from the refusal of interim relief should they succeed at trial, a separate finding that there are serious issues for trial cannot shift matters any further in their favour.  In considering whether there would be losses for which damages would be inadequate should the Plaintiffs prevail at trial, it is (for that analysis)  already assumed in their favour that serious issues for trial not only exist but have been resolved in their favour.

6.  Next there is the Plaintiffs’ complaint (Ground 3 of their proposed grounds)  against the logic of refusing relief on the basis that the requisite consent for use of the Synergy Funds is “a far prospect” (Decision §49)  even though it is not as yet established that “the need for unanimous Beneficiary consent itself means that the Interlocutory Injunctions would be necessarily pointless or futile”. The complaint is invalid because:

(1)  There is logically and linguistically a plain distinction between, on the one hand, the stark proposition that the requisite unanimous Beneficiary consent was essentially impossible so as to make interim relief entirely “pointless” or “futile” (this being the 1^st and 2^nd Defendants’ assertion, which I rejected), and on the other hand the recognition that such consent – while not impossible – was and is nonetheless highly unlikely, and thus at best of limited weight.

(2)  The distinction is significant in the context of the discretionary weighing exercise that the Court conducts in terms of the balance of convenience. For the purposes of a global discretionary balancing of factors, there is nothing at all “self-defeating” or “internally inconsistent” (as the Plaintiffs contend)  in taking the remoteness of the prospect of any consent – a factual assessment that is not itself directly challenged in the proposed appeal – as one factor militating against the applicants in the overall balance of factors before the Court.

(3)  The Plaintiffs’ Ground 3 is in any event unviable if I am right about the failure to establish inadequacy of damages as a critical factor in this case. If I am right on that score, then the soundness or otherwise of my observations on the balance of convenience is of no moment. As noted at §42 of the Decision, my observations on the prospect of consent for use of the Synergy Funds in connection with any balance of convenience assessment are strictly unnecessary, given that the application must in any event fail on the inadequacy of damages front.

7.  The Plaintiffs’ remaining grounds / sub-grounds of appeal in substance repeat factual and evidential matters already put before and considered by me for the purposes of reaching the Decision.  As such, having fully considered those grounds, it is appropriate for me to simply state – without engaging the Plaintiffs’ points yet again – that I remain of the view the Decision is correct, for the reasons given there, and that the Decision is not in my view reasonably susceptible to challenge on these same essential points (or slight variations / elaborations of them).

8.  I take this approach bearing in mind (1)  the primary nature of the complaints in the remaining grounds, which largely centre on claims that I was (the Plaintiffs boldly assert)  “ignorant” or otherwise insufficiently attentive as to this or that fact or portion of evidence or submission by counsel for the Plaintiffs, and (2)  Kwan VP’s observation in Harbour Front Limited as set out at §4(1)  above, which strikes me as apt not only in relation to decisions on interlocutory applications but a fortiori as to applications for leave to appeal against such applications, which must be despatched with the interests of speed and procedural economy in close view.

9.  In the same register, having already rendered the Decision, it is in my view neither necessary nor appropriate after the event to catalogue and confirm each and every matter that I took into consideration in determining the Plaintiffs’ application, whether specifically mentioned in the Decision or not. Ultimately the Decision is either sound and sustainable on its own terms or it is not.

C.  APPLICATION DISMISSED

10.  The Plaintiffs’ leave application is therefore dismissed with costs, together with a certificate for two counsel.