Far East Bank Ltd v. Lam Sam Kee and Another

HCA000151/1967

IN THE SUPREME COURT OF HONG KONG

ORIGINAL JURISDICTION

ACTION NO. 151 OF 1967

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Coram: Briggs, J.

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DECISION

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1. This is an application made by the plaintiff for an order that the first defendant should be called upon to furnish security under Order 44A of the Rules of the Supreme Court.

2. The plaintiff is a bank, the 1st defendant runs a business at 101/102 First Street, Shatin. The plaintiff's claim is for $277,045 and costs: and there are allegations that the 1st defendant conspired with the 2nd defendant to defraud the plaintiffs. The date of the writ is 2nd February 1967 and of this application 2nd December 1968.

3. Order 44A rule (2) states inter alia that if the court, after making such investigation as it may consider necessary, is of the opinion that there is probable cause for believing that the defendant has disposed of his property or any part thereof and that by reason thereof the execution of any judgment that may be given against him in the action is likely to be obstructed or delayed - then, in such a case the court may issue a warrant to the bailiff to bring the defendant before the court to show cause why he should not give security for his appearance to answer any judgment.

4. In this case the result of making the order sought would almost inevitably result in the imprisonment of the first defendant until judgment is given in the action, the sum claimed being of such a great amount.

5. In support of the application the plaintiffs have filed certain affidavits. These show that the place of business of the first defendant is shut up and no further business is being done. It is also on record that at least 30% of the stock of the first defendant has been removed from those premises. In addition there is an affidavit which states that a Mr. Chiu, an official in the plaintiff bank, was told by a friend that the first defendant "has disposed of a great deal of his stock at a low price in order to get cash to pay off his creditors".

6. In the leading case of Sun Ming Shan v. Moran⁽¹⁾ the Chief Justice after deprecating the existence of this order [, with which view I heartly concur,] said that this order "is administered with great vigour against the plaintiff".

7. I agree with those words. A successful application under the Order may have draconian consequences.

8. In the present case what the applicant has to prove is that the first defendant has disposed of his property. I take this to mean that he has divested himself of proprietorship in the property in question with the consequences referred to in rule 2 of the Order. This has not been proved in this case. It is suggested that the first defendant is realising his stock or part of it in order to pay off certain pressing creditors. Such conduct does not of course come within the ambit of the rule in question. The plaintiff is not in the position of a secured creditor. The facts deposed to in the affidavits filed on behalf of the plaintiff do not prove that the conduct of the first defendant comes within the scope of the rule.

9. This application is therefore refused.

Representation:

Charles Ching (L.J. Remedios) for Plaintiff.

(1) (1910) H.K.L.R. 216.