LI HOI SANG v. CHAN LAP WING ALAN

DCCJ873/2009

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 873 OF 2009

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DECISION

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1.  This is the plaintiff’s application for leave to appeal against my judgment given on 22 October 2013 (“the Judgment”) where I dismissed the plaintiff’s claim against the defendant save that the plaintiff be entitled to $61,000 which was previously paid into court.

2.  The defendant opposes the application.

3.  The full background leading to the plaintiff’s application for leave to appeal has been set out in the Judgment which I will not repeat in this Decision.  For the sake of convenience, I shall also adopt the same terms and definitions referred to in the Judgment.

4.  In the Judgment I found, inter alia, that:-

(a) The issues to be determined at trial were framed via the Agreed List of Issues.  The plaintiff had the burden of proof to establish the matters referred to in the Agreed List of Issues in his favour;

(b) It was accepted by the parties that if the First Quotation was for $91,000 (save for item 17 thereof) which is inclusive of materials and labour and that there were no variations, the plaintiff would only be entitled to the remainder of $61,000;

(c) After trial, I found that the quoted price of $91,000 for decoration works at the Property as contained in the First Quotation was inclusive of material costs (matters relating to the Agreed List of Issues – 1^st Issue).  Additionally after trial, I found that the defendant did not instruct the plaintiff to vary the design and to change the materials stated in the First Quotation in the manner as provided by the plaintiff in Annex 1 of the Answer to F&BP (matters relating to the Agreed List of Issues – 2^nd Issue); and

(d) After trial, I found that given my findings relating to the Agreed List of Issues – 1^st and 2^nd Issues, the plaintiff’s claim for quantum meruit failed.  To be complete, I also found that given my findings relating to the Agreed List of Issues – 2^nd Issue and in particular my findings on the Expert Report and Updated Expert Report, the plaintiff’s claim for quantum meruit failed.

5.  It is from the above findings of fact that the plaintiff proposes to appeal against the Judgment.

Principles applicable to application for leave to appeal

6.  Section 63A(2) of the District Court Ordinance, Cap 336, provides:-

“Leave to appeal shall not be granted unless the judge, the master or the Court of Appeal hearing the application for leave is satisfied that:-

(a) the appeal has a reasonable prospect of success; or

(b) there is some other reason in the interests of justice why the appeal should be heard.”

7.  The burden is on the applying party to satisfy the court that the intended appeal fulfills the requirements of s 63A in order for leave to appeal be granted.

8.  There should be no dispute as to the proper test in whether granting leave to appeal as stated in Smith v Cosworth Casting Processes Ltd [1997] 1 WLR 1538 as to whether the applicant has a realistic prospect of success and Lord Woolf MR provided the following guidance for determining applications for leave to appeal:-

“1. The court will only refuse leave if satisfied that the applicant has no realistic prospect of succeeding on the appeal.  The test is not meant to be any different from that which is sometimes used, which is that the applicant has no arguable case.  Why however this court has decided to adopt the former phrase is because the use of the word “realistic” makes it clear that a fanciful prospect or an unrealistic argument is not sufficient.

2. The court can grant the application even if it is not so satisfied.  There can be many reasons for granting leave even if the court is not satisfied that the appeal has any prospect of success.  For example, the issue may be one which the court considers should in the public interest be examined by this court or, to be more specific, this court may take the view that the case raises an issue where the law requires clarifying.”

9.  I also remind myself of the decision by the court of Final Appeal in Ting Kwok Keung v Tam Dick Yuen [2002] 1 HKC 601 where the following was held by Bokhary PJ, namely:-

“42. Where the judgment turns on an issue of fact, the Court of Appeal must have regard to the nature of that issue of fact. And it must have regard to the advantages enjoyed by a trial judge who received the evidence on such an issue at first-hand, in other words, in whose presence the whole of the evidence unfolded in its living state. Such advantages can be, as Lord Shaw of Dunfermline put it in Clarke v Edinburgh Tramways [1919] SC (HL) 35 at p35, “sometimes broad and sometimes subtle.” The question for the Court of Appeal is whether, even though it does not enjoy the advantages enjoyed by the trial judge who received the evidence at first-hand, it is nevertheless satisfied that his conclusion on the facts is plainly wrong. The Court of Appeal should intervene if so satisfied. But if not so satisfied, the Court of Appeal should defer to the trial judge’s conclusion even if in some doubt as to its correctness.”

The intended appeal

10.  The plaintiff advanced the following 3 proposed grounds of appeal as summarized in the written submissions and in a detailed statement, namely:-

(1) The learned judge erred in his conclusion that the Quotation was inclusive of labour and materials;

(2) The learned judge’s conclusion that the defendant did not instruct the plaintiff to vary the design and to change the materials stated in the Quotation was against the weight of the evidence; and

(3) On a quantum meruit basis, the defendant has to pay the plaintiff the reasonable value of the work done at his request at the Property.

11.  Other than the plaintiff’s preliminary point which was a matter based on procedural law (to be discussed in this Decision), the plaintiff advanced no points of law in his opening submissions, closing submissions or at the leave to appeal hearing.

12.  I note that the proposed grounds of appeal relied on by the plaintiff are arguments that have already been advanced by them at trial and are grounds of appeal based on facts and not law.  In essence, the plaintiff is advancing this application on the basis that I have on all of the evidence that was before me come to an erroneous conclusion.  I have considered each of the plaintiff’s proposed grounds of appeal in turn before coming to this Decision.

13.  For the avoidance of doubt, the Quotation as referred to by Mr Yip was understood to mean the First Quotation as defined in the Judgment.

Preliminary point raised by the plaintiff

14.  In the plaintiff’s written submissions and in his verbal submissions at the outset of the hearing for this leave application, counsel for the plaintiff, Mr Francis Yip, raised a preliminary point that if the defendant intended to resist the plaintiff’s application for leave to appeal, the defendant shall within 14 days after the application is served on him, file in the Court of Appeal and serve on the applicant a statement as to why the application should not be granted.  Mr Yip relied upon O 59, r 2A of the Rules of the High Court for advancing the foregoing position and that since the defendant had failed to file such a statement as earlier referred to in compliance with O 59, r 2A, the defendant had no locus to be heard at the plaintiff’s leave application.

15.  In the defendant’s written submissions and also advanced at the outset of the defendant’s verbal submissions, counsel for the defendant, Mr King Wong, disagreed with the plaintiff’s preliminary point.  The plaintiff’s current application for leave to appeal is under O 58, r 2 of the Rules of the District Court and more specifically the application must be made to the trial judge under O 58, r 2(4) of the Rules of the District Court.

16.  O 59, r 2A Rules of the High Court is only engaged after an application to the Court of Appeal for leave to appeal is made.  However, the fact that the present application for leave to appeal from the District Court was yet to be concluded means that the defendant need not file any statement as to why the application for leave to appeal in the Court of Appeal should not be granted.  O 59, r 2A(4) Rules of the High Court is as follows:-

“A party who intends to resist an application under paragraph (1) made inter partes shall, within 14 days after the application is served on him, file in the Court of Appeal and serve on the applicant a statement as to why the application should not be granted.”

17.  I would also note that O 59, r 2A(4) Rules of the High Court relate to paragraph 8 of Practice Direction 4.1 – Civil Appeals.  Since references to “Court” at paragraph 8 of Practice Direction 4.1 – Civil Appeals refers to the Court of Appeal, any need for the respondent to file a statement as to why the application for leave to appeal is opposed relates to applications that are already in the Court of Appeal.

18.  Given the foregoing matters relating to the plaintiff’s preliminary point on the defendant’s locus at the hearing for leave to appeal, I determined that the defendant did not need to file a statement as to why the application for leave to appeal is opposed and therefore the defendant had locus to be heard at the hearing and to make submissions.

The first proposed ground of appeal

19.  In support of the first proposed ground of appeal, the plaintiff submitted that the evidence from the parties was that there was no universal practice that when the Chinese character “做” was used, the price would include labour and materials costs and this varied from company to company.  The First Quotation provided for specific items and that some of the items according to the joint expert were underpriced or substantially underpriced up to $32,300 in addition to the $61,000 that was the balance of payment already owed.  As such, Mr Yip asked rhetorically whether the plaintiff, a decoration contractor with 10 years of experience, would agree to take up such work under the First Quotation at a loss or substantial loss.

20.  During the trial of this action, apart from the documentary evidence upon which the parties invited the court to draw various inferences in favour of their respective cases, I also had the benefit of considering the relevant background, expert evidence and importantly the oral testimony of the witnesses.

21.  It was not disputed at all that the First Quotation was prepared by the plaintiff or a dispute raised on the finding in the Judgment that the First Quotation was prepared after the parties inspected the Property after an hour to an hour and a half discussing in relative detail and with particulars the works to be done in the context that both parties were quite familiar working with one another and with properties at Fairview Park.

22.  The plaintiff advanced various discrete points relating to the issue of the usage of the Chinese character “做” in the First Quotation is not inclusive of materials cost unless specified and this was the plaintiff’s practice and the defendant knew or ought to have known.

23.  These were matters already considered and dealt with in the Judgment in particular at paragraphs 51 to 62 in the context of the aforesaid background leading to the issue of the First Quotation, I am not convinced that I was plainly wrong in coming to those conclusions.

24.  The plaintiff also advanced the point that the First Quotation provided for specific items and that some of the items according to the joint expert were underpriced or substantially underpriced up to $32,300 in addition to the $61,000 that was the balance of payment already owed.  This point was also made in part based on criticisms of a few allegedly unpaid or only partially paid goods from the PRC for the First Quotation based on matters relating to the trade in such goods and a lack of supporting evidence.

25.  For reasons given in the Judgment and in particular my findings pertaining to the Expert Report and the Updated Expert Report show that there was not any underpricing, let alone any substantial underpricing.  Where necessary, I also refer to the reasons given in the Judgment in particular at paragraphs 55 to 60 and the fact that I refused to give weight to any of the witness statements relating to the plaintiff’s witnesses located in the PRC or such matters.  As such, I am not convinced that I was plainly wrong in coming to those conclusions.

26.  Given the foregoing matters, the plaintiff in fact did not take up the items of work as per the First Quotation at a loss, let alone a substantial loss.

27.  I am of the view that the plaintiff’s first proposed ground of appeal has no realistic prospect of succeeding and the Judgment will not be disturbed.

The second proposed ground of appeal

28.  In support of the second proposed ground of appeal, the plaintiff submitted that according to the Expert Report at paragraph 9.4, the expert opined that items 1, 10, 11, 18, 19, 21 and 22 were additional/variation works completed by the plaintiff and the expert assessed the reasonable value of the total additional or variation works at $32,300 in addition to the $61,000 that was the balance of payment already owed under the First Quotation.  As such, there was no reason for the plaintiff to agree to take up items of decoration work at an underprice or substantial underprice and therefore suffering a loss.

29.  As Mr King Wong pointed out, paragraph 9.4 of the Expert Report must be read in its entirety and I would add that paragraph 9.2 of the Expert Report must also be read to provide context:-

“9.2 The reasonable value of [the] original contract works completed by the plaintiff for items 1 to 16 is HK$84,500 (excluding item 17).

9.4 If the Judge determines that the above additional / variation works mentioned in above paragraphs 8.1, 8.10, 8.11, 8.18, 8.19, 8.21 and 8.22 (ie items 1, 10, 11, 18, 19, 21 and 22 of the Undated quotation and the Quotation dated 15 July 2007) (which is referred to as the First Quotation and the Second Quotation respectively in the Judgment) are valid additional / variation works and completed by the plaintiff, the reasonable value of the total additional / variation works for items 1 to 16 and 18 to 25 of the Undated quotation and the Quotation dated 15 July 2007 completed by the plaintiff is HK$32,300 (excluding item 17).”

30.  For reasons given in the Judgment and in particular my findings pertaining to the Agreed List of Issues – 2^nd Issue and detailed in my findings pertaining to the Expert Report and the Updated Expert Report, items 1, 10, 11, 18, 19, 21 and 22 were not additional/variation works.  As similarly stated in matters relating to the first proposed ground of appeal, the plaintiff in fact did not take up the items of work at a loss, let alone a substantial loss.

31.  I have made particular findings of fact in the Judgment in relation to the Agreed List of Issues – 2^nd Issue based on all of the circumstances and evidence in this case.  However, for the avoidance of doubt, I would add that paragraph 5.1 of the Expert Report contained the following statement despite my findings of fact relating to the Agreed List of Issue – 2^nd Issue were independently arrived at as found in paragraphs 65 and 66 of the Judgment.  Paragraph 5.1 of the Expert Report states as follows:-

“As alleged by the plaintiff, there were substantial variations / additional works and the original contract sum was changed from HK$91,000 to HK$636,500 which was almost 7 times of the original contract sum. There was a deposit of HK$31,000 (approx. 33% of the original contract sum) paid in advance. If the contract sum was changed substantially by variations / additional works, the contractor would usually request further deposit not only to finance the project easily but also to secure his payment. I cannot find such request in the documents.”

32.  I am of the view that the plaintiff’s second proposed ground of appeal has no realistic prospect of succeeding and the Judgment will not be disturbed.

The third proposed ground of appeal

33.  In support of the third proposed ground of appeal, the plaintiff submitted that on a quantum meruit basis the defendant must pay the plaintiff the reasonable value of work done at his request at the Property which should therefore be at the very least $32,300 for the additional work done which is in addition to the $61,000 that was the balance of payment already owed.

34.  For reasons given in the Judgment in particular my findings pertaining to paragraphs 108 to 110, as well as my aforementioned findings in relation the plaintiff’s first and second proposed grounds of appeal, I am of the view that the plaintiff’s third proposed ground of appeal has no realistic prospect of succeeding and the Judgment will not be disturbed.

35.  In short, if the First Quotation was found to be for $91,000 which is inclusive of materials and labour and that there were no variations, the plaintiff would only be entitled to the remainder of $61,000 being the balance of payment owed and already paid out to the plaintiff as per the Judgment with no quantum meruit claim being sustainable.  Mr Yip accepted this to be the position at trial and I see no difference or change in circumstances in the present application for leave to appeal.

Conclusion

36.  Having considered the submissions by both Mr Yip and Mr Wong and for the reasons above, the plaintiff has failed to show that the intended appeal has a reasonable prospect of success or that there is some other reason in the interests of justice that the appeal should be heard.  The application for leave to appeal is therefore dismissed.

37.  Costs should follow the event.  I make a costs order nisi that the plaintiff do pay the costs of this application with a certificate for counsel, such costs are to be taxed if not agreed.  The order nisi shall be made absolute after 14 days from the date of handing down of this Decision.