CHAN MAN LIN AND ANOTHER v. CHAN MAN YIN AND ANOTHER

HCA 514/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 514 OF 2000

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REASONS FOR DECISION

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1. This was an appeal by the Plaintiffs against the orders of Master Lung who set aside the default judgment obtained by the Plaintiffs against the Defendants and refused to make a charging order absolute against the Defendants' property at Flat 5, 31/F, Block A, Ming Hoi House, Ming Nga Court, No. 7, On Po Lane, Tai Po, New Territories (the said property).

2. After submission from Counsel for the Plaintiffs, the appeal was dismissed on 30 November 2000. The parties then agreed that the action should be discontinued and that the claims should be incorporated in another action HCA 18773 of 1999.

3. Nevertheless I indicated that I would give my reasons for the dismissal and this I now do.

4. The 1st Defendant is the sister of the Plaintiffs and the 2nd Defendant is her husband.

5. It is 1st Plaintiff's case against the Defendants that between 1992-1998, $400,000.00 was lent to the Defendants and the Defendants agreed to pay interest on the principal sum at 12% p.a. and to repay the principal on demand.

6. The Defendants only paid interest up to the end of 1997 and have since refused and/or failed to pay any interest. The Defendants also refused to repay the principal on demand.

7. The 2nd Plaintiff made a similar claim against the Defendants except the loan involved is $220,000.00 which was lent to the Defendants between 1991 to 1995.

8. The 1st and 2nd Plaintiffs therefore claim against the Defendants for the respective sums of $400,000.00 and $220,000.00 plus interest.

9. The writ was taken out on 14 January 2000 and was properly served. In the acknowledgment of service, the Defendants indicated that they did not intend to contest the proceedings.

10. The Plaintiffs then obtained judgment on their claims against the Defendants on 26 January 2000 and a charging order nisi against the said property was made on 31 January 2000.

11. When the hearing of the charging order absolute eventually went before Master Lung on 21 August 2000, Master Lung on the application of the Defendants set aside the default judgment and no order could therefore be made on the charging order, hence the present appeal.

12. It is necessary to refer to another set of concurrent proceedings.

13. On 8 December 1999, another sister of the 1st Defendant, Chan Man Ling commenced proceedings, being HCA 18773 of 1999 against the Defendants for $560,000.00 as loan lent to the Defendants from 1993 to 1997. She prays for the return of the sum of $560,000.00 as well as a declaration that an equitable mortgage over the said property as security for the repayment of the loan to the extent of $510,000.00 had been created in her favour.

14. On 21 January 2000, the Plaintiffs applied for and were granted on 31 January 2000 leave to join in as the 2nd and the 3rd Plaintiffs in HCA 18773 of 1999. In the Amended Statement of Claim dated 6 March 2000, the Plaintiffs plead that between 1991 to 1997, the Defendants have obtained the respective loans of $400,000.00 and $220,000.00 from them.

15. They also claim that the Defendants, for sincerity had deposited the title deeds of the said property to them and Chan Man Ling as security for the repayment of their respective loans.

16. The Plaintiffs pray for a declaration that an equitable mortgage over the said property as security for the repayment of the respective loans of $400,000.00 and $220,000.00 had been created in their favour. The Plaintiffs have not prayed for the repayment of the loans.

17. On 16 March 2000, the Plaintiffs together with Chan Man Ling applied for summary judgment in HCA 18773 of 1999 against the Defendants.

18. The application was unsuccessful and the Defendants were granted unconditional leave to defend on 12 May 2000 by Master Lung. Master Lung's order was not appealed against.

19. It is the Defendants' case that they had repaid the loans to the Plaintiffs and they had been misled by the Plaintiffs when they indicated in the acknowledgment of service in HCA 514 of 2000 that they did not intend to contest the proceedings.

20. For the purpose of the present appeal, I do not find it necessary to deal with the merits of the case.

21. It is an abuse of process for any party to raise in subsequent proceedings matters which could and therefore should have been litigated in earlier proceedings.

22. Wigram V C in Henderson v Henderson (1943) 3 Hare 100 said at Page 115.

"... ... where a given matter becomes the subject of litigation in, and of adjudication by a Court of competent jurisdiction, the Court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject matter in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the Court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties exercising reasonable diligence, might have brought forward at the trial."

23. In Clark and others v. Urguhant [1930] AC 28 Viscount Summer said at page 54.

"A claimant, furthermore, must prove and recover damages, arising from one and the same cause of action, once for all."

24. Although the Plaintiffs pray for different reliefs in HCA 18773 of 1999 and HCA 514 of 2000, the cause of action in both actions is identical. It is a claim based on the loans of $400,000.00 and $220,000.00.

25. There is no valid basis for the Plaintiffs to have to institute two actions in respect by the same cause of action and it is an abuse of process for the Plaintiffs to do what they have done.

26. The application for Summary Judgment in HCA 18773 of 1999 was made on 16 March 2000 and the default judgment in HCA 514 was granted on 26 January 2000.

27. But in HCA 18773 of 1999, the Defendants have been granted unconditional leave to defend which means that the Defendants have an arguable defence or at least these are matters that should proceed to trial. The Plaintiffs have not appealed against the order.

28. In the circumstance, there are justifications for Master Lung to set aside the default judgment in HCA 514 of 2000 as the question of whether the Defendants have an arguable defence or whether there are matters that should proceed to trial in both actions must be the same.

29. There is no valid basis upon which I should interfere with the decision of Master Lung.

30. In the circumstances, the appeal must be dismissed and I so order.