廈門新景地集團有限公司 Formerly Known As 廈門市鑫新景地房地產有限公司 v. Eton Properties Ltd and Others

CACV 158/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 158 OF 2012

(ON APPEAL FROM HCCL NO. 13 OF 2011)

________________________

BETWEEN

____________________________

________________________

D E C I S I O N

________________________

Introduction

1.Following a 22-day trial, Deputy High Court Judge Stone QC dismissed the plaintiff’s claims against the defendants in the action giving rise to this appeal.

2.One of the consequences of the dismissal of the action was that an interlocutory injunction granted by Saunders J on 27 May 2008 and continued by Burrell J on 6 June 2008 restraining the 2^nd to 5^th defendants from dealing with the shares in the 4^th defendant was discharged.  By his Judgment dated 9 November 2012, the Judge granted a declaration in favour of the 3^rd to 5^th defendants to this effect.

3.In the same Judgment, the Judge dismissed the plaintiff’s application for the re-grant of the injunction in its original terms pending its appeal against the dismissal of its action.

4.However, he granted a temporary stay of the effect of his orders for a period of 21 days in the light of the plaintiff’s indication that it wished to appeal the refusal of the re-grant of the injunction to this Court.  That 21 day period expires today.

5.I am therefore now seized of a summons dated 22 November 2012, by which the plaintiff applies for an order restraining each of the 2^nd to 5^th defendants from dealing with the shares in the 4^th defendant “until the final determination of the Plaintiff’s appeal herein or until further order”.  A draft order setting out the precise terms of the interlocutory injunctive relief sought is annexed to the summons.

6.The summons is supported by an affidavit of the solicitor having the conduct of the appeal on behalf of the plaintiff.  An affirmation from the 1^st and 2^nd defendants’ solicitor has been filed in opposition and there is a short reply affidavit from the plaintiff’s solicitor.

7.The principles on which this Court should proceed are not controversial.  It is not in dispute that the Court of Appeal has jurisdiction to grant an injunction after judgment at trial and pending an appeal.  It is also common ground that, for such an injunction to be granted, the applicant must show reasonable prospects of success on appeal.  In addition, the grant of a fresh injunction by the Court of Appeal is analogous to a stay of execution and the principles governing the latter are therefore also relevant.

8.Mr Thomas Lee, counsel for the plaintiff, submits in support of the application that the plaintiff has a strong appeal, alternatively at least reasonable prospects of success on appeal, in relation to its proprietary claim in respect of the shares in the 4^th defendant.  He then goes on to submit that the appeal will be rendered nugatory if the injunction is not re-granted.

9.As matters stood before the Judge, there would have been no basis for accepting the first of Mr Lee’s submissions.  That is because there was no proprietary claim advanced in the appeal.  The relief sought by way of the notice of appeal dated 12 July 2012 was limited to equitable compensation or damages to be assessed against each of the defendants (on various juridical bases).

10.By an amended notice of appeal dated 28 November 2012, however, the plaintiff has added the following relief, namely:

“a declaration that the Plaintiff is entitled to require the D2 to transfer to it the one share in D4 registered in the name of D2 and that the Plaintiff is entitled to require the D3 to transfer to it the 9,999 shares in the 4^th defendant”.

On its face, the amended notice of appeal therefore does now disclose relief consistent with a proprietary claim.

11.However, I cannot simply look at the amended notice of appeal in a vacuum.  The indisputable fact is that, at the trial, the plaintiff’s leading counsel (Mr Barrie Barlow SC) expressly accepted that the arbitral award was not an order of specific performance and that specific performance was no longer “efficacious” so that the plaintiff elected to seek damages in lieu of specific performance.

12.Mr Lee submits that the statements of the plaintiff’s leading counsel at trial concerning the proprietary remedy and equitable compensation were in the nature of concessions on a point of law and therefore an appellate court is not bound by them.  I am told that the plaintiff “upon reconsideration” now wishes to press its claim for the transfer of the shares on appeal.  He submitted that the plaintiff had not made a formal binding election.  He referred to The Personal Representatives of Tang Man-sit v Capacious Investments Limited [1996] 1 HKLR 16 for the proposition that a plaintiff was not required to make an election between inconsistent remedies before judgment was entered.

13.That may be so but I cannot ignore the fact that the concession was made by Senior Counsel for the plaintiff and Mr Lee has confirmed in his skeleton submissions that the concession was made on instructions.  In the light of what has in fact happened to the land development with which this litigation is concerned, those instructions are perhaps not surprising.

14.Bearing in mind that it is not practicable to reach any concluded view on the merits of the appeal at this stage, in the light of the stance adopted by the plaintiff at the trial, I am not persuaded that the prospects of success on the appeal in respect of the newly amended declaratory relief are strong.

15.But the point goes further than that for the purposes of today’s application.  Even assuming a reasonably arguable appeal, which is the bare minimum an applicant must show in order to obtain a stay of execution pending appeal, it is very difficult to see how it can now fairly be said that the appeal would be rendered nugatory in the absence of the injunction sought.  Until the notice of appeal was amended on 28 November 2012, the interlocutory injunction granted by Saunders J that remained in place by reason of the Judge’s interim stay order was of no relevance to the appeal which only sought an award of equitable compensation or damages.  Yet it was not suggested, nor in my view could it have been suggested, that the appeal was nevertheless nugatory.  I am not persuaded that the amendment of the notice of appeal changes the position in this regard.

16.In short, by their amended notice of appeal, the plaintiff has executed a volte-face and is seeking to argue a completely different case in the Court of Appeal to that in the court below.  Whether that is permissible or not is not a matter to be decided today.  But I am not prepared to accede to an application which encourages this.  The Court of Appeal is not a court of “second thoughts”.  The amended notice of appeal stands, since it was amended without leave under RHC O.59 r.7(1) as of right, but that does not mean that the court should ignore what has gone before.

17.In the circumstances, even accepting there may be no prejudice to the defendants from the change of stance now taken, I am not prepared to grant the injunction sought and I dismiss the plaintiff’s summons.

[Submissions on costs]

18.The costs of the application are to be paid by the plaintiff to the 1^st and 2^nd defendants and the 3^rd to 5^th defendants, but only in respect of one counsel for each set of defendants, to be taxed if not agreed.

19.I grant a 14-day extension of the stay of the execution of the orders of Deputy High Court Judge Stone dated 9 November 2012.

Mr Thomas Lee, instructed by Clyde & Co., for the Plaintiff/Applicant

Mr Chan Chi Hung SC & Mr Richard Khaw, instructed by Mayer Brown JSM, for the 1^st & 2^nd Defendants/1^st & 2^nd Respondents

Ms Elizabeth Cheung, instructed by Wilkinson & Grist, for the 3^rd to 5^th Defendants/3^rd to 5^th Respondents