Poon Bun Chak v. Li Tin Sang

HCA10769/1997

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. HCA 10769 OF 1997

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R U L I N G

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1. These are order 14 proceedings. This is an appeal from an order of Master Lung dated 29 July this year whereby he entered judgment in favour of the plaintiff in the sum of $888,000 in respect of three cheques as follows: 28 May 1993, 480143, $180,000; 11 October 1993, 798238, $108,000; 4 February 1994, 798263, $600,000.

2. The plaintiff says these cheques were loans made by him to the defendant. The defendant says that these relate to dividend payments due to him in respect of his shares in a company called Megawell Industrial Limited. The action itself is for a far larger amount claimed by the plaintiff which is in excess of $16 million but the order 14 summons is limited to this lesser amount of $888,000.

3. It is necessary to briefly refer to the background to this action which is related to another action tried by Chu J in 2000 in which she delivered judgment on 29 December 2001. In that action, the parties' roles were reversed. The defendant in this action was the plaintiff. Chu J dismissed his claim. That judgment is being appealed. The appeal will be heard shortly on 10 and 11 October.

4. In the action before Chu J, many of the matters covered by this action were also considered by her. Given that she found in favour of the plaintiff in the action before me, the defendant, whilst not in terms conceding the point, felt unable to make out any positive case to show that the claim in respect of these three cheques should go to trial. That was because having regard to Chu J's judgment, the issues had been decided by her and were covered by the principle of res judicata. The defendant merely sought to stay execution of any judgment that might be entered.

5. The master, having entered judgment, has declined to stay his order pending the outcome of the appeal in the Court of Appeal. The judgment and the costs consequent upon it have been paid by the defendant to the plaintiff. Today Mr Chan is applying to me to adjourn his appeal until after the Court of Appeal delivers judgment in the appeal from Chu J. He says that if his client succeeds, then Master Lung's order must also go. If the appeal fails, then this appeal before me must stand dismissed. I should therefore wait for the outcome of his client's appeal in the Court of Appeal. No conceivable prejudice can be caused to the plaintiff who has been paid his judgment.

6. That, of course, is a highly persuasive way of putting this matter which I had considered unanswerable until I heard Mr Kwok on behalf of the plaintiff. He submits that irrespective of the outcome of the appeal before the Court of Appeal, his client's claim in respect of these three cheques is simply unanswerable. There can be no reason for delaying the hearing of this appeal which on its merits should stand dismissed.

7. He has very carefully taken me through the relevant parts of Chu J's judgment which relates to these three cheques and the evidence that she referred to in support of her findings. I am bound to say that taken by itself this evidence is of a most compelling nature and, as Mr Kwok submits, stands apart from his client's additional ground for judgment based on res judicata. He submits, therefore, that the outcome of the appeal in the Court of Appeal will not have any impact on Master Lung's order.

8. Whilst I found Mr Kwok's approach highly persuasive, I am ultimately persuaded by Mr Chan that I should adjourn his appeal today as he asks. The two actions are in effect a mirror image of each other. I am simply not prepared to "second-guess" what the Court of Appeal will decide on the various aspects of Chu J's judgment. In any event, no conceivable prejudice can be caused to the plaintiff. He has his judgment which has been paid out. If he succeeds in the Court of Appeal, this appeal must inevitably be dismissed. If the appeal is upheld, then the terms of the Court of Appeal's judgment will need to be considered to see what effect it has on Master Lung's order.

9. If I were to hear the appeal from Master Lung today and decline the adjournment, then Mr Chan understands that his appeal is bound to fail as matters presently stand. If his client were to succeed in the Court of Appeal, then there must also be an appeal to the Court of Appeal against my orders today; relatively speaking, a cumbersome and time-consuming process. I have decided that I should wait until after the Court of Appeal's judgment before proceeding with this appeal.

10. My order therefore will be that the appeal will be adjourned until after the Court of Appeal has delivered judgment in Case No. CA 153 of 2002.

11. In respect of both summonses, these costs will be reserved and I think it would be, if I may say so, far too harsh to penalise the appellants today where they have succeeded, notwithstanding the way that Mr Kwok has characterised their appeal as being one that is unnecessary. Costs reserved in respect of both matters with liberty to restore.