Zheng Chulin v. Wo Kee Hong Kong Industrial Ltd

DCCJ 2581/2010

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 2581 of 2010

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BETWEEN

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Coram: Deputy District Judge G. Chung in Chambers (Open to public)

Date of Hearing: 29 December 2011

Date of Decision: 27 January 2012

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DECISION

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1.On 9 November 2011, I gave decision (“the Decision”) in this matter and dismissed the Defendant’s appeal against Master T. Chan’s Order, which allowed the Plaintiff to amend the Statement of Claim. The gist of the amendment is to include a relief of specific performance.

2.By a Summons dated 23 November 2011, the Defendant sought to appeal against the Decision.

3.As said in the Decision, the Plaintiff by virtue of Paragraphs 24 and 25 of the Statement of Claim, claims against the Defendant for: (1) return of deposits; (2) apportionment costs; (3) agency fees; and (iv) legal costs (“Paragraphs 24 and 25”).  Paragraph 26 of the Statement of Claim claims for damages to be assessed in the alternative (“Paragraph 26”).

4.The Defendant contends that by virtue of Paragraphs 24 and 25, the Plaintiff must have accepted the Defendant’s repudiation, and therefore is not entitled to a relief of specific performance.  The proposed amendment hence shall not be allowed.

5.However, I have found in the Decision that damages sought under Paragraph 26 can include loss arising from delay in performance.  It would then be equivocal from the Statement of Claim as to which of the two courses set out in Johnson v Agnew[1]was opted by the Plaintiff.

6.There is no dispute as to legal principles applicable to an application for leave to appeal.  For leave to be granted, I must be satisfied that the appeal has “reasonable prospects of success”.  It means “more than just an arguable case”, but an appeal that has merits, the prospects of which are more than “not fanciful”, without having to be “probable”.  (Smith & Cosworth Casting Processes Limited, [1997] WLR 1538; Surf Wide Investments Limited v Lam Kit Yuk Noel, DCCJ 3878/2009, 10 March 2010; Ho Yuen Ki Winnie v Ho Hung Sun Stanley, HCMP 1009/2009, 24 August 2009; Wynn Resorts (Macau) S.A. v Mong Henry, HCA 192/2009, 10 August 2009)

Grounds 1 and 2 of the Notice of Appeal

7.The gist of the Defendant’s appeal under Grounds 1 and 2 of the Notice of Appeal is whether the Statement of Claim is clear and unambiguous in accepting the Defendant’s repudiations in the light of Paragraph 26.

8.Defence Counsel Mr Wong sought to argue that if the Plaintiff had in fact intended to keep the subject agreements alive, there is no reason for him to embed such an intention in Paragraph 26. 

9.Having said that, Mr Wong fairly conceded that the Statement of Claim is to be construed objectively as to whether it amounts to an acceptance of repudiation.  Hence it is neither here nor there whether the Plaintiff has intended to keep the subject agreements alive.  Mr Wong’s argument thus cannot assist the Defendant’s case in this regard and I reject it.

10.Further, Mr Wong also sought to argue that if the Plaintiff had no intention to terminate the subject agreements, why would he seek for damages which was clearly conduct inconsistent with keeping the subject agreement as still subsisting?

11.Again, this argument goes to the intention of the Plaintiff.  Secondly, when construing the Statement of Claim objectively as a whole, one cannot lose sight of Paragraph 26.  The Plaintiff is not claiming for the damages set out in Paragraphs 24 and 25 alone, but also claiming for damages to be assessed as an alternative in Paragraph 26.  The accumulative effect of the 3 paragraphs creates an ambiguity as to whether the Statement of Claim, as a whole, amounts to conduct inconsistent with keeping the subject agreements alive.  For these reasons, the Defendant’s argument is rejected.

12.For the above reasons, I am not persuaded that the Plaintiff’s act of issuing the Statement of Claim should be construed as clear and unequivocal in accepting the Defendant’s repudiation.

Ground 3 of the Notice of Appeal

13.The gist of Ground 3 is that as the Plaintiff had in fact acted by further issuing of the Statement of Claim claiming for damages, the silence or inactivity on his part (for not pursuing specific performance) shall not be considered as “mere”.

14.Mr Wong however fairly conceded that the Plaintiff’s silence or inactivity will only be regarded as “not mere” if the Statement of Claim is clear and unequivocal in accepting the Defendant’s repudiation.  Should the Statement of Claim be considered otherwise, this ground will not be in issue.

15.As I find in the above, the Statement of Claim is equivocal as to whether it amounts to an acceptance of repudiation, hence there is no merits in Ground 3.

Conclusion

16.For the above reasons, I concluded that the intended appeal has no reasonable prospects of success.  Accordingly, the application is dismissed with costs to the Plaintiff, with Certificate of Counsel, to be taxed if not agreed.  The costs order will be made absolute within 14 days.

Mr Robin D’Souza instructed by Messrs. Tam, Pun & Yipp for the Plaintiff.

Mr Kenneth Y. F. Wong instructed by Messrs. Tang & Tang for the Defendant.

[1]The two courses set out in Johnson v Agnew [1980] AC 367 are: (1) accept the repudiation, and proceed to claim damages for breach of contract; or (2) may seek an order of specific performance with damages for any loss arising from delay in performance.

Please refer to CACV56/2012 for the relevant appeal(s) to the Court of Appeal.