XCHRX THE HONG KONG CHINESE BANK LTD. v. FUNG KWONG CHIU ADVERTSING CO. LTD.

1994, No. A1745

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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J U D G M E N T

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1. On 13 July 1995, the judgment creditor obtained judgment against the judgment debtor for the sum of $567,335.33, with interest and costs. On 18 July 1995, the judgment creditor obtained a garnishee order nisi under which it was ordered that all debts due and accruing due from the garnishee to the judgment debtor be attached to answer the judgment. This order was served on the garnishee on 21 July 1995.On 22 August 1995, the order was made absolute in respect of the sum of $148,134.12, with costs, which the garnishee was holding in one account of the judgment debtor. On 5 September 1995, the order was made absolute as to the balance of the judgment. The garnishee now appeals against that order.

2. In effect, the order to pay the sum of $148,134.12 is not in dispute. What is in dispute is the order to pay the balance from a fixed deposit account, which, as at 21 July 1995, had a credit balance of $2,121,579.47. The garnishee says it should not be ordered to pay money from this account because it had been charged in favour of the garnishee by two fixed charges, one dated 29 June 1993 and registered on 29 July 1993, and the other dated 20 July 1995 and registered the same day, which was, of course, the day before the garnishee order nisi was served on the garnishee.

3. The charges are in essentially the same terms. By them, the judgment debtor agreed "on demand to pay or dicharge to the [garnishee] all moneys obligations and liabilities whether actual or contingent now or at any time due owing or incurred to the [garnishee] by the [judgment debtor]" including in respect of guarantees given by the [garnishee] at the request of the judgment debtor. The judgment debtor charged the deposit by way of first fixed charge and assigned and released the deposit to the [garnishee] as a continuing security for the payment and discharge of all liabilities to the [garnishee]. The judgment debtor also agreed not to suffer to arise any third party rights over the deposit.

4. At the hearing before the Master, the garnishee relied only on these charges. No evidence was adduced by the garnishee as to any indebtedness by the judgment debtor to the garnishee. Before me, the garnishee seeks to adduce additional evidence to the effect that it issued certain guarantees at the request of the judgment debtor. As at 21 July 1995, there were 63 of these guarantees outstanding under which the garnishee had a potential laibility of $2,107,000. Since the service of the garnishee order nisi, the garnishee has been obliged to pay out $811,000. Miss Cruden says that I should not allow this additional evidence to be adduced.

5. The appeal before me is, of course, by way of re-hearing. It is not at all unusual for additional evidence to be adduced on these appeals. Leave, of course, is required, but this is usually granted. This is not an unusual case. This is not the kind of case with which Kaplan J. was concerned in Core Resources (Far East) Ltd v Sky Finders Ltd [1992] 1 HKLR 193, in which the evidence sought to be adduced puts before the court a completely different defence arising after the hearing before the Master. Here, the evidence before the Master was that there were fixed charges over the deposit to secure indebtedness to the garnishee. Now, the garnishee seeks to adduce evidence to give details of this indebtedness. I find this acceptable, and I grant leave to adduce the additional evidence.

(J.K. FINDLAY)

Judge of the High Court