BANK OF CHINA, MACAU BRANCH v. CHAN YEUK WAI AND ANOTHER

HCA745/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.745 OF 2003

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REASONS  FOR  DECISION

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1. There was a summons before me issued on 6 November 2004 seeking leave to file the 2^nd affirmation of Keung in order to produce a legal opinion on Macau law dated 4 November 2004.  The 1^st defendant also sought an abridgement of time, less than two clear days have been given so far as the summons was concerned.  I granted an abridgement of time because although the summons was not issued until 6 November 2004,  the opinion had been supplied on 4 November to the plaintiff’s solicitor.

2. The 1^st defendant was sued as a guarantor and it is common ground that the guarantee is governed by the law of Macau.

3. The application for summary judgment was issued on 2 December 2003.  On 22 December 2003 Master Lung made an order to the following effect :

“	1.	The 1st Defendant do have leave to file and serve an affirmation on legal opinion on Macau Law within 28 days from the date of this Order;
	2.	The Plaintiff do have leave to file and serve an affirmation in reply, if any, within 21 days thereafter;
	3.	No further affirmations shall be filed or served without leave of the Court.”

4. On 18 June 2004, Mr Keung in his 1^st affirmation had this to say about difficulty in obtaining a legal opinion from Macau :

“	3.	In view of the nature of the case, a legal opinion on Macau law was required.  Pursuant to my client’s instructions, I have approached several Macau lawyers for this purpose.  I have made at least 4 telephone enquiries with legal firms in Macau.  The replies I have got from them was that they are in a position of conflict of interest as they have acted for the Plaintiff in Macau.
	4.	I exhibit hereto marked ‘kshj-1’ a copy e-mail message which I have sent to Manuela Antonio and a reply from them which stated the situation.  The other firms which I telephoned simply replied orally that they were in a position of conflict.”

5. On 21 June 2004, the hearing before Master Wong for summary judgment took place.  I was told by Mr Ng who appeared on behalf of the 1^st defendant that there was no application for an adjournment before the learned master. 

6. Judgment was given against the 1^st defendant on 21 June 2004.  An appeal from that judgment was lodged on 2 July 2004.

7. Then on 5 November, came Mr Keung’s 2^nd affirmation exhibiting the legal opinion.

8. I did not believe the 1^st defendant had adequately explained the delay in supplying the legal opinion.  The only explanation was Mr Keung’s 1^st affirmation of 18 June which I have referred to above.  At the hearing, Mr Maurice Ng explained further by saying that it was only in October that his instructing solicitors managed to instruct theMacau lawyer who supplied the legal opinion now sought to be relied on.  But that was a bare assertion and I am not satisfied that the 1^st defendant could not have instructed a Macau lawyer earlier.  

9. It will be noted that leave to serve evidence was given as long ago as December 2003.  Having regard to the lapse of time I did not believe the explanation given for the delay was satisfactory.

10. Moreover, the legal opinion which was sought to be relied on was accompanied by many pages of documents in Portuguese without any translation. 

11. More importantly, Mr Ng in response to a query by me in relation to clause 10 of the guarantee accepted that the legal opinion had omitted to deal with clause 10.  He therefore sought leave from me to adduce a supplemental legal opinion dealing with clause 10 of the guarantee.  

12. Now, on an appeal from a master, the court is much more ready to admit further evidence than on appeal to the Court of Appeal. 

Nevertheless it is a matter of discretion and it depends on the circumstances of the case.  See Wong Hung Yu v. Wu Ming Fat [2002] 1 HKLRD 555 paras. 13, 14.

13. Under clause 10 of the guarantee or certificate, the 1^st defendant had waived the right to require the creditor to start legal action, against the principal debtor before enforcing the guarantee, and the right to require the creditor to enforce and realize all the principal debtor’s assets first :

“

十、

保證人自願預將先訴抗辯權及檢索權拋棄借款人如不依約履行債務保證人願立即履行保證責任將債務如數代為清償。”

14. Because the defendant’s legal opinion did not deal with such waiver or its validity, the 1^st defendant’s legal expert opinion was of little value, since the opinion seemed to say that as a matter of the law of Macau, the plaintiff was not entitled to sue the 1^st defendant until after it had sued the principal debtor and the security realized.  I do not know whether clause 10 was effective in waiving such requirements.

15. It was highly unsatisfactory that, without any explanation and at the hearing of the appeal, I was asked to adjourn it so that the 1^st defendant should have an opportunity to put its house in order.  Mr Ng had argued that the plaintiff would not suffer any prejudice which an order for costs could not compensate.  But even if that was so, I do not believe that an adjournment or leave should be granted automatically.  Hence, I refused leave with reasons to be given later.  These are my reasons.