Hong Kong Canton Export Co Ltd v. Ng Mao Yip t/a Yip Kee Hong

HCA000111/1968

IN THE SUPREME COURT OF HONG KONG

ORIGINAL JURISDICTION

ACTION NO. 111 OF 1968

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Coram: Pickering, J.

Date of Judgment: 22 August 1970

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RULING

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1. The applicant is imprisoned pursuant to a writ of execution as a result of his failure to satisfy the judgment in this action. In May of this year, his application for discharge from prison was refused by another judge. He has now made a fresh application for discharge and I am asked to decide, as a preliminary point, the important question whether the applicant has any right to make a second application, his first having been refused.

2. It is common ground that the reason for the initial refusal to release the applicant from prison was that the judge on that occasion found as a fact that the applicant had effected a fraudulent transfer of property for the purpose of avoiding payment of the judgment debt.

3. O.49B r.6(1) of the Rules of the Supreme Court reads:-

"Any person imprisoned in execution of a judgment may at any time make written application to the Court for his discharge."

4. Mr. Chettle, for the applicant, said that he relied mainly upon the words "at any time" occurring in this sub-rule and referred to the case of YAM Sau-ying v. YOUNG Ying-cheung⁽¹⁾ where Huggins, D.J. (as he then was) refrained from deciding whether or not a fraudulent transfer effected for the purpose of procuring a discharge from prison without satisfying the judgment would give rise to a plea of res judicata upon a second application for discharge. In that case, as Mr. Chettle observed, the learned judge did not appear to have been asked to consider the meaning of the words "at any time" in O.49B r.6(1).

5. Mr. Chettle also referred to the unreported case of Chai Oi Kwan v. Kader Industrial Co. Ltd.⁽²⁾ where Rigby, S.P.J. (as he then was) having dismissed the application for discharge on the grounds that the debt was the consequence of bad faith and unjustifiable extravagance in living, added that some other judge might take an entirely different view and then advised the applicant to make a fresh application for discharge within "a reasonable period" which he suggested as three weeks or a month.

6. Mr. Chettle urged that the words "at any time" should be construed in their particular context, that is, in a context involving the liberty of the subject. The provisions regarding imprisonment for debt had been frequently criticised by the judges in Hong Kong and any doubt as to interpretation should be construed in favour of judgment debtors.

7. Mr. Zimmern for the respondent said that it appeared to be the view of most practitioners and of some judges that multiple applications for release from prison could be made by a judgment debtor and instanced the case of Go Yet-wah v. The China State Bank Ltd.⁽³⁾ which had been the subject of four applications to three different judges. Despite what practitioners and judges had previously thought however, Mr. Zimmern argued, repeated applications may well not be permissible under the law and by way of analogy he referred to the practice in England prior to 1949 of going from judge to judge on a habeas corpus application if unsuccessful before the first and subsequent judges; but that practice had been declared incorrect in the cases of re Hastings (No.2)⁽⁴⁾ and re Hastings (No.3)⁽⁵⁾ where it had been decided that there was only a right to go, and to go once to a Divisional Court of the High Court of Justice on a writ of habeas corpus.

8. In the final analysis, Mr. Zimmern said, the question must rest on the construction of O.49B but the words "at any time" did not mean any number of times, and in support of this proposition he cited the case of L. v. L.⁽⁶⁾ and in particular the first paragraph of the judgment of Davies, L.J.:-

"          I agree that this appeal should be allowed. Counsel for the wife submits that the effect of s.1 of the Matrimonial Causes (Property and Maintenance) Act, 1958, and the amendments made by that section to s.19(2) and (3) of the Matrimonial Causes Act, 1950, is that there is now no limit to the number of applications which may be made by a wife for permanent maintenance or a secured provision. His argument goes, and must go, as far as saying that, if a wife has made, for example, fifteen applications for maintenance, each one of which has been dismissed, either on the figures or in the light of the circumstances and the conduct of the parties, she is nevertheless entitled to make thereafter a subsequent application with a view to re-litigating the question all over again. In effect, that would mean that the words 'at any time thereafter' would be almost equivalent to 'at any number of times thereafter'. In my judgment, that is plainly wrong. The effect of the Act is to empower the court to make an order for maintenance on or at any time after the decree instead of, as formerly, on the decree. The previous power, according to the authorities, was exercisable on or within a reasonable time after the decree. The present power is exercisable on or at any time after the decree. There is nothing in the statute to empower the court, once it has decided the matter, to enter on a fresh inquiry whether such an order should be made."

9. O.49B r.6(1) did not imply, counsel continued, that a judgment debtor could make as many applications for discharge as he liked. In the present case an application had been made and the judgment creditor had accepted and discharged the burden of proof imposed upon him by O.49B r.6(3). That discharge of the burden of proof had resulted in a judicial decision of a Supreme Court judge which was subject to appeal but in the absence of appeal was res judicata. The present application was identical with that dismissed by Scholes, J. even to the extent that the same assets were revealed on the affidavit made in support of each application. There was nothing in O.49B which suggested that it could over-reach the principle of res judicata.

10. In reply Mr. Chettle submitted that the words "at any time" should, in the context of the liberty of the subject, be construed entirely independently of any construction adopted regarding maintenance which was the subject matter of the interpretation of the phrase in L. v. L.⁽⁶⁾

11. The phrase "at any time" has in fact fallen for interpretation in cases other than those referring to a wife's maintenance. In Digges'⁽⁷⁾ case it was held that a power to revoke uses "at any time" was not confined to one execution but the words were equivalent to "from time to time" as often as the donee of the power should choose. In ex. p. Norris⁽⁸⁾, a case which concerned the interpretation of the phrase "at any time" contained in R.13 of Schedule II to the Bankruptcy Act 1883, Lord Esher, M.R., said:-

"Then the rule says that he may amend the valuation and proof 'at any time', and we have no right to diminish the full force of those words 'at any time', unless from the Act itself or the Rules we can find some necessary implication to limit the force of the words."

12. In re Fanshawe⁽⁹⁾, a similar interpretation of the same words occurring in the same Rule was arrived at. In re Swinson⁽¹⁰⁾, the words were construed as meaning "from time to time". That case concerned the interpretation of Section 102(5) of the Bankruptcy Act, 1908 of New Zealand which provided that:-

"where a creditor has ..... valued his security, he may at any time amend the valuation and proof on showing to the satisfaction of the assignee or the Court that the valuation and proof were made bona fide on a mistaken estimate."

In that case Ostler, J. said:-

"It is a possible construction of this subsection that it only gives the creditor the right to amend once and not the right to amend from time to time ..... I think, however, that would be too narrow a construction of s.102(5), and I am prepared to hold that a creditor may amend his valuation and proof under the subsection from time to time. But if he asks for a second amendment on that ground, the onus lies strongly upon him to show that the amended valuation was itself made bona fide on a mistaken estimate."

13. It therefore appears that the phrase "at any time" has been construed restrictively in regard to a wife's maintenance in England and more liberally in regard to the right of a creditor to amend his valuation and proof under the Bankruptcy Acts both in England and New Zealand. Thus only contradictory guidance as to the interpretation of the phrase appears to be available from the authorities and none in the context of the liberty of the subject. In the absence of any authority to the contrary I am strongly of the view that the Court should give a liberal interpretation to the phrase "at any time" where it occurs in O.49B r.6(1) of the Rules of the Supreme Court since there its application is specifically to the liberty of the subject. On that basis alone I would rule that there is nothing to prevent the judgment debtor in this case from making a second application to the Court for his discharge from prison.

14. There is however another reason why I consider that multiple applications of this nature are permissible in law. O.49B r.6(3) provides that the Court shall cause the judgment creditor to be furnished with a copy of the judgment debtor's application for discharge and the proviso to that sub-rule lays it down that the judgment creditor shall not be allowed to appear and oppose the application unless within a period fixed by the Court he shall have signified in writing his intention of so appearing and opposing the application.

15. Sub-rule (4) of O.49B r.6 provides that:-

"If, ............................................., the judgment creditor has not signified his intention as aforesaid, (the Court) shall order the release of the judgment debtor."

16. It follows that in any case in which a judgment creditor does not signify his intention of appearing and opposing the application, the Court must order the release of the judgment debtor. It seems to me that in those circumstances it must remain open to a judgment debtor to apply for his discharge whenever he entertains what he believes to be a reasonable hope that the judgment creditor will have relented and will not oppose the application so that it will then be mandatory upon the Court to order discharge from prison. An over-hasty renewal of an application which has been dismissed might be frivolous and vexatious and an abuse of the process of the Court as was held by Huggins, D.J., (as he then was) in YAM Sau-ying v. YOUNG Ying-cheung⁽¹⁾ where an interval of only six days elapsed between the applications.

17. On the other hand neither the Court nor (one presumes, usually) the judgment debtor is in a position to know beforehand whether the judgment creditor will resist any particular further application for release particularly in circumstances where there appears to be nothing to be gained financially by keeping the judgment debtor in custody. Consequently, following the refusal of an application, a subsequent application made after a reasonable interval of time (a phrase which I refrain from attempting to define and which may well differ from case to case) could scarcely be considered an abuse of the process of the Court. The judgment debtor is, after all, in prison at the will of the judgment creditor and if the former feels that that will may well have dissipated he is surely entitled to test his belief by means of an application for release rather than to sit passively in prison. It not infrequently happens that when an application for release is made, the judgment creditor either informs the Court that he does not intend to oppose the application or merely takes no steps to oppose it. In such cases, the Court is unaware of the earlier point of time at which the judgment creditor came to the conclusion that no purpose was to be served by keeping the judgment debtor in prison any longer. All the Court does know is that the application is unopposed and that the judgment creditor, whilst not averse to the release of the debtor, has been too disinterested to request that release as he could have done under O.49B r.(4). In a situation in which an unannounced acquiescence in the release of the debtor has come into existence on the part of the creditor, it would in my view be oppressive to construe narrowly the words "at any time" so as to preclude the debtor from a further application designed to uncover that fact and to lead to his mandatory discharge from prison.

18. I am aware that in the case of Go Yet Wah and The China State Bank Ltd.⁽³⁾ the Full Court expressed the view, though probably obiter, that an element of penalty attached to some of the matters mentioned in rule 75(3) of the old Code of Civil Procedure which was in the same terms as O.49B r.6(3) of the present Rules of the Supreme Court. Specifically the Full Court referred to unjustifiable extravagance and fraudulent transfer or concealment of property. Again in Yam Sau Ying vs. Young Ying Cheung⁽¹⁾ Huggins, D.J. (as he then was) held that a previous finding that the judgment debtor's inability to pay was due to unjustified extravagance in living, was res judicata. This is a view which does not appear to have been put before Rigby, then S.P.J., in the case of Chai Oi Kwan and Kader Industrial Co. Ltd.⁽²⁾. Certainly in that case the learned judge, despite his finding of unjustifiable extravagance in living and his dismissal of the application, encouraged the applicant to make a further application within a reasonable period.

19. All these cases however were cases in which the application for discharge from prison was opposed. The judgment debtor in durance cannot be sure that a second or subsequent application for discharge will in fact be opposed. If it is, he may well be met with a ruling that the element of penalty attaching to the procedure of imprisonment for debt in Hong Kong precludes his release or that in the particular circumstances of his case the matter is res judicata. But he is at least entitled to try, to make his application and test the determination of his creditor to keep him in prison; for in the absence of opposition he will be entitled, under Rules of Court made under the authority of the Supreme Court Ordinance (Cap. 4 S.38), to be discharged.

20. For this reason and also because the words "at any time" in O.49B r.6(1), relating as they do to the liberty of the subject, should be construed liberally, I rule that the applicant is entitled to make a second application to the Court for his discharge from prison.

21. Cost reserved.

Representation:

Ruling read in Chambers.

Chettle of J.S. & M. for Applicant/Defendant.

A. Zimmern (C.Y. Kwan & Co.) for Respondent/Plaintiff.

(1) 1964 D.C.L.R. p.32

(2) O.J. Action No.1975/67.

(3) 1958 H.K.L.R. p.45.

(4) (1959) 1 Q.B.D. 358.

(5) 1959 1 A.E.R. p.698.

(6) (1961) 3 A.E.R. p.834 at p.841.

(6) (1961) 3 A.E.R. p.845 at p.841.

(7) 1 Rep. 173. Coke Pts. I & II V. 1 p.408.

(8) 17 Q.B.D. p.728 at p.731.

(9) 1905 (1) K.B. p.170.

(10) 1942 N.Z.L.R. p.678 at p.681.