XCHRX DENE HUNT v. GORDON WILLIAM FISHER

1993 No.A10072

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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The Background

1. Mr Gordon Fisher ("Fisher") is a barrister of the Supreme Court of New South Wales in Australia. He was practising in Hong Kong between 1986 and 1989.

2. Mr William Hodgekiss ("Hodgekiss") is another barrister of New South Wales. He came to know Fisher in 1983/84.

3. Ms Dene Hunt ("Ms Hunt") is a family friend of Hodgekiss in Australia. In late 1988 or early 1989, she asked Hodgekiss for advice to re-organize her finance. In late 1989 Hodgekiss introduced her to Fisher.

4. Fisher at that time had already ceased his barrister practice in Hong Kong since March 1989. He was the managing director of a French company Union Fidelite Corporation SA ("UFC"). It was initially an UK company called PFL (Holdings) Ltd ("PFL").

5. In late 1989, Ms Hunt met Fisher in Hong Kong and entrusted US$500,000.00 (according to Fisher) through him to UFC (and according to Ms Hunt) to Fisher personally as a financial adviser in a trust fund called the "Snow Trust". According to Fisher, the settlor of Snow Trust was PFL. This was a "blind" trust in that there was no presently then entitled beneficiaries - the only beneficiary was a "default beneficiary".

6. PFL as trustee had powers to invest the trust moneys as it saw fit. Later on, money was invested in the American Mutual Funds. According to Fisher, in the third quarter of 1992, such an investment had been lost due to fraud.

7. Since August 1992, Hodgekiss have been authorised by Ms Hunt to act on her behalf to secure the return of the funds entrusted by her to Fisher.

8. On or about 16th September 1992, Fisher met Ms Hunt at his office in France and informed her that he was willing to assume the risk of recovering the Snow Trust's investment in the American Mutual Funds and to that end, he was prepared to "stand in the shoes" of the Snow Trust. Fisher said that Ms Hunt in exchange was to release any interest which she might have in the Snow Trust in consideration of his agreement to pay her the value of the investment by the Snow Trust in the American Mutual Funds.

9. Fisher further said he was prepared to give her a deed, of which he showed her a draft.

10. About two months later (which according to Hodgekiss was 12th November 1992) Hodgekiss went to see Fisher in France. Hodgekiss said over lunch with Fisher that the deed was not acceptable according to the advice of him and one Mr Lindsay Leggatt-Smith ("Lindsay") - a lawyer practising in Monaco. Ms Hunt had earlier gone to him for advice.

11. The original Clause 2 of the deed provided that "In consideration of the covenant of Fisher contained in Clause 1 hereof ..." Both Lindsay and Hodgekiss were of the opinion that the deed should be drafted in such a manner if Fisher did not perform his covenant, then Ms Hunt would not be required to perform her covenant, i.e. Ms Hunt would then not have to give up any rights she might have in the Snow Trust. Fisher accepted such an amendment and inserted in Clause 2 of the Deed the words "and subject to the performance". Accordingly Clause 2 was amended to read : "In consideration, and subject to the performance, of the covenant of Fisher contained in Clause 1 hereof ..."

"The Deed"

12. Eventually the Deed is in the following form which I set out in full as follows : -

"DEED OF COVENANT AND ACKNOWLEDGMENT

THE DEED is made the 16th day of September, 1992

BETWEEN:

GORDON WILLIAM FISHER of 43 Boulevard de la Turbie, 06240 Beausoleil France ('Fisher'), of the one part;

AND

DENE HUNT of PO Box 14, Double Bay, Sydney, New South Wales, Australia ('HUNT'), of the other part.

NOW THIS DEED WITNESSES:

1. In consideration of the acknowledgment by HUNT contained at Clause 2 hereof, FISHER, on behalf of the trustee of the trust estate of 31 July, 1990 known as the Snow Trust, covenants to pay to HUNT the sum of five hundred and ten thousand United States Dollars (USD510,000) as follows:

(A) The sum of four hundred and thirty-five thousand United States Dollars (USD435,000) no later than 31 March, 1993 Pending payment thereof, and in order to guarantee and support the covenant aforesaid of FISHER in respect of the said payment, FISHER shall cause and procure forthwith the registration of a mortgage, in favour of Hunt and in the sum of four hundred and thirty-five thousand United States Dollars (USD435,000), being a mortgage overt that property being real estate with improvements erected thereupon, and being that property registered with the Nice Mortgage Registry on 13 June, 1988, at volume 88 P No.2197 and being that property located in Beausoleil, France, at 43 Boulevard de la Turbie, Quartier du Carnier/des Mules, formerly registered under Section D No.1P and subsequently re-registered in the New Property Register of the said Commune of Beausoleil under Section AD No.230; PROVIDED THAT if the aforesaid described property is sold before 31 March, 1993, the aforesaid payment of four hundred and thirty-five thousand United States Dollars (USD435,000) shall be made simultaneously with the settlement of such sale as consistent with the rights and interests of HUNT as a mortgage of the aforesaid described property.

(B) The sum of seventy-five thousand United States dollars (USD75,000) no later than 31 December, 1992.

2. In consideration, and subject to the performance, of the covenant of FISHER contained in Clause 1 hereof, HUNT hereby acknowledges:

(a) that she has no rights or interests whatsoever in the trust estate known as the Snow Trust and that she shall not hereafter make or assert any rights or interests whatsoever therein; and

(b) that she has no claims or actions whatsoever against the trustee of the said Snow Trust, nor against any person or persons associated therewith, and that she shall not hereafter make or assert any claims or actions whatsoever against the trustee of the said Snow Trust, nor against any person or persons associated therewith.

3. In support of his covenant given and expressed at Clause 1 hereof, FISHER declares that the property described at and in Clause 1(A) hereof has a bona fide market value of six million francs (FF6,000,000) and that there are extant against the said property mortgages to an aggregate value of approximately four million francs (FF4,000,000); being mortgages in favour of Barclays Bank SA, Susan Lenehan and Alpha Technical Services SA.

4. In further support of his covenant given and expressed at Clause 1 hereof, FISHER hereby declares and further covenants that he shall not do any act, matter or thing which shall or may reduce the value of the outstanding equity in the property described at and in Clause 1(A) hereof prior to the registration of the mortgage referred to at Clause 1(A) hereof.

5. FISHER acknowledges that prior to his execution of this Dead he was free and at liberty to seek and obtain legal advice with respect to the Deed and its consequences, but choose not to so seek and obtain such legal advice. HUNT acknowledges that prior to her execution of this Deed she was free and at liberty to seek and obtain legal advice with respect to the Deed and its consequences, and did so seek and obtain such legal advice.

6. This Deed shall have no force or effect whatsoever unless and until executed by both parties hereto.

7 This Deed and the obligations and rights hereunto shall be governed by and construed in accordance with the laws of England, and the parties hereto submit to the jurisdiction of the Courts of England with respect to this Deed and all matters arising thereout.

SIGNED SEALED AND

DELIVERED by GORDON WILLIAM

FISHER in the presence of :

SIGNED SEALED AND

DELIVERED by DENE

HUNT in the presence of :"

13. According to Hodgekiss, this "Deed of Covenant and Acknowledgment" was produced to him later on in the day over dinner on 12th November 1992. It had already been signed and sealed by Fisher. It was then "delivered" to Hodgekiss whom Fisher admitted (in paragraph 6(i) of his Defence) was acting on behalf of Ms Hunt. I said "delivered" because Fisher said in his Defence that the deed was only handed over by him to Hodgekiss upon certain conditions and undertakings which is one of the bones of contention here.

14. Has Fisher shown any defence to Ms Hunt's action herein? I shall analyse Fisher's contentions in full after I set out the law on an O.14 Summons.

The Law on O.14

15. It is for the Defendant to show cause to the satisfaction of the Court that there is an issue or question in dispute which ought to be tried or that there ought for some other reason to be a trial of the plaintiff's claim.

16. The learned authors of The Supreme Court Practice 1995 said at P.156 : -

" It is trite law that the mere assertion in an affidavit of a given situation does not, ipso facto, provide leave to defend, since the defendant must satisfy the court that he has a fair or reasonable probability of showing a real or bona fide defence, i.e. that his evidence is reasonably capable of belief (per Ackner L.J. in Banque de Paris et des Pay-Bas (Suisse) S.A. v. Costa de Naray [1984] Lloyd's Rep. 21, 28. See also per Bingham L.J. in Bhogal v. Punjab National Bank [1977] 2 All E.R. 286, 303; Standard Chartered Bank v. Yacob 1990, C.A. Transcript No.699 per Lloyd LJ.). After reviewing all the authorities, the Court of Appeal has laid down a definitive ruling that if the evidence of the defendant is incredible in any material respect, it cannot be said that there is a fair or reasonable probability that the defendant has a real or bona fide defence and judgment will be given to the plaintiff (National Westminster Bank plc v. Daniel [1993] 1 W.L.R. 1453; [1994] 1 All E.R. 156), following the Banque de Paris case, disapproving Paclantic Financing Co. Inc. v. Moscow Narodny Bank [1983] 1 W.L.R. 1063 (which was not cited in the Banque de Paris case) but approving the observation made in the Second Cumulative Supplement to The Supreme Court Practice 1991 that the Banque de Paris should be followed in preference to the Paclantic case. Two tests are appropriate, namely, 'Is what the defendant says credible?' and 'Is there a fair or reasonable probability of the defendant having a real or bona fide defence?' Where an issue of fact is raised, the first question must be answered in the affirmative before considering the second.

As a matter of law, the Court does not have to treat every affidavit filed in Order 14 proceedings as truthful and at face value when perhaps every probability and circumstance might point to the contrary (Famous Ltd. v. Ge Inn Ex Italia SRL, The Times August 3, 1987, C.A.)."

17. In the often cited case in Hong Kong : Murjani v. Bank of India [1990]1 HKLR 586, Hunter, J.A. said at pp. 589-590 : -

"... It is important to my mind to notice here the fairly obvious proposition that O.14, r.3 puts an onus upon a defendant. The onus is upon the defendant 'to satisfy the court with respect to the claim ... that there is an issue or question in dispute which ought to be tried'. It might be described as a threshold onus upon a defendant to show that there is a triable issue in the case. That onus can only be satisfied on the balance of probabilities, and this is the only way in which a court can consider it. This explains some of the language Ackner, L.J. used which is particularly criticised. In approaching that question all the court can possibly do is to consider all circumstances, to put the affirmation in its context, and to consider whether that threshold onus is discharged in that context.

That it seems to me is all the court was saying in de Naray. It was in fact an exceptional case in one respect. There the conversation asserted in the affidavit, which taken at face value would have amounted to a defence at least of misrepresentation, had no contemporary context to put against it. But what the court took into consideration was later evidence which bore heavily upon the credibility of the deponents.

The much more usual course under O.14 is where the court is in a position to test the credibility of an affidavit or affirmation against contemporary documents. I am indebted to my brother Clough, J.A. for drawing my attention to a decision of Beldam, J. in Bremar Holdings Ltd. v. de Roth, The Times Newspaper, 22nd February 1984, where he deals expressly with this particular position. It was an appeal from a master. The master had granted conditional leave to defend upon the basis that one of the three points which had been raised by the defendant in his affidavit gave rise to a shadowy triable issue. Beldam, J. considered the three points. He said the first two were hopeless, and thought the third point was also insufficient to give rise to an arguable defence. But on the assumption that that conclusion was wrong, the report says:

'Assuming that that was wrong, the plaintiffs' documentary evidence cast such doubt upon the validity of the defendant's documents and affidavit statements in support of the third suggested defence, that his Lordship found the affidavit incredible, or almost incredible, by reason of its inherent implausibility or inconsistency with the documents.

Even had his Lordship not been of the opinion that no defence was disclosed, he would have held that the affidavit statements were not sufficiently credible to raise an issue or question in dispute which ought to be tried.

The dividing line between a triable issue, albeit shadowy, from no issue, was a fine one which in every case was a matter of opinion based upon an assessment of the sufficiency of the facts alleged and the supporting evidence'.

That I find a most useful and helpful description of this threshold onus in the context of conflicting documents. Substantially the same thing was said by May, L.J. in a case noted in the Supplement to the White Book, from the Times Newspaper of 3rd August 1987, Famous Ltd. v. Ge Inn Ex Italia SRL:

'As a matter of law the court does not have to treat every affidavit filed in O.14 in proceedings as truthful and at face value even though every probability and circumstance might point to the contrary'.

Those three statements all point to the same conclusion. They are all useful expressions in practice of the way in which the court should approach this threshold onus put upon defendants by the terms of O.14, r.3. I cannot accept that the language which Ackner LJ uses is in any way wrong or out of line with the English authorities."

18. Further Cons, V.-P. said at p.597 : -

" I agree with my Lord that the three appeals should be dismissed. I add a few words of my own merely with regard to an idea which seems to lie behind a great deal of the argument advanced to us.

I respectfully agree with the way in which my Lord has analysed the correct approach to O.14 proceedings. I would only like to emphasise that I am unable to accept a suggestion that a defendant who is refused leave to defend in such proceedings has in some way been condemned unheard. The order does not do that. The defendant has a full opportunity to put before the court as much evidence as he wishes whether from himself or from others. That is normally done as was in the present instance, by affidavit or affirmation. What O.14 does do then, is to say that the defendant shall have no further opportunity unless he satisfies the court by that initial evidence that there is an issue or question in dispute which ought to be tried. It is to be noted that unlike criminal proceedings there is a positive burden thus placed upon the defendant. It is he who has to show that such an issue or question does arise."

Any Defence?

19. I now consider the defence raised by Fisher to the claim of Ms Hunt. Fisher says that the deed is not the deed of him. In this regard he says (in paragraph 5 of his Defence) :

"(i) That the plaintiff does not allege that the Deed was delivered to the plaintiff by the defendant.

(ii) That the defendant denies that the Deed was delivered by the defendant to the plaintiff.

(iii) That the plaintiff denies the date of the Deed is the date which appears upon its face and hence denies the Deed was delivered upon that date or on any date.

(iv) That the defendant denies that the Deed was signed by the plaintiff and by the defendant on or about 13 November, 1992; at and about which time the defendant was in France and the whereabouts of the plaintiff, then and afterwards, was unknown to the defendant, although the plaintiff alleges she signed the Deed in Australia."

20. It is trite law to say that the Plaintiff should not anticipate what defence the Defendant would raise. The Plaintiff has already pleaded that the parties entered into a deed. Thus it is not necessary to allege specifically that the deed was delivered nor was it necessary for a plaintiff to allege that the deed was signed, sealed and delivered.

21. The date of the deed in this case is not relevant. It has been said in Chitty on Contracts (27th ed.) Vol. 1 paragraph 1-032 that : "A date is not essential. A deed takes effect on the date of its delivery". Here Fisher alleged that the deed was delivered in escrow which will be apparent herein below. In other words, Fisher did not deny that he signed and sealed the deed. He only denied that it was "delivered" by him to the plaintiff. This is more apparent in paragraph 6 of his Defence. I make no apology to set out the relevant parts of the Defence in full. It would demonstrate the convoluted way the Defence was presented. Paragraph 6 reads as follows :

"6. In further answer to paragraph 3, or in the alternative, the defendant denies that the defendant ever, whether by words or conduct, expressly or implicitly acknowledged any intention to be immediately and unconditionally bound by the Deed or any of its provisions, or at all. In the foregoing regard, the defendant says that by oral agreement made at 4th Floor, 33 Avenue Marechal Leclerc, 06240 Beausoleil, France, between the defendant and one William Hodgekiss of St. James hall, 169 Phillips Street, Sydney 2000, New South Wales, Australia, Barrister ('Hodgekiss'), it was agreed that the Deed would be, and was, handed over by the defendant to Hodgekiss upon the following express conditions and understandings, namely:

(i) That Hodgekiss was acting on behalf the plaintiff in relation to the Deed but with no power to bind the plaintiff in relation to the Deed.

(ii) That Hodgekiss was to attend upon the plaintiff and ascertain whether the terms of the Deed, its consequences and the contingencies relating thereto, were acceptable to the plaintiff.

(iii) That the plaintiff had instructed Hodgekiss that no matter the form of the Deed as in due course to be shown to the plaintiff for her consideration by Hodgekiss, the plaintiff intended to obtain independent legal advice as to whether the form, as aforesaid to be shown to the plaintiff, was acceptable to the plaintiff or whether the plaintiff ought to seek amendments thereto.

(iv) That in relation to the matters referred to in subparagraph (ii) above, Hodgekiss would:

(a) ensure that, in fact, the plaintiff obtained independent legal advice with respect to the Deed and its consequences as specifically called for in clause 5 of the Deed which insofar as it is relevant to this pleading provides as follows:

'... HUNT acknowledges that prior to her execution of this Deed she was free and at liberty to seek and obtain legal advice with respect to this Deed and its consequences, and did so seek and obtain such legal advice.';

(b) explain to the plaintiff, and ensure that the plaintiff obtained independent legal advice with respect to, the fact that the defendant was not in an independent position to commit unconditionally to the covenant of the defendant as contained in clause 1 of the Deed;

(c) explain to the plaintiff, and ensure that the plaintiff obtained independent legal advice with respect to, the fact that it was, in any event, possible that the defendant may not be in a position to accept any amendments to the Deed which might be sought by the plaintiff;

(d) explain to the plaintiff, and ensure that the plaintiff obtained independent legal advice with respect to, the fact that unless the plaintiff confirmed, as aforesaid and within a short period, that the terms of the Deed, its consequences and its contingencies were acceptable to the plaintiff, and that any amendments to the Deed sought by the plaintiff were acceptable to the defendant, then the defendant would not authorise Hodgekiss to deliver the Deed to the plaintiff in the manner hereinafter described in subparagraph (e) below: and

(e) that upon confirmation by Hodgekiss to the defendant of the conditions and understandings referred to in this subparagraph (iv) were acceptable to, and had been carried into effect by, the plaintiff, and that any amendments to the Deed sought by the plaintiff were acceptable to the defendant, then, and only then, the defendant would (and subject expressly thereto and hereinafter):

(i) in anticipation of an exchange for a counterpart of the Deed signed by the plaintiff, authorise Hodgekiss to deliver the Deed to the plaintiff; but

(ii) only upon the written or telephone undertaking of Hodgekiss that Hodgekiss was in a position to, and would so, obtain a counterpart copy of the Deed signed by the plaintiff and would thereafter and forthwith deliver the same, or would thereafter and forthwith cause the same to be delivered, to the defendant.

And the defendant says that none of the above conditions and understandings were fulfilled by Hodgekiss and/or the plaintiff and the defendant further says that the foregoing requirement that there be an exchange of Deed and counterpart thereof was as contemplated by clause 6 of the Deed which provides as follows:

'This Deed shall have no force or effect whatsoever unless and until executed by both parties hereto.'"

22. This is a long and convoluted paragraph. However, on analysis, I do not think it has disclosed any defence at all. In short, Fisher, is trying to say the "delivery" of this deed was a delivery in escrow i.e. subject to a number of conditions and undertakings. This was the alleged oral agreement he had with Hodgekiss.

23. In sub-paragraph (i) Fisher says Hodgekiss was at that time acting on behalf of the Plaintiff in relation to the deed but with no power to bind the Plaintiff in relation to the deed. This is contradictory. How could Hodgekiss act for the Plaintiff without having the power to bind her. What was the point of having the alleged oral agreement he said he reached with Hodgekiss when this could not bind Ms Hunt. This sub-paragraph is meaningless and was only put in so that Fisher could have the best of both worlds. In other words, he was trying to say that for one purpose Hodgekiss was acting for the Plaintiff and therefore the conditions and undertakings were binding on her, but for other purposes, Hodgekiss could not bind her and therefore could not accept the delivery of the deeds.

24. The sole question here is whether there was any delivery or whether the delivery was in escrow. The meaning of "delivery" is considered in Chitty on Contracts (27 ed.) Vol. 1 paragraph 1-031[24] as follows :

"1-031 Delivery. 'Where a contract is to be by deed, there must be a delivery to perfect it.' 'Delivered,' however, in this connection does not mean 'handed over' to the other party. It means delivered in the old legal sense, namely, an act done so as to evince an intention to be bound. Any act of the party which shows that he intended to deliver the deed as an instrument binding on him is enough. He must make it his deed and recognise it as presently binding on him. Delivery is effective even though the grantor retains the deed in his own possession. There need be no actual transfer of possession to the other party: 'the efficacy of a deed depends on its being sealed and delivered by the maker of it, not on his ceasing to retain possession of it.' Where a solicitor or licensed conveyancer in the course of a transaction involving the disposition or creation of an interest in land, purports to deliver an instrument as a deed on behalf of a party to the instrument, it shall be conclusively presumed in favour of a purchaser that he is authorised so to deliver the instrument."

25. The question therefore is whether in the acts done by Fisher, he had evinced an intention to be bound by it. He said in the negative in that the delivery was in escrow. Again Chitty considered escrow in paragraph 1-033 as follows :

"1-033 Delivery as an escrow. A party may likewise deliver a deed as an escrow, that is, so that it shall take effect or be his deed on certain conditions. It is in other words a limited or conditional delivery. Such delivery need not be accompanied by express words; if from all the facts attending the transaction it can reasonably be inferred that the writing was delivered so as not to take effect as a deed until a certain condition should be satisfied, it will operate as an escrow. To constitute a delivery as all escrow, however, it was at one time necessary that the deed should not have been handed over to the grantee or covenantee. But nowadays a deed may be delivered as an escrow by handing it to a solicitor who is acting for all the parties to it; or even to the solicitor of the grantee or covenantee himself, provided it is clear upon the whole transaction that such handing over was not intended to be a delivery at that time to such grantee or covenantee. In other words, evidence is admissible to show the character in which and the terms upon which the deed was delivered. It is a question of fact, and depends on what the parties intended. Their intention may be ascertained either from their statements or from the surrounding circumstances prior to or simultaneous with (but not subsequently to) the delivery of the Instrument."

26. Was Fisher's delivery an escrow? He said it was as it was subject to a number of conditions and undertakings. One of the so-called conditions and undertakings which could be extracted out of the long and convoluted pleadings is that allegedly Hodgekiss should ensure Ms Hunt would and could receive or obtain independent legal advice in respect of the form and contents of the deed. This is a matter for Ms Hunt. As aforesaid she had in fact previously received independent legal advice from Hodgekiss and Lindsay. Hodgekiss had already informed Fisher that the only amendment Ms Hunt required, as she had been so advised, was the insertion of "and subject to the performance of" as aforesaid. It is not a case where Ms Hunt was trying to avoid the deed on the ground of undue influence. It is a case where she was trying to enforce the deed itself. In the first place, this is not a condition or undertaking. Even if it were, it is no defence to say that this condition or undertaking has not been fulfilled by Hodgekiss. Ms Hunt had already been given independent legal advice as aforesaid. The deed itself, as Fisher pleaded in sub-paragraph (iv)(a) said Hunt acknowledged that prior to her execution of this deed, she was free and at liberty to seek and obtain legal advice with respect to this deed and its consequences and did so seek and obtain such "legal advice". She made the said acknowledgment by her execution of the deed thereafter. There is absolutely no substance in this defence.

27. The other part of this paragraph raised two further points, namely :

(a) If Ms Hunt raised any amendment, it might not be acceptable to Fisher and the amendment so raised should be subject to Fisher's acceptance;

(b) Ms Hunt has to confirm within a short period of time that the terms of the deed, its consequences and its contingencies were acceptable to her.

28. I do not see how the possibility of Ms Hunt's raising any amendment can form a separate and distinct condition or undertaking. It amounted to say that the deed is final and she had to accept it in full. If she raised any amendment, then of course it would be subject to the acceptance of Fisher. It was not and could not be a condition or undertaking. Ms Hunt was of course not free to amend the deed which was already signed and sealed by Fisher. Even if it were, the event was Ms Hunt did not raise any amendment at all.

29. Fisher alleged that the confirmation should be within a short period of time and Hodgekiss would have to informed Fisher. Was there any confirmation from Hodgekiss? According to Hodgekiss, he sent the deed as executed by Fisher on 16th November 1992 from Warwick Hotel in Paris to his secretary in his Chambers in Sydney Australia. On the same day, he received confirmation from his Chambers that Ms Hunt had signed the faxed version of the deed. Immediately, Hodgekiss caused a fax message to be sent from Warwick Hotel advising Fisher of the execution. According to the header of the fax, it was sent on 17th November 1992 at 10:33 hour. This was sent to the fax number of Fisher. The documentary evidence supported Hodgekiss' contentions. Fisher just denied that he had ever received the fax message. Be that as it may, the condition or undertaking was already fulfilled as Hodgekiss had already confirmed the acceptance and execution of Ms Hunt and informed Fisher of the same.

30. Hodgekiss said he had a telephone conversation with Fisher on 14th December 1992 at 9:10 pm Sydney time. This again was denied by Fisher. Thereafter, according to Hodgekiss, he had made three further attempts to telephone Fisher on 19th, 25th and 29th of December. On 29th December 1992, he sent a fax message to Fisher which was a payment direction signed by Ms Hunt authorizing Fisher to pay to Hodgekiss the monies owing under the deed. (The first sum of US$75,000.00 would be due by 31st December 1992.) Another fax message was sent on 4th January 1993, the process was repeated on 8th January to Fisher's home and office in Monaco and to his office in Hong Kong. On 15th January 1993, another fax message was sent to Fisher, this was sent to his Hong Kong office.

31. Fisher denied receiving any of these messages until Hodgekiss' affidavit made on 9th May 1994. He said that he was not in France on 29th December as he had left France on 18th December 1992 and arrived in Hong Kong on 19th December 1992. He remained in Hong Kong until 18th February 1993. That was because he had separated from his wife on 18th December 1992. The Hong Kong office referred to by Hodgekiss was, according to Fisher, not an office which he shared with others but was an office of a friend in Hong Kong which he permitted Fisher to use as an address. He visited the office from time to time during the first quarter of 1993 but he did not attend the office on a regular basis. To the best of his recollection, he did not visit the office during the first week of January 1993 and in any event he did not receive any message left for him at that office by Hodgekiss nor did he receive copies of those exhibits, WG5, WG6 and WG7.

32. In other words, for those messages which were sent to France when he was not in France, he said that he had not received them. For those messages which were sent to Hong Kong office while he was in Hong Kong, he had not received them either and no one had related any message of Hodgekiss to him. This is of course in addition to the denial of the fax message sent to him on 16th November 1992 while he was admittedly in France. In one sentence, Fisher is saying I did not receive anything from Hodgekiss. In this very material respect, I must say that Fisher's explanation and contention is wholly incredible. It is a classical case that the Court is not obliged to accept everything an affirmant said in an affirmation when every probability and circumstance might point to the contrary. In any event if necessary, I do not consider that there is a fair or reasonable probability of the Defendant having a real or bona fide defence. Accordingly, I cannot accept the Defendant's contention that the Plaintiff did not communicate to him any acceptance of the deed or of any of its provisions, nor his contention that he had rejected and/or disclaimed the deed which was never binding upon him as pleaded in paragraph 9 of the Defence .

33. The next defence raised by the Defendant is in paragraphs 10 and 11 of the Defence which I again reproduce in full as follows : -

"10. In further answer to paragraph 3 the defendant says that the covenant contained in clause 1 of the Deed was subject to the further express conditions of the oral agreement between Hodgekiss and the defendant pleaded in paragraph 6 herein, namely, that as the mortgage security referred to in clause 1(A) of the Deed was a security over property owned jointly by the defendant and the defendant's wife, the defendant would have to obtain the agreement of his wife to the giving of the mortgage security and, as such, until the defendant's wife agreed to the giving of the said mortgage security, the defendant was not in a position to unconditionally commit himself to the covenant contained in clause 1 of the Deed. In the event, the defendant's wife refused to agree to the giving of the said mortgage security and the prospective performance of the covenant contained in clause 1 of the Deed was rendered impossible on the part of the defendant and was so rendered impossible without any fault on the part of the defendant.

11. In further answer to paragraph 3, or in the alternative, the defendant says that the words 'and subject to them performance' were inserted in clause 2 of the Deed at the express demand of the plaintiff and on the understanding between the plaintiff and the defendant, and for the purpose, that if the defendant did not, or was unable to, perform his covenant as contained in clause 1 of the Deed, then the plaintiff would not be obliged to perform her executory covenant as contained in clause 2 of the Deed."

Again it is difficult to understand what these paragraphs actually meant. If Fisher is trying to explain his failure to create the mortgage as a collateral to "guarantee and support" the covenant he made in Clause 1 (i.e. his payments of US$510,000.00), then the short answer to Fisher's contention is that Ms Hunt is not trying to enforce this part of the collateral but his covenant to pay the aforesaid sum or the total sum in terms of two sums payable on the 31st December 1992 and 31st March 1993 respectively.

34. On the other hand, if Fisher is trying to say that by reason of the oral agreement he reached with Hodgekiss (which in this respect of course he is saying the same is binding also on Ms Hunt), Fisher himself, was not in a position to unconditionally commit himself to the covenant contained in Clause 1 of the Deed, he is trying to create a smoke screen to cloud the clear intention and wordings of the Deed. He is suggesting that the collateral guarantee and support of the covenant to pay by way of the mortgage was conditional upon or subject to his wife's agreement. Since his wife did not in the event subsequently agree to the creation of the mortgage security, then the condition could not be fulfilled by him and the covenant contained in the whole of Clause 1 would then be discharged.

35. If this is the contention of the Defendant, it could be disposed of in no time. I cannot see how a collateral given in support of the performance of the payment can itself suddenly become a condition precedent which in turn was subject to the approval of a third party. It would make a mockery of the covenant to pay the money. In short, even if it is accepted there was a bona fide oral agreement as alleged by Fisher, this would only affect his liability to create the mortgage and would not absolve his obligation to pay the covenanted sums of money. The impossibility as contended by him is irrelevant to the action of Ms Hunt.

36. Further paragraph 11 of his Defence is totally irrelevant to the action of Ms Hunt. It is true to say that when Fisher did not perform his part of the covenant, then Ms Hunt's acknowledgment that she has no right or interest in or she has no claims or actions whatsoever against the trustee of the said Snow Trust would not be an obligation on her part. By this action, Ms Hunt has elected to enforce Clause 1 of the deed. Paragraph 11 is totally irrelevant by way of a defence to the action.

37. Lastly, Fisher in paragraph 13 of the Defence raised the following matter : -

"13. In further answer to paragraph 4 the defendant says that notwithstanding the document pleaded in the Statement of Claim is pleaded as a deed, it nonetheless was a document which, by its express terms, called for interdependent mutual covenants between the parties thereto. And the defendant further says that the defendant by the express terms of clause 1 of the Deed was not to be called upon to perform his covenant unless the plaintiff performed her covenant and that a failure on the part of the plaintiff to perform her covenant released the defendant forthwith from performing his covenant. The plaintiff having failed to perform her covenant, the plaintiff has no claim at law or any cause of action under the Deed as against the defendant. In any event, the plaintiff has not suffered any loss and damage as alleged in paragraph 5, or at all."

Again, this 14 lines of pleadings at page 7 of the Defence is devoid of any meaning at all. The pleader is trying to say that the covenant of Ms Hunt and the covenant of Fisher are "interdependent mutual covenants" between them. It alleged that Ms Hunt had failed to perform her covenant and therefore Fisher himself is discharged or released from performing his covenants. This is supposed to be a further answer to paragraph 4 of the Statement of Claim. Paragraph 4 of the Statement of Claim said :

"4. Wrongfully and in breach of the terms of Clause 1 of the Deed, the Defendant has failed to make payment of all or any part of the said sum of US$510,000.00, in the manner set out in Clause 1 of the Deed or at all."

The pleader of the Defence did not condescend on particulars as to what covenant that Ms Hunt had not performed. If it was the covenant as stated in paragraph 11 above, then I have already dealt with that contention as aforesaid.

38. It was submitted by Mr Faulkner, Counsel for Fisher, that this action is an action for breach of the Deed instead of enforcing Clause 1 of the Deed. There is, of course a distinction between a claim for payment of a debt and a claim for damages. It has been said in Chitty (op. cit.) at paragraph 21-031 that :

"There is an important distinction between a claim for payment of a debt and a claim for damages for breach of contract. A debt is a definite sum of money fixed by the agreement of the parties as payable by one party in return for the performance of a specified obligation by the other party or on the occurrence of some specified event or condition; whereas, damages may be claimed from a party who has broken his primary contractual obligation in some way other than by failure to pay such a debt. (It is also possible that, in addition to a claim for a debt, there may be a claim for damages in respect of consequential loss caused by the failure to pay the debt at the due date.)"

39. Strictly speaking, paragraph 4 said wrongfully and in breach. However the word "and" sometimes can mean "or" and sometimes it means "and/or". In other words, paragraph 4 can mean : "wrongfully the Defendant has failed to make payment ..." This would be an enforcement of Clause 1 of the Deed. The only missing word is "/or" which can either be implied or construed in the word "and". It is quite apparent that the plaintiff is enforcing Clause 1 of the Deed. In other words, if Fisher wanted to cloud the clear stream of justice by bringing us back to the Star Chambers days of pleadings, this Court would not allow itself to be used for such an end.

40. Paragraphs 15 and 16 concerned with the defence of jurisdiction which I have already dealt with separately in an earlier hearing.

Conclusion

41. From the aforesaid analysis of the Defence, I come to the firm conclusion that no defence has been disclosed by Fisher or there is no issue or question in dispute which ought to be tried. Accordingly, this appeal is allowed and judgment has to be entered in favour of the Plaintiff against the

Defendant as claimed with costs of the action including costs in the Court below.