STRONG OFFER INVESTMENT LTD v. NYEU TING CHUANG

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J U D G M E N T

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Mr Justice Chan PJ (for the Court):

1.  In a judgment which we handed down on 30 March 2007 (“the March 2007 judgment”), we dismissed the Defendant’s appeal but declared that any element of compound interest in the judgment debt awarded to the Plaintiff must be removed and the judgment debt be reduced accordingly. We also directed that if the parties were unable to agree the correct figure of the amount by which the judgment debt was to be reduced, they had liberty to apply to a single judge of the High Court for a determination of the proper figure and the judge should report his findings to this Court for the entry of judgment.

2.  As it turned out, the parties failed to agree and the matter was brought before Mr Justice Chung on 21 April 2008. Prior to the hearing, discovery of documents by the Plaintiff regarding the Defendant’s margin accounts was ordered.  As a result, all the documents relating to the Defendant’s share trading, such as bought and sold notes and the daily transaction reports were supplied. However, by the time of the hearing before the judge, both parties confirmed that the full set of documentation was no longer available. The matter was then dealt with by the judge after hearing submissions made by senior counsel on behalf of both parties.  

3.  On 28 April 2008, the judge submitted a report to this Court.  Pursuant to the direction given by Mr Justice Chan PJ on 29 August 2008, the parties were invited to make written submissions on the judge’s report and the question of costs. No submission was filed by the Defendant by the time specified and in the light of this, the Plaintiff indicated that it would not do so either.

4.  Before the judge, the Plaintiff’s position was that:

(1)   the principal debt was (i) $17,713,692.40 for the margin account M3001 as at 7 January 1999, and (ii) $9,207,400.42 for the margin account M3480 as at 30 December 1998 (a sub-total of (i) and (ii) being $26,921,092.82); and

(2)   the amount of simple interest payable was (i) $8,637,987.09 as at 7 January 1999 for M3001 , and (ii) $4,021,177.97 as at 31 December 1998 (a sub-total of (i) and (ii) being $12,659,165.06).

5.  The debt claimed is now the total of the amounts in (1) and (2), being $39,580,257.88. The amount to be reduced from the judgment debt would therefore be $1,640,311.96. The Plaintiff had previously offered to deduct $2,000,000, giving allowance to a margin of error of 3%. 

6.  The Defendant had refused to put forth his case or any alternative figure despite an earlier order made by the judge on the application of the Plaintiff. He submitted to the judge that unless the full set of relevant documentation was available, the court was not ready and would never be ready to prepare a report. Since it was accepted by the parties that the full set of documentation was no longer available, this submission, as the judge pointed out in his report, was tantamount to saying that the judgment debt would become incapable of enforcement. This argument was rightly rejected by the judge. 

7.  The judge considered that there were two options open to him: the first was to examine what documents there were available to him and determine the amount of reduction taking into account any margin of error which might result from discrepancies or inaccuracies that might be referred to by the Defendant, and the second was to determine the amount of reduction based on the Plaintiff’s calculations. He was aware that either approach would not produce figures which were totally accurate. Having considered the parties’ submissions, the judge decided to adopt the second option.

8.  According to the Plaintiff’s figures which were accepted by the judge, the amount of debt outstanding in the margin account M3480 was $13,228,578.39 as at 31 December 1998 and the amount outstanding in the margin account M3001 was $26,351,679.49 as at 7 January 1999.

9.  In our view, the judge was entitled to adopt the Plaintiff’s figures which were the best one could achieve based on the available documents. Both parties were handicapped by the lack of a complete set of documentation. However, the Plaintiff’s figures are not without basis. The principal debts due under the two margin accounts M3001 and M3480 (as set out in paragraph 4(1) above) were compiled from the available bought and sold notes and daily transaction reports which were already supplied. There does not seem to be any serious dispute on these principal sums. The amount of interest to which the Plaintiff is entitled and which it is now claiming is simple interest (as set out in paragraph 4(2) above) which was calculated on the basis of the principal debts and the relevant rates of interest during the relevant period. The Defendant was given ample opportunity to challenge these figures but chose not to do so. There is nothing to suggest that the Plaintiff’s figures are contrary to any term in the contract made between the parties or that they are clearly inaccurate, excessive or unfair to the Defendant.

10.  We would accept the Plaintiff’s figures and order that the judgment debt awarded in favour of the Plaintiff by the trial judge should be reduced by $1,640,311.96 and that judgment should be entered for the sum of $39,580,257.88. The respective adjusted amounts due under the two margin accounts (as set out in paragraph 8 above) also carry interest as ordered by the trial judge in his judgment dated 9 November 2004 which was upheld on appeal.

11.  In the March 2007 judgment, we made an order providing for the costs of the appeal to this Court and the costs in the courts below. As to the costs of the hearing before the judge as directed by this Court, we agree with the judge that the hearing before him was contentious and that the Defendant should pay the Plaintiff’s costs to be taxed if not agreed. We make an order to this effect.