Viva Industrial Corporation (A Firm) v. Shanghai Commercial Bank Ltd

HCA002189/1977

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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Coram: Mr. Commissioner Liu, Q.C. in Chambers.

Date of Judgment: 6th October, 1977

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DECISION

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1. This is an action against the defendant bank not in their capacity of a local correspondent bank for the Farmers Bank of China but on the basis of alleged independant causes of action. The claims of the plaintiff can be described as two-fold: The first claim amounts to some $1,221,198.10 and the second claim $853,265.91, but I must confess that I do not follow the deduction of the ultimate figure for the plaintiff's first claim in this action. I should hasten to state the obvious that what I do not understand is not necessarily inaccurate.

2. Apart from the causes of action pleaded in the amended Statement of Claim, the facts have little bearing on the bone of contention in the present proceedings. In substance, the plaintiff's first claim of over a million dollars arose from an alleged agreement entered into between, inter alia, the plaintiff and the defendant whereby the defendant are said to have assured certain payment to the plaintiff under a Letter of Credit, and this first claim is in respect to part of 35% of that Letter of Credit. The second claim of the plaintiff is founded on two of the drafts drawn on the remaining 65% of the said Letter of Credit. For the second claim against the defendant, the plaintiff rely on the defendant's alleged capacity as the plaintiff's collecting agent, or alternatively as holder of fund which is said to have been credited to the plaintiff by the defendant on discounting certain drafts, or further alternatively on an alleged admission made by the defendant.

3. On the 5th of September, 1977, an Order 14 summons was duly issued by the plaintiff on those causes of action against the defendant in their personal capacity. On the 14th of September, 1977, an Inter-pleader Summons was taken out by the defendant with a view to staying the proceedings at large, substituting Farmers Bank of China as defendant and seeking to interplead with the Farmers Bank of China as claimant. On the 20th of September, 1977, the defendant filed another summons for leave to serve the Inter-pleader Summons out of jurisdiction on the claimant, the Farmers Bank of China, in Formosa. I am informed by the Mr. Tong for the defendant that the Inter-pleader Summons has been served and that steps will be taken to have the Inter-pleader Summons heard expeditiously.

4. On the 21st of September, 1977, all these summonses came before the learned Registrar. On the Order 14 summons, he adjourned it sine die with liberty to restore but directed that the Order 14 summons was not to be heard before the disposal, if I may stress the word "disposal", of the Inter-pleader Summons. On the Inter-pleader Summons, the learned Registrar ordered it to be adjourned to a date to be fixed in consultation with counsel's diaries with costs reserved, and on the defendant's summons for service of the Inter-pleader Summons out of jurisdiction, an order in terms was made but with no order as to costs.

5. On this appeal, which is to be heard de novo, Mr. Robert Tang, counsel for the plaintiff, complains that since this is an action on causes of action against the defendant personally and independently of their capacity as a local correspondent bank or advising bank for the Farmers Bank of China, the Order 14 summons ought in justice to be heard first, otherwise in view of the state of the Court's diary and the multifarious issues expected to be contested in the Inter-pleader Summons, the plaintiff's claim for summary judgment will be unwittingly delayed. Counsel urges rhetorically that justice delayed is justice denied. It is the plaintiff's fervent desire that the Order 14 summons should at least be heard at the same time with the Inter-pleader Summons, and Mr. Tang informs the Court that his lay clients would be content to leave the sequence in which these two summonses are to be heard to the discretion of the hearing Registrar or the trial judge, as the case may be. As I see it, this latter request of counsel for the plaintiff does not, in substance, differ from the spirit of the orders made by the learned Registrar on the 21st of September 1977, but I will return to this later in the course of my decision.

6. It was submitted by Mr. Tang, counsel for the plaintiff, that relief on an inter-pleader summons may only be granted to a party who claims no interest in the subject-matter in suit. As I understand it, Mr. Tong for the defendant maintains that the defendant claim no interest in the subject matter of these proceedings, but that since they have never acted in a capacity other than that of an advising bank, they have properly asserted their right to contest the allegations in the amended Statement of Claim.

7. The defendant have, in the affidavit of one Samson Su filed in the Inter-pleader proceedings on the 14th of September 1977, disclosed their "defence". It is averred by the defendant that at no time did they act beyond the capacity of a local correspondent bank i.e. an advising bank for the Farmers Bank of China and that never had they entered into any undertaking or agreement with the beneficiary of the said Letter of Credit i.e. the plaintiff. It is not without interest to note that for the alleged undertaking or agreement on the part of the defendant in respect to the plaintiff's first claim of over one million dollars, the plaintiff rely inter alia on their own letter, said to have been drafted by the defendant, sent to the defendant. It is not for me to descend into the area of merits or demerits at this stage of the case. Suffice it to say that it is not improbable that in the light of the defendant's strenuous denial of the alleged capacity in which they are being sued, the staggering sums of fund involved, the status and local connection of the defendant as a bank carrying on business in Hong Kong and the assertion that the defendant are not in the least interested in the disposition of the fund in suit, a payment into Court would be ordered in the 0.14 Summons rather than shutting out the defendant entirely from defending this action. Again, this is no more than surmise on my part, and these observations are intended to be read only in so far as they are relevant to the issues on this appeal.

8. The defendant admit that the amount representing the second claim of the plaintiff is in their custody. On my calculations which may not be precise or accurate, the defendant have further cash in hand to the extent of $929,168.20 which, including accrued interest, is fairly close to the first claim of the plaintiff of $1,221,198.10. The defendant have offered to make a payment into Court or to deal with the money in such a manner as the Court sees fit to direct. It is not without significance to observe that the claimant is also a bank, the Farmers Bank of China, whose business integrity like that of the defendant's in the present proceedings has never been impugned or sought to be impugned. Faced with this situation, particularly where amounts of fund in litigation are not insubstantial, in my view the learned Registrar's orders cannot be faulted. Naturally, in these de novo proceedings, it is incumbent on me to decide what Order this Court will make in the known circumstances.

9. The plaintiff were granted liberty to restore the Order 14 summons but not to be heard before the disposal of the inter-pleader summons. On behalf of the plaintiff, it was sought to be established that inordinate delay would be caused by postponing the hearing of the Order 14 summons after the ultimate determination of the Inter-pleader Summons, but obviously that was not what was ordered on the 21st of September 1977 by the learned Registrar who merely directed the Order 14 summons not to be heard prior to the disposal, not ultimate determination, of the Inter-pleader Summons. To all intents and purposes, the Order 14 Summons may be heard on the same day after the Inter-pleader Summons. This is in fact what is now being prayed for by the plaintiff on this appeal. Further, as the plaintiff was granted liberty to restore the Order 14 summons, there is obviously nothing to inhibit or otherwise hinder the plaintiff from returning to the learned Registrar for a payment into Court by the defendant of fund admittedly held by them. What has been stood over pending the disposal of the Inter-pleader Summons is only an adjudication on the merit in the 0.14 Summons. Payment into Court has been offered by the defendant, and an order to that effect, if applied for, may be made by consent. There is also nothing to discourage the plaintiff from inviting the learned Registrar to have such fund appropriately invested other than in the Suitors' Fund Account in the interim. I can see no possibility of prejudice whatsoever in the orders made by the learned Registrar on the 21st of September 1977 save for some delay in the availability of the funds claimed in the amended Statement of Claim if the plaintiff succeed. I myself would have made the same orders as these granted by the learned Registrar.

10. In the circumstances and for all these reasons, I dismiss the appeal with costs and a counsel certificate.

Representation:

Mr. Robert Tang instructed by Messrs. Deacons for Plaintiff/Appellant.

Mr. Ronny Tong instructed by Messrs. Hallant Y.T. Ho for Defendant/Respondent.