BANK OF CREDIT AND COMMERCE HONG KONG LTD v. YIP CHUN LING SIMON AND OTHERS

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JUDGMENT

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1. As its name appears in the heading of this action, the Plaintiff is "Bank of Credit and Commerce Hong Kong Limited (formerly known as Hong Kong Metropolitan Bank Limited)". The Plaintiff claims to be carrying on business, now and at the material time, as a licensed bank with Dominican Finance Limited as one of its customers. These proceedings only concern the 3rd defendant, who signed a document entitled "Continuing Guarantee and Idemnity in respect of General Balance of Account of Customer" on the 28th September 1982. As at the 25th March 1985, the said Dominican Finance was indebted to the Plaintiff in the sum of $8,096,722.85 accrued from overdraft facilities granted pursuant to this said 1982 document.

2. The writ was issued on the l9th April 1985, suing the 3rd defendant under the document I have just described for the sum of $7½  million with interests and costs. The writ was served by post on the same day, and service was acknowledged on behalf of the 3rd defendant on the 2nd May. On the 15th May, an Order 14 summons was filed by the Plaintiff against the 3rd defendant. The parties came before Master Woolley on the 2nd of July. The Plaintiff's application was resisted, but final judgment was entered against the 3rd defendant by the learned Master as claimed. This is an appeal by the 3rd defendant against that decision of Master Woolley.

3. This appeal is a hearing de novo, and both counsel have made extensive and exhaustive submissions.

4. It is convenient to set out the relevant clauses of the document signed by the 3rd defendant on the 28th September 1982. Clause 1 reads as follows : -

Clause 6 reads as follows :-

"I/We agree to be bound by any account which before such demand as aforesaid has been settled between you and the Customer(s). If no such account has been settled immediately before such demand a certificate in writing signed by the Manager or Accountant or other duly authorized officer of your Bank shall be accepted by me/us as conclusive evidence of the amount owing to you by the Customer(s) at the date of such certificate."

5. Clause 5 is a clause which tolerates extention of time, variations and other indulgences granted by the Plaintiff bank in favour of the principal debtor, Dominican Finance Limited.

6. The 3rd defendant himself filed an affirmation. Mr. Lee, counsel for the 3rd defendant no longer pursued matters set out in paragraph 5 of the 3rd defendant's affirmation, but general reliance was sought to be placed on those matters. However, Mr. Lee elaborated no further. I am unable to appreciate how matters set out in this paragraph 5 of the 3rd defendant's affirmation could possibly come to his rescue.

7. Paragraph 6 of the 3rd defendant's affirmation is the bone of contention. Suffice it for me to set out only paragraph 6(a) :

8. On this sub-paragraph, submissions on behalf of the 3rd defendant were primarily founded. It would not be out of place here for me to direct attention to the words "should have ceased", "under a fresh loan arrangement" and "properties were to be mortgaged". This sub-paragraph is not free from obscurity. The 3rd defendant's complaint is essentially one of variation of risks in his obligations created by the 1982 document which he had signed. In counsel's endeavour to cure this unintelligibly ailing paragraph, Mr. Lee offered as an alternative "enter into" for the word "under". But of course it could very well be the case that paragraph 6(a) was meant to read : the Plaintiff and Dominican Finance Limited "agreed", "planned" or "negotiated" under a fresh loan arrangement for a sum of $7.5 million. It is an agony trying to surmise the intended meaning of this paragraph, particularly when the 3rd defendant's assertion is that his liability "should have ceased". It is naturally not permissible to speculate. It is certainly also not a matter for Counsel's attempted interpretation. It is or supposed to be a factual narration. If it is an error, then the Court must be told what the mistake is. Upon being invited to state precisely the position of the 3rd defendant and having taken instructions through those instructing him in the well of the Court, Mr. Lee was unable to obtain instructions to raise the allegation that a fresh loan arrangement had in fact been entered into or mortgages executed.

9. Paragraph 6 can therefore offer no comfort to the 3rd defendant. No sensible averment can be spelt out of this paragraph.

10. Counsel for the 3rd defendant was virtually driven to stand or fall on technical objections, based on what has been described as the 3rd defendant's inherent right to put the Plaintiff to strict proof.

11. First, criticisms were levelled at the name of the Plaintiff as it appears in the heading of the writ. In his affirmation, the Plaintiff's Assistant Manager, Mr. Kuruvilla categorically referred to the claimant bank as the "abovenamed Plaintiff". Both the Assistant Manager and Mr. Chan, the Pro-manager, linked the Plaintiff to the bank involved in the 1982 document signed by the 3rd defendant. The 3rd defendant has, on paper, taken no issue of any misnomer. On the contrary, in the affirmations of the 3rd defendant and his solicitor, the Plaintiff presented in its respective names was constantly associated with this same document with no intimation of any possible confusion or misunderstanding.

12. The 3rd defendant must, in an application such as the Plaintiff's Order 14 application for summary judgment, condescend upon particulars as to what his defence really is. This technical objection has been described by Mr. Lee, counsel for the 3rd defendant quite candidly as a matter of tactics in the sense that whilst the 3rd defendant is not in a position to challenge the disclosed names of the Plaintiff, for tactical purposes the 3rd defendant is putting the Plaintiff to proof that indeed the Bank of Credit and Commerce Hong Kong Limited is and can stand in the shoes of the former Hong Kong Metropolitan Bank Limited. The 3rd defendant has not condescended upon particulars for this technical ground, which was said to have been advanced at the hearing for mere tactical purposes. In my view, an objection raised, for the first time, impromtu before the learned Master without prior notice, not as a point of substance but as a matter of tactics, should not be countenanced.

13. But in fact there is no assertion of misnomer. The 3rd defendant through his counsel has conceded that he is not in a position to attack it. Dominican Finance is in liquidation, a fact which I can take judicial notice of. There is no conceivable difficulty for the 3rd defendant to explore the change of name of or the making of a fresh loan arrangement, if any, with the Plaintiff. In my view, by the affirmations of its officers the Plaintiff's name has sufficiently been verified.

14. If in fact, it were a misnomer and the 3rd defendant not precluded from canvassing it as an objection, the settled practice would compel me to rectify a bona fide mistake such as this by an amendment with leave in the absence of material prejudices or treat the same as having been appropriately amended without much ado.

15. But, I repeat, there is no evidence or allegation that the name of the Plaintiff in this action is in fact a misnomer. In the course of the proceedings, Mr. Leong, counsel for the Plaintiff sought leave to introduce a further affidavit, yet to be filed by its pro-Manager, Mr. Chan, with a view to establishing that the bank had changed its name in 1983. By that stage, I had heard enough from both counsel to be able to express the view that there was hardly any need for receiving further evidence on the matter. In my opinion, the application was wholly unnecessary and would serve no useful purpose. For that reason, I disallowed the application. That disposes of the first technical objection.

16. Secondly, counsel submitted that Clause 6 of the document signed by the 3rd defendant on the 28th September 1982 was not providing any means for proving the very indebtedness for which the 3rd defendant would be liable under that particular document. It was urged that Clause 6 was merely dealing with the general indebtedness of the principal debtor, Dominican Finance Limited. Counsel offered no rationale as to why subject-matters extrinsic to the 3rd defendant's liability under that 1982 document ought to be so allegedly introduced by its Clause 6. Clause 6 is one of the provisions in that 1982 document entitled "Continuing Guarantee and Idemnity in respect of General Balance of Account of Customer" which begins with the following recital :-

"IN CONSIDERATION of your agreeing at my/our (joint and several) request to continue/open an account with you and to give credit to Messrs.  DOMINICAN FINANCE LIMITED (hereinafter called "the Customer(s)") I/We hereby (jointly and severally) agree to guarantee and/or idemnify you as follows."

It is a document in respect to an account of the principal debtor, Dominican Finance Limited with the Plaintiff, and Clause 6 strives for the provision of conclusive evidence of the amount owing to the Plaintiff by the principal debtor in that particular account. Clause 6 was obviously not calculated to touch upon any general indebtedness beyond the 3rd defendant's liability under that 1982 document. What need there was for establishing the extent of a liability unrelated to the aims and purports of that 1982 document? Clause 6 is clear and can admit of no ambiguity. That a certificate given under Clause 6 can be said to be conclusive evidence of an indebtedness other than that of the principal debtor in that particular account must be absurb. A Clause 6 certificate has, in my view, been procured. That brings an end to the second technical objection.

17. Thirdly, on behalf of the 3rd defendant, it was contended that the construction of every clause must be latched onto and allied with one of the general headings "Guarantee" of that 1982 document and that if there should be any doubt, the surrounding circumstances including the contractual documents signed between the Plaintiff and the principal debtor must be examined in aid of construction.

18. Clause 1, as I have set out earlier, would appear to be an idemnity clause, but whatever its true nature is, be it a guarantee or be it an idemnity, Clause 1 evidently creates a primary obligation on the part of the 3rd defendant to pay the amount outstanding in the principal debtor's account with the Plaintiff. The language of Clause 1 is plain. It is a clearest possible provision. Clauses 1 and 6 are to be construed without resort. To any other contractual documents. In my view, the third technical objection raised on behalf of the 3rd defendant also fails.

19. A somewhat desperate attempt was made to persuade me that there were fit matters to be investigated. I do not agree.

20. There is patently no triable issue raised by or on behalf of the 3rd defendant. The learned Master has, in my view, come to a correct decision. In this de novo hearing of an appeal from his decision, I can find no justification for departing from the conclusion reached by the learned Master on the 2nd of July. Consequently, the 3rd defendant's appeal must be dismissed with costs, and I so order.