Prime Credit Leasing Sdn Bhd v. Tan Cho Lung Raymond and Another
Read the full judgment text of HCMP 2744/2004 on BabelCite. This High Court CFI judgment was delivered on 6 November 2006.
1. Section 2A(2)(b) of the Interpretation and General Clauses Ordinance (“IGCO”), taking effect on 1 July 1997, stipulates that in any Ordinance, provisions conferring privileges on the United Kingdom or other Commonwealth countries or territories, other than provisions giving effect to reciprocal arrangements between Hong Kong and the United Kingdom or other Commonwealth countries or territories shall have no further effect.
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HCMP2744/2004 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE MISCELLANEOUS PROCEEDINGS NO. 2744 OF 2004 --------------------- BETWEEN
---------------------- Before : Deputy High Court Judge Poon in Chambers Dates of Hearing : 6-7 April and 4-6 October 2006 Date of Decision : 6 November 2006 ---------------------- DECISION ----------------------- I. The primary issue 1.Section 2A(2)(b) of the Interpretation and General Clauses Ordinance (“IGCO”), taking effect on 1 July 1997, stipulates that in any Ordinance, provisions conferring privileges on the United Kingdom or other Commonwealth countries or territories, other than provisions giving effect to reciprocal arrangements between Hong Kong and the United Kingdom or other Commonwealth countries or territories shall have no further effect. 2.In this application, the court is asked to construe section 2A(2)(b) and to consider how on a proper construction it impacts on the provisions of reciprocal enforcement of judgments in the Foreign Judgments (Reciprocal Enforcement) Ordinance, Cap.319 (“FJREO”) that affect Malaysia, one of the Commonwealth countries. The primary issue that arose for determination is whether section 2A(2)(b) applies and has rendered those provisions in FJREO relating to Malaysia to have no further effect since 1 July 1997. Put differently, do those provisions in FJREO relating to Malaysia survive the resumption of sovereignty when Hong Kong, formerly a British colony, became the Hong Kong Special Administrative Region (“HKSAR”)? II. The application 3.The application arose in this way. 4.On 30 May 2003, the Judgment Creditor obtained a summary judgment against the Judgment Debtors from the High Court of Malaysia for RM7,048,346.83 with interest (“the Malaysian Judgment”). By ex parte originating summons dated 25 October 2004, the applicant applied to register the Malaysian Judgment pursuant to FJREO and Order 71 of the Rules of the High Court (“the Ex Parte Application”), which was allowed by Master Kwan on 27 October 2004. 5.By summons dated 7 July 2004 as amended by order dated 6 April 2006, the Judgment Debtors seek to set aside the registration of the Malaysian Judgment on the following grounds :
I will consider them in turn. III. The Registration Ground A. Statutory provisions relating to the reciprocal enforcement of judgments between Hong Kong and Malaysia 6.I will begin with a brief summary of the statutory provisions relating to the reciprocal enforcement of judgments between Hong Kong and Malaysia before and after the handover.
7.In Hong Kong, the reciprocal enforcement of judgments obtained in the United Kingdom and the Commonwealth was initially provided for under the Judgments (Facilities For Enforcement) Ordinance, Cap.9 (“JFFEO”), which was enacted in 1921. Section 3(1) of JFFEO enabled judgments obtained in a superior court in the United Kingdom to be registered in Hong Kong if the Hong Kong Court thought that “it is just and convenient that the judgments should be enforced in the Colony”. 8.Section 6 of JFFEO empowered the Governor in Council to extend the Ordinance to judgments obtained in any other part of the Commonwealth outside the United Kingdom if satisfied that “substantial reciprocity of treatment will be assured as respects the enforcement in that part of the Commonwealth of judgments given in the (then) Supreme Court”. 9.By the Judgments (Facilities For Enforcement) (Federation of Malaya) Order dated 2 August 1950, JFFEO was extended to the Federation of Malaya. 10.On 6 May 1960, FJREO was enacted. Under section 3(1), the Governor in Council, if he is satisfied that, substantial reciprocity will be assured, may direct the provisions of FJREO shall extent to a foreign country. Section 9 of FJREO empowers the Governor in Council to direct by order that the provisions of FJREO shall apply to any part of the Commonwealth and upon such order being made, the provision of JFFEO shall cease to have effect. By the Foreign Judgments (Reciprocal Enforcement) (Application to the Commonwealth) Order dated 15 January 1965, the Governor in Council directed that the provisions of FJREO shall apply to every part of the Commonwealth and to judgments obtained in the superior courts of any such part. Since then, JFFEO applied to judgments obtained in the United Kingdom only. Malaysia, like other Commonwealth countries or territories, is to be dealt with under the statutory regime of FJREO. 11.By the Foreign Judgments (Reciprocal Enforcement) Order dated 4 October 1968 (“the 1968 Order”), the Governor in Council, having been satisfied that substantial reciprocity was in existence or would be assured under section 3(1), directed that the provisions in FJREO shall apply to judgments given in the superior courts of, inter alia, Malaysia. Since then, judgments obtained in the superior courts of Malaysia could be enforced in Hong Kong by registration under FJREO. 12.In Malaysia, there was first the Reciprocal Enforcement of Judgments Ordinance 1949 (“the Malaysian REJO”), which facilitated the reciprocal enforcement of judgments obtained in the Federation of Malaya and in other parts of the Commonwealth. By Order made under section 5 thereof dated 4 August 1950, the Malaysian REJO was extended to “judgments obtained in a Superior Court in the Colony of Hong Kong”. 13.Malaysia became an independent state on 31 August 1957. After some legislative developments, the Reciprocal Enforcement of Judgments Act 1958 (“the Malaysian REJA”) came into existence in 1972. The Malaysian REJO had since been repealed. The Malaysian REJA introduced for the first time a definition for “reciprocating country” in section 2 and a list of reciprocating countries in the First Schedule. Hong Kong was included as one of the reciprocating countries. It should be noted that in the First Schedule, Hong Kong is stated as “Hong Kong”, as opposed to “the colony of Hong Kong” in the Malaysian REJO. 14.By virtue of the above statutory provisions, reciprocal enforcement of judgments existed between Hong Kong and Malaysia before 1 July 1997.
15.Since 1 July 1997, other than a minor amendment to section 4, FJREO has not been amended. Nor is there an amendment to the 1968 Order. Thus, Malaysia remains on the face of the statutory instruments a designated country to which the provisions of FJREO extends. 16.In Malaysia, no amendment had been made to the Malaysian REJA until 22 January 2004 when an order (“the Extension Order”) was gazetted to extend the Act to HKSAR and to amend the First Schedule to the Act by substituting for Hong Kong [the HKSAR]. B. An overview of the parties’ contentions 17.Mr Yuen, SC, appearing for the Judgment Debtor submitted that on a proper construction of section 2A(2)(b), a fact-finding exercise is necessary to ascertain if there existed between 1 July 1997 and 22 January 2004 (“the Relevant Period”) reciprocal enforcement of judgments between Hong Kong and Malaysia. The fact-finding exercise reveals that such reciprocal enforcement did not exist. Hence by virtue of section 2A(2)(b), the provisions in FJREO affecting Malaysia cease to have any further effect. They had since 1 July 1997 either been impliedly repealed or alternatively suspended until reciprocal enforcement was restored on 22 January 2004 by Malaysia by the Extension Order. In either case, the registration of the Malaysian Judgment must be set aside. 18.Mr Bartlett, appearing for the Judgment Creditor, submitted that on a proper construction, section 2A(2)(b) does not repeal or suspend those provisions in FJREO affecting Malaysia. Malaysia remains a designated country to which FJREO applies. Section 2A(2)(b) does not require the fact-finding exercise as contended. Such fact-finding exercise, even if required and which had been conducted, shows that there was in fact reciprocity enforcement between Hong Kong and Malaysia during the Relevant Period. The registration of the Malaysian Judgment must stand. 19.In the course of their submissions, counsel drew support from the following academic writings :
They also referred to the discussion in The Hong Kong Civil Procedure 2006, Vol.2 at para.F4/3/2 at p.395. C. Construing section 2A(2)(b) 20.So how is section 2A(2)(b) to be construed? I will start the enquiry by looking at the legislative history of section 2A.
21.Section 2A of IGCO deals with laws previously in force in Hong Kong before the resumption of the exercise of sovereignty by the People’s Republic of China. Its genesis begins with the Basic Law, which was promulgated on 4 April 1990. 22.Article 160 of the Basic Law provides :
Under Article 8 :
A general principle of continuity emerged from Articles 160 and 8. All the laws previously in force in Hong Kong before 1 July 1997 shall be adopted and maintained as the laws of the HKSAR except for :
23.On 23 February 1997, the SCNPC made a decision at its Twenty Fourth Session in accordance with Articles 160 and 8 of the Basic Law (“the Decision”)[1]. The SCNPC acted upon the general principle of continuity by firstly re-iterating that the laws previously in Hong Kong, except for those which are in contravention of the Basic Law, are adopted as the laws of the HKSAR[2] and secondly declaring that the ordinances and subordinate legislation previously in force in Hong Kong as set out in Annex 1 to the Decision[3] and the provisions of the ordinances and subordinate legislation previously in force in Hong Kong as set out in Annex 2[4] are in contravention of the Basic Law and are not adopted as the laws of the HKSAR. 24.The SCNPC then went on to set out the principles under which the laws previously in force in Hong Kong and adopted as the laws of the HKSAR are to be applied in these terms[5] :
25.The SCNPC then declared that the names or expressions appearing in the laws previously in Hong Kong shall be construed or applied in accordance with the principles provided for in Annex 3[6]. 26.Finally, the SCNPC stated that if any laws previously in force in Hong Kong which have been adopted as the laws of the HKSAR are later discovered to be in contravention of the Basic Law, they shall be amended or shall cease to have force in accordance with the procedure as prescribed by the Basic Law[7]. 27.In summary, the Decision :
28.The next piece of statutory instrument is HKRO, which took effect on 1 July 1997. Sections 5 to 7 of HKRO implement the matters set out in the Decision on how the laws previously in force and adopted as the laws of the HKSAR are to be applied. Section 5 introduced a new section 2A to IGCO, which deals with the matters set out in Clause 4 of the Decision. Section 6 added a new Schedule 8 to IGCO, which contains the matters set out in Annex 3 to the Decision. Section 7 provides, inter alia, that the laws previously in force in Hong Kong, that is common law, rules of equity, Ordinances, subsidiary legislation and customary law, which have been adopted as the laws of the HKSAR, shall continue to apply. 29.It is apparent from its genesis that section 2A of IGCO formed part of the comprehensive legislative package that deals with the laws previously in force in Hong Kong and how they are to be adopted, applied and construed as the laws of the HKSAR.
30.Implementing the matters set out in Clause 4 of the Decision, the relevant parts of section 2A are couched in these terms :
31.Section 2A firstly lays down in subsection (1) the general principle for construing all laws, including Ordinances and subsidiary legislation, immediately in force in Hong Kong before 1 July 1997 and adopted as laws of the HKSAR by reference to two fundamental requirements :
This ensures that all the laws previously in force in Hong Kong before 1 July 1997, though adopted as the laws of the HKSAR, must fully comply with the requirements so that any non-compliance, when subsequently discovered, will be properly addressed by applying the requisite construction. In the case of statutory provisions, no amendment or express repeal will be required if a particular provision is later found to be in contravention of any of the requirements. The offending part can be dealt with by applying the requisite construction. 32.Section 2A then deals with in subsection (2)(a) to (e) statutory provisions relating to five specific subject matters. Without prejudice to the generality of section 2A(1), those statutory provisions are to be construed by applying the specific construction as stipulated. Thus those statutory provisions are subject not only to the general principle of construction laid down in section 2A(1) but also the specific construction as set out in section 2A(2)(a) to (e) respectively.
33.I now examine section 2A(2)(b) more closely. The subsection first renders the statutory provisions conferring privileges on the United Kingdom and other Commonwealth countries or territories to be of no further effect, although they still remain on the statute books. The reason is obvious. Those provisions are plainly incompatible with the status of Hong Kong as a Special Administrative Region of the People’s Republic of China. They cannot have any further force. 34.The subsection then retains those statutory provisions that give effect to the reciprocal arrangements between Hong Kong and the United Kingdom or other Commonwealth countries or territories. There is no evidence before me on what those reciprocal arrangements, other than the reciprocal enforcement of judgments, encompass. But such reciprocal arrangements, which might take various forms, were plainly made because Hong Kong was a British colony or a member of the Commonwealth[11]. Upon the handover, different scenarios might arise :
35.It is inconceivable that when a reciprocal arrangement ceased to exist in any of scenarios (1) to (3) upon the handover, the statutory provisions giving effect to it immediately before the handover would still continue to have further force. In scenario (1), the reciprocal arrangement, the very subject matter of the provisions concerned, is for all intents and purposes gone. There exists nothing to which the provisions could give effect. In scenario (2), it will be absurd to continue to give effect to the provisions concerned. In scenario (3), if the relevant provisions were to continue to have force, they would remain provisions giving effect to the reciprocal arrangement in name only. In reality, the arrangement would have become unilateral. What the provisions purport to confer on the country concerned would be unilateral benefits or even privileges without any reciprocity whatsoever. This must be contrary to the original legislative intent of those provisions. Depending on circumstances, it may also contravene the requirement in section 2A(1) that the relevant provisions must conform with the status of Hong Kong as a Special Administrative Region of the People’s Republic of China. It is only in scenario (4) that the statutory provisions concerned must continue to be in force in order to give effect to the reciprocal arrangement. 36.Thus analyzed, statutory provisions giving effect to reciprocal arrangements shall continue to have force only if the reciprocal arrangements in question continue after the handover. It follows that when applying the construction in section 2A(2)(b) to a particular statutory provision purporting to give effect to a reciprocal arrangement, it must be ascertained if that reciprocal arrangement continues after the handover. And for this purpose, each reciprocal arrangement must be considered in its own context. D. The reciprocal enforcement of judgments between Hong Kong and Malaysia under FJREO 37.This brings me to the reciprocal enforcement of judgments between Hong Kong and Malaysia under FJREO. 38.As noted above, Mr Yuen submitted that a fact-finding exercise has to be carried out to ascertain if Malaysia still accords reciprocal enforcement to Hong Kong judgments after 1 July 1997. If the answer is no, then the provisions in FJREO pertaining to Malaysia shall have no further effect. 39.The Department of Justice also considered it necessary to find out if Malaysia continues to give reciprocal enforcement to Hong Kong judgments after 1 July 1997. In a letter dated 3 November 1997 addressed to the Law Society of Hong Kong, Mr David Little, Law Officer (International Law) of the Department of Justice said :
40.In a subsequent letter dated 18 January 1999, Mr Frank Poon, Deputy Principal Government Council said :
41.By a joint letter dated 4 August 2006, the solicitors acting for the parties herein wrote to the Department of Justice for further information. By a letter dated 8 August 2006, Mr James Ding, Senior Government Counsel (Treaties & Law) replied :
42.For obvious reasons, the Department of Justice had to make enquiries with other jurisdictions, including Malaysia, which demonstrated reciprocity before the handover to ascertain if they still recognize and enforce judgments of the HKSAR after 1 July 1997. But the Department of Justice, while recognizing that the interpretation of FJREO is a matter of the court, takes that view that as Malaysia is still a designated country, there is no reason why FJREO does not apply to a Malaysian judgment[12]. 43.Mr Yuen’s submission is premised on the footing that in order for the provisions in FJREO relating to Malaysia to have effect, Malaysia must, as a matter of fact, give reciprocal enforcement to Hong Kong judgments. However, this is not what FJREO requires for reciprocal enforcement between Hong Kong and a foreign country to be put in place. Under the statutory regime laid down in FJREO, its provisions will apply to a country designated by the Chief Executive in Council. The requirement for designation is set out in section 3(1), which reads :
It is not a pre-requisite for designating a particular country under section 3(1) that that particular country does give actual reciprocal enforcement at the time. It will be sufficient if the Chief Executive in Council is satisfied that substantial reciprocity of treatment will be assured (Emphasis supplied). The wording of section 3(1) gives the Chief Executive both discretion and flexibility to allow FJREO to continue in force in respect of any country pending either clarification of its position, or the formulation of further agreements as to enforcement of judgments or other reciprocal juridical assistance : see Knoniljike Philips Electronics NV v. Utran Technology Development Ltd, HCMP4509/2000, unreported, Deputy High Court Judge Woolley, 26 October 2001, at para.11. 44.Thus the focus of enquiry in the present case is : whether the Chief Executive in Council is satisfied that substantial reciprocity of treatment by Malaysia will be assured at the time of and after the handover. If the answer is yes, then the designation of Malaysia under FJREO still holds good. The provisions in FJREO relating to Malaysia continue to have full force. The fact-finding exercise to ascertain if Malaysia continues to give reciprocal enforcement to the judgments of the HKSAR after 1 July 1997 is, for the purpose of considering if the provisions in FJREO relating to Malaysia continues to have force under section 2A(2)(b) of IGCO, unnecessary. So is the expert evidence on Malaysian law adduced by the parties on this topic. 45.On a fair reading of the letters written by the Department of Justice referred to above, I am of the view that although the Government of Malaysia had not explicitly stated its position, the Chief Executive in Council must have been satisfied that substantial reciprocity of treatment by Malaysia would be assured upon and after the handover, even assuming that no actual reciprocity existed at the time. I therefore rule that the provisions in FJREO relating to Malaysia continue to have force after 1 July 1997. E. Reciprocity does exist 46.Even assuming that it is necessary to ascertain whether Malaysia gives reciprocal enforcement to judgments obtained in Hong Kong after 1 July 1997 in order for the provisions of FJREO relating to Malaysia to have force under section 2A(2)(b) of IGCO, the fact-finding exercise shows that Malaysia does recognise and enforce judgments obtained in the Hong Kong under the Malaysian REJA. In suit No.R2-24-24-2002 of the High Court of Malaya, a judgment obtained in HCA21850/1998 dated 19 June 2001 was ordered to registered for enforcement there on 9 July 2002. The Judgment Debtors’ expert on Malaysian law queried the validity of this order. But the fact remains that a judgment of the HKSAR has been recognized and enforced in Malaysia under the Malaysian REJA. Reciprocal enforcement of judgments between Hong Kong and Malaysia does continue to exist after 1 July 1997 up to date. The provisions in FJREO relating to Malaysia continue to have full force after 1 July 1997. F. Conclusion 47.For these reasons, the Registration Point must fail. IV. The Non-Disclosure Point 48.I next turn to the Non-Disclosure Point. 49.I accept that the Judgment Creditor must make full and frank disclosure in the Ex Parte Application. Mr Yuen complained that the Judgment Creditor had failed to draw Master Kwan’s attention to section 2A of IGCO and the issues arising from it. I am unable to accept this submission. For the matters have been discussed in detail in the relevant commentary of The Hong Kong Civil Procedure. I do not think they would have escaped the attention of the learned Master when she dealt with the Application. Even if the Judgment Creditor was under a duty to refer those matters to the Master and had failed to do so, she must have those points in mind when she granted the Application. This Point also fails. V. Conclusion 50.For the above reasons, I will dismiss the Judgment Debtors’ application. I will also make an order nisi that the Judgment Creditor shall have the costs, to be taxed if not agreed.
Mr Jeremy Bartlett, instructed by Messrs Stephenson Harwood & Lo, for the Applicant Mr Rmisky Yuen, SC, leading Mr Jose A. Maurellet, instructed by Messrs Simmons & Simmons, for the Respondents [1] The Decision is made in Chinese. The English translation text is prepared by the Department of Justice of the HKSAR. It is for reference purpose only and does not have legislative effect. |