Goei Tsusho Co Ltd v. Leader Engineering & Construction Ltd and Another
Read the full judgment text of DCCJ 4581/2005 on BabelCite. This District Court judgment before Deputy District Judge Raymond Tsui.
Civil procedure – Leave to appeal – Reasonable prospect of success – Stay of execution – Apparent authority – District Court Ordinance – Contract – Agent – Principal – GOEI TSUSHO COMPANY LIMITED v LEADER ENGINEERING & CONSTRUCTION LIMITED – Whether appeal has reasonable prospect of success – Leave granted – Whether stay pending appeal granted – Stay granted on condition of payment into court – Costs in the cause
Legal issues: Leave to appeal · Stay pending appeal
Outcome: Leave to appeal granted; Stay of execution granted pending appeal
Cited by 2 cases · Cites 4 cases
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DCCJ 4581/2005 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO. 4581 OF 2005 ----------------------
---------------------- Coram: Deputy District Judge Raymond Tsui in Chambers Date of Hearing: 14th January 2010 Date of Handing Down Judgment: 22nd January 2010 ---------------------- J U D G M E N T ---------------------- The Application 1.This is an application taken out by the 1st Defendant under section 63 of the District Court Ordinance, Cap. 336 (the “Ordinance”) for leave to appeal to the Court of Appeal against my Order dated 27th October 2009 whereby I give judgement in favour of the Plaintiff. My ruling is that the 1st Defendant is liable as the 2nd Defendant placed various orders with the Plaintiff with apparent authority of the 1st Defendant. The 1st Defendant also applies for a stay of execution pending appeal if I were to grant leave to appeal. 2.At the end of the hearing, Mr Wong, counsel for the 1st Defendant, submitted a revised draft Notice of Appeal which more correctly reflected the arguments advanced. 3.I have set out in detail the facts of the present case in the judgement dated 27th October 2009 (the “Judgement”). I do not seek to repeat the same in this judgement. To avoid confusion, I shall use the same abbreviations in the Judgement. The Appeal 4.Section 63A(2) of the Ordinance provides that leave to appeal shall not be granted unless the court is satisfied that “the appeal has a reasonable prospect of success” or “there is some other reason in the interests of justice why the appeal should be heard”. The application of the 1st Defendant is under both limbs. 5.As to the test to be applied in respect of the “reasonable prospect of success” limb, both counsel for the Plaintiff and the 1st Defendant cited Wynn Resorts (Macau) SA v Mong Henry (HCA No. 192/2009, 10th August 2009). I was also referred to SMSE v KL [2009] 4 HKLRD 125 and CWT v CKK (FCMC No. 14169/2007, 30th November 2009). Chu J explained in Wynn Resorts (Macau) SA (in which similar words are used in the High Court Ordinance) that to meet the test of reasonable prospect of success, the applicant “is required to show more than just an arguable case, but an appeal that has merits and ought to be heard, although he does not have to demonstrate that the appeal will probably succeed.” 6.Mr Wong suggested that what was required was that the appeal had some merits and that the chance of succeeding was more than fanciful and if this threshold was satisfied, leave to appeal ought to be granted even if I was of the view that the appeal was not likely to succeed. 7.The first ground of appeal advanced by Mr Wong was that since the claim of the Plaintiff was based on apparent or ostensible authority, it was unnecessary and irrelevant for the court to direct itself to consider whether the 1st Defendant was an actual party to the sale and purchase of the Goods. Mr Wong referred to paragraph 74 of the Judgement. It is, however, clear that, when read in context, the phrase “actual party” was used in discussing whether, based on the principle relating to apparent or ostensible authority, the 1st Defendant was a party to the transactions concluded apparently between the Plaintiff and the 2nd Defendant. 8.Mr Wong also argued that in the absence of any finding that the 2nd Defendant had the “actual authority” to act for the 1st Defendant, it was wrong to hold that the 1st Defendant as the contracting party, the reason being that all the documents were issued by or addressed to the 2nd Defendant without any indication that the 2nd Defendant was contracting as the 1st Defendant’s agent. Mr Wong referred to paragraph 70 of the Judgement. Again, the discussion, when read in context, was in respect of whether, based on the principle relating to apparent or ostensible authority, the 1st Defendant was a contracting party. 9.It is trite law that an appellate court is in as good a position as a trial judge to deal with the finding of facts which is a result of inferences from primary facts, as opposed to the finding of primary facts. Cases such as Tam Yu Hung v Chu Man On [1996] 2 HKC 337, Ting Kwok Keung v Tam Dick Yuen [2002] 1 HKC 601 and World Food Fair Ltd v Hong Kong Island Development Ltd [2005] 1 HKC 594 were cited to me by Mr Wong in support of this proposition. 10.Mr Chan, counsel for the Plaintiff, drew my attention to the Court of Final Appeal decision in World Food Fair Ltd v Hong Kong Island Development Ltd (2006) 9 HKCFAR 735. The Court of Final Appeal judgement is not concerned about the general proposition of law which I believe is the purpose of Mr Wong in citing to me the Court of Appeal judgement. Mr Chan quoted to me the following passage from the Court of Final Appeal judgement in World Food Fair Ltd (748E):
11.By quoting this passage, Mr Chan tried to argue that the finding of facts reached by me was not one of inference but was a primary finding. Although I agree with Mr Chan, I could not say that the prospect of success of Mr Wong’s argument is entirely fanciful. 12.This leads to the second ground of appeal whereby it is argued that I erred in holding that the 2nd Defendant had ostensible authority to enter into transactions for and on behalf of the 1st Defendant. Mr Wong suggested that the documents relied on by me did not constitute any representations made by the 1st Defendant that the 2nd Defendant had the apparent authority. 13.Mr Wong identified three classes of documents upon which I relied to hold that the 2nd Defendant had the apparent authority. The first class of documents was those letters issued by the “Leader Group”. He argued that such letters could not be equated as letters issued by the 1st Defendant even though Leader Engineering was one of the companies of the Leader Group, citing The Albazero [1977] AC 774, 807E-F) in support. The second class of documents identified was the covering letters issued by Annie Leung under the 1st Defendant’s letterhead for the purpose of informing the Plaintiff of telegraphic payments made by the 2nd Defendant. He suggested that since the 1st Defendant and the 2nd Defendant were managed by the same people, the use of the 1st Defendant’s letterhead for the purpose of informing the Plaintiff of payment to be made by the 2nd Defendant, without more, did not amount to representation that the 2nd Defendant had the apparent authority. The third class of documents identified by Mr Wong was those documents issued in the name of the 2nd Defendant but referred to the 1st Defendant’s email/correspondence addresses and/or bore the Leader Engineering’s Imprint. He pointed out that for these documents, the fact there was such reference or imprint per se could not amount to representation that the transactions were entered into on behalf of the 1st Defendant. Mr Wong also argued that the court failed to draw a distinction between representations that the 1st Defendant and the 2nd Defendant were related companies and representations that the 2nd Defendant had authority to enter into binding contracts on behalf of the 1st Defendant. 14.I have considered the submission of Mr Wong. It would be sufficient for me to say that having considered all the circumstances of the case, I am of the view that the documents so identified did constitute such a representation. Mr Wong stressed that the 1st Defendant and the 2nd Defendant were managed by the same people and thus the representation could only be that they were related companies. It was also stressed that they were two separate entities. In reality, however, as could be seen in the Judgement, the two Defendants paid scant regard to this now steadfastly held distinction. Given the circumstances of this case, I think the representation did go much further and included the representation that the 2nd Defendant had the authority to enter into the relevant transactions with the Plaintiff. Whilst Mr Wong and I differ in this respect, again, I could not say that the chance of success of this argument is entirely fanciful. 15.Relying on the comment of Lord Diplock in Freeman & Lockyer (p. 503) that for the principle of “apparent authority” to apply, Mr Wong submitted the agent must not purport to make the agreement as principal himself. He suggested that since all the contractual documents unequivocally pointed to the 2nd Defendant as the principal, the principle of “apparent authority” was precluded from being applied. In reply, Mr Chan submitted that whether the 2nd Defendant purported to make the agreement itself must be looked at from the whole circumstances of the case and the evidence showed that the 2nd Defendant did not purport to make the agreement itself. 16.I can see some force in the argument of Mr Wong. One possible argument against it is that the documents issued in the name of the 2nd Defendant should be viewed in the light of the letter dated 9th November 2001 (paragraph 79 of the Judgement refers) and other documents as a result of which the 2nd Defendant was no more than a nominal party in those contractual documents. However, bearing in mind the 1st Defendant was only required to show a reasonable prospect of success, I am satisfied that it has reached that threshold. 17.As a result of the discussion above, I am of the view that leave to appeal should be granted. As such, I do not intend to deal with other arguments. Stay Pending Appeal 18.There is no dispute between the parties that the legal principles relating to stay pending appeal are set out in Star Play Development v Bess Fashion Management Co Ltd [2007] 5 HKC 84. I also have had regard to the affirmations filed by the Plaintiff and the 1st Defendant in respect of the application for stay pending appeal. 19.Parties were basically in agreement that stay be granted on the condition that a sum be paid into court pending the appeal. The 1st Defendant suggested a sum of JP¥12,660,500, being the judgement sum and the interest accrued thereon up to 31st December 2009, be paid into court. It was a reasonable suggestion and Mr Chan did not seek to argue otherwise. I would thus adopt this figure. 20.The Order I would thus make is:
Representation: Mr. Frederick Chan instructed by Messrs Robert Lee Law Offices for the Plaintiff. Mr. Anson Wong instructed by Messrs Joyce Chan & Co for the 1st Defendant. |
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