YUI CHUNG YIN v. NG KIT SUM

CACV 25/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 25 OF 2013

(ON APPEAL FROM HCA NO. 1826 OF 2009)

________________________

________________________

________________

JUDGMENT

________________

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

1. The Plaintiff in this action purchased notebook computers and accessories in large quantities for the purpose of trade from the Defendant in 2008. At the beginning of the trading relationship, the Plaintiff paid a deposit of $3 million as security money. At the end of the trading relationship, disputes arose as to which party was indebted to the other. The Plaintiff sued the Defendant for the sum of $2,149,741 as balance of the deposit which should be refunded and another sum of $130,000 for refund in respect of some adaptors.

2. On the other hand, the Defendant said it was the Plaintiff who was indebted to him and counterclaimed for $637,108 as the outstanding amount due for computers supplied and $130,000 for the adaptors. 

3. The parties also had a dispute in respect of insurance premium paid under two insurance policies.  The Plaintiff claimed $100,000 as his contribution to the policies taken out by the Defendant. 

4. The Defendant said the policies were taken out at the request of the Plaintiff and he counterclaimed US$25,641.

5. The trial lasted for 8 days before Deputy High Court Judge Cheng SC [“the Judge”] in December 2012.  On 11 January 2013, the Judge dismissed the Plaintiff’s claim and ordered judgment be entered in favour of the Defendant in the sum of $730,147 for the computer claim and US$25,641 for the insurance claim. 

6. This is the Plaintiff’s appeal against that judgment.

The permissible scope of the appeal

7. In the Notice of Appeal, prepared by lawyers acting for the Plaintiff (when he was still legally aided), two grounds of appeal were advanced.  Though legal aid was discharged subsequently and the Plaintiff acted in person in the pursuit of his appeal, he did not file any supplemental notice of appeal or apply for amendment of his notice of appeal.

8. Instead, he attempted to advance some other grounds in his skeleton submissions lodged on 23 October 2015 (and the appeal was heard on 3 November 2015).  This was opposed by counsel for the Defendant.

9. By reason of Order 59 Rule 3(3) of the Rules of the High Court Cap 4A, the Plaintiff cannot rely on those grounds unless leave is granted by this court or a single judge.  The rule is applicable irrespective of whether a litigant acts in person or acts through lawyers.  It is important for parties to an appeal to observe this rule as the appellate process must be a focused one, with the preparation of appeal bundles and skeleton submissions as well as the court’s pre-hearing reading concentrated on the grounds properly advanced in the notice of appeal and the respondent’s notice.  Further, the party must be able to assess the merit of the appeal by reference to the grounds set out in these notices and act accordingly (whether by way of preparation or pursuing alternative means to resolve the dispute). This is important for the furtherance of the underlying objectives in Order 1A in the Rules of the High Court.  Thus, it is inherently unfair if a party is lightly allowed to advance grounds to support or resist an appeal which has not been set out in the requisite notices. For these reasons, this court should not readily grant leave pursuant to this rule unless it can be satisfied that the opposite party is not prejudiced and that all the necessary materials are already included in the appeal bundles. The court will also take account of the readiness of the opposite party to respond to the new grounds as well as the court’s proper preparation for the appeal by way of pre-hearing reading. 

10. There is no acceptable explanation from the Plaintiff for not raising these new grounds earlier.  As we said, the rule is applicable to litigants in person as well as those represented by lawyers.  The fact that the Plaintiff also engaged in other interlocutory applications in this appeal cannot be an excuse.  As explained, the rule is there to serve the purpose of proper case management and as provided under Order 1A Rule 3, parties as well as lawyers have the duty to assist the court in the furtherance of the underlying objectives.  Compliance with the rules and directions given by the court is the minimum obligation in that respect. 

11. On 3 November 2015, after hearing submissions from the Plaintiff and Mr Ng, counsel for the Defendant, we refused to grant leave to the Plaintiff to rely on those other grounds. 

12. The first new ground, the allegation of illegality in respect of the insurance claim, was never advanced at the court below.  As we observed at the hearing, there was no plea of illegality in the Plaintiff’s pleadings.  Further, if the plea were advanced, more evidence would have to be adduced in respect of the transaction in question and the course of evidence could have been different in terms of the respective role of the parties in it.  The examination and cross-examination of the agent would have been substantially different.  On the materials before us, we cannot say that it is a clear case of illegal arrangement.  It is now too late to advance such a plea, see Flywin Co Ltd v Strong & Associates Ltd (2002) 5 HKCFAR 356; Cheung Sun Lam v Lai Kam Man CACV 148 of 2011, 18 March 2013. 

13. In respect of the grounds raised at paragraphs 42, 45 and 58 of the Plaintiff’s skeleton submission, on the materials before us we were not satisfied that they had been properly canvassed by counsel for the Plaintiff at the trial.  Nor were we satisfied that all necessary facts and materials were before us.  The appeal bundles were, as directed by the court, prepared by the Defendant.  The preparation was based on the grounds advanced in the Notice of Appeal and the additional documents lodged by the Plaintiff did not give us a full picture of the course of evidence and submissions at the trial in relation to these grounds.  In any event, we did not find those grounds provide reasonably arguable bases for suggesting that the Judge’s findings of fact were plainly wrong, which is the hurdle that the Plaintiff had to satisfy in an appeal against such findings, see Ting Kwok Keung v Tam Dick Yuen (2002) 5 HKCFAR 336; Bank of China (Hong Kong) Ltd v Tsang Sheung Bun [2013] 5 HKLRD 62; McGraddie v McGraddie [2013] 1 WLR 2477.

14. The last comment is also apposite in respect of the grounds raised at paragraphs 55 and 56.  At paragraph 32 of the judgment, the Judge referred to a number of reasons for rejecting the evidence of the Plaintiff and the so-called “danger” was only of peripheral significance.  Paragraph 56 of the Plaintiff’s submission is wholly misconceived as the decision of Au-yeung J was about different documents from those the Judge opined that the Plaintiff should have disclosed by way of discovery.

15. We shall therefore focus on the two grounds raised in the Notice of Appeal.  Both grounds relate to the computer claim.

The grounds in the Notice of Appeal

16. The Judge recorded at paragraph 37 of the judgment that she had confirmed with counsel on both side that the issues to be decided under the computer claim did not depend on the existence or otherwise of the 2008 Oral Agreement or the written Chinese Agreement.  The main issue was the agreed prices under which the computers were sold by the Defendant to the Plaintiff.  In that respect, the Judge preferred the evidence of the Defendant to that of the Plaintiff and found that the prices were set out in the I_MY invoices. 

17. We have examined the written agreement.  We do not accept the submission of the Plaintiff that the written Chinese agreement had already provided that the prices of the computers should be the same as the prices by which the Defendant obtained the same from his supplier.  He relied on the last sentence in that document, particularly the expression “機價全數” as representing that the prices charged by the Defendant would be the same as those of his own supplier.

18. The relevant part of that clause reads:

“ [The Plaintiff] 需於就所有機器提供學生證及機價全數…”

19. Literally speaking, that clause only required the Plaintiff to produce the relevant student proofs and the payment of the full purchase price.  It did not specify the prices to be paid.  The Plaintiff did not bring our attention to any part of the evidence (whether by way of his own evidence or the cross-examination of the Defendant) which supports his contention that the expression had the meaning he now attributed to it. 

20. Nor did the Plaintiff challenge the Judge’s record of what counsel had agreed at paragraph 37 of the judgment.

21. The Judge gave ample reasons for accepting the evidence of the Defendant and rejected the evidence of the Plaintiff before she came to her factual finding that the prices charged by the Defendant were those stated on the I_MY invoices. 

22. Bearing in mind what was said at paragraph 37 and what we said above, we do not regard the ground set out at paragraph 1 of the Notice of Appeal as good reason for upsetting the Judge’s findings.  That ground challenged the findings by the Judge because she regarded the agreements contended by the Plaintiff (the written Chines Agreement, the Lockout Agreement, the Termination Agreement) as only having peripheral significance in the case.  These agreements were disputed by the Defendant at the trial. 

23. In our judgment, the Plaintiff failed to have regard to the acceptance by his counsel that the outcome of the case did not turn on the agreements (as recorded at paragraph 37 of the judgment).  The central issue was the prices at which the computers were sold by the Defendant to the Plaintiff.  As analysed above, the written Chinese Agreement did not avail the Plaintiff in that regard.  The refund formula in the written Chinese Agreement was irrelevant when the amount due as outstanding purchase prices exceeded the deposit. 

24. The Judge explained at paragraphs 16 to 18 why she regarded these agreements as of peripheral significance.  In light of what had been said above, we do not regard the Judge erred in so holding.

25. At paragraph 44 of the judgment, the Judge took account of the Plaintiff’s reliance on the written Chinese Agreement and explained why she did not accept his case.  It is also plain from the last sentence of that paragraph the Judge preferred the evidence of the Defendant to those of the Plaintiff on the agreement as to prices.  We do not see any basis for suggesting that the Judge was plainly wrong in this regard.

26. Thus, paragraph 1 of the Notice of Appeal has no merit.

27. Turning to the ground of appeal in paragraph 2 of the Notice of Appeal, it challenges the Judge’s failure to consider the Jack Invoices and the I_MY invoices properly. 

28. For the Jack Invoices, the Plaintiff contended that the Judge should have found them to be evidence fabricated by the Defendant after the event by reason of the orientation of the company stamps on those invoices.  The Judge did not overlook this argument and she discussed it at paragraphs 38 and 39 of her judgment.  The Judge did not specifically refer to the orientation of the company stamps on the Jack Invoices.  However, the Judge was not obliged to set out in her judgment each and every point taken by the parties, see Eagil Trust Co Ltd v Pigott-Brown [1985] 3 All ER 119; English v Emery Reimbold & Strick Ltd [2002] 1 WLR 2409 at paragraphs 17-21; Welltus Ltd v Fornton Knitting Co Ltd [2013] 5 HKC 106 paragraphs 22 to 25.  She gave her judgment promptly and if the argument had been advanced by counsel for the Plaintiff at the trial, we do not believe she would have overlooked it.  The argument was advanced without any supporting evidence.  We must say that it is not a particularly cogent argument to support the serious allegation that the Defendant fabricated these Jack Invoices as evidence and we are not surprised that the Judge did not deem it necessary to comment on the same in her judgment.

29. The Plaintiff had made an application for the admission of fresh evidence on appeal in relation to this ground.  That application was unsuccessful as it was dismissed by Yuen JA on 7 July 2015. There was no appeal by the Plaintiff against that decision.  In the judgment of Yuen JA, she further explained why the Jack Invoices were only of peripheral relevance as the Judge principally relied on the I_MY invoices to come to her conclusion.  We respectfully agree.

30. For the I_MY invoices, the Plaintiff referred to the fact that the originals were still retained by the Defendant.  In the course of his evidence, the Defendant accepted he had confused about whether the original sets of the I_MY invoices as opposed to copies were sent to the Plaintiff.  It was open to the Judge to accept that explanation.  We do not regard this as a sufficient ground for us to conclude that the Judge was plainly wrong in her findings at paragraphs 39 and 40 of the judgment.

31. Hence, paragraph 2 of the Notice of Appeal cannot avail the Plaintiff.

Conclusion

32. For these reasons, we dismiss the appeal and order the Plaintiff to pay the Defendant’s costs of the appeal, such costs are to be taxed if not agreed.