Lai Cheuk-biu v. Robertson, Wilson Co Ltd
Read the full judgment text of CACV 74/1977 on BabelCite. This Court of Appeal judgment.
1. The appellant was arrested and imprisoned for debt at the instance of the respondent on July 22nd, 1977. He applied for his discharge under the provisions of Order 44B rule 6 of the Rules of the Supreme Court on July 27th, 1977. The respondent opposed that application and it was dismissed on August 25th, 1977. Leave to appeal against that decision out of time was granted on December 20th, 1977.
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CACV000074/1977
Coram: Briggs, C.J., Huggins and Pickering, JJ.A. Date of Judgment: 11 May, 1978. ----------------- JUDGMENT ----------------- 1. The appellant was arrested and imprisoned for debt at the instance of the respondent on July 22nd, 1977. He applied for his discharge under the provisions of Order 44B rule 6 of the Rules of the Supreme Court on July 27th, 1977. The respondent opposed that application and it was dismissed on August 25th, 1977. Leave to appeal against that decision out of time was granted on December 20th, 1977. 2. At the hearing of the application the appellant filed an affirmation of means in accordance with Order 49B rule 6(2). 3. The ground of appeal is that the trial judge was wrong in law in refusing the application for discharge he having found as a fact that the respondent had failed to prove any of "the things set out in Order 49B rule 6(3)". 4. That sub-rule reads in part as follows:-
5. Sub-rule (4) reads thus:-
6. In his judgment, the trial judge found that the respondent had not proved that the applicant was unable to pay the debt because of his extravagant living nor that he had wilfully concealed property nor that he had been guilty of fraud or some act of bad faith. Nevertheless he dismissed the application for discharge. 7. In doing so, he relied on the case of Leung Lai Sheung v. Sam Ying Company(1). Since that case was decided, Order 44B rule 6(3) has been amended. And in my view that case cannot assist the respondent. As the law stands to-day the position appears to me to be plain. 8. In order to succeed in opposing an application for discharge the judgment creditor must prove one of the matters referred to in sub-rule (3) of the rule. If he is unable to do this, he cannot succeed and the judgment debtor is entitled to be released. The burden of proof is on the judgment creditor, the judgment debtor does not have to prove that he has not committed any of the acts referred to in the sub-rule. 9. Reliance was put on sub-rule (4) of the rule. It was suggested that this gave an overriding discretion to the court to decide whether or not a judgment debtor should be released or not apart from the matters contained in sub-rule (3). If that were so it would be unnecessary to mention the matters in sub-rule (3) at all. 10. In my view, sub-rule (4) does not give such a discretion. It must be read in conjunction with sub-rule (3). And in my view unless the judgment creditor can prove one at least of the matters mentioned in sub-rule (3) the judgment debtor is entitled to be discharged. 11. In view of the finding of the trial judge that the respondent has not proved any matter referred to in the sub-rule the appellant is entitled to be discharged.
Representation: K. Kwok (Hastings & Co.) for appellant R. Tang (P. Mo & Co.) for respondent (1) (1964) H.K.L.R. 752.
----------------- Coram: Briggs, C.J., Huggins and Pickering, JJ.A. Date of Judgment: 11th May 1978. ----------------- JUDGMENT ----------------- Huggins, J.A.: 12. As we are disagreeing with the learned judge I, too, will state my reasons. 13. The basis of the judge's decision is contained in two sentences:
Clearly the judge took the view that he was not obliged to order the release of the judgment debtor in spite of the failure of the judgment creditor to establish any of the grounds upon which it was open to him to oppose the application for release. The judge found support for that view in the judgment of Blair-Kerr, J., in Leung Lai-sheung v San Ying Co. 1964 H.K.L.R. 752. 14. In seeking to support the decision Mr. Tong has reviewed the history of the provisions relating to imprisonment for debt and has forcefully argued that between 1901 and 1966 there was a burden upon the judgment debtor to persuade the court that he ought to be released, a burden which went beyond successfully negativing the four possible grounds upon which the judgment creditor could oppose his application for release: he had to persuade the court that he was poor but he was honest and that in all the circumstances it was just that he should be set at liberty. That was a view which had been expressed by Blair-Kerr, J., in the case cited, although it was obiter since the ratio of his decision was that the judgment creditor in that case had proved that the debtor fraudulently transferred property "for the purpose of procuring his discharge without satisfying the judgment". It is no longer necessary to consider whether the ratio of that decision was sound, because in 1966 (as a result of that case) the rule was amended by the substitution of the words "for the purpose of avoiding payment of the debt" for the words which were there in question. Mr. Kwok, for the present Appellant, was prepared to question Blair-Kerr, J.'s view on the wider issue, but he submitted that it was unnecessary to do so as the rule was, by the Code of Civil Procedure (Amendment) (No. 4) Rules 1966, also amended by the addition of the words "in that event in order to succeed", "that event" being the signification of an intention of appearing and opposing the application for release. Mr. Kwok's contention is that this addition has the same effect as the sentence which appeared in s. 6 of Ordinance No. 13 of 1873: "If the execution creditor shall fail to make such proof, the court shall cause the defendant to be set at liberty". Mr. Tong emphasizes the distinction between failure by the judgment creditor to make proof and failure by the judgment debtor to establish that in all the circumstances he ought to be released: he says the judgment creditor may not "succeed" and yet the judgment debtor may not be released. I think this argument fails because it is based upon the false premiss adopted by Blair-Kerr, J. We are here concerned with a provision affecting the liberty of the subject and it must be interpreted strictly in favour of the judgment debtor. That is not to say that I doubt the desirability of retaining the power to imprison for debt, but only that the power must be kept within the bounds prescribed by the legislating authority. It seems to me it would be absurd to hold that where an opposed application for release has been dismissed the judgment creditor has not "succeeded". Indeed, in my judgment the intention has never been that a judgment debtor could lawfully be refused his release although none of the four specified grounds of refusal had been proved. The true principle was laid down in Go Yet- wah v China State Bank Ltd. 1958 H.K.L.R. 45, 47:
There might possibly be a case where the court would be of opinion that the judgment debtor should be set at liberty in spite of the judgment creditor's having proved one of the matters mentioned in para. (3), but it cannot refuse to set him at liberty for some reason other than proof of one of those matters. If there were power to refuse to order release on other grounds, it would have been unnecessary to specify the four matters which were mentioned in para. (3). 15. The Appellant was, on the finding of the learned judge, entitled to an order for his discharge from prison. 11th May 1978. Representation:
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----------------- Coram: Briggs, C.J., Huggins & Pickering, JJ.A. Date of Judgment: 11th May, 1978. ----------------- JUDGMENT ----------------- Pickering, J.A.: 16. I am of the same opinion. What we are concerned with is the construction of the modern sub-rules and an analysis which concludes, as Mr. Tong would have us conclude, that because 0.49B r. 6(3) does not employ the ipsissima verba of s.6 of Ordinance No. 13 of 1873, the modern sub-rule cannot be construed as having the same effect, is incomplete. The old wording was: "If the execution creditor shall fail to make such proof, the court shall cause the defendant to be set at liberty." The modern sub-rule 6(3) reads in part:-
17. That sub-rule is perfectly susceptible of construction without reference to the older repealed legislation. It is only necessary to ask what it is that is governed by the phrase "in order to succeed" for it to be apparent that the answer is in "opposing the application" that is in successfully resisting the request of the judgment debtor to be set at liberty. To achieve that result the judgment creditor must demonstrate that the judgment debtor has been guilty of one or more things:- unjustifiable extravagance, wilful concealment of property, fraudulent transfer or removal of property or some other act of bad faith. If the judgment creditor is unable to do that he does not "succeed" and it follows that the judgment debtor must be set at liberty and the judge or registrar has no discretion in the matter. 18. As I see it the discretion points in the opposite direction and arises from sub-rule (4) which reads:-
19. This appears to confer a discretion to set the judgment debtor at liberty in a proper case despite the fact that the judgment creditor has demonstrated one or more of the matters referred to in sub-rule (3). 20. Since in the present case the learned judge found that the judgment creditor had not made satisfactory proof of any of the things set out in sub-rule (3) the judgment debtor, the appellant, was entitled to be discharged. It was for these reasons that I concurred in allowing the appeal and ordering the immediate discharge of the appellant. Representation: Kenneth Kwok (Hastings & Co.) for appellant. Ronny Tong (Peter Mo & Co.) for respondent. |