WEALTHY (FAR EAST) LTD. v. LAM TIT KWAN

HCMP1838/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO.1838 OF 1999

-----------------------

-----------------------

------------------------

J U D G M E N T

------------------------

1. The plaintiff is at all material times a licenced moneylender. It is claiming the payment of outstanding principal of $731,163.00 with interest, and the vacant possession of Flat 02, 11/F, Silver Garden, 95 Po Kong Village Road, Kowloon ("the Property") charged under a mortgage dated 26 January 1998 by the defendant in favour of the plaintiff ("the Mortgage"). The defendant denied liability, and alleged that the loan agreement was induced by fraudulent misrepresentation on the part of the plaintiff; that he never executed the Mortgage and the purported execution by him was a forgery. The defendant counterclaimed a declaration that the loan agreement and the Mortgage were void and/or unenforceable; an order that the plaintiff do cause the vacation of the registration of the Mortgage at the Land Registry; and an order that the plaintiff do return the title deeds of the Property to him.

Plaintiff's case

2. Ma Yiu Sin ("Ma") is the manager of the plaintiff. He said that on 16 January 1998, one Madam Leung Tim Lee ("Madam Leung") signed a loan agreement No.W-94-1451 and borrowed $800,000 with interest from the plaintiff ("the 1st Loan Agreement"). A few days later, Madam Leung requested to borrow more. Ma said she needed to come up with a guarantor preferably with property as security. A few more days later, Madam Leung said she found such a friend. Ma asked her to bring along the person and the title deeds of the property to his office.

3. On 26 January 1998 at about 10 a.m., Madam Leung and the defendant went to the plaintiff's office. Madam Leung wanted to borrow $500,000 more. Ma required the defendant to enter into a mortgage of the Property for $1.3 million, covering the $800,000 under the 1st Loan Agreement and the new loan of $500,000. Ma said the defendant was asked to take up the responsibility of the $800,000 because the plaintiff had doubts as to Madam Leung's financial ability by reason of her request for a new loan after such a short time. The defendant did not agree and left.

4. At about 4 p.m. on the same day, Madam Leung, the defendant, Madam Leung's daughter Wang Chi Shan Sukie ("Sukie") and her son Wang Chun On Marco ("Marco") went up to the plaintiff's office. The defendant said he now agreed to the terms of the loan as Madam Leung had pleaded with her so much. Ma explained to the defendant that he was borrowing $1.3 million in order to cover the previous loan of $800,000. He never told the defendant that liability was limited to $500,000 only. Ma asked the defendant to sign a loan agreement instead of a guarantee because the defendant was to be the mortgagor of the Property.

5. The defendant signed as the borrower on two loan agreements both No.W-94-1459 (Bundle of Documents ("BD") pp.6&7) (collectively "the 2nd Loan Agreement"). The two loan agreements are identical in terms save as to the names of the guarantors. Madam Leung and Sukie signed as guarantors on one of the agreements ("the 1st Page") (BD p.6) and Madam Leung and Marco signed as guarantors on the second of the agreements ("the 2nd Page") (BD p.7). Ma said as the standard form agreement only had enough space for the names of two guarantors, two identical agreements were prepared for the three guarantors and the defendant had signed twice.

6. The material terms of the 2nd Loan Agreement are :

(a) Borrower : Lam Tit Kwan (the defendant);

(b) Principal amount of loan : HK$1,300,000;

(c) Monthly interest : 2.63%;

(d) Annual interest : 31.52%;

(e) Overdue interest : 0.133% per day;

(f) Interest : HK$1,639,136;

(g) Total : HK$2,939,136;

(h) Repayment by 48 consecutive monthly instalments of HK$61,232 each;

(i) First instalment due on : 25 February 1998.

7. Ma said he explained the terms of the 2nd Agreement to the defendant, Madam Leung, Sukie and Marco. The standard form loan agreement was in duplicate of white and green. Ma gave the two green copies to the defendant and two photocopies to Madam Leung. He had forgotten to give copies to Sukie and Marco.

8. After the loan procedure was finished, the defendant requested Ma to issue a proof that Madam Leung's liability under the 1st Loan Agreement had been discharged. Ma issued the following document in Chinese ("the Certificate") (BD p.124) :

"This is to certify that the loan of Leung Tim Lee (Loan Agreement No.W-94-1451 in the sum of HK$800,000 will be repaid by Lam Tit Kwan on her behalf on 26-1-98

Chop of the plaintiff"

Ma explained to the defendant that Madam Leung no longer owed the plaintiff any money under the 1st Loan Agreement.

9. Ma asked the defendant to sign two receipts acknowledging that he had duly received $1.3 million in cash ("the Receipts") (BD pp.8&9). The reason for two receipts was the same for two loan agreements. Ma said although the Receipts stated cash of $1.3 million, he had explained to the defendant that $800,000 had previously been paid to Madam Leung under the 1st Loan Agreement and the new loan was only for $500,000.

10. A colleague told Ma that one Mr Stephen Wong ("Wong"), solicitor of Messrs Stephen Wong, Yau & Co. had come to the plaintiff's office and asked whether the documents were ready. Ma said almost ready. Shortly afterwards, Leung Kwong Kuen ("KK Leung") who was a clerk of the plaintiff, the defendant, Madam Leung and Wong went to Wong's office. By then, Sukie and Marco had left. Before the party left, Ma gave $500,000 in cash to KK Leung and told him to hand it to the defendant once Wong said the Mortgage was completed. Ma said Madam Leung had requested $500,000 in cash as she needed to pay her staff that evening.

11. KK Leung said at 5 p.m. or so, he went with the defendant, Madam Leung and Wong to Wong's office. Altogether, there were four of them in Wong's room. Wong's partner Mr Jeremiah Yau ("Yau") was not present. Wong explained to the defendant the contents of the Mortgage and that the Property was mortgaged to the plaintiff for $1.3 million. Wong asked the defendant whether there was any problem. The defendant said no and he signed at p.26 of the Mortgage (Exhibit P1). KK Leung said he had no impression whether Wong also signed at p.26 of the Mortgage, nor whether there was any name chop of the attesting solicitor. After signing, KK Leung gave the $500,000 to the defendant and the defendant counted the money in front of Madam Leung and Wong. He never obtained any receipt from the defendant as he was not instructed to do so. He did not deduct any sum from the $500,000 before giving it to the defendant.

12. Later on the same day, Ma received a fax from Steven Wong, Yau & Co. showing the execution clause of the Mortgage with the signature of the defendant. The name chops of "Steven KS Wong, Solicitor, Hong Kong" appeared at the attestation clause and the interpretation clause. However, there was no signature beside the chops.

13. Ma said when Madam Leung signed the 1st Loan Agreement, she had given 48 cheques of $42,251 each to the plaintiff for the monthly instalments. After the 2nd Loan Agreement was signed, Madam Leung had given 10 odd cheques of $23,551 each to the plaintiff for the balance of the increased instalments. Ma said Madam Leung told him to present one cheque each for the instalments of the 2nd Loan Agreement. The total of the two cheques exceeded the monthly instalment of $61,232 and the surplus would be applied towards the next instalment.

14. According to the payment record of the plaintiff (Exhibit P2), Madam Leung had duly paid the first instalment. For the second instalment, the cheques were not presented as Madam Leung said there was not enough fund in her account. She paid the instalment later. As from April 1998, payment had become irregular. Madam Leung settled the monthly instalment by depositing smaller amounts from time to time. Until July 1998, there was still no overdue.

15. In July 1998, Madam Leung and the defendant went up to the plaintiff's office. She offered to settle the outstanding principal and interest so that the Mortgage could be released. Madam Leung issued three cheques all dated 27 July 1998 :

(a) $344,983 payable to the plaintiff ("1st Cheque");

(b) $900,000 payable to the plaintiff ("2nd Cheque");

(c) $7,500 with the payee left blank ("3rd Cheque").

16. Ma said the 1st and 2nd Cheques were for the repayment of principal and interest. It was split into two as the plaintiff's franking machine only had six figures. The 3rd Cheque was for the legal fee of the release of the Mortgage, hence the payee was left blank.

17. Ma asked a staff member to make a photocopy of all the three cheques on one sheet (BD p.44). Below the 1st and 2nd Cheques, it was written in Chinese :

"If these two cheques are honoured after presentation to Bank, this company will cancel the mortgage of the property of Lam Tit Kwan, holder of HKID No...

Chop of the plaintiff"

Beside the 3rd Cheque, it was written in Chinese :

"This cheque is for lawyer's fee"

Ma handed this document to the defendant.

18. Upon the due date of the three cheques, Madam Leung asked Ma to hold the 1st and 2nd Cheques, and only to present the 3rd Cheque as payment of the monthly instalment. The 3rd Cheque was dishonoured.

19. Ma started to encounter difficulties in contacting Madam Leung by phone. He had to telephone the defendant to tell Madam Leung to call back. The September instalment was partly overdue but later paid. The October instalment was paid up to $31,033 only. Thereafter there was no further payment.

20. In September or October, the plaintiff decided to call in the loan by reason of Madam Leung's irregular payment pattern and difficulty in contacting her. Madam Leung was so informed on the phone.

21. Shortly before 23 October 1998, Ma contacted the defendant and informed him that Madam Leung was not punctual in payment and could not be contacted directly. Ma told the defendant that if Madam Leung did not fulfil her duty to repay, the defendant was responsible for repayment. Ma said the defendant realized it was impossible to locate Madam Leung. The defendant said as a businessman, he would shoulder all responsibilities.

22. On 23 October 1998, the defendant and his son went up to the plaintiff's office. He paid $500,000 by cashier order and asked for two to three weeks to repay the balance of $700,000 odd. He also asked the plaintiff not to demand the entire balance.

23. Later, the defendant went to the plaintiff's office again and requested the plaintiff to accept $200,000 as full settlement of the balance.

24. On 26 November 1998, the plaintiff through their solicitors demanded the balance of the loan and interest from the defendant.

25. As at 30 January 2001, the outstanding principal was $731,163.00 and the accrued interest was $1,160,129.00.

Defendant's case

26. The defendant said he never agreed to take up the liability of the entire amount of $1.3 million. Ma told him that notwithstanding the amount of $1.3 million in the 2nd Loan Agreement, his liability was limited to $500,000. He had never gone to Wong's office, and he had never executed the Mortgage.

27. The defendant said on 26 January 1998, he went up to the plaintiff's office with Madam Leung, Sukie and Marco at 11 a.m. and did not leave until 6 to 7 p.m. He was in the plaintiff's office all that time.

28. Upon arrival, he met Ma briefly and handed him the title deeds of the Property. About half an hour later, a man asked him to go into a room. He was asked to sign his name on three to four sheets of blank paper purportedly for comparison with his signature in the title deeds. The man asked him to sign on the top right handcorner of the first sheet. He signed more but could not recall how they were signed. Those sheets were never given back to him afterwards. The defendant alleged that one of the signed blank sheet had become the execution page of the Mortgage (Exhibit P1, p.26).

29. The defendant said he waited through lunch time and at all times he was without food or drink. At 3 p.m., Madam Leung's children left. At 4 p.m. he wanted to leave but Ma said it would be quick.

30. At 5 p.m., Wong arrived at the plaintiff's office. Wong went into Ma's room first, then came out and told him his title deeds were clean. Wong then told him to go into Ma's room.

31. Ma took out the 1st Page of the 2nd Loan Agreement (BD p.6). The defendant saw the figure of $1.3 million and said he was unable to guarantee Madam Leung for so much. He refused to sign and stood up.

32. Ma said that $1.3 million included two amounts. $800,000 were borrowed by Madam Leung before and had nothing to do with him. He was only to guarantee $500,000. Wong echoed that he was only to guarantee $500,000 and the rest had nothing to do with him.

33. Wong told Madam Leung to write a receipt for the defendant. Madam Leung wrote the following note ("IOU") (BD p.41) :

"I, Leung Tim Lee, holder of HKID No... borrow the sum of HK$500,000.00 from Mr. Lam Tit Kwan and hereby guarantee to repay the whole sum thereof within 3 months. Executed as proof.

26 January 1998

Leung Tim Lee (signed)"

34. The IOU was put to Ma in cross-examination and he denied ever seeing it on 26 January 1998.

35. The defendant thought he was only guaranteeing Madam Leung for $500,000 and he signed the 1st Page of the 2nd Loan Agreement (BD p.6). The defendant said he had never signed on the 2nd Page of the 2nd Loan Agreement (BD p.7) nor the Receipts (BD pp.8&9). He said Wong then gave him a schedule of the title deeds of the Property (BD p.40) as acknowledgment of receipt.

36. The defendant went back to the reception room. He never took $500,000 cash from anyone. Fifteen to twenty minutes later, Madam Leung, Ma and Wong went to the lift lobby. He saw Madam Leung counted the money and gave $25,000 to Ma as commission and $50,000 to Wong as legal fee. The defendant said when he left the plaintiff's office, he only had the IOU and the receipt of the titles deeds. He was never given any copy of the 2nd Loan Agreement. He had also never seen the Certificate issued by the plaintiff as to the discharge of the 1st Loan Agreement (BD p.124).

37. About one month later, Ma telephoned him saying that Madam Leung was in arrears of the instalment. The defendant told Ma to look for her himself and hung up. The defendant wanted to get back the title deeds but could not contact Madam Leung until June.

38. In July, Madam Leung and he went to Ma's office to give Ma the three cheques. The defendant asked Ma for a receipt and was given the photocopy of the three cheques with the Chinese writing (BD p.44).

39. A few days later, Ma telephoned him and said the three cheques were not cleared and asked him to find Madam Leung to settle the amount of the cheques. He told Ma that Madam Leung had moved and he could not find her.

40. In September, Madam Leung telephoned the defendant from Mainland and said if he paid $500,000 to Ma, Ma would release the title deeds of the Property.

41. On 23 October 1998, the defendant paid Ma the cashier order of $500,000. Ma said the title deeds could be released in one or two days after Madam Leung had signed to complete the procedure.

42. A few days later, Ma told the defendant that Madam Leung had disappeared and he had to shoulder the liability of the $800,000 loan. The defendant resisted and said Ma had promised him that he was only liable up to $500,000 and the rest had nothing to do with him. Ma said that the defendant was responsible as Madam Leung had disappeared.

43. The defendant sought legal advice and only then he found out that the Mortgage had been registered in the Land Registry. He reported the matter to the police.

44. It was agreed that on 9 March 1998, Messrs Steven Wong, Yau & Co. was taken over by the Law Society. Wong had disappeared and Yau had been struck off the roll of solicitors.

The issues

45. The issues in dispute are :

(a) whether the defendant was induced to sign the 2nd Loan Agreement as a borrower for $1.3 million by the misrepresentation of Ma and/or Wong;

(b) whether the plaintiff has agreed to limit the liability of the defendant to $500,000;

(c) whether the defendant has signed the Mortgage;

(d) whether the 2nd Loan Agreement was unenforceable under section 18 of the Moneylenders Ordinance (Cap.163) by reason of lack of a copy being given to the defendant.

46. Counsel for the defendant submitted that the 2nd Loan Agreement was induced by the misrepresentation that the defendant's liability was limited to $500,000 and the defendant sought rescission. Insofar as the oral agreement of the liability of $500,000, it has been performed by the payment of $500,000 by cashier order. The defendant denied signing the Mortgage but otherwise took no issue as to the terms of the Mortgage and in particular that it was an all moneys mortgage.

Assessment of the evidence

47. Counsel for the defendant accepted that the burden of alleging and proving falsity which is required for the representation to be a misrepresentation rests on the party who sets it up. He also accepted that the standard of proof in civil cases, in which serious allegations of misconduct such as fraud were in issue, was on the preponderance of probabilities, but the degree of probability must be commensurate with the occasion (Aktieselskabet Dansk Skibsfinansiering v. Brothers & Ors [2000] 1 HKLRD 568.

48. Counsel for the defendant criticized that the plaintiff's documentation did not truly reflect what was the reality :

(a) Although the defendant was stated to be the borrower in the 2nd Loan Agreement, the plaintiff had all along looked first to Madam Leung as opposed to the defendant for the payment of the instalments;

(b) The Receipts (BD pp.8&9) stated $1.3 million in cash was duly received by the defendant but in fact it was subject to the oral explanation by Ma that $800,000 had been paid to Madam Leung under the 1st Loan Agreement;

(c) Although Ma said the Certificate (BD p.44) was requested by the defendant as a proof that the 1st Loan Agreement was discharged, it stated that the $800,000 borrowed by Madam Leung was to be repaid by the defendant. As such, there should have been the signatures of the defendant and Madam Leung.

49. It was submitted that the pattern that the written document did not reflect the reality without being supplemented by oral explanation was consistent with the defendant's allegation that the 2nd Loan Agreement was subject to the oral representation by Ma and Wong.

50. Counsel for the defendant also pointed out discrepancies in the Mortgage itself :

(a) The testimonium (p.24 of the Mortgage), schedule of property (p.25) and the execution clause (p.26) were spread over three pages instead of being placed on one page while there was sufficient space to do so resulting in the execution clause starting at the top rather than at the foot of the page;

(b) At the execution page (p.26), the chops of "Steven KS Wong, Solicitor, Hong Kong" at the attestation clause and the interpretation clause were covered with white correction fluid and the chops of "Jeremiah CW Yau, Solicitor, Hong Kong" were placed over them.

51. It was submitted that the chops of Yau as the attesting solicitor were inconsistent with KK Leung's evidence that Wong explained the Mortgage to the defendant and attested the execution. It was submitted that while Wong had disappeared, Yau was simply disqualified and there was no reason why he should not be called. Hence, an adverse inference should be drawn against the plaintiff.

52. Counsel for the defendant also queried whether KK Leung took any part in the transaction at all :

(a) KK Leung only relied on the counting of the $500,000 by Ma and never counted it himself before going to Wong's office;

(b) He was never instructed to obtain any receipt from the defendant after handing over the $500,000.

53. Counsel for the defendant also submitted that Ma's evidence that Madam Leung was called upon to repay the entire loan in September or October 1998 was not credible :

(a) There was only slightly late payment in September 1998;

(b) There was no formal demand letter to Madam Leung or the defendant until November 1998.

54. It was also submitted that the defendant could have continued with the monthly payment until the last of the 48th instalment and there was no need for him to ask for further time to repay the entire amount. Further, Ma's evidence that the defendant proposed to settle the liability by paying $200,000 was not contained in his witness statement.

55. On the other hand, counsel for the plaintiff submitted that the defendant's evidence was at substantial variance with his previous statements and/or the pleadings on the core matters :

(a) In his statement to the police, the defendant said he thought he was guaranteeing Madam Leung $500,000. In September 1998 he was demanded $1.3 million by the plaintiff, only then he looked at the document and realized he was the borrower for $1.3 million. Further, he never mentioned to the police any representation by either Ma or Wong that his liability was limited $500,000;

(b) The defendant said in evidence that a staff member other than Ma asked him to sign on several sheets of blank papers, but in his statement to the police, his witness statement and also the affirmation filed in the O.14 proceedings, he said it was Ma who asked him to sign on the blank papers;

(c) The defendant said in evidence that he had only signed the 1st Page of the 2nd Loan Agreement (BD p.6) but had not signed the 2nd Page (BD p.7) nor the Receipts (BD pp.8&9). This was not pleaded in the Defence. At one stage under cross-examination, the defendant attempted to deny even signing the 1st Page, but retracted that when being told that his counsel agreed he had so signed;

(d) The defendant said in evidence that he saw Madam Leung counted the money at the lift lobby and she gave Ma $25,000 as commission and Wong $50,000 as legal fees. In his witness statement, he said immediately after signing the 2nd Loan Agreement, he saw Ma give a thick wad of bank notes to Madam Leung after deducting $50,000 as interest and $25,000 as legal fees;

(e) The defendant said in evidence that after he gave the cashier order for $500,000 to Ma, Ma asked him to wait for Madam Leung's signature before the title deeds would be returned, and a few days later, Ma told him he still owed $700,000. In his witness statement, he stated that after the payment, Ma immediately told him he still owed the balance.

56. Counsel for the plaintiff also submitted that the evidence of the defendant was inherently improbable :

(a) The defendant's evidence that he stayed in the plaintiff's office from about noon to 6 to 7 p.m. without any food or drink was incredible and was merely an attempt to conceal the fact that he had left and later returned;

(b) The defendant's evidence that Madam Leung's children had left before he signed the 2nd Loan Agreement was inconsistent with the fact that they had also signed as guarantors on the 2nd Loan Agreement;

(c) The defendant said he was willing to deposit the title deeds to the Property as a security for Madam Leung, but was unwilling to go to a solicitor's firm to execute a formal mortgage because it was too inconvenient seems wholly unreasonable.

57. I find the defendant a wholly unsatisfactory witness. The inconsistencies as to when he first realised the 2nd Loan Agreement was stated to be for $1.3 million, or who told him to sign the blank sheets, or whether he had signed on the 2nd Page of the 2nd Loan Agreement and the Receipts were irreconcilable.

58. The defendant said that after Madam Leung had tendered the three cheques, he asked Ma for a receipt. However, he said he folded it and put it aside without looking at the Chinese writing. I find this incredible. Under cross-examination, the defendant agreed that he did not consider the photocopy of the three cheques per se as a receipt, and it would only be a receipt by reason of the Chinese writing. That means the defendant must have looked at the Chinese writing. The Chinese writing mentioned the release of the mortgage after the payment of the entire sum as opposed to $500,000 and it also mentioned the legal fees. Had there been any promise that his liability was limited to $500,000, the defendant would have pointed out to Ma that the title deeds should be returned upon the payment of $500,000.

59. Counsel for the defendant submitted that the word "mortgage" in the photocopy of the three cheques could have meant an equitable mortgage by way of deposit of the title deeds and it would be unfair to take the meaning of a legal charge. The defendant's evidence was that he never looked at the wordings and I have rejected it. Hence, there is no evidence that he ever mistook "mortgage" to mean the deposit of title deeds.

60. As to the evidence of the plaintiff, it is true that there is an inconsistency as to who was the attesting solicitor between the evidence of KK Leung and the name chop in the Mortgage. There is no evidence from either Wong or Yau as to who signed as the attesting solicitor.

61. According to Godfrey J (as he then was) in Champhon Industrial Limited v. Hight Projects Industrial Limited (unreported, 29 December 1992, see [1992] HKCU 328) :

"The law as to attestation of deeds (including powers of attorney under seal) is clear: at common law no attestation is required in order to prove due execution. It is desirable, and a wise practice, to have the execution of a power of attorney witnessed, preferably by two witnesses. But except where for some particular purpose a statute requires it, this is not necessary."

62. The formal validity of the Mortgage did not depend on attestation. The issue before me is that in the absence of the evidence of the attesting solicitor, whether I am satisfied that the defendant had executed the Mortgage. I find KK Leung to be a straightforward and honest witness and I can safely rely on his evidence that the defendant did so. The points that he did not count the money or take a receipt from the defendant did not cast any doubt on the matter. I am satisfied that the discrepancy as to the name chops at the execution clause had nothing to do with the plaintiff.

63. It is true that the 2nd Loan Agreement stated that the defendant was the borrower while in fact the plaintiff had looked to Madam Leung for the repayment of the loan first. However, the dispute was not so much liability but the amount. I accept the evidence of Ma that he had explained the terms of the 2nd Loan Agreement to the defendant at the time of the signing and had given him the duplicates thereof, and the defendant agreed to take up the liability of Madam Leung under the 1st Loan Agreement.

64. It is true that as at October 1998, the defendant could have continued to pay the monthly instalments only without repaying the principal. However, it is clear that by that stage Madam Leung had disappeared and the defendant was eager to get back the title deeds.

Finding of facts

65. From the accepted evidence, I make the following findings of facts :

(a) The defendant sign the 2nd Agreement knowing that he was the borrower for $1.3 million without any misrepresentation by Ma or Wong;

(b) The plaintiff never agreed to limit the liability of the defendant to $500,000;

(c) The defendant did sign the Mortgage;

(d) The plaintiff did provide the defendant with copies of the 2nd Loan Agreement;

(e) The plaintiff did call in the principal and interest under the 2nd Loan Agreement against Madam Leung and the defendant.

Conclusion

66. By reason of the findings above, the plaintiff is entitled to recover the outstanding principal of $731,163 and accrued interest under the 2nd Loan Agreement and under the covenants for repayment under the Mortgage from the defendant. As at 30 January 2001, the accrued interest was $1,160,129.00, and continuing at the default rate of $959.12 per day as pleaded until judgment, and thereafter at judgment rate until payment.

67. The plaintiff is also entitled to recover possession of the Property under the terms of the Mortgage.

68. The defendant's counterclaim must fail and is hereby dismissed.

Costs

69. The plaintiff is seeking indemnity costs of the action under the Clause 18 of the Mortgage. I make an order nisi for indemnity costs in favour of the plaintiff, to be made absolute within 21 days.