BILL CHAO KEH LUNG v. DON XIA

CACV 425/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 425 OF 2002

(ON APPEAL FROM HCA 9289 OF 2000)

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J U D G M E N T

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Hon Cheung JA :

Application for leave to appeal

1. On 13 June 2003 we allowed the defendant's appeal and set aside the judgment that was entered against him. The plaintiff now applies for leave to appeal to the Court of Final Appeal.

2. The plaintiff's claim was for damages resulting from the defendant's repudiation of an agreement to sell shares to the plaintiff. The trial judge found in favour of the plaintiff and gave judgment for US$555,750.

3. At the appeal the issue was on liability only. As we reversed the trial judge's decision that there was repudiation and acceptance of the repudiation, we did not have to deal with the question of damages apart from a small item which was said to be independent from the claim for damages.

Appeal as of right

4. The plaintiff says that he is entitled as of right to appeal to the Court of Final Appeal under section 22(1)(a) of the Court of Final Appeal Ordinance.

5. It is clear that the agreement between the parties did not contain provisions on the amount recoverable or how damages were to be assessed in the event of non-performance by one of the parties. In this case the judge assessed the damages by reference to the market price of the shares at the contractual time for delivery less the contract price.

6. The Court of Final Appeal have in two cases, namely, Cheng Lai Kwan v. Nan Fang Textiles Ltd. (1997-98) 1 HKCFAR 204 and Shum Kam Fai v. Lam Chi Wai FAMV No. 38 of 2002 held that since section 22(1)(a) of the Court of Final Appeal Ordinance only gives an automatic right of appeal where the matter in dispute is of a precise figure, an award of unliquidated damages, even if it exceeds the $1 million threshold, does not qualify for an automatic right of appeal.

7. Shum Kam Fai illustrates this principle clearly. In that case this Court reduced an award for personal injuries from about $4,274,000 to about $1,160,000. It was held that the plaintiff did not have an automatic right of appeal because although the judgment was in excess of $1 million, it included an award for unliquidated damages. That amount was merely assessed and not liquidated.

8. This approach was followed by this Court in Poon Hau Kei v. Hsin Chong Construction Company Limited Taylor Woodrow International Ltd. Joint Venture CACV 167/2002.

9. It is clear that the dispute in question relates to a claim for unliquidated damages. The damages assessed by the judge, even if it exceeds the $1 million threshold will not turn it into a claim for a precise figure within the ambit of section 22(1)(a).

Amount at the time of the judgment

10. Mr. Scott S.C., counsel for the plaintiff, referred to Meghji Lakhamshi & Brothers v. Furniture Workshop [1954] A.C. 80 and Allan v. Pratt (1888) 18 A.C. 780 and argued that one should look at the value of subject matter by reference to the amount at the time of the judgment and if the amount exceeds $1 million then the plaintiff has the automatic right of appeal.

11. These two cases were based on the earlier decision of Macfarlane & Another v. Leclaire & another (1862) 15 Moore P.C.C. 181. Lord Chelmsford at page 187 held that

‘ In determining the question of the value of the matter in dispute upon which the right to appeal depends, their Lordships consider the correct course to adopt is to look at the judgment as it affects the interests of the parties who are prejudiced by it, and who seek to relieve themselves from it by an appeal. If their liability upon the judgment is of an amount sufficient to entitle them to appeal, they cannot be deprived of their right because the matter in dispute happens not to be of equal value to both parties; and, therefore, if the judgment had been in their favour, their adversary might possibly have had no power to question it by an appeal.'

12. I do not regard these cases as propounding a different principle from the one stated by the Court of Final Appeal. One still has to consider the nature of the damage. Macfarlane was concerned with whether a judgment creditor was entitled to execute on the property of a third party who had bought goods from the judgment debtor for a value which exceeded the threshold value provided for automatic right of appeal to the Privy Council. Meghji was a case where the value of the landed property in question exceeded the threshold value. Allan was a case where a plaintiff sought to recover damages for injuries at work. The amount claimed was within the appealable limit but was awarded an amount which was below the limit. The Privy Council held that where the amount recovered by the plaintiff falls short of the appealable amount, the court below cannot give leave. The Privy Council was not dealing with the same issue that was before the Court of Final Appeal or before this Court now.

Discretion

13. The Court of Final Appeal also recognized that there may be cases where one can say with certainty that the damages ultimately awarded may be in excess of the appealable amount and the court may consider it appropriate to grant leave. Conversely if the matter is so lacking in merit, leave should not be granted even if the appealable amount is exceeded.

14. In this case the damages assessed by the judge exceeds the appealable limit and Mr. Scott argued that leave to appeal should be granted.

15. We reversed the judge's finding on the repudiation by the defendant and acceptance of the repudiation by the plaintiff. This was based on the interpretation of the legal consequence that arose from the evidence adduced at the trial. Such evidence, in particular those concerning the acceptance of repudiation, was by way of contemporaneous correspondence between the parties. We fail to see that there is any merit in the appeal which justifies leave being granted.

Conclusion

16. Accordingly I will refuse leave to the plaintiff with costs to the defendant.

Hon Ma CJHC :

17. I agree with the reasons given by Cheung JA. I will only add that the case of Zuliani v. Veira [1994] 1 WLR 1149 marked a watershed in the way the Privy Council dealt with applications for leave involving monetary amounts. This decision has been followed in Hong Kong in a number of authorities and we are bound by the decisions of the Court of Final Appeal in this regard.

Hon Waung J :

18. I agree with the judgment of Cheung JA as well as the judgment of Ma CJHC.