WONG TAK HUNG v. F.E.B. FINANCE LTD. AND OTHERS

1988 No.A2564

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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D E C I S I O N

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1. I have been exhaustively assisted on the question of costs. Mr Fung, counsel for the plaintiff, made or purported to make an application, invoking my discretion under 0.35, r.7(1). At the conclusion of his submissions, Mr Ching, counsel for the defendants, was not called upon. It may well be robust of Mr Ching to describe the application or purported application as a hopeless application. But on my analysis, the endeavour made on behalf of the plaintiff was certainly unmeritorious. Background information had to be involved in supporting the plea of the plaintiff, but it cannot be said that counsel's task in opening the case for the plaintiff is now expected to be wholly overtaken. It is to be appreciated that emphasis on background information will be, or is likely to be, differently placed.

2. There would seem to be no warrant for the question of costs to be reserved to be dealt with at a later stage. It would be fair to say in part of yesterday morning, say for about half an hour, what was said by Mr Fung could be taken as a real contribution to the opening of the case of the plaintiff against the defendants. The adjournment was evidently part and parcel of the plaintiff's attempt to have the defendants directed to begin.

3. For all these reasons, it is not necessary to postpone my determination on the question of costs. There is no good cause shown for interfering with the general principle that costs is to follow the event. I need not,, therefore, be involved at this stage with burden of proof. out of consideration for counsel's efforts, a ^-word or two on the principles, as I see them, will be said. I have reached the conclusion that in the circumstances of this case; the burden of proof, not for the litigation - the case, but for the single issue of alleged instructions lies on and will remain with the defendants throughout the entirety of these proceedings. In that sense, what has been submitted by Mr Ching on burden of proof is not favourably received by this Court. But the matters relating to burden of proof are certainly not matters improperly raised in the course of the submission on costs. For that reason, the defendants ought not be penalised. There is a case decided a month or two ago directly on this topic. I certainly will let counsel have sight of a copy in my possession. (In re Elgindata Ltd., Times 18th June 1992). That being the principle, the defendants are to be given, save for half an hour, costs from the commencement of the trial up to this moment in any event.

4. I turn, out of respect to counsel's submissions, to deal with the question of burden of proof. It is trite law, so observed Bowen L.J. in Abrath v. The North Eastern Railway Company, (1883] 11 QBD 440, at p.456 :-

"whenever litigation exists, somebody must go on with it; the plaintiff is the first to begin; if he does nothing, he fails; if he makes a prima facie case, and nothing is done to answer it, the defendant fails."

The observation touches upon the overall burden in an action. It could cover the shifting of evidential burden. Here in the submissions of Mr Fung, in his attempt to invoke the court's jurisdiction under 0.35, r.7(1), the planitiff confined himself, for the purpose of those submissions, to onus for the single issue of alleged instructions to buy 1.5 million Seapower shares.

5. Attention should not be focused on the allegation of wrongful debit. which stems from the defendants' alleged instructions to purchase. It is not the case of the plaintiff that none of the issues, including the absence of instructions to purchase the 1.5 million Seapower shares and to debit, was to be substantiated by the plaintiff litigant. That is not the plaintiff's case. The plaintiff's case is apart from Five, six separate issues, the burden of proof of which lies on the shoulder^, of the plaintiff, the contended central factual issue of alleged instructions to purchase 1.5 million Seapower shares would have to be established by the defendants. As a matter of degree, Mr Fung saw fit to invite this Court to exercise its discretion to direct the defendants to begin. For a negative averment, Phipson on Evidence, 19th Edn., p.53 para.4-05 provides a succinct statement. One must have regard to the substance of the allegation and not its form, grammatically or otherwise. Then Phipson proceeds as follows :-

"The true meaning of the rule is that where a given allegation, whether affirmative or negative, forms an essential part of the party's case, the proof for such allegation rest on him, e.g. in an action against a tenant for not repairing according to covenant, or against a horse dealer that a horse sold with a warranty is unsound, proof of this allegation is on the plaintiff; so in actions for malicious prosecution, it is upon him to show not only that the defendant prosecuted him unsuccessfully, but also the absence of reasonable and probable cause; while in actions for false imprisonment, proof of the existence of reasonable cause is upon the defendant since arrest, unlike prosecution, is prima facie a tort and demands justification. In bailment cases, a bailee must prove that the goods were lost without his fault." (Emphasis supplied).

6. Therefore, it can be readily seen that Phipson puts, inter alia, covenant to repair, soundness of a horse on a warranty, absence of reasonable or probable cause in malicious prosecutions into the category of negative averments which form an essential part of a litigant's case, and for which that litigant must carry the onus of proof.

7. The defendants' allegation of instructions to purchase leads to a denial on the part of the plaintiff.. The denial of a plaintiff is decidedly an assertion of a negative but the question is : does it form an essential part of his case? It does not appear to be so. Coming back to Bowen L.J. in Abrath v. The North Eastern Railway Company, supra. p.457, the learned Lord Justice recognised the principle that the burden in substantiating the assertion of a negative would not, in general, shift. He affirmed the rule that "if the assertion of a negative is an essential part of the plaintiff's case, the proof of the assertion still rests upon the plaintiff".

8. The plaintiff's case is a case of pledge. His claim or claims are founded on activities involving his pledged shares. There is evidently a denial that he had ever given instructions to the defendants to purchase the 1.5 million Seapower shares. But allowing shares to be deposited for a pledge would, in my view, prima facie import an obligation to re-deliver them, as in the case of Seldon v. Davison [1968] 1 WLR 1083. I believe my proposition is well supported by the holding in the headnote at p.1083 and that part of the judgment of Willmer L.J. appearing at p.1088 Letters F/G, in which the learned Judge observed :-

"In the absence of any such circumstances, money paid by the plaintiff in circumstances such as this is prima facie repayable on demand. If the defendant seeks to evade repayment of the money which was paid to him, it seems to me, that the judge was right in placing the onus on him to prove the facts which he alleges show that the money was not repayable."

A like comment was made by Edmund-Davies L.J. at p.1090, Letter F :

"Accordingly, one is really driven back to consider this matter without the assistance of authority and, being so unassisted, I ask myself what is to be inferred as to the nature of the transaction when the simple payment of money is proved or admitted between strangers. I entirely agree with My Lord on the bald state of affair proof of payment imports a prima facie obligation to repay the advancement in the absence of circumstances from which presumption of the advancement can or may arise. "

An equally^, supportive reference can be found in para.4-05 of Phipson, supra.

"In bailment cases; the bailee must prove that the goods Nere lost without his fault."

9. Pledge has been admitted, thus importing a prima facie obligation against the defendants to re-deliver the pledged shares - subject matters of the plaintiff's claim in this action. The want of instructions to purchase the 1.5 million Seapower shares, leading subsequently to a wrongful debit and sale of these pledged shares of the plaintiff is not a negative averment which forms, in my opinion, an essential part of the plaintiff's case.

10. For all these reasons, it is my view that onus for the single issue of instructions to purchase, bringing about the wrongful debit and improper disposal of the plaintiff's shares in these proceedings lies on the shoulder of the defendants.