Shenzhen Tian He Jian Sang Electronic Holdings Co Ltd v. Hong Kong Jian Sang Electronics (Group) Ltd and Another
Read the full judgment text of HCA 1587/2007 on BabelCite. This High Court CFI judgment was delivered on 9 May 2008.
1. This is a trial of preliminary issue pursuant to the order of the Registrar dated 21 January 2008, namely: “whether the plaintiff’s claim is statute-barred by virtue of the provisions under the Limitation Ordinance (Cap. 347), in particular section 4?”
Cited by 5 cases
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HCA 1587/2007 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO. 1587 OF 2007 ----------------------
---------------------- Before: Hon Fung J in Court Date of Hearing: 31 March and 2 April 2008 Date of Judgment: 9 May 2008 ---------------------- J U D G M E N T ---------------------- 1.This is a trial of preliminary issue pursuant to the order of the Registrar dated 21 January 2008, namely: “whether the plaintiff’s claim is statute-barred by virtue of the provisions under the Limitation Ordinance (Cap. 347), in particular section 4?” 2.The 2nd defendant’s summons to strike out the claim as scandalous, frivolous, vexatious or otherwise an abuse of the process of the Court and that the action be dismissed is also heard at the trial of preliminary issue. 3.The 1st defendant has been dissolved and is no longer before the Court. Background 4.On 7 August 1995, the plaintiff issued legal proceedings in the Shenzhen Municipal Intermediate People’s Court (“Shenzhen Court”) against the 1st and 2nd defendants for wrongful transfer of plant and equipment situated in Dongguan by the 2nd defendant. The claim was dismissed by the Shenzhen Court. The plaintiff appealed to the Guangdong Provincial Higher People’s Court (“Guangdong Court”). 5.On 22 July 1998, the Guangdong Court allowed the appeal (“Appeal Judgment”) and ordered the defendants to:
6.In October 1999, the plaintiff applied to the Guangdong Court for a retrial, and execution of the Appeal Judgment was stayed pending the application. 7.On 30 August 2000, the Guangdong Court dismissed the application for retrial by the plaintiff (“Review Judgment”). 8.Both the Appeal Judgment and the Review Judgment were outside the limitation period of 6 years from the date of the proceedings herein. 9.On 14 June 2001, the plaintiff applied to the Shenzhen Court for execution of the Appeal Judgment. On 14 June 2001, the Shenzhen Court made an Execution Order, ordering the 2nd defendant to comply with the Appeal Judgment within 7 days, failing which to file a list of assets within 7 days. 10.On 26 July 2001, the Shenzhen Court held a hearing in the execution proceedings (“Execution Hearing”). The Execution Hearing was within the limitation period of 6 years. 11.At the Execution Hearing, lawyers for the plaintiff and the 2nd defendant signed the notes of proceedings prepared by the court (“Transcript”). The plaintiff obtained a photocopy of the Transcript from the Shenzhen Court (“Copy Transcript”) and relied on it as the acknowledgment of liability to satisfy the Appeal Judgment and the Review Judgment under sections 24 and 24 of the Limitation Ordinance (Cap. 347). 12.As recorded in the Copy Transcript, the plaintiff’s lawyer said the execution was based on the Appeal Judgment which was effective and not satisfied. The 2nd defendant’s lawyer indicated no dispute to that, and said they had received the Execution Order, but did not fulfil the obligation as the 2nd defendant had applied for retrial, and they were not satisfied with the judgment. The court said the retrial was determined in 1999 (sic.) and asked the 2nd defendant to submit a list of equipment. The 2nd defendant’s lawyer submitted a list and said the equipment was in Dongguan Yeebo Company (a subsidiary of the 2nd defendant) and stored separately in order to facilitate the execution by the court. The plaintiff’s lawyer alleged that the 2nd defendant had three wholly owned subsidiaries in the Mainland and did not satisfy the debt even was able to do so. The 2nd defendant’s lawyer said they were actively collecting the assets for execution by the court and cooperating with the court, but the other side was inaccurate in saying that the 2nd defendant owned 100% of the three enterprises. The plaintiff’s lawyer said the 2nd defendant had the ability to pay the debt, but did not do because it was dissatisfied with the judgment. The 2nd defendant’s lawyer said the other side’s lawyer had approached them and they were willing to return the equipment and also repay three million to the other side to settle the other requirements of the judgment. The plaintiff’s lawyer said their losses exceeded RMB ￥14 million and they disagreed with the suggestion of the other side. The 2nd defendant’s lawyer said their company had financial difficulties and three million were already not easy to find, and hoped the other side could accommodate, and they had discussed with the Dongguan company and after the equipment was returned, they would pay compensation to the Dongguan company. 13.The Copy Transcript had been in the plaintiff’s lawyer’s file for several years, and the plaintiff had recently obtained a certified copy of the Transcript from the Shenzhen Court. 14.The plaintiff also relied on a copy letter dated 16 August 2001 sent by the 2nd defendant to the Shenzhen Court entitled “Explanation of Situation” in relation to the three companies mentioned in the Execution Hearing (“Copy Letter of Explanation”) as an acknowledgment of the Appeal Judgment. 15.The Copy Explanation Letter referred to three subsidiary companies mentioned in the notes in the 2nd defendant’s Annual Report for year ending 31 March 2000, i.e. Dongguan Yeebo Semi-conductor Co Ltd, Jiangmen Yeebo Circuit Board Co Ltd and Jiangmen Yeebo Semi-conductor Co Ltd, but stated that they were joint venture companies with three different parties and were separate legal entities, and their assets should not be regarded as assets of the 2nd defendant in execution. 16.The notes to the Annual Report in turn referred to the Appeal Judgment but stated that no provision had been made as the 2nd defendant had applied to the Guangdong Court for a retrial and the decision was pending, and the lawyer had advised that the 2nd defendant’s prospect of success was high. 17.On 25 December 2001, the Guangdong Court made an order (“Remit Judgment”) that the execution of the Appeal Judgment be transferred from the Shenzhen Court to the Guangdong Railway and Transport Intermediate Court (“Railway Court”). The Remit Judgment was within the 6 years period. 18.On 23 July 2007, the plaintiff issued the proceedings herein in respect of the awards of damages and costs in the Appeal Judgment. The plaintiff was suing on (1) the Appeal Judgment; (2) the Review Judgment; and (3) the Remit Judgment. Relevant principles 19.It is common ground that a plaintiff can sue on a money judgment obtained outside Hong Kong on the basis of an implied contract to pay. 20.In Grant v Easton (1883) 13 QBD 302, 303, Sir Baliol Brett MR said:
21.The relevant period of limitation for an action on a judgment is 6 years as for simple contract debt under s.4 of the Limitation Ordinance. 22.Section 23(3) of the Limitation Ordinance provides for the extension of the limitation period:
23.Section 24 further provides for the formal requirements as to acknowledgment:
24.The Hong Kong Civil Procedure 2008 Vol. 2 at para. G1/23/1 refers to the principles set out in New World Development Co Ltd v Sun Hung Kai Securities Ltd [2006] 3 HKLRD 345 (CFA):
25.Chitty on Contracts (29th Ed, 2004) Vol.1 para. 28-095 comments on what constitutes acknowledgment:
26.In In re Compania de Electricidad de la Provincia de Burnos Aires Ltd [1980] Ch 146 at p. 193F-H, Slade J ruled on the requirement that the acknowledgment must be “made to” the creditor:
Section 24(2) of the Limitation Act 1980 (UK) is in pari materia with section 24(2) of the Limitation Ordinance. The issues 27.The issues in the case are:
Copy Transcript 28.It is common ground that the Appeal Judgment and the Review Judgment can be looked at together as they are both outside the limitation period. 29.Mr. Albert Yau, for the plaintiff, submitted that construed objectively as a whole, the Copy Transcript was an acknowledgment of the 2nd defendant’s liability to satisfy the Appeal Judgment. The Copy Transcript recorded that the 2nd defendant’s lawyer had no objection to the statement that the Appeal Judgment was effective and remained unsatisfied, and the 2nd defendant had set apart the equipment to facilitate enforcement. These answers could only be consistent with the acknowledgment of the 2nd defendant’s liability to satisfy the Appeal Judgment. Reference to the 2nd defendant “not being satisfied” with the Appeal Judgment was only an indication that the 2nd defendant was not happy with the reality and did not detract from the acknowledgment. 30.Mr. Edward Chan SC, for the 2nd defendant, submitted that whether the underlying subject matter is a contract or a judgment is irrelevant because it is the acknowledgment that counts. An acknowledgment must relate to both the existence of the judgment and the liability to satisfy it. Identification of a judgment by reference is not acknowledgment of the liability to pay, and dispute as to the correctness of a binding judgment, for whatever its worth, does not amount to acknowledgment of liability to satisfy the judgment. 31.Mr. Chan submitted that the Copy Transcript did not amount to an acknowledgment of liability to pay the Appeal Judgment. It recorded that the 2nd defendant was dissatisfied with the Appeal Judgment and the plaintiff’s lawyer so understood it. Although the 2nd defendant had separated the equipment in Dongguan for execution, they only related to the non-money part of the Appeal Judgment, and did not amount to acknowledgement of the money awards. The 2nd defendant did say it would pay compensation to the Dongguan company in due course, but the Dongguan company is not the plaintiff. 32.I agree that the acknowledgment must relate not only to the existence of the judgment, but also the liability to satisfy it. Otherwise, unless the judgment creditor denied the objective fact of the judgment, any reference to the judgment would ipso facto nullify the statute of limitation. Hence, one must construe the Copy Transcript to see whether there is any acknowledgment of the liability to satisfy the Appeal Judgment. 33.The Copy Transcript recorded two acts of the 2nd defendant:
34.Earlier in the Execution Hearing, the 2nd defendant’s lawyer did say they were not satisfied with the Appeal Judgment and had applied for a re-trial. After the court pointed out that the Review Judgment had been handed down and asked for a list of equipment for the execution, the 2nd defendant’s lawyer handed up the list and said they would cooperate with the court in execution. When the plaintiff’s lawyer said the 2nd defendant was able to repay the debt but did not comply with its obligation because of it was not satisfied with the judgment, the 2nd defendant’s lawyer repeated the offer of RMB￥3 million to settle the other requirements of the judgment and hoped the plaintiff could accommodate as the 2nd defendant was in financial difficulties. The offer to settle the judgment sum by a lesser amount nevertheless shows the 2nd defendant was willing to satisfy the Appeal Judgment. 35.In the premises, I find that the Copy Transcript constitutes an acknowledgment of the liability to satisfy the Appeal Judgment. 36.Mr. Chan submitted further that the Copy Transcript was not “made to” the plaintiff as it was made to the Shenzhen Court. As at the date of the Execution Hearing, the plaintiff was not entitled to the Copy Transcript but obtained it at the discretion of the court. 37.The original Transcript was delivered to the Shenzhen Court and not to the plaintiff. Hence, the plaintiff could only rely on scenario (b) in In re Compania Electricidad, i.e.“expressly or implicitly addressed to the creditor or its agent” and “actually received by the creditor”. 38.Mr. Chan conceded although it is not, as a matter of law, that the creditor could never succeed unless the original acknowledgment is produced, the fact that the plaintiff is unable to produce any signed document is strong evidence that the document was not intended for them. There could be circumstances where the original document was made to the creditor but no longer available and a copy of it or oral evidence is the best evidence thereof. But here, the Transcript was addressed to the Shenzhen Court and the plaintiff never received the original document and only managed to obtain a copy. Hence, scenario (b) in In re Compania Electricidad is not satisfied either. 39.Mr. Yau submitted that there is no requirement in section 24 that the plaintiff must have the document actually signed by the debtor in order to rely on it as an acknowledgment, and it would be an unduly restrictive interpretation of the section. He submitted that it would suffice if the plaintiff can prove the existence of a document signed by the debtor. 40.Mr. Yau referred to Jones v Bell Grove Properties Ltd [1949] 2 KB 700 where the company owed the plaintiff £1,807 but the debt did not accrue within 6 years of the action brought by the plaintiff against the company. The plaintiff attended an annual general meeting as a shareholder held within the limitation period. A balance sheet signed by the chartered accountants, agents of the company, and two directors containing the statement: “To sundry creditors £7,638 6s 10d” was presented to the shareholders at the meeting. No particular creditors were named in the accounts. At the hearing of the action a witness from the firm of chartered accountants which signed the balance sheet testified that the debt of £1,807 was included in the sum stated in the balance sheet to be due to sundry creditors. The plaintiff contended that the balance sheet presented to him at the meeting constituted an acknowledgment of the debt within section 24(2) of the Limitation Act 1939. Lord Goddard CJ said that he could see no reason why a balance sheet should not contain a good acknowledgment within the meaning of the Act. 41.And in In re Gee & Co (Woolwich) Ltd [1975] Ch 2, two trustees of the deceased shareholder’s estate were present at the company’s meeting at which the balance sheet, signed by its directors, were presented. The balance sheet was held to be an affective acknowledgment of the state of the company’s indebtedness as at the date of the accounts. 42.Mr. Yau also referred to the facts in In re Compania Electricidad where the company went into members’ voluntary liquidation in 1975. The accounts recorded sums representing unclaimed capital, dividends or interest of non-cumulative participating preference shares by holders of bearer bonds. Such holders remained unidentified notwithstanding extensive notice by advertisements. The issue was whether the potential claimants were to be treated as creditors or as members, and the extent to which the potential claims were barred by the Limitation Act 1939. Slade J held that the potential claimants were not members of the company, and also there was no evidence that any of the missing claimants actually received copies of any accounts containing the relevant acknowledgments, as it would be necessary that the creditor should actually receive the acknowledgment before he could rely on it. 43.Mr. Yau submitted that in Jones v Bell Grove and In re Gee,as in here, both the acknowledger and acknowledgee were present when the acknowledgment was made or signed, and it was not necessary for the acknowledgee to prove that he had actually received a copy of the acknowledgment in order to satisfy the requirement that the acknowledgement was “made to” the acknowledgee. The reason why in Slade J held In re Compania Electricidad that the potential claimants should have actually received the balance sheet was because they were not present at the company’s meeting. 44.Mr. Chan pointed out that in both Jones v Bell Grove and In re Gee, the point of whether the acknowledgment was made to the claimants was never taken as the balance sheets were presented to them at the meeting. 45.In London Borough of Wandsworth v Birchwood (16 June 2000 unreported), the applicant applied to the English Court of Appeal for permission to appeal against a judgment entered against him. In 1992, Wandsworth obtained a judgment against the applicant’s father, and applied for the examination of judgment debtor. At the oral examination, Wandsworth was absent and the applicant appeared and answered questions before the court. At the end of the questioning, he signed a record of what had been said, acknowledging a debt he owed to the Borough. Wandsworth sought to recover the debt from the applicant, which would be statute-barred but for the acknowledgment made in those proceedings in 1993. An issue arose as to whether the acknowledgment was made to the person, or to the agent of the person whose title or claim is being acknowledged. The trial judge noted that there had been nobody from Wandsworth at the oral examination, and found that the examiner could not be regarded as an agent of the Borough. However, the judge considered that the applicant would have understood that the purpose of being there was to give information that in the circumstances would be transmitted to Wandsworth. His Honour found that the acknowledgment had been an acknowledgment to Wandsworth because the form was to be transmitted to it. On the application for permission to appeal, counsel for the applicant said the judge was wrong in holding, inter alia, that the acknowledgment was implicitly addressed to the creditor as per the dictum of Slade J in Compania de Electricidad (as cited above). Further, the acknowledgment was not voluntary as it was a compulsory acknowledgment in the context of an oral examination. Buxton LJ said he did not agree the judge was wrong. Further, even if one did not rely on the word exclusively, it was plainly a case where the acknowledgment was expressly to Wandsworth, because it was addressed to, and it was known by the man making it that it was going to be sent to the judgment creditor. His Lordship also held that none of the cases cited was basis for saying that an acknowledgment made in court proceedings that the debtor was bound to take part in could not be taken into account. 46.Mr. Chan submitted that Wandsworth v Birchwood is distinguishable from the present case:
47.Mr. Liu Min-chun, the 2nd defendant’s lawyer at the Examination Hearing, deposed to that lawyers for both parties perused the Transcript immediately after the hearing, and he only signed the Transcript as confirmation for the court’s record. The signed record would be filed in the court without releasing to the representatives of the parties. However, if either party need to inspect the record, they may apply to do so with the court’s permission. 48.Mr. Yau submitted that the plaintiff was entitled to a copy of the Transcript under the provisions relating the inspection of court record under the Civil Procedural Law of China《民事訴訟法》(“CPL”) and the Supreme Peoples’ Court Stipulation relating to Inspection of Civil Case Materials by Litigation Representatives 《最高人民法院關於訴訟代理人查閲民事案件材料的規定》(“Inspection Stipulation”). 49.Section 133 of the CPL provides that the clerk should record in writing all events in the court hearing to be signed by the judicial officers and the clerk. The court record in writing should be read out at the hearing, or to notify the parties and other participants in the litigation to peruse it at the hearing or within 5 days. If the parties and other participants consider there are omissions or inaccuracies in their statements, they are entitled to apply for amendment. If amendment is not allowed, the application should be recorded on file. The court record in writing is to be signed or chopped by the parties and other participants. If they refuse to sign or chop, the situation should be recorded in an annex[1]. 50.Section 61 of the CPL provides that the lawyer or other litigation representative is empowered to investigate and collect evidence, can inspect the relevant materials of the case, and the scope and method of inspection of the relevant materials of the case is stipulated by the Supreme People’s Court[2]. 51.Section 7 of the Inspection Stipulation provides that litigation representatives can copy or photocopy when inspecting the case materials. Case material concerning national security shall be dealt with according to the relevant provisions of the nation. The photocopying of case materials should be subject to the custodian of the files. In photocopying the relevant materials of concluded cases, the litigation representative can request the custodian department of the files to stamp for certification[3]. 52.Mr. Chan pointed out that the date of the Execution Hearing was 26 July 2001 whereas the commencement date of the Inspection Stipulation was 7 December 2002. Hence, as at the Execution Hearing, there was no law to enable the plaintiff to obtain the Copy Transcript, and it was done at the discretion of the court. The lack of entitlement is inconsistent with the document being intended to be addressed to them. The fact that the plaintiff eventually did get the Copy Transcript did not alter the fact that it was not addressed to them. 53.Section 24 of the Limitation Ordinance provides that:
54.I have ruled that the Copy Transcript is an acknowledgment of the liability to satisfy the Appeal Judgment. It is the record of the Execution Hearing, and must be viewed in such context. Those proceedings were tri-partes between the plaintiff, the 2nd defendant and the court. Both the plaintiff and the 2nd defendant were present at the Execution Hearing. No doubt the Transcript was addressed to the court, but it did not exclude the fact that both the plaintiff and the 2nd defendant were also addressing each others, as ultimately, they were the parties whose interests would be affected by the outcome of the proceedings. Hence, I find that the Transcript was also addressed to the plaintiff, and vice versa¸ the 2nd defendant. The Transcript was also “made to” the plaintiff in the presence of its representative. 55.I note that in both Jones v Bell Grove and In re Gee, the creditors were shareholders of the company who were present (either personally or by personal representatives of the estate) at the company’s meeting where the balance sheets were presented. However, that did not detract from my finding that the Transcript was also “made to” the plaintiff qua party in the Execution Hearing. 56.Only the original Transcript was signed. The 2nd defendant did obtain the Copy Transcript, notwithstanding that it was subject to the permission of the court. The obtaining of a copy by the claimant where the signed original was “made to” it is not unlike the presentment of the company’s accounts to the shareholders at the annual general meeting, where the original accounts were signed by the directors, and copies were available for collection, which must be regarded as “signed” or issued with the sanction of the debtor. 57.Hence, I hold that the Copy Transcript satisfy the requirement of section 24 of the Limitation Ordinance. I also find that as a fact that the Copy Transcript was received by the 2nd defendant within the relevant limitation period. 58.I find that Wandsworth v Birchwood is not entirely of assistance as the creditor was not present at the examination hearing. 59.In the premises, the cause of action based on the Appeal/Review Judgment did accrue within the relevant limitation period by reason of the acknowledgment in the Copy Transcript. Copy Explanation Letter 60.As to the Copy Explanation Letter, Mr. Chan submitted that it contained no acknowledgment per se, and merely referred to the Annual Report which mentioned the Appeal Judgment with the rider that the 2nd defendant was of the view that it would not be liable on it upon retrial. I agree that it would be a quantum leap to conclude that there was an acknowledgment of liability to pay. 61.Furthermore, the copy of the Copy Explanation Letter is unsigned. 62.Mr. Yau referred to Good Challenger Navegante SA v Metalexport SA (The “Good Challenger”) [2004] 1 Lloyd’s Rep 67 which held that the typed signature of the charterers’ agents appeared on the telex in circumstances in which it was evidence that it was put on with the agent’s authority so that it could be seen that the agents (and thus the charterers) were acknowledging the debt. Mr. Yau pointed out that the 2nd defendant’s name was typed at the end of the Copy Explanation Letter, and it amounted to a typed signature as in the Good Challenger. 63.Mr. Chan submitted that there is no evidence whether a signed copy of the Copy Explanation Letter was ever sent to the Shenzhen Court. Even if assuming so, and that the plaintiff received un unsigned copy by compliment of the 2nd defendant, it could not be said that a signed acknowledgment was made to the plaintiff, rather, a signed copy was made to the Shenzhen Court, an unsigned copy was made to them. 64.Whether a printed name amounts to a signature depends on whether it is intended to be so. In the case of the telex, it must be taken to be signed by the sender for the recipient because the circumstances do not allow for any manual or facsimile signature. Here, the Copy Explanation Letter was addressed to the Shenzhen Court. It was not made in the presence of the 2nd defendant. It could not be inferred that an unsigned copy of the letter with the typed name of the 2nd defendant is intended to be a signed copy addressed to the plaintiff. Hence, I do not consider that the Good Challenger assist the plaintiff. 65.In the premises, the Copy Explanation Letter did not amount to any acknowledgement, nor was it signed or made to the 2nd defendant. Remit Judgment 66.Mr. Chan submitted that Remit Judgment merely transferred the execution of the Appeal Judgment from the Shenzhen Court to the Railway Court. There is no order to pay. If the plaintiff were suing on the Remit Judgment, it would simply be asking this Court to confirm that enforcement of the Appeal Judgment should be in the Railway Court, no more and no less. The Statement of Claim did not clearly state what relief is sought to reflect the Remit Judgment. 67.Mr. Yau submitted that the action based on the Remit Judgment should not be struck out as the full meaning and effect of the Remit Judgment is a matter of expert evidence on Chinese law, and it is not a clear and obvious case to strike out at this stage. 68.It is trite that unless there is evidence on the foreign law, it is presumed to be same as the domestic law. Ex facie, the Remit Judgment was an order on the forum of the enforcement action, and contained no money award. It is not for this Court to surmise in the absence of any evidence on Chinese law that it is implicitly a money judgment. 69.In the premises, I hold that the Remit Judgment provides no basis for the enforcement of the money awards of the Appeal Judgment, and the claim based on must be struck out. Conclusion 70.I hold that the plaintiff’s claim as based on the Appeal/Review Judgment is not statute-barred by virtue of the provisions under the Limitation Ordinance. 71.I order that claim based on the Remit Judgment be struck out. Costs 72.The plaintiff is successful save on the issue of the Remit Judgment. As the argument thereon is separate and distinct, I consider a separate costs order should be made in favour of the 2nd defendant. 73.As to the hearing on 31 March and 2 April 2008, after setting off the respective costs on successful and unsuccessful issues, I think the plaintiff should be entitled to 4/5 of the costs on those 2 days. 74.I make an order nisi that:
75.Lastly, I thank Mr. Chan and Mr. Yau for their helpful submissions.
Mr. Albert K C Yau, instructed by Messrs Hastings & Co, for the Plaintiff Mr. Edward Chan, SC and Mr. Damian Wong, instructed by Messrs Hui & Lam, for the 2nd Defendant [1] Original：第133條 書記員應當將法庭審理的全部活動記入筆錄 ，由審判人員和書記員簽名。
[2] Original：第61條 代理訴訟的律師和其他訴訟代理人有權調查收集証據，可以查閱本案有關資料，查閱本案冇關資料的範圍和辨法由最高人民法院規定。
[3] Original：第7條 訴訟代理人查閱案件材料可以摘抄或者複印。涉及國家秘密的案件材料，依照國家有關規定辨理。
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Other judgments that cite this case
Further hearings and rulings under HCA 1587/2007