Ko Hong and Another v. Chow Hung Wai and Another
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DCCJ3410/2007 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO. 3410 OF 2007 ----------------------- BETWEEN
----------------------- Coram: H H District Judge Marlene Ng in Chambers (open to the public) Date of Hearing: 5th December 2007 Date of Handing Down Judgment: 7th December 2007 _________________ JUDGMENT ________________ I. Introduction 1.The Plaintiffs, ie Ko Hong (“Ko”) and Ko Chi Ching trading as Wing Yick Chau Hong (“Wing Yick”), was established on 16th June 1997 for carrying on the business of general trading of sauce and Chinese spirit/wine. Chow Hung Wai (“HW Chow”) and Chow Hung Choi (“HC Chow”) formerly trading as Man Hung Store was established on 11th October 1995 for carrying on the business of “store”. II. Plaintiff’s claim 2.Wing Yick claimed that since 1997 the parties adopted the following practice for the supply and purchase of wine by Wing Yick and the Defendants respectively (“Practice”) :
3.Wing Yick further claimed that at the Defendants’ request and pursuant to the Practice it sold and delivered goods to the Defendants, including goods sold and delivered between September 2001 to January 2002 as evidenced by the Orders listed in paragraph 5 of the Statement of Claim (“Subject Orders”) for the total price of HK$975,871.20 (“Price”). Wing Yick commenced the present proceedings on 2nd August 2007 to claim for the outstanding Price with interest. III. Defence 4.The Defence filed on 30th August 2007 was nothing more than a bare denial. IV. Order 14Summons 5.Not surprisingly, on 13th September 2007 Wing Yick issued a summons seeking final judgment for the Price with interest and costs (“O14 Summons”). Wing Yick filed Ko’s supporting affirmation on the same day to verify its claim and to exhibit inter alia copies of the Subject Orders. 6.The Subject Orders were on the following letterhead :
Each Order had an oval chop (“Chop”) on its face as follows : “九龍油麻地利業街1號地下 * 萬鴻士多 * TEL: 23321345” 7.As at the hearing of the O14 Summons on 5th October 2003, the Defendants had not filed any affirmation in opposition. At the hearing before Master S T Poon, the Defendants’ solicitor applied for time to do so. He confirmed to the learned master that the goods under the Subject Orders had been paid for in cash, and the Defendants required time to locate documents and witnesses to verify such payments. The learned master granted leave to the Defendants to file and serve an affirmation in opposition within 7 days and adjourned the hearing to 26th October 2007. 8.On 13th October 2007, the Defendants filed the affirmations of HW Chow and Hong Chung San (“Hong”), an ex-employee of Wing Yick. As seen below, such affirmations raised wider defence contentions than those set out in the Defence or disclosed to the learned master at the hearing on 5th October 2007. 9.At the adjourned hearing before Master S T Poon on 26th October 2007, the parties were represented by the same counsel who appeared before me. The learned master granted leave to Wing Yick to file and serve affidavit in reply (if any) within 14 days and adjourned the O14 Summons to be heard before a judge in chambers. In particular, the learned master directed that no further affidavit be filed without leave of the court. 10.On 31st October 2007, the parties attended before the Listing Clerk and fixed the adjourned hearing for argument before me. On 8th November 2007, in compliance with Master S T Poon’s order of 26th October 2007, Wing Yick filed the affirmation of Lam Kam Lung (“Lam”), an ex-employee of Man Hung Store, in reply. V.Summons for further evidence and adjournment 11.At 2:45pm on 3rd December 2007, the Defendants filed a summons (“Summons”) seeking the following reliefs :
12.The affirmation of Fan Kwok Keung (“Fan”), a legal executive of the Defendants’ solicitors, in support of the Summons was filed at 4:30pm yesterday (ie 4th December 2007) although some background to the Summons was alluded to in the written submissions of Ms Lau, counsel for the Defendants, lodged on 3rd December 2007. Unsurprisingly, Mr Chum, counsel for Wing Yick, opposed such application. 13.It is of course necessary to deal with the Summons first. To have a proper understanding of the application, I need to start with the various affirmations filed by the parties. VI. Defendants’ affirmation evidence 14.HW Chow and his elder brother HC Chow (both primary school graduates) were the Defendants. As early as in 1965, their parents operated a wall stall at 282 Reclamation Street, Kowloon (“Reclamation Street Shop”) known as Man Hung Store under a fixed-pitch hawker licence (“Licence”) authorised by the Urban Council that later became the Food and Environmental Hygiene Department (“FEHD”) after 1997. When their father passed away, their sister Chow Oi Tong (“Sister”) succeeded to the Licence with FEHD’s approval. The current Licence issued on 18th December 2006 stated that the Sister was the licensee and the address of the pitch was fixed at “咸美頓街新填地街282號側行人路上”, ie the Reclamation Street Shop. HW Chow claimed he was never the licensee and if necessary he could ask the Sister to liaise with FEHD to confirm such fact and to further confirm her tenure as licensee of the Licence since their father’s death. 15.The address printed on the Subject Orders was the Reclamation Street Shop. It is worthy to note that pursuant to section 36(1) of the Hawker Regulations Cap.132AI, no person (whether a licensee or otherwise) shall use a fixed pitch unless he was the holder of a fixed pitch hawker licence. The licence conditions on the reverse of the current Licence also made clear that the licensee should be present and carry on business of “store” at the Reclamation Street Shop 16.But the property known as Ground Floor, 1 Lee Yip Street, Yau Ma Tei, Kowloon (“Lee Yip Street Premises”) jointly owned by HW Chow and HC Chow was separate from the business of Man Hung Store. The business registration records of Man Hung Store under BR no.19502562-000-10 (“BR”) showed that between 11th October 1995 and 31st May 2002 it was an enterprise between HW Chow and HC Chow for the business of “store” at the Lee Yip Street Premises. HW Chow explained that for some time the Lee Yip Street Premises were partly used by Man Hung Store as warehouse. HC Chow heard from his friends that it was necessary to apply for business registration if the property was used for warehouse purpose, so he applied for the BR so as not to breach the law. When the Sister no longer used the Lee Yip Street Premises for stocking her merchandise, HC Chow did not continue the BR. The “Man Hung Store” mentioned in the BR never operated any business and it ceased on 31st May 2002. 17.After receiving the Writ of Summons herein, HW Chow checked with the Sister and was informed that although Man Hung Store had ordered wine from Wing Yick, it did not owe Wing Yick the Price as alleged. In fact, Man Hung Store continued to order wine from Wing Yick from 2002 to mid-2007, and Wing Yick never complained of the alleged outstanding Price. If the Price were outstanding (which was denied), it would have been unlikely for Wing Yick to continue selling wine to Man Hung Store. 18.Hong, who worked for Wing Yick from 12th June 1992 to end of September 2002, confirmed that during that time Wing Yick sold wine to Man Hung Store at the Reclamation Street Shop and did not deal with any Man Hung Store at the Lee Yip Street Premises. He had never heard his then boss (Ko) mention Man Hung Store owed him so much money. He recollected that price of goods even for millions of dollars were paid in cash to Wing Yick, and Ko might or night not issue receipts to customers (including Man Hing Store) upon payment. Even if Ko gave receipts, he would frequently write on the back of traditional Chinese calendar. After Hong left his employment with Wing Yick, he heard from his former colleagues who worked or still works for Wing Yick that Wing Yick and Man Hung Store had business dealings up to mid-2007. VII. Plaintiff’s affirmation evidence 19.Since 2005 Lam was a temporary helper with Swire Coca-Cola Hong Kong Limited, but prior to that he was a delivery worker for the Defendants between 1994 and 2005. He said the Defendants carried on business of Man Hung Store at the Reclamation Street Shop and used the Lee Yip Street Premises as warehouse. He reported to his boss and employer HW Chow rather than to HC Chow. He knew HW Chow decided not to apply for business registration for the Reclamation Street Shop since the BR had been issued for the Lee Yip Street Premises, but both premises were used for the business of Man Hung Store. 20.Lam’s duties included collecting wine purchased from Wing Yick on behalf of HW Chow for Man Hung Store. HW Chow would instruct him to bring Orders bearing the Chop (which were similar to the Subject Orders) to receive/collect the ordered goods. He would hand over the relevant Orders to Wing Yick or directly to Ko as records of the quantities of goods ordered by the Defendants. Lam would then bring the goods back to the Reclamation Street Shop and report to HW Chow who would decide where to store the goods. Sometimes they would be delivered to Man Hung Store’s warehouse at the Lee Yip Street Premises. 21.To the best of Lam’s recollection, Man Hung Store had 2 chops, one for the Reclamation Street Shop and the Chop for the Lee Yip Street Premises. The former was broken in/about 2000 and was never replaced. Lam said that according to HW Chow both chops referred to Man Hung Store, and as there was no business carried on at the Lee Yip Street Premises they started to use the Chop for business dealings with others (including Wing Yick) since 2000. 22.Lam claimed that all Orders were prepared by HW Chow or under his directions. Most of the Orders were filled out by HW Chow whose handwriting Lam recognised. Some Orders had the same reference numbers because HW Chow would sometimes use duplicate copies of a single Order with the same reference number for different transactions. Sometimes HW Chow even used pieces of paper to jot down the goods he ordered. Wing Yick accepted all these purchase orders because of their then good business relationship. 23.Lam explained that it was the parties’ practice that Wing Yick would upon receipt of the price return the relevant Order to Lam for him to bring it back to HW Chow for disposal. So any Orders in Wing Yick’s custody meant the Defendants had not paid the same. Lam recalled that during his employment the Defendant only settled Orders for small amounts, but the Orders for large amounts remained outstanding. 24.Lam claimed that Wing Yick employed Hong as a driver who would not have knowledge of the business dealings between the parties. Lam believed the Defendants made use of 2 different addresses to evade payment liability to Wing Yick. VIII. Events leading up to the Summons 25.According to Fan’s affirmation, the Defendant’s solicitors received Lam’s affirmation on 8th November 2007. Fan then contacted HW Chow by telephone to arrange for a meeting to explain the contents of Lam’s affirmation to him and to take his instructions on the same because counsel had already advised that instructions were necessary for replying to the new allegations in Lam’s affirmation. HW Chow told Fan he felt very uncomfortable and weak, and he would not be able to attend the offices of the Defendants’ solicitors. Fan therefore explained the contents of Lam’s affirmation to HW Chow over the telephone. HW Chow disagreed with Lam’s allegations, but was unable to give detailed instructions over the telephone. HW Chow said he would contact Lam when he got better. 26.However, Ms Lau’s written submissions put forward a different version of events. She submitted that after the Defendants’ solicitors received Lam’s affirmation, they set up a meeting with HW Chow to explain the contents to him. At that meeting HW Chow disagreed with the allegations and indicated he would like to apply for leave to file an affirmation in rebuttal and to collect some documentary evidence for such purpose. “Before he could hold conference with counsel to confirm his instructions”, HW Chow (who suffered from cancer a few years ago) became very sick and had to be hospitalised in the intensive care unit. 27.On 28th November 2007, HW Chow’s sister, Madam Chow (who, according to Ms Lau, is not the Sister), informed Fan that HW Chow had been admitted to the ICU of Queen Elizabeth Hospital at about midnight of 23rd November 2007 in an unconscious state. According to the medical report by Dr Ko Hiu Fai dated 3rd December 2007, HW Chow was admitted on 24th November 2007 due to severe pneumonia. He was then under the care of the intensive care unit. 28.On 30th November 2007, the Defendants’ solicitors wrote to Wing Yick’s solicitors stating the following and suggesting to adjourn the hearing before me :
29.On the same day, Wing Yick’s solicitors replied to confirm their client’s refusal to the Defendants’ request. IX. Summons 30.The starting point is Master S T Poon’s order of 26th October 2007 that no further affidavit be filed without leave of the court. As explained by Deputy Judge Chu (as she then was) in Jindal Exports Limited v Waco Trading Co Ltd HCA15404/09 (unreported, 3rd February 2000), “[the] filing of repeated rounds of affidavits is to be discouraged in interlocutory proceedings, especially in summary judgment applications, for there should not be a mini-trial on affidavits. It is therefore for the party seeking to have a fresh round of evidence to justify it. ……” 31.Much as I sympathise with HW Chow’s unfortunate illness, I am not persuaded that sufficiently compelling reasons have been put forward to justify the lateness of the application. 32.Ms Lau argued that 7 out of 11 paragraphs of Lam’s affirmation referred to new allegations concerning HW Chow. This is incorrect. It should be remembered that Wing Yick did not issue the O14 Summons until after sight of the Defence, which regrettably contained nothing more than a bare denial. Had the Defendants properly pleaded the defence averments now found in HW Chow’s and Hong’s affirmations, one would have expected Wing Yick to have dealt with them in its affirmation in support of the O14 Summons. Hong Kong Civil Procedure 2008 Vol.1 para.14/1/7 at p.184 stated as follows :
In putting forward a bare denial Defence and reserving positive defence averments to the affirmations in opposition, it did not lie in the Defendants’ mouths to complain that the factual allegations raised in Lam’s affirmation in reply had not been previously raised. As seen from paragraphs 19-24 above, the factual matters raised in Lam’s affirmation were plainly in response to the Defendants’ twin defence arguments that Wing Yick (a) sued the wrong party and (b) had received payment for the Subject Orders, and hence such affirmation was properly an affirmation in reply. There is no merit to this argument. 33.Ms Lau tried to suggest that the practice described by Lam of Wing Yick returning the Orders to the Defendants upon payment (see paragraph 23 above) was a new allegation because it was not mentioned as part of the Practice pleaded in Statement of Claim and verified by Ko’s affirmation. Again, I cannot accept such contention. As Ms Lau conceded, “[a] pleader should never allege any fact which is not material in the present stage of the action, even though he may reasonably suppose that it may become material hereafter” (see Hong Kong Civil Procedure 2008 Vol.1 para.18/7/11 at p.320). A careful reading of the Statement of Claim showed that the Practice was pleaded in support of the averment of goods sold and delivered by Wing Yick to the Defendants. It was Wing Yick’s case that the Subject Orders had not been paid for and such material fact was expressly pleaded. It was unnecessary for Wing Yick to anticipate a defence of payment and satisfaction by describing the usual arrangement between the parties as to payment. In the circumstances, Lam’s description of such arrangement in his affirmation was not a new unpleaded allegation, but a fact deposed in reply to the defence raised by the Defendants. 34.Ms Lau further submitted it would be fair and just to allow the Defendants to file affirmation in rebuttal because of the serious allegation by Lam that the Defendants used 2 different addresses to evade liability, which amounted to commission of a crime. I also do not accept this argument. Ms Lau did not identify any specific offence save to say that such contention must be within the ambit of various offences prescribed in the Theft Ordinance Cap.210. As explained in Jindal Exports Limited, it was for the party seeking to have a fresh round of evidence to justify it, and I am afraid that such vague approach was of no assistance. Upon enquiry by the court, Ms Lau agreed that the offence she had in mind might be section 18B of the Theft Ordinance Cap.210 :
35.I do not see the relevance of section 18B(1)(a) and (c), and I cannot understand how the assertions in Lam’s affirmation amounted to “dishonest inducement” “to wait for” or “to forgo” payment within the parameters of the offence in section 18B(1)(b). In any event, given (a) Wing Yick averred that the Defendants were established in 1995, (b) the parties commenced business dealings only in 1997, and (c) the unpaid Subject Orders were placed even later in 2001-2002, I find it hard to imagine that Wing Yick by Lam’s affirmation was contending that the 2 addresses which came into existence years before the alleged default in payment of the Subject Order was a dishonest scam to facilitate the subsequent default in payment. On a plain reading of Lam’s affirmation, what he said was that the Defendants put up the 2 addresses as an unwarranted excuse to avoid payment under the Subject Orders. I do not agree with Ms Lau’s submissions. 36.But having said that, the true question was whether it was necessary and just to grant leave to the Defendants as requested. 37.On the question of lateness, I note that Fan did not in his affirmation say when he contacted HW Chow by telephone, but it should be quite soon after 8th November 2007 because he claimed it was “[after] acknowledging [Lam’s] affirmation”. Even on the Defendants’ case, 3 things were of note. First, by that time counsel for the Defendants had already advised a reply to Lam’s allegations was necessary. Secondly, HW Chow said he disagreed with Lam’s allegations. Thirdly, according to Ms Lau’s written submissions, HW Chow also told the Defendants’ solicitors he would like to apply for leave to file an affirmation in rebuttal. The Defendants’ solicitors must also have been well aware of the prohibition in Master S T Poon’s order against further affidavit without leave and of the imminence of the adjourned hearing of the O14 Summons fixed before me, and hence the need to seek leave to file and serve further affirmation well ahead of the hearing. 38.However, there was no evidence before me that as time elapsed the Defendants’ solicitors attempted to follow up on HW Chow’s illness to see if he were ready to give more detailed instructions and/or to come to a decision whether to intimate to Wing Yick’s solicitors and/or apply to court for leave in good time to avoid incurring unnecessary costs. Indeed, the whole matter was held in abeyance until 28th November 2007 (ie 4 working days before the adjourned hearing) when Madam Chow (but not the Defendants’ solicitors) took the initiative to inform the Defendants’ solicitors of HW Chow’s illness. 39.There was no justifiable reason for inaction on the part of the Defendants’ solicitors to follow up on the matter. At the same time, there was also no explanation put before the court as to why HC Chow, who was (a) a co-owner of the Lee Yip Street Premises, (b) the applicant for the BR and (c) a co-defendant in the present proceedings, could not have dealt with Lam’s allegations in relation to the Lee Yip Street Premises, and why the Sister could not be prevailed upon through HW Chow and/or HC Chow (who are her brothers) to deal with the allegations in relation to Man Hung Store at the Reclamation Street Shop and the use of the Lee Yip Street Premises as warehouse. After all, HW Chow in his affirmation said he could ask the Sister to verify certain facts in relation to Man Hung Store if necessary, and the Sister also helpfully gave information to HW Chow as to the history of Man Hung Store, her Licence, and the payment position in relation to wine purchased from Wing Yick. If, as the Defendants contended, the Sister operated Man Hung Store at the Reclamation Street Shop, there was all the more reason to approach her for assistance. 40.More importantly, although the Summons asked for leave to file/serve the affirmation in rebuttal within 28 days, there was no information before this court of whether this would be achievable. Fan’s affirmation and the letter of the Defendants’ solicitors dated 30th November 2007 placed weight on the need to have instructions from HW Chow, but as at 30th November 2007 it was still impossible to predict when he might be discharged from the hospital or be fit to give instructions. Dr Ko’s report did not give any hint as to when HW Chow could leave the ICU. 41.Further, other than Fan’s hearsay averment that HW Chow denied Lam’s allegations, no attempt had been made to check with HC Chow, the Sister or Hong as to their responses to Lam’s allegations so as to give this court some intimation of the rebuttal evidence likely to be adduced beyond HW Chow’s denial. In short, the court was asked to adjourn the hearing fixed before me and to grant leave for filing further affirmation on the Defendants’ hope that some substantive rebuttal evidence might be forthcoming. This is not a sound basis for exercising the court’s discretion. 42.The court had a duty to hold the scales between the need for proper adjudication and effective case management so that there would be no prejudicial delay or unwarranted loss of judicial time for litigants in the present proceedings as well as for other court users. In assessing where justice lies in respect of the present application, bearing in mind the reminder by Deputy Judge Chu (as she then was) that generally there should not be rounds of affidavits for summary judgment applications, and further noting Wing Yick’s due compliance with the previous court orders and their readiness to proceed with the hearing fixed before me, there was no good reason why the court having made the direction of no further affidavit without leave should on the day of the substantive hearing almost a month later grant leave to put in further affirmation that would necessarily abort the hearing. I have carefully reminded myself that the Defendants were not to be blamed or penalised for HW Chow’s illness, but given the above analysis, I find that fair and just case management in the present case would not require last minute moving of goal posts. 43.So at the hearing, I dismissed the Summons and ordered the Defendants do pay Wing Yick’s costs of the Summons to be taxed if not agreed with certificate for counsel. To assist the taxing master, I also apportioned 1 hour of the hearing on 5th December 2007 before me for the Summons. I see no reason to depart from the usual order that costs should follow event. X. Law on summary judgment 44.A plaintiff may invoke the procedure under Order 14 of the Rules of the District Court (“RDC”) where there is no valid defence to his claim or otherwise a triable issue. The rationale is set out in Hong Kong Civil Procedure 2008 Vol.1, para.14/4/1 at p.188 as follows :
45.In Ng Shou Chun v Hung Chun San [1994] 1 HKC 155, Godfrey J noted it was not appropriate to embark on a mini-trial of the action on affidavit evidence. The court should ask itself the question whether what the defendant says is credible or believable. If so, he must have leave to defend; if not, the plaintiff is entitled to summary judgment. 46.Hong Kong Civil Procedure 2008 Vol.1 para.14/4/9 at pp.190-192 went on to say that :
XI. Analysis of O14 Summons 47.In a nutshell, the Defendants’ defence arguments were as follows :
48.I cannot agree with Mr Chum’s submissions that “the Defendants’ case is bound by the Defence” which did not contain the above defences. Order 14 rule 4(1) of the RDC provides that a defendant might show cause against an Order 14 application “by affidavit or otherwise to the satisfaction of the Court”. If the affirmation in opposition raised triable issues or arguable defences, it is always open to the Defendants to apply for amendment of the Defence in due course especially at such early stage in the legal proceedings. Mr Chum then fell back on the argument that the court should look at the affirmations in opposition with a jaundiced eye given the bare denial Defence. I will return to the defence contentions below. 49.Next, Mr Chum submitted that the burden fell on the Defendants to prove the above defence contentions. This was incorrect. There was no need for the Defendants to do so. All they had to do was to show that the defence contentions were credible and/or believable so that there were triable or arguable issues properly left for trial. 50.In respect of defence (a), Mr Chum argued that since every Subject Order bore on its letterhead the address of the Reclamation Street Shop and on its face the Chop relating to the Lee Yip Street Premises (which the parties did not dispute were used by Man Hung Store as warehouse), there could be only one Man Hung Store for both premises. 51.However, there was no dispute on the affirmation evidence before me that the Sister (and not the Defendants) was the Licence holder of the Reclamation Street Shop for operating the business of “store” thereat. There was no countervailing evidence obtained from FEHD or otherwise to rebut HW Chow’s explanation of the history of the Licence for Man Hung Store at the fixed pitch being the Reclamation Street Shop (see paragraph 14 above). On such basis, bearing in mind the statutory requirement and licence conditions that only a licensee under a Licence could “use” a fixed pitch for the specified business, I find that notwithstanding Lam’s allegation that HW Chow was his “boss and employer” when he worked for Man Hung Store, it was arguable that the Defendants named in these proceedings (ie “[HW Chow] and [HC Chow] both formerly trading as Man Hung Store” which was exclusive of the Sister) would not have “used” the Reclamation Street Shop for their business. 52.Further, Wing Yick averred in the Statement of Claim that the Defendants were established on 11th October 1995 and that the Defendants were a former partnership (ie it had been dissolved). There was no doubt that Wing Yick considered the Defendants were the “Man Hung Store” named in the BR. Indeed, Lam’s affirmation exhibited the BR as the relevant business registration records of the “Man Hung Store” being the purchaser under the Subject Orders and hence the Defendants in the present proceedings. That being the case, according to the BR, Man Hung Store being the Defendants ceased operations on 31st May 2002. 53.However, according to HW Chow’s affirmation, Man Hung Store existed prior to such date and was operated by his parents and later his Sister, and it also existed after the “Man Hung Store” in the BR ceased operations since Wing Yick continued to trade with Man Hung Store from 2002 until mid-2007. If, as Wing Yick alleged, the Defendants were a former partnership which had been dissolved, how could Wing Yick have continued to trade with “Man Hung Store” from 2002 up to mid-2007? Despite the opportunity to file affirmation in reply, Wing Yick did not deny it continued to trade with Man Hung Store throughout such period. This immediately raised a question as to the proper identification of the relevant proprietor(s) of the “Man Hung Store” that actually had dealings with Wing Yick. 54.As regards the presence of the Chop on the Subject Orders, I bear in mind the Subject Orders were from September 2001 to January 2002, ie within the period of operation of the “Man Hung Store” in the BR during which the Lee Yip Street Premises were used as warehouse. Notwithstanding Lam’s allegations in respect of the Chop (see paragraph 21 above), he also admitted that sometimes goods purchased from Wing Yick by Man Hung Store would be delivered to the Lee Yip Street Premises. 55.Mr Chum submitted that this was good enough to show that the “Man Hung Store” in the BR (which named the Lee Yip Street Premises) also operated the business of Man Hung Store at the Reclamation Street Shop. I am not persuaded that the evidence was so unmistakably clear. Despite Lam’s explanation (see paragraph 19 above), the evidence suggested an absence of any business registration in the name of the Defendants for the business at the Reclamation Street Shop, but the existence of the Licence in the name of the Sister (ie not the Defendants) for the Reclamation Street Shop. I am persuaded that the true purport of the Chop on the face of the Subject Orders and its interaction with the reference to the Reclamation Street Shop in the letterhead could only resolved at trial after hearing evidence. 56.HW Chow by his affirmation expressed doubt as to the alleged indebtedness owed to Wing Yick given the absence of demand for payment over several years until mid-2007, especially when there were on-going business dealings between Wing Yick and Man Hung Store up to 2007. However, Lam’s affirmation in reply was silent on the subject. No explanation was forthcoming as to the lack of demand and willingness to continue trading despite an outstanding indebtedness of close to HK$1 million. When considered together with the other matters discussed above, it lent support to the view that the Defendants’ defence arguments were arguable. 57.In all the circumstances, I am unable to say that defence (a) above was wholly incredible or unbelievable. It is a fact-sensitive matter that should be left to trial. Defence (a) if upheld amounted to a complete defence to Wing Yick’s claim, so I need not be concerned with defence (b). However, I will deal with it briefly for completeness. Mr Chum suggested that in light of the practice described in paragraph 23 above, the Defendants’ failure to produce and/or exhibit the Subject Orders showed that the Price was still outstanding. I agree that the hearsay allegations from the Sister (ie there was no outstanding price due to Wing Yick) and from Hong (ie he had never heard of such a large debt) were vague and failed to condescend upon particulars. But the short answer to this was that if (as I have found) there was an arguable defence that Wing Yick dealt with a “Man Hung Store” that was not operated by the Defendants, then the Defendants could hardly be expected to produce the Subject Orders even if there were a practice of returning Orders upon payment. 58.I note that Ms Lau made a number of other arguments in her written submissions, but I find I need not deal with them in coming to my conclusions. 59.In the circumstances, I grant unconditional leave to defend to the Defendants. I also order that costs of the O14 Summons (including all costs reserved if any) with certificate for counsel be costs in the cause. Ms Lau sought costs of the O14 Summons. Bearing in mind the extremely thin nature of the Defence as filed and the defence contentions being only elicited in the affirmations in opposition, I do not consider that I should exercise my discretion on costs in the manner suggested. A fair order would be as I have indicated. 60.At the hearing, Ms Lau informed me that if the Defendants were allowed to defend, they would take out an application to amend the Defence within 7 days. In the circumstances, pursuant to Order 14 rule 6 of the RDC, I further direct that :
Representation: Mr David Chum instructed by Messrs Tam, Pun & Yipp for the Plaintiff. Ms Lorinda Lau instructed by Messrs Oliver C M Chan & Co for the Defendant. |
Cases cited in this judgment