KWOK SIU MING, SIMON v. ROTHSCHILD BANK AG AND OTHERS

HCCL 140/1997

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMMERCIAL ACTION NO. 140 OF 1997

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R E A S O N S  F O R  J U D G M E N T

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The application

1. By summons dated 18 March 2005, the 2^nd defendant in this action, Mr Ian Huang, applied to set aside the Judgment of this court dated 18 November 1998.

2. At the conclusion of the adjourned hearing of this application to set aside, this summons was dismissed with costs.

3. I now give reasons for such dismissal.

The background

4. At the trial of this High Court action, which took place in the Commercial Court on 16-18 November 1998, the plaintiff, Mr Simon Kwok, proceeded against the 2^nd, 3^rd and 4^th defendants herein for recovery of the sum of US$3,230,000.

5. The case advanced by the plaintiff at this trial was that he had been the subject of a fraud executed by Miss Ang, the 3^rd defendant and formerly his trusted personal assistant, by her companion, Mr Huang, the 2^nd defendant, and by Alidex Portfolio SA, the 4^th defendant, into whose account with Rothschild Bank AG, Zurich, the sum claimed had been deposited.

6. It was the case of Mr Kwok, who did not speak or read English, that he had known nothing of this remittance, which had been fraudulently sent from his account with the Hong Kong Bank.  Accordingly, he wished to recover these monies which, consequent upon a restraining order granted by a Swiss court upon a request from the Hong Kong Department of Justice, had remained frozen in the Rothschild Bank in Zurich.

7. At the trial in November 1998 Mr Huang, Miss Ang, and Alidex did not appear.

8. During the week preceding the commencement of this trial, fax applications had been made by the 2^nd, 3^rd and 4^th defendants to adjourn the trial and to vacate the trial dates, requests which were rejected by this Court.

9. At the completion of the trial, in which six witnesses of fact were called by the plaintiff, this court rendered its Judgment. 

10. This Judgment speaks for itself.  The court granted the relief set out therein (at pages 10 and 11 of that Judgment), declaring that the funds standing in the account of the 4^th defendant in the Rothschild Bank belonged in equity to the plaintiff, who was the beneficial owner thereof, and were held by the 4^th defendant as constructive trustee of the plaintiff, and judgment was entered against the 2^nd, 3^rd and 4^th defendants in the sum of US$3,230,000, together with compound interest and costs.

11. This Judgment was enshrined in a sealed Order of this court dated 18 November 1998.

12. I am told that Mr Kwok, the successful plaintiff in this action, thereafter has been, and currently is seeking to enforce this Order in the Swiss courts.

Hearing of the application to set aside the Judgment

13. It was against this background that, some six and a half years later, the 2^nd defendant, Mr Huang, issued his summons, dated 18 March 2005, to set aside the Judgment entered by this court in favour of Mr Kwok.

14. This application was backed by a draft affirmation of Mr Huang dated 17 March 2005.  The copy of this document available in the court papers does not indicate whether it has been duly affirmed, and I have been unable to locate an attested copy.  In the circumstances, however, perhaps this omission (if indeed omission it be) is not of great significance.

15. The affirmation of Mr Huang requests that the court take the view that the Judgment obtained by the plaintiff, Mr Kwok, was, in the words of the deponent, obtained by the plaintiff “by way of irregularities and/or tainted with high falsity which only came to my knowledge in the course of criminal trial HCCC 26/2004”.

16. Mr Huang states in his affirmation that the existing High Court judgment is irregular and tainted with falsity as the result of fresh evidence which, it is said, emerged in the criminal trial, in which, as I understand the position, he and Miss Ang were acquitted of criminal charges laid against them arising from the events the subject of the earlier civil claim.  In addition to matters arising from the criminal proceedings, Mr Huang relied upon a number of collateral matters, notably a public censure upon Mr Kwok by the Listing Division of the Hong Kong Stock Exchange, together with issues said to arise in unrelated civil litigation involving Mr Kwok.  Mr Huang further deposed to the reasons underpinning his non-appearance at the trial of HCCL 140/1997, and further to the time lapse between the conclusion of his criminal trial in Hong Kong and the time of his application to set aside the judgment.

17. Mr Huang also filed a Supplemental Affirmation, which is undated, although it appears to have been prepared at some stage in April 2005, and likewise appears not to have been actually affirmed.  In this supplemental document, Mr Huang seeks further to highlight the “irregularity and/or high falsity” of the High Court judgment he seeks to attack as the result of “fresh evidence” adduced in his criminal trial.

18. Mr Huang’s summons to set aside was first called on for hearing on 15 July 2005.

19. At that hearing Mr Huang explained that he wished to apply to adjourn the present application in order to give Legal Aid more time to process his request for legal aid which, he said, he required in order to mount this application.

20. Mr Huang explained that he was currently in custody in Hong Kong, whence he had been extradited from the United States on 16 December 2003.  He said that when, on 29 October 2004, he had been acquitted on the criminal charges brought against him in Hong Kong, he immediately had been rearrested outside court, and was currently being held in custody pending an application for his extradition to Singapore on unrelated fraud and dishonesty charges, an application which he was in the process of resisting.  He noted that his being in custody effectively was impeding his ability to proceed with his application.

21. Ms Kwong, on behalf of Mr Kwok, resisted the adjournment of the application to set aside the judgment.  She stated that in the circumstances this application was bound to fail. 

22. Ms Kwong further suggested that the timing of this application had been made with a view to assisting the efforts of a Swiss company known as ‘TEC’, the alleged assignee of a debt from Alidex, to dispute her client’s application in the Swiss courts to enforce the High Court judgment and to recover the monies frozen in the Alidex account.  She said that in ‘contestation proceedings’ begun in Switzerland by TEC in March 2005, reference had been made by those acting for TEC to Mr Huang’s application to set aside the existing High Court judgment which formed the cornerstone of her client’s attempt to recover his funds.  She added that the fact that the Hong Kong judgment was potentially at risk in Swiss eyes obviously had aided the TEC contestation proceedings.

23. It is fair to record that Mr Huang strenuously denied any knowledge of TEC, or any involvement therewith.

24. In the circumstances of the adjournment application, this court acceded to Mr Huang’s request to be permitted more time to process his legal aid application.  However, this court made it clear that it would be highly unlikely that any further adjournments would be granted, and ordered that the present application be relisted for hearing on 31 August 2005.

25. On 29 August 2005 the Legal Aid Department issued a Memorandum of Notification that a Party has been refused Legal Aid.

26. At the adjourned hearing of the summons on 31 August 2005 Mr Huang noted that legal aid had been refused, and stated that he wished to appeal that decision.  He said that he would try to obtain funds in order to retain counsel to assist him in such endeavour.

27. In effect, Mr Huang was thus seeking a further adjournment of the hearing of his application to set aside dated 18 March 2005.

28. The court declined this request, and Mr Huang was asked to proceed with his summons to set aside the Judgment dated 18 November 1998.

29. In response, Mr Huang indicated that he was, in his words, “incompetent to proceed”, and thus that he did not wish to make the application.

Reasons for Order

30. Upon Mr Huang declining to proceed with his application, the court dismissed the application with costs.

31. The court further dismissed Mr Huang’s oral application for transcripts of the trial hearing of November 1998, and of the two hearings on this application of 15 July and 31 August 2005, considering that no purpose would be served thereby, and that no basis had been established for production of such transcripts.

32. Had Mr Huang sought to move his application (which in the event he did not) by placing reliance upon the matters contained in his affirmations filed in support of the application, I would have dismissed his application in any event.

33. In my view Ms Kwong is correct in her submission – contained within her skeleton argument dated 5 July 2005, and filed prior to the initial hearing of this summons – that the Order of 18 November 1998, having been sealed, the court is functus officio and has no jurisdiction to alter or vary the judgment after it has been entered : see the observations of the English Court of Appeal in Ex-parte Muldoon & ors, [1984] QB 686, wherein Sir John Donaldson stated (at page 695) :

“	It is well settled that any judge is fully entitled to reconsider and vary any decision at any time before the order embodying or based upon that decision has been perfected … although in some circumstances he may be under an obligation to give the parties a further opportunity to be heard. At that stage no slip rule power is needed. However, once the order has been perfected, the trial judge is functus officio and, in his capacity as trial judge, has no further power to reconsider or vary his decisions whether under the authority of the slip rule or otherwise. The slip rule power is not a power granted to the trial judge as such. It is one of the powers of the court, exercisable by a judge of the court who may or may not be the judge who was in fact the trial judge …
	… it cannot be over-emphasised that the slip rule power can never entitle the trial judge or a court to reconsider a final and regular decision once it has been perfected, even if it has been obtained by fraud …”

34. I further agree with Ms Kwong that, the issue of jurisdiction apart, in any event this applicant has disclosed no grounds to justify setting aside a judgment of this court which was entered after trial, and wherein all defendants, having been informed of trial dates some four months in advance, chose not to attend.

35. I would also observe that, on the face of the material presently before me, I am manifestly unable to discern the existence of fraud on the part of the plaintiff, as is now alleged by Mr Huang, and I find it difficult to understand how the verdict of the jury in the criminal case against the 2^nd defendant, wherein there is a different applicable standard of proof, is of any probative value in this regard, nor that the learned judge’s directions or defence counsel’s submissions to the jury in that case are anything to the point. 

36. Nor, for that matter, is the fact that Mr Kwok was subject to public censure by the Stock Exchange in an unrelated matter, or the fact that Mr Kwok’s company, Sa Sa International Holdings Ltd, was involved in civil litigation with the former owners of Phillip Wain (litigation which in fact subsequently settled), of any relevance.

37. In short, there is no merit whatever in this application, even had the court possessed jurisdiction to grant the application, which in my view it does not.

38. Accordingly, the Judgment of the court which was entered against the 2^nd, 3^rd and 4^th defendants in November 1998, a judgment reached after full consideration of all the evidence before it, remains extant.

39. As to the costs of and occasioned by this application, including the costs of the two hearings which were required, Ms Kwong has asked for costs on an indemnity basis, on the basis that this application is clearly an abuse of the court.

40. I have considered this submission, and confess that I have some sympathy with it.  On reflection, however, I have decided that in the circumstances that the appropriate order for costs is that the 2^nd defendant is to pay the plaintiff the costs of and occasioned by this application, such costs, if not agreed, to be taxed and paid on a common fund basis.  I so order.