EGO FINANCE LTD v. JU LUI AND OTHERS

DCMP 1714/2020

[2021] HKDC 1002

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 1714 OF 2020

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DECISION

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1.  For the background of these proceedings, I refer to my reasons for judgment dated 15 October 2020 and my decision dated 4 June 2021. I adopt the same defined terms and abbreviations there for the present purpose.

2.  Suffice to say that this court summarily determined these proceedings in favour of the plaintiff after hearing on 9 October 2020, from which the defendants were absent.  The 1^st defendant applied to set aside the judgment in March 2021, which this court in its written decision on 4 June 2021 dismissed with costs (“the Decision”).

3.  By summons filed on the same day, 4 June 2021, the 1^st defendant applied for leave to appeal against the Decision (“the 4 June Summons”), and filed his affirmation in support.

4.  On 30 June 2021, the 1^st defendant filed another 2 affirmations (“the 30 June Affirmations”).

5.  One week before the present hearing, the plaintiff’s solicitors discovered and complained about the lack of service of the 30 June Affirmations on it, and sought leave to search the court file for these documents.

6.  Unbeknownst to the plaintiff, the 1^st defendant actually took out another summons on 19 July 2021 (“the 19 July Summons”), the exact nature of which could only be described by referring to its content below, with another affirmation in support dated the same date.

7.  Prior to the present hearing, this court gave leave to the plaintiff’s solicitors to search the court file for the above documents filed after the 4 June Summons.

The 4 June Summons

8.  Pursuant to section 63A of the District Court Ordinance, Cap 336, leave to appeal shall not be granted unless this court is satisfied that the appeal has a reasonable prospect of success or there is some other reason in the interest of justice that the appeal should be heard. A reasonable prospect must be more than fanciful or just arguable, though not having to be probable: see SMSE v KL [2009] 4 HKLRD 125 (at §17); Wynn Resorts (Macau) SA v Mong Henry, HCA 192/2009 (10 August 2009) (at §19).

9.  As explained in the Decision, this court considered the question of the defendants’ (ie not just the 1^st defendant’s) notice of the hearing on 9 October 2020.  In the circumstances of this case, this court found that the 1^st defendant failed to discharge his burden of satisfying the court that he was disabled from attending the hearing on 9 October 2020 because of the alleged failure of the plaintiff to serve him notice of hearing.

10.  This court then considered the merits of the defence and, for that, the assertions of the 1^st defendant.  For the purpose of that application before this court, the 1^st defendant by affirmation demanded the plaintiff to disclose and adduce oral evidence (by calling all the plaintiff’s staff members concerned) and documentary evidence (CCTV recording) in respect of his signing of the loan documents.  That must be rejected, as it was his burden to substantiate his assertions and merits of his intended defence by evidence for the purpose of setting aside the judgment.

11.  This court also proceeded to consider what the 1^st defendant did not actually argue, namely whether it was unjust to enter judgment and make the order for sale in the first place.

12.  In view of the plaintiff’s understanding of the 1^st defendant’s application then as an application for leave to appeal against the judgment, this court expressed that even assuming that this were considered as such an application (and putting aside the issue of application out of time), the 1^st defendant would still have failed to discharge his burden to show that his intended appeal had a reasonable prospect of success or that there would be question that should be considered by the appellate court in the interest of justice.

13.  Now by the 4 June Summons, the 1^st defendant seeks leave to appeal against the Decision.  He set out no real grounds of appeal, but repeated his complaint about the plaintiff’s failure to answer his demand for disclosure and adducing of oral evidence of its staff members as well as documentary evidence (CCTV recording) in respect of his signing of the loan documents before this court for the purpose of the last hearing.  By his affirmation in support, the 1^st defendant complained that, as a result of the plaintiff’s default in meeting his demand, he had no chance of stating what had happened during the last hearing.

14.  During the present hearing, the 1^st defendant verbally represented that the plaintiff has forged different documents with a view to defrauding him since 2005.  He claimed that the application form for the loan produced by the plaintiff was over 80% forgery.  He claimed to have filed a report to the police on 19 July 2021.  Whilst the police allegedly accepted that this was a fraud or forgery case, they would need the court’s permission in order to investigate.

15.  Solicitor appearing for the plaintiff rightly pointed out that fraud and forgery are serious assertions, which may not be made lightly without clearly stated particulars and corroborative evidence.  He pointed out the fact that various loan and charge documents were signed by the 1^st defendant and thus binding on him in accordance with established legal principles.  The 1^st defendant’s repeated attack now focused on the application form but not specifically the others documents.  Whilst the 1^st defendant now disputes liability, the fact was that he did make some repayments.  Instead of raising all these issues about the alleged fraud and forgery, the 1^st defendant somehow stopped payment and petitioned for his own bankruptcy.  The assertion of fraud and forgery was raised only when the plaintiff commenced proceedings to enforce the security.

16.  As explained in the Decision, it is the burden of the 1^stdefendant to set aside the judgment, including by stating his case with sufficient particulars and substantiating the prospect of his case.  He failed to do so.  All circumstances considered, what, and the manner in which, the 1^st defendant put forward now hardly meets the threshold of section 63A.

The 30 June Affirmations

17.  Needless to say, it is against the rules and basic fairness of inter partes matters in legal proceedings for the 1^st defendant to have filed the 30 June Affirmations without serving copies of the same on the plaintiff.  More significantly, insofar as he intends to rely on these affirmations for the purpose of appeal, he may not do so unless he satisfies O59, r10(2) of the Rules of the High Court, Cap 4A, which applies to an appeal from the District Court.

18.  Pursuant to O59, r10(2), the Court of Appeal has the power to receive further evidence on appeal but no such further evidence (other than evidence as to matters which have occurred after the date of the decision being appealed) shall be admitted except on special grounds.  By special grounds, it means that such further evidence (i) could not have been obtained for use at the hearing below with reasonable diligence; (ii) would, if adduced, have an important influence on the result of the case, though it need not be decisive; and (iii) is presumably to be believed (or in other words, apparently credible though it need not be incontrovertible): see Ladd v Marshall [1954] 1 WLR 1489. It is the burden of the plaintiff to satisfy all three criteria.

19.  During the hearing, the 1^st defendant confirmed that the two 30 June Affirmations are duplicates with the same content and exhibits.  Doing my best, I understand that he makes the following allegations in these new affirmations:

(1)     The plaintiff conspired with third parties to defraud him with a view to seizing the Property.  He had no idea what documents he had signed in relation to the loan from the plaintiff.  He lost everything and would claim against the plaintiff for that.

(2)     Upon discovery of the fraud, he consciously stopped repayment to the plaintiff and petitioned for his own bankruptcy.

(3)     The plaintiff did not have notice of the hearing on 9 October 2020.

(4)     The plaintiff did not respond to his request for the CCTV recording (presumably referring to that mentioned in the Decision).

(5)     The plaintiff’s solicitors never produced proof of their authority to appear for the plaintiff in the previous hearings.

(6)     The plaintiff’s solicitors provided forged documents in this action to the Director of Legal Aid (presumably in relation to the 1^st defendant’s application for legal aid).

20.  Properly considered in the circumstances of this case, the above assertions hardly satisfy the three criteria under Ladd v Marshall for them to be received as further evidence on appeal.

The 19 July Summons

21.  By the 19 July Summons, the 1^st defendant demanded the plaintiff’s solicitors to stop proceeding with possession of the Property and alleged harassment until they provide all the evidence in this action, including evidence of the staff members of the plaintiff, documentary evidence and CCTV recording, to the court.  By the affirmation in support of that summons, the 1^st defendant repeated his allegation that the documents in this action provided by the plaintiff’s solicitors to the Director of Legal Aid were forgery, and he reserved the right to report the matter to the police and claim for all his loss over the past six years.  As mentioned, the 1^st defendant now claims that he did file report with the police on the day when he filed this summons, but the police allegedly requires the court’s permission to investigate.

22.  Appeal does not operates as stay of proceedings: see O58, r3 of the Rules of the District Court, Cap 336H.  The writ of possession of the Property consequential upon the judgment in this action was issued on 2 March 2021.  The 1^st defendant apparently applied for stay of execution of the writ in June 2021, which was already dismissed by the master on 13 July 2021.

23.  Even assuming that the 1^st defendant is seeking to repeat his attempt to obtain stay of proceedings by this summons, the request made of the plaintiff (or its solicitors) as per his summons for justifying the stay is not readily understandable by reference to recognised legal principles.

Conclusion and order

24.  The 4 June Summons and the 19 July Summons are dismissed.

25.  Following the event, I order that the 1^st defendant shall pay the plaintiff’s costs of and occasioned by these two summonses before me.  During the hearing, the 1^st defendant was given the chance to make representation about the statement of costs provided by the plaintiff.  He simply stated his objection to pay regardless.  I now summarily assess such costs to be in the sum of HK$10,000 payable within 14 days.

[The present hearing was conducted in punti for the benefit of the 1^st defendant. Interpreter was there to assist him if necessary. If requested, interpreter will be arranged to assist him when he received this written decision.]