LOKUMAL & CO (HONG KONG) LTD v. KARISON LTD

DCCJ 80/2016

[2018] HKDC 319

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 80 OF 2016

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DECISION

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1.  By a judgment handed down on 5 January 2018 (“Judgment”), I ordered payment of the sum of USD20,000 by the defendant to the plaintiff with interest and costs. On 18 January 2018, the defendant filed a summons to seek leave to appeal against the Judgment and for stay of the Judgment pending appeal. The facts of this case have been set out in the Judgment. Unless otherwise stated, I adopt the abbreviations used in the Judgment.

2.  An affirmation made by JS (“JS Affirmation”) on behalf of the defendant was also filed on 18 January 2018, where five intended grounds of appeal have been set forth, grounds (1) to (5).  The intended grounds of appeal are not readily comprehensible and clarifications have been sought from JS at the hearing, whereupon the defendant confirmed withdrawal of two intended grounds of appeal, grounds (2) and (5).  The remaining three intended grounds of appeal can be summarized as follows:

(1)With reference to paragraph 22 of the Judgment, the witness was our main evidence but he was absent, and the WhatsApp messages were not considered only for reason that they were in text form.  The defendant asks me to consider the jpeg form of those messages shown as exhibits to the JS Affirmation as proof of its case;

(3)With reference to paragraph 54 of the Judgment, the finding that the defendant had breached the contract was not supported by the WhatsApp messages of 5 September 2015, 9 October 2015, 23 November 2015 and 27 November 2015;

(4) With reference to paragraph 56 of the Judgment, the plaintiff chased for the deposit on 14 January and 1 February 2016 on the one hand, but on the other hand it asked for shipment of goods during Chinese New Year season when normally no factory would work.

3.  Section 63A of the District Court Ordinance applies on an application for leave to appeal against a decision of a judge.  Subsection (2) sets out the circumstances where leave to appeal are to be granted. The subsection is reproduced below –

“(2) Leave to appeal shall not be granted unless the judge, the master or the Court of Appeal hearing the application for leave is satisfied that—

(a) the appeal has a reasonable prospect of success; or

(b) there is some other reason in the interests of justice why the appeal should be heard.”

4.  The defendant is not relying on section 63A(2)(b).  The only issue before the court is whether the defendant has satisfied the court that the appeal has a reasonable prospect of success. A reasonable prospect of success means that the prospect of succeeding must be more than fanciful, but without having to be probable, see KHM v HTF (HCMP 288/2011, 7 September 2011) per Hartman and Fok JJA.

5.  I need to first deal with a preliminary matter in respect of the defendant’s application for leave to appeal.  The defendant is now seeking to rely on evidence that has not been adduced at the trial of the case and there is no application for leave to adduce such new evidence.  Apart from a number of the emails from Sunil to the defendant sent in January and February 2016, the exhibits of the JS Affirmation are mainly new evidence that the defendant asks to be considered.

6.  There is no explanation from the defendant as to why the fresh evidence was not brought before the court at trial, except the rather lame excuse that the defendant could not afford the high fees of lawyers and was not knowledgeable of the legal principles.  It is helpful to refer to the following remarks of Kwan JA in the case of A v Administrative Appeals Board HCMP 985 of 2017, unreported 21 July 2017, in paragraph 20:

“The rules for adducing evidence in the court below and further evidence on appeal apply to all litigants, whether they act in person or are legally represented.”

7.  Even if there was an application from the defendant for adducing new evidence, such evidence can only be adduced if it meets these three requirements: (1) it could not have been obtained with reasonable diligence for use at the trial; (2) if given, it would probably have an important influence on the result of the case, though it need not be decisive; and (3) it must be such as is presumably to be believed, in other words it must be apparently credible though it need not be incontrovertible (Ladd v Marshall [1954] 1 WLR 1489).

8.  None of the new evidence presented by the defendant can meet the first requirement listed above.  In particular, in relation to the WhatsApp messages, in response to the complaints of the plaintiff that the text form of those messages could have been tampered with, the defendant is now producing the jpeg format of the messages.  In the first place, the defendant has not brought up the complete set of those messages in jpeg format.  Only the messages on a few days have been produced. 

9.  Further, as noted in paragraphs 26 and 27 of the Judgment, the parties were directed at the Pre-Trial Review to attend trial with all the original documents.  Notwithstanding such directions, the defendant chose not to bring along the original WhatsApp messages.  I do not see any basis to allow the defendant to rely on the jpeg form of those messages now.

10.  Mr Mahtani has drawn my attention to an additional concern about the jpeg form of the WhatsApp messages in the exhibits of the JS Affirmation.  They differ from the text form of the messages produced at trial.  Some of the messages shown in jpeg format were not shown in the trial version.  For example, the word “conference” is found missing in the jpeg version of one message and another message “Toh make 1 x 40 only cig” is not included in the text format used at trial.  JS explained that personal messages exchanged with Sunil have been deleted, but he did not agree that that was editing.

11.  Authenticity of documentary records is of paramount importance when court assess their reliability.  The omitted message of “Toh make 1 x 40 only cig” would seem to have direct relevance to the dispute between the parties and its omission only puts the reliability of the jpeg version in doubt.  With the jpeg format of the messages in such state, I do not see how they can pass the third limb of the Ladd v Marshall test.

Intended ground (1)

12.  In paragraph 22 of the Judgment, I pointed out that although Sunil made a witness statement on behalf of the defendant, he was not called to testify at trial.  Without the opportunity to cross-examine Sunil, it was my decision not to give any weight to his evidence.  JS confirmed that the defendant is not taking issue with that, but it is asking for the jpeg format of the WhatsApp messages to be considered.  As can be seen from the discussions above, there is no application for fresh evidence to be adduced, but even there had been one, the application would not have been granted.

13.  In respect of the WhatsApp messages that had been adduced at trial in text form, it is not correct to say that they had not been considered.  I had actually considered them in detail. The reasons why they were of no help to the defendant’s case had been set out in paragraphs 28 to 33 of the Judgment.  I have mentioned the inconsistencies between the messages and the defendant’s case.  I have also pointed to the difficulty in interpreting the messages in the manner put forward by the defendant without the assistance of Sunil.  I do not see any reasonable prospect of success in an appeal based on this intended ground.

Intended ground (3)

14.  The defendant points to various WhatsApp messages which, in its view, do not support the finding that the defendant had breached the agreement between the parties that was evidenced by the Sales Contract.  In the jpeg WhatsApp messages that the defendant wishes to rely on, the defendant has added some notes as to how those messages should be interpreted.  It is again important for the defendant to bear in mind that it had not called any witness to give evidence as to the true meaning of those messages.  As such, I can only rely on the mere wording on the documents. Hence, even without the hurdle posted by the principles in the Ladd v Marshall case, it would not be open to me to take into account the annotations to the WhatsApp messages provided by the defendant.

15.  As pointed out in the above, despite the challenge to their authenticity, I had considered the WhatsApp messages.  I had, in paragraphs 28 to 33 of the Judgment, set out the reasons why they could not assist the defendant.  In particular, as noted in paragraph 28 of the Judgment, I found it difficult to identify the matter that the records pertain to and their relationship with the business between the plaintiff and the defendant, when the sender or the recipient of the messages was not called to testify at trial.

16.  The annotations that the defendant has now added to the jpeg format of the WhatsApp messages in the JS Affirmation are what might have been helpful to the court in understanding the messages but which were not available to the court at trial because no witness was called by the defendant.  Oral testimony of Sunil would have been allowed had he been called and, being the sender or recipient of the messages, he would have been able to give evidence on how the messages were to be interpreted. The defendant did not avail itself of this option.    

17.  At the hearing, JS informed the court that having informed Sunil that the defendant lost the case because he did not attend trial to testify, Sunil has since indicated that he is now prepared to do so on behalf of the defendant.  The defendant therefore asks for the chance for Sunil to give evidence.   It is therefore apparent that the defendant does not seek leave to appeal because of a mistake in the findings I have made, but because it wants to provide the benefit of the oral testimony of Sunil which was not available at the trial that had taken place.  I therefore do not see any reasonable prospect of success in this intended ground of appeal.

Intended ground (4)

18.  In paragraph 56 of the Judgment, I referred to the emails of the parties and pointed in particular to one dated 29 October 2015 from the defendant which said the defendant was waiting for the plaintiff’s other list of items of interest so it can clear out everything.  That the plaintiff was at the same time chasing for return of the deposit had not escaped my notice.

19.  In paragraph 58 of the Judgment, I referred to that email and found that it did not amount to any commitment on the part of the plaintiff.  I also found that there is nothing to show that the parties were in active discussions to vary the terms of the Sales Contract in terms of the late delivery of the shipment.  Looking also to the exchange of emails in February 2016, I concluded that they are more in support of the plaintiff’s case that it had agreed to help find other buyers, but without prejudice to its right to the balance of the deposit.

20.  I do not understand the defendant to be taking issue with the findings I made in paragraph 58 of the Judgment.  There is thus no reasonable prospect of success in this intended ground of appeal.

Conclusion

21.  As none of the intended grounds of appeal has any reasonable prospect of success, the application for leave to appeal is dismissed.  That being the case, the application for stay of the Judgment should also be dismissed.

22.  On a nisi basis, I order costs to be paid by the defendant to the plaintiff, to be taxed if not agreed.