XCRHX STANDARD CHARTERED BANK v. LING SZE CHIU AND ANOTHER

HCMP 4725/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 4725 OF 2000

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D E C I S I O N

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1. This is an appeal from the order of Master Jones in proceedings brought by the Plaintiff under Order 88 of the Rules of the High Court. In the order made on 16 November 2000 (which has not yet been drawn up), the master adjourned the hearing of the originating summons and gave the following directions:

(1) the Plaintiff is to file a supplemental affidavit annexing a detailed breakdown of its claim for the money judgment within 14 days thereof;

(2) in case of any objection, the Defendants be at liberty to file an affirmation within 28 days after the service of the Plaintiff's supplemental affirmation;

(3) in case of no objection by the Defendants, the Plaintiff may set down the case to obtain money judgment.

2. The Plaintiff has recovered vacant possession of the mortgaged property in August 2000, before the originating summons was issued, and is only seeking judgment of the moneys owing as secured by the legal charge dated 7 October 1997.

3. The 1st and 2nd Defendants have filed an acknowledgement of service stating that they intend to contest the proceedings.

4. At the hearing before the master, the Defendants alleged that they had made certain part payment after they defaulted in the payment of the mortgage instalments. I understand from Mr Steven Cheng, who appeared on behalf of the Plaintiff in the court below and in this appeal, that it was because of this indication by the Defendants that the master ordered a breakdown of the outstanding indebtedness to be provided.

5. In this appeal, the Plaintiff filed evidence to make two points. Firstly, the Plaintiff would like to rely on Clause 15(h) of the legal charge which is a "conclusive evidence" clause. Secondly, the Plaintiff stated that it had been regularly sending to the Defendants statements of their mortgage loan indebtedness prior to the commencement of these proceedings.

6. Clause 15(h) of the legal charge reads as follows:

"Any statement of account of the Mortgagor signed as correct by any duly authorised officer of the Bank shall be conclusive evidence against the Mortgagor of the indebtedness of the Mortgagor to the Bank and HKHA [i.e. Hong Kong Housing Authority]."

7. I should mention here that none of the statements of mortgage loan indebtedness that the Plaintiff claimed to have sent the Defendants regularly before the commencement of these proceedings have been exhibited in any affirmation filed by the Plaintiff.

8. Of the documents placed before the master, the only document that could possibly qualify as a statement of account is the affirmation of the Plaintiff's officer, Raymond Lo Chi Fai, filed on 5 October 2000. Indeed, it is submitted by Mr Steven Cheng that this affirmation should qualify as the statement of account within clause 15(h). I have reservations whether the affirmation could constitute the statement of account under this provision.

9. Even if it does, I do not think the effect of this provision is to oust the jurisdiction of the court to exercise its discretion, if it thinks fit, in the particular circumstances of a case to order the Plaintiff in a mortgage action to give a breakdown of the amounts due.

10. I should mention that in the second affirmation of Mr Steven Cheng filed on 29 November 2000, he has exhibited two schedules giving breakdowns of the two loans made by the Plaintiff to the Defendants, apparently in compliance with the order of Master Jones on 16 November 2000.

11. The question is whether I ought to set aside the order of Master Jones and give judgment to the Plaintiff without affording to the Defendants an opportunity to file evidence in case the Defendants should have any objection to the calculation of the indebtedness. I am not persuaded that I should not deprive the Defendants of that opportunity. I decline to set aside the order made by Master Jones on 16 November 2000 and dismiss the Plaintiff's appeal.