Natamon Protpakorn v. Citibank, N.A.

CACV 163/2013

[2018] HKCA 450

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 163 OF 2013

(ON APPEAL FROM HCCL 5 OF 2011)

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J U D G M E N T

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Hon Barma JA (giving the Judgment of the Court):

Introduction

1.By a judgment dated 22 October 2015, this court dismissed with costs the plaintiff’s appeal against the judgment of Harris J dated 5 July 2013, by which her claims against the defendant were dismissed.  The plaintiff has by its Notice of Motion dated 16 November 2015 applied for leave to appeal to the Court of Final Appeal pursuant to section 22(1)(b) of the Hong Kong Court of Final Appeal Ordinance, under both the “great general or public importance” limb and the “or otherwise” limbs of that section.  As agreed by the parties, the application has been dealt with on paper, on the basis of the written submissions lodged by them.  The delay in handing down this judgment is very much regretted.

The questions

2.By the notice of motion, the plaintiff suggests that there are five questions of great general or public importance, which it has formulated as follows:

“ As regards oral agreement or representations by a bank (‘Oral Agreement or Representations’), and clauses in the bank’s standard agreement (‘Bank’s Standard Agreement’) that are inconsistent with such Oral Agreement or Representations (‘Inconsistent Clauses’):-

1. Whether, either contractual agreement or the principle of promissory estoppel in Central Property Trust Ltd v High Trees House Ltd [1947] 1 KB 130 precludes a bank from relying on any Inconsistent Clauses without giving reasonable notice unless the bank has acquired (which is not alleged by the Bank) material fresh information after such Oral Agreement or Representations;

2. Whether the principle of repugnancy in Mendelssohn v Norman Ltd [1970] 1 QB 177, CA results in the Oral Agreement or Representations (as contained in or evidenced by the recorded telephone conversations between the parties) overriding any such Inconsistent Clauses, to the effect that the bank cannot rely thereon without giving reasonable notice unless the bank acquired (which is not alleged by the Bank) material fresh information after such Oral Agreement or Representations;

3. Whether the Court of Appeal was wrong to hold that it was a necessary precondition (‘Precondition’) to show that the parties must have intended to override the Bank’s Standard Agreement, and that, inferentially, the parties must have been aware of the terms of the Bank’s Standard Agreement, and in particular:

3.1 Whether the said Precondition now replaces, or otherwise imposes an additional prerequisite to, the principles as established in High Trees and Mendelssohn? or

3.2 Would this Precondition require the parties to have expressly addressed their minds as to whether the Bank’sStandard Agreement is to be overridden or displaced (and is therefore fact-sensitive depending on the parties’ actual intentions), or whether this test is applicable irrespective of the parties’ actual intentions (and therefore applies irrespective of the actual facts)?

4. Whether the Bank could rely on a standard clause in the Bank’s Standard Agreement, which purports to give a discretion to the Bank, such as to allow the Bank to act inconsistently with the said Oral Agreement or Representations?

5. Whether the judgment of the Court of Appeal should be set aside (a) by reason of its failure to address either arguments 1 and/or 2 above, both of which were placed before it or (b) for the reasons set out at 3 and 4 above?”

3.The plaintiff goes on to suggest that in the alternative, leave should be given on the “or otherwise” ground on the following basis:

“ FURTHER OR ALTERNATIVELY, in all the circumstances of this case, leave to appeal ought to be granted under the ‘or otherwise’ limb of section 22(1)(b) of the Ordinance, in that unless leave to appeal is granted, a serious miscarriage of justice would not be redressed for the following reasons:

6.1. The Court of Appeal held and proceeded on the basis of a concession by the plaintiff’s counsel which he in fact did not make; thereby resulting in the court not dealing with the plaintiff’s alternative submissions and all the authorities relied on;

6.2 Had the court not proceeded on the basis of such assumed concession, it should and would have dealt with the plaintiff’s submissions and all the authorities relied on.

7. Accordingly, whether the judgment of the Court of Appeal should be set aside for the reasons set out above?

The “GPI” limb

4.Questions 1 to 4 are all premised on there being an inconsistency between the “Oral Agreement or Representations” said to have been made, and the standard terms and conditions contained in the Bank’s FX Agreement on which the Bank sought to rely.  In our view, whether or not there is any such inconsistency (and, for the reasons explained in paragraphs 25 to 39 of our judgment, we do not think there was) is clearly something that is case-specific and fact-dependent, and as such is not a situation that lends itself to being a question of great general and public importance.  How the “Oral Agreement or Representations” are to be understood, and whether or not they can be regarded as inconsistent with or as overriding the terms of the FX Agreement, is very much dependent on the factual situation in the which the parties found themselves, and on the background and context in which the “Oral Agreement or Representations” were made.

5.The fact that the terms of the FX Agreement might be said to be common or standard in banker/customer documents and relationships, and that there might be frequent occasions on which bankers make oral statements to their customers, which might, depending on the facts of the case, give rise to an agreement or representation requiring modification of the standard terms, or limiting the bank’s ability to rely on its standard terms, does not detract from the reality that the outcome in any given case is very much fact-driven and context-specific, and does not elevate what is essentially a fact-specific question into one of great general and public importance.

6.In our view, for the reasons which we gave in our judgment, the background and context in which the “Oral Agreement and Representations”were made pointed clearly to the conclusion that what was said was merely intended to govern the strategy for foreign exchange trading by the plaintiff that would be permitted within the overall framework of the FX Agreement, and we do not, therefore, regard the arguments to be put forward as having reasonable prospects of success.

7.Insofar as it is suggested that this court introduced a new test (described by the plaintiff as the “effect of” test) as a precondition for the application of the doctrines of inconsistent agreement or estoppel, we do not think that this is the case—rather, the questions of what effect the “Oral Agreement and Representations” should be understood as having and whether or not they are inconsistent with the standard, or previously agreed, terms on which the bank seeks to rely are questions that need to be answered before going on (if necessary) to consider what (if any) the impact of such “Oral Agreement and Representations” is, so far as such standard or previously agreed terms are concerned.

8.Although it is fair to say that we did not, in our judgment, deal with the effect of the “entire agreement clause” in the FX Agreement, given our conclusions in relation to the “discretion clause”, it was not necessary for us to do so.

9.We therefore do not consider it appropriate to grant leave on the “great general or public importance” ground in respect of Questions 1 to 4, and it follows that leave should also be refused on this ground in respect of Question 5, which is predicated on the plaintiff succeeding on one or more of the preceding questions.

The “or otherwise” limb

10.So far as Questions 6 and 7 are concerned, the general practice of this court is not to grant leave to appeal on the basis of the “or otherwise”limb, as it is more appropriate to leave the question of whether leave should be granted to be determined by the Court of Final Appeal.  We propose to follow that practice here, and accordingly do not grant leave in respect of these questions either.

11.We would, however, point out that it does appear to us from what was said by Mr Joffe QC in his exchange with the court between pages 39K and 40K of the transcript of the hearing, that it was accepted that the estoppel argument could only arise if the representations and promises relied upon did not give rise to an agreement, and that such a situation could not readily be envisaged.  Moreover, the proper understanding of the effect of the representations or statements, having regard to the factual context and background, would seem to us to be the same, whether they are said to give rise to a concluded agreement, or to be simply promises that give rise to an estoppel.

12.We therefore dismiss the application, with costs to the defendant, to be taxed on the party and party basis if not agreed [OR, if statements of costs lodged, give directions for the plaintiff to state its objections, if any, and then assess on gross sum basis].

Written submissions by Mr Victor Joffe QC and Mr Nigel Aiken SC, leading Mr Kenneth Chow and Ms Anny Chak, instructed by Christine Tsang & Co, for the plaintiff (applicant)

Written submissions by Mr John Scott SC, leading Mr Martin Rogers and Ms Sally Ho, instructed by Davis Polk & Wardwell, for the defendant (respondent)