Read the full judgment text of CACV 000129/1999 on BabelCite. This Court of Appeal judgment was delivered on 29 June 1999 before Mortimer V-P, Rogers JA.
Civil procedure – Order 14 – summary judgment – application for leave to defend – whether defendant raised an arguable defence – rule in Turquand's case – internal management – actual or constructive notice of irregularity – undisclosed director's interest – whether plaintiff put on inquiry – loan agreement between public company and finance company – controlling shareholder's director signing on behalf of company – loan proceeds credited to controlling shareholder's account to reduce company's acknowledged debt to shareholder – whether defendant established arguable defence that director lacked authority – held no, defendant failed to condescend upon particulars and no director at material time supported the defence – whether plaintiff had actual or constructive notice of irregularity defeating Turquand rule – held no, defendant must show plaintiff put on inquiry and mere non-declaration of interest in minutes insufficient where interest otherwise publicly known from annual report – whether post-demand letters amounted to admissions – court hesitant to treat letters as formal admissions but 10 March letter significantly inconsistent with defendant's case – appeal dismissed – Order 14 judgment for HK$15m plus interest affirmed
Legal issues: Whether defendant established arguable defence of lack of authority on Order 14 application · Whether plaintiff had actual or constructive notice of irregularity defeating Turquand's rule · Effect of the two post-demand letters on the defendant's case
Outcome: Defendant's appeal dismissed; Order 14 judgment of Master Bharwaney (as upheld by Pang J) for HK$15m plus interest in favour of the plaintiff is affirmed.