XCHRX JAMES CONRAD LOUEY v. WONG YAT SANG

HCA 12759/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 12759 OF 1999

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J U D G M E N T

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1. This is an application by the Defendant for leave to appeal against the judgment of Master Poon given on 3 January 2000 although the time prescribed for doing so has expired. The appeal should have been lodged 5 days after the order of Master Poon. The application was taken out on 24 January. There is some 16 days delay.

2. The Plaintiff claims against the Defendant on a loan agreement. Judgment was entered under the provisions of Order 14 as the Master held, on the material before him, that the Plaintiff was entitled to judgment. At that stage, there was only a bare Defence denying the Plaintiff's claim with no facts in support of the defence.

3. The affirmation of the Defendant filed on 29 January 2000 sets out the facts whereby he says that he simply introduced a Mr Choi to the Plaintiff and that there was a business arrangement between Mr Choi and the Plaintiff whereby Mr Choi would arrange for letters of credit to be opened with the Plaintiff being the beneficiary. However, the Plaintiff had to pay $1.15m, being handling charges. That is the amount set out in the loan agreement which has been produced in evidence. The Defendant says that the Plaintiff said to Mr Choi and to him that as he had to pay $1.15m first, he had to have some security and requested Mr Choi to sign an agreement stating that the $1.15m was a loan to him but if the letters of credit were successfully opened, then it would not be necessary to repay the $1.15m. The Defendant says that the Plaintiff asked Mr Choi to sign on an agreement written in English. After Mr Choi had signed, the Plaintiff also requested the Defendant to sign as a witness and he noticed that there were some words written in Chinese at the bottom of the English document bearing the meaning that it was Mr Choi who received the $1.15m. That was basically what he thought he was signing. He says that he was signing, and thought that he was signing, as a witness only.

4. It is clear from his affirmation that he did not understand English and that the contents of the English loan agreement were not explained to him. What he really understood was that he was simply the witness and the meaning of the Chinese words on the document. And he affirms that he at no time borrowed or received any money from the Plaintiff nor did he intend to be a guarantor of Mr Choi.

5. In October 1999, he received the Writ of Summons and acknowledged the same by filing the acknowledgement of the Writ. A holding Defence was filed as he was unable to provide all the evidence to his solicitor to give sufficient instructions to prepare his defence. On 18 December 1999, he telephoned his solicitor telling him that he could not contact Mr Choi to obtain a copy of the agreement. Without the said agreement, he could not recall the details of the incident. The evidence shows that he was able to contact Mr Choi only on or about 20 January 2000 and obtained a copy from Mr Choi's solicitors shortly thereafter and it is this agreement that has been produced in his affirmation with the words in Chinese at the bottom of the loan agreement which, as translated, reads as follows:

"I myself Choi Yuk Lun has now received Mr Louie Siu Kwong HK$1.15 Million only being (the charges) representing Mr Louie to apply to U.B.S. Head Office to open guaranty notice. If within the specified date (the transaction) was completed, the parties agree (that) the aforesaid amount received and the interest should not be repaid."

6. This tends to support the Defendant's version that it was Mr Choi who was the recipient of the $1.15m from the Plaintiff and not the Defendant. Had this document been produced earlier, then it could have been used as the basis of a defence with particulars and put into an affidavit to oppose the Order 14 application. That, however, was not done. Regrettably, the solicitor acting for the Defendant failed to employ the provisions of Order 24, r. 10 and to seek a copy of the agreement from the Plaintiff's solicitors. It seems to me that the delay, as has been recognised by Mr Wong on behalf of the Defendant, is entirely the fault of his solicitor and not the Defendant's fault. This is certainly a factor that the court can take into account in exercising its discretion to grant an extension of time to the Defendant. (Chiu Butt-york and Chiu Kwok-lim & Others [1980] HKLR 459.)

7. There has been absolutely no explanation from the Plaintiff as to why the words in Chinese, as translated and set out above, appeared in the English loan agreement. It seems to me that the Defendant can raise a defence with real prospects of success. In the circumstances, it would be just to allow the Defendant an extension of time to lodge his appeal. In the circumstances, I give leave to the Defendant to appeal against the judgment of Master Poon although the time prescribed for his so doing has expired. The application is granted. Leave is granted to the Defendant to file his Notice of Appeal within 3 days from to-day.