Case Detail

CACV000306A/2002

CACV 306/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. CACV 306 OF 2002

(ON APPEAL FROM HCSD 22 OF 2002)

________________

Re: NG YAT CHI

________________

CACV 414/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. CACV 414 OF 2002

(ON APPEAL FROM HCA 2039 OF 2002)

BETWEEN
	NG YAT CHI	Plaintiff

	AND

	MAX SHARE LIMITED	1st Defendant
	CHINA RESOURCES (HOLDINGS) COMPANY LIMITED	2nd Defendant

Coram: Hon Yeung JA, Stone J & Lugar-Mawson J in Court

Date of Hearing: 18 November 2003

Date of Judgment: 28 November 2003

__________________

J U D G M E N T

__________________

Hon Yeung JA (giving the judgment of the Court):

1. On 10 September 2003, we dismissed two appeals lodged by the applicant-Ng Yat Chi.

2. The 1st appeal (CACV 306 of 2002) related to an application to set aside a statutory demand served on the applicant for about $1.4 million, being part of the legal costs arising out of HCCW 321 of 1996 and the consequential appeals. Deputy Judge Woolley dismissed the application and we confirmed his decision.

3. The 2nd appeal (CACV 414 of 2002-an appeal from HCA 2039 of 2002) related to 49% of the shareholdings in Max Share Ltd.

4. In HCA 2039 of 2002, the applicant sought to restore the original decision of Yuen J (as she then was) in HCCW 321 of 1996 after the Court of Appeal over-ruled her decision and the Appeal Committee of the Court of Final Appeal refused leave to appeal against the decision of the Court of Appeal.

5. The applicant suggested that the decisions of the Court of Appeal and of the Appeal Committee were the result of fraud/cheating and were therefore null and void.

6. Deputy Judge Carlson struck out the applicant's claim on the basis that it was an abuse of the process of the court. He also made a Grepe v Loam Order. We also confirmed Deputy Judge Carlson's decision.

7. The background of the cases had been set out in sufficient details in our earlier judgment and we do not repeat it here.

8. The applicant now seeks leave (in both cases) to appeal to the Court of Final Appeal.

9. The applicant suggests that the amounts involved in the 1st and 2nd appeals are respectively $1.43 million and $6.7 million and hence the appeals lie as of right. The $6.7 million is said to be the applicant's liability for the total costs in connection with HCCW 321 of 1996.

10. The applicant further suggests that the questions involved in the appeals are of great general or public importance.

11. Section 22 of the Hong Kong Court of Final Appeal Ordinance (the Ordinance) provides:

(1) An appeal shall lie to the Court-
(a) as of right, from any final judgment of the Court of Appeal in any civil cause or matter, where the matter in dispute on the appeal amounts to or is of the value of $1,000,000 or more, or where the appeal involves, directly or indirectly, some claim or question to or respecting property or some civil right amounting to or of the value of $1,000,000 or more;
(b) at the discretion of the Court of Appeal or the Court, from any other judgment of the Court of Appeal in any civil cause or matter, whether final or interlocutory, if, in the opinion of the Court of Appeal or the Court, as the case may be, the question involved in the appeal is one which, by reason of its great general or public importance, or otherwise, ought to be submitted to the Court for decision;

12. The applicant has not formulated the questions involved in the appeals. We also cannot identify any question involved in either appeal to submit to the Court of Final Appeal, let alone one of great general or public importance.

13. In deciding if a judgment is final for the purpose of section 22 of the Ordinance, the test is "whether the order made upon the application would, whether it fails or succeeds, determine the whole action". (See B + B Construction Ltd v Sun Alliance & Another [2000] 2 HKC 295)

14. The dismissal of the application to set aside a statutory demand could not be "final" within s.22 of the Ordinance as the debtor (the applicant) would still be entitled to show cause to challenge the bankruptcy petition against him.

15. The dismissal of the 1st appeal (albeit concerning $1.4 million) is not "final". There is no question of great general or public importance or otherwise which ought to be submitted to the Court.

16. There is no basis upon which we can grant leave to appeal against our judgment in the 1st appeal. The application for leave to appeal in respect of CACV 306 of 2002 is refused.

17. The decision to strike out HCA 2039 of 2002 together with a Grepe v Loam Order would indeed determine the whole action from the applicant's point of view. The applicant could take the matter no further. But that is not the test.

18. An order is a final judgment only if it is made upon an application, which would determine the whole action, whether it fails or succeeds (emphasis added). The application to strike out would only determine the whole action if it succeeds and not if it fails and therefore the order made in pursuant to such an application is not a final judgment.

19. We share a degree of uneasiness that strict application of the so-called 'application test' produces a result that is not attractive and may be perceived as unfair - a strike out followed by imposition of a Grepe v Loam order resonates 'finality'- but in this our course must be governed by the decision of the Court of Final Appeal in B + B Construction Ltd (supra). In certain cases, of course, the court can further rely upon the "or otherwise" provision in considering whether to grant leave, although we venture to suggest that this is not one of those cases in which it would be appropriate to engage that provision.

20. The applicant also suggests that HCA 2039 of 2002 involves over $6.6 million. There was no claim for over $6.6 million in the prayers of the statement of claim. The reference to the $6.6 million costs was made as part of the background facts leading to the applicant's purported claim.

21. In any event, in considering if the matter in dispute on the appeal amounts to or is of the value of $1 million or more, the amount of legal costs is not a relevant factor.

22. In the statement of claim in HCA 2039 of 2002, the applicant did not specify the value of the 49% shareholdings in Max Share Ltd.

23. The court had earlier found that at the material time, Max Share Ltd. had a capital deficiency of about $172 million and the applicant's shares were valueless.

24. There is therefore no basis for suggesting that the dispute in CACV 414 of 2002 (an appeal from HCA 2039 of 2002) amounts to $1 million or more. There is no automatic right of appeal to the Court of Final Appeal on such basis even if the order to strike out the applicant's claim constitutes a final judgment.

25. We are not persuaded that CACV 414 of 2002 involves any question of great general or public importance (in fact none has been put forward). We are also not persuaded that there is any "otherwise" question which justifies the granting of leave. As we had observed in our earlier judgment, the applicant's case had no merit whatsoever.

26. The application for leave to appeal in respect of CACV 414 of 2002 is also refused. We also make an order nisi that the applicant is to pay the costs of the application to be taxed if not agreed.

(W Yeung)	(William Stone)	(G.J. Lugar-Mawson)
Justice of Appeal	Judge of the Court of	Judge of the Court of
	First Instance	First Instance

Representation:

Plaintiff/Applicant: Represented by Mr Choy Bing Wing, present.

Mr Kenneth W H Ng instructed by Messrs Johnson Stokes & Master for the 1st and 2nd Defendants/Respondents.

Appeal dismissed: see FACV5/2004 dated 20 January 2005

CACV000306/2002

CACV 306/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. CACV 306 OF 2002

(ON APPEAL FROM HCSD 22 OF 2002)

________________

Re: NG YAT CHI

________________

CACV 414/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. CACV 414 OF 2002

(ON APPEAL FROM HCA 2039 OF 2002)

BETWEEN
	NG YAT CHI	Plaintiff

	AND

	MAX SHARE LIMITED	1st Defendant
	CHINA RESOURCES (HOLDINGS) COMPANY LIMITED	2nd Defendant

Coram: Hon Yeung JA, Stone J & Lugar-Mawson J in Court

Date of Hearing: 10 September 2003

Date of Judgment: 10 September 2003

__________________

J U D G M E N T

__________________

Hon Yeung JA:

1. The appellant, Ng Yat Chi takes out two appeals, one against the order of Deputy High Court Judge Woolley dismissing his application to set aside the Statutory Demand served on him by China Resources (Holdings) Company Limited (China Resources) (CACV 306/2002) and the other by Deputy High Court Judge Carlson striking out his Statement of Claim in HCA 2039/2002 (CACV 414/2002) with a Grepe v Loam order. (see Grepe v Loam (1887) 37 Ch. D. 168)

2. With the leave of the court, Mr. Choy Bing Wing was permitted to address the court on behalf of the appellant.

3. The nature of the appeals is unusual and it is necessary to set out the background history of the dispute, be it just briefly.

4. In HCCW 321 of 1996, the appellant sought to wind up Max Share Limited (Max Share) on the just and equitable ground. On 24 May 2000, Yuen J (as she then was) ruled in favour of the appellant against China Resources and ordered that Max Share be wound up.

5. China Resources took the matter to the Court of Appeal (CACV 204 of 2000). On 31 October 2000, the Court of Appeal (Rogers VP, Stock and Le Pichon JJA) allowed the appeal and set aside the winding up order of Yuen J with costs against the appellant.

6. The Court of Appeal refused leave for the appellant to appeal to the Court of Final Appeal on 13 July 2001, and the appellant sought leave from the Court of Final Appeal under s.24 of the Hong Kong Court of Final Appeal Ordinance ('the Ordinance').

7. On 17 September 2001, the Appeal Committee (Bokhary, Chan and Ribeiro PJJ) refused leave with costs against the appellant. Under s. 18(3) of the Ordinance, the decision of the Appeal Committee is final.

8. The appellant failed to meet the cost orders, and China Resources served on him a Statutory Demand for about $1.4 million, being the balance of the unpaid costs on 14 June 2002.

9. The appellant applied to set aside the Statutory Demand on the basis that the judgment of the Court of Appeal on 31 October 2000, and the Determination of the Appeal Committee on 17 September 2001, were made without jurisdiction and/or obtained by fraud/cheating and are therefore null and void.

10. Deputy Judge Woolley dismissed the application on 15 July 2002.

11. On 29 May 2002, the appellant commenced proceedings in HCA 2039 of 2002 against China Resources and Max Share with a view to restoring the decision of Yuen J of 24 May 2000. These proceedings were of course the subject of the order of Deputy Judge Carlson.

12. It is the appellant's contention - through Mr. Choy both in written and oral submissions - that the Court of Appeal and the Appeal Committee had based their decisions on invented facts and that they had either innocently or dishonestly committed act/acts of fraud/cheating with the acquiescence or connivance of China Resources and Max Share. In the circumstances hereinmentioned, their decisions are void and of no effect.

13. The appellant also alleges that the Appeal Committee had improperly exercised the power of the Court of Final Appeal under s.16 (1) of the Ordinance and its decision of 17 September 2001 is therefore ultra vires.

14. Deputy Judge Carlson struck out the appellant's claim on the basis that it was an abuse of the process of the court. He also made an order preventing the appellant from commencing any further new proceedings in respect of the same subject matters without first obtaining the leave of the court (a Grepe v Loam Order).

15. It appears that the issues in both appeals are identical, namely whether the decisions of the Court of Appeal and the Appeal Committee are void for fraud, and whether the decision of the Appeal Committee is ultra vires.

16. Allegations of fraud are very serious allegations to make against anyone, let alone two of the highest courts in Hong Kong, including the court of final adjudication.

17. An allegation of fraud should not be made unless there is clear and sufficient evidence in support and it must be pleaded with the utmost particularity.

18. Deputy Judge Carlson did a most careful analysis of the appellant's allegation and I do not find it necessary to repeat the same exercise.

19. What it boils down to is the suggestion that the Court of Appeal and the Appeal Committee had misunderstood the effect of the judgment of Yuen J, and that when they rested their decisions on such "twisted facts" they were in error.

20. I have considered the documents in question, including the relevant judgments. There was in fact no misunderstanding and any perceived misunderstanding would not have made any difference. The fact remained that Max Share had a capital deficiency of about $172 million and the appellant's shares were therefore valueless. In the circumstances, the injection of new capital/issue of new shares could not have resulted in any unfair prejudice to the appellant, according to the decision of the Court of Appeal, which specific decision the Appeal Committee of the Court of Final Appeal "entirely endorsed."

21. The materials adduced by the appellant simply do not support a charge of fraud.

22. An appellate court is of course entitled to disagree with the decision of the lower court, be it on matters of fact or law. It is unfortunate, to say the least, that decisions of superior courts, which take a different view of the legal position to that of the Court of First Instance, should as a result be characterised as dishonest or fraudulent.

23. Whether the appellant likes it or not, the Court of Appeal had decided to overrule Yuen J and the Appeal Committee had confirmed such decision. The matter is res judicata and there is no further avenue (as far as judicial proceedings are concerned) for the appellant to re-open the issue. We are bound by the decision, and the appellant should also accept the decision.

24. The allegation that the decisions of the Court of Appeal and the Appeal Committee were obtained by fraud is manifestly unfounded.

25. S. 16(1) of the Ordinance stipulates that an appeal to the Court of Final Appeal shall be heard and determined by a court consisting of 5 judges including 1 non-permanent Hong Kong judge or 1 judge from another common law jurisdiction. It only applies to hearings of appeals for which leave have been granted either by the Court of Appeal or the Court of Final Appeal itself.

26. S. 18 of the Ordinance further stipulates that "the power of the Court (of Final Appeal) to hear and determine any application for leave to appeal,... shall be exercised by the Appeal Committee" consisting of 3 judges.

27. In refusing leave to the appellant to appeal against the decision of the Court of Appeal, the Appeal Committee was exercising its power under s. 18 of the Ordinance.

28. The suggestion that the decision of the Appeal Committee is ultra vires again is completely unfounded.

29. In view of the background of the case as outlined in this judgment, a Grepe v Loam order is a proper order to make in order to avoid further abuses of the process of the court.

30. In an affirmation filed on behalf of the appellant and affirmed on 11 July 2003, Mr. Choy Bing Wing referred to a report by the House of Representatives of the United States of America to the effect that China Resources has been identified as an "agent of espionage, economic, military, and political". The report appears to have been available to the public on 25 May 1999.

31. On 28 May 1999, China Resources denied the contents of the report in a public announcement. However the fact that China Resources is a state owned company of PRC is not in dispute. As a state-owned company, China Resources can of course carry out business activities as any other business organization.

32. Quite apart from the fact that the contents of the Cox Report are double hearsay, they are fresh evidence and the requirements under Ladd v Marshall [1954] 1 WLR 1489 have not been fulfilled. While we have a discretion to receive such fresh evidence, it is not a discretion that I would exercise in favour of the appellant in this case. In any event, I am not persuaded that the report is relevant to any of the issues that we have to decide.

33. The Court of Appeal decided that the appellant could not have formed a personal relationship with the State through China Resources to bring into play the 'just and equitable' clause in order to wind up Max Share, although on this issue, the Appeal Committee preferred "to express no view" as to the proposition that a quasi-partnership could be so constituted. That earlier decision is binding upon us, and the appellant must accept it.

34. There is no foundation whatsoever upon which the appellant can properly rest his appeals. The decisions of Deputy Judge Woolley and Deputy Judge Carlson cannot be faulted.

35. The appellant's both appeals are therefore dismissed.

Hon Stone J:

36. I agree. For the reasons given by Hon Yeung JA, I too would dismiss these appeals.

Hon Lugar Mawson J:

37. I also agree. For the reasons given by Hon Yeung JA, I also dismiss the appeals.

(W Yeung)	(William Stone)	(G.J. Lugar-Mawson)
Justice of Appeal	Judge of the Court of	Judge of the Court of
	First Instance	First Instance

Representation:

Plaintiff/Appellant: Represented by Mr Choy Bing Wing, present.

Mr Kenneth W H Ng instructed by Messrs Johnson Stokes & Master for the 1st and 2nd Defendants/Respondents.

RE NG YAT CHI

Files (2)

(1)	An appeal shall lie to the Court-

(a)	as of right, from any final judgment of the Court of Appeal in any civil cause or matter, where the matter in dispute on the appeal amounts to or is of the value of $1,000,000 or more, or where the appeal involves, directly or indirectly, some claim or question to or respecting property or some civil right amounting to or of the value of $1,000,000 or more;

(b)	at the discretion of the Court of Appeal or the Court, from any other judgment of the Court of Appeal in any civil cause or matter, whether final or interlocutory, if, in the opinion of the Court of Appeal or the Court, as the case may be, the question involved in the appeal is one which, by reason of its great general or public importance, or otherwise, ought to be submitted to the Court for decision;