Wing Ming Garment Factory Ltd v. Sanwa Trading (H.K.) Ltd

CACV 571/2021, [2023] HKCA 1198

On Appeal From [2021] HKCFI 3357

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 571 OF 2021

(ON APPEAL FROM HCA NO 1805 OF 2016)

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J U D G M E N T

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

1.On 1 June 2023, this Court gave its judgment (“the CA Judgment”) dismissing the Plaintiff (Wing Ming)’s appeal against the Judgment of Coleman J dated 16 November 2021 (“the CFI Judgment”).

2.By Amended Notice of Motion dated 17 August 2023, Wing Ming applies for leave to appeal the CA Judgment to the Court of Final Appeal.

3.The background facts of this case and the Court’s reasons for dismissing Wing Ming’s appeal have been set out in the CA Judgment and will not be repeated here. In this judgment, we shall continue to use the expressions and abbreviations as defined in the CA Judgment.

4.In the Amended Notice of Motion, Wing Ming sets out 3 questions said to be questions involved in the intended appeal which, by reason of their great general or public importance, ought to be submitted to the Court of Final Appeal for decision. The 3 questions are as follows:

“1 Where in a title document parties have made a specific, definite and clear identification on the assignment plan as to the area to be conveyed, is it open to the court to rely on general provisions or textual descriptions in the assignment to override the specific, definite and clear identification?

2 Where a vendor has expressed an intention to sell property A which was not disputed and executed an assignment of property A and accepted by the purchaser, is it open to the court to infer from the conveyancing documents a different intention that the vendor in fact intended to convey property B to the purchaser and order rectification of the assignment on that basis?

3 Where an original owner has specifically reserved to himself a space and attributed undivided share to that space (covering both the Void and the original CPS-2 in the present case) by way of a Deed of Mutual Covenant, is it open to the court to interfere with that reservation without the consent of all the other owners in the building?”

5.Having considered the papers before us, we consider that it is appropriate to determine this application on paper without an oral hearing pursuant to §3 of Practice Direction 2.1.

6.Under s 22(1)(b) of the Hong Kong Court of Final Appeal Ordinance, Cap 484, an appeal shall lie to the Court of Final Appeal at the discretion of the Court of Appeal or the Court of Final Appeal in any civil cause or matter if, in the opinion of the Court of Appeal or the Court of Final Appeal (as the case may be), the question involved in the appeal is one which, by reason of its great general or public importance, or otherwise, ought to be submitted to the Court of Final Appeal for decision.

Question 1

7.The formulation of Question 1 is based on the incorrect premise that the Judge and the Court of Appeal held that the identification of the subject matter of the Assignment on the Assignment Plan was overridden by the general provisions or textual description in the Assignment. In fact, what was held by the Judge was that the true intention of Wing Ming was to sell, and Sanwa to purchase, 5 equal undivided shares together with the rights attached to those shares by the DMC, being the right to hold, use and occupy the Original CPS 2, and this common intention continued up to the time of the execution of the Assignment but was not properly reflected by the Assignment Plan. Thus, the Assignment Plan ought to be rectified to correctly reflect the true intention of the parties and show the correct location of the car parking space assigned to Sanwa[1]. The Court of Appeal upheld the above findings of the Judge. In particular, the Court of Appeal held that upon the true construction of the PSPA, the subject matter of the agreement for sale and purchase entered into between Wing Ming and Sanwa was the Original CPS 2 (not the “VOID” area in front of it as shown on the DMC Ground Floor Plan or, what amounts to the same thing, the Re-designated CPS 2 as shown on the Assignment Plan), and the Assignment Plan failed to reflect the true common intention of the parties as regards the subject matter of the Assignment, and hence should be rectified[2].

8.The principles of law concerning how a conflict between (i) the verbal description of a property in an assignment, and (ii) the delineation of the property on a plan attached to the assignment, ought to be resolved referred to in §5 of the Skeleton Submissions of the Plaintiff (Applicant) dated 16 August 2023 (“Wing Ming’s Skeleton Submissions”) are not germane or pertinent to the question of whether the Assignment Plan failed to correctly reflect the true common intention of the parties such that it ought to be rectified.

9.At §6 of Wing Ming’s Skeleton Submissions, Wing Ming contends that “the DMC … made it unquestionably clear that the original owner/Applicant had reserved to himself and agreed by every other owner of the building that he is entitled to 5 shares of the building which are attached to, and with them also entitled to exclusion possession of both the carpark and the ‘VOID’ area as defined under the DMC”. This contention of Wing Ming was rejected in a previous judgment of Reyes J[3], who found that, upon the true construction of the DMC, the “VOID” areas were common areas of the building. Reyes J’s judgment was upheld by the Court of Appeal[4], and the Court of Final Appeal refused to grant Wing Ming leave to appeal against the judgment of the Court of Appeal[5]. The finding that the “VOID” areas were common areas was subsequently acted upon by both Wing Ming and Sanwa, and in fact used by Wing Ming in its action against the IO in the Lands Tribunal in LDBM 89/2018[6]. Leaving aside the question of whether Wing Ming’s present challenge to the finding that the ‘VOID’ areas are common areas should be barred on the ground of issue estoppel/abuse of process[7] (which question Wing Ming has not addressed), the finding that the “VOID” areas are common areas is based on the true construction of the DMC and is necessarily fact-sensitive. It is well established that a fact-sensitive question is generally not regarded as a question of great general or public important for the purpose of s 22(1)(b) of the Hong Kong Court of Final Appeal Ordinance.

Question 2

10.Question 2 is based on the assumption that Wing Ming’s intention was to sell and Sanwa’s intention was to purchase the Re-designated CPS 2. This factual premise was rejected by both the Judge and this Court. At §8 of Wing Ming’s Skeleton Submissions, it is said that “Question 2 involves determination of parties’ intentions from conveyancing documents beyond the Assignment”. It is apparent from this submission that Question 2 does not raise any question of great general or public important, but is fact-sensitive.

11.At §12 of Wing Ming’s Skeleton Submissions, Wing Ming argues that it is well-settled that before ordering rectification, evidence of a high degree of conviction or convincing proof is required, and questions whether it is open to the court to rewrite the bargain and force the Applicant to convey something he never intended to convey by way of rectification. This argument is, in substance, the same argument that was advanced and referred to at §66(1) of the CA Judgment that the Judge’s finding regarding the parties’ intention was “equivocal”. However, as pointed out at §67 of the CA Judgment, the Judge had in fact made a specific finding that it was “a clear common intention that the subject-matter of the Assignment up to the time of its execution was not properly reflected by the Assignment Plan”.

12.At §13 of Wing Ming’s Skeleton Submissions, it is submitted that (i) Wing Ming could not convey what it did not have, and (ii) assuming that the Court of Appeal is right that the Re-designated CPS 2 did not exist and the “VOID” area was common area, it follows that the Applicant had failed to convey something he was entitled to convey, and thus the contract to sell should be void for lack of subject matter and there is no factual or legal basis to suggest the parties had in fact intended to convey a different area to Sanwa and ordered a rectification of the Assignment. This submission has no validity if, as found by the Judge and this Court, the common intention of the parties up to the time of the execution of the Assignment was to sell and purchase the Original CPS 2 which Wing Ming was plainly in a position to convey to Sanwa.

Question 3

13.This question is based on the same assumption that the “VOID” areas have been reserved to Wing Ming under the DMC, and are not common areas. We repeat our comment in §9 above.

14.In short, no question of great general or public importance is involved in the proposed appeal. We are also not satisfied that Wing Ming has shown that its intended appeal has a reasonable prospect of success.

15.In the Amended Notice of Motion, Wing Ming also seeks leave to appeal based on the “or otherwise” limb in s 22(1)(b) of the Hong Kong Court of Final Appeal Ordinance. The “or otherwise” limb is reserved for exceptional cases. Wing Ming’s arguments are, in substance, a repetition of those already advanced but rejected by the Court of Appeal in the CA Judgment. Wing Ming is merely seeking another chance to re-argue its case in the Court of Final Appeal. We do not consider that there is any special or exceptional circumstance in the present case to justify granting leave to appeal under the “or otherwise” limb. In any event, it is the settled practice of this Court to defer the question of whether leave to appeal should be granted on the “or otherwise” limb to the Appeal Committee of the Court of Final Appeal for their consideration. We see no good reason to depart from this practice in the present case.

16.Accordingly, the application for leave to appeal is refused and the Notice of Motion is dismissed.

17.Insofar as costs are concerned:

(1)  On 27 July 2023, the Court made an order that Sanwa shall have the costs of and incidental to the Consent Summons dated 27 July 2023, including all costs thrown away, with certificate for counsel, to be summarily assessed. We have considered the relevant items in Sanwa’s Statement of Costs dated 4 September 2023, namely, items D1, D2, D3, D4 and E1 thereof, and summarily assess the costs in the sum of HK$60,000.

(2)  We further order Wing Ming to pay the costs of the application for leave to appeal, excluding the costs referred to in (1) above, with certificate for 2 counsel, to be summarily assessed. We have considered the remaining items in Sanwa’s Statement of Costs dated 4 September 2023, and summarily assess the costs in the sum of HK$160,000.

(3)  For the avoidance of doubt, we have disallowed items D3 and D7 relating to the preparation of 2 costs statements. Such costs are generally not recoverable in a summary assessment (see §13 of Practice Direction 14.3).

Mr Ronny Tong, SC and Mr Lawrence Cheung, instructed by Howell & Co., for the Plaintiff

Mr Jonathan Chang, SC and Ms Esther Mak, instructed by Hampton, Winter & Glynn, for the Defendant