Kan Si Loong and Another v. Sarah Kwok Hon Wah t/a S. Tong & Co

HCA003190/1978

-----------------

Coram: Li, J.

Date of Judgment: 6th November, 1978

-----------------

JUDGMENT

-----------------

1. This is an application by Sarah KWOK Hon-wah trading as S. Tong & Co., the Defendant in Action No. 3190 of 1978 (herein referred to as the Applicant) to strike out the Statement of Claim in the said action on the ground that it is frivolous and vexatious and that it is an abuse of the process of the Court, or that the Plaintiffs' action and/or the Respondent's action against the Applicant be stayed or dismissed, and that the Applicant be at liberty to enter judgment for her costs, including the costs of this application to be taxed. Perhaps I should add that the Respondents in this application are the Plaintiffs, KAN Si-loong and YU Hau-ling in Action No. 3190 of 1978. The background giving rise to this application is that the Applicant was the Plaintiff in Action No. 798 of 1976 in this Court in which the Applicant sued one "Cheung Tat Co." of which the Respondents were partners for shares sold and delivered. Amongst various points of the defence raised was that the shares alleged to have been sold by the Applicant were never sold to the Respondents and/or delivered to the Respondents at all. In the course of the action in 1976 further and better particulars were sought and the Applicant, as Plaintiff in the said action in 1976, gave further and better particulars setting out the serial numbers of the share certificates, the number of shares and the type of shares sold and delivered to the Respondent or the Respondent's client on the 12th March 1976. That was tendered as Exhibit H in that action. I found in that action, having heard the parties, and on the totality of the evidence, that the said shares had been delivered to the Respondent's client.

2. I must observe at this stage that at the time I gave judgment for the Applicant in the former action I was not relying wholly on the serial numbers of the shares alleged to have been so delivered. However, the number of shares alleged by the Applicant to have been delivered to the Respondent's client must of necessity have something to do with her credibility in her evidence, namely, the Applicant's evidence at the former trial. After my judgment the Respondent then filed their notice of appeal to the Court of Appeal. In addition to various grounds of appeal the Respondent allege they have now found new evidence that the share certificates as set out in Exhibit H and alleged to have been delivered by the Applicant to the Respondent's client could not possibly have been so delivered simply on the ground that on days later than the 12th March 1976 those share certificates, the serial numbers of which as set out in Exhibit H, were still in the possession of the Applicant. It is also known to me now that the Respondents' appeal to the Court of Appeal will be heard to-morrow morning and that at the appeal the Respondents will apply to the Court of Appeal for leave to adduce evidence to the effects that the share certificates with their serial numbers set out in Exhibit H by the Applicant were still in the possession of the Applicant and therefore could not have been delivered to the Respondent as alleged by the Applicant on the 12th March 1976 according to the Applicant's evidence. Thus it is alleged that a fraud had been practised in this Court and in particular in the action before me.

3. Pausing at this stage it is quite apparent that the Respondent had the alternative of two choices. One is to carry on with the appeal, apply to the Court of Appeal for leave to adduce new evidence. The other alternative is to institute an action to set aside the judgment I gave. The Respondent had taken both courses and it is an irony of the situation that one of the courses that is possible for the Respondent has been set down before me. I hope in judging the issue as to the one of the choices of the Respondent that I have not been biased and I shall try my best. In my opinion both courses taken by the Respondents rely on one matter and one matter alone - that they be allowed to adduce new evidence. The principle governing whether new evidence may be allowed is the same whether the issue is before the Court of Appeal or before a court of trial for setting aside the judgment. The principle is clearly set down and enumerated in the case of Ladd v. Marshall⁽¹⁾ in which Denning L.J. as he then was said:

"It is very rare that application is made to this court for a new trial on the ground that a witness has told a lie. The principles to be applied are the same as those always applied and fresh evidence is sought to be introduced. To justify the reception of fresh evidence or a new trial, three conditions must be fulfilled: first, it must be shown that the evidence could not have been obtained with reasonable diligence for use at the trial; secondly, the evidence must be such that, if given, it would probably have an important influence on the result of the case, though it need not be decisive; thirdly, the evidence must be such as is presumably to be believed, or in other words, it must be apparently credible, though it need not be incontrovertible."

4. In the case of Boswell v. Coaks⁽²⁾. the head notes read thus:

"Where it is sought to rescind a final and valid judgment on the ground of discovery of new evidence it must be shown that such evidence is both new and material."

5. A host of other authorities have been cited before me, including the Hip Foong Hong and Neotia Company⁽³⁾. That case supports the proposition that when it is alleged that a judgment has been obtained by fraud and independent to set aside the judgment is more convenient mode of procedure than to move for a new trial. In this instance, the appeal before the Court of Appeal and this application to strike out new action is separated by one day. One way or another I am bound by the Court of Appeal's decision. Three heads are always better than one, not to mention that obviously the Court of Appeal has superior jurisdiction. As trial judge who has heard the former action formed his decision, I must, of necessity, be prejudiced whatever decision I come to in this application. There is no doubt that the so-called new evidence should have and could have been available at the trial or before the trial. There had been discovery of documents. There had been further and better particulars. Had the Respondents at the trial been acting with due diligence the Respondent would have obtained the so-called new evidence and the Respondent's counsel would be in a position to confront the Applicant in cross-examination that whatever she claimed to have been delivered to the Respondents, were completely farcical. This would have given both the Applicant and the Respondents to sort out the matter properly. On the one hand the Respondent will be able to show that the Applicant was talking nonsense. On the other hand the Applicant would be given a chance to explain herself as to why she gave the particulars which were not correct without having to be labelled as a person who was so reckless as to have presented a recklessly careless case amounting to conduct described as fraudulent. I have no doubt that the alleged evidence was available at or before the trial that took place before me. In this Court I find that there must be finality in all proceedings. I would not re-open it except on fairly cogent grounds and for good reasons. Such good grounds and cogent reasons may well be shown to the Court of Appeal and on answer will be obtained, by tomorrow morning, from the Court of Appeal. It is for the Respondent to justify himself why such evidence was not adduced earlier. This is, in my opinion, not a matter of mere technicality. It is in law that a plaintiff in an action is entitled to the fruit of the judgment on the evidence adduced in court at the time of trial unless good reason is given that certain evidence was not available or known to the Defendants or could not with due diligence be found at the time of trial and that such evidence affects the judgment. It does appear that if the Respondent's allegations were true then the Applicant had not delivered the shares she alleged to have delivered to the Respondent's client on the day she said she had delivered them. However, there might be an explanation. The Applicant was deprived of her chance to explain because the Respondent did not make use of that evidence at trial. For these reasons I will not strike out the action but I would order that the action against the Applicant be stayed pending the appeal before the Court of Appeal and that the Applicant should have liberty to enter judgment for her costs including the costs of this application. Certificate for counsel.

Representation:

Jackson-Lipkin & Van Buuren (Alfred Lau & Co.,) for plaintiffs

C. Ching, Q.C. & R. Tang (Alexander Tsang & Co.,) for defendants

(1) 1954 1 W.L.R. 1489.

(2) (1894) 6 R. 167.H

(3) 1918 A.C. 888.