Wong Yuk Ying v. Chan Pui Shan May

DCMP 688/2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 688 OF 2013

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DECISION

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Application for leave to appeal

1.On 17 September 2013, I gave judgment in favour of the defendant and dismissed the plaintiff’s Amended Originating Summons.  I also ordered costs summarily assessed at HK$118,503.40 be to the defendant.  This is the plaintiff’s application for leave to appeal against my judgment.

Proper approach to leave application

2.The principles regarding leave application have been explained clearly by District Judge M Ng (as she then was) in Commissioner of Inland Revenue v Nam Tai Trading Co Ltd [2009] 3 HKC 421.  Paragraph 12 of that case stated that “… all that the [appellant] needs to show is that there is a good arguable case in respect of the intended appeal that has a reasonable and not a fanciful prospect.”  The learned judge cited with approval a passage from Smith v Cosworth Casting Processes Ltd [1997] 1 WLR 1538 by Lord Woolf MR which stated that “The court will only refuse leave if satisfied that the applicant has no realistic prospect of succeeding on the appeal.  This test is not meant to be any different from that which is sometimes used, which is that the applicant has no arguable case.  Why, however, this court has decided to adopt the former phrase is because the use of the word ‘realistic’ makes it clear that a fanciful prospect or an unrealistic argument is not sufficient.”

3.Regarding the proper approach of the court in the hearing of such application, I echo with what Mr Justice Leong JA said in the leave application for the case of Ma Bik Yung v Ko Chuen [2009] 3 HKC 359, para 5: “Both counsel for the applicant and counsel for the respondent have submitted lengthy written skeleton arguments and authorities in support of their respective cases.  But I do not think it necessary for me to consider these details which should better be reserved for the appeal proper.  What is required for the purpose of this application is for the applicant to show that he has an arguable case with reasonable chances of success on appeal.”  I agree with Mr Justice Leong JA’s view that leave application should not be treated like a rehearsal of the appeal.  The time and costs to be incurred in such applications should be kept within confines.  Otherwise parties have to incur costs for multiple hearings on the same issues before the matter could be finally disposed of.

Plaintiff’s arguments

4.It would be recalled that the central issue in this case is whether the requirement to deliver vacant possession should be implied in circumstances where the sale and purchase was subject to a tenancy, and the tenancy expired before the completion date.  I held that, as a matter of contractual interpretation and considering the requirement of business efficacy and necessity, there was no such implied term in this particular case.  In doing so, I distinguished the Court of Appeal authority of Strong Beauty Ltd v Gain Legend Industries Ltd, CACV 337/2007.

5.In the draft notice of appeal, Mr Liu, counsel for the plaintiff (who did not appear at the trial) put forward 9 grounds of appeal and made extensive submissions thereon supported by authorities.  Ms Liu raised a number of arguments to show why there should be the implied term of vacant possession.  With respect, I found only one of such arguments reasonably arguable.  This argument was not one that has been raised at the trial.  It is the argument based on Clause 5 of Part A of the Second Schedule to the Conveyancing and Property Ordinance, Cap 219, which provides that “If a tenancy subject to which the property is sold terminates for any reason, the vendor shall inform the purchaser and, on being indemnified by the purchaser against all consequential loss, expenditure or liability, shall act as the purchaser directs.”  This Clause was incorporated into the Sub-Sale and Purchase Agreement by Clause 34 thereof.

6.Ms Liu contended that in the circumstances of this case, where the tenancy had expired, and where the plaintiff purchaser had indicated that the tenancy should not be renewed, the obligation to deliver vacant possession would have arisen.  And this was particularly so where the plaintiff had been kept in the dark as to true situation of the tenancy until the day before completion.

Decision and costs

7.I shall not comment further on such argument of Ms Liu except to express my view that this argument could not be characterized as fanciful and having no reasonable prospect of success, in the sense explained by the authorities cited above.  On this basis, I will grant leave to appeal to the plaintiff.

8.For completeness, I should add that Ms Liu also tried to invoke the ground under section 63A(a)(b) of the District Court Ordinance, Cap 336, that “there is some other reason in the interests of justice why the appeal should be heard”.  It was contended by Ms Liu that it would be desirable for the Court of Appeal to give guidance as to whether there should be a duty to deliver vacant possession in sale of property subject to tenancy where the tenancy expires before the completion date.  I do not think this ground is engaged.  All the problems in this case and, if I may say so, in the Strong Beauty case, could be easily avoided if the drafters of the relevant contracts have been more vigilant and added a simple sentence in the contract to clearly reflect their client’s intention.

9.Costs of the application should be costs in the cause of the appeal.

Miss Elaine Liu, instructed by Tam, Pun & Yipp, for the plaintiff

Mr Tony Ko, instructed by Kent Tam & Co, for the defendant