Ccig Credit Ltd Formerly Known As Cashing Credit Ltd v. Ng Chin Hung

Case No.HCA 1760/2016

Court

High Court CFI

Date—

Judge—

Case Document

100%Judiciary

HCA 1760/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1760 OF 2016

_________________________

BETWEEN
	CCIG CREDIT LIMITED Formerly known as CASHING CREDIT LIMITED	Plaintiff (Judgment Creditor)
	and
	NG CHIN HUNG	Defendant (Judgment Debtor)

	and
	CHINA CITIC BANK INTERNATIONAL LIMITED	Garnishee
	and
	NG CHUN HUNG	Applicant

_________________________

Before: Master K. Lo in Chambers

Date of Hearing: 5^th July 2017

Date of Handing Down of Decision: 22^nd December 2017

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D E C I S I O N

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THE SUMMONS

1.This is the hearing of Summons taken out by the Applicant on 8 December 2016 pursuant to O.49 r.6 RHC which seeks in effect, to discharge the garnishee order nisi dated 6 October 2016 on the grounds that:-

“(1) all monies in the joint accounts are the property of the estate of Ng Chuen On(吳傳安), deceased, and

(2) the debt, against which the Applicant is not privy to , should not be attached to the bank accounts in the joint names of the Applicant and the Judgment Debtor.”

2.The brother of the Applicant is the defendant in the present action and was previously adjudged to pay the Plaintiff a judgment sum with interests and costs. As the same remains unsatisfied, Plaintiff obtained the said garnishee order nisi which ordered that all debts due or accruing due from the garnishee to the defendant, i.e. the judgment debtor be attached to satisfy, inter alia, the said judgment.

Can money in Joint Account be attached in garnishee proceedings?

3.It is not in dispute that money was held in the garnishee bank account, in joint names of the Applicant and the judgment debtor.

4.Mr J. Li, counsel for the Applicant submitted that it is well established legal principle that the debt owing to a judgment creditor can only be attached to a bank account held by the judgment debtor alone. Where the bank account is held jointly with another, it cannot be attached: Beasley v Roney (1891) 1 QB 509, 512; Hirschon v Evans (CA) [1938] KB 801, 814-815.

5.He referred this Court to Allinson, Enforcement of a Judgment, 12^th Edn., p.129 where it says “…to successfully attach a bank account, all account holders must be judgment debtors”.

6.He argued that the same principle was adopted in Hong Kong: Gail Stevenson v The Chartered Bank [1977] HKLR 566, 568-569; Uni‑Rich Technology Ltd v Maoshan Arts and Crafts (HK) Co Ltd, DCCJ 810/2012 (unrep., 24 January 2013) at §13 per Deputy District Judge S Lo (as he then was).

7.Reference was made to Halsbury’s Laws of Hong Kong 2016, Vol.11, 2^nd Edn, §90.1483. The same reads “an account held jointly by the judgment debtor with another person cannot be attached by garnishee proceedings” and Hong Kong Civil Procedure 2017, §49/1/39 where it reads “Debt due to judgment debtor jointly with another person-(Macdonald v. Tacquah Gold Mines Co. (1984) 13 Q.B.D. 535; CA; Hirschorn v. Evans [1938] 2 K.B. 801, CA; cf. Beasley v. Roney [1891] 1 Q.B. 509). The principle was applied by Henn Collins J. in chambers, where the judgment debtor was a partner in a firm (Fox v. Mainwaring, June 13, 1891).”

8.He submitted that in respect of joint accounts, unless all account holders are also joint debtors, no attachment could be made against a joint account.

9.It is argued by Mr. Chiu, counsel for the Plaintiff that joint account can be garnished because of s.28 of Law Amendment and Reform Consolidation Ordinance (“LARCO”) (the predecessor of s.43 of Conveyancing and Property Ordinance Cap. 219) because the liability of garnishee bank is both joint and several and therefore money are owed to the judgment debtor.

10.He relied on the case of the Hong Kong and Shanghai Banking Corporation v Attorney Geveral, Civil Appeal No.109 of 1981.

11.This case involved the operation of a notice issued under s.76 of Inland Revenue Ordinance, Cap.112(“IRO”) where in case tax payable by a tax payer is in default, the government may issue notice under this section and serve it on any other person, whom appears to the Commissioner to be probable that such person owes or is about to pay money to the tax payer or holds money for or on account of the tax payer. Upon receipt of such notice such other person shall have to pay the Commissioner the tax outstanding.

12.Under s.59(2) of the IRO, such person who has made payment under this section shall be deemed to have acted under the authority of the tax payer or on whom it was charged and of all other persons concerned and is indemnified in respect of such payment against all both in civil or criminal proceedings, notwithstanding the provisions of any written law, contract or agreement.

13.There are also sanctions for non-compliance with the notice.

14.Mr. Chiu asked the Court to ignore the comment by Bewly J. in the said case at the Court of First Instance when he said “it is not possible to equate garnishee proceedings with a recovery notice under s.76”.

15.In his written submission dated 12 July 2017, Mr. Chiu submits that after the enactment of s.28 of LARCO, the legal principle that joint account could not be garnished, is no longer the law. He did not cite any authority in support of this contention.

16.In fact, all the cases cited or text quoted to this Court did not support this proposition.

17.The Hong Kong Banking Corporation case does not deal with garnishee proceedings. From the wordings of the said s.76, it is clear that the very basis invoking the operation of the section is completely different from that of garnishee proceedings, for example, it deals with any other person whom appears to the Commissioner to be probable to owe or is about to pay money to the tax payer and any other persons who had authority from some other person to pay money to the tax payer.

18.In my view, the law in this area has remained unchanged. Money held in joint bank account and the judgment debtor is just one of the account holders, the prevailing law dictates that the monies in the joint account could not be attached.

Can trust money be attached?

19.For the sake of argument, I will now deal further with the issue of whether the monies in the joint account is trust money.

20.From the affirmation evidence available and the exhibits disclosed, taking into consideration in particular of the contemporaneous documents exhibited, I find that the money now standing in the said joint account was part of the proceeds of the sale of the land owned by the brothers’ deceased father and that they form part of the estate.

21.The Applicant now says that since their father died intestate and despite efforts, no Letters of Administration in respect of the estate had been issued, the brothers (i.e. the joint debtor and the Applicant) merely held the money in the joint bank account as intended co-administrators, and that they, in their personal capacity, have as yet no legal or beneficial interests in the money.

22.In the submissions advanced by Mr. Chiu, he queried the reason for the lack of progress in the brothers’ application for Letters of Administration.

23.He submitted that although in the case of Incorporated Owners of Million Fortune Industrial Centre v Jikan Development Ltd & Anor, unreported, HCA 14915/1998, 26 June 2003, Master Bharwaney (as he then was) held that as the monies in some of the bank accounts were trust monies beneficially owned by some other parties and the Garnishee order nisi in respect of those accounts should be discharged but present case can be distinguished from that case because the judgment debtor here actually owns beneficial interest in the estate.

24.Parties had in fact agreed that pending issuance of the Letters of Administration, the beneficiary only has an inchoate right which merely empowers the beneficiary to ensure due and proper administration of the estate.

25.Mr. Li explained that this inchoate right is a chose in action which is transmissible but is not beneficial interest. The only interest of such a person is to have the estate properly administered and applied for his benefit when the administration is completed: Williams, Mortimer and Sunnucks, Executors, Administrators and Probate, 20^th Edn., §§81-03.

26.Likewise, he said, in McGhee, Snell’s Equity, 33^rd Edn., §§33-002:

“The ownership of the property of a deceased person between the death and the distribution sometimes gives rise to problems. Although personal representatives are in a fiduciary position, it is wrong to regard them as holding only the legal estate, with the beneficial interests in the beneficiaries. Not until there has been an assent can it be said with certainty whether or not a particular asset will be needed for the payment of debts or other liabilities; and until these have been discharged, it cannot be said what assets there will be in the residuary estate. Accordingly, the general rule is that no beneficiary can assert that he has any legal or equitable interest in any of the assets which are still unadministered; for the whole right of property in them is vested in the personal representatives. The beneficiary merely has a right ‘to have the estate duly administered by the personal representatives in accordance with law’…”

27.The above principle had very recently been cited with the approval in the Court of First Instance in Chung Chiu Hing v Law Sam HCMP 2384/2011 (unrep., 9 June 2017) at §§69-per Bebe Chu J.

28.He says that the money now held by the Garnishee Bank relates to deceased father’s land, which the Applicant and judgment debtor received in their capacities only as intended co-administrators; and that as they are trust money, the same is ungarnishable, for this is merely a debt due to the judgment debtor as trustee only: Halsbury’s Laws of Hong Kong 2016, Vol.11, 2^nd Edn, §90.1483.

29.Further, he submitted, as the Letters of Administration has not been obtained, administration of the Deceased’s estate has not even begun and further that pending distribution of the estate of the deceased father, the Judgment Debtor, as one of the interested beneficiaries under the deceased father’s intestacy, has absolutely no beneficial interest in it as the entire interest (including beneficial interest) vests in the personal representative.

30.He says all the Judgment Debtor now has, is only an inchoate right.

31.The money now held in the Garnishee Bank is therefore not debt due to the Judgment Debtor himself in his personal capacity.

32.Mr. Chiu on the other hand tried to persuade this Court that in this case notwithstanding that, the estate is held on trust for the four beneficiaries pending administration, as stated by the learned editors in Snell’s Equity, 33^rd edition, at para. 33-002, the beneficiary and therefore the Judgment Debtor has a right not only ‘a chose in action transmissible by his will” (the case Re Leight’s WT [1970] Ch.277 as quoted by the learned editors at footnote 17) but also an interest which is “assignable, whether by sale or as a gift or as a security for some obligation”, a “realisable property for the purposes of criminal confiscation proceedings” and “in the event of the beneficiary’s bankruptcy, the chose in action may vest in the trustee in bankruptcy entitling the trustee to receive whatever property comprising the residuary estate the bankrupt was entitled to”.

33.He submitted that such right, which is also a chose in action, should be an interest capable of being garnished.

34.Mr. Chiu did not cite any authority in support of this argument.

35.In the alternative, he sought to argue that pending administration of the estate, the judgment debtor has both the legal and beneficial interests in the monies in the bank account albeit in capacity as trustees and after administration, he will have beneficial interest in the moneys. He says therefore the interest in the joint account can be attached.

36.I must say I am not persuaded by any of these submissions of Mr. Chiu.

37.Clearly, trust money cannot be attached to satisfy a personal debt. Incorporated Owners of Million Fortune Industrial Centre v Jikan Development Ltd.

38.Moreover, the garnishee order nisi will only attach to those funds which are standing to the credit of the judgment debtor at the time the order nisi is served upon the bank. The order nisi will not attach funds received subsequently.

39.As Mr. Li submitted, in the present case, where the only right is an inchoate right, there is simply no “debt due” against which the Judgment Creditor could attach.

40.“For there to be garnishee proceedings, it is essential that there exists a present debt, and not merely something that may or may not become a debt in the future” (Wilkinson, Cheung and Meggit, A Guide to Civil Procedure in Hong Kong, 5^th Edn., §19.208.)

41.Mr. Chiu also invited this Court to find that as the father of the brothers had died for 12 years, the Court should infer readily that there is implied assent or an actual assent and that the estate had actually been administered already.

42.On what is before me, there is simply no evidence to support such argument.

43.Despite all the complaints made by Mr. Chiu in his submissions as to failure of the Applicant disclosing the updates of their application for Letters of Administration, their suspicion that the brothers had already distributed the estate, there has been no applications of any sort from their side directed at these doubts before this hearing.

44.In the written submission of the Plaintiff, he asked that the Court should order the Applicant to file affirmation accounting for the progress of their application for Letters of Administration of the estate of the deceased father, the whereabouts of the balance of sale price of deceased father’s land, whether there was any agreement amongst the four beneficiaries of the estate in respect of the disposal of the proceeds of sale of deceased father’s land. He asked that in the meantime, the balance of the Time Deposit Account should be paid into Court and the Garnishee Order Nisi should be continued pending further order of the Court.

45.This is simply not right. If the above are necessary for disposal of the Applicant’s Summons and the garnishee proceedings, the Plaintiff could have taken out appropriate applications, they have failed to do so.

46.Whilst I appreciate the frustration and suspicions of the Plaintiff, it is inappropriate and I am not prepared to grant any of the relief sought.

CONCLUSIOIN

47.By reasons of matters aforesaid, the garnishee order nisi should not continue and is discharged.

COSTS

48.I also make an order nisi that as from 1 July 2017, the cost of the Applicant’s Summons be to the Applicant and as for the costs prior to 1 July 2017, there be no order as to the costs. The Plaintiff is entitled to have reasonable time to consider his position after the clarification via the 2^nd affirmation of the Applicant the sale price of land of the deceased father. Subject to the foregoing, there be no order as to costs in respect of the Garnishee proceedings proper.