NG YUK PUI KELLY v. NG LAI LING WINNIE as the executor of THE ESTATE OF DUNG WAI MAN, DECEASED AND OTHERS

CACV 86/2019

[2021] HKCA 1065

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 86 OF 2019

(ON APPEAL FROM HCA 1826/2011)

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J U D G M E N T

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Hon Lam VP (giving the Judgment of the Court):

1.  By a Notice of Motion of 11 June 2021, the 1^st and 2^nd Defendants (“the Defendants”)  sought leave to appeal to the Court of Final Appeal (“the CFA”)  in respect of the judgment of this Court of 20 April 2021. In the Notice of Motion, 3 questions were put forward which were said to be questions of great general or public importance.

2.  The Defendants also relied on some other grounds which, according to them, warrant leave to be granted under the “otherwise” limb of Section 22 (1)(b)  of the Hong Kong Court of Final Appeal Ordinance Cap 484.  Counsel for the Defendants, Mr Lam SC, properly acknowledged that the practice of this Court is not to grant leave under this limb.  We therefore need not be concerned with these other grounds though we do not see much merit in those grounds warranting leave being granted.

3.  The application is opposed by the Plaintiff.  Mr Ismail submitted that the application was brought out of time.  Whilst this is technically correct, we also bear in mind that the Reasons for Judgment was handed down 14 May 2021 and it is understandable that the Notice of Motion was filed late. Having said that, we would not endorse the Defendants’ reticence about the delay until the Plaintiff brought up the issue. Actually, there was no reason why the Defendants could not even issue a Notice of Intended Application to Appeal without sight of the Reasons for Judgment. The summons of 16 July 2021 seeking extension of time should have been taken out together with the Notice of Motion. In any event, in light of our decision below on the substantive merit of the application, the time point pales into insignificance and we would not grant extension of time under the summons of 16 July 2021 for an unmeritorious application.

4.  In accordance with Practice Direction 2.1, submissions were respectively lodged by parties and we have duly considered the same. 

5.  Having read the submissions, we are of the view that the application can be determined on the papers.  We now give our decision on the Notice of Motion.

6.  Of the three questions set out in the Notice of Motion, we would refer to them as follows:

(a)  The Contractual Estoppel Question;

(b)  The Part Performance Question; and

(c)  The Proprietary Estoppel Question.

7.  We shall address the last two questions first before we come back to the Contractual Estoppel Question.

8.  The Part Performance Question is formulated in these terms in the Notice of Motion:

“ (2)  In respect of the law of part performance, what should be the appropriate test regarding the requirement of unequivocal referability? Without prejudice to the generality of the foregoing, in particular, whether the following acts would generally meet the requirement of unequivocal referability:

(a)  to remain in possession, as opposed to the taking and delivery of possession, of the land?

(b)  to cease payment for the use of the land?

(c)  to demand for transfer of the legal title of the land?”

9.  It can immediately be said that though the first part of the question can be regarded as a question of some general importance (as it relates to a question of law on the appropriate test), the other parts of the question are actually questions of application of the relevant legal test to the facts of the case (which are not questions of general importance).

10.  We considered the issue of part performance at [33] to [48] of our Reasons for Judgment dated 14 May 2021.  The legal test we applied was the one accepted by Mr Lam before us (as well as before the judge)  to be the correct one: see [46].  We also explained at [35] and [36] that it was necessary to apply the test of unequivocal referability against the surrounding circumstances.

11.  In the written submissions in support of the Notice of Motion, Mr Lam did not argue against the legal test and our approach. In his submission of 25 June 2021, at [12], counsel focused his challenge on how the test was applied by us on the facts of the present case.

12.  Hence, notwithstanding Mr Lam’s submission to the contrary in his reply submission of 16 July 2021, we are of the view that in substance, the first part of the question as formulated in the Notice of Motion is only a disguise.  The substance of the contentions of the Defendants under the Part Performance Question is the application of the legal test to the facts of the present case.

13.  Mr Lam submitted that some of the acts we referred to could not satisfy the test of unequivocal referability.  With respect, counsel failed to pay proper regard to the context in which we made references to those acts at [39] to [44].  We did not refer to such acts as a single act or acts by themselves constituting part performance.  They were surrounding circumstances, or as put by Lord Selborne, equities resulting from res gestae subsequent to and arising out of the contract.  Seen in that light, we do not find the contention of Mr Lam to be reasonably arguable.

14.  In any event, much depends on the relevant circumstances of each case.  We do not see any question of great general public importance being ventilated in Mr Lam’s submissions under the Part Performance Question.

15.  We reject the application based on the Part Performance Question.

16.  As Mr Lam acknowledged in his submissions, the Proprietary Estoppel Question only arises if he could successfully challenge the determination of the Part Performance Question.  In light of our refusal of leave on the Part Performance Question, we cannot see any basis for granting leave on the basis of Proprietary Estoppel Question.

17.  Coming back to the Contractual Estoppel Question, the gist of it was set out in the first part of the formulation under [1(1)] of the Notice of Motion:

“Whether the doctrine of contractual estoppel should usually be confined to the dealings arising from the contract; and in the absence of clear agreement between the parties, it should not extend to other aspects of their relationship which have nothing to do with the contract in question?...”

18.  Whilst other subsidiary questions were also set out at [1(1)(a)] to [1(1)(d)] of the Notice of Motion, they were mere amplifications of this core question.

19.  In the Reasons for Judgment of 14 May 2021, we discussed the legal doctrine of contractual estoppel at [66] to [76].  In particular, the core question in [1(1)] of the Notice of Motion challenges what we held at [76]:

“In principle, given that the rationale of contractual estoppel lies in the agreed basis for the contractual parties to conduct their relationship arising from the contract, the scope of the estoppel should be confined to that as agreed between the parties which would usually be confined to the dealings arising from the contract. In the absence of clear agreement between the parties, there is no reason why the estoppel should extend to other aspects of their relationship which have nothing to do with the contract in question.”

20.  We did not, in that paragraph, hold that the operation of contractual estoppel is confined to disputes on contractual rights. This appears to be the misconception of Mr Lam when he submitted that we misunderstood First Tower Trustees Ltd v CDS (Superstores International)  Ltd [2019] 1 WLR 637 and Uber BV v Aslam [2021] UKSC 5 at [4] to [6] of his submissions of 25 June 2021 and [5] of his submissions of 16 July 2021.

21.  At [68] and [69] of our Reasons for Judgment, we referred to the judgment of Moore-Bick LJ in Peekay Intermark Ltd v Australia and New Zealand Banking Group Ltd [2006] 1 CLC 582 which was a case the claim was made in tort.  His Lordship referred to the operation of contractual estoppel “so far as concern those aspects of their relationship to which the agreement was directed”.  We thus took care in saying at [69] that:

“ Thus, the rationale stems from the adoption by the parties to a transaction of a specific basis for conducting their relationship arising from the agreement.”

22.  The relationship arising from the agreement is wider in scope than contractual obligations owed to each other under the contract.  This was the formulation we adopted at [76].

23.  Such understanding on our part should also be clear from our citation of Colchester Borough Council v Smith [1992] Ch 421 (see [70] of the Reasons for Judgment)  and our discussion of Uber BV v Aslam, supra and First Tower Trustees Ltd v CDS (Superstores International)  Ltd, supra at [80] to [87].  At [81], we expressly referred to tortious liability arising from the same transaction.

24.  After reading Mr Lam’s submissions, we do not find his proposition (which we had rejected for reasons set out in our Reasons for Judgment)  that contractual estoppel should govern all dealings between the parties to be reasonably arguable.

25.  For the above reasons, we would not grant leave on the basis of the Contractual Estoppel Question.

26.  We dismiss the Notice of Motion of 11 June 2021 and the summons of 16 July 2021 of the Defendants accordingly.  We also order that the 1^st and 2^nd Defendants shall pay the costs of the Plaintiff in the Notice of Motion and the Summons with certificate for two counsel.  Having considered the statement of costs of the Plaintiff, we fix the costs of the Plaintiff at $220,000.