AMERITAX PLUS LTD v. DENICE Y. FOSTER-HARRIS

DCCJ 3001/2007

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 3001 OF 2007

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BETWEEN

(By Counterclaim)

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Judgment on Appeal against Master’s Order

1.  This is an appeal by the Judgment Debtor under Ord. 58 r. 1. of Rules of District Court against Master Mak’s order of 11 May 2011 dismissing the Judgment Debtor’s application under her 31 March 2011 Summons to set aside the Master’s Order for examination of 6 December 2010 (a) on the basis the Judgment Debtor was not present in Court at the hearing of the setting aside application; and (b) for holding that an order for examination against a personal representative in respect of a judgment against the personal representative in the aforesaid capacity comes within the ambit of Order 48 of the Rules of District Court.

2.  Unfortunately, solicitor for the Judgment Debtor, Messrs. Hart Giles, when compiling the bundle for the appeal hearing failed to include the relevant court orders in the bundle.  While it may be the duty of the Judgment Creditor to obtain the approved orders, the party lodging the appeal has the duty to compile an appeal bundle for the hearing of the appeal. At the present appeal, there were 2 parts to the order made by Master Mak on 11 May 2011, only the first part of the order dismissing the Judgment Debtor’s summons of 31 March 2011 to set aside Master Mak’s  order of examination of the Judgment Debtor with costs was placed in the bundle under tab 12 of the appeal bundle.  The second part of the order giving directions was not included.  Tab 12 contained a draft order; the approved order had not been inserted.  This has caused some confusion in determining exactly which aspects the appeal was on at the hearing of the appeal.  The notice of appeal failed to specify the part of the Master’s direction the Judgment Debtor is appealing against, it simply stated under (b)  the appeal was on the Master’s holding the order for examination against a personal representative in the aforesaid capacity comes within the ambit of Order 48.  At the appeal hearing, Mr. Hart informed the Court, the Judgment Debtor’s appeal is also against the Master’s direction on disclosure of documents made on 11 May 2011.

3.  The Court therefore has to examine the Court file to find the relevant manuscript of the Master on the relevant date and ascertain the contents of the approved order of 11 May 2011 which was amended under the Judgment Creditor’s summons of 27 May 2011 granted by Master Chan on 1 June 2011.

4.  Paragraph 2 of the amended 11 May 2011 order of Master Mak required the Judgment Debtor to attend the examination hearing to supply copies of documents or make available the originals for copying no later than 21 days before the adjourned hearing, the passbooks,  bank statements and all financial statements of all financial institutions, tax returns, shares and stocks certificates, deeds or land registered records of all properties held, vehicles owned, and outgoings and incomes and liabilities of the Judgment Debtor’s deceased husband, or in the name of his estate whether in joint names with another person or in his sole name and in the Judgment Debtor’s name etc since 2002.  This 2^nd part of the Judgment Debtor’s appeal was not specified in the Notice of Appeal.

5.  I shall not repeat the history of these proceedings except that judgment against the Judgment Debtor was entered under the order of H.H. Judge Pang on 20 July 2010; the learned judge also dismissed the Judgment Debtor’s counterclaim in the same judgment.  The judgment was not satisfied and on 6 December 2010 the Judgment Creditor applied for and obtained an order to examine the Judgment Debtor under Order 48 and an order to prohibit her from leaving the jurisdiction under Order 44A.  The Probation Order was extended in spite of the Judgment Debtor’s objections; attempts were made by her to set it aside in March and April 2011.

6.  There were also attempts by the Judgment Debtor to set aside the Order 48 order for examination after she failed to attend the original date of the examination on 25 January 2011.  The hearing was adjourned to 22 February 2011 and it was further adjourned to 19 April 2011; she had failed to attend Court on any of these hearings.

7.  On 6 May 2011, at the hearing of the appeal from the Master’s direction on 19 April 2011 for Judgment Debtor’s personal attendance at the hearing of her application to set aside the order for examination on 21 April 2011 which was refixed to 11 May 2011 due to the appeal, H.H. Judge Leung upheld the personal attendance order but removed the penal notice from the Master’s order.  His judgment set out the background history of these proceedings up to the 6 May 2011 hearing.

8.  The Judgment Debtor’s grounds of appeal to Master Mak’s order dismissing the Judgment Debtor’s summons to set aside the Order for examination on the basis of the Judgment Debtor’s absence at the hearing of the application to set aside the order for examination and that Order 48 is applicable to a personal representative of the estate of the Judgment Debtor.  I cannot find any indication that the absence of the Judgment Debtor was the reason for the Master’s dismissal of the application to set aside the order for examination of the Judgment Debtor. In any event, the present appeal is a hearing de novo; the Court will consider the application based on the merits of the case.

9.  The Judgment Debtor is in the dual capacity of being the Judgment Debtor in her own personal capacity and in the capacity of the personal representative of her late husband’s estate.  Mr. Hart, the legal representative of the Judgment Debtor, submitted the Judgment Debtor is only responsible in her own capacity.  As she had already made payment in satisfaction of the judgment debt against her in her personal capacity on 31 March 2011, therefore she should not be cross-examined.

10.  Order 48, Rule 1(1) provides that:-

“Order for examination of judgment debtor

1. (1) Where a person has obtained a judgment or order for the payment by some other person (hereinafter referred to as “the judgment debtor”) of money, the Court may, on an application made ex parte by the person entitled to enforce the judgment or order, order the judgment debtor or, if the judgment debtor is a body corporate, an officer thereof, to attend before the Registrar or such officer as the Court may appoint and be orally examined on the questions-

(a) whether any and, if so, what debts are owing to the judgment debtor, and

(b) whether the judgment debtor has any and, if so, what other property or means of satisfying the judgment or order;

and the Court may also order the judgment debtor or officer to produce any books or documents in the possession of the judgment debtor relevant to the questions aforesaid at the time and place appointed for the examination.”

11.  Order 48 r. 2 provides that:-

“Examination of party liable to satisfy other judgment

2. Where any difficulty arises in or in connection with the enforcement of any judgment or order, other than such a judgment or order as is mentioned in rule 1, the Court may make an order under that rule for the attendance of the party liable to satisfy the judgment or order and for his examination on such questions as may be specified in the order, and that rule shall apply accordingly with the necessary modifications.”

12.  Under Order 48 rules 1 & 2, it is clear that the Judgment debtor, Mrs. Denice Foster-Harris, is the appropriate person to be examined though not in her own personal capacity as a Judgment Debtor after she paid up the judgment debt she was personally liable for, but as the personal representative of her late husband’s estate.  This falls directly into the ambit anticipated in Order 48 rr. 1 &. 2 as the personal representative of the deceased’s estate liable to satisfy the judgment. The case authorities referred to me by Mr. Hart do not assist Mrs Forster-Harris’s case.

13.  Paragraph 65-01 of Williams Mortimer and Sunnucks On Executors, Administrators and Probate, 2008 ed.  stated:

“... Thus if he admits that, apart from a release to himself, he has acted as representative the judgment against him must be that the claimant do recover the debt and costs to be levied out of the assets of the testator, if the defendant have so much; but if not, then the costs out of the defendant’s own goods.”

14.  Order 45 r.15 provides:

“ If the judgment is against a party as the representative of a deceased person and such judgment is for money to be paid out of the property of the deceased person, it may be executed by the attachment and sale of any such property or, if no such property can be found and the defendant fails to satisfy the Court that he has duly applied such property of the deceased person as may be proved to have come into his possession, the judgment may be executed against the defendant to the extent of the property not duly applied by him, in the same manner as if the judgment had been against him personally.”

15.  It follows that Mrs. Foster-Harris as the Personal Representative of her late husband’s estate is the proper person to answer questions on the deceased’s estate at the hearing of the examination of the Judgment Debtor. I find the Judgment Debtor’s 1^st ground of appeal unsubstantiated and without merit.

16.  As to the second part of the appeal on the directions given by the Master under the 11 May 2011 order, the original hearing of the examination was on 25 January 2011.  The Judgment Debtor failed to attend Court on that day; it was adjourned to 22 February 2011, then to 21 April, and eventually to 11 May 2011.  At the 11 May 2011 hearing, after the dismissal of the application to set aside the order to examine the Judgment Debtor, Master Mak gave directions on the documents the Judgment Debtor is required to disclose before the hearing of the examination which was adjourned to 21 June 2011.

17.  Order 48 r. 3 gave the Registrar or the Master conducting the examination the authority to direct the Judgment Debtor to make disclosure of documents.  The Hong Kong Civil Procedure 2011 p. 878 48/3/1B and 48/3/1C  provides:-

“Disclosure of further documents – After commencement of an oral examination under O. 48 and/or O. 49B, the court has jurisdiction to order the examinee to disclose further documents. See Lafarge SA & Others v. Continental Cement Corp. & Another (unrep., HCCT 33 of 2006) [2006] H.K.E.C. 1957.

Jurisdiction to order discovery – The normal practice is for the court to order discovery of documents prior to the actual oral examination.  The scope of discovery is not limited to the documents referred to in the standard directions referred to above.  The court retains jurisdiction to make further orders for discovery after the initial order for discovery is made and even after the oral examination has commenced: see Lafarge SA & Others v. Continental Cement Corp. (unrep., HCCT 33 of 2006) [2006] H.K.E.C. 1957.”

18.  I am satisfied Master Mak’s order of directions was made in accordance with Order 48 and should be complied with by the Judgment Debtor. Order 48 r.3 authorises the Master to direct the Judgment Debtor , in this case, the Personal Representative of the deceased’s estate, to produce such documents relevant to the examination. 

19.  The appeal is dismissed with costs to be taxed if not agreed.