Cheong Shing Ltd v. Yu Kwan
Read the full judgment text of FAMV 40/2010 on BabelCite. This Court of Final Appeal judgment was delivered on 18 March 2011 before Mr Justice Chan PJ, Mr Justice Ribeiro PJ, Mr Justice Mortimer NPJ.
Civil procedure – leave to appeal – abuse of process – res judicata – unjust enrichment – counterclaim – whether permitting re-litigation would re-open Court of Final Appeal decision – application by third defendant (Mr Kong Kai Cheung) for leave to appeal from Court of Appeal decision striking out his counterclaim as an abuse of process – loan of HK$38.76 million alleged by plaintiffs against first and third defendants – claim confined to HK$28.26 million after crediting two payments totalling HK$10.5 million – Court of Final Appeal in Cheong Shing Ltd v Yu Kwan (2008) 11 HKCFAR 594 held that alleged loan was not established, but second plaintiff entitled to restitution from Mr Lo as unjustly enriched recipient, and action against Mr Kong dismissed for want of evidence of enrichment – counterclaim by Mr Kong against plaintiffs and Mr Yu alleging HK$6 million loan to Mr Yu and HK$4.5 million extracted under duress rejected at trial, duress not pursued in Court of Appeal – whether leave threshold met – whether re-litigation of counterclaim would involve inadmissible attempt to re-open CFA decision – Court of Final Appeal had necessarily rejected counterclaim by treating Mr Kong's payments as having partially relieved Mr Lo of personal liability, leaving Mr Kong to look to Mr Lo for reimbursement – duress not raised below and could not now be revived – Registrar's remittal direction administrative only, not ordering fresh trial – trial judge and Court of Appeal correct to strike out counterclaim as abuse – leave refused with costs to respondents
Legal issues: Whether leave to appeal should be granted to re-open counterclaim dismissed by Court of Final Appeal
Outcome: Application for leave to appeal dismissed with costs
Cites 4 cases
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FAMV No. 40 of 2010 IN THE COURT OF FINAL APPEAL OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MISCELLANEOUS PROCEEDINGS NO. 40 OF 2010 (CIVIL) (ON APPLICATION FOR LEAVE TO APPEAL FROM CACV NO. 68 OF 2010) _______________________ Between: HCA 12021/1998
And Between HCA 2183/2001
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_________________________ DETERMINATION __________________________ Mr Justice Ribeiro PJ: 1.On 14 March 2011, we dismissed this application for leave to appeal with costs and reasons to be given later. These are our reasons. 2.The plaintiffs sued the 1st defendant, Mr Lo Kam Wing (“Mr Lo”) and the 3rd defendant (the present applicant) Mr Kong Kai Cheung (“Mr Kong”) inter alia on the basis that they had made a loan of $38.76 million to Mr Lo and/or Mr Kong. However, their claim was confined to the sum of $28.26 million, giving credit for two payments totalling $10.5 million which they had received. 3.On 29 October 2008, this Court[1] held that the evidence did not establish the alleged loan (or various other suggested arrangements) but that the 2nd plaintiff was entitled to restitution from Mr Lo, as the unjustly enriched recipient of the $28.26 million. The action against Mr Kong was dismissed since there was no evidence that he had been enriched at the plaintiffs’ expense.[2] 4.Mr Kong had brought a counterclaim against the two corporate plaintiffs and Mr Yu Kwan (“Mr Yu”), then suing as the 3rd plaintiff, claiming to recover the $10.5 million referred to above, alleging that $6 million had been lent by him to Mr Yu and that $4.5 million had been extracted from him under duress by the plaintiffs. 5.The trial judge, Burrell J[3], rejected the counterclaim for $6 million based on a loan to Mr Yu, preferring the explanation that it was a partial repayment by Mr Kong of money due to Mr Yu. His Lordship also held that the suggestion of duress was “borderline, but in any event academic” since the entire amount was found due to the plaintiffs from Mr Kong in any event.[4] Duress was not argued by Mr Kong in the Court of Appeal.[5] 6.In giving judgment for the 2nd plaintiff, it is clear that this Court treated Mr Kong’s payments as having been made to the plaintiffs on behalf and for the benefit of Mr Lo, reducing by $10.5 million Mr Lo’s liability to make restitution to the plaintiffs. Thus, Mr Justice Litton NPJ stated:
7.Mr Kong was therefore held to have “partially relieved Mr Lo of his personal liability” to the plaintiffs. His Lordship added:
He was obviously referring to the absence of findings in the context of any possible claim by Mr Kong against Mr Lo. 8.On 19 June 2009, solicitors for Mr Kong wrote to the Registrar asserting that the Court had not dealt with Mr Kong’s counterclaim, seeking directions “as to the determination of the counterclaims of our client”. In the reply dated 7 December 2009, the Registrar stated that after consulting other members of the Court, Mr Justice Chan PJ had directed that Mr Kong’s “counterclaim and any matter relating thereto including the costs of such counterclaim be remitted to the trial judge for disposal”. 9.The matter then came before the trial judge (sitting, after retirement, as Deputy High Court Judge Burrell)[8] on the plaintiffs’ striking out application. His Lordship in our view correctly confirmed that the counterclaim had indeed been dismissed when tried before him and accurately noted that this Court had left Mr Kong to look (if at all) to Mr Lo (and not the plaintiffs) insofar as he might be able to claim reimbursement from the latter.[9] His Lordship accordingly “disposed of the counterclaim” as directed by striking out its attempted resurrection as an abuse. The Court of Appeal[10] upheld the Judge and rejected the submission that Chan PJ’s direction amounted to an order for there to be a full trial of the counterclaim. 10.Mr Benjamin Chain who appeared for Mr Kong on the present application endeavoured to argue that pursuit of the counterclaim involves no attempt at re-opening the decision of this Court and therefore no abuse. We do not agree. As noted above, in holding that Mr Kong’s payments “partially relieved Mr Lo of his personal liability” the Court necessarily rejected the counterclaim based on debt and duress, leaving Mr Kong to look toMr Lo for re-imbursement on such grounds, if any, as might be open to him. Moreover, not having raised the issue of duress in the Court of Appeal, Mr Kong cannot now be permitted to complain that the Judge wrongly failed to deal with that issue at the trial. 11.We respectfully agree with the Courts below that permitting the matter to be re-litigated would involve an inadmissible attempt at re-opening the decision of the Court. Leave must therefore be refused.
Mr Benjamin Chain (instructed by Messrs Chui & Lau) for the Applicant Mr Peter Ng, SC & Mr Norman Nip (instructed by Messrs Gallant Y.T. Ho & Co.) for the Respondents [1] Cheong Shing Ltd v Yu Kwan (2008) 11 HKCFAR 594. [2] At §55. [3] HCA 12021/1998 and HCA 2183/2001 (15 August 2006), §120. [4] At §124. [5] CACV 319/2006 and CACV 348/2006 (14 December 2007), §5. [6] At §53(4). [7] At §56. [8] HCA 12021/1998 and HCA 2183/2001, 16 March 2010. [9] At §3(iv), §5, §§7-10. [10] CACV 68/2010, Rogers VP, Le Pichon JA and Stone J, 30 July 2010. |
Cases cited in this judgment