TELE ART INC. (IN LIQUIDATION) v. BANK OF CHINA (HONG KONG) LTD

CACV 283/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 283 OF 2011

(ON APPEAL FROM HCA NO. 2443 OF 2008)

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BETWEEN

TELE-ART INC. (IN LIQUIDATION) Plaintiff
and
BANK OF CHINA (HONG KONG) LIMITED Defendant

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Before: Hon Kwan , Lam JJA and Au J in Court

Date of Hearing: 7 February 2013
Date of Judgment: 7 February 2013
Date of Reasons for Judgment: 19 February 2013

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REASONS FOR JUDGMENT

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Hon Kwan JA (giving the Reasons for Judgment of the Court):

1. On 10 October 2012, we dismissed the plaintiff’s appeal from the decision of Barma J on the third of the preliminary issues. Ourreasons were handed down on 16 October ([2012] 5 HKLRD 399).

2. The plaintiff seeks leave to appeal to the Court of Final Appeal, contending that it is entitled to do so as of right, and invokingthe first and second limbs of section 22(1)(a) of the Hong Kong Court of Final Appeal Ordinance, Cap 484. Alternatively, it invites this court to exercise discretion to grant leave under section 22(1)(b) on the basis that the intended appeal involves a question of great general or public importance. It reserves the right to rely onthe “or otherwise” ground before the Court of Final Appeal if leave should be refused by this court.

3. The plaintiff’s claim in para 14 of the amended statement of claim relevant to the third preliminary issue is a claim for paymentof money retained by the defendant bank to make provision for its anticipated costs to finalise the accounting process in these proceedings. As Mr Jat, SC for the defendant has pointed out, the size of the provision which the defendant has or could set aside depends onthe amounts it is permitted to deduct from the sale proceeds to cover the costs of the legal proceedings set out in Table C of theletter of the defendant’s solicitors dated 1 November 2007. The amount of permissible deductions remains to be assessed, and theamount of the provision set aside by the defendant changes from time to time as a result of the plaintiff’s actions taken in theseand other relevant proceedings. Hence, the plaintiff’s claim is an unliquidated monetary claim and is outside the first limb.

4. In his oral submissions before us, Mr Coleman, SC concentrated on the second limb of section 22(1)(a) and argued that the plaintiff’s claim is a claim to some particular property and must be within the second limb at least.

5. We agree with Mr Jat that Mr Coleman is seeking to disguise a monetary claim as a claim to property. The second limb should beconsistently interpreted and must not undermine the established construction of the first (Chinachem Charitable Foundation Ltd v Chan Chun Chuen & Anr [2011] 6 HKC 273 at para 20(ii)). As the plaintiff’s claim is an unliquidated monetary claim, it is outside section 22(1)(a) altogether (WLK v TMC (No. 1) (2009) 12 HKCFAR 473 at para 7).

6. The question as framed in the Notice of Motion for which leave to appeal is sought is the question set out in para 15 of our reasonsfor judgment. We have held in para 16 that this question did not arise from the decision of Barma J, which was specific to the factsof this case and the terms of the relevant share charges.

7. We decline to exercise our discretion to grant leave to appeal on this question. We are not persuaded by Mr Coleman that determinationof the question of such a wide scope as framed by him was necessary for deciding the appeal or that our decision was not in realitybased on the terms of the share charge.

8. For the above reasons, we have refused leave to appeal with costs to the defendant. We have ordered costs to be taxed on an indemnitybasis, consistent with our ruling on costs in the appeal.

(Susan Kwan)
Justice of Appeal
(M H Lam)
Justice of Appeal
(Thomas Au)
Judge of the
Court of First Instance

Mr Russell Coleman SC and Mr José Maurellet, instructed by Wilkinson & Grist, for the Appellant/Plaintiff

Mr Jat Sew-Tong SC and Mr Mike Lui, instructed by Deacons, for the Respondent/Defendant