Wong Hok Ngan v. Angel Garment Factory
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DCDT 544/1972 IN THE DISTRICT COURT OF HONG KONG HOLDEN AT KOWLOON DISTRAINT NO. 544 of 1972 ____________ BETWEEN
____________ Coram: His Hon Judge D.A. Davies Date of Judgment: 17th August, 1972. _______________ J U D G M E N T _______________ 1. In this action, the Plaintiff, WONG Hok-ngan, on 29th June, 1972, applied for and was granted a Warrant of Distress against the Defendants (The Angel Garment Factory), her tenants, to levy for the sum of $10,400.00 being arrears of rent due and owing. 2. The Defendants, however, were already judgment debtors in three civil actions – T.W.67/72, T.W.75/72 and T.W.80/72. 3. Execution was issued in each of those three cases, and levied in T.W. 67 on 23rd June, 1972, in T.W. 75 on 26th June, 1972, and in T.W. 80 on 29th June, 1972. 4. The Bailiff received the Plaintiff’s Warrant of Distress on 3rd July, 1972. 5. Also after the dates of the three executions, but prior to receipt of the Plaintiff’s Distress Warrant, the Bailiff on 30th June, 1972, received a claim against certain of the Defendant’s goods from the 2nd Claimant, Sweetmart Garment Works Ltd. 6. On 3rd July, 1972, the Bailiff gave notice to the judgment creditors in T.W.67, 75 and 80 that he had received a Distress Warrant. 7. On 6th July, the judgment creditor in T.W.67 withdrew his Warrant of Execution, and on 10th July, the judgment creditor is T.W. 75 similarly withdrew. The judgment creditor in T.W. 80 withdrew his Warrant of Execution in Court at the commencement of this action on 19th July. On 17th July, the 1st Claimant, CHOY Moon-leung, through an affidavit filed by his solicitors, also laid a claim to certain of the goods of the Defendants. 8. It is common ground that the three executions resulted in the seizure of goods which are also the subject matter of the claims of the 1st and 2nd Claimants. 9. The Bailiff has said that as and when each of the Warrants of Execution was withdrawn, the goods were forthwith seized again under section 33 of the Distress for Rent Ordinance – i.e. under the Plaintiff’s Distress Warrant. (Actually, it is by no means clear that the withdrawals of execution were occasioned by payments off – indeed, my understanding of the evidence is the reverse – and so the Bailiff may have been quoting the wrong section in his evidence, but the important point is that he did in each and every case re-seize the goods under the Plaintiff’s Distress Warrant, so that up to the time this Court ordered release of the goods after payment in by 2nd Claimant of $10,400.00 the goods were still under seizure by the Bailiff). 10. Ingenious arguments have been put before me both by Mr Gunston for the Plaintiff and Mr Wong for the 2nd Claimant (for it is between these two parties that the vital issues are joined), and it is impossible for me to do justice to all of them. I will confine myself to discussing my findings and the reasons for them. 11. I have been referred to, and derive much assistance from, the judgment of Williams District Judge in Yu Chock and Rocky Industrial Factory and Charles Morgan Lendrum Ltd. 1963 District Court Law Report 248. I respectfully agree with the decision in that case, and intend to follow it in principle. It does however, require a certain amount of analysis. The facts are almost on all fours with those in the present case. 12. The sequence of events commenced with seizure of goods under Warrants of Execution, the Claimant filed a claim, and the judgment creditors withdrew in the face of it. Meanwhile, however, a Distress Warrant had been issued, and after withdrawal by the judgment creditors, the Bailiff seized the goods under the Distress Warrant. 13. It was held that upon withdrawal by the judgment creditors, the goods were released to the judgment debtor – i.e., they ceased to be in custodia legis, and were liable to be re-seized under the Distress Warrant. Section 16(f) of the Distress for Rent Ordinance accordingly did not protect the said goods, and the release by the judgment creditors did not affect the landlord’s right to distrain. 14. Clearly the re-possession by the judgment debtor envisaged by the learnt District Judge was in that case somewhat of a legal fiction, for physically the goods were apparently never out of the Bailiff’s custody, but the point is unmistakeably made that legally there is a stage albeit momentary, where, between release and re-seizure, the goods are ex-custodia legis. 15. A number of decisions are discussed in the Yu Chock judgment, and I see no reason whatever for differing with the conclusions of Judge Williams. If as I intend to do, I fully apply the same principles to the present case, the main issues before me are virtually disposed of. 16. My findings should perhaps be prefaced by expression of my view that the reason why a judgment creditor withdraws from execution is not material. I think that the Yu Chock judgment makes that obvious, for in that case the judgment creditors withdrew, it seems not in favour of the Landlord, but in favour of the Claimants; yet this did not affect the re-seizure, which was clearly made under the Warrant of Distress. 17. Thus in the present case, as and when each judgment creditor withdrew, the goods in that execution ceased to be covered by section 16(f) of the Distress for Rent Ordinance, and were properly re-seized by the Bailiff under the Plaintiff’s Warrant of Distress, which had already been issued on 29th June, 1972, prior to any of the withdrawals by judgment creditors. I would hold that this situation even applied to the withdrawal of the judgment creditor in T.W.80/72 in Court on 19th July. Notionally there was even in that instance, a release to the Defendants, and then a re-seizure under the Plaintiff’s Distress Warrant. 18. (I should add that this position is unaffected in any way by the consent order made at a later stage in that hearing, releasing all the goods, for that order was made after all issues had been joined, and was completely without prejudice to those issues.) 19. It follows from this ruling that in respect of all the goods which were the subject of the executions in T.W.67, 75 and 80 of 1972, section 16(f) of the Distress for Rent Ordinance does not apply, and the claim of the 2nd Claimant thereto is effectively defeated by the Plaintiff’s Warrant of Distress. I accordingly order that the value of those goods be paid out to the Plaintiff from the sum paid into Court by the 2nd Claimant. They are the items of machinery, as listed. This order in effect also covers, and resultingly dismisses the claim of the 1st Claimant, whose claim was also based on section 16(f) of the Distress for Rent Ordinance. 20. The 2nd Claimant has also laid claim to certain other items also under seizure by the Plaintiff, which are piece-goods manufactured by the Defendants on contract, from cloth supplied by the 2nd Claimant. 21. Mr WONG bases the claim to those goods under section 16(g) of the Distress for Rent Ordinance. 22. Once again, the merits of this claim have been vigorously argued by Mr WONG and Mr Gunston. 23. With the greatest respect to both submissions, in the interests of brevity, I will sum the matter up by saying that it would appear to me that the 2nd Claimant’s claim to these articles is formidable, since they are statutorily protected from seizure. 24. The crux of Mr Gunston’s argument, if I understand him correctly, is that the Claimant must adduce evidence in support of his claim. 25. With this I agree, but only if the Plaintiff seeks to dispute the facts set out in the affidavit of one Mr Desmond TAM filed on behalf of the 2nd Claimant on 5th July 1972. The question of identity, quantum, and value of the piece-goods is purely and simply a matter of fact. Prior to Mr Gunston’s address at the close of these proceedings, there was nothing to indicate either to the Court or to Mr Wong that any issue of fact was joined by the Plaintiff in respect of this part of the 2nd Claimant’s claim. 26. Accordingly, it was reasonable to assume that once the issue of law was decided, the factual side could be determined by affidavit. 27. My ruling is that any piece-goods or materials delivered to the Defendants and manufactured by or intended for manufacture by, the Defendants, were not liable to seizure by the Bailiff. 28. In fairness both to the Plaintiff and the 2nd Claimant, if it now appears that the Plaintiff wishes to put the 2nd Claimant to proof of identity, quantum and value I am prepared to order that the issue now go to hearing, on the facts; otherwise I will proceed upon Mr TAM’s affidavit. 29. I look forward to hearing further from the solicitors for both sides on the mater. 30. Meanwhile, however, there must be judgment for the Plaintiff against the 1st and 2nd Claimants for the value of the machinery; if this sum cannot be agreed between all parties, it will have to be assessed by the Court, since there has been no sale. 31. The Plaintiff is entitled to her costs in respect of this part of the claim as against both Claimants, which will have to be taxed on the scale appropriate to the sum recovered, if not earlier agreed. 32. At the same time, I award judgment in favour of the 2nd Claimant against the Plaintiff in respect of materials supplied to and piece goods manufactured by, the Defendants, in such sum, if any, to be agreed by the parties or assessed by the Court, as may be; and such costs upon this part of the judgment will be the 2nd Claimant’s costs, to be taxed on the scale appropriate to the sum recovered, unless earlier agreed. 33. In open Court this 17th August, 1972.
Mr Gunston of Gunston & Chow for Plaintiff (Distrainor). 1st Claimant not appearing. Mr Ronald Wong of J. S. & M. for 2nd Claimant |