Lee Yip Tang and Another v. Lee Yu Ying

HCA006832/1983

IN THE HIGH COURT OF JUSTICE

BETWEEN

Coram: Hon. Mantell J.

Date: 4th November, 1983.

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JUDGMENT

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1. On 5th August 1983, the plaintiffs entered judgment against the defendant under R.S.C. O.13 r.1 for $275,00O. Thenceforward, they became judgment creditors and she a judgment debtor.

2. On 12th August 1983 without further order by the court, the judgment creditors took out the praecipe for a writ of fi fa. The praecipe contained no instruction that the writ should authorise the arrest and imprisonment of the judgment debtor, in other words that it should follow Form 53 with the words in brackets included, but when sealed on 15th August, the writ followed the unexpunged Form 53.

3. On 12th October 1983, the judgment debtor applied in writing under O.49 r.6(1) for an order of release. Her application was supported by affidavit.

4. On 17th October 1983, the court gave notice to the plaintiffs that the application would be heard on 24th October. On 18th October, the judgment creditors signified their intention to appear and oppose the application. On 24th October, the hearing took place in my . chambers.

5. Solicitor appearing for the judgment creditors called no evidence but sought leave to cross-examine the judgment debtor. Leave was granted. The judgment debtor was cross-examined at length. At the conclusion of the hearing, I discharged the judgment debtor from prison but reserved my reasons. I give them now in court.

6. In this case, the applicant spent 20 days in debtor's jail.I doubt that the period could have been much reduced under the procedure followed. There is no reason to think that her treatment would have been different however much or little to blame she might have been. In the event,she has been released. I am doubtful as to whether she was lawfully imprisoned in the first place. O.45 r.1. sets out the available means of enforcing a judgment. One is by a writ of fi fa, another is by an order of committal made under O.49B. The means are separate. O.47 which deals with writs of fi fa contains no provision authorising the inclusion in the writ of a direction to the Bailiff to arrest and imprison. O.49B itself is silent as to the authority necessary for committal to prison and as to the procedure by which such authority is to be obtained. O.49B r.2 appears to contemplate some reference to the court because it provides for the fixing of an amount for the civil debtor's support and maintenance. In practice, however, the maximum sum permitted is simply included in the writ of fi fa. I question whether on a true construction the rules justify imprisonment without order of the court. I am assured that the practice has continued unquestioned for many years. But any more than the wording of Form 53 long practice seems insufficient justification. Nor does the absence from O.49B of any provision for leave to issue the writ, or for bail, or for opportunity to show cause make the present procedure more digestible. The form of the praecipe has been the subject of comment already. ⁽¹⁾But these matters have not been argued in this case and I have not needed to come to any conclusion.

7. An application for discharge is initiated by the judgment debtor who is required to give a full account of any attachable property. The application is verified by affidavit. There is no onus upon the judgment debtor beyond that, and certainly no burden upon him or her to disprove suggestions at the hearing that the disclosure is incomplete. There is, for example, no duty upon the defendant to support his application with the production of bank statements or other documents. The procedure contemplated under O.49 r.6 is not a substitute for the examination of the judgment debtor under O.48.

8. Nor is there any duty upon the court to conduct an inquisition. The words in O.49B r.6(4) "If, after such investigation as it may think proper on the application, the court is of opinion that the judgment debtor should be set at liberty ..... it shall order the release of the judgment debtor" do no more than confirm the court's duty to regulate the conduct of the hearing and do not require court to enter the arena. Any other construction would be inconsistent with the provision for release of the judgment debtor upon the judgment creditors' failure to oppose, and would be repugnant to rule 6(3) which places a burden of proof upon the judgment creditor.The proceeding contemplated by rule 6 is adversarial and the burden throughout rests upon the judgment creditor who opposes the application for discharge. In order to succeed, the judgment creditor must satisfy the court of one or more of the four matters set out in rule 6(3). They are:

Failure to prove one or more of those matters must result in an order for release.See Lai Cheuk-Biu v. Robinson Wilson Co. Ltd.(2)It seems unnecessary to add that if the judgment creditor does not oppose the application, there must be an order for release but unnecessary or not, that is precisely what rule 6(4) does go on to provide.

9. Now, in this case, the judgment creditors have alleged that the judgment debtor has wilfully concealed property and has transferred her interest in a beauty clinic in a transaction which, making no bones about it, Mr. Kong says was a sham. He also questions the fullness of her disclosure of assets. The first allegation is the most serious and the one upon which Mr. Kong places most reliance. Some years ago, apparently, the judgment creditors and the judgment debtor had been jointly engaged in the promotion of a limited company. The judgment creditors provided $275,000 towards the financing of the company. The judgment debtor was entrusted with the money which has now disappeared. Mr. Kong suggests that the judgment debtor has made off with it. She says that the money was lost in the running of the business. The sum in question is that for which judgment was recovered.So far as the transfer of the beauty clinic is concerned, Mr. Kong says that it is extremely suspicious that it should have been transferred to someone who is a distant relative of the judgment debtor at a relatively modest figure and the more so because the transferee happens to have been an employee of hers. Well, these were matters which Mr. Kong investigated thoroughly in cross-examination and to such effect that at the end of the day, I was left with some suspicion, but no more.

10. Each of the four grounds of opposition involve the proof of disreputable conduct. The last three, I should think, involve the proof of criminal or quasi-criminal conduct. The proceeding itself is one involving the liberty of the subject. However, this is a civil proceeding and 1 hold that the standard of proof to be achieved by a judgment creditor is the civil standard, namely, that of satisfying the court on a balance of probabilities. Nevertheless, following the decision of the House of Lords in Reg. v. Home Secretary Ex-parte Khawaja,⁽³⁾ such proof is only to be established by clear evidence. It will be a rare, indeed, that a judgment creditor will be able to discharge the burden by cross-examination alone and without putting forward any positive case.Of course, a positive, case may be established by putting documents to a judgment debtor in cross examination but more often than not, something more will be required.Mr. Kong complains that there is very little time udder the procedures for the judgment creditor to assemble his case. I disagree. A judgment creditor who seeks to enforce his money judgment by imprisonment ought to have his tackle in order before taking out the praecipe.

11. In this case, I hold that the judgment creditors have not discharged the burden which lies upon them of satisfying me as to any one of the matters which would be a sufficient ground for refusing this application.

12. I intend to take the opportunity to make two general observations arising out of this application.

13. First, these applications concern the liberty of the subject and should be heard in court not chambers. I am told that in the past, the practice has been that they are sometimes heard in court and sometimes in chambers. For that reason and because the judgment creditor was not represented by counsel, I did not, on this occasion, adjourn into court. In future, I shall hear all such applications in court on the day appointed. Second, in this case there was no application for costs and I made no order. In future a judgment creditor who unsuccessfully opposes an application such as this may well be required to pay the applicant's costs as well as his own.

(1)    Supreme Finance Limited v. Wan Hang Trading Limited & Others

(2)    [1978] H.K.L.R. p.108 C.A.

(3) [1983] 2 W.L.R. 321

Representation:

L. Kong of Louis Kong for Plaintiff.

S. Chow (Chu & Lau) for Defendant, Applicant.