Wing Lung Finance Ltd v. Cheng Ho Yin and Others
Read the full judgment text of HCA 1494/2008 on BabelCite. This High Court CFI judgment was delivered on 19 August 2009.
1. On 14 April 2009, I handed down judgment on the plaintiff’s application for summary judgment against the 1 st defendant. I held that the defence advanced by the 1 st defendant is shadowy that that leave to defend should only be granted on terms. Upon the 1 st defendant’s request made through counsel, I granted the 1 st defendant leave to file evidence on his means before deciding on the condition to be imposed.
Cited by 1 case · Cites 1 case
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HCA1494/2008 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO. 1494 OF 2008 ----------------------- BETWEEN
----------------------- Before : Hon Chu J in Chambers Date of Hearing : 19 August 2009 Date of Decision : 19 August 2009 ----------------------- DECISION ----------------------- 1.On 14 April 2009, I handed down judgment on the plaintiff’s application for summary judgment against the 1st defendant. I held that the defence advanced by the 1st defendant is shadowy that that leave to defend should only be granted on terms. Upon the 1st defendant’s request made through counsel, I granted the 1st defendant leave to file evidence on his means before deciding on the condition to be imposed. 2.The 1st defendant had on 21 April 2009 filed his 4th affirmation. The plaintiff had also on 28 April 2009 filed the 5th affirmation of Lau Chung Cheung by way of reply. 3.The 1st defendant at this hearing seeks to introduce a further affirmation – the Affirmation of Wong Kam Mun, who is an assistant solicitor of his solicitors. The affirmation sought to state that the 1st defendant was unlikely to be able to raise finance from his friends. It explained that the 1st defendant is currently in Kuala Lumpur and unable to make the affirmation himself. The plaintiff objects to the affirmation. 4.This is no doubt a very late affirmation. The time for the 1st defendant to file evidence on his means expired in April 2009. There is no reason given for the lateness. As Mr Shum pointed out, the 1st defendant appears to be in the habit of introducing affirmation whether shortly before or at the hearings throughout the entire Order 14 proceedings. 5.Mr Poon had not relied heavily on this affirmation. Nevertheless, I am of the view that this affirmation should not be received. Principally, this Order 14 application has taken a very long course, due largely to the 1st defendant’s request to introduce further affirmation at the last minute in the hearings before the Master. With the Civil Justice Reform and its underlying objectives, such conduct is no longer to be tolerated. In any event, the matters stated in this affirmation should have been deposed to by the 1st defendant and not by his solicitor on his behalf. There is no explanation why he could not have deposed to them in his 4th affirmation. It seems this is very much an afterthought, probably in light of the criticism levelled against the 1st defendant’s case in Mr Shum’s written submission. 6.I turn to deal with the subject matter of this hearing. This is the resumed hearing to determine the condition to be imposed before leave to defend is given to the 1st defendant. 7.The relevant legal principles on imposing terms on a defendant when giving leave to defend are set out in Hong Kong Civil Procedure 2009, vol. 1, para.14/4/16. For the present purpose, it is important to note the following points:
8.In the present case, the 1st defendant’s affirmation shows that by 21 March 2009, he had about $196,600 in his bank account. He owns a property in Tung Chung, which by 1 April 2009 had an outstanding mortgage liability of $3,058,000. His net monthly income is stated to be $33,000. He also owns a second-hand car, which is said to have a negligible value of $20,000. He estimated his monthly expenditure, including the monthly mortgage payment of about $11,800, to be about $26,000. The 1st defendant estimated the market value of his property to be $3.2 million, with therefore a net equity of about $150,000. The plaintiff, on the other hand, had adduced evidence of on-line valuations by Hang Seng Bank and Bank of China. The two banks assessed the property to have a market value of $3.56 million in April 2009 and a higher value of $ 3.78 million to $3.88 million in August 2009. The 1st defendant does not challenge these valuations. 9.The 1st defendant’s position in a nutshell is that he is only able to make a payment into court in the sum of HK$30,000. This is because he wishes to make provision for his future legal costs and also (according to his affirmation) to cater for any possibility of unemployment or any unexpected expenses. At this hearing, he through Mr Poon offers to create a charge on his Tung Chung property in favour of the plaintiff as a condition to defend. The plaintiff does not agree to this. 10.The primary position of the plaintiff is that the 1st defendant should be ordered to make payment into court of the entire sum claimed, being HK$1,217,377.68 together with interest. Alternatively, there should be payment in of a substantial part of the amount claimed. 11.I do not find the 1st defendant’s suggestion of creating a charge in favour of the plaintiff over his Tung Chung property attractive. This is rather cumbersome and does not provide any effective immediate security to or enforcement of any judgment that may be awarded to the plaintiff. 12.On the evidence before the court, it is clear that the 1st defendant has ability to make payment into court of a substantial part of the amount claimed. He has a monthly surplus of over $6,000. This is reflected in the credit balance of some $196,000 in his bank accounts in March 2009. In the normal course, between March 2009 and now, he would have accumulated a further saving of over $300,000. At the same time, his Tung Chung property has a net equity of some $700,000 to $800,000. 13.Mr Shum is correct in submitting that the court’s only concern is what is the financial condition that the 1st defendant can meet on the evidence presented. It is not the business of the court or of the plaintiff to assist the 1st defendant to arrange the finance for meeting the condition. It is entirely a matter for him as to how he manages his finance or deals with his assets so as to meet the condition imposed. 14.Having regard to the materials available, I am of the view that an appropriate condition is to require the 1st defendant to make payment into court in the sum of $600,000. 15.Mr Poon asked for two months to make the payment in, stating that instruction on this aspect had not been sought before the hearing. This is too long, considering the evidence of the 1st defendant’s means and also that this is merely an estimate of his legal representatives. I will grant 28 days for making the payment into court. 16.As to costs, the usual costs order will be for costs in the cause. In this case, I consider that the costs of this hearing should be treated differently. This hearing would not have been necessary had the 1st defendant prepared evidence on his means at the last hearing in April 2009. Mr Poon referred to the judgment of Kempster JA in Hwang Yiou Kwa Victor v. Morgan Guaranty Trust Co of New York (at 296B), which stated that it is not a general rule that a defendant seeking leave to defend should be advised to prepare evidence of his financial resources prior to an intimation from the court that condition will be imposed. He submitted that the 1st defendant should therefore not be held liable for the costs of this adjourned hearing. However, in Muhammad Ibrahim v. Asmat A.M. Khan [1986] HKLR 581, 585I-586A, it was pointed out that on an Order 14 application, while the principal issue was whether there was an arguable defence, there was always the subsidiary issue of whether leave to defend should be conditional and, if so, what the condition(s) should be. And after referring to the passage of Kempster JA’s judgment in Hwang Yiou Kwa Victor, Huggins VP pointed out that if the defendant does not come prepared with the evidence, it will be incumbent upon him at least to indicate a wish to adduce evidence of his financial resources. In my view, this highlights the duty of a defendant in an Order 14 application to be ready to argue the conditions to be imposed for leave to defend. This is consistent with his duty to present proper and sufficient evidence if he seeks to limit or avoid financial condition to be imposed. Hence, if an adjournment is occasioned by reason of his not being ready at the hearing of the Order 14 application, there is no reason why the plaintiff should not be compensated by costs for the inconvenience caused. 17.Accordingly, if the 1st defendant were ready at the last hearing to argue the conditions to be imposed, this adjourned hearing would not have been necessary. The additional costs of this hearing ought therefore to be made the plaintiff’s costs in the cause in any event. 18.As to the directions for the further conduct of the action, parties are in agreement in relation to the timetable for discovery and exchange of witness statement. I will order in terms and also fix a date for the Case Management Conference before Master. 19.In conclusion, I make the following order:
Mr Timon K L Shum instructed by Messrs Keith Lam Lau & Chan for the plaintiff. Mr Albert Y Y Poon instructed by Messrs Christine F L Ip & Young for the 1st defendant. |
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