THE HONG KONG & SHANGHAI BANKING CORPORATION v. GOBIND MOHAN

BETWEEN

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JUDGMENT

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1. On 17th February 1977 the Hong Kong & Shanghai Banking Corporation obtained judgment against Mr. Gobind Mohan, also known as Obi Mohan, in the sum of HK$9,746,307. Today well over HK$3 million remains unpaid.

2. On 20th June of this year, after some 6 years of inactivity, the Bank obtained an ex parte order under Order 49B for the cross-examination of Mr. Mohan as to his means. Mr. Mohan applied to set this order aside or to have the date of cross-examination adjourned until after the determination of High Court Action No. 4611 of 1978 which he had brought against the Hong Kong & Shanghai Banking Corporation; being the judgment creditor. That action has been set down, take it in the fixture list, for hearing commencing on Monday next.

3. The Master refused Mr. Mohan's application and Bewley, J. dismissed an appeal from that refusal. Mr. Mohan then took the matter further but on 25th of this month the Court of Appeal dismissed that appeal. Mr. Mohan has been cross-examined before me pursuant to the order of 20th June and that cross-examination now stands adjourned.

4. In giving the judgment of the Court of Appeal Fuad J.A. said:

"I think one needs no authority for the proposition that if the Court has reasonable grounds for fearing that a party seeking to examine a debtor in the circumstances that obtained here has as his real purpose the gaining of an advantage over and above the ordinary advantages that his rights in pending litigation give him the Court will refuse to order the relief sought. This is but one manifestation, it seems to me, of the inherent jurisdiction of the Court to see to it that its process is not abused."

That statement of principle I have had in mind in considering two applications now made for Garnishee Orders nisi against Haldane Midgeley & Company and against Fairbairn & Kwok, both firms of solicitors in this territory, but, as will appear, have not found it necessary to consider whether or not it has any application in the present context.

5. The affidavit filed in support is explicit as to the judgment debt and the amounts paid in respect of that debt but laconic as to the circumstances in which it is contended that moneys held by these two firms of solicitors constitute debts owing by them to Mr. Mohan. Paragraph 4 of that affidavit reads:

I have used the word "laconic" because the situation does not seem to me to be one of evident simplicity. My own note of the relevant evidence which is not, I emphasize, "the record" for the purposes of the cross-examination, reads as follows:

"My mother has lent me between 1978 or 1979 to date some $3 1/2 million. She had advanced me money by cheque as needed. She gave money to Madrigal Ltd. which has a Mohan Co. account." I understood that to mean an account in her name. "And Madrigal Ltd. would pay the solicitors' bills. There is nothing to the credit of that account at the moment because a few weeks ago it was cleared to pay solicitors."

Order 49 rule 1(1) reads:

"Where a person (in this Order referred to as "the judgment creditor) has obtained a judgment for the payment by some other person (in this Order referred to as "the judgment debtor) of money, and any other person within the jurisdiction (in this Order referred to as "the garnishee") is indebted to the judgment debtor, the Court may, subject to provisions of this Order and of any written law, order the garnishee to pay the judgment creditor the amount of any debt due or accruing due to the judgment debtor from the garnishee ...."

Before parting from Order 49 I should read the terms of rule 3:

Accordingly, if I accede to the applications moneys in the hands of these two firms of solicitors will effectively be frozen as from the time of service of the orders upon them which may have the effect of aborting Mr. Mohan's claim against the judgment creditor to be tried from Monday onwards.

6. Insofar as my note of Mr. Mohan's evidence is at all accurate it appears to be highly questionable whether the two firms of solicitors are accountable to Mr. Mohan in respect to any moneys held for the purposes of his litigation. They may, for example, be accountable to Madrigal Ltd. Alternatively those moneys may well be impressed with a trust, enforceable by the mother, to use the moneys for and only for the purposes of particular litigation. In the further alternative resulting trusts may arise in her favour. As Mr. Bunting, who appears for the judgment oreditor, has argued, in normal cases these are matters to be considered on the return of the order to show cause but the time scale presently obtaining does not so permit. In such circumstances I do not consider that it would be a proper exercise of the discretion which I believe I have to grant the applications for garnishee orders sought and such applications are, therefore, refused.