XCHRX TIMES-RINGIER (HK) LTD. v. TIN TIN PUBLICATION DEVELOPMENT LTD. AND OTHERS

HCA1370/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1370 OF 2001

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J U D G M E N T

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1. On 17 July 2001, the Master entered summary judgment against the defendants in the sum of $7,667,636 with interest, and interlocutory judgment for $5,269,629 with an order to account the same upon the 4th defendant paying into court the same amount within 21 days, failing which the plaintiff may enter judgment against the 4th defendant for that amount. The 4th defendant having made no payment, judgment had already been entered against him for that sum as well. The 4th defendant now appeals.

2. The plaintiff's case is that the 1st defendant published a daily Chinese newspaper, known as the "Tin Tin Daily News". Pursuant to a printing agreement dated 22 September 1999, the plaintiff printed and produced the newspapers and, as at the date of the writ, the 1st defendant owed the plaintiff the sum of $12,937,265 being the amount of the outstanding printing charges for the period between 3 June 2000 and September 2000. By a Deed of Release and Guarantee dated 3 June 2000, the 2nd to the 4th defendants agreed to jointly and severally guarantee the performance of the 1st defendant's obligations under the printing agreement, and keep the plaintiff fully indemnified of any loss and damage which the plaintiff might suffer as a result of the 1st defendant's breach of the printing agreement.

3. In support of the application for summary judgment, the plaintiff had exhibited the printing agreement, the guarantee and the supporting invoices. The 4th defendant made a number of points in his affirmation in opposition. First, the plaintiff failed to account for a debt of $3,769,629 owed by one Tak Kee Newspaper and Magazine (Distribution) Co. Ltd to the 1st defendant and assigned to the plaintiff pursuant to an assignment dated 15 August 2000. Secondly, the plaintiff failed to account for a sum of $1.5 million paid on or about 15 August 2000. Thirdly, and accordingly, the 4th defendant queried the accuracy of the plaintiff's claims. Lastly, the deed of guarantee sued upon by the plaintiff is a guarantee and not an indemnity. His liability thereunder had not arisen yet.

4. In reply, the plaintiff said that the assignment was a "sham" because Tak Kee Newspaper and Magazine (Distribution) Co. Ltd had denied liability; that the $1.5 million paid was applied to settle an invoice TI9017 which is not a subject invoice being sued upon in these proceedings; and that the 4th defendant had failed to show the $1.5 million was in fact part-payment of the sums sued upon. The accuracy of the amount outstanding had been proved by the production of the invoices. The 4th defendant's liability as a guarantor arose because the 1st defendant did default in making payment for the outstanding charges and it is not in dispute that the 1st defendant has so defaulted.

5. Mr Chan appearing for the 4th defendant, has fairly and, in my view, rightly considered that the order of the Master in respect of the balance of the claim should not be disturbed. In particular, he referred me to clause 5 of the assignment providing that should Tak Kee refuse or default in paying the plaintiff, did that view that the 1st defendant as the principal debtor should repay the plaintiff the same. So he conceded that there would be no defence concerning the $3.7 odd million so assigned.

6. In light of Mr Chan's submissions I only need to deal with the claim concerning the $1.5 million. As I understand him, Mr Chan was not submitting that there was a triable issue raised concerning the $1.5 million. What the 4th defendant wanted was to inspect or to make discovery concerning the supporting documents relied on by the plaintiff for that part of the claim. Counsel therefore submitted that there, for some reason, ought to be a trial.

7. On the evidence before me, I am not satisfied that the defendant has shown any reason that the matter ought to go to trial for that part of the claim. The plaintiff had already produced the documents in support. The demand, the correspondence, and more importantly the invoices in respect of which the $1.5 million was paid, had all been sent to the 1st defendant. I do not accept the explanation of the 4th defendant, on the evidence before me, that he is not in a position to verify that part of the claim. As already pointed out by Mr Kwan appearing for the plaintiff, the 4th defendant is, and was at all material times, the director of the 1st defendant and in his affirmation, he clearly stated that the information containing his affirmation was either within his personal knowledge or was obtained by his review of the records and documents of the 1st defendant.

8. In this connection, I would like to refer to a passage in paragraph 14-410 of the Hong Kong Civil Procedure 2001 which Mr Chan has also cited. It is the last part of that section which reads :

"On the other hand, lack of evidence as to a possible defence does not justify grounds and leave to defend when there is nothing devious or artificial in a claim even though such evidence would not lie within the power of the party seeking summary judgment."

9. For the above reasons, the appeal concerning the $1.5 million, in my view, must fail. I would therefore dismiss the appeal.