Master Universe Development Ltd v. Mass Ocean International Ltd and Others

HCMP 3312/2016, HCMP 3313/2016 AND HCMP 3314/2016

HCMP 3312/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 3312 OF 2016

(ON AN INTENDED APPEAL FROM HCA NO 1295 OF 2015)

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HCMP 3313/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 3313 OF 2016

(ON AN INTENDED APPEAL FROM HCA NO 1849 OF 2015)

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HCMP 3314/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 3314 OF 2016

(ON AN INTENDED APPEAL FROM HCA NO 1850 OF 2015)

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J U D G M E N T

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Hon Kwan JA (giving the judgment of the Court):

1.On 12 September 2016, Deputy High Court Judge Marlene Ng handed down her decision in HCA 1295/2015, HCA 1850/2015 and HCA 1849/2015 (“the Decision”) dismissing the summonses issued by D2 to 4 in HCA 1295/2015 and by D2 in HCA 1850/2015 and HCA 1849/2015 (collectively, “the defendants”) for combined applications under Order 14A and Order 18 rule 19(a) of the Rules of the High Court seeking the following orders:

(1)  the claims against the defendants be disposed of on a point of law;

(2)  the claims against the defendants be struck out as not disclosing any reasonable cause of action; and

(3)  judgment on their counterclaims.

2.The Decision ran into 56 pages.  Suffice it to say the judge dismissed the summonses with costs as she agreed with the plaintiffs in the three actions that enough has been asserted to warrant investigation into the validity of the Leases to determine whether they were sham transactions, that there are interwoven questions of fact and law which could not be decided without such investigation, and that the actions are not suitable for disposal under Order 14A[1].  She also held there are fact-sensitive issues for trial and that the defendants have not established a clear and obvious case for striking out[2].

3.The defendants applied for leave to appeal.  The judge dismissed their applications by a decision handed down on 14 November 2016 (“the Leave Decision”).

4.They have renewed their application for leave to appeal to the Court of Appeal by the summonses in the present proceedings issued on 28 November 2016.  A draft notice of appeal was annexed to each of the summonses raising eight grounds of appeal.  The grounds are identical to those considered by the judge in the Leave Decision.

5.Both sides have served skeleton submissions and the authorities relied on, pursuant to the directions of the court given on 29 November.

6.Under Order 59 rule 2A(5)(a), the Court of Appeal is empowered to determine this application without a hearing on the basis of written submissions only.

7.The defendants contended that leave to appeal should not be refused without an oral hearing as this court “cannot properly arrive at that conclusion without hearing [their] detailed submissions on the relevant authorities and analysis of the Plaintiffs’ pleadings and affirmations”.

8.We do not accept this. The judge has given two very detailed judgments dealing with the submissions of Mr Michael Yin, who appeared for the defendants throughout.  In seeking leave to appeal, it is incumbent on counsel to demonstrate in what respect the judge is said to have erred in law or in fact, and he should not just repeat the submissions made below that had been discussed and rejected by the judge.  An application for leave to appeal is not a dry run of the intended appeal.  We do not think any intricate point of law or fact is involved in the intended appeals that cannot be adequately canvassed in written submissions or that there is any need to supplement the same with detailed oral submissions.  We exercise our power under the rule mentioned above to determine this application on the basis of the written submissions without a hearing.

9.Under section 14AA(4) of the High Court Ordinance, Cap 4, leave to appeal shall not be granted unless the appeal has a reasonable prospect of success, or that there is some other reason in the interests of justice why the appeal should be heard.  The defendants relied on both limbs.  It is well established that reasonable prospect for this purpose involves the notion that the prospect of succeeding must be reasonable and therefore more than fanciful, without having to be probable.

10.Further, as pointed out in the Leave Decision at §6, the intended appeals are against the exercise of discretion of the judge under Order 14A and Order 18 rule 19(1)(a).  The Court of Appeal will not interfere with the exercise of discretion unless the judge has erred in principle or in law or is sufficiently plainly wrong that he must be taken to have exercised his discretion wrongly.

11.Having considered the submissions, we are in agreement with Mr David Wong, the solicitor for the plaintiffs, that the intended appeals smack of desperate attempts to avoid a trial on merits.  It has not been shown that the judge has erred in principle or in law, nor do we think the decision exceeds the generous ambit within which reasonable disagreement is possible or is in fact plainly wrong.  There is no proper basis to interfere with the Decision.

12.The judge has considered and rejected the grounds of appeal and has given full reasons in §§13 to 28 of the Leave Decision.  We agree with her reasons.  It is unnecessary to repeat them.

13.Mr Yin again sought to restrict the ambit of the plaintiffs’ case by making technical arguments on the pleadings.  We find his arguments singularly unattractive.  In any event, they have been thoroughly considered and rejected by the judge, see §§71, 75 to 79 of the Decision and §§13 to 17 of the Leave Decision.

14.As for factual issues for investigation at trial, we agree with the judge’s approach in §§80 to 87 of the Decision.  There is no error in law as regards the treatment of the plea that D2 to 4 were the alter egos of D1, for the reasons given in §§18 to 24 of the Leave Decision.

15.We have considered the authorities cited by Mr Yin.  We do not think they would advance the defendants’ arguments in the intended appeals.  There is no need to refer to any of them.

16.The application for leave to appeal is an exercise in futility.  The threshold requirement of reasonable prospect of success is plainly not met, nor is there any question of great general public importance as contended by the defendants such that there is some other reason in the interests of justice why the appeals should be heard.  As the application is wholly without merit, we dismiss the summons in each of the proceedings and pursuant to Order 59 rule 2A(8) further order that no party may under rule 2A(7) request the determination to be reconsidered at an oral hearing inter partes.

17.We make an order nisi that the relevant defendant or defendants should pay the plaintiff’s costs in each of the three proceedings.  The plaintiffs’ solicitors have submitted a statement of costs for summary assessment in the total sum of $58,020.  We will make a gross sum assessment on a global basis for all three proceedings.  Taking into account that the same grounds of appeal were relied on as those before the judge, we reduce the costs to $48,020.

18.Any party who wishes to seek a variation of the costs order nisi or the gross sum assessment should lodge a written submission within seven days hereof.  We give leave to the other party to respond within seven days thereafter.

Written submissions by Mr David Wong of Wong, Hui & Co, for the Plaintiff in HCMP 3312/2016, HCMP 3313/2016 and HCMP 3314/2016 (the Respondents)

Written submissions by Mr Michael Yin, instructed by Haldanes, for the 2^nd to 4^th Defendants in HCMP 3312/2016, the 2^nd Defendant in HCMP 3313/2016 and the 2^nd Defendant in HCMP 3314/2016 (the Applicants)

[1] The Decision, §84

[2] The Decision, §§87 and 92