XCHRX WING HANG BANK LTD. v. CRYSTAL JET INTERNATIONAL LTD. AND OTHERS

HCMP5014/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO.5014 OF 1999

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J U D G M E N T

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Originating summons

1. The plaintiff applies by originating summons for various relief against the defendants. The master referred the matter to the judge for determination.

The plaintiff's claim

(1) The claims against the 1st defendant are for possession of a property in Mount Kellett Road, Hong Kong ("the Property") and payment of money due to the plaintiff under a Legal Charge ("the Charge") dated 21 May 1997 made between the 1st defendant as the mortgagor, the 2nd defendant as the borrower and the plaintiff as the lender.

(2) The claim against the 2nd defendant is for payment of money due to the plaintiff under the Charge.

(3) The claim against the 3rd defendant is for payment of money due to the plaintiff under a guarantee dated 27 October 1995 given by the 3rd defendant in favour of the plaintiff for the liability of the 2nd defendant.

(4) The claim against the 4th defendant is for payment of money due to the plaintiff under two guarantees, namely, the guarantees dated 27 October 1995 and 21 December 1998 respectively.

The plaintiff asks for judgment

2. Under Order 28, rule 4 of the High Court Rules, unless the liability of the defendant is established on hearing the originating summons, the court will give directions for the future conduct of the case.

3. The plaintiff asks for judgment to be entered against the defendants on the ground that there is no defence to its claim. It refers to paragraph 28/4/2 of the Supreme Court Practice 1999 ("SCP") which states that if the plaintiff considers that the defendant's evidence discloses no triable issue, it may seek a summary judgment under rule 4(1).

Application for judgment not appropriate

4. Although in an appropriate case, a plaintiff is entitled to judgment in an originating summons proceeding, this is not one of them. For a start the causes of action relied upon by the plaintiff is based on the Charge and two guarantees. Under Order 88 of the High Court Rules, a mortgage action may be commenced either by writ or an originating summons, on the other hand, an action on a guarantee is usually by way of a writ unless the issue is on the construction of the guarantee itself. The present case is not concerned with the construction of the guarantees but factual disputes on the circumstances in which the guarantees were made. Likewise there were factual disputes on the circumstances in which the Charge was made.

Fundamental question

5. What matters here is the fundamental question of how civil litigation should be conducted. It has to be borne in mind the originating summons procedure was invented for the purpose of quickly determining simple points without pleadings : paragraph 7/0/2 SCP. The emphasis is on simple points.

6. The parties in this case have filed a total of 19 affidavits and the documents prepared for the hearing consist of two large volumes with a total of 652 pages. In my view, it tantamounts to an abuse of process to require a judge in an originating summons proceeding to plough through 19 affidavits and voluminous exhibits in order to determine whether any triable issue exists between the parties. The absurdity of the situation is self apparent. The matter should never have been dealt with in this manner. This is particularly unacceptable when the Rules actually provide for directions and how they should be given for the future conduct of the case. Any attempt to persuade a judge to undertake the course suggested by the plaintiff should be strenuously resisted.

Directions

7. In my view, the issues in this case should be identified by pleadings. Accordingly, I will order that the matter is to be treated as if it had been commenced by writ and the following directions are made :

(1) The plaintiff is to file the Statement of Claim within 10 days.

(2) The defendants are to file the Defence within 10 days.

(3) The plaintiff is to file the Reply within 10 days thereafter.

(4) Discovery within 10 days of close of pleadings and inspection within 10 days thereafter.

(5) The affidavits filed by the parties are to stand as witness statements.

(6) The parties are entitled to file one further witness statement within 10 days after inspection of the documents.

8. The costs nisi of the hearing of the originating summons be in the cause of the action.