STORE FRIENDLY SELF STORAGE GROUP LTD v. WALON ENTREPRENEURS LTD

CACV 101/2017

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 101 OF 2017

(ON APPEAL FROM HCA NO 499 of 2017)

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JUDGMENT

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Hon Lam VP (giving the Judgment of the Court):

1.  By a consent summons of 31 October 2017, the parties jointly asked this Court to make the following orders:

“ 1. The Defendant’s appeal (the “Appeal”) from the Decision and Order for Interim Injunction made by Hon Campbell-Moffat J dated 10 March 2017 (the “Injunction Order”) pursuant to the Plaintiff’s Summons filed on 2 March 2017 (the “Plaintiff’s Summons”) be allowed;

2. The Plaintiff’s Summons be dismissed and the Injunction Order be set aside;

3. The hearing of the Appeal fixed for 17 January 2018 at 10am before a panel of 2 Judges in the English Division be vacated;

4. The Defendant be released from the undertaking (as recorded in the Order of Hon Lam VP and Hon L Wong J dated 13 April 2017) to provide accounts to the Plaintiff up to the end of the expiry of the covenant on quarterly basis on oath;

5. The Plaintiff’s undertaking in damages (as recorded in the Injunction Order), (that if the Court later finds that the Injunction Order has caused loss to the Defendant or any other party and decides that the Defendant or that other party should be compensated for that loss, that the Plaintiff will comply with any order the court may make) do remain in place pending the determination of the Action No. HCA 499/2017 or until further order;

6. There be an inquiry as to damages; and

7. The Defendant’s costs of this appeal and the costs associated with and incidental to (i) the Defendant’s Summons in HCA 499/2017 dated 24 March 2017 for the discharge of the Injunction Order; (ii) the Defendant’s Summons in HCMP 778/2017 applying for leave from the Court of Appeal to appeal from the Injunction Order out of time dated 3 April 2017; and (iii) the Defendant’s Summons for leave to adduce new evidence on appeal, including but not limited to the execution of Orders thereof and all reserved costs, be to the Defendant agreed in the sum of HK$320,000 and be payable in 2 instalments in the following manner;-

a. the first instalment of HK$200,000 shall be paid within 7 working days of the signing of this Consent Summons, i.e. on or before 8 November 2017; and

b. the send (final) instalment of HK$120,000 shall be paid within 1 month after the date of the payment under paragraph 7(a) above.”

2.  The Court of Appeal will only allow an appeal, even by consent, when it is satisfied that it is appropriate to do so: see Johannesen v Cibean Development Co Ltd [1998] 2 HKC 616 at p.621H; Foskett on Compromise 8^th Edn (2015) paragraph 34-06.

3.  Further, by reason of Sections 34B and 35 of the High Court Ordinance, it is not within the power of a single justice of appeal to allow an appeal.  The procedure in PD 4.1 Section I only caters for dismissal of appeal by consent.  It cannot be utilized for seeking to have an appeal allowed by consent.

4.  In view of the underlying objectives in Order 1A, the Court can adopt practices which would save the parties from incurring unnecessary costs when the interest of justice is not compromised.

5.  The present case concerns with an interlocutory injunction, which parties now agreed to be set aside.

6.  Leave to appeal was granted by this Court on 13 April 2017 when the Court were satisfied that the appeal has reasonable prospect of success.

7.  In the circumstances, having assessed the merit based on materials now before the Court (including those placed before us in the leave application in HCMP 778 of 2017, subject to clarifications discussed below, the Court is satisfied that the appeal can be allowed by making an order by consent in terms of the consent summons of 31 October 2017.

8.  The Court raised these queries on 1 November 2017:

(a) the parties must confirm that they agree to have the appeal determined on the papers without any oral hearing before two judges;

(b) paragraph 6 of the summons provide for inquiry as to damages.  It is not clear to this Court if the inquiry as to damages is an inquiry pursuant to the plaintiff’s undertaking as to damages to compensate the defendant for damages incurred as a result of the injunction and it is accepted by the plaintiff that the injunction ought not to have been granted.  If it were so, parties should also clarify if the inquiry is to commence right away or be withheld pending the determination of HCA 499 of 2017.  If it were otherwise, parties should clarify the meaning and effect of paragraph 6.

9.  By a joint letter of 10 November 2017, the respective solicitors for the parties confirmed that the parties agreed to have the matter processed on the papers by two judges.

10.  Further, they confirmed that the inquiry as to damages is pursuant to the Plaintiff’s undertaking as to damages to compensate the Defendant for damages incurred as a result of the injunction as the injunction ought not to have been granted.

11.  They also confirmed that the inquiry shall be withheld pending the determination of HCA 499 of 2017.

12.  On these bases, we make an order in terms of the consent summons.