SIT SAU MING v. LEUNG MAY CHUN ALISON ALIANCE formerly known as SHAM MAY CHUN

DCCJ4453/2008

[2008] HKDC 1150

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 4453 OF 2008

--------------------

--------------------

-----------------------------

DECISION

-----------------------------

Introduction

1.  I handed down the judgment of this action on 12 December 2017 (“the Judgment”). The plaintiff sought an order for specific performance against the defendant pursuant to a sale and purchase agreement of 6 carparks. I gave judgment to the plaintiff. The defendant applied by way of summons filed on 9 January 2018 for leave to appeal.

2.  The defendant filed another summons for amendment on 23 February 2018. By consent, the defendant agreed to withdraw the said summons with costs to the plaintiff.

3.  I shall set out the facts of this case briefly.  The defendant was the registered owner of the land and premise known as parking lot nos 7, 15, 24, 25, 32 and 40 of the basement of Tung Lo Court, Nos 136-154 Tai Po Road; No 52-56 Shek Kip Mei Street, Hong Kong (“the 6 carpark spaces”). On 22 October 2007, they entered into a preliminary sale and purchase agreement, the defendant agreed to sell and the plaintiff agreed to purchase the 6 carpark spaces in consideration of HK$660,000.  The plaintiff paid HK$200,000 initial deposit to the defendant. Both the plaintiff and the defendant retained Messrs Gary Mak, Dennis Wong & Chang, solicitors (“MWC”) to do conveyancing.  On 2 November 2007, the parties entered into a formal sale and purchase agreement in the office of MWC.  The plaintiff paid further deposit in sum of HK$120,000 to the defendant and 3^rd deposit in sum of HK$180,000 to MWC as stakeholder.  The completion date was agreed to take place on or before 2 January 2008 and the balance of the purchase price, being HK$160,000, would be paid by the plaintiff to the defendant upon completion. The parties also agreed Part A, second schedule of the Conveyancing and Property Ordinance, Cap 219 was incorporated as part of the formal sale and purchase agreement.

4.  The dispute arose when MWC discovered title defects of the 6 carpark spaces. The plaintiff said the completion date was agreed to be postponed to 9 January 2008. The defendant disagreed and complained the plaintiff did not complete on 2 January 2008.

Legal principles on leave to appeal applications

5.  The legal principles on applications for leave to appeal are well settled.  Leave to appeal shall not be granted unless the court is satisfied the appeal has a reasonable prospect of success or there is some other reason in the interests of justice why the appeal should be heard. (See section 63A(2) of the District Court Ordinance, Cap 336)

6.  Reasonable prospect of success connotes the prospect of succeeding must be reasonable and more than fanciful, without having to be probable.  An applicant is required to show more than just an arguable case, but he does not have to demonstrate the appeal will probably succeed. Even if the court takes the view that there is a reasonable prospect of success, it still remains adiscretion as to whether to grant leave, though the fact that there is, ex hypothesi, a reasonable prospect of success would heavily influence the court in exercising its discretion. (See commentary of Hong Kong Civil Procedure 2018, §59/2A/4)

The grounds of appeal

7.  The defendant formulated 14 grounds of appeal in the Notice of Appeal against the Judgment.

The 1^st – 7^th grounds of appeal – the plaintiff and Tsang’s evidence

8.  The defendant submitted I was wrong in principle to have:

(i)   allowed Gordon Tsang (“Tsang”), the conveyancing executive of MWC to adopt his witness statement prepared and filed on behalf of MWC for the third party proceedings[1] where Tsang’s evidence was highly controversial and his credibility was put in issue;

(ii)   failed to consider Tsang had no reason to assist the plaintiff by putting up a case falsifying the completion date and thus  failed to order Tsang was an unbiased witness;

(iii)   failed to consider Tsang’s admissions[2]; and

(iv)   failed to consider Tsang’s evidence to have made up a falsifying case[3].

9.  The defendant submitted I was wrong in principle to have found Tsang’s evidence tallied with the plaintiff’s evidence, where the material assertions of Tsang was not supported but on the contrary contradicted by the plaintiff’s evidence. The defendant pointed out a number of inconsistencies[4]. On the strength of the 1^st – 5^th ground above, the defendant submitted I should have held the mutual agreement as alleged by the plaintiff to postpone the completion date is inherently improbable.

10.  I am also being criticized of not drawing adverse inference against Tsang or MWC from the facts of the title investigation.

11.  I do not see these ground of appeal has a reasonable prospect of success on appeal, the reason being, the defendant was duly represented and counsel was instructed at trial. No objection or concern has been raised by counsel for the defendant either prior or at the trial hearing. Counsel for the defendant has duly cross examined Tsang during trial.

12.  The defendant further criticized I have come to a wrong conclusion with the evidence heard at trial, namely, whether Tsang has falsified the mutual agreement of postponing the completion date. The issue is purely on credibility of witnesses. I am of the view that the appellate court should be slow to reverse the finding of fact unless the trial judge’s finding is plainly wrong(See: Ting Kwok Keung v. Tam Dick Yuen (2002) 5 HKCFAR 336). I do not see grounds 1 – 7 could demonstrate a reasonable prospect of success in the appeal and leave to appeal shall be refused.

The 8^th – 13^th grounds of appeal – the defendant’s evidence

13.  The defendant submitted I have erred to have rejected the defendant’s evidence. Firstly, I have no basis to reject the defendant’s evidence that the original statutory declaration was delivered at noon time on 2 January 2008. I should not have come to a conclusion that the defendant’s evidence is incredible by taking into account irrelevant matters and had rejected the defendant has not agreed to postpone the original completion date. Furthermore, I erred not to have directed myself to contemporaneous documents of the payment of deposits. I should have held there was no mutual agreement to postpone the original completion date.

14.  I shall repeat paragraph 12 of this decision hereinabove. I am not satisfied grounds 8 – 13 could demonstrate a reasonable prospect of success and leave to appeal shall be refused.

The 14^th ground of appeal – delay

15.  The defendant submitted judgment was rendered unsafe by reason of long delay of one year from the conclusion of trial to delivery of judgment. I have made mistakes, including but not limiting grounds 1 – 12 above:

(i)   It was the evidence of the plaintiff that she has paid the balance of purchase price HK$160,000 to MWC on 31December 2007 when she was in the belief that the completion was to take place on 2 January 2008 without knowing any title defect relation to the discrepancy in carpark spaces. I have erred in my finding that the said sum was paid on 8 January 2008 (see paragraphs 19 & 38 of the judgment) and further erred in an inconsistent finding that it was paid on 3 January 2008 (see paragraph 26 of the judgment).

(ii)   It was the evidence of the defendant that on 8 January 2008 the defendant in response to a call attended a firm of solicitors, it was the evidence of Tsang that the defendant had on that day attended Messrs. Kong & Cheng. I have misapprehended the evidence in paragraph 33 of my judgment as it was on 9 January 2008 the plaintiff attended the office of Messrs. Mak, Wong & Cheung and she has told the staff of Messrs. Mak Wong & Cheung that she has terminated the agreement.

(iii)   I have omitted to analyze the chronological events presented by Tsang that it was inherently improbable that Tsang could have told the plaintiff and the defendant of the title defects and was advised to seek independent representation. I have then erred to have found the defendant has not responded to Tsang’s proposal to postpone the completion date.

(iv)   I have failed to consider the dereliction of duty on the part of MWC or Tsang in investigation of title.

16.  The defendant submitted the Judgment was rendered unsafe by reason of long delay, i.e, one year from the conclusion of trial to the delivery of judgment resulted in various omissions, errors, misunderstandings and or inconsistencies. In Chow Sau Hei v. Ko Keung Yuen (unrep. CACV 112, 113 and 114/2013 [2014 HKEC 1124], Hon Cheung JA stated the following in paragraphs 7.7 – 7.8,

“7.7 The second complaint is a more substantial one. There is a lengthy delay of 16.5 months. One must, of course, recognise the exigency of work of a judge with a heavy list or, as in this case, a busy practitioner providing his service to the Judiciary on a temporary basis. However, while the question of delay must be considered in the context of the length and complexity of the case itself, one can safely say that the 16.5 months’ delay in this case is unreasonable. This Court in Welltus Ltd v Fornton Knitting Co Ltd [2013] 5 HKC 106, at 110E-112B reviewed the authorities and summarised the principles as follows :

“11. The importance of giving judgment promptly has recently been highlighted in several authorities in Hong Kong: Yeung May Wan v HKSAR (2005) 8 HKCFAR 137, [2005] HKCU 551 paras 116 to 125; Esquire (Electronics) Ltd v Hong Kong and Shanghai Banking Corp [2007] 3 HKLRD 439, [2006] HKCU 1705 at paras 3 to 7; Mak Kang Hoi v Ho Yuk Wah (2007) 10 HKCFAR 552, [2007] HKCU 567 at paras 56 to 66. In Yeung May Wan, the majority of the Court of Final Appeal said at para 124 (with the agreement of Bokhary PJ on this issue as well, see para 166),

... it must be clearly and firmly reiterated that judges at all levels of court have a duty to give judgments within a reasonable time after the conclusion of the hearing. This is important not only for ensuring that justice is done to the parties but also for the maintenance of public confidence in the Judiciary and the judicial system.’

12. In Mak Kang Hoi paras 57 to 59, Mortimer NPJ set out what an appellant court must be satisfied before acceding to a request to set aside a judgment on the ground of delay,

57. First, it is necessary to note that even delay of this length cannot alone succeed as a ground of appeal in the absence of it being shown that there are omissions, errors, misunderstandings, inconsistencies and the like which invalidate the Recorder’s findings, render the judgment unsafe, and have led to injustice to the Appellant.

58. Delay of this nature therefore increases the burden on an appellate court. Necessarily it must be vigilant to ensure that the decision and reasoning have not been harmed in any significant or fatal way by the passage of time. Counsel’s submissions and the evidence require detailed examination.

59. On the other hand, much as an appellate court may deplore delay of the length here shown, to overturn an otherwise sound judgment simply on delay would amount to a greater injustice than the delay itself.’

13. In short, there must be grounds for believing that the judgment contains errors that are probably, or possibly, attributable to the delay.

14. In that case, the Court of Final Appeal agreed with the Court of Appeal that a judgment delivered 30 months after the conclusion of the trial should not be set aside because, as observed by Rogers VP in the Court of Appeal, ‘the judgment itself demonstrates that far from the judge not recollecting the events and issues at the trial, her concise and precise reasoning demonstrates that she was fully aware of all the facts and matters and, indeed, the events of the trial’.

15. In contrast, in Esquire, the Court of Appeal set aside a judgment delivered 16 months after the end of the trial where ‘there are areas which clearly lead to the conclusion that the judge must have forgotten important conclusions to which he had arrived in the course of the hearing the case’ and ‘the lapses in this case ... are almost certainly attributable to the delay in the preparation of the judgment having led the judge to forget important factors and the conclusions to which he arrived as a result of them’. That was a trial which lasted for 24 days.

16. Thus, it is not the mere lapse of time which gives rise to a ground of appeal. There has to be grounds for believing that the judgment is unsafe on account of errors attributable to the delay. In many instances whether such grounds exist will depend on the adequacy and cogency of reasons set out in the judgment.’

7.8 The appellate court’s approach in considering factual challenges to cases involving delayed judgments is that a higher degree of scrutiny is required than the usual cases involving factual challenges. This approach has been considered in the English case of Goose v Wilson Sandford & Co. unreported, Court of Appeal (Civil Division) 13 February 1998 which was also adopted by the Australian courts in R v Maxwell, unreported, Court of Criminal Appeal 23 December 1998 and Laminex (Australia) Pty Ltd v Smeeth [1999] NSWCA 462 at sub-section 6-9 :

113. Because of the delay in giving judgment, it has been incumbent on us to look with especial care at any finding of fact which is now challenged. In ordinary circumstances where there is a conflict of evidence a judge who has seen and heard the witnesses has an advantage, denied to an appellate court, which is likely to prove decisive on an appeal unless it can be shown that he failed to use, or misused, this advantage. We do not lose sight of the fact that the judge had transcripts of the evidence, as well as very extensive written submissions from counsel. But the very fact of the huge delay in itself weakened the judge’s advantage, and this consideration had to be taken into account when we reviewed the material which was before the judge. In a case as complex as this, it is not uncommon for a judge to form an initial impression of the likely result at the end of the evidence, but when he has come to study the evidence (both oral and written) and the submissions he has received with greater care, he will then go back to consider the effect the witnesses made on him when they gave evidence about the matters that are not troubling him. At a distance of 20 months, Harman J denied himself the opportunity of making this further check in any meaningful way.’ (emphasis added)

7.9  This is a sound approach and the Court will adopt the same approach in this appeal.  I would only repeat that it is a blot on the administration of justice for a judgment to be delayed.  The sooner the judgment is delivered the better it is for all parties concerned.”

17.  In a recent case Allied Success Creation Ltd v. Cheung Hon Kuen [2015] 5 HKLRD 355, Kwan JA stated in paragraphs 18 – 19:

“18. Where it is sought to argue on appeal that the judgment contains errors probably attributable to inordinate delay in delivering the judgment, the approach of the appeal court is that a higher degree of scrutiny is required than the usual cases involving factual challenges. The substantial delay in itself must have weakened the advantage of the trial judge of having seen and heard the witnesses, and this consideration has to be taken into account in reviewing the material which was before the judge (Chow Sau Hei v Ho Keung Yuen & Anr, CACV 112, 113 & 114/2013, 7 July 2014 at §7.8).

18.  I accept the length of time for handing down judgment from conclusion of trial, which is 12 months, was more than reasonable. Coupled with the inconsistencies pointed out by the defendant under this head, I am satisfied this ground of appeal against the Judgment is more than fanciful, with a reasonable prospect of success. It is fair to exercise my discretion to grant leave to appeal to the defendant.

Conclusion

19.  I allow the defendant’s application for leave to appeal against the Judgment on ground 14. Costs of the defendant’s summons filed on 9 January 2018 shall be in the cause of the appeal, with certificate for counsel, to be taxed if not agreed.