STANDARD INC. LTD v. MTR CORPORATION LTD

CACV218-230/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 218 OF 2008

(ON APPEAL FROM HCA NO. 884 OF 2008)

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REASONS FOR JUDGMENT

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Hon Rogers VP:

1.  These were applications for leave to appeal to the Court of Final Appeal from judgments of this court dated 21 August 2008.  At the conclusion of the hearing of these applications leave was refused with reasons to be given in writing.

2.  The plaintiff, Everwin Inc. Ltd, is a company that was incorporated for the purposes of purchasing a flat in a development in Kowloon, the Arch.  The flat was Flat E, 39^th floor.  There are 12 other companies in similar situations and there is no dispute between the parties that the actions by those parties which are in similar form will stand or fall with this action.  Hence, in these reasons reference will only be made to the one action, although the reasons apply equally to the other actions.

3.  On 14 April 2005 the plaintiff signed a memorandum for sale and purchase of the flat at a price of $7,469,800.  A deposit of $373,490 was payable on signing with four further instalments of a like amount due on 18 April, May, July and November 2005.  Hence, on completion of payment of those instalments 25% of the price would have been paid.  The sale and purchase agreement was signed on 18 April 2005.

4.  The final instalment of the deposit payable on 18 November 2005 was never paid, and at that time the owners of the plaintiff were in communication with the vendors complaining that the price charged for the flat was too high.

5.  The full history of the matter is set out in the judgment of Deputy High Court Judge Gill dated 22 July 2008.  It suffices to say that the plaintiff not only never paid the final instalment of the deposit but failed to pay the full purchase price of the flat when the flat was ready for occupation.  On 11 April 2008 notice was given to the plaintiff that there had been default for more than 21 days and that the defendant was thereby holding the plaintiff to have repudiated the contract and the repudiation was accepted.  In consequence the defendant found a new buyer for the flat and on 26 April 2008 a contract was signed with a date for completion of the sale to the new purchaser of 26 August 2008.  In respect of the 12 other flats which are the subject of the other actions various completion dates were fixed between 27 July and 22 September 2008.

6.  On 20 May 2008 the plaintiff issued the writ in this action seeking, amongst other things, declarations that the agreement for sale and purchase said to be dated 18 April 2005 was subsisting and enforceable and that the purported termination of that agreement and the forfeiture by the defendant of the deposit was wrongful and in breach of agreement.

7.  Given the shortness of time before the completion of the sale to the new purchasers, it is hardly surprising that the defendant took immediate steps in respect of the action.  On 2 June 2008 a summons was issued under Order 14A and Order 18 rule 19 of the Rules of the High Court seeking dismissal of the action on the basis that the action was scandalous, frivolous or vexatious and an abuse of the process, and for a determination that the letter of 11 April 2008 constituted a valid notice to terminate the sale and purchase agreement.

8.  This was followed by the service of the statement of claim on 21 June 2008.  It was clear from that document that the grounds upon which the plaintiff relied to show that the termination of the sale and purchase agreement had been wrongful were that any breaches by the plaintiff had been waived by reason of three letters and also that the defendant was estopped from terminating the agreement by reason thereof.  The matter was fully considered by the judge in a lengthy and detailed judgment and there is no apparent reason to doubt its correctness.  The judge came to the following conclusion at the end of his judgment:

“Conclusion

83.       Taking away the smoke and mirrors put up by and for Everwin, this is in reality a simple case where a purchaser in a conveyancing transaction has to suffer the consequences of default in failing to show up to complete.

84.       It was given time to remedy that default but failed to take the opportunity.  That it claims now to be in a position to complete is to ignore the vendor’s prior rights to terminate the contractual relationship.

85.       The claim brought by Everwin is obviously unsustainable.

86.       In exercise of my power to do so I order a striking out of the statement of claim and indorsement.  I do so upon the grounds that they are frivolous and vexatious, under O.18 r.19(1)(b) and my inherent jurisdiction.  The action is dismissed.

87.       I order further that registration of the writ against the title to the property in question be vacated.”

9.  That judgment was given on 22 July 2008.  The order of the court was sealed on 28 July 2008, but it was not until 8 August 2008 that the plaintiff filed a notice of appeal.  Given the imminent completion dates, it is again hardly surprising that, as soon as the case had been set down by the plaintiff, the defendant applied by notice filed on 12 August for the date for the hearing of the appeal to be fixed.  The defendant, the respondent to this appeal, then wrote to the court indicating that the matter was urgent and asked the court to fix an early date for the hearing of the appeal.  Since this court had a date available on 19 August, notice was given on 15 August that that date would be fixed for the hearing of the appeal.

10.  The appellant’s solicitors, the same day, wrote back indicating that they had immediately consulted their Senior Counsel, Mr Ronny K.W. Tong, but due to short notice, Mr Tong was not available on that date and they asked for an adjournment.  There was no mention on that occasion that there was any difficulty with regard to fees; it was simply that senior counsel was not available.  It was not even suggested that junior counsel was not available.  The court then wrote back and said that the hearing of the appeal would be postponed from 19 August, but that the court would sit on 19 August to give directions for hearing the appeal and it was anticipated that an early hearing date would be fixed, without reference to counsel's diaries, making it quite clear that these appeals would be ordered to come on very shortly.  On 19 August, I myself sat and gave directions that these appeals would be heard on 21 August.

11.  On the morning of 21 August the plaintiff’s solicitors applied for an order to cease to act in the case on the basis that they had not received costs on account.  Suffice it to say that the letter requesting those costs was dated the day before the hearing.  Their application was refused.  I would simply point out that the solicitors had filed the notices of appeal and had set the appeals down, and when seeking an adjournment of the hearing of 19 August no mention was made of any difficulty in obtaining costs on account.

12.  The hearing of this appeal was then called on and counsel who appeared on behalf of the plaintiff addressed the court on the basis that she had not been properly briefed for the substantive appeal hearing and asked to be excused from the appeal.  It was said that a representative of the plaintiff was in court.  The court refused to permit the representative of the plaintiff to address the court because the solicitors were still on the record and in view of that counsel asked for a short adjournment.  That was granted and when the matter was resumed counsel then informed the court that she had no instructions to appear on behalf of the appellant on the hearing of the appeal, but simply was instructed to request an adjournment.  She asked for a two hour adjournment so that counsel who had been involved in the case for could be contacted.  Counsel informed the court that the plaintiff’s directors had not given “concrete” instructions in the matter.

13.  Further adjournment for one hour was then granted, and when the court resumed at 11.45 am counsel informed the court that she had no instructions to proceed with the appeal.  In those circumstances although the court had sat to hear the appeal, the appellant, who was represented by both by solicitors and counsel, failed and refused to move the appeal.

14.  On this application the plaintiff seeks leave to appeal to the Court of Final Appeal on the basis of section 22(1)(a) of the Hong Kong Court of Final Appeal Ordinance Cap. 484 and on the basis that there are questions of great general or public importance or which otherwise ought to be submitted to the Court of Final Appeal.

15.  In my view in the circumstances prevailing an appeal to the Court of Final Appeal is not open to the plaintiff.  The plaintiff was given a hearing date for an appeal to this court, it attended by solicitors and counsel, but refused to move the appeal.  Metaphorically, if not in practice, it turned its back on this court.  Quite apart from the professional propriety of counsel appearing in court on the basis that she had instructions only to seek an adjournment but no further instructions, it appears to me to be an abuse of the process of the court for a litigant deliberately to refuse to present its appeal, and thereafter to seek to bring a further appeal.

16.  In so far as the plaintiff sought to rely on the decision in Ford v China Light & Power Co. Ltd & another [1997] 2 HKC 14 for the proposition that this court should have delivered reasoned judgement, that decision was based upon a concession of counsel that this court had in that case been in error in considering that it had no jurisdiction to consider the appeal.

17.  In contrast in this case this court not only considered that it did have jurisdiction, but sat specifically to hear the appeal.  The appeal was not moved.  It was not moved deliberately although it could and should have been moved by counsel who appeared in front of this court on the occasion that the court was sitting in order to hear the appeal.

18.  I have no doubt that this application for leave to appeal to the Court of Final Appeal is an abuse of the process of the court, and I content myself with saying that it is highly likely that these proceedings as a whole were an abuse of the process of the court designed to put the defendant in difficulties in exercising its rights in respect of the property.

Hon Le Pichon JA:

19.  I agree.

Hon Stone J:

20.  I respectfully agree with the judgment of the Vice President.

21.  It struck me as extraordinary that appellants which specifically declined to move the appeals against the judgment of Deputy Judge Gill on the date appointed for the hearing thereof now should think it appropriate to appear before this Court upon an apparently serious application for leave to appeal to the Court of Final Appeal.

22.  It also seemed extraordinary in the circumstances that Mr Leung, counsel for the appellants upon this application, should have been placed in the position in which he stated, in his first supplemental skeleton submission of 4 November (at paragraph 6), that:

“In the present appeal it was not clear as to the reasons for dismissals of the appeals as no reasoned judgment was given.  The appeals might be dismissed for either the reason of the Appellants/Applicant’s absence or on merits.  In any event it was not expressly mentioned that the appeals were dismissed on merits.”

23.  Even making due allowance for the fact that Mr Leung did not appear below, and that his clients had changed solicitors, it is regrettable that Mr Leung – who appeared to be aware (see his 1^st skeleton submission, at paragraph 21) that “no submissions were made in relation to the grounds of appeal set out in the Notice of Appeal” – should have seen fit to frame a question of great general or public importance which, as he put it (at paragraph 22) related “to practices of the Court of Appeal in respect of giving reasoned judgment…”

24.  Notwithstanding that consequent upon the formal dismissal of these unmoved appeals the engrossed Order of this court perhaps lacked specificity, and could, with the benefit of hindsight, have made the situation crystal clear, in my view it was unfortunate, in circumstances wherein it was as plain as a pikestaff to all parties why no reasoned judgment had been forthcoming, that counsel should have sought to elevate that fact into a reason underpinning the grant of leave to appeal to the Court of Final Appeal under the generic head of a question of “great general or public importance”.

25.  I agree with the observation of the Vice President that it is difficult not to conclude that this application for leave to take these actions to the highest court constituted, at bottom, an abuse of process.