DE MONSA INVESTMENTS LTD v. WHOLE WIN MANAGEMENT FUND LTD

CACV 251/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 251 OF 2010

(ON APPEAL FROM HCMP NO. 2603 OF 2008)

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BETWEEN

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REASONS FOR JUDGMENT

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Hon Fok JA (giving the Reasons for Judgment of the Court):

1.  In our Judgment handed down on 23 August 2011, we set aside the Judge’s order dismissing the plaintiff’s action and directing an assessment of damages on the defendant’s counterclaim. In place of that order, we ordered that:

“the Defendant do pay to the Plaintiff a sum of HK$13,886,910.00 and interest thereon at the rate of 1% over the best lending rate from 19 June 2008 (being the date after the Plaintiff terminated the Sale and Purchase Agreement) until the date of actual payment”.

2.  By notice of motion dated 20 September 2011, the defendant sought leave to appeal against our Judgment on the basis that an appeal lay as of right pursuant to s. 22(1)(a) of the Hong Kong Court of Final Appeal Ordinance, Cap. 484.

3.  The plaintiff did not dispute this but questioned whether the defendant was also seeking to challenge our setting aside of the Judge’s direction that there should be an assessment of damages on the defendant’s counterclaim: the defendant’s case being that it sold the property in question at a reduced price of $88.8 m to another purchaser, whereas the contract price agreed with the plaintiff was $138 m.

4.  At the hearing before us, the defendant confirmed it intended to challenge the whole of our Judgment including the setting aside of that direction, so that, if successful, the Judge’s direction for damages on its counterclaim to be assessed would be reinstated.

5.  However, since those damages would necessarily be unliquidated, it would be necessary for the defendant to seek and obtain leave under s. 22(1)(b) of the Ordinance.

6.  It seemed to us that it would be anomalous for the defendant’s appeal against the order that it pay liquidated damages to the plaintiff to proceed to the Court of Final Appeal as of right without the Court of Final Appeal also having before it the question of whether, in case it were to reverse our Judgment, it should reinstate the Judge’s direction for an assessment of the defendant’s (unliquidated) damages on its counterclaim.

7.  We therefore considered it would be appropriate to grant leave to appeal to the defendant on the “or otherwise” ground in s. 22(1)(b) of the Ordinance in respect of that part of our Judgment.

8.  For these reasons, we:

(1)  granted leave to the defendant to amend its notice of motion (the plaintiff having indicated it did not object) to add, after paragraph 3 on p. 2:

“4. further or alternatively, that, pursuant to section 22(1)(b) of the Hong Kong Court of Final Appeal Ordinance, Cap. 484, the question involved in the appeal is one which, by reason of its great general or public importance, or otherwise, ought to be submitted to the Court of Final Appeal for decision”;

(2)  granted leave to the defendant to appeal to the Court of Final Appeal from our Judgment dated 23 August 2011 pursuant to s. 22(1)(a) and s. 22(1)(b) of the Ordinance;

(3)  ordered that, pursuant to s. 25(2)(a) of the Ordinance, the defendant provide security by paying the sum of $400,000 into court within 42 days; and

(4)  ordered that costs of the application for leave to appeal be costs in that appeal.