TSO MAN KUEN JASMINE v. POON CHUK HUNG

DCCJ 1379/2023

[2024] HKDC 1467

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 1379 OF 2023

________________________

________________________

________________________

DECISION

________________________

Introduction

1.  On 7 June 2024, Master Y. H. Chan dismissed the applications under paragraphs 3 to 7 of the Plaintiff’s summons filed on 11 December 2023.

2.  Whilst the contents of the said summons are convoluted, it can be seen that:-

(1)  Under paragraphs 1 to 2, the Plaintiff seeks time extension for filing her amended reply and defence to counterclaim.

(2)  Under paragraphs 3 to 4, the Plaintiff seeks summary judgment and/or interim payment against the Defendant.

(3)  Paragraphs 5 to 7 concern calculation of compensation and consequential matters.

3.  By the notice of appeal filed on 14 June 2024, the Plaintiff seeks to appeal against Master Chan’s decision.

4.  This is the substantive hearing in respect of the Plaintiff’s appeal.

5.  As I understand, the Plaintiff’s stance is that the court should enter summary judgment or order interim payment against the Defendant.  It appears that paragraphs 1 and 2 of her summons are no longer relevant as the same have been dealt with by another master already. 

6.  It is trite that an appeal from a master’s decision to a judge in chambers is a de novo hearing, and the judge will deal with the matter in question as if it came before him or her for the first time: see Hong Kong Civil Procedure (2024)  at para 58/1/2.

Summary Judgment

7.  For the following reasons, I am of the view that the Plaintiff’s application for summary judgment is liable to be dismissed.

8.  First of all:-

(1)  Order 14, rule 2(1)  stipulates that:-

“An application under rule 1 must be made by summons supported an affidavit verifying the facts on which the claim, or the part of a claim, to which the application relates is based and stating that in the deponent’s belief there is no defence to that claim or part, as the case may be, or no defence except as to the amount of any damages claimed.”(emphasis added).

(2)  In my view, the said mandatory requirements are not mere technicalities.  They ensure that a litigant who seeks summary judgment appreciates that the application is a serious matter.  This is why the applicant must confirm on oath that the other party has no defence and the facts pleaded are correct.  The mandatory requirements are an important procedural device designed for the purpose of ensuring that the procedure of summary judgment would not be abused by litigants.  In the premises, they shall be complied with.

(3)  It is hardly disputable that the Plaintiff failed and/or refused to comply with the mandatory requirements under Order 14, rule 2(1).  The Plaintiff filed her affirmations dated 11 December 2023 and 31 May 2024 in support of her application for summary judgment.  In these affirmations, the Plaintiff did not verify the facts pleaded in the statement of claim; nor did she state she held a belief that the Defendant had no defence to her claims in these proceedings.

(4)  For completeness, it should be pointed out that after Master Chan gave his decision on 13 June 2024, the Plaintiff filed a declaration dated 19 July 2024.  This declaration enclosed an affidavit made by the Plaintiff on 16 July 2024 (which referred to a lengthy yet convoluted document that was said to be an expert’s review of the documents and evidence).  I cannot see how the Plaintiff may satisfy the three conditions laid down in Ladd v Marshall (which is applicable to applications for admitting new evidence in support of an appeal from a master’s decision: see CCMD Overseas Ltd v Sino Investments Ltd & Anor [2023] HKCFI 2912 at para 29 (per Recorder Eugene Fung SC).  In any event, in the said declaration and affidavit, the Plaintiff still failed and/or refused to (i)  verify the facts pleaded in the statement of claim; and (ii)  confirm she held a belief that the Defendant had no defence to her claims in this action.

(5)  In the premises, the Plaintiff’s application for summary judgment must be dismissed.

9.  Second:-

(1)  The Plaintiff’s application for summary judgment is premised on the assertion that the Defendant made fraudulent misrepresentation(s)  to her. Paragraph 4 of her summons dated 8 December 2023 reads as follows:-

“Application for the Court order for the proposed tentative judgment/Summary Judgment of fraudulent misrepresentation and Remedies (O 14, rule 4(3))  … Suspects of inducting others to do Money Laundering and Terrorist Financing.”

(2)  It is trite that summary judgment will only be granted on the claims set out, and facts pleaded, in the statement of claim: see Hong Kong Civil Procedure (2024) at para 14/1/5 (citing Wong Chow Hoi Sze Elsie v Crown Wine Cellars Ltd (CACV 252/2015, 15 April 2016)  at para 10 (per Lam VP (as Lam PJ then was).

(3)  In the statement of claim, the Plaintiff pleads that her “claim is for the original loan/investment of HKD80,000 due at the end of June 2022…”. It does not contain any averment that the Defendant made fraudulent misrepresentation(s)  and/or committed wrongdoings in relation to money laundering or terrorist financing.

(4)  In the premises, it is not open to the court to enter summary judgment in favour of the Plaintiff based on her summons filed on 11 December 2023.

10.  Third:-

(1)  It is trite that application for summary judgment is only for clear-cut cases, and there shall be no mini-trial on affidavits as genuine factual disputes ought to be resolved at trial: see Hong Kong Civil Procedure (2024)  at para 14/4/9.

(2)  In my view, it is plain that there are issues to be tried in the present case.  The Defendant’s case can be summarized as follows:-

(a)  The Defendant admits that he borrowed HK$80,000 from the Plaintiff and that the parties have, by agreement, converted this loan into an investment.  The Defendant says that the said “conversion” was concerned with an investment in relation to purchasing and on-selling granite for reclamation purposes, and such investment was made through the agency of a company that he controlled (namely Chinat Engineering Ltd).

(b)  It is the Defendant’s case that on 2 June 2022, the Plaintiff agreed to invest or provide a total sum of HK$800,000, and she should provide HK$500,000 by 2 June 2022 and HK$300,000 by 9 June 2022.  In consideration therefor, the Defendant promised that he would pay an aggregate sum of HK$1,440,000 to the Plaintiff by four tranches during the period from 2 August 2022 to 2 February 2023.

(c)  In light of the Plaintiff’s agreement, the Defendant confirmed a shipment with a company named Hunan Ruisheng Trade Co Ltd (“Hunan Ruisheng”)  for acquiring granite.  Thus, on 3 June 2022, the Defendant paid a purchase sum of RMB189,000 to Hunan Ruisheng and incurred transportation expenses of RMB100,000.  However, in breach of the agreement between the parties, the Plaintiff did not provide any fund to the Defendant at all.

(d)  In light of the Defendant’s repeated requests, on 30 September 2022 the parties agreed that the previous loan of HK$80,000 owed by the Defendant be treated as part of the Plaintiff’s investment contribution. However, the Plaintiff still failed and/or refused to provide the remaining sum of HK$720,000.

(e)  As a result, the Defendant was unable to complete the order with Hunan Ruisheng, thereby suffering loss and damage, including the aforesaid payment of RMB189,000 (which was forfeited by Hunan Ruisheng)  and transportation expenses of RMB100,000 (which was wasted).

(f)  In the premises, the Defendant contends that the loan of HK$80,000 has been discharged and/or repaid already.  He has also brought a counterclaim against the Plaintiff in respect of the alleged loss and damage that was suffered as a result of the alleged breach of contract on the part of the Plaintiff.

(3)  Whilst the Plaintiff has failed to lodge written submissions to explain why her claim in this action is appropriate for summary determination, the materials that are produced under her affirmations are convoluted, disorganized and difficult to comprehend.  When the Plaintiff made oral submissions, she even suggested that the Defendant engaged hackers to delete the files in her computer that constituted important evidence.  I am plainly not in a position to make findings in relation to this sort of grave accusation involving forensic issues.

(4)  The Plaintiff also accused the Defendant of failing to make discovery of certain allegedly important documents.  In this connection, I have been informed that the Defendant’s application for specific discovery will be heard in November this year.  In my view, the Plaintiff should not have sought summary judgment when some allegedly important documents are not before the Court.  In any event, I am not in a position to determine whether there is substance in the Defendant’s complaint, and this is one of the matters to be dealt with in the upcoming hearing in November.

(5)  Based on the materials before me, I am unable to conclude that the Defendant’s case is incredible or moonshine.  I am also not persuaded that the Plaintiff has an iron-cast case against the Defendant and that the Defendant has no arguable defence at all.  In my view, the factual disputes between the parties can only be resolved at trial, and the Plaintiff should not have ventured to seek summary judgment at all.

11.  For all the above reasons, the appropriate course to take is to dismiss the Plaintiff’s application for summary judgment, and I agree with the decision made by Master Chan.

Interim Payment

12.  In Hollywood Palace Co Ltd v Trans-Global Hong Kong Investment Ltd [2011] 1 HKLRD 833 at paras 16-18, Recorder Anderson Chow SC (as Chow JA then was)  stated:

“16.  Order 29 r11(1)(c)  provides as follows:-

“If, on the hearing of an application under rule 10 in an action for damages, the Court is satisfied –

(c)  that, if the action proceeded to trial, the plaintiff would obtain judgment for substantial damages against the respondent or, where there are two or more defendants, against any of them, the Court may, if it thinks fit and subject to paragraph (2), order the respondent to make an interim payment of such amount as it thinks just, not exceeding a reasonable proportion of the damages which in the opinion of the Court are likely to be recovered by the plaintiff after taking into account any relevant contributory negligence and any set-off, cross-claim or counterclaim on which the respondent may be entitled to rely.”

17.  Mr Chain accepts that the onus on the applicant for an order of interim payment under Order 29 r11(1)(c)  is a high one, and refers me to the judgment of Mr Justice Au in Guo Jing Jing v Artmaster Investment Ltd (unreported), HCA 1008/2009, 11 December 2009, where the learned Judge, at paragraph 88 of his judgment, stated as follows:-

“The test for granting interim payment is a high one and is well settled:

(1)  The court must be satisfied that the plaintiff “would” obtain judgment for substantial damages against the defendant, not “would likely to”, and the standard of proof is a high one, on the balance of probabilities: Shenzhen Envirotex Electronics Co Ltd v Cellplus (HK)  Ltd [2005] 4 HKLRD 217 at para 19.

(2)  The court must be satisfied that the defendant has no arguable defence, such as one that would warrant the grant of unconditional leave in an O.14 application: Commonwealth Holdings Plc v Quadrex Holdings Inc [1989] 3 All ER 492 at 519b.”

18.  As for the situation where a defence is so shadowy that only conditional leave to defend would be given in an Order 14 application, Mr Chain refers me to the following judgment of Sir Nicolas Browne-Wilkinson VC (as he then was)  in British and Commonwealth Holdings plc v Quadrex Holdings Inc [1989] QB 842 at 866D-F:-

“In my judgment, in cases where on the evidence then before it, the court entertains sufficient doubts as to the genuineness of the defence to give only conditional leave to defend, it is possible for a court to be satisfied that the plaintiff will succeed at trial. Although in such a case it does not automatically follow that it is appropriate to make an order for interim payment, if in all the circumstances such payment appears sensible and desirable, in my judgment it can be ordered”.

13.  In Rich Profit Creation Ltd v Ko Chung Lun & Ors [2020] HKCFI 1459 at para 15, DHCJ Paul Lam SC stated:-

“15.  It is trite that the Court must be satisfied that if the claim were to go to trial, then, on the material before the judge at the time of the application for interim payment, the plaintiff would succeed in his claim, and would obtain a substantial amount of damages; the court must be satisfied on the balance of probabilities, and need not be satisfied beyond reasonable doubt.  However, it is insufficient that the plaintiff is likely to succeed.  The court must be satisfied that the defendant has no arguable defence or that there are sufficient doubts regarding the genuineness of the defence, so that the court would not grant the defendant unconditional leave to defend in a summary judgment application.  The test is essentially the same as that for granting conditional leave to defend, namely, whether the defence can be said to be shadowy.  See Hong Kong Civil Procedure 2020, vol. 1, §29/11/1 at p. 795; Hollywood Palace Co Ltd v Trans-Global Hong Kong Investment Ltd [2011] 1 HKLRD 833 at 838-839, §§16-18.”

14.  For the reasons set out in paragraph 10, the Plaintiff has failed to show that her claim would succeed at trial, and I am not satisfied that the Defendant has no arguable defence at all.

15.  In the premises, the appropriate course to take is to dismiss the Plaintiff’s application for interim payment. I agree with the decision made by Master Chan.

16.  Following the conclusion above, I also agree that paragraphs 5 to 7 of the Plaintiff’s summons dated 8^th December 2023 (which concerned compensation and consequential matters)  should be dismissed as well.

Conclusion and Order

17.  I dismiss the Plaintiff’s appeal against Master Chan’s decision on 7 June 2024.

18.  There is no reason why costs does not follow the event. 

19.  The Plaintiff keeps alleging that the Defendant did not produce certain documents and was late in making discovery.  These allegations are separate matters, and will be canvassed elsewhere.  They do not constitute a valid excuse for not bearing the costs in respect of the present appeal, which was unmeritorious and dismissed.

20.  I order the Plaintiff to pay the Defendant’s costs in respect of the present appeal, summarily assessed at HK$60,000.

21.  I thank Mr Tam for his assistance.