XCHRX STANDARD CHARTERED BANK v. GRAND UNIVERSE HOLDINGS LTD.

HCCL109/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMMERCIAL ACTION NO.109 OF 1999

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J U D G M E N T

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1. The court is presently seized with an Order 14 summons taken out by the plaintiff herein, the Standard Chartered Bank, against the defendant, Grand Universe Holdings Limited. The summons asked that judgment be entered in this action for the plaintiff against the defendant in the sum of US$617,100.00, together with interest at such rate and for such period as the court shall think fit, together with costs.

2. The background of the case is relatively straightforward. This claim by the bank concerns a Bill of Exchange No.HP98/025 dated 23 April 1998 drawn by one Hainan Namkwong Import & Export Corporation at Hainan Province, PRC upon the defendant for the sum of US$617,100.00. On 29 April 1998, the defendant accepted the Bill of Exchange. The plaintiff is the holder and payee of the bill, and despite demand and presentation made on the defendant, the Bill of Exchange remains unpaid. The Bill of Exchange was protested on 31 March 1999. Mr Darton, who appears today on behalf of the bank, asserts that there is due and owing from the defendant to the plaintiff the aforesaid sum, and that there is no defence.

3. The procedural background is a little unfortunate. The Writ was issued against the defendant on 15 June 1999 and was served the same day. An Acknowledgement of Service was filed by the defendant on 28 June 1999, the defendant thereby giving Notice of Intention to defend. On 5 July 1999, a Notice of Intention to Enter Judgment against the defendant in this action was filed by the plaintiff, and again was served on the same day. On 6 July 1999, a document in Chinese language, which appears to be a form of defence, was filed by the defendant and was served on Mr Darton's firm, Messrs Deacons, Graham & James, on 7 July 1999. On 26 July 1999, Messrs Deacons, Graham & James sent a letter to the defendant indicating that a limited company was not entitled to take any step (other than to acknowledge service) in the proceedings without a solicitor acting on its behalf. That letter went on to request that the defendant do within seven days appoint such a solicitor or, alternatively, obtain leave from the court to represent itself. However, no step was taken by the defendant to appoint solicitors to act, nor to obtain leave from the court. The only document which appears on the court file, so far as I can see, is an undated letter sent by the defendant to the court purportedly appointing one Mr Chan Pui, a director of the defendant, to act for and on behalf of the defendant.

4. That, to-date, represents the procedural state of play in this matter. Nothing further was heard from the defendant and today's hearing is Mr Darton's second appearance before this court in order to endeavour to obtain Order 14 judgment. He appeared last week, during which hearing he made a very minor re-amendment to the amount of money claimed under the Statement of Claim (I think, the discrepancy was in terms of US$100 or so), and at that time the court instructed him to re-serve the Re-amended Statement of Claim, and to draw to the attention of those apparently acting on behalf of the defendant the fact of today's hearing. Mr Darton has shown me his letter of 8 March 2000 addressed to the registered office of the defendant, and also to the correspondence business address of the defendant, drawing the defendant's attention to the return date of this summons today, and indicating what he perceived was going to happen. That letter concludes : "We anticipate that the Judge will enter judgment against you if you again fail to attend.". There has been no response to that letter. Indeed, there appears to have been no response of any kind after the undated letter, to which I have earlier referred, purportedly appointing Mr Chan Pui to act on behalf of the defendant.

5. Returning now to the merits. The application has been backed by two affidavits of Mr Darton on behalf of the plaintiff. During the course of today's hearing, Mr Darton also has drawn my attention to the translation of the Chinese document which, he says, purports to be the defence in this case. I have it before me. It is exhibited at 'RDD-2' to the first affidavit of Mr Darton in support of this application. So far as I can see, the defence does little more than put the plaintiff to proof; it is a short document and perhaps it may be construed as a bare denial together with a formal putting of the plaintiff to proof of the claim.

6. This court never likes entering judgment without hearing the other side of the story. But a recitation of the history of events demonstrates that there is little option in this case. The defendant, or more particularly those who would act for it, appear to have gone to ground. Every effort has been made to contact them, but they have not appeared. This would seem to lend credence to the assertion that there really is no defence in this case. In the circumstances, therefore, I have concluded that the defendant herein has a primary liability and an engagement to pay under the Bill of Exchange in question.

7. Accordingly, I enter judgment in this action for the plaintiff against the defendant in the sum of US$617,100.00. Mr Darton asks for interest on that sum. He points out that there is no contractually specified rate of interest, and that the matter is in the discretion of the court. He also points out that there were two dates from which interest could run : firstly, the due date for payment, being 26 October 1998, and the alternative being the date upon which the bill was protested, namely, 31 March 1999. He queries whether it was necessary to protest the bill, but he does, in all fairness, point out that it is a general practice of bankers to do so. Since such protest has been effected, I order that interest is to run on the principal sum at the rate of 8% p.a. from 31 March 1999 to the date of judgment, that is 10 March 2000, and thereafter on such sum at the judgment rate from time to time prevailing until payment.

8. As to costs, these must, of course, follow the event. The plaintiff is to have its costs of this action, which is hereby concluded by this judgment, including, of course, the costs of and occasioned by the plaintiff's Order 14 summons dated 3 February 2000. These costs are to be taxed if not agreed. I make no order as to such costs as were occasioned by the necessity for leave to re-amend the Statement of Claim.

9. I am grateful to Mr Darton for his assistance.