Tower Imitation Jewellry Factory Ltd v. Artcraft Co (A Firm) and Another
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IN THE SUPREME COURT OF HONG KONG ORIGINAL JURISIDICTION ACTION NO. 1909 OF 1972 ________________________
Coram: Blair-Kerr, S.P.J. in Chambers ________________________ JUDGMENT ________________________ 1. The plaintiff company’s claim against the defendants is for $120,000 being the total amount of 3 bearer cheques drawn by the 2nd defendant, which cheques were dishonoured upon presentation. 2. The 2nd defendant, who is the sole proprietor of the 1st defendant firm, admits that he drew the 3 cheques and that they were dishonoured; but he denies that the defendants are indebted to the plaintiffs. The defence is contained in the 2nd defendant’s affirmation of 12th August 1972. Two directors of the plaintiff company (NG Chin-te and CHUA Hung-tih) filed affirmations dated 14th November, 1972. 3. The plaintiff company applied to the Registrar for summary judgment under O.14, and on 15th November, 1972 Mr. Registrar Jones gave the 2nd defendant leave to defend conditional upon his paying the sum of $120,000 into court within 7 days. 4. The 2nd defendant appealed against that decision under O.58 and he filed a further affirmation dated 27th November, 1972. Such an “appeal” is really a re-hearing of the application, the judge treating the matter as though it came before him for the first time. Although giving due weight to the Registrar’s decision, the judge is in no way bound by it. He exercises an entirely independent discretion. 5. On 30th November, 1972, the order made by me was virtually the same as the order made by Mr. Registrar Jones, that is to say the 2nd defendant was given leave to defend but only on condition that the sum of $120,000 was paid into court within 7 days. 6. I do not think that it is necessary to go into the details of the defence as set out in the affirmations of the 2nd defendant and of the counter allegations of the directors of the plaintiff company. Suffice it to say that, without in any way prejudging the issues, the story told by the 2nd defendant struck me as being so highly suspicious that in all probability it would turn out to be a sham defence. Therefore, it seemed to me that, as a condition precedent to the grant of leave to defend, the full amount claimed ought to be paid into court within a reasonable time. 7. The grant of conditional leave is very much a matter of discretion. The general principles which guide courts of law in such matters may be gleaned from a perusal of the judgments in such cases as Lloyds Banking Company v. Ogle ([1]), Ward v. Flumbley ([2]), Jacobs v. Booth’s Distillery Co. ([3]), Fieldrank Ltd. v. Stein ([4]), and Van Lynn Developments Ltd. v. Pelias Construction Co. ([5]). The following passage from the judgment of Devlin, L.J., in the Fieldrank Ltd. (4) case is frequently cited. It reads (p. 683):- 8. “I should be very glad to see some relaxation of the strict rule in Jacobs v. Booth’s Distillery Co. (3). I think that any judge who has sat in chambers in R.S.C., Ord. 14 summonses has had the experience of a case in which, although he cannot say for certain that this is not a triable issue, nevertheless he is left with a real doubt about the defendant’s good faith, and would like to protect the plaintiff, especially if there is not grave hardship on the defendant in being made to pay money into court.” 9. In this case, the condition imposed has not been complied with. Nothing has been paid into court. But the 2nd defendant has filed a notice of appeal against my decision; and the parties now come before me again. The plaintiff company seeks an order that they be at liberty to enter judgment against the 2nd defendant; and the 2nd defendant seeks an order that the time for payment into court be extended until 14 days after the outcome of the hearing of the appeal; or in the alternative a stay of execution of any judgment entered until the outcome of the hearing of the appeal. 10. I have always maintained that the likelihood of an appeal succeeding is a relevant factor to be borne in mind by a judge when deciding whether to grant a stay. To this end he may re-read the papers including the affidavits and counsel’s submissions – which I have done in this case. The words of Willmer, L.J., in Gordon v. Cradock ([6]) may also be borne in mind. He is reported as having said (p.123):- 11. “…. the question what terms ought to be imposed on a defendant as a condition of giving him leave to defend is very much a matter of discretion for the judge. That being so, this court is naturally reluctant to interfere with the exercise of discretion by the judge below …. unless it can be shown that there has been some error of principle on his part, or that he has in some way misapprehended the facts, or has given undue weight to this or that aspect of the facts.” 12. But an even more important matter is this: The defendant is asking me to depart from the fundamental rule in O.59 r.13(1) which reads:
13. and he has not chosen to file any evidence in support of his application. It is said on his behalf that it would be unfair to permit the plaintiffs to sign judgment thereby enabling them, if they were so minded, to levy execution, put the defendant in prison, make him bankrupt and so on. But there is not a shred of evidence that the defendant is impecunious or that payment into court, as ordered, would deprive him of his ability to defend the action. There is nothing before this court, so far, to suggest that refusal of a stay will render the appeal nugatory; and I do not subscribe to the view that upon the mere filing of a notice of appeal, the court ought to grant a stay. 14. For the above reasons, the 2nd defendant’s application is dismissed and there will be an order in terms of the plaintiff company’s application, that is to say they may now enter judgment against the 2nd defendant for $120,000 and costs.
D. Chang (Shea & Co.) for plaintiff. R. Wills-Owens (Johnson, Stokes & Master) for defendants. [1] [1876] 1 Ex. D. 262 [2] [1890] 6 T.L.R. 198 [3] [1901] 85 L.T. 262 H.L. [4] [1961] 1 W.L.R. 1287; [1961] 3 A.E.R. 681 C.A. [5] [1968] 3 W.L.R. 1141; [1968] 3 A.E.R. 824 [6] [1963] 2 A.E.R. at p.12 | ||||||||||||||||||||