ARTHUR ANTONIO DA SILVA AND ANOTHER v. GABRIEL RICARDO DIAS-AZEDO

HCA 2158/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2158 OF 2009

----------------------

----------------------

----------------------

J U D G M E N T

----------------------

Introduction

1.  There is an error on the face of the garnishee order absolute in this matter because it overstates what is owing by the garnishee, HSBC, to the judgment debtor, Mr Dias-Azedo.  The judgement creditors, Mr and Mrs Da Silva are applying for an order amending the order absolute in order to delete the incorrect amount and to replace it with the correct amount owed by the garnishee to the judgment debtor.

2.  The garnishee has a cross-summons.  It is submitted on its behalf that it is not appropriate to amend, the proper course is to set aside the order, leaving it to the judgment debtor and creditors to start again.

The Law

3.  Before going into how the error as to the amount has come about, it is helpful to consider the authorities relied on by the parties.  In Moore v Peachy [1892] 66 LT 198, a garnishee order absolute was set aside in a case where the garnishee bank had mistakenly entered the name and account of a customer whose name was very similar to that of the judgment debtor.  In Marshall v James [1905] 1 Ch 432, an order absolute was set side on the basis that at the time that the order was made, no debt was owing from the judgment debtor to the judgment creditor but to someone else.  In both of these cases the court in the exercise of its inherent jurisdiction considered it right to cure what would have been a manifest injustice by setting aside the order absolute. 

4.  Mr Dennis Kwok for the judgment creditor submits that these two authorities have no application to the facts of this case.  There is no injustice that has arisen in the matter before me which requires the drastic remedy of having the order set aside, as yet no monies have been paid out.  A debt is undoubtedly due from the judgment debtor to the judgment creditor.  The garnishee bank has a balance owing to the judgment debtor albeit substantially smaller than what is shown in the order as presently drawn.  This case can and should be rectified by amendment of the order under the slip rule.

5.  Mr Kwok has also referred to other authorities such as The Tile Centre v Symons ex parte Kyritis [1972] VR 965 and O’Brien v Killeen [1914] 2 IR 63 where orders absolute were set aside. These also related to cases where no debt was owing by the garnishee to the judgment debtor or by the judgment debtor to the judgment creditor.

6.  All four cases to which I have referred relate to what would have amounted to a manifest injustice had the order absolute remained in place.  Much of the judgments in these cases relate to whether the court has the power to set aside and the circumstances in which this power can be exercised.

Disposal

7.  For my part, I am satisfied that the facts of this case do not disclose the fundamental factual errors which required the court in the cases to which I have referred to set the orders aside.   In fact, in each of those cases had the judgment creditor started again, the garnishee applications would all have been doomed to failure, hence the need to have them set aside in the first place.

8.  In this matter all that I am concerned with is an error as to quantum only.  It is accepted by the garnishee that it owes the judgment debtor an amount and the identity of the parties is known and undisputed as to their respective entitlements.  Order 20 rule 11 of the Rules of the High Court has application where there is a clerical mistake, not the case here, or - and I quote:

“An error arising from an accidental slip or omission, for example, an arithmetical error in the calculation of damages.  The rubric to the rule goes on to say that the error or omission must be an error in expressing the manifest intention of the court (see 20/11/1 Hong Kong Civil Procedure 2010, page 444).”

9.  It strikes me that what has happened here falls squarely within the purport of the rule. Plainly, it was the intention of the court, as it was of the parties, both of whom had failed to notice the error on the face of the order, to make an order which reflected what it was that the garnishee owed, as a net amount, to the judgment debtor.  Now that the error has been realised, the judgment creditors are asking for the amendment to go so as to cure the mistake and for them to receive the correct amount from the garnishee. 

10.  Insofar as this is Mr Kwok’s submission, I agree with it and with his analysis of the facts and the situation as a whole. Accordingly, I will make the order asked for in the summons so as to correct the mistake.  It must also follow that the garnishee’s summons to set aside the order will stand dismissed. 

Should there be a stay

11.  I will now go on and consider whether this now corrected order should be stayed.  Miss Reynolds, for the garnishee, has pointed out that there are afoot contested bankruptcy proceedings in which another creditor of the judgment debtor, a Miss Gardner, is petitioning to have him made bankrupt.  The question arises as to whether payment out under the now amended order would amount to a preference of the judgment creditors over Miss Gardner and of any other supporting creditor.

12.  In my view, Miss Reynolds raises a serious issue which needs to be addressed.  Miss Gardner’s solicitors have today sent representatives to observe these proceedings.  What I propose to do is to direct that they should be served with today’s order and my judgment, and I will give 21 days from receipt of the order and of the judgment to apply to me to show cause why the garnishee should not pay out to the judgment creditors the amount in the order absolute as now amended.  If they are not minded to make any application or address any representations within the time allowed by me I will direct that there be payment out by the garnishee to the judgment creditors.

Costs

13.  And, finally, costs.  I will wait for the expiry of the 21 days to see how Miss Gardner is minded to address the question of a stay and then decide the issue of the costs of today.  The judgment creditors have succeeded on the main event, as it were, but the issue of a stay will undoubtedly also have a bearing on costs, so I will wait and see how that develops before ruling on the overall costs of today.  So that is the judgment.