Hau Chat Tong v. Hau Chak Lam

DCCJ4772/2005

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 4772 OF 2005

(FORMERLY HIGH COURT ACTION NO. 3778 OF 2003)

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BETWEEN

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Coram : Deputy Judge C.P. Pang

Date of Handing Down Ruling : 27^th December 2006

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RULING

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1.This is the Defendant's application for leave to appeal against my judgment dated 13 October 2006 and for stay of execution of the judgment pending the appeal.

2.The Plaintiff claimed for a loan of $1,000,000 made to the Defendant in 1997. 

3.The Plaintiff, the Defendant and one Hau For Wan are full-blood brothers (the 3 brothers).  They jointly owned 2 plots of land in the New Territories (the first and the second property).

4.In 1997, the Defendant was in urgent need of money to settle a matrimonial claim by his divorced wife.  In order to help the Defendant, the first property was sold for $5,945,940.  Out of the sale proceed, $3,385,443 was used to settle the outstanding maintenance order, and $300,000 was used to pay costs of the Defendant's ex-wife's solicitors.  It was the Plaintiff's case that, taking into account other costs for sale of the first property, the Defendant should owe to each of the Plaintiff and Hau For Wan more than $1,000,000.

5.The Defendant subsequently transferred his share in the second property to the Plaintiff and Hau For Wan by a deed of assignment purportedly for a consideration of $250,000, which was not actually received by the Defendant.

6.In consideration of the Defendant's transfer of his share in the second property, the loan of more than $1,000,000 was rounded up to $1,000,000 to each of the Plaintiff and Hau For Wan.

7.The Defendant's case was simple: the loan was extinguished by the Defendant's transfer of his one-sixth share in the second property to the Plaintiff.

8.In my judgment, I accepted the Plaintiff's evidence as reliable and found, inter alia, that:

(i) The Defendant was originally indebted to the Plaintiff and Hau For Wan in the sum of $2,058,838.  Subsequently the 3 brothers reached an agreement that the Defendant would transfer his share in the second property, and in return the Plaintiff and Hau For Wan would reduce the loan to $1,000,000 each;

(ii) The Defendant's transfer of his share in the second property was not a full and final settlement of his indebtedness to the Plaintiff and Hau For Wan.

9.It is against the above findings of fact that the Defendant proposes to appeal.

10.The Defendant in his Draft Notice of Appeal advances 5 grounds of appeal which may be summarised as follows:-

(i) “The learned judge erred in holding that the possibility of building a  “ding House” on [the second property] and its uniqueness are not supported by any evidence”.

(ii) The learned judge erred in relying on the Plaintiff’s valuation report of [the second property] and in holding that the said property was a non-residential property.

(iii) The learned judge erred in a number of findings of facts including accepting oral evidence not pleaded or contradictory to the pleaded case.

(iv) The learned judge erred in relying on the demeanor of the Defendant in holding him as an evasive and unreliable witness and rejected the evidence of the Defendant without sufficient reasons.

(v) The learned judge erred in holding the amount of the loan as exceeding $1 million.

11.There is no dispute that the proper test in considering whether to grant leave to appeal is the one set out in Smith v Cosworth Casting Processes Ltd [1997] 1 WLR 1539, that is, whether the applicant has a realistic prospect of success.

12.The proposed grounds of appeal relied on by the Defendant are basically that I have come to a wrong conclusion in the light of the evidence before me.

13.The general principle is that the appellant court will be slow to disturb the findings of fact of the court below unless it is an exceptional case that the Court of Appeal is satisfied that the trial judge's conclusion is plainly wrong: Ting Kwok Keung v Tam Dick Yuen [2002] 1 HKC 601.

14.In A Solicitor v The Law Society of Hong Kong, unreported, CACV 302/2002, 18 February 2004, the Court of Appeal, having reviewed the relevant authorities, summarised the principle succintly at paragraph 19 of its judgment:

“(a) If the Court of Appeal is to reverse the trial judge’s decision on the facts, it “must not merely entertain doubt whether the decision below is right, but be convinced it is wrong”.

(b) The Court of Appeal will certainly not disturb the judge’s findings of primary fact where they are based on the credibility of the witnesses or the preference of the evidence of one witness for that of another because he enjoyed the advantages of receiving the evidence in its living state at first-hand.

(c) In order to disturb a finding of primary fact, the Court of Appeal has to be satisfied that the judge’s conclusion is plainly wrong in the sense that either (1) that there is no evidence to support it; or (2) that it is contrary to documentary or other incontrovertible evidence that the judge overlooked.  It is not enough to show there is little evidence to support the judge’s finding, or that it was “contrary to the weight of the evidence”.  The weight of the evidence is a matter for the trial judge.  It does not matter how many witnesses say one thing, and how few say the contrary.  The judge is perfectly entitled to prefer the evidence of the few to that of the many.”

15.Mr. Hui, Counsel for the Defendant, has put forward arguments in his written and oral submissions to suggest that I have taken into consideration irrelevant evidence and/or failed to consider relevant evidence sufficiently and correctly.  It appears to me that Mr. Hui has probably misunderstood the judgment or imputed his misunderstanding in the judgment.

16.In order not to give the impression of embellishing the judgment, I will not make clarification or elaboration of the judgment here.  Suffice it for me to say that the points raised by Mr. Hui have been considered by me in my judgment on 13 October 2006. 

17.The findings which I have made are findings of primary facts based on all the evidence including the documentary and oral evidence of all the witnesses.  Having considered all the evidence before me, I found the Plaintiff's evidence more reasonable and reliable than the Defendant's evidence.  I accepted the Plaintiff's evidence as facts of the case.

18.For the reasons I set out in the judgment, I found as a fact that the Defendant's transfer of his share in the second property was not a full and final settlement of his indebtedness to the Plaintiff. 

19.Having considered the submissions of Mr. Hui in this application, I am not convinced that I was plainly wrong in coming to the conclusion.

Conclusion

20.To conclude, I am of the view that there is no merit in the Defendant's application.  The Defendant has no realistic prospect of success and is bound to fail in his appeal.

21.I would therefore refuse to grant leave to appeal. 

22.There is also no good reason to delay the P from enjoying the fruits of his success in the litigation: see Wenden Engineering Service Co Ltd v Lai Shing Yue Construction Co Ltd, unreported, HCCT 90/1999.

23.I therefore also refuse to stay the excution of the judgment.

Costs

24.Costs should follow the event.  I make a costs order nisi that the Defendant do pay the costs of this application, with certificate for counsel, such costs to be taxed if not agreed.  The order nisi shall be made absolute after 14 days.

Mr. Tommy K.K. Ho, instructed by Messrs. Kenneth Woo & Co. for the Plaintiff.

Mr. Lawrence Hui, instructed by Messrs. Hagon Wai & Partner for the Defendant.