HCA 1118/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1118 OF 2009

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BETWEEN

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J U D G M E N T

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I. PARTIES

1.  The Plaintiff was/is a securities dealer registered with the Securities Futures Commission. The Defendant in DCCJ2164/2009 (now HCA 2540/2009 upon transfer of the action from the District Court to the Court of First Instance) is Madam Chan Kin Ping (“Madam Chan”). The Defendant in HCA 1118/2009 is Mr Chang Kar Hung (“Mr Chang”), who is the husband of Madam Chan. Madam Chan and Mr Chang (collectively, “Changs”) were investors holding personal securities trading accounts with the Plaintiff.

II. UNDISPUTED FACTS

2.  For the purpose of the summary judgment applicationsin both HCA 1118/2009 and HCA 2540/2009 before me, the following matters are not in dispute:

(a)  In 1999 Mr Chang became a customer of the Plaintiff by opening a margin securities trading account with the Plaintiff (“M0902”).  On 12 January 2009, he also opened a cash account (“P2790”) with the Plaintiff.

(b)  Although Mr Chang maintained M0902 since 24 August 1999, he stopped trading in securities with the Plaintiff after about a year and only resumed trading in securities under M0902 in July 2005.  M0902 and P2790 are collectively called the “Chang Accounts” below.

(c)  Madam Chan became a customer of the Plaintiff in 2006.  Although her Defence and Counterclaim avers that she holds 1 personal securities trading account with the Plaintiff, she in fact holds a cash account (“P1978”) and a margin account (“M2188”) with the Plaintiff. P1978 and M2188 (collectively, “Chan Accounts”) were respectively opened on 27 January and 19 June 2006.

(d)  Mr Chang operated the Chan Accounts upon Madam Chan’s authorisation.

(e)  For the period prior to 2009, the brokerage commission charged by the Plaintiff in respect of the securities trading transactions for the Chan and Chang Accounts (collectively, “Accounts”) was 0.25% (“Basic Brokerage Rate”) subject to rebate in their favour.

III.  PLAINTIFF’S CLAIMS

3.  The Plaintiff claims against Madam Chan for a sum of HK$776,200.75 together with interest in the sum of HK$5,311.12 calculated up to 28 April 2009 making up a total sum of HK$781,511.88 being the debit balance forP1978 after the Plaintiff exercised its right to sell her securities.

4.  The Plaintiff claims against Mr Chang for the sums of HK$552,611.82 (P2790) and HK$791,513.98 (M0902) inclusive of interest in the sums of HK$5,668.55 and HK$5,379.13 respectively calculated up to 28 April 2009 making up a total sum of HK$1,344,125.80 being the debit balance for P2790 and M0902.

5.  The Changs deny the Plaintiff’s claims. They claim that by their 2 oral agreements with Mr Kenneth Cheung (“Mr Cheung”) for and on behalf of the Plaintiff (“Oral Agreements”), it was agreed that (a) the brokerage commission at the Basic Brokerage Rate was subject to rebate at the rate of 0.0125% in respect of the total trade volume respectively under the Chan and Chang Accounts payable monthly (“Monthly Rebate”), and (b) there would be further rebate at the rate of 0.03% of the total trade volume respectively under the Chan and Chang Accounts payable annually (“Annual Rebate”). In the case of Madam Chan, it was further orally agreed that for the purpose of calculating the indebtedness due to the Plaintiff, the total trade volume under the Chan Accounts would be calculated together with the total trade volume under the Chang Accounts. But in breach of the Oral Agreements, the Plaintiff failed to credit the Annual Rebate to the Accounts and/or failed to pay the same or at all. So the Changs argue that they are entitled to set off and counterclaim against the Plaintiff for (i) an account of the total trade volume of the Accounts and (ii) an order for payment by the Plaintiff to them of any sum due upon taking such account with interest.

IV. SUMMARY JUDGMENT APPLICATION

6.  On 5 August 1999, the Plaintiff applied for summary judgment against the Changs. For the application against Mr Chang, the Plaintiff filed 3 affirmations of Madam Lam Oi Chun (executive director of the Plaintiff and wife of Mr Cheung, “Madam Lam”) in support. Mr Chang filed his 2 affirmations and also the affirmations by Mr Chan Shin Chun (“Mr Chan”) and Mr Wu Ka Leung (“Mr Wu”) in opposition. For the application against Madam Chan, the Plaintiff filed 2 affirmations of Madam Lam in support, and Madam Chan filed the affirmations by Mr Chang, Mr Chan and Mr Wu in opposition.

V. LEGAL PRINCIPLES ON SUMMARY JUDGMENT APPLICATIONS

7.  Both Mr Leung, counsel for the Plaintiff, and Mr Wong, counsel for the Changs, have no quarrel over the legal principles on summary judgment. A plaintiff may invoke the procedure under Order 14 of the Rules of the High Court where there is no valid defence to his claim or otherwise a triable issue. The rationale is set out in Hong Kong Civil Procedure 2010 Vol.1, para.14/4/1 at p.190:

“The underlying policy of the summary procedure is to prevent a defendant from delaying the plaintiff from obtaining judgment in case in which the defendant clearly has no defence to the plaintiff's claim: Man Earn Ltd v. Wing Ting Fong [1996] 1 H.K.C. 225.  “Order 14 proceedings for summary judgment when there is no defence to a claim are an important feature of the legal process.  It enables plaintiffs in cases where there is no defence to obtain expeditious summary judgment to avoid unnecessary delay.  When applied for, it is for the defendant to show that there is a triable issue or an arguable defence if he is to be allowed his day in court.  To deny him his day in court, if he shows a triable issue or an arguable defence, is indeed a fearful injustice.  On the other hand, if he has no defence and he obtains leave to defence, equally, there is injustice to the plaintiff” (per Mortimer J.A. in Manciple Ltd. v Chan On Man [1995] 3 H.K.C. 459 at 466).  The machinery of O.14 works on the basis that if the plaintiff's application is properly constituted, he is prima facie entitled to judgment unless the defendant shows cause to the contrary or the application is dismissed.”

8.  In Ng Shou Chun v Hung Chun San [1994] 1 HKC 155, Godfrey J noted it was not appropriate to embark on a mini-trial of the action on affidavit evidence. The court should ask itself the question whether what the defendant says is credible or believable. If so, he must have leave to defend; if not, the plaintiff is entitled to summary judgment.

9.  Hong Kong Civil Procedure 2010 Vol.1, para.14/4/9 at pp.230-232 goes on to say that:

“It is trite law that the mere assertion in an affidavit of a given situation does not, ipso facto, provide leave to defend, since the defendant must satisfy the court that he has a fair or reasonable probability of showing a real or bona fide defence, i.e. that his evidence is reasonably capable of belief ……  “There is a difficulty because the court cannot resolve issues of fact on affidavits.  However, there are some cases in which the defendant’s own case, although apparently it raises issues which, if found in his favour, would provide him with a defence, are so incredible or so contradicted by contemporaneous documents or circumstances that it becomes clear that his defence is a sham”: per Mortimer J.A. in Manciple Ltd. v. Chan On Man [1995] 2 H.K.C. 459 at 466.  Two tests are appropriate, namely “Is what the defendant says credible?” and “Is there a fair or reasonable probability of the defendant having a real or bona fide defence?”  Where an issue of fact is raised, the first question must be answered in the affirmative before considering the second.”

10.  It is further said at Hong Kong Civil Procedure 2010 Vol.1,para.14/4/14 at pp.234-237 that:

“Moreover, where the defendant sets up a bona fide counterclaim arising out of the same subject-matter of the action, and connected with the grounds of defence, the order should not be for judgment on the claim subject to a stay of execution pending the trial of the counterclaim, but should be for unconditional leave to defend, even if the defendant admits the whole or part of the claim ……  Although a counterclaim is (for many purposes) a cross-claim, for the purposes of O.14 it ought to be treated as a defence.

On the other hand, the mere fact that the defendant has a counterclaim does not necessarily entitle him to leave to defend ……  Where therefore there is clearly no defence to the plaintiff’s claim, so that the plaintiff should not be put to the trouble and expense of proving it, but the defendant sets up a plausible counterclaim for an amount not less than the plaintiff’s claim, the order should not be for leave to defend but should be for judgment for the plaintiff on the claim with costs, with a stay of execution until the trial of the counterclaim or pending further order. In a proper case …… the court may order payment into court of part of the claim with stay of execution pending the counterclaim. ……”

VI.  KEY DOCUMENTS

11.  The Plaintiff exhibits to Madam Lam’s 1^st affirmation in HCA1118/2009 the Plaintiff’s forms titled “Request for Client’s Account Info Changes” (“Rebate Forms”) of divers dates (some of which were actually signed and acknowledged by Mr Chang) that specify (notwithstanding the Basic Brokerage Rate) the actual brokerage commission receivable (實收) by the Plaintifffor M0902 as follows:

(a)  effective from 1 July 2005, 0.15% for monthly turnover over HK$10 million;

(b)  effective from 20 October 2005, 0.1% for monthly turnover over HK$10 million;

(c)  effective from 1 June 2007, 0.09% for monthly turnover over HK$100 million;

(d)  effective from 1 July 2007, 0.07% for monthly turnover over HK$100 million;

(e)  effective from 1 February 2008, 0.05% for monthly turnover over HK$50 million,

and for P2790 as follows:

(f)  effective from 12 January 2009, 0.15%;

(g)  effective from 1 April 2009, 0.05% for minimum HK$100.00.

12.  The Plaintiff exhibits to Madam Lam’s 1^st affirmation in HCA2540/2009 theRebate Forms of divers dates that specify (notwithstanding the Basic Brokerage Rate) the actual brokerage commission receivable by the Plaintifffor P1978 as follows:

(a)  effective from 1 April 2007, 0.1% for monthly turnover over HK$20 million;

(b)  effective from 1 June 2007, 0.09% for monthly turnover over $100 million;

(c)  effective from 1 July 2007, 0.07% for monthly turnover over HK$100 million;

(d)  effective from 1 February 2008, 0.05% for monthly turnover over HK$50 million.

13.  The monthly statements for the Accounts are exhibited to Madam Lam’s affirmations. They set out the details of the securities trading transactions (including the description, quantity and price of the securities bought and sold) each month for each Account, and give an overview or summary of the position of each Account as at the date of each statement. The Changs by their pleadings and/or by the affirmations filed on their behalf do not deny the Plaintiff’s assertion that such monthly statements have been sent to them ona monthly basis. According to Mr Wong’s written submissions, the Changsfurther admit that for every security trading transaction the Plaintiff also provided them with a contract note that sets out the rate of the brokerage commission at the Basic Brokerage Rate.

14.  There is endorsed on each monthly statement the following words: “In case of error or omission in this statement, please notify our company within 7 days from above date. Otherwise, this Account shall be considered as correct” (“Correction Notice”). Mr Leung does not seek to rely on the Correction Notice as any conclusive evidence clause, but only as a clear reminder to the Changs to raise prompt objection if they disagree with any aspect of the contents of the monthly statements.

15.  A large bundle of monthly statements has been disclosed under Madam Lam’s affirmations for the purpose of the summary judgment applications. However, both counsel assure the court there is no need to review the detailed particulars in the monthly statements other than those specifically referred to in their oral and written submissions.

16.  Both counselhave also prepared charts summarising information extracted from the monthly statements and the Rebate Forms. On an overall impression, they show significant trade volume with significant amount of rebates actually credited to the Accounts for the period from 2005 to 2009.

17.  The Plaintiff’s charts (“P Chart”) set out inter alia the following information for each month:

(a)  the turnover of securities trading transactions for the Accounts;

(b)  the brokerage commission in respect of such turnover at the Basic Brokerage Rate;

(c)  the rebate on brokerage commission based on the formulae shown in the Rebate Forms and/or in the monthly statements;

(d)  the rebate actually credited to the Accounts;

(e)  the difference between (c) and (d) above with explanation.

18.  Mr Wong’s charts (“D Chart”) set out inter alia the following information for each month:

(a)  “debit” and “credit” amounts taken from the monthly statements;

(b)  “monthly notional bought” amount being the total price for all securities bought for the month;

(c)  “monthly notional sold” amount being the total price for all securities sold for the month calculated according to a formula, ie the “monthly sold” amount (ie “credit” less (i) “rebate” and (ii) “deposit/dividend”, all of which amounts are taken from the monthly statements) ÷ (1 + 0.25% (brokerage commission) + 0.1% (stamp duty) + 0.004% (transaction levy) + 0.005% (trading fee), all of which amounts are taken from the monthly statements);

(d)  “monthly notional total” amount being the sum total of (b) and (c) above, which is equivalent to the turnover in the P Chart in paragraph 17(a) above save for minor differences as a result of inclusion or exclusion of CCASS fees (“CCASS Difference”);

(e)  “monthly notional brokerage” amount being the brokerage commission based on the “monthly notional total” at the Basic Brokerage Rate, which is equivalent to the brokerage commission amount in the P Chart in paragraph 17(b) above save for the CCASS Difference;

(f)  “agreed rebate” amount being the mechanical calculation of the rebate for the “monthly notional brokerage” based on the formulae shown in the Rebate Forms and/or the monthly statements, which is equivalent to the rebate in the P Chart in paragraph 17(c) above save for the CCASS Difference;

(g)  the difference between the “rebate” shown in the monthly statements and the “agreed rebate”.

19.  After having heard each other’s explanation of the make up of the P and D Charts at the hearing before me, Mr Leung and Mr Wong agree to adopt a pragmatic approach by dealing with the issue of quantum for the purpose of the summary judgment applicationsin the following manner:

(a)  In the event the court is prepared to grant summary judgment in favour of the Plaintiff, the quantum of the Plaintiff’s claims is not disputed save and except that there are triable issues in respect of the Plaintiff’s claim for the following sums under M0902 which shall be left for determination at trial:

(i)  the sums of HK$6,732.59and HK$64,269.18, which Mr Chang claim are omitted rebate sums for August and September 2008 respectively but which the Plaintiff says are not payable since Mr Chang has failed to meet the threshold monthly trade volume required for triggering the monthly rebate;

(ii)  the sum of HK$66,898.16, which Mr Chang claims to be a calculation error forthe rebate for May 2007 but which the Plaintiff does not admit.

(b)  If the court is prepared to grant leave to defend (whether conditional or unconditional) in favour of the Changs, the Plaintiff accepts for the purpose of the summary judgment applications that the quantum of Madam Chan’s and/or Mr Chang’s defence of set-off and counterclaim exceeds the amount of the Plaintiff’s respective claims against them, and the Plaintiff does not seekany partial judgment against the Changs.

20.  Counsel’s pragmatic stance has obviated the need for detailed study of the mathematical calculations in the P and D Charts or for tedious comparison between such charts to work out their differences. Hence, in the course of the hearing before me, counsel referred to such charts to illustrate their respective submissions rather than to ascertain the calculations on the issue of quantum. On this note, I turn to parties’ argumentsfor the summary judgment applications.

VII. THE CHANGS

21.  Plainly, Mr Chang cannot be said to be an inexperienced investor and trader in securities. When he opened M0902 with the Plaintiff in 1999, he already had over 3 years of experience in securities trading, and according to the account opening form dated 24 August 1999 he had funds of HK$1 million available for investment. After Madam Chan opened the Chan Accounts with the Plaintiff in 2006, Mr Chang operated both the Chan and Chang Accounts. The volume of securities traded under the Accounts between 2005 and 2009 was significant, and consequently the brokerage commission and the rebate generated were also substantial.

VIII. PLAINTIFF’S CASE ON REBATE OF BROKERAGE COMMISSION

22.  According to the Plaintiff’s pleaded case and Madam Lam’s affirmations, the parties agreed that if Mr Chang or Madam Chan could achieve a trade turnover for the Chan and Chang Accounts exceeding certain volume per month, the Plaintiff would only charge effective brokerage commission at a lower rate as specified in the Rebate Forms described in paragraphs 11-12 above and would refund the excess brokerage commission (ie the monthly rebate) by crediting the same to the Chan or Chang Accounts accordingly (“Usual Rebate”).

23.  According to Madam Lam, the Plaintiff would offer different rate of net brokerage commission (ie brokerage commission net of rebate) for different customers depending on their trade volume and other factors. This is evidenced by the 2 credit vouchers referred to in paragraph 58 below (“Vouchers”), which show different rebate rates for different customers at any given time, eg different rebate rates were given for Madam Chan/Mr Chang (0.2%) and for Mr Wu (0.18%) in May 2008. Further, the Rebate Forms in paragraph 11-12 above show that for the same customer (eg Madam Chan or Mr Chang) the rebate rate for the Usual Rebate changed over time.

24.  Madam Lam adds that the Plaintiff would at its absolute discretion grant certain clients including the Changs a special rebate in a lump sum if the Plaintiff considered them valuable clients who had generated significant brokerage income for the Plaintiff and the Plaintiff would like to retain them by offering further incentive such as special rebate (“Special Rebate”). There was no formula or pattern for granting any Special Rebate.

25.  In fact, there were only 2 occasions when the Plaintiff granted Special Rebate, ie HK$900,000.00 on 16 October 2006 (deposited by 2 sums of HK$500,000.00 and HK$400,000.00 respectively) and HK$600,000.00 on 2 March 2007 identified in the monthly statements for M0902 as “special rebate”. Madam Lam explains that a further reason why the Plaintiff did not grant further Special Rebate was because as time progressed the Changs were entitled to higher rates of rebate for brokerage commission charged (see the Rebate Forms described in paragraphs 11-12 above) with the result that the Plaintiff earned less brokerage commission income.

IX. CHANGS’ CASE ON REBATE OF BROKERAGE COMMISSION

26.  Mr Chang and Mr Chan in their affirmations claim that at about the beginning of 2005, at the request and solicitation of Mr Chan, Mr Cheung for and on behalf of the Plaintiff negotiated new terms of rebate of brokerage commission with Mr Chang. In/about 2005, Mr Cheung for and on behalf of the Plaintiff and Mr Chang orally agreed to the Annual and Monthly Rebates in paragraph 5 above. Upon such agreed terms, Mr Chang started to resume trading in securities with the Plaintiff under M0902.

27.  Mr Chang further claims that when Madam Chan opened her securities trading accounts with the Plaintiff (presumably in 2006), Mr Cheung for and on behalf of the Plaintiff and Madam Chan orally agreed to the Annual and Monthly Rebates and to the consolidation of the total trade volume in the Accounts for the purpose of calculating Madam Chan’s indebtedness due to the Plaintiff (see paragraph 5 above). Upon such agreed terms, Madam Chan started trading in securities with the Plaintiff.

28.  According to Mr Chan’s affirmations, he became a customer of the Plaintiff for trading in securities in/about September 2004. Mr Chan claims that when he opened his margin account M1768, Mr Cheung for and on behalf of the Plaintiff orally agreed with him that the brokerage commission would be at the Basic Brokerage Rate but there would be the Monthly and Annual Rebates. At about the beginning of 2005, Mr Cheung for and on behalf of the Plaintiff orally agreed with Mr Chan that should Mr Chan recruit and/or introduce other customers from other securities company(ies) to the Plaintiff, the Plaintiff would pay him 20% of the total brokerage commission received and/or earned by the Plaintiff from customers so recruited and/or introduced by him. Mr Chan further claims that he knew Mr Chang and Mr Wu who were former customers of the Plaintiff and traders in securities and stocks, and they occasionally met to exchange views on securities trading. He also knew thatsince about August 2000 Mr Chang and/or Mr Wu had stopped trading in securities with the Plaintiff, so he told them the Plaintiff would offer them better terms for rebate of brokerage commission should they once again become customers of the Plaintiff.

29.  Mr Chan says that he was present when Mr Chang and/or Mr Wu negotiated with Mr Cheung for and on behalf of the Plaintiff on the terms of the rebate payable by the Plaintiff to them if they again become customers of the Plaintiff. He further claims that after Mr Cheung orally agreed to the Monthly and Annual Rebates, Mr Chang and Mr Wu agreed to become customers of the Plaintiff once again, and they resumed trading in securities under their old securities trading accounts with the Plaintiff.

X. DISCUSSION

(a)  Oral Agreements

30.  The crux of the Changs’ opposition to thesummary judgment applications rests on (a) whether the alleged Oral Agreements and (b) the alleged failure by the Plaintiff to pay the Annual Rebate to the Changs raise a triable issue or arguable defence. Mr Wong concedes that since the allegations in (b) above as well as the set-off and counterclaim raised by the Changs that rest on the allegations in (b) above are dependent on the viability of the allegations in (a) above, the defence contentions in both (a) and (b) above essentially turn on whether the alleged Oral Agreements and the alleged Monthly and Annual Rebates are credible or believable.

31.  I note at the outset that there are material factual differences between the Plaintiff’s case of the Usual and Special Rebates and the Changs’ case of the Monthly and Annual Rebates under the Oral Agreements:

(a)  the rate for the Monthly Rebate was 0.125%, but the rate of the Usual Rebate changed over time corresponding to the rates specified in the Rebate Forms;

(b)  the Monthly Rebate was calculated over the total trade volume for each of the Accounts, but the Usual Rebate was applicable only if the trade volume for a particular Account exceeded a certain threshold;

(c)  the Plaintiff denies the existence of any Annual Rebate as alleged by the Changs and Mr Chan.

32.  I find the Changs’allegations as to the Oral Agreements and the Monthly and Annual Rebates thereunder incredible and unbelievable.

33.  First, Mr Chang avers in his pleadings and Mr Chang and Mr Chan depose in their affirmations that upon the agreed terms under the Oral Agreement Mr Chang started to trade in securities with the Plaintiff under M0902. The monthly statements and the P and D Charts show that such trading in securities for M0902 commenced in July 2005. In effect, Mr Chang and Mr Chan say that when Mr Chang resumed trading in securities under M0902 in July 2005 he did so upon the Monthly and Annual Rebates agreed pursuant to the Oral Agreement. But Mr Chang actually signed a Rebate Form dated 1 July 2005 confirming that with effect from that date “客戶如每月Turnover如超過1000萬，公司實收佣金0.15%”, ie the actual rebate receivable by the Plaintiff would be at the rate of 0.1% (being the Basic Brokerage Rate of 0.25% less the actual net brokerage commission rate of 0.15%) and not at the rate of 0.125% for the Monthly Rebate under the Oral Agreement. The actual net brokerage commission rate of 0.15% and the monthly rebate rate of 0.1% are corroborated by the July 2005 monthly statement for M0902 and summarised in the P Chart. In my view, this clearly shows that the Monthly Rebate under the Oral Agreement is incredible, and since the Annual Rebate is part and parcel of the same Oral Agreement as the Monthly Rebate it is also unbelievable. This also undermines the Oral Agreement between the Plaintiff and Madam Chan, and the assertions as to the Monthly and Annual Rebates in Mr Chan’s and Mr Wu’s affirmations.

34.  Secondly, the allegation in the Changs’ pleadings and affirmations in opposition that the Monthly Rebate was at the rate of 0.125% does not sit well at all with the Rebate Forms referred to in paragraphs11-12 above. Indeed, such Rebate Forms (some of which are actually signed by Mr Chang himself) show that the net brokerage commission rate (and hence the monthly rebate rate)for the Accounts changed a number of times over the relevant period between 2005 and 2009.

35.  At the hearing before me, Mr Wong argues that the Changs in fact admit the Rebate Forms and the net brokerage commission rates (and hence the corresponding monthly rebate rates) specified therein. Indeed, the P Chart has been prepared on such premise.

36.  Upon query by the court as to how such submissionmarries with the Changs’ pleadings as verified by Mr Chang’s affirmations as to the Monthly Rebate calculated ona fixed rate based on total trade turnover, Mr Wong submits that the parties agreed to the arrangements in the Rebate Forms subsequent to the Oral Agreements.

37.  Even if it is permissible for Mr Wong to put forward such submission, it does not help the Changs. As explained in paragraph 33 above, when Mr Chang resumed securities trading under M0902 in July 2005 and thereafter, the relevant Rebate Forms (see paragraph 11(a)-(e) above) show that he did so on the basis of the monthly rebate rate variously at 0.1% (starting from 1 July 2005), 0.15%, 0.16%, 0.18% and 0.2%, but never at 0.125% as alleged by the Changs. It will also be remembered that whilst the Monthly Rebate is based on total trade turnover, the Rebate Forms (again starting from 1 July 2005) specify that the net brokerage commission (and hence the monthly rebate) at the rate specified therein will be triggered only if the threshold trade volume is satisfied. In the circumstances, the allegation that the Plaintiff and Mr Chang initially agreed to the Monthly Rebate at 0.125% calculated on the total trade turnover under the Oral Agreement and then subsequently varied as per the Rebate Forms is incredible and unbelievable.

38.  But more fundamentally, on careful study of the Changs’ pleadings and their affirmations in opposition, such contention is in fact not permissible. I am unable to find any factual plea or affirmation evidence from the Changs in support of the suggestion that there were subsequent agreements between the parties as per the Rebate Forms. Such pleadings and affirmation evidence only depose to the Oral Agreements inter alia for the Monthly Rebate at the rate of 0.125% on total trade turnover without reference to any subsequent agreed variations of the monthly rebate rate based on the threshold trade volume. As regards the Rebate Forms, Mr Chang’s affirmations merely note the Plaintiff’s case premised on the rates for net brokerage commission based on threshold trade volume in the Rebate Forms, but are carefully silent on any acknowledgment of such matters as part of the Changs’case. Mr Wong is eventually constrained to concede there are no pleadings or evidential foundation for his suggestion that the Changs have agreed to the changes to the monthly rebate rate and to the method of calculation based on threshold trade volume shown in the Rebate Forms.

39.  In my view, since Mr Chang operated the Accounts from 2005 to 2009, it is most telling that not only has he not referred to such changes to the calculation for the Monthly Rebate, the Changs on the contrary have expressly confirmed by way of pleadings and affirmations in opposition that the Plaintiff has duly effected the Monthly Rebate at the rate of 0.125% or what “appeared to be a rate of 0.125%” ever since the Oral Agreements.

40.  Given the objective contemporaneous documents in the shape of the Rebate Forms and the monthly statements, which are consistent with the Plaintiff’s case on the Usual Rebate and inconsistent with the Changs’ case on the Monthly Rebate, the Oral Agreements are incredible and unbelievable, and the Changs’ suggestion of subsequent changes to the Monthly Rebate calculations expressed by way of Mr Wong’s submissions isa belated but unconvincing attempt to resile from an obviously untenable position.

41.  Mr Wong complains that the Changs are put in difficulty because I have redacted paragraph 8 of the 2^nd affirmation of Mr Chang in HCA1118/2009.

42.  For proper understanding this argument, I need to set out briefly the relevant history. On 24 August 2009, Master Lung directed that after the Plaintiff filed the affirmation in reply to Mr Chang’s affirmation in opposition to the Plaintiff’s summary judgment application, no further affirmations were to be filed by any party without leave of the court. However, on 2 November 2009, Mr Chang took out a summons returnable on 9 November 2009 (ie a day before the substantive hearing for argument in respect of the summary judgment application) for leave to file and serve his 2^nd affirmation in opposition. The summons was adjourned to be heard on the following day at the substantive hearing for the summary judgment application, and after hearing arguments I granted leave for Mr Chang to rely on his 2^nd affirmation save that paragraph 8 thereof be redacted.

43.  The redacted paragraph 8 of Mr Chang’s 2^nd affirmation reads as follows:

“Furthermore, the Plaintiff has verbally agreed to give me, for my accounts a monthly rebate of brokerage commission of 0.1% for the months, January, February and March 2009 (with a brokerage commission of 0.15% actually charged) and a monthly rebate of brokerage commission of 0.02% from April 2009 onwards (with a brokerage commission of 0.05% actually charges).  So far the Plaintiff has not credited me with the additional rebate brokerage commission for these months.”

Mr Wong on one hand suggests that had it not been redacted this passage would have shown there has been agreed variation to the rebate ratesubsequent to the Oral Agreements.  On the other hand, he objects to the Plaintiff slipping into the P Chart calculations for the monthly rebate forP2709 for the period from January to April 2009 based on the formula in the redacted passage, which he regards as an abuse of process.

44.  I am not persuaded that such arguments are of assistance. Paragraph 8 of Mr Chang’s 2^nd affirmation in HCA 1118/2009 was redacted because it raised a new dimension to Mr Chang’s case at a late stage but failed to give particulars as to the circumstances of the alleged verbal agreement or any details as to correlation between the Monthly Rebate based on fixed rate and total trade turnover and the “additional” rebate described in the redacted passage. Had Mr Chang considered the redacted passage material to his opposition to the summary judgment application, he could have appealed against my order or applied for special leave to introduce further affirmation evidence on the subject, but he has not followed either course of action.

45.  Further, notwithstanding Mr Wong’s complaint against the inclusion of the calculations for the Usual Rebate for 2009in respect of P2709 in the P Chart, similar calculations are also included in the D Chart. Indeed, the calculations in the P and D Charts are takennot from the redacted passage but from the monthly statements exhibited to Madam Lam’s affirmations and possibly also from the disclosed Rebate Forms in paragraph 11(f)-(g) above. I do not see any abuse of process in putting forward the P and D Charts that essentially summarise information from the disclosed monthly statements. In any event, both counsel eventually agree to proceed on the basis that the P and D Charts summarise calculations of the monthly rebate for 2009 in respect of P2709 drawn from the monthly statements.

46.  But even if I am wrong and should not have redacted paragraph 8 of the 2^nd affirmation of Mr Chang in HCA1118/2009, such affirmation evidence is still not helpful to the Changs. By referring to new rebate ratesfor 2009 in respect of P2709 without (as Mr Wong concedes) mention of (a) any other changes to the monthly rebate rate for the period from 2005 to 2008 or (b) any change of the calculation of the Monthly Rebate based on total trade turnover to a threshold trade volume to be satisfied before the monthly rebate would be payable, the redacted passage only serves undermine the credibility of the Changs’ contention of a Monthly Rebate payable over total trade turnover at the rate of 0.125% under the Oral Agreement.

47.  Thirdly, although the Changs claim that the Plaintiff has “duly effected the [Monthly Rebate] at the rate of 0.125% since the [Oral Agreement]”, they have not identified any sum in the monthly statements that show the Monthly Rebate as credited to any of the Accounts are calculated on total trade turnover at the rate of 0.125%. The P Chart shows that the monthly rebate sums in the monthly statements are calculated at different rates corresponding to the Rebate Forms when the threshold trade volume was triggered.

48.  Fourthly, by reason of the above analysis, I am not persuaded that the allegations in Mr Chan’s affirmations, which are similar to those in Mr Chang’s affirmations, lend any further credibility or believability to the Changs’ case on the Monthly Rebate, the Annual Rebate and the Oral Agreements. For the avoidance of doubt, I do not draw any adverse inference from the fact that the Plaintiff commenced recovery action in HCA1112/2009 against Mr Chan similar to the Plaintiff’s claims against the Changs. I note that Mr Chan has filed a Defence and Counterclaim to resist such claim, but the merits of that litigation have no bearing on the present summary judgment applications against the Changs.

49.  In light of the above, I am unable to accept Mr Wong’s submissions that the Plaintiff’s denial of the Oral Agreements is nothing but a bare denial. Whilst it is true that Mr Cheung did not depose any affirmation himself, there is affirmation evidence from Madam Lam that Mr Cheung has confirmed to her his denial of the Oral Agreements and, more importantly, such denial is supported by the above analysis based on objective documents and inherent implausibility of the Changs’ contentions.

50.  Mr Wong submits that the Changs’ case on the Oral Agreements is also supported by Mr Wu’s affirmations. According to Mr Wu, he became a customer of the Plaintiff in/about September 1999 and traded in securities under his securities trading account P1812. After trading for about a year, he changed to another securities company. Mr Wu says that in about mid-2005, at the request and solicitation of Mr Chan and after meeting with Mr Cheung for and on behalf of the Plaintiff, he again became a customer of the Plaintiff. Mr Wu claims that Mr Cheung for and on behalf of the Plaintiff orally agreed with him that the brokerage commission would be at the Basic Brokerage Rate with the Monthly and Annual Rebates, and on such basis he started to trade in securities with the Plaintiff again. Mr Wu claims he stopped doing so in about August 2008 because the Plaintiff never paid him the Annual Rebate despite repeated requests. Since his trade volume with the Plaintiff during 2005 to 2008 was HK$300 billion, he is considering taking action against the Plaintiff for recovery of the Annual Rebate.

51.  Again, I do not find Mr Wu’s evidence helpful to the Changs. First of all, Mr Wu’s affirmations refer to the Monthly Rebate at 0.125% and the Annual Rebate at 0.03% based on total trade turnover in respect of his whole trading period with the Plaintiff from 2005 to 2008 without any mention of the Monthly Rebate being calculated at other rate(s) for the period between 2005 and 2008. But the Vouchers show that for May 2008 the rebate rate for P1812 was 0.18% (ie the Basic Brokerage Rate of 0.25% x 0.72) and not the rate of 0.125% for the Monthly Rebate deposed in Mr Wu’s affirmations. Further, the Vouchers also show that the monthly rebate rates for different customers are different (see paragraph 23 above), and I am not persuaded that the monthly rebate rate for Mr Wu is necessarily relevant to that for the Changs. The Vouchers have been disclosed in Madam Lam’s 2^nd affirmations, but Mr Chang has not addressed any of the above matters in his 2^nd affirmation in opposition in HCA 1118/2009. In any event, Mr Wu’s assertions in his affirmations are unsupported by any documentary evidence that show payment of the Monthly Rebate at the rate of 0.125% to him by the Plaintiff and are in fact contradicted by the Vouchers. This undermines the alleged Monthly Rebate under the alleged verbal agreement between the Plaintiff and Mr Wu, and in turn undermines the Annual Rebate which is part and parcel of the same alleged verbal agreement.

52.  In my view, the collapse of the Changs’ assertion of the Monthly Rebate as a credible or believable contention inevitably has an adverse domino effect on the alleged Annual Rebate which together with the Monthly Rebate form part of the same Oral Agreements. I am not persuaded that the Oral Agreements raise any triable issue or arguable defence, and the defence of set-off and counterclaim by the Changs premised on the Plaintiff’s alleged duty to account for and to pay the Annual Rebate under the Oral Agreements necessarily fall away as well.

53.  Mr Wong argues that where an oral contract is sued upon and its terms are in dispute, summary judgment must be refused because the true construction of the contract must await exploration and final determination at trial, and for such purpose discovery of documents and witness evidence are required. However, this is not a case in which the Plaintiff sues on an oral contract, but rather it is the Changs who try to raise the Oral Agreements as their defence. Hence, it is for the Changs to establish a triable issue or arguable defence based on the Oral Agreements. It is trite that mere assertions in an affidavit of a given situation does not ipso facto mean leave to defend should be granted since the defendant must satisfy the court he has a fair and reasonable probability of showing a real and bona fide defence, ie that his evidence is reasonably capable of belief. In my view, the Changs’ case is so incredible that the defence of the Monthly and Annual Rebates under the Oral Agreements cannot be supported. In this respect, Hong Kong Civil Procedure 2010 Vol.1, para.14/4/3 at p.228 states that ““[a] desire to investigate alleged obscurities and a hope that something will turn up on the investigation cannot, separately or together, amount to a sufficient reason for refusing to enter judgment for the plaintiff. You do not get leave to defend by putting forward a case that is all surmise and Micawberism” (per Megarry V.-C. in Lady Anne Tennant v Associated Newspapers Group Ltd [1979] F.S.R. 298)”.

(b)  Special Rebate

54.  Mr Wong criticises the Plaintiff for not pleading the criteria for the Special Rebate, but it is clear from Madam Lam’s 1^st affirmations and made abundantly obvious by her 2^nd affirmations that the Special Rebate is wholly discretionary. In my view, such criticism, which in any event does not aid the Changs’ defence premised on the Monthly and Annual Rebates under the Oral Agreements, cannot stand.

55.  Mr Wong in his written submissions argue that “[the Special Rebate] was paid on top of the monthly/annual rebate of brokerage commission. It should be removed on calculating the amounts due to [Mr Chang] on [the Monthly and Annual Rebates] as it had already been included as the monthly rebate in the monthly statements”.

56.  Although the Special Rebate is specifically referred to in the Plaintiff’s pleadings and in Madam Lam’s 1^st affirmations and is specifically identified as such and credited to M0902 in the monthly statements, none of the affirmations in opposition filed on behalf of the Changs refer to the Special Rebate let alone depose as to whether the Special Rebate was payable over and above the Monthly and Annual Rebates or not. However, Mr Wong’s submissions go to show that the Changs do not challenge the Special Rebate and this lends weight to the Plaintiff’s case.

57.  Given the agreement between counsel in paragraph 19 above, I need not be concerned with the interaction of the quantum calculation vis-à-vis the Special Rebate and the Monthly/Annual Rebates. But in any event, to allay Mr Wong’s concern, Mr Leung assures the court there is no suggestion by the Plaintiff that the Special Rebate should be or has been taken into account in calculating the Usual Rebate.

(c)  Complaints about non-payment of rebate?

58.  Mr Chang in one of his affirmations questions why the rebates for May and July 2008 have not been credited to P1978 in line with the Rebate Form dated 1 February 2008 when Madam Chan’s trade volume exceeded HK$50 million. Madam Lam explains that this was because Mr Chang instructed the Plaintiff to credit the rebate to M0902. The 2 Vouchers CV0805017 and CV080714 and the monthly statements for May and July 2008 show that the Plaintiff credited rebate in the sums of HK$287,313.85 (HK$149,028.19 + HK$138,285.66) and HK$207,357.19 (HK$101,840.25 + HK$105,516.94) for M0902 and P1978 respectively into M0902. There is no merit to Mr Chang’s complaint, but the above clarification goes to support the Plaintiff’s contention that Mr Chang had control over the operation of the Accounts and that he actively monitored the rebate for the Accounts.

59.  The Plaintiff claims that the Changs did not raise any complaint about non-payment of the Annual Rebate or any miscalculation of rebate credited to or interest debited from the Accounts during the period of active operation of the Accounts and that they only did so after the present recovery actions were commenced. Mr Leung submits that the Monthly and Annual Rebates, the Oral Agreements and the alleged belated complaints are incredible:

(a)  all primary information necessary for working out the Usual Rebate was given in the particulars of the securities trading transactions and monthly trade turnover in the monthly statements and in the prevailing monthly rebate rate specified in the Rebate Forms;

(b)  the actual monthly rebate credited to the Accounts are shown in the monthly statements;

(c)  hence, there is no difficulty for the Changs to work out the monthly rebate sums;

(d)  the clear absence of any Annual Rebate which according to Mr Chang should have been payable at year end in 2005, 2006, 2007 and 2008 is obvious from the monthly statements for December (2005-2008) and January (2006-2009);

(e)  there was clear monthly reminder to the Changs by the Correction Notice in each monthly statement to raise objection against any omission or error within 7 days;

(f)  the significant monthly trade volume and corresponding amount of monthly rebate for the Accounts as well as the Correction Notice in each monthly statement render it unlikely that Mr Chang would not have checked the accuracy of the rebate in the monthly statements;

(g)  had the Plaintiff failed to pay the Annual Rebate to the Changs and the same was/is still due and owing, they would not have required any cash advance from the Plaintiff and could have simply asked for a set-off against the outstanding Annual Rebate and for credit of such sum to the relevant Account to be identified in the relevant monthly statement as partial payment of the Annual Rebate (see paragraph 66 below).

60.  Mr Wong submits that since the monthly statements only show the monthly rebate credited to each of the Accounts in a lump sum without any breakdown of how such lump sum is calculated or any information on the total monthly brokerage commission charged or any detail of inter-Account transfer of the monthly rebate, it is not possible for Mr Chang to calculate and verify the monthly rebate.

61.  The short answer to such contention is that there is simply no contractual duty by the Plaintiff to provide the particulars referred to in the above paragraph. The Changs refer to an implied duty on the part of the Plaintiff to do so, but they have not referred to any foundation for such implied duty either on necessity, business efficacy or any other reason. Had Mr Chang wanted such breakdown, it would have been incumbent on him to make such request to the Plaintiff. There is simply no evidence before me that he has requested for such detailed breakdown and the Plaintiff has declined such request.

62.  Further, Mr Chang admits that it was upon his instructions that some monthly rebate for the Chan Accounts was credited to M0902, which was why the actual monthly rebate shown in the monthly statements for M0902 exceeds his entitlement for monthly rebate and the actual monthly rebate for the Chan Accounts shown in the monthly statements for such accounts was less than her entitlement. It lies ill in the mouth of the Changs to complain about confusion and lack of information when the inter-Account transfers were made pursuant to their own express instructions.

63.  Mr Chang only mentioned about complaints to the Plaintiff in paragraph 11 of his 2^nd affirmation in opposition in HCA 1118/2009 as follows: “I persistently did but the Plaintiff refused to account for the amounts of rebate of brokerage commission. They were always different from what I thought they should be and sometimes, the Plaintiff simply did not credit the amounts as well”.

64.  Such bare assertion is unsupported by any other contemporaneous evidence and is discredited by the aforesaid analysis in relation to the Monthly and Annual Rebates and the Oral Agreements. Mr Chang has also failed to condescend upon the particulars of his allegedly “persistent” complaints to the Plaintiff. Further, such allegation does not sit well with the discussion on cash advances (see paragraph 66 below). In my view, even if I were to put aside the calculation of the monthly rebate, the absence of the Annual Rebate is glaringly obvious from the monthly statements. According to the Changs, the outstanding Annual Rebate is a substantial sum. I find it incredible that (and no explanation is forthcoming from the defence as to why) the Changs would be so complacent in continuing with substantial securities trading under the Accounts over an extended period when on their case the Plaintiff has clearly failed to pay the Annual Rebate for a number of years despite “persistent” complaints.

(d)  Cash advances

65.  According to the monthly statements, there were several occasions when the actual monthly rebate credited to the Accounts are different from the monthly rebate calculated on the formula for the Usual Rebate. Madam Lam explains that this was because at Mr Chang’s request and with the Changs’ consent the Plaintiff made cash advances in terms of “thousands or tens of thousands” of dollars up to, say, HK$90,000.00 and HK$130,000.00 for the lunar new year period in February 2007 and January 2008 respectively, thus leaving only the net monthly rebate to be credited to the relevant Accounts at month end. Madam Lam says that Mr Chang required cash advances because the Changs’ assets were tied up with their investments in securities.

66.  As explained above, the Changs agree there were occasions that the Plaintiff made cash advances, but they put the Plaintiff to strict proof of the exact amount of such advances. I pause to note that given the agreement between counsel on the issue of quantum for the purpose of the summary judgment applications in paragraph 19 above, strict proof of the quantum of cash advances is unnecessary for the present purpose. But it is telling that notwithstanding the allegedly substantial amount of the Annual Rebate for the period from 2005 to 2008 due to the Changs, they still required cash advances from the Plaintiff. If the Changs’ case as to the Annual Rebate and the Oral Agreements were correct, any need for cash advances could have been obviated by set-off against the alleged outstanding Annual Rebate to be recorded in the monthly statements as part payment of the Annual Rebate. But they were not recorded as such. This undermines the Changs’ allegations as to the Annual Rebate and the Oral Agreements as well as their alleged “persistent” follow up with the Plaintiff in respect of the Annual Rebate.

67.  To illustrate the point more forcefully, Madam Lam refers to a personal loan of HK$500,000.00 from Mr Cheung to enable Mr Chang to keep the Chang Accounts in sufficient funds. Such sum was paid by Mr Cheung’s personal cheque and reflected in the May 2008 monthly statement for M0902 as “Deposit” and not as “Rebate” or “Special Rebate”. On 30 April 2009, Mr Cheung wrote to Mr Chang to demand repayment of such loan. According to Madam Lam, Mr Cheung informed her there was no response from Mr Chang and he was planning to take recovery action against Mr Chang.

68.  Mr Chang claims that the sum of HK$500,000.00 was not a loan but “part payment of the annual/monthly rebate of brokerage commission which [Mr Cheung] had agreed” as a result of his persistent follow up with the Plaintiff on such matters.

69.  First, I am unable to understand why the sum of HK$500,000.00 is part payment of the “annual/monthly rebate of brokerage commission which [Mr Cheung] had agreed” (my emphasis) when the Changs accept that the Plaintiff has duly effected the Monthly Rebate at the rate or what appears to be the rate of 0.125%. Secondly, I fail to appreciate why Mr Cheung would have issued a personal cheque to Mr Chang if such payment were meant to be part payment of rebate due from the Plaintiff (and not from Mr Cheung) to Mr Chang. Mr Cheung is a manager of the Plaintiff and the husband of Madam Lam (executive director of the Plaintiff), but as Mr Wong concedes, there is no affirmation evidence to support his submission that Madam Lam is the owner of the Plaintiff which is a small entrepreneurial business. Even on the basis of Mr Wong’s submission, there is still no credible reason for Mr Wong to make a personal payment to satisfy the liability owed by the Plaintiff limited company to Mr Chang. Thirdly, the sum of HK$500,000.00 was deposited in M0902 and identified in the relevant monthly statement as “Deposit”, ie a deposit from the customer (ie Mr Chang) to the Plaintiff, and not as “Rebate”, ie a payment received by the customer (ie Mr Chang) from the Plaintiff. Such contemporaneous document contradicts the Changs’ case but is consistent with the Plaintiff’s case that Mr Chang required the loan to keep the Chang Accounts in sufficient funds, hence such loan was paid to Mr Chang’s order by depositing the same in M0902 for such purpose. I note there is no objection from Mr Chang as to the label of “Deposit” for this sum in the relevant monthly statement. Fifthly, I agree with Mr Leung that such loan would have been unnecessary had Mr Chang’s claim that the Plaintiff still owed him rebate for brokerage commission been correct. This undermines the Changs’ allegations as to the Oral Agreements and the alleged outstanding Annual Rebate. Sixthly, Mr Wong asked me to infer from the substantial volume of securities purchased in February and March 2008 (ie over HK$26 million each month), the sharp drop in April 2008 (ie just over HK$760,000.00) and the sharp rise in May 2008 (ie over HK$37 million) that Mr Chang reduced his trade volume to put pressure on the Plaintiff to pay the outstanding rebate and upon receiving the sum of HK$500,000.00 in May 2008 as part payment he resumed his substantial trading. I am unable to draw such inference. M0902 is a margin account. Given the substantial purchases of securities in February and March 2008, the sharp drop in trade volume for April 2008 is also consistent with the Plaintiff’s case that Mr Chang had insufficient funds in the Chang Accounts. It is for the Changs to condescend upon particulars of their defence arguments, and Mr Chang did not depose to the particulars of the above matters in his affirmations.

70.  Mr Wong argues that on the totality of the following considerations the sum of HK$500,000.00 cannot be a loan:

(a)  it does not say what the interest rate is;

(b)  it does not have a repayment schedule;

(c)  there is no evidence that Mr Cheung has requested for repayment before the Plaintiff commenced the present action (ie the demand letter was dated 30 April 2009);

(d)  the cheque was dated 30 May 2008 and credited to M0902 rather than into Mr Chang’s personal bank account;

(e)  the amount shown on the cheque is imprinted which suggests that it is business and not personal in nature;

(f)  the Chinese word “借” written without Mr Chang’s acknowledgement could be written at any time and is not evidence of a loan.

71.  Even accepting (f) above for present purpose, I am unable to see my way to agreeing that the above factors lend any credibility to the allegation that the cheque is payment of “annual/monthly rebate”. I see nothing sinister in respect of (a)-(c) and (e) since they are neutral factors. A loan does not necessarily have to bear interest and it can be repayable on demand. It does not necessarily follow that a cheque with an imprinted amount must be of a business nature. I bear in mind that Mr Chang has been a valued customer with high trade volume that has generated substantial brokerage commission income for the Plaintiff that even attracted payment of the Special Rebate. As Madam Lam explained, there is incentive to keep such valued customers. It is unsurprising for Mr Cheung (as the manager of the Plaintiff and the husband of the executive director of the Plaintiff) to preserve Mr Chang as a viable customer by granting a loan to keep the Chang Accounts in sufficient funds, which also explains why the cheque is deposited into M0902 to the order of Mr Chang and not into his personal account.

(e)  Distortion of interest?

72.  Mr Wong submits that since the Plaintiff charged interest to the Accounts on a daily basis but the Monthly Rebate was to be paid at month end, the amount due and interest charged to the Accounts have been distorted because the Annual Rebate should have been but was not credited to the Accounts. Mr Wong therefore argues that the amount of interest charged should be less than shown in the monthly statements, and the Plaintiff is required to account for the excess interest charged.

73.  The short answer to the above submission is that the Changs have failed to cross the hurdle of establishing that the Annual Rebate and/or the Oral Agreements are credible or believable. That being so, the above argument falls away.

XI. CONCLUSION

74.  In conclusion, I grant summary judgment in favour of the Plaintiff as follows:

(a)  against Madam Chan in the sum of HK$781,511.88 with interest on the sum of HK$776,200.75 at 8% pa from the date of the issue of the Writ of Summons to the date of judgment herein and thereafter at judgment rate until payment;

(b)  against Mr Chang in the sum of HK$1,206,225.87 (being HK$1,344,125.80 – HK$6,732.59 – HK$64,269.18 – HK$66,898.16) with interest on the sum of HK$1,195,178.19 (being HK$1,206,225.87 – HK$5,668.55 – HK$5,379.13) at 8% pa from the date of the issue of the Writ of Summons to the date of judgment herein and thereafter at judgment rate until payment.

75.  I further order that there be unconditional leave to defend in favour of Mr Chang in respect of the following sums: (a) the sums of HK$6,732.59and HK$64,269.18, which Mr Chang claims are omitted rebate for August and September 2008 respectively under M0902 but which the Plaintiff says are not payable; and (b) the sum of HK$66,898.16, which Mr Chang claims to be a calculation error forthe rebate for May 2007 under M0902 but which the Plaintiff does not admit.

76.  I also grant costs order nisi that:

(a)  Madam Chan do pay the Plaintiff costs of the summary judgment application at District Court scale prior to the transfer of DCCJ 2164/2009 from the District Court to the Court of First Instance and thereafter for HCA 2540/2009 at High Court scale with certificate for counsel to be summarily assessed;

(b)  Mr Chang do pay the Plaintiff 90% of the costs of the summary judgment application in HCA 1118/2009 at High Court scale with certificate for counsel to be summarily assessed;

(c)  the remaining 10% of the costs of the Plaintiff’s summary judgment application against Mr Chang in HCA 1118/2009 be costs in the cause with certificate for counsel;

(d)  costs of the hearing before me on 3 February 2010 shall be apportioned equally between HCA 1118/2009 and HCA 2540/2009.

77.  Since I have granted unconditional leave to defend for part of the Plaintiff’s claim against Mr Chang, it is appropriate that the costs in respect of such aspect of the summary judgment application be costs in the cause. Further, given that both actions have to proceed to trial on the prayer of relief for damages in the Writ of Summons and that HCA 1118/2009 has to proceed to trial on the subject matter in paragraph 75 above, it is inappropriate to grant any order in relation to costs of the action.

78.  By my order dated 10 November 2009 in HCA 1118/2009, I directed that costs of the hearing on that day and costs of the adjournment of the Plaintiff’s summary judgment application against Mr Chang be to the Plaintiff to be summarily assessed and I granted consequential directions for lodging statement of costs and objection thereto.

79.  Since then the Plaintiff’s solicitors have filed 2 statements of costs for HCA 1118/2009 and 1 statement of costs for HCA 2540/2009, and the Changs have filed a succinct list of objections to the Plaintiff’s statement of costs for the costs order dated 10 November 2009 in HCA 1118/2009.

80.  In respect of the summary assessment of the above costs, I hereby grant the following directions:

(a)  If no application is made to vary the costs order nisi in paragraph 76 above within 14 days from the date hereof or if application is made to vary such costs order nisi within 14 days from the date hereof but the Changs do not challenge liability for costs, Madam Chan and Mr Chang do within 21 days from the date hereof respectively in HCA 2540/2009 and HCA 1118/2009 lodge and serve succinct summary of objections in bullet-point form of not more than half page in respect of the Plaintiff’s statement of costs for the costs order in paragraph 76 above (“Objection Summaries”);

(b)  if application is made to vary the costs order nisi in paragraph 76 above within 14 days from the date hereof and the Changs challenge liability for costs, Madam Chan and Mr Chang do within 21 days from the date hereof respectively in HCA 2540/2009 and HCA 1118/2009 lodge and serve (i) her/his statement of costs for the respective summary judgment application pursuant to Practice Direction 14.3 and (ii) their Objection Summary to the Plaintiff’s statement of costs for the costs order in paragraph 76 above, and the Plaintiff do lodge and serve the Objection Summaries to the Changs’ statements of costs in (i) above within 7 days thereafter;

(c)  the Plaintiff’s solicitors do within 14 days from the date hereof fix a date with the Listing Clerk for an appointment for hearing before me for summary assessment of costs, including summary assessment of the costs under the costs order dated 10 November 2009 in HCA 1118/2009, but not to be heard before 35 days from the date hereof with 1 hour reserved.

Representation: