Chine Kit Limited v. Ma Hing Fung

Case No.

Court

Date—

Judge—

Case Document

100%Judiciary

HCA006846A/1987

1987, No. A6846

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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BETWEEN

	CHINE KIT LIMITED	Plaintiff

	and

	MA HING FUNG	Defendant

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Coram: Hon. Liu, J. in Chambers

Date of hearing: 9th May 1988

Date of delivery of judgment: 9th May 1988

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JUDGMENT

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1. This is the defendant's application by summons for extra time to file his Defence, conditional upon payment into Court as ordered of a sum of $l,639,715.20, "until after the hearing of the Notice of Appeal". Notice of Appeal has been lodged. The defendant now claims that he is unable "to raise the said sum" for fulfilling the financial condition for defending this action.

2. The matter came before me previously on an appeal from the learned Master who had ordered the defendant to pay into Court 75% of the claim before letting him in to defend. I upheld that decision.

3. It is common ground that the question of the defendant's financial capability had never been broached before the Master; nor was it sought to be ventilated before me on appeal. I regard myself as sufficiently guided by the directives in the M.V. Yorke Motors v. Edwards ⁽¹⁾. Lord Diplock in their Lordships' House saw no reason to dissent from submissions of Counsel as to how the impecuniosity of a defendant should be raised. At page 449, Letters C to E of his Lordship's speech, he said the following:-

	"In the Court of Appeal, it was conceded by counsel for Mr Yorke, and Brandon, L.J. in his judgment accepted the concession as correct, that if the sum ordered to be paid as a condition of granting leave to defend is one which the defendant would never be able to pay, then that would be a wrongful exercise of discretion, because it would be tantamount to giving judgment for the plaintiff notwithstanding the court's opinion that there was an issue or question in dispute which ought to be tried. The same concession was repeated in the respondent's written case, which contained the following submissions as to the proper limitations upon its applicability:
		'(i) Where a defendant seeks to avoid or limit a financial condition by reason of his own impecuniosity the onus is upon the defendant to put sufficient and proper evidence before the court. He should make full and frank disclosure. (ii) It is not sufficient for a legally aided defendant to rely on there being a legal aid certificate. A legally aided defendant with a nil contribution may be able to pay or raise substantial sums. (iii) A defendant cannot complain because a financial condition is difficult for him to fulfil. He can complain only when a financial condition is imposed which it is impossible for him to fulfil and that impossibility was known or should have been known to the court by reason of the evidence placed before it. '

I see no reason to dissent from those submissions. "

4. Not only was the financial capability of the defendant not raised before the Master, it was not objected to as such when he granted conditional leave to defend upon payment into Court of 75%. Financial incapability was not made an issue on appeal, and it was not a matter canvassed before me on appeal. I consulted Counsel on both sides as to how the percentage was arrived at, and even at that stage there was no suggestion from the defendant that 75% or any percentage at all was beyond his means as a condition to fulfil. When the Master's percentage was affirmed, it was not resisted. There was no complaint on the ground of impecuniosity immediately after my decision until today. The summons of the defendant was not filed until the 3rd May, and his affirmation in support was only filed on the 9th May i.e. today. In these circumstances, it is inconceivable that any court would view the defendant's application with sympathy or would entertain his summons favourably with indulgence.

5. Turning to the defendant's affirmation in support a copy of which was handed up for my perusal, the relevant passages are contained in two paragraphs:-

6. "

I have suffered serious losses in my investment in stocks and securities in October, 1987 and it is absolutely impossible for me to raise the said sum of $l,639,715.20 in order to fulfil the condition to defend this action.

7. "

There is also no one I can think of who can lend me such sum of money or part of (sic) parts thereof in order to fulfil the aforesaid condition to defend this action."

6. The suggestion is not that it is absolutely impossible for the defendant to pay the sum, it is only that "it is absolutely impossible for (the defendant) to raise (it)". The question as to why the defendant should make such an indirect assertion immediately leaps to mind. The defendant, believed at one time to be a man of means, claims to have "a few million dollars worth of stocks and shares" in October 1987. He has supplied no information as to his assets and liabilities or generally his affairs. He now claims to be absolutely impossible to raise the sum, and he has not come out with any categorical statement that he is unable to pay. There is no explanation offered as to why it is not possible for him to raise the money or what his difficulties are. He has not divulged particulars of security, if any, he possesses. No disclosure is made as to what efforts, if any, he has made although "he can think of (no one) who can lend (him) such sum of money".

7. It is highly unsatisfactory to rely on such vague remarks in support of an application to defer payment. The instant application for further time is tantamount to removing the condition altogether until the ultimate determination of the appeal. The evidence falls, in my view, short of that required to support an assertion of impecuniosity.

8. This application is made under 0.3, r.5, but in reality it is an application seeking to have my decision tested without the condition for, leave to defend. In the circumstances, I can see no way in which I could possibly come to the defendant's rescue. The defendant's application is therefore dismissed with costs to the plaintiff.

(B. Liu)

Judge of the High Court

(1) (1982) l W.L.R. p.444

Representation:

Miss Maria Yuen (M/s Iu, Lai & Lee) for the Plaintiff.

Miss Queeny Au-Yeung (M/s C.T. Chan & Co.) for the Defendant.