SANDAY INVESTMENT LIMITED v. THIAM JOO (HK) LIMITED AND OTHERS

IN THE COURT OF APPEAL

On Appeal from the High Court of Justice

Action No. 5338 of 1984

BETWEEN

___________

JUDGMENT

___________

Mantell, J. : -

1. The background of this appeal is clearly and comprehensively set out in the judgment of the Court below. There LIU, J. entertained two appeals from decisions of different Masters by which the 1st and 3rd defendants to an action for breach of contract were granted unconditional leave to defend. The only question for the learned Judge was the true construction of a letter dated 11th April 1984 which purported to set out terms of settlement between the plaintiff and the three defendants. The successful contention before the Masters had been that it was reasonably arguable that the effect of the letter was not to impose any obligation on the 1st and 3rd defendants or, if it did, only in the event of the 2nd defendant having first transmitted to the 1st defendant the sum to be paid to the plaintiff. LIU, J. did not construe the letter in that way or accept that it was reasonably arguable that it should be construed in that way. Having set out the terms of the letter he found the language used for creating these obligations of the 1st defendant and the 2nd and 3rd defendants in paragraph 3 of the Settlement Agreement unobscure, and no necessity for referring to the commercial background or the matrix in the sense of the factual background known to the parties at or before the date of the contract. He did not think it necessary to pass on to consider whether or not conditional leave should be granted in view of his understanding of "these very simple and straight forward paragraphs".

2. We respectfully agree with and adopt the approach of the learned Judge. In our view the terms of settlement clearly do impose upon the 1st defendant a duty to pay the sum provided for and upon the 3rd defendant the duty to cause the 1st defendant to pay that sum.

3. If that have been all we would have given our reasons at the time of dismissing the appeal. But two further matters were argued before us. The first goes to the jurisdiction of the Judge to hear an appeal from the Master's grant of unconditional leave to defend and which we considered warranted the handing doom of a written judgment.

4. RSC Order 58 r. 1 provides :-

"(1) subject to the provisions of section 26 of the Legal Aid Ordinance an appeal shall lie to a judge in chambers from any judgment, order or decision of the Registrar.".

However section 14(3) of the Supreme Court Ordinance reads :

 

"No appeal shall lie -

It is said that the decisions of the Masters in this case were decisions of the High Court, see Purcell v. F.C. Trigell Ltd. & Another [1971] 1 Q.B. 358 C.A. and, therefore, notwithstanding the long established practice in Hong Kong, LIU, J. had no jurisdiction to entertain these appeals. It seems to us that two questions arise : (1) as to what appeals does section 14(3) of the Supreme Court Ordinance apply and, (2) what is meant by "High Court" in the context of the section.

5. That subsections 1 and 2 of section 14 only apply to appeals to the Court of Appeal is clear from their terms. In our judgment the words introducing the six categories set out under subsection 3 "no appeal shall lie" hark back to and should be read as following the introductory words to subsection 1, namely :-

 

"Subject to subsection 3 an appeal shall lie as of right to the Court of Appeal.".

The six cases under subsection 3 are therefore to be seen as exceptions to the general principle. It was so held in the unreported decision of Shing Top Trading Company (a firm) v. Kok Hing Wah trading as South Sea Trading Centre (a firm) (1983 No. 14907) in relation to an appeal from the Master on the question of costs under subsection 3(e). We take the view that s. 14(3) as a whole relates only to appeals from the High Court to the Court of Appeal and has no application in the present case.

6. In those circumstances it is not really necessary for us to go on to consider what is meant by the words "High Court" in the context of section 14 but having regard to the definition of "High Court" contained in section 4 of the Ordinance we are by no means sure that the reasoning in Purcell's case would lead us to a similar conclusion.   

7. The other point not taken before the learned Judge-but which we gave Mr. Mills-Owen leave to argue was that a passage in paragraph 5 of Mr. Wong Yu-wai's affirmation of 20th September 1984 was sufficient to support a claim for rectification of the agreement. The passage reads as follows :-

"It was the intention of all the parties to the alleged agreement which was drawn up by the plaintiff that the 1st defendant would act as agent to the 2nd defendant in channelling payments from the 2nd defendant to the plaintiff in Hong Kong and also the 1st defendant's only liability was to transfer to the plaintiff such funds as it received from the 2nd defendant and it had no liability to obtain or secure those funds from the 2nd defendant or from the 3rd defendant or to pay them from its own resources. All this was well-known to the plaintiff.".

8. From that passage Mr. Mills-Owen has attempted a revision of paragraph 3 of the terms of settlement which he argues if properly construed would not only afford a defence to the 1st defendant but to the 3rd defendant also. It is fundamental to a claim for rectification that there must be alleged a previous agreement between the parties with which the written instrument does not accord. We find the passage upon which Mr. Mills-Owen relies insufficient to the purpose.

9. For all the above reasons we dismissed this appeal with costs.