CHAK KAK AND ANOTHER v. PACRIM INTERNATIONAL CAPITAL INC.

CACV 366/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 366 OF 2007

(ON APPEAL FROM HCA NO. 1250 OF 2006)

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D E C I S I O N

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Hon Chu J (giving the decision of the Court):

1.  This is the application by the 3^rd and 4^th plaintiffs for leave to appeal out of time to the Court of Final Appeal against the judgment of this Court given on 4 June 2008. 

2.  In the action below, there were five plaintiffs. The claims of the plaintiffs arose out of their respective Transfer Agreement and the notice of redemption dated 27 October 2003.  Each of the plaintiffs claimed the payment of CAD 60,000, dividends and interest relying on clause 4 of Schedule B to the Transfer Agreement.  Yam J after trial entered judgment for each of them for the sum of CAD 60,000 together with interests from the date of the claim until the date of the judgment at 10% per annum.  He also awarded costs to all the plaintiffs in the sum of $180,000. 

3.  The defendant appealed against the judgment.  There was no cross-appeal from the plaintiffs in respect of those parts of their claims that had not been allowed, including the claims for dividends. We allowed the defendant’s appeal, set aside the judgment and dismissed the plaintiffs’ claims with costs to be taxed if not agreed.

4.  By two Notices of Motion filed on 13 and 26 June 2008, the 1^st and 2^nd plaintiffs applied for leave to appeal against our judgment to the Court of Final Appeal.  By our Decision handed down on 4 November 2008, we refused the application.  In respect of the 1^st and 2^nd plaintiffs’ submission that they were entitled to appeal as of right under section 22(1)(a) of Hong Kong Court of Final Appeal Ordinance, Cap. 484 (“the Ordinance”), we held that they were not so entitled as the matter in dispute between the 1^st and 2^nd plaintiffs and the defendant did not amount to nor was of the value of HK$1,000,000.

5.  By Notice of Motion filed on 1 December 2008, the 3^rd and 4^th plaintiffs, acting by Mr Chak Kak, the 1^st plaintiff, applied for leave to appeal to the Court of Final Appeal out of time. The affirmations in support of the applications were also made by Mr Chak on their behalf, with the letters of authorization from the 3^rd and 4^th plaintiffs exhibited thereto.  At the hearing, Mr Chak also appeared on behalf of the 3^rd plaintiff.

6.  Section 24(2) of the Ordinance provides that an application to the Court of Appeal for leave to appeal must be brought within 28 days from the date of the judgment appealed against. Under section 24(5) and (6), the Court of Appeal may on such terms as it considers appropriate, extend the time for making the leave application and may do so even though the application for extension is not made until after the expiration of the 28-day period.      

7.  The 3^rd and 4^th plaintiffs’ leave applications are seriously out of time.  Further, the 4^th plaintiff had previously on 16 October 2008 made an affirmation confirming he did not wish to appeal.  The affirmation also exhibited a letter of authorization from the 3^rd plaintiff, in which he also stated that he would not appeal.

8.  In their Notice of Motion, the delay was explained on the basis that they were concerned with the costs involved and feared they might become bankrupt if they were to fail in the appeal to the Court of Final Appeal.  It was also said that the 3^rd and 4^th plaintiffs were under the belief that the amount of the 1^st and 2^nd plaintiffs’ claims was of the value of HK$1,000,000, having regard to the exchange rate of CAD at the time of Yam J’s judgment, and that the 1^st and 2^nd plaintiffs would therefore be entitled to appeal as of right to the Court of Final Appeal.

9.  We are not persuaded that the explanations afford good reasons for the delay, which is substantial.  Further, the amount of the matter in dispute between the 3^rd and 4^th plaintiffs and the defendant, namely, CAD 120,000, is substantially less than HK1,000,000.  Mr Chak had referred to the claims for dividends, but since there was no cross-appeal on them, they do not form part of the matter in dispute.  As to the amount of the 1^st and 2^nd plaintiffs’ claims, it cannot be taken into account for the purpose of the present application.  The 3^rd and 4^th plaintiffs do not come within section 22(1)(a) of the Ordinance and are not entitled to appeal as of right.

10.  We understand that the 1^st and 2^nd plaintiffs have applied to the Court of Final Appeal for leave to appeal and the matter is pending.  As pointed out by Mr Law for the defendant, in the event the 3^rd and 4th plaintiffs were to apply to the Court of Final Appeal for leave to appeal, the Appeals Committee may consider consolidating their applications with those of the 1^st and 2^nd plaintiffs. That, however, cannot advance the 3^rd and 4^th plaintiffs’ position in the present application.

11.  For reasons indicated in our Decision of 4 November 2008, we also do not consider that any question of great general or public importance is involved in the 3^rd and 4^th plaintiffs’ intended appeal.

12.  We are therefore not satisfied that we should exercise our discretion to extend the time for applying for leave to appeal.  Accordingly we dismiss the applications of the 3^rd and 4^th plaintiffs with cost to be paid by the 3^rd and 4^th plaintiffs to the defendant, to be taxed if not agreed.

The 3^rd plaintiff, in person, absent, represented by the 1^st Plaintiff (Mr Chak Kak).

The 4^th plaintiff, in person, present.

Mr Lawrence T. H. Law, instructed by Messrs Robertsons, for the defendant.

CACV 366/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 366 OF 2007

(ON APPEAL FROM HCA NO. 1250 OF 2006)

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D E C I S I O N

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Hon Tang VP (giving the decision of the Court):

1.  This is the application by the 1^st and 2^nd plaintiffs (“these plaintiffs”) for leave to appeal to the Court of Final Appeal against our judgment given on 4 June 2008.  The background to this application can be seen in our judgment.  For the purpose of this application, it is sufficient to say that these plaintiffs’ claims arose out of their respective Transfer Agreement and the notice of redemption dated 27 October 2003.  Their case was that under clause 4 of Schedule B to the Transfer Agreement, they were entitled to be paid CAD 1 for each of the shares.  Since each of them had 60,000 shares, each claimed the payment of CAD 60,000 and interest.  Yam J after trial ordered that they be paid CAD 60,000 each together with interests from date of the claim until the date of the judgment at 10% per annum.  He also awarded costs to the plaintiffs (there were 5 at trial) in the sum of $180,000.

2.  The 1^st plaintiff who appeared before us was authorised to speak on behalf of the 2^nd plaintiff.  The 1^st plaintiff submitted that they are entitled to appeal as of right under section 22(1)(a) of Hong Kong Court of Final Appeal Ordinance, Cap. 484.  Alternatively, he said that leave should be given because the question involved in the appeal is one which, by reason of its great general or public importance ought to be submitted to the court for decision.  The relevant provisions are:

“(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 $1000000 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 $1000000 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;”

3.  In order to bring this application within section 22(1)(a), the matter in dispute must amount to or is of the value of $1 million.  It is clear from well-established authorities that such a claim must be for liquidated damages or be a liquidated demand of the value of $1 million or more:  Chao Keh Lung v Don Xia [2004] 7 HKCFAR 260.

4.  A claim is for liquidated damages where the damages had been agreed or fixed by the parties: Chitty on Contracts, General Principles, 29^th Edition, para. 26-010.

5.  A liquidated demand is in the nature of a debt, i.e. a specific sum of money due and payable under or by virtue of a contract.  Its amount must either be already ascertained or capable of being ascertained as a mere matter of arithmetic: Hong Kong Civil Procedure 2009, Vol. 1 6/2/4.

6.  As noted, the judgment was given in Canadian dollars.  Miliangos v George Frank (Textiles) Ltd [1976] AC 443 is authority that if it was necessary to enforce the judgment, that amount was to be converted into Hong Kong dollars at the date when leave was given to enforce the judgment: per Lord Wilberforce at 469C.  So the relevant exchange rate is the rate when leave is given to enforce the judgment.  In their written submissions, the parties have proceeded on the basis that the relevant exchange rate is CAD 1 to 6.5 HKD.  The 1^st plaintiff has informed us orally that CAD has since fallen against HKD.  Anyway, as of today, CAD 120,000 is substantially less than HKD 1,000,000.

7.  The 1^st plaintiff submitted that since the plaintiffs have been awarded interest, that should go towards the calculation of the liquidated amount involved.  Interests if payable by contract may be a liquidated demand:  Hong Kong Civil Procedure 2009, Vol. 1 at 6/L/2. 

8.  However, Mr Kwok, counsel for the defendant, submitted there is no contractual provision for the payment of interest.  The 1^st plaintiff was unable to show otherwise.  Moreover, looking at the statement of claim, which was drafted by the plaintiffs, who were unrepresented throughout, there was no claim for any contractual interest.  The claim in the statement of claim for interest could only have been made under section 48 of High Court Ordinance, Cap. 4.  That being the case, it is quite clear that the interest payable could not be regarded as part of the liquidated claim: See Hong Kong Civil Procedure 2009, Vol. 1 at para. 6/L/5.

9.  The 1^st plaintiff also submitted since the defendants have presented a bill of costs for an amount in excess of $1,200,000, the plaintiffs should also be entitled to substantial costs.  It is sufficient to say that entitlement to costs is not a liquidated claim. 

10.  So in all the circumstances, we are satisfied that these plaintiffs are not entitled to appeal as of right.

11.  We turn to consider whether this is a case for leave to be granted under section 22(1)(b).  The 1^st plaintiff has told us that in fact he is entitled to 170,000 shares and not merely 60,000 shares.  But his claim was confined to 60,000 shares.  He also said that this matter involves over 100 elderly investors with a total of 7,035,000 shares. 

12.  Even so, we are not satisfied that the appeal involves a question of great general or public importance.  The case turned on the interpretation of the relevant provisions in the Transfer Agreement.  Lastly, the 1^st plaintiff submitted that our judgment is clearly wrong.  We are not satisfied that we are wrong.  The 1^st plaintiff has informed us that should we refuse leave he intended to apply to Court of Final Appeal for leave.  This is a case where if leave is to be granted, it should be granted by the Court of Final Appeal. 

13.  For the above reasons, this application is dismissed with cost to be paid by the 1^st and 2^nd plaintiffs to the defendant, such costs to be taxed if not agreed.