Kwai Tak Ming v. K.S. Capital One Ltd and Others
Read the full judgment text of CACV 132/2016 on BabelCite. This Court of Appeal judgment was delivered on 31 August 2017 before Lam VP, Cheung JA and G Lam J.
Civil appeal – leave to appeal to Court of Final Appeal – questions of great general and public importance – misrepresentation of present intention as to true nature of transaction – formal sale and purchase agreement – whether legal representation bars rescission for misrepresentation – whether pleading of fraudulent misrepresentation of intention adequate – distinction between misrepresentation about contents/effect of document and misrepresentation of intention – Court of Appeal civil appeal No. 132 of 2016 – Defendants' appeal against finding of misrepresentation had been dismissed by judgment of 12 June 2017 – Defendants applied for leave to appeal to Court of Final Appeal on three alleged GPI grounds plus an 'or otherwise' ground – first question concerned whether, absent allegation of negligence, fraud or misrepresentation by the Plaintiff's legal representative, it is open to a court to find the Plaintiff was subject to the Defendants' fraudulent misrepresentation of the true nature of the transaction – court held that the representation was one of present intention extraneous to the FS&P, not a representation about the document's contents or effect – court held there is no rule of law that legal representation prevents rescission for misrepresentation; reliance is a question of fact – second question concerned required particulars in a pleading of fraudulent misrepresentation of intention – court held the issue had already been addressed in the substantive judgment and the nub of the case had been pleaded at paragraph 83A of the Amended Statement of Claim – third question concerned the distinction between misrepresentation about the contents/effect of a document and misrepresentation made before execution about the document's legal effect – court held the distinction did not arise on the facts as the representation was one of intention regarding deployment of the agreements – court held no GPI question was raised by any of the three grounds – 'or otherwise' ground could not arise in the absence of a granted GPI ground – Notice of Motion dismissed – Defendants to pay the Plaintiff's costs fixed at $143,090.
Legal issues: Whether leave to appeal to the Court of Final Appeal should be granted on grounds of great general and public importance
Outcome: Leave to appeal to the Court of Final Appeal refused; Notice of Motion dismissed
Cited by 9 cases · Cites 3 cases
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CACV 132/2016 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CIVIL APPEAL NO 132 OF 2016 (ON APPEAL FROM HCA NO 679 of 2012) ________________________ BETWEEN
_______________________ Before : Hon Lam VP, Cheung JA and G Lam J in Court Dates of written submissions: 24 July 2017, 7 and 14 August 2017 Date of Judgment: 31 August 2017 _________________ JUDGMENT _________________ Hon Lam VP (giving the Judgment of the Court): 1.On 12 June 2017, we handed down our judgment dismissing the appeal brought by the Defendants. By a Notice of Motion of 10 July 2017, the Defendants applied for leave to appeal to the Court of Final Appeal on the basis of three questions which they contended to be questions of great general and public importance [“GPI grounds”]:
2.Further, the Defendants asked for leave to be granted on the “or otherwise” ground in respect of the following question:
3.In accordance with Practice Direction 2.1, written submissions were filed by the parties and we have read the same. In the submissions of Mr Cheung (counsel for the Defendants in this application), he clarified that the question under the “or otherwise” limb is not an independent ground. Instead, it premised on leave being granted on at least one of the GPI grounds and it only raised a “follow-up” issue for full disposal of the matter. 4.We shall first focus on the GPI grounds. 5.With respect, the way in which Mr Cheung (who did not appear at the substantive appeal before us) formulated these questions indicated that he did not fully understand the basis on which we upheld the judge’s finding of misrepresentation. The representation which the Defendants were held to have made was a representation of the then present intention with regard to the true nature of the whole transaction, viz it was not intended to be enforced as an outright sale[1]. Hence, it is not a “misrepresentation about the contents or meaning of a document” or “misrepresentation … about the effect which some document will have once effected”. The representation does not focus on the document to be executed, viz the provisional agreement and the Formal Sale and Purchase Agreement. Rather, the representation is about the intention on the part of the Defendants on how these documents would be deployed. 6.Hence, the fact that the Plaintiff was legally represented at the time of signing of the Formal Sale and Purchase Agreement is neither here nor there. The representation on intention stemmed from conversations and conducts extraneous to the document to which the solicitors were not privy. 7.There is no rule of law which prevents the court from setting aside an agreement procured by misrepresentation simply because it had been executed with legal representation. The authorities cited by Mr Cheung[2] do not support such a proposition of law. 8.Rather, it is a question of fact whether in light of legal representation the party who wishes to set aside the agreement had acted in reliance on the false representation. It was addressed by us at [88] to [89] of the judgment in light of the evidence summarized at [19]. 9.Thus, we do not regard Question (1) as raising any GPI question. 10.Question (2) sought to raise a pleading point. We have addressed the same at [78] to [83] of the judgment. See also [105]. We held that in the circumstances under which the plea was made, the case of the Plaintiff had been made clear to the Defendants. With respect, we cannot see the basis for suggesting Question (2) as raising a GPI question. 11.Further, the complaint of inadequacy of the pleadings is, with respect, somewhat hollow when the nub of the case on misrepresentation is that the Defendants falsely represented to the Plaintiff their intention of not using the agreements by way of an outright sale. That had been pleaded at para 83A of the Amended Statement of Claim. 12.Question (3) is difficult to follow. As we said earlier, the relevant representation is the representation as to the intention of the Defendants in respect of the use of the agreements. Mr Cheung referred to Cartwright, Misrepresentation, Mistake & Non-Disclosure 4th Edn paragraphs 3-24 and 10-14. It is similar to the point raised by Mr Wong SC at the appeal with regard to the distinction between a representation and a contractual promise, discussed at [73] of the judgment. On the facts, we held that it was a case of representation. No GPI question is involved. 13.Hence, there is no basis for the grant of leave on GPI ground. As such, on Mr Cheung’s own admission, Question (4) could not arise. 14.We therefore dismiss the Notice of Motion and order the Defendants to pay the costs of the Plaintiff in the motion. Having considered the statement of costs of the Plaintiff, we are of the view that given that the matter is disposed of on paper, the fees charged by counsel (who has been involved in the matter all along) is on the high side. We shall fix the costs of the Plaintiff at $143,090.
Mr Simon Ho, instructed by David Y. Y. Fung & Co, for the plaintiff Mr Matthew Cheung, instructed by KCL & Partners, for the defendants [1] See [67] to [80] and [106] to [127] of the judgment of 12 June 2017 [2] Bank of China (Hong Kong) Ltd v Fung Chin Kan (2002) 5 HKCFAR 515 at [51]; Wise Think Global Ltd v Finance Worldwide Ltd (2013) 16 HKCFAR 799 at [14] and [30] and Hui Cheung Fai v Daiwa Development Ltd HCA 1734 of 2009, 8 April 2014 at [101]. |
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