Luan Gang v. Simpson Marine Ltd

CACV 142/2016

[2018] HKCA 636

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 142 OF 2016

(ON APPEAL FROM HCA NO 107 OF 2011 AND

HCAJ NO 171 OF 2011)

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HCA 107 /2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 107 OF 2011

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(By Original Action)

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(By Counterclaim)

AND

HCAJ 171/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ADMIRALTY ACTION NO HCAJ 171 OF 2011

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(Consolidated by Order of Reyes J on 1 June 2012)

Before: Hon Lam VP, Kwan JA and McWalters JA

Dates of Written Submissions: 6 and 28 August 2018

Date of Judgment: 21 September 2018

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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 27 April 2018, this court dismissed the appeal of the plaintiff, Luan Gang (“Luan”), against the judgment of Ng J handed down on 20 May 2016. The underlying dispute is in relation to the sale to Luan by the defendant, Simpson Marine Limited (“Simpson Marine”), of a pleasure craft (“the Yacht”).

2.The appeal was concerned with a single point, namely, the proper interpretation of a contractual term referred to in the judgments as “Clause 3”.  The full terms of this provision, written partly in Chinese and partly in English, were set out in §12 and footnotes 3 and 4 of our judgment ([2018] HKCA 228) and the rival contentions of the parties in §4.  We upheld the construction of the judge, namely, that the date of 12 July 2010 referred to in the provision was the date when the Yacht should arrive in Hong Kong, in readiness for the commissioning work to be carried out to put it in a deliverable state for eventual delivery to Luan, not the date when the Yacht should be delivered to Luan.

3.Luan filed a notice of motion on 22 June 2018 seeking leave to appeal to the Court of Final Appeal.  We have received the skeleton submissions in support and in opposition.  Luan chose not to lodge a submission in reply, as was made clear when his solicitors merely submitted a statement of costs for summary assessment on 11 September 2018, this being the date when the last round of skeleton submission was to be lodged.

4.Luan raised these three questions said to be of great general or public importance:

Question 1:  “In construing the terms of a contract, whether, in the absence of specific words stating a specific effect, it is open to the Court to extend the natural and ordinary meaning of a term to encompass a meaning that could only [sic] understood with knowledge of industry‑specific practices which had not been communicated to or explained to a party to the contract.”

Question 2:  “Whether, when construing the terms of a contract in which one party is dealing as consumer, regard may be had to: (1) A specialist understanding or meaning of the term which has not been communicated or explained to the consumer; (2) Evidence of industry‑specific or specialist practice when the same has not been communicated or explained to the consumer; (3) “Common sense” assumptions in relation to industry‑specific practices which have not been communicated or explained to the consumer.”

Question 3:  “Whether the Court is entitled to admit into evidence the Witness Statement of a witness who was unavailable for cross‑examination but whose evidence would have been critical and material, in that the witness was, at the time the contract was agreed and drafted: (1) the only person in the position to depose to and identify the objective, expressed intentions of the parties, (2) the only person in a position to depose to and identify the objective facts known (or which had been made known) to both parties; and by reason of the foregoing, the evidence of that witness would have enabled the Court to ascertain the facts and circumstances known or assumed by the parties at the time the contract was agreed and drafted.”

5.On behalf of Luan, it was submitted by Ms Janine Cheung and Ms Amanda Lee (neither had appeared for him at trial or on appeal) that all three questions should be answered in the negative.

Questions 1 and 2

6.What Luan’s counsel have sought to do in this application is to argue again the grounds and matters that had been canvassed in the appeal, instead of focusing on whether grounds have been made out for the intended appeal to be heard by the Court of Final Appeal, as stipulated in Practice Direction 2.1 §3(e).

7.We do not think genuine questions of law are raised in Questions 1 and 2.  Question 2 is just another way of raising the same issue as in Question 1.

8.The underlying premise of these questions is that the construction adopted by the court had “extended” the ordinary and natural meaning of Clause 3 to encompass a meaning that is “industry-specific” and which had not been communicated or explained to Luan.  We do not think our construction would have any such effect, for the reasons given in §§26 to 30 of our judgment.  Nor was our construction of the ordinary and natural meaning of the language of Clause 3 informed by any “industry‑specific or specialist practice”, as contended on Luan’s behalf.  For the reasons given in §33 of our judgment, it would be contrary to commercial common sense to construe the date of 12 July 2010 in Clause 3 as providing for the deadline of completion of commissioning after the offloading of the Yacht in Hong Kong.

9.We do not find the contentions made on Luan’s behalf reasonably arguable.  In any event, Clause 3 is a unique contractual provision, and Questions 1 and 2, which are case‑specific, do not raise any question of great general or public importance.

Question 3

10.This relates to the admission of the witness statement of Angel Zhou (who was referred to in §6 of our judgment), which we did not find necessary to deal with (see §35 of our judgment).

11.This can hardly give rise to any question of great general or public importance.  Besides, any evidence this witness might have given on the “expressed” intentions of the parties but not stated in the contract, would not be admissible evidence in construing the contract.  Further, it was not even mentioned in the notice of motion or the submissions what specific evidence could have been given by this witness on the “objective facts known (or which had been made known) to both parties” that the witnesses who testified at trial did not cover.

Conclusion and orders

12.As Luan has failed to satisfy this court he has raised any question of great general or public importance, we decline to exercise our discretion to grant leave to appeal to the Court of Final Appeal.  We also decline to grant leave on the “or otherwise” limb.  We discern no exceptional circumstances to warrant the exercise of discretion under this limb.  His application is dismissed.

13.Costs of this application should follow the event.  We order Luan to pay the costs of Simpson Marine and assess costs summarily in the sum of $107,291.

Ms Janine Cheung and Ms Amanda W Y Lee, instructed by Ho Tse Wai & Partners, for the Plaintiff (by original action) and the 1^st Defendant (by counterclaim) in HCA 107/2011 and the Defendant in HCAJ 171/2011 (Appellant)

Mr Edward Alder, instructed by Hill Dickinson Hong Kong, for the Defendant (by original action) and the Plaintiff (by counterclaim) in HCA 107/2011 and the Plaintiff in HCAJ 171/2011 (Respondent)