XCHRX MUNICH INDUSTRIAL HOLDINGS LTD. v. CHEUNG FAI MING T/A HING YIP INDUSTRIAL CO.

1996 No. A7288

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

_____________

_____________

_______________

J U D G M E N T

_______________

1. In this action, judgment in default was entered against the Defendant on 26th July for $96,918.70 plus interest. On 22nd August, he was prohibited from leaving Hong Kong for a month. On 28th August, he applied for the discharge of the prohibition order, and he also sought an order permitting him to pay the judgment debt by instalments of $9,000.00 a month.

2. That summons came before Master Jones on 30th August. He adjourned the summons sine die to give the Defendant an opportunity to file evidence relating to his means. The summons was restored on 3rd September. By then, the Defendant had filed some evidence relating to his means, but Master Jones thought, in my view rightly, that it was insufficiently detailed to justify making an order for the payment of the judgment debt by instalments. What Master Jones did was to discharge the prohibition order and to order the examination of the Defendant under Ord. 49B. The Plaintiff now appeals against that order. It claims that Master Jones should not have discharged the prohibition order, but once he had decided to discharge it, he should have proceeded there and then as if the Defendant had appeared for examination under Ord. 49B.

3. I share Master Jones' view that the prohibition order should be discharged. The debt was not a particularly large one, and care should be taken to ensure that the drastic remedy of preventing a defendant from leaving Hong Kong should not be disproportionate to what it is intended to achieve. That, I think, is what Master Jones had in mind when he described the remedy as a "stringent" one. Moreover, the Defendant claimed that he has business interests in China. Indeed, he told Master Jones on 30th August that in order to pay his debt to the Plaintiff he had to leave Hong Kong. There is no reason to doubt that. In those circumstances, to maintain the prohibition on the Defendant's departure from Hong Kong would only serve to make it more difficult to pay off the judgment debt. As Master Jones said, a prohibition order is "justifiable only if it is efficacious".

4. Having discharged the prohibition order, should Master Jones have then proceeded as if the Defendant had appeared for exmination under Ord. 49B? He was entitled to do so because Ord. 44A r. 4(2) provides :

"In an application ... by a debtor under a judgment for money [for a prohibition order to be discharged], the Court shall, after the assessment of the amount due to the judgment creditor if appropriate -

(a) discharge the order; and

(b) proceed as if the judgment debtor appears under arrest for examination under Ord. 49B."

However, whether Master Jones should have proceeded on 3rd September as if the Defendant had appeared for examination under Ord. 49B (assuming that there had been time for such an examination to take place) is not something which it is necessary for me to decide. That is because even if he should have proceeded in that way, I cannot now turn the clock back. The most I could do would be to make an order myself for the examination of the Defendant under Ord. 49B. There is no need for me to make that order, because that was what Master Jones himself ordered on 3rd September. Subject, therefore, to the order for costs made by Master Jones, this appeal must be dismissed.

5. Master Jones decided that the costs of and occasioned by the Defendant's summons, including the hearings on 30th August and 3rd September, be paid by the Defendant to the Plaintiff. In my view, that does not reflect the true outcome of the summons. Although Master Jones had refused to permit payment of the judgment debt by instalments, he nevertheless granted the Defendant the primary relief which the Defendant sought, namely the discharge of the prohibition order. In my view, in view of the fact that the Defendant has been unrepresented throughout these proceedings, the fairest order to make as to the costs of and occasioned by the Defendant's summons is no order as to costs. To that extent, the order made by Master Jones in relation to the costs below is varied. As for the costs of the appeal, in my view the correct order for costs is that there be no order as to costs.