Wang Shuai v. Zhang Qiaohui

CACV 275/2023, [2024] HKCA 484

On appeal from [2023] HKCFI 2067

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 275 OF 2023

(ON APPEAL FROM HCA No. 64 of 2019)

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BETWEEN

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J U D G M E N T

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Hon Anthony Chan J (giving the Judgment of the Court)  :

1.This is the Defendant’s Notice of Motion filed on 23 April 2024 seeking leave to appeal to the Court of Final Appeal from the Judgment of this Court given on 26 March 2024 with Reasons for Judgment (“Reasons”)  dated 10 April 2024 ([2024] HKCA 304).

2.The Defendant has put forward two questions relying respectively on the first and second limbs of s 22(1)(b)  of the Hong Kong Court of Final Appeal Ordinance, Cap 484 as follows :

(1)  “Great general or public importance”: “Whether, in construing the provisions of an agreement for the sale and purchase of shares in a limited company with the acquisition of the land properties owned by the said limited company being an important underlying part of the said transaction, the court shall treat the said transaction in substance a conveyancing transaction of the said land properties and shall construe the said provisions accordingly.”

(2)  “Or otherwise”: “It was unfair to the Defendant where the said sale and purchase of the shares in HK Arts & Cultural Interchange Centre Limited (the “Company”)  was in substance a sale and purchase of the land properties owned by the Company.  The construction of the relevant sale and purchase agreement by the Court of Appeal disregarded such crucial background which led to the construction of the provisions of the sale and purchase agreement that the Subject Warranties applied to breaches committed before the sale and purchase agreement.”

3.In accordance with Practice Directions (2.1), [3], this application is dealt with and determined on paper.

4.We regret to say that there is no merit in either of the proposed questions.  This Court was alive to the fact that the acquisition of the Properties[1] was an important part of the transaction: Reasons, [3].  It was evident that the SPA provided for various aspects of the transaction, including the passing of good title to the Properties at completion.  The material terms of the SPA were clear and there was no inconsistency to be resolved by reference to the conveyancing context of the transaction: Reasons, [18] and [19]. 

5.The Defendant’s skeleton submissions ([7(b)])  suggested that Clause 2.1.5 of the SPA (no breach of Warranties from the date of the SPA)  conflicted with Clause (c)  under Part A of Schedule 4 (delivery of the Properties subject to the Tenancy Agreement).  As analysed in the Reasons, [44] to [46], this was an opportunistic point.  No answer can be found in the Defendant’s submissions which suggests otherwise.

6.The second question adds nothing of substance to the first.  It plainly fails to meet the threshold for the second limb: Liquidators of China Medical Technologies Inc v Tsang Tak Yung Samson (2020)  23 HKCFAR 145, [11].

7.In the premises, the Notice of Motion is dismissed.  The Plaintiff referred this Court to Huge Dragon Corp Ltd v Lung Mun Oasis (IO) [2014] 3 HKLRD 286 and seek an indemnity costs order against the Defendant.  In light of the total lack of merits in this application, we agree with the Plaintiff that it should never have been brought.  The costs of this application are awarded to the Plaintiff on indemnity basis, which are summarily assessed at HK$152,516 as per the Plaintiff’s statement of costs.

Mr Benny Lo and Mr Victor Chan, instructed by Terry Yeung & Lai, for the Plaintiff

Mr Kenneth CL Chan and Mr Raymond WN Tsui, instructed by Peter Mo & Co., for the Defendant

[1]  Adopting the nomenclature used in the Reasons.