Far East Bank and Trust Co v. King Poo Koo
Read the full judgment text of HCA 2586/1980 on BabelCite. This High Court CFI judgment.
1. This is an appeal from an order of the registrar giving unconditional leave to defend under Order 14.
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HCA002586/1980
IN THE SUPREME COURT OF HONG KONG HIGH COURT
Coram: Bewley, J. Date of Judgment: 31st October, 1980 ----------------- JUDGMENT ----------------- 1. This is an appeal from an order of the registrar giving unconditional leave to defend under Order 14. 2. The defendant signed two powers of attorney in favour of a Mr. Jose Bengzon who is an attorney at law practising in the Philippines. He was also associated with the defendant in a business enterprise in Manila known as Ginofarini Manufacturing Inc. 3. The first power of attorney, dated 18th January, 1977, gave Mr. Bengzon specific authority to sign bills of exchange, promissory notes, guarantees etc. in connection with a P 2,000,000 loan from the plaintiff to Ginofarini. 4. The second document, dated 22nd November, 1978, was rather more extensive. It authorized Mr. Bengzon to do a number of things relating to Ginofarini, including the power to enter into contracts for the disposition of shares in the company. One of the clauses was in these terms:-
5. Between September, 1977 and June, 1978, the defendant signed 16 promissory notes, which, inter alia, specifically conferred exclusive jurisdiction, in the event of litigation, on the Philippine courts. 6. On 7th March, 1977, Mr. Bengzon entered into a continuing guarantee with the plaintiff, on the defendant's behalf, in favour of Ginofarini. Under this guarantee liability was incurred in respect of 15 trust receipts signed on behalf of Ginofarini between August, 1977 and April, 1978. 7. In due course these notes and trust receipts fell due and remained unpaid. 8. The plaintiff sued the defendant in the Manila Court of First Instance. The action was compromised by Mr. Bengzon on terms that gave the plaintiff the sum demanded, but with smaller costs. Judgment by consent was entered for the plaintiff on 29th October, 1979. 9. On 23rd May this year the plaintiff took out a writ in Hong Kong for the amount of the judgment debt. The defendant entered an appearance, but did not file a defence. On an application for summary judgment, the registrar gave the defendant leave to defend. The plaintiff now appeals. 10. Before dealing with the main point at issue - whether the Manila court had jurisdiction - it is convenient to dispose of a matter raised by Mr. Wei. The statement of claim has been amended since the registrar's order by the addition of paragraph 6A. This pleads the agreement to confer jurisdiction contained in the promissory notes. The amendment was made because the registrar had refused to hear argument on a point that had not been pleaded. 11. Mr. Wei submits that the proper course for the plaintiff to have taken was to have asked the registrar for an adjournment in order to make the amendment. He argues that, having failed to do so, and the registrar having adjudicated on the original statement of claim, it is not now open to the plaintiff to rely upon the amendment. He says the Court must ignore paragraph 6A and deal with the issues as they were before the registrar other words, the plaintiff must have its two bites at the same cherry. 12. I am satisfied that this submission lacks merit. The parties are entitled to amend without leave before the close of pleadings. See Order 20 Rule 3. The proceedings before the judge in chambers are an appeal by way of rehearing. Under the Rules of Court there is nothing to stop a party mending his fences between the two hearings, if he feels it is necessary. Order 14/1/2A states that the master will adjourn the summons to allow the plaintiff to amend the statement of claim. It does not say that the plaintiff may not amend after the registrar's decision, but before the appeal. In Roberts v. Plant(1), Lopes L.J. said:
I conclude that I am entitled to have regard to paragraph 6A. 13. The Philippine judgment was final and conclusive. It was for a liquidated sum. Provided the Court had jurisdiction in the eyes of the Hong Kong Court and that judgment was not obtained by fraud, was not contrary to public policy and did not involve a breach of natural justice, it may be enforced by action in Hong Kong. See Halsbury's Laws of England 4th Ed. Vol. 8 paragraphs 725 - 729. 14. It is contended by the plaintiff that the Court acquired jurisdiction by the defendant's agreement to submit to its jurisdiction by (1) the power of attorney of 28th November, 1978 and (2) alternatively, so far as paragraph 4(i) of the claim is concerned, the specific clause in each of the 16 promissory notes referred to above. 15. I asked Mr. Wei if, in the event of his not succeeding on the pleading point, he still resisted the claim on the 16 promissory notes. He replied that he would have to take instructions. In the event he did not do so and I apprehend that, subject to the question of natural justice, this part of the claim cannot now be gainsaid. 16. An agreement to submit to the jurisdiction of a foreign court must be express. Vogel v. R. & A. Kohnstamm Ltd.(2). But if a defendant has agreed to accept service of process in the foreign country, this is a sufficient submission. 17. This court is not concerned with the correctness of the decision of the foreign court. Henderson v. Henderson(3), Godard v. Grey(4). Much of the defence case hangs on the argument that the phrase "any document from or for the court" was not sufficient authority for Mr. Bengzon to settle the action without reference to the defendant. Perhaps it would not be sufficient in Hong Kong. Its scope might be interpreted as being limited to the swearing of affidavits and the like. That, however, was a matter for the Philippine court, subject to the question of natural justice, which I shall deal with later. It was a question of construction, to which Philippine law applied. On this question, therefore, the affidavits of the Philippine attorneys, Messrs. Bagatsing and Romulo, do not assist. 18. The real point at issue is whether the second power of attorney gave jurisdiction to the Philippine court. Mr. Bengzon was the defendant's lawyer and fellow company director. He was being given authority to deal with the affairs of a Philippine company in the Philippines. I have no doubt that the defendant intended that disputes concerning the affairs of Ginofarini were to be resolved in the courts of the Philippines. The courts of Hong Kong or Australia - of which he is a citizen - would have been quite inappropriate. I am also satisfied that the words 'any documents from or for the courts' are sufficiently express to give effect to this intention. 19. There is no question of fraud or public policy, but what of natural justice? I was at first concerned with the question of notice, but there is authority for the proposition that, if the defendant agreed to submit to the jurisdiction of the foreign court, he is deemed to have agreed to submit to the foreign court's rules of procedure, and he is bound by its judgment, even though he may not have had notice of the proceedings. See the cases referred to in Halsbury, Vo1. 8, paragraph 729. 20. The other matter that worried me was whether the Philippine judge had given any thought to the sufficiency of the power of attorney. There is no doubt, as I have said, that this was a matter for him, but, if he had given it no thought at all, this, I think, could amount to a breach of natural justice. This court could refuse to enforce his decision. 21. I am, however, impressed by the meticulous thoroughness of the Manila court. There is a danger, when parties consent to judgment, that the court may give its imprimatur without really looking into the propriety of the settlement. But I agree with counsel for the plaintiff that, when a foreign national is involved, courts do tend to be more wary. Secondly, the judge has initialled every page of a lengthy settlement. I have little doubt, therefore, that he considered the effect of the power of attorney on the defendant's position. 22. It is true that an application to set aside the judgment has been filed in the Philippines. This, however, has been done so tardily - 7th October this year - that it would not be right to take it into accounnt It remains a final judgment. 23. Finally, there is no suggestion in the documents before me that this money is not in fact owed to the plaintiff by the defendant. 24. For these reasons I hold that there has been no breach of natural justice. The appeal succeeds and, so far as the amendment to the statement of claim is concerned, it has proved to have been made ex abundante cautela. 25. The order of the registrar is set aside and leave to enter judgment as claimed is given. Representation: Mr. R. Mills-Owens, Q.C. & Mr. William Waung (Dental, Hall & Burgin) for plaintiff. Mr. Robert Wei, Q.C. & Mr. Philip Lee (F. Zimmern & Co.) for defendant. (1) [1895] 1 QB 597 @ 605 (2) [1973] 1 QB 133 at 144 - 147 (3) [1844] 6 QB 28 (4) L.R. 6 QB 139 |