FONG CHAK KWAN v. ASCENTIC LTD AND OTHERS

CACV 358/2020

[2021] HKCA 1974

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 358 OF 2020

(ON APPEAL FROM HCPI NO. 242 OF 2016)

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D E C I S I O N

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Hon Cheung JA (giving the Decision of the Court) :

1.  There are two applications before us. The first is the notice of motion by the 3^rd defendant for leave to appeal to the Court of Final Appeal against our judgment of 5 August 2021. The second is the plaintiff’s summons to vary the costs order nisi of our judgment. We will deal with the applications on paper.

I.    Leave to appeal

2.  The 3^rd defendant set out three questions said to be of great general importance which would justify the granting of leave under section 22(1)(b) of the Hong Kong Court of Final Appeal Ordinance (‘HKCFAO’) (Cap. 484).

‘ Question 1

On a proper interpretation of the phrase ‘the damage was sustained … within the jurisdiction’ in Order 11, rule 1(1)(f) (‘Gateway (F)’) of the Rules of the High Court (Cap. 4A) (‘RHC’), whether ‘the damage’ is limited to direct damage (i.e. the damage done to an interest protected by law) or extends to indirect or consequential damage (i.e. the pecuniary expenditure or loss resulting from the direct damage)?  

Question 2

Whether it is correct for Court of Appeal to approach the obiter dicta of the majority view of the United Kingdom Supreme Court as if it were a decision of a court of coordinate jurisdiction, such that the same should be followed ‘unless [the Court of Appeal is] satisfied that it is clearly wrong’?  

Question 3

In considering Question 1 above, in light of the fact that Order 11, rule 1(1)(f) of the English Rules of Supreme Court as adopted in 1987 (upon which Gateway (F) is based) was intended to give effect to the jurisdiction provisions in Article 5(3) of the Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters 1968 (‘Convention’), whether the Hong Kong Court is entitled to consider the interpretations of Article 5(3) of the Convention given by the Court of Justice of the European Union (‘CJEU’) from time to time, including those that were given after 1987?’

3.     The 3^rd defendant also submitted that by reason of their great general or public importance, Questions 1 to 3 ought also to be submitted to the Court of Final Appeal on the ‘or otherwise’ limb of section 22(1)(b) of the HKCFAO.

II.   Our view

(1)   The three questions

4.  Question 1 in its abstract form may engage issues of great general or public importance but in the light of the current authorities, the question is not reasonably arguable.  We based our judgment on the earlier judgment of this Court in Dynasty Line Ltd v. Sakamoto Sia [2009] 4 HKLRD 454 which in turn was based on the long established authority of Metall and Rohstoff AG v Donaldson Lufkin & Jenrette Inc [1990] 1 QB 391.  The majority decision of the UK Supreme Court in Brownlie v. Four Seasons Holdings Inc [2018] 1 WLR 192 (‘Brownlie (No. 1)’) approved of Metall.  The Supreme Court recently in FS Cairo (Nile Plaza) LLC v Lady Brownlie (as Dependant and Executrix of Professor Sir Ian Brownlie CBE QC) [2021] UKSC 45 adopted the majority view of Brownlie (No. 1).  Based on the existing authorities, this issue is beyond challenge.

5.  The majority view of Brownlie (No. 1), which we recognized to be an obiter dictum, had comprehensively reviewed the authorities under Gateway (F).  The judgment of the UK Supreme Court is, of course, not binding on us in terms of precedent but where it has addressed the similar gateway and decided on the very same point this Court was asked to decide, it must be properly regarded as a persuasive authority of the highest order.  Our view expressed in [36] of our judgment must be understood in that context.  In any event, Question 2 is academic and no longer reasonably arguable as a result of the latest Supreme Court decision.

6.  Question 3 is academic in nature and is not reasonably arguable.

(2)   The ‘or otherwise’ limb

7.  The usual practice of this Court is to defer the consideration of this limb to the Court of Final Appeal.  However, in view of our decision on the three questions, this ground is academic and also not reasonably arguable.

(3)     Order

8.  In respect of the application for leave, the written submissions of the 3^rd defendant referred to 51 authorities when the issues related to the three questions which fall within a narrow compass.  This excessive approach is unnecessary and appears to be a constant theme in this case.  The lack of discipline is regrettable.

9.  The application is dismissed with costs to the plaintiff with certificate for two counsel.  The plaintiff’s own costs are to be taxed according to the Legal Aid Regulations (Cap. 91A).

III.   Variation of costs

(1)   Without prejudice correspondence

10.  In our judgment, we made an order nisi that the Board is to pay 80% of the plaintiff’s costs of the appeal in order to reflect the Board’s success on Gateway (C) and Gateway (D).  The plaintiff now applies to vary the costs order nisi to ‘the 3^rd defendant shall pay 100% of the plaintiff’s costs of and occasioned by the appeal against the judgment of the Honourable Madam Justice Marlene Ng dated 29 April 2020, including all costs reserved if any, on an indemnity basis, to be taxed if not agreed’. 

11.  The plaintiff relied on the without prejudice except as to costs correspondence between the solicitors of the plaintiff and the 3^rd defendant.

12.  It is plain that the relevance of the correspondence is to the costs below rather than this appeal.  We do not see how it would assist us in any way in the plaintiff’s application to vary the costs order nisi.  [74] of our judgment is self‑explanatory.

(2)   Order

13.  The application is dismissed with costs to the 3^rd defendant.  The plaintiff’s own costs are to be taxed according to the Legal Aid Regulations (Cap. 91A).