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CACV 184/2017
[2018] HKCA 610
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF APPEAL
CIVIL APPEAL NO 184 OF 2017
(ON APPEAL FROM ACTION NO 1019 OF 2015)
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BETWEEN
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BANK OF CHINA (HONG KONG) LIMITED |
Plaintiff |
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and
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EDDY TECHNOLOGY COMPANY LIMITED |
1st Defendant |
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TANG CHI HUNG |
2nd Defendant |
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YEUNG CHOI HUNG |
3rd Defendant |
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Before: Hon Lam CJHC(Ag) and Hon Yuen JA in Court
Date of the Plaintiff’s submissions: 16 May 2018
Date of the Defendants’ submissions: 5 May 2018
Date of Judgment: 14 September 2018
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J U D G M E N T
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Hon Yuen JA (giving the Judgment of the Court):
1. This is an application by the defendants for leave to adduce new evidence, being a letter dated 5 January 2018 from the plaintiff’s solicitors to the defendants’ solicitors. The court considered that the matter could be disposed of on paper, and written submissions were duly provided by both parties.
2. Put briefly, the matter arises in this way.
Background
3.1. The plaintiff is successor of Sin Hua Bank Ltd Hong Kong Branch. For ease of reference we shall refer to SHB/the plaintiff as “the plaintiff”.
3.2. The 1st defendant was a customer of the plaintiff. The 2nd and 3rd defendants were guarantors of the 1st defendant’s indebtedness to the plaintiff.
Legal charge of property
4. In June 1997, the 2nd and 3rd defendants mortgaged a property (“the property”) to the plaintiff by way of legal charge to secure the 1st defendant’s debts.
1st defendant’s debts
5. The plaintiff had made 3 loans1 to the 1st defendant, which also had an overdraft with the plaintiff, as well as time loans.
Sale of property
6. In 2004, the defendants, with the plaintiff’s consent, sold the property. By 3 cheques, redemption money of $2.2 million were paid to the plaintiff. The plaintiff then divided that sum of $2.2 million in repayment of (1) the overdraft ($539,102.18); (2) a time loan ($1,404,836.13) and (3) the 2nd loan ($256,061.69). However the 1st defendant remained indebted to the plaintiff.
Restructuring
7.1. It is not necessary for present purposes to go into the details of the business arrangements between the parties. Suffice it to say that in June 2009, a restructuring of the debt was effected by a letter called “the 2009 Letter” signed by all parties.
7.2. Subsequently however, there was non-compliance with the repayment schedule.
HCA1019/2015
8. In due course, in May 2015 the plaintiff issued HCA1019/2015 against the defendants for repayment of sums outstanding.
9. In November 2015, the plaintiff issued a summons for summary judgment.
Plaintiff’s affirmation - reference to cheques
10. On 17 November 2015, an Assets Recovery Manager of the Risk Management Department of the plaintiff, Wong Ka Yan made an affirmation in support of the summons, setting out the history of the matter. In §5(i) of the affirmation, Wong referred to the receipt of $2.2 million for the redemption of the property as follows:
“By a letter dated 11 February 2004 from Ford Kwan to the Plaintiff, 3 cheques for the total sum of HK$2,200,000.00 drawn in favour of the Plaintiff, being redemption money of the Property calculated up to 11 February 2004, were sent to the Plaintiff. There is now produced and shown to me marked ‘WKY-22’, a copy of the said letter. Unfortunately, the Plaintiff has not kept copies of the 3 cheques”. (Emphasis added).
2nd defendant’s affirmation - exhibiting 2 cheques
11.1. On 8 December 2015, the 2nd defendant Tang Chi Hung made an affirmation opposing the summons for summary judgment. In the affirmation, Tang alleged (among other things) that the plaintiff had concealed information regarding the sale of the property in 2004 and how the proceeds had been applied. In §54 of the affirmation, Tang said:
“At similar time2, I also approached Messrs Ford Kwan & Company (i.e. the solicitors handled the sale of the property for the Defendants in 2004) to retrieve records about the sale of the Property in 2004. There is now produced and shown to me marked ‘TCH-6' copy of the documents obtained from Messrs Ford Kwan & Company in June 2015”. (Emphasis added).
11.2. Exhibit “TCH-6” included (among other things) a letter dated 11 February 2004 from Ford Kwan to the plaintiff purporting to “enclose herewith 3 cheque(s) for the total sum of HK$2,200,000.00 ...”. However the letter apparently enclosed only 2 cheques, one for $982,000 and one for $998,000.
11.3. Be that as it may, that was the state of the evidence for the summons for summary judgment.
12. On 6 July 2016, Master Ho made an order for summary judgment.
PCPD
13.1. In the meantime in 20153, the 2nd defendant had lodged a complaint with the Office of the Privacy Commissioner for Personal Data (“PCPD”) in connection with his request for documents from the plaintiff.
13.2. Pursuant to a request from the PCPD on 21 July 2016, on 29 July 20164 the plaintiff found copies of the 3 cheques referred to above, and they were sent to the PCPD on 9 August 2016.
13.3. The PCPD issued its Reasons for Decision on 22 November 2016. The Reasons apparently included a reference to the plaintiff having copies of the cheques.
13.4. The 2nd defendant was served with the PCPD’s Reasons for Decision. Although he says he “could not recall”5 when he was served with the Reasons, one would assume in the normal course of events that it would have been within days of the issue of the Reasons.
Hearing before Lok J
14. Be that as it may, on 14 December 2016 the defendants’ appeal against Master Ho’s order for summary judgment was heard before Lok J. For reasons set out in his Judgment of 31 July 2017, the judge dismissed the defendants’ appeal. On 16 August 2017, the defendants filed a notice of appeal. A date has apparently not been fixed for the hearing of the appeal.
Defendants’ summons to adduce fresh evidence
15.1. On 29 March 2018, the defendants filed a summons to adduce fresh evidence on appeal, viz a letter dated 5 January 2018 from the plaintiff’s solicitors to the defendants’ solicitors. In this letter, copies of the 3 cheques (ie the 2 cheques previously exhibited, plus a 3rd one for $220,000, adding up to $2,200,000) were enclosed. The letter also said:
- Wong had been unable to find copies of the 3 cheques when she made her affirmation in November 2015,
- Wong had been transferred to another department in March 2016,
- after the master’s order for summary judgment, the plaintiff had received a request on 21 July 2016 from the PCPD for copies of the 3 cheques,
- Wong’s successor conducted a fresh search for copies of the 3 cheques, found them on 29 July 2016 and provided them to the PCPD on 9 August 2016,
- the copies of the 3 cheques were not relevant to the grant of summary judgment or the issues in dispute in the proceedings.
15.2. An affirmation in support of the summons was made by the 2nd defendant on 29 March 2018, and affirmations in opposition were made by Lin Yi Feng and Wong on 12 April 2018.
Discussion
16. Having read Lok J’s Judgment and the Notice of Appeal, and the affirmations filed in relation to the present summons, we do not see any grounds for giving leave to adduce the fresh evidence. In the defendants’ skeleton submissions, it was submitted that the three conditions of Ladd v Marshall6have been satisfied because it was “of paramount importance that contents of Wong’s affirmation must be accurate”.
17. In our view, it is correct that the plaintiff should have filed an affirmation before Lok J to say that after Wong’s first affirmation, copies of the cheques had since been found, and as a matter of completeness, the plaintiff should have exhibited the 3rd cheque (the other 2 cheques having been exhibited by the 2nd defendant already). But since the 3 cheques make up the exact sum of $2,200,000 which it was common ground was the redemption sum, this additional evidence would not have been of any significance at all to the determination of the issues before the judge. There was no need to conceal the 3 cheques because what was in issue was not how the redemption sum came, but where it went (the defendants’ defence being that the sum should have been used in repayment of the 3 loans and not for reducing the overdraft and time loans). So analyzed, the summons clearly fails the 2nd condition of Ladd v Marshall. The defendants have made a quantum leap in a hopeless attempt to create a triable issue out of this non-issue. We shall not of course comment on the grounds of the Notice of Appeal which is still to be heard.
Order
18. The summons shall be dismissed with costs summarily assessed at $65,000.
| (M H Lam) |
(Maria Yuen) |
Acting Chief Judge of the
High Court
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Justice of Appeal
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Ms Queenie Lau, instructed by Anthony Chiang & Partners, for the Plaintiff
Mr Tommy Lo, instructed by Brian Kong & Co, for the Defendants
[1] The 1st loan was made in June 1997, the 2nd loan in October 1999, and the 3rd loan in November 1999.
[2] Early 2015.
[3] The 2nd defendant did not state when in 2015 this was done: Tang 2nd, §15.
[4] After the master had given the order for summary judgment.
[5] Tang 2nd §18.
[6] [1954] 1 WLR 1489.
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