XCHRX KIM ENG SECURITIES (HONG KONG) LTD. v. CORBIN PROFITS LTD. AND ANOTHER

HCA17106/98

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.17106 OF 1998

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REASONS FOR JUDGMENT

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1. This is an appeal against a decision of Master Kwan who on 19th April 1999 entered final judgment in the Plaintiff's favour in the sum of $9,207,861.52 with interest and costs in Order 14 proceedings. After hearing submissions from Mr Rimsky Yuen, Counsel for the Plaintiff and Mr Sun Lup-chung, of the solicitors for the Defendants, I dismissed the appeal and now give reasons.

The facts

2. The Plaintiff is a securities broker. The 1st Defendant is a BVI company set up for the purpose of trading in securities. The 2nd Defendant is the sole shareholder and the sole director of the 1st Defendant. The 1st Defendant's account with the Plaintiff was in debit and unsettled in the amount claimed. As a result of repeated failures by the Defendants to meet its liability, the Plaintiff instituted these proceedings.

3. The Order 14 summons was served on 12th March 1999, the Writ having been issued on 10th October 1998, the Statement of Claim filed on 17th November 1998 and a short Defence filed on 30th November 1998. When the Defence solicitors tried to contact the 2nd Defendant to oppose the Order 14 summons they discovered he had left Hong Kong without informing them. Mr Sun, both before the learned Master and at this appeal hearing, conceded that he had not received instructions directly from the 2nd Defendant either to oppose the Order 14 or to appeal Master Kwan's order. Certainly, no affidavit was or could have been prepared by the Defence to oppose the summons.

4. At the time of the appeal hearing, Mr Sun's firm has still had no contact or information as to the whereabouts of the 2nd Defendant. The only document he has been able to file is a two page Defence which consists of bare denials and non-admissions.

Decision

5. In a situation such as this the law is firm and clear. Save in exceptional and obvious cases an affidavit from the Defence is required before leave to defend is granted. The Defendant has raised no triable issues by affidavit or by any means. There has been complete inactivity by the Defendants.

6. Further the Defence can place no reliance on the Defence as pleaded as a substitute. It puts forward nothing positive by way of Defence, it does not condescend upon any particulars and does not specify any ground of defence or triable issue.

7. A further reason for dismissing this appeal is that the solicitors for the Defendants launched it without specific instructions. They were in a difficult situation and I do not criticize them. The 2nd Defendant was their client and they felt obliged to protect their client and themselves by taking what they considered to be the proper steps.

8. I was invited by Counsel for the Plaintiff to make an order for costs against the solicitor's firm because of this. I have considered such application but decline to make the order for costs as requested.

9. For the above reasons this appeal will be dismissed with costs against the Defendants.