CHINA DRAGON INTERNATIONAL LTD v. PANG HONG

cacv 79/2007

in the high court of the

hong kong special administrative region

court of appeal

civil appeal no. 79 of 2007

(on appeal from HCA NO. 1864 of 2005)

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J U D G M E N T

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Hon Rogers VP:

1.  This case is an appeal from a decision of the judge below who set aside the judgment which had been entered in default.

2.  The Plaintiff says that it has a claim, which is a personal claim against the Defendant as its agent who has received money on its behalf.  It filed its claim against the Defendant and the Defendant asked for time to put in a defence.

3.  The reason he asked for time to put in a defence was quite simply this:  that the Claimant, which is a very substantial company in Taiwan, says that systematically, over the course of a large number of years, an enormous amount of money has been taken out of their bank accounts by various individuals who had senior positions in their organisations, and this was used to set up a large number of businesses, primarily in Hong Kong but with BVI companies as well.

4.  One of their claims is that the Plaintiff itself, being a subsidiary of some of the other entities, was set up with their money, and they have tracing and other claims not only against the Plaintiff’s money but probably against the Plaintiff itself.  These matters are all subject to criminal prosecutions which are ongoing in Taiwan.  There are proceedings in Hong Kong.  There are proceedings in Beijing.  There are proceedings in the BVI.  So it was in those circumstances that the Defendant was asking for time to file a defence, not surprisingly.

5.  Eventually, an unless order was made, but before the final date of the unless order the Defendant started interpleader proceedings.  Those were probably not the right way of going about it.  But nevertheless, he then notified the Plaintiff and asked the Plaintiff not to enter judgment until that matter had been sorted out.  The Plaintiff did not agree to that.  Its solicitor fast-footed to the court and entered judgment in default, without telling anybody.  Quite rightly, that was set aside.

6.  This is not a case of ordinary agents, with other people having civil claims against the money.  This is a case where the Claimant itself, who in these proceedings is the 2nd Respondent, says that the money which the Plaintiff itself is claiming is its money, and indeed all the money of the Plaintiff is its money.  To say that judgment should be entered against the defendant in circumstances such as this seems to me to turn the law on its head.  My only surprise in this case is that this appeal was brought.  For those reasons, I propose to dismiss this appeal.

Hon Le Pichon JA:

7.  I agree.