Taibao Investment and Management (Hong Kong) Co Ltd v. Kary Enterprises (Holdings) Ltd and Another
Read the full judgment text of HCA 642/2011 on BabelCite. This High Court CFI judgment was delivered on 12 December 2013.
2. In short, the May 2013 order allowed the defendants’ appeal against Master S Kwang’s order (where the master gave leave to amend the statement of claim).
Cited by 4 cases · Cites 3 cases
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HCA 642/2011 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE HIGH COURT ACTION NO 642 OF 2011 ____________
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_____________ D E C I S I O N _____________ Introduction 1.There are before me:
2.In short, the May 2013 order allowed the defendants’ appeal against Master S Kwang’s order (where the master gave leave to amend the statement of claim). 3.The main issues in the master’s appeal were, and the application for leave to appeal against the May 2013 order are, it being undisputed the plaintiff’s claim in debt has accrued more than 6 years before this action, whether:
4.In a written decision handed down on 28 May 2013 (“the challenged decision”), the above were decided against the plaintiff, and in the defendants’ favour. The proposed grounds of appeal set out in the draft notice of appeal (“proposed appeal grounds”) contend that I erred in so concluding. 5.However, at the hearing, the plaintiff no longer pursued the part of the proposed appeal grounds relating to para 3(2) above in relation to D1 solicitors’ letter: para 20, plaintiff’s skeleton submissions. But whether the part of the challenged decision relating to para 23, defence filed herein (also para 3(2) above) is unclear: para 21, plaintiff’s skeleton submissions (which appears to be a question than a statement)). It would appear that little logical difference can be made between the two post-writ documents (both referred to in para 3(2) above). 6.The plaintiff nonetheless appears to contend that (when deciding whether the Dec 2010 documents are sufficient acknowledgements) the two post-writ documents can be used as “connected” documents, as that phrase was used in New World Development Co Ltd and Others v Sun Hung Kai Securities Ltd and Another (2006) 9 HKCFAR 403 (the New World case was relied on at the earlier hearings, and referred to at para 12, the challenged decision): para 10 to 16, plaintiff’s skeleton submissions. 7.In short, I find none of the proposed appeal grounds to have any reasonable prospect of success. 8.Whatever “connected” documents and/or parties’ conduct are said to be relevant (para 12(2) and (3), 13 to 14, 15.1 and 16.2 to 16.3 plaintiff’s skeleton submissions), the ultimate issue remains this: whether the document(s) relied on as a written acknowledgement can in fact constitute a sufficient acknowledgement. This is a question of construction: the New World case, para 91 (as the plaintiff so accepts: para 10.1(1), plaintiff’s skeleton submissions). 9.As has been famously observed in Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896, at 912H-913F (and in effect reiterated in Jumbo King Ltd v Faithful Properties Ltd (1999) 2 HKCFAR 279, at 296D-I):
10.Thus, irrespective of whatever “extraneous” matters one can properly take into account, following the guidance given in the above authorities, the only crucial subject-matter for construction is the document(s) to be construed itself/themselves. In the present context, they are the Dec 2010 documents: para 3(1) above. 11.A summary has already been given in the challenged decision as to what the Dec 2010 documents were:
12.More specifically, the relevant parts of the letter addressed to the People’s Court state:
13.Thus, so far as it is relevant to this application (and to the May 2013 order), the said letter represented to the People’s Court that steps had earlier been taken by D1 to attempt to avoid the enforcement proceeding. It can be inferred “steps” here should mean obtaining funds for payment. Judged in such context, the reference to transfers of shares could only mean they were an attempt to obtain fresh funds for paying the judgment sum(s) (rather than a reference to transfers of shares to comply with the terms of an existing loan agreement). 14.The other of the Dec 2010 documents (the shareholders’ letter (para 10(2), the challenged decision)) was written in the same context, for the same purpose, and, on a fair reading, should carry the same meaning. 15.The plaintiff cannot point to any “connected” documents, or adduce evidence, to show that, at least arguably, the Dec 2010 documents can be construed as sufficient acknowledgements of an existing debt. 16.Having concluded there is no reasonable prospect of success in an appeal based on para 3(1), I now consider the proposed appeal grounds summed up in para 3(3) and (4) above. 17.As should be obvious from the challenged decision, I was aware that there was no positive plea raising the limitation defence (para 34 thereof), but nevertheless exercised my discretion to refuse giving leave to amend. Reliance has been placed on Ronex Properties Ltd v John Laing Construction Ltd and Others [1983] 1 QB 398, 408 (para 35, the challenged decision). Among other things, the Ronex case observed that the limitation defence can be raised by the defendant:
18.I am thus not at all convinced that my discretion has been wrongly exercised. Insofar as there may be any need, the post-Civil Justice Reform provisions of the Rules of the High Court (Cap 4A) in fact support such an approach: Ord 1A rr 1(a), 2(1)(a), 4(2)(h) and (i) and Ord 1B r 1(2)(l). D1’s summons 19.This has been referred to in para 1(b) above. There is a dispute as to whether D1’s summons falls within the doctrine of res judicata (as the plaintiff contends); it is undisputed D1 had taken out an earlier summons to strike out, and which the master dismissed on 31 October 2012 (“D1’s earlier striking out summons”). 20.On D1’s part, it is contended the master dismissed D1’s earlier striking out summons, not on the merits, but based on grounds which have by now been overtaken. First:
21.It is apparent from the 31 October 2012 hearing transcript the master also determined D1’s earlier striking out summons on another ground:
22.Taking into account the above, I disagree with the plaintiff’s argument that the matter is now res judicata. 23.D1’s summons was taken out after the challenged decision was pronounced in May 2013. The plaintiff has not argued that D1 had been guilty of delay, or that any real prejudice would be suffered as a result. In these circumstances, I consider it appropriate to give leave for D1’s defence to be amended. 24.The plaintiff argues that the “new” defence (limitation) is inconsistent with the existing defence (that the loan agreement was a sham), relying on Ord 20 r 13(1) (verification by statement of truth). The argument has no merit. What D1 now seeks to introduce is a defence afforded to him by statute, that is, the Limitation Ordinance (Cap 347). There is no valid reason why the statement of truth should be a hurdle for raising such a defence. 25.Further, because I have in effect decided that the plaintiff’s claim has been time-barred, it is also appropriate to strike it out, as against D1, as an abuse of the court’s process. 26.The position as regards D2’s summons is not as clear. D2 has earlier taken out a striking out summons (“D2’s earlier striking out summons”), which was heard by the master on 30 November 2012. But the perfected order of 30 November 2012 made no reference to the disposal of D2’s earlier striking out summons except that there be no order as to its costs. 27.The transcript of the 30 November 2012 hearing cannot help either. The exchange between the master and counsel for D2 was as below. The master said:
28.As should be obvious from the subsequent dispute between the plaintiff and D2 (which lasted up to the present hearing), the matter was not “sorted out” between them (as D2’s counsel (and probably also the master) had anticipated). 29.Such being the case, there is a need for D2 to seek clarification from the master as to whether D2’s striking out summons has been disposed of after a consideration of its substantive merits. Conclusion 30.Accordingly:
Other matters 31.The parties’ written submissions also mentioned various other points. These have not been expressly set out or dealt with above. This is so only because of the need to balance between the length of the decision and its comprehension. It does not mean those other points are thought to be irrelevant (or have been overlooked). To avoid doubt, those other points have also been considered. Costs order 32.In relation to the plaintiff’s application for leave to appeal, and D1’s summons, the usual rule that costs should follow the event is accepted. There will accordingly be a costs order that those costs should be paid:
33.I consider summary assessment of costs to be appropriate. The above costs shall thus be so assessed. For this purpose:
Mr Kenneth CL Chan and Ms Annie Lai, instructed by Jal N Karbhari & Co, for the plaintiff Mr Norman Nip, instructed by Anthony Siu & Co, for the 1st defendant Mr Isaac Chan, instructed by David YY Fung & Co, for the 2nd defendant | ||||||||||||||||||||
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