廣東順德展煒商貿有限公司 v. Sun Fung Timber Co Ltd
Read the full judgment text of HCCT 25/2019 on BabelCite. This 高等法院原訟法庭 judgment was delivered on 22 February 2022 before Hon Mimmie Chan J.
Construction and arbitration proceedings — Enforcement of arbitral award — Application to set aside enforcement order — Authority of alleged de facto managing director to bind company — Frauds and collusion allegations — Admissibility of affirmation evidence without cross-examination — Appellate standard for review of factual findings and exercise of discretion — High Court refused leave to appeal against decision setting aside leave to enforce arbitral award — Court found no authority of ST to bind Company, rejected fraud allegations as unsupported beyond bare denial, and emphasized applicant’s failure to seek cross-examination of witnesses — Established that appellate intervention on factual findings or exercise of discretion requires high threshold — Costs ordered on indemnity basis to respondent. The Applicant’s arguments largely repeated previously rejected submissions and no ground with reasonable prospect of success was found to grant leave.
Legal issues: Authority of ST as de facto managing director · Admissibility and weight of affirmation evidence without cross-examination · Standard for appellate review of factual findings and discretion
Outcome: Leave to appeal is refused
Cited by 5 cases · Cites 2 cases
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HCCT 25/2019 [2022] HKCFI 551 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE CONSTRUCTION AND ARBITRATION PROCEEDINGS NO 25 OF 2019 ____________________
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____________________ Before: Hon Mimmie Chan J in Chambers Dates of Written Submissions: 28 January 2022, 11 & 18 February 2022 Date of Decision: 22 February 2022 _____________ D E C I S I O N _____________ 1.On 29December 2021, this Court handed down a Decision to set aside an earlier order granting leave to enforce an arbitral award made on 19 May 2017. On 12 January 2022, the Applicant applied for leave to appeal against the Decision. The definitions and nomenclature of the Decision are adopted herein. 2.The grounds of the intended appeal are that the Court erred in law and/or on the evidence in arriving at the conclusions contained in the Decision. 3.Having considered the submissions made on behalf of the Applicant and the Respondent, I am not satisfied that the intended appeal has reasonable prospects of success, and decline to grant leave for the reasons set out below. 4.The arguments made for the Applicant are essentially repetition of the submissions made for the purpose of the hearing on 30 August 2021, which had been considered and rejected by the Court. 5.On the question of the authority of ST, and as pointed out in the Decision, this Court rejected the argument that ST had authority as the alleged de facto managing Director of the Company. The Court found on the evidence that there was no course of dealings between ST and GD/SW in marble, that the Contract was of a totally different nature and scale from the previous dealings between the Company and SW/GD in terms of quantity, products involved and the price involved, and further, that there was no valid, or clear and unequivocal, representation of the authority of ST to bind the Company on the basis of ST’s apparent authority. Reference can be made to paragraphs 20 to 24 of the Decision. 6.The Applicant sought to argue, again, that the Court should not have made findings on the basis of the affirmation evidence, and that the Applicant did not have the chance to cross-examine the witnesses who made the affirmations on behalf of the Company. The Applicant highlighted the fact that the claims made on behalf of the Company and as found by the Court concerned allegations of fraud, collusion and other similarly serious allegations. 7.These claims had been made from the start of all the relevant proceedings, including the application to set aside the Enforcement Order. Yet, the Applicant never applied for a hearing for the cross-examination of the relevant deponents, and was content to have the application to set aside the Enforcement Order proceed on the basis of the affirmations filed and served. Nor did it ever apply to have any of the deponents called at the hearing for cross-examination. As such, it lies ill in the mouth of the Applicant to complain that there was no chance for it to cross-examine any of the witnesses of the Company. 8.The Court noted, at paragraph 27 of the Decision, that the allegations of fraud and collusion are serious and have to be established by cogent evidence. However, the Court referred to the fact that the Applicant had only given extremely limited evidence to refute the serious allegations, apart from a bare denial. The Court also pointed out, at paragraphs 39 to 44 of the Decision, that in cases of fraud, it is open to and usually necessary for the Court to draw the proper inferences of fraud from the primary facts and from circumstantial evidence. In drawing the conclusions that it was more probable than not that GD was a party to ST’s plan to orchestrate the Award to enable ST and GD to receive valuable assets of the Company, that ST had acted entirely in furtherance of his own personal interests, rather than in the interests of the Company in entering into the Contract and consenting to the Award, and that ST was not acting in good faith, the Court pointed out that it was from “a holistic consideration of all the circumstantial materials and on the entirety of the evidence adduced”, including the timing of the Contract, its terms, and the Company’s usual business pattern and financial situation at the time of the Contract. 9.The intended appeal is against findings of facts and the exercise of the Court’s discretion. The threshold for such an appeal is high. 10.I am not satisfied and am not persuaded by the Applicant’s submissions, that in drawing any factual inference, the findings of the Court on the evidence can be said to be perverse, or irrational, or otherwise without the necessary evidential support, to be plainly wrong (Lee Yuk Shing v Dianoor [2016] 4 HKC 535 (CA); ZJW v SY CACV 10/2017, 1 December 2017; DP World Djibouti FZCO and ors v China Merchants Port Holdings Company Limited [2022] HKCA 84). Nor am I satisfied that the Court had failed to consider relevant evidence, or had taken into account irrelevant matters, such that the findings were plainly wrong in the context of any exercise of discretion. Nor has it been shown that the Court had erred in the application of any relevant legal principle. 11.Further, in the context of an appeal which involves an exercise of the judge’s discretion, the Court of Appeal highlighted again in DP World Djibouti FZCO and ors v China Merchants Port Holdings Company Limited the fact that an appellate court adopts a cautious approach in relation to the weight given by the judge to facts taken into account when exercising its discretion. The fact that the appellate court would have given more weight than the judge to one of the many factors to be taken into account in the exercise of the discretion is not a ground for interfering. 12.Since I am not satisfied that any of the grounds of appeal have reasonable prospects of success, leave to appeal is refused, with costs to the Company on indemnity basis, including certificate for Counsel. The order nisi for costs shall be made absolute unless application for variation is made within 14 days.
Mr Rimsky Yuen SC leading Mr Kenny Lin, instructed by Howell & Co, for the applicant Mr Anson Wong SC leading Mr Martin Kok, instructed by Yu & Associates, for the respondent | |||||||||||||||||||||||||||||
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