The China Investment & Development Fund (No.3) Ltd. v. Wong Kwong Yiu, John
Read the full judgment text of HCA 22080/1998 on BabelCite. This High Court CFI judgment was delivered on 29 October 1999.
1. This is the Defendant's appeal against the order of Master Jones dated 1st September 1999 refusing the Defendant's application for security for costs to be given by the Plaintiff.
Cites 2 cases
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HCA022080/1998 HCA22080/98 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO.22080 OF 1998 -------------
------------- Coram : Hon Mr Justice Chung in Chambers Date of hearing : 29 October 1999 Date of judgment : 29 October 1999 -------------------- J U D G M E N T -------------------- 1. This is the Defendant's appeal against the order of Master Jones dated 1st September 1999 refusing the Defendant's application for security for costs to be given by the Plaintiff. 2. It is common ground that the Plaintiff is a company incorporated overseas and is therefore a foreign Plaintiff within the meaning of the Rules of High Court, O.23, r.1(1)(a). 3. In the course of the appeal (as was in the Court below) the main arguments of the parties centred around the merits of the parties' respective case. It is trite law, as the parties accepted, that in this kind of application, the merits of the Plaintiff's claim are not usually a major factor because more often than not the Court cannot at an interlocutory stage properly consider this aspect. The exception to this "rule" is that the Plaintiff's claim can be shown to be overwhelming, or, in the words used in Wong Kwok Mei, Sanrita v. Eversonic Incorporated [1992] 2 HKC 62, the Plaintiff's claim is "genuine and strong". I have borne this principle in mind when deciding this appeal. 4. The Plaintiff's claim against the Defendant is for the sum of about US$8.26 million. It is based on various written arguments which in substance was a guarantee contract. The original Defence alleged that the crucial document relied upon by the Plaintiff had not been signed and therefore there was no binding contract between the parties. At the beginning of the appeal hearing, Mr Law for the Defendant, asked for leave to amend the Defence. This was not opposed by Mr Lui for the Plaintiff and leave was given for the Defence to be amended. The Amended Defence raises three lines of Defence :-
5. At the appeal hearing, Mr Law indicated he would not rely on either point (a) or point (c) above (for the purpose of the appeal only). I understand him to be saying that I can consider that the Plaintiff's claim is either overwhelming or "genuine and strong" vis-à-vis these two points. I consider that he was entirely correct in taking this stance in view of the documentation before me. Even if he had not made this implied "concession", I would have no hesitation in reaching the same conclusion that the Plaintiff's claim is overwhelming or "genuine and strong" vis-à-vis these two points. 6. As a result, the only real issue between the parties is whether the Plaintiff's claim is overwhelming or "genuine and strong" in relation to the so-called "money-lender" Defence. Mr Law argued that once this Defence is raised, the Court has to investigate into the allegation. Thus, the Plaintiff cannot be said to have shown an overwhelming or "genuine and strong" case. He relied for this argument on the following cases :-
It appears that in each of these cases, there was some evidential basis before the Court in support of the allegation that a money-lender transaction was in issue. 7. Mr Liu's answer to this argument is in short that this Defence is not a bona fide defence and was one created for the purpose of this action. He drew my attention to the following matters :-
8. Mr Liu said that up to now, there is absolutely no evidence from the Defendant to support the money-lender defence. In reply, Mr Law argued that the point has been raised in the pleadings and the Court can infer from the Plaintiff's case and the documentation (that two loans were advanced by the Plaintiff) that it is at least arguable that the Plaintiff was a money-lender and that the loans were money-lender transactions. 9. In the circumstances set out above, I conclude that (at least) for the purpose of this appeal, there is no substance in the money-lender defence. I agree with Mr Liu that the way in which, and the time at which, the money-lender defence is raised entitles me to so conclude. For this reason, I find that this is one of the exceptional cases where I should have regard to the strength of the Plaintiff's claim. I find that (at least) for the purpose of this appeal, it is overwhelming or "genuine and strong". 10. In reaching that conclusion, I have not taken into account the second affirmation of Lam Miu Yin Amy dated 26th October 1999, in particular paragraph 5 thereof and exhibit LMYA4. In my view, that piece of evidence only reinforces my said conclusion. 11. It has been said that the likelihood of the Plaintiff winning the case is "... a major factor for consideration..." : see The Supreme Court Practice 1985 Vol.1 para.23/1-32 referred to inLeslie Fay Companies Incorporated v. Cheerio Ltd. [1990] 1 HKC 463, 464 B-C. I consider that this observation is applicable to the present appeal. 12. A point was made by Mr Law regarding a letter dated 4th February 1999 from the Plaintiff's Solicitors offering to give $100,000 by way of security for costs. I have taken that letter into account and consider that it is not a factor which should affect my discretion in a great way. 13. For the above reasons, I consider that my discretion should be exercised in refusing the application for giving security for costs. I agree with the Master's order and the appeal is therefore dismissed.
Representation: Mr Michael K.W. Liu, inst'd by M/s Linklaters & Pianes, for the Plaintiff Mr Law Man Chung, inst'd by M/s Lo, Wong & Tsui, for the Defendant |