KO NGA CHUN v. COMPANHIA DE DESENVOL VIMENTO WUI SAN LIMITADA AND ANOTHER

HCA 277/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 277 OF 2012

_________________________

_________________________

_____________

DECISION
_____________

THE APPLICATION

1.  This is the plaintiff’s application for leave to adduce valuation report on the unencumbered market value of the land slot in Macau known as Nos. 14-17 Marginal da Ilha Verde, Estrada, Macau (“the Land”) as at (1) 18th January 2007 and (2) 10th January 2009.  The plaintiff says that a valuation by a jointly appointed surveyor is sufficient.[1]

2.  The Defendants submit that the expert evidence sought in the application is not necessary because it is irrelevant to the real issues between the parties.[2]

3.  The parties are legally represented.[3]

THE FACTUAL BACKGROUND

4.  For the purpose of the present application, it is only necessary to outline the skeleton of the relevant facts and issues between the parties for the trial as follows:

a. The disputes arise out of a sale and purchase of the Land between the 1^st defendant and Empresa De Fomento E Investimento Kong Cheong (Macau) Limitada ("Kong Cheong") where Kong Cheong as the vendor refused to assign the Land to the 1^st defendant and there had been litigation in Macau.

b. The plaintiff alleges that by an oral agreement between the plaintiff and the 2^nd defendant, a majority shareholder of the 1^st defendant, the defendants agreed to pay the plaintiff a fee of $95 million to the plaintiff upon the plaintiff having successfully assisted the defendants to obtain the Land by having Kong Cheong signed the transfer of the Land to the 1^st defendant.  This oral agreement was made in November 2008, which was evidenced by a written agreement in Chinese dated 10 January 2009.

c. With the assistance of the plaintiff, Kong Cheong had executed the transfer of the Land in favour of the 1^st defendant on 10 January 2009.[4]

d. The 2^nd defendant had only paid the plaintiff the amount of $10 million and had failed to pay the balance.

e. The plaintiff now claims against the defendants for the balance of $85 million.

f. However, the defendants deny the oral agreement in November 2008.[5]

g. The defendants say that the 2^nd defendant had never met the plaintiff.[6]

h. The defendants also say that the sale price for the Land had been paid by the 1^st defendant to Kong Cheong.

i. The 2^nd defendant had negotiated with a person called Ko Kan, who was the majority shareholder of Kong Cheong and the father of the plaintiff whereby they agreed orally that the defendants would pay Ko Kan $105 million provided that he procured the delivery of possession of the Land free of all encumbrances to the 1^st defendant.

j. Pursuant to the said oral agreement, the 2^nd defendants had paid Ko Kan a total sum of $25 million and had given three cheques of unnamed payee to Ko Kan.

k. The defendants say that Ko Kan had failed to clear the charges of the Land and delivered vacant possession of the Land to the 1^st defendant.

l. They now counterclaim against the plaintiff for the return of the three cheques.[7]

DISCUSSION

The live issues in dispute

5.  The plaintiff’s case and the defendants’ case are directly running counter to each other.  This is a fact-sensitive case,[8] a common view of the parties.[9]

6.  The defendants submit that the real issues for the trial are:

(a) Whether there was an oral agreement between the plaintiff and the defendants as alleged;

(b) Whether the plaintiff provided any consideration for the four cheques;

(c) Whether Ko Kan and the defendants reached the oral agreements in respect of the removal of the encumbrances on the Land; and

(d) Whether Ko Kan performed any part of the oral agreements.[10]

7.  The plaintiff does not dispute that the above are the issues in dispute for the trial.

The relevant legal principles

8.  It is clear that since the defendants oppose this application, the plaintiff has to obtain leave from this Court to adduce expert evidence under O.38, r.36 and the burden is on the plaintiff to show to this Court that the proposed expert evidence is relevant to the issues in dispute Majorette Hong Kong Ltd v Fullmore Corporation Ltd (unreported, HCA 1583/2008 and HCA 1599/2008, 23 June 2010, §7).  The court has to examine the pleadings to determine whether the proposed expert evidence is required in the pleaded case: Yeung Ga Wai v Lau Ming Shum (unreported,HCA 798/2004, 19 July 2012.)

The plaintiff’s reasons in support of this application

9.  Against the defendants’ objections, the plaintiff says:

“…The simple questions the trial judge would ask will be “what Land are we talking about?”, “how much was it worth?”, “what were the encumbrances and how much?”  For example, P would say that what D alleged is contrary to any commercial sense, because the judicial charges were as much as over HK$100m and the unencumbered value of the land was several hundreds of millions.  The payment of a mere HK$105m by D to Ko Kan plainly could not affect the discharge of the charges; and the payment of such a small sum should not enable D2 to ripe [sic] the benefit of the unencumbered value of several hundreds of millions. Knowing nothing about the Land and its value, the trial judge is simply not in a position to assess the merits such points, which are to be taken inevitably at trial.”[11]

10.  The identity of the Land is not in dispute.  The market price of the Land is not an issue in dispute for the trial although it may throw some light on its value and the amount of fee for the negotiation.  However, the amount of fee as agreed to be paid by the defendants to the plaintiff, again, is not in dispute. There is no issue whether the fee should cover the amount for freeing the encumbrances of the Land.  The meaning of the word “procure” can mean Ko Kan will cause the discharge of the charges by the chargor or other persons.

11.  Expert evidence must be confined to the live issues of dispute between the parties, which must be sought from the pleadings China Gold Finance Limited v CIL Holdings Limited & Ors (unreported, HCA2900/2001, 25 September 2012, at paras. 17-18.)  See also §21 of the Court of Final Appeal’s Decision in Kwok Chin Wing v 21 Holdings Ltd (formerly known as GFT Holdings Ltd, Capital Prosper Ltd and Rockapetta Holdings Ltd) & Another (2013) 16 HKCFAR 663 per the CJ.

Conclusion

12.  It is clear that the reasons given by the plaintiff in support of this application fail to satisfy the requirements under the above authorities.  As such, this application must be dismissed.

COSTS AND ORDER

13.  As to the costs of this application, including the costs reserved and the costs for today’s hearing, the plaintiff has no dispute that the costs should be paid to the defendants. She only disputes the amount in the statement of costs submitted by the defendants.  Summarily assessed under O.62, r.9A of the RHC, the costs for the defendants are $46,200, to be paid by the plaintiff to the defendants within 14 days from the date hereof.

14.  I shall now make an order in terms as follows:

a. The plaintiff’s summons be dismissed;

b. The costs of this application be as per paragraph 13 above.

CASE MANAGEMENT CONFERENCE

15.  I shall now give directions for the Case Management Conference, which has been ordered to be dealt with immediately after this hearing. I shall give the following directions for this matter:

(1) By consent, leave to the plaintiff to set down within 90 days for a 10-day trial before a judge alone in the fixture list in consultation with counsel’s diaries.  There be a pre-trial review before the trial judge for 30 minutes on a date 12 weeks before trial.  Parties shall prepare the agreed/certified translation of the Chinese documents, raise the issues of recusal of the trial judge, or related proceedings or actions, if any, and shall confirm the length of the trial by counsel in charge at the pre-trial review. At the setting down the plaintiff shall produce a letter to the Listing Clerk confirming that there are no outstanding interlocutory applications.  Before the pre-trial review, all interlocutory applications shall be listed to be heard by the Registrar.

(2) The plaintiff shall obtain leading counsel’s advice on the matter within 28 days from the date hereof and all interlocutory applications as may be advised shall be taken out within 14 days thereafter;

(3) Costs of this Case Management Conference be in the cause.