Civil Action2006

QUENTIN KEITH HILLS v. MARLENE RITA WITTMAN

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60039-EN-2008-02-06

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HCA2149/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2149 OF 2006

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

BETWEEN

	QUENTIN KEITH HILLS	Plaintiff
	and
	MARLENE RITA WITTMAN	Defendant

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

Before : Hon Suffiad J in Chambers

Date of Hearing : 22 January 2008

Date of Decision : 6 February 2008

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D e c i s i o n

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1. This is an application by summons dated 11 January 2008 taken out by the defendant seeking to set aside the judgment entered herein on 23 November 2007 and for an extension of seven days for the defendant to comply with the order of the court dated 23 October 2007 to pay into court the amount of US$135,000, being the condition imposed for granting leave to defend.

Background

2. The plaintiff and the defendant were, prior to their breakup some time in February 2006, engaged to be married.

3. It is the plaintiff’s case that before their breakup, the plaintiff had made a loan of US$150,000 to the defendant in November 2001.

4. A further or additional loan of US$10,000 was made by the plaintiff to the defendant in March 2005.

5. In November 2005, the defendant had made a part repayment to the plaintiff of US$10,000 and a 2^nd part repayment was made by the defendant of US$15,000 in December 2005.

6. The plaintiff’s claim herein is for US$135,000 being the balance outstanding of the loans made by him to the defendant.

7. The defendant disputes that the original amount of US$150,000 by the plaintiff to her in November 2001 was a loan. It is the defendant’s case that this sum was paid to her by way of gift by the plaintiff.

8. The writ herein was issued on 28 September 2006.

9. On 18December 2006, the plaintiff took out a summons for summary judgment. That summons was heard by a master and on 26 April 2007 summary judgment was granted to the plaintiff by the master.

10. As a result of summary judgment being granted to the plaintiff, the plaintiff entered judgment and issued garnishee proceedings upon HSBC where the defendant held bank accounts. A Garnishee Order nisi was made by the Registrar on 26June 2007.

11. On 3August 2007, Master de Souza discharged the Garnishee Order nisi upon the invitation of the plaintiff when HSBC confirmed by affidavit that there was a net debit balance in the defendant’s bank accounts maintained with it.

12. Master de Souza’s sealed order discharging the Garnishee Order nisi was served on HSBC on 17 August 2007.

13. In the meantime, on 9 May 2007 the defendant had issued a Notice of Appeal, appealing the decision of the master granting summary judgment to the plaintiff. That appeal was heard by me on 4 September 2007 and in a written judgment given on 23 October, I set aside the order for summary judgment and gave the defendant conditional leave to defend. The condition imposed was for the claimed amount of US$135,000 to be paid into court by the defendant within 21 days from 23 October 2007 failing which the plaintiff be at liberty to enter judgment against the defendant.

14. The 21 days within which the defendant was to make payment into court upon the condition imposed was to expire on 13 November 2007.

15. On 12 November, one day before the expiry of the time for the defendant to meet the condition imposed, the defendant applied by Summons for an extension of time to make payment into court as ordered and further asked for the Garnishee Order Absolute to be set aside. That Summons came before me on 16 November when the defendant was represented by her solicitor, Mr Erving. At the start of the hearing, Mr Erving informed the court that the application for extension of time by the defendant was on the basis that the plaintiff had obtained a Garnishee Order Absolute against the defendant in respect of the defendant’s bank accounts held with HSBC. This drew from the plaintiff the response that the Garnishee Order had been discharged in August and the order for discharge had been duly served on HSBC. As a result, Mr Erving accepted that there was no good basis for that application by the defendant for extension of time and invited me in the circumstances to dismiss the defendant’s application. Accordingly, the defendant’s summons was duly dismissed.

16. On 23 November 2007, judgment against the defendant was sealed and perfected since the defendant had failed to comply with the condition of making payment into court.

17. The present summons was taken out by the defendant on 11 January 2008 seeking to set aside the sealed judgment and to extend time by a further seven days for the defendant to make payment into court being the condition imposed for granting leave to defend as contained in my order of 23 October 2007.

The application

18. The present application by the defendant is said to be made pursuant to Order 13, rule 9 of the RHC, alternatively the inherent jurisdiction of the court.

19. The basis for this application is that the defendant was misled by the conduct of the plaintiff or his legal advisers in not pursuing the application for extension of time at the hearing on 16 November 2007 in that the plaintiff or his legal advisers chose not to inform the defendant or her solicitors of the discharge of the Garnishee Order.

20. It was also submitted that had this information been supplied to the defendant, she would have been able to comply with the condition imposed by the court on 23 October 2007.

Decision

21. This application is wholly misconceived in so far as it purports to be made pursuant to Order 13, rule 9 of the RHC.

22. Order 13 of the RHC relates to “Failure to Give Notice of Intention to Defend” being the heading of that order. Rule 9 of that order therefore can only have application where judgment has been entered upon a failure to give notice of intention to defend. That is not the case here and Order 13, rule 9 can have no application.

23. In the present case, not only was judgment entered against the defendant upon the defendant’s failure to comply with the condition imposed by the order of 23 October 2007, that judgment was sealed and perfected on 23 November 2007.

24. Upon the judgment being sealed and perfected on 23 November 2007, the court is functus officio and has no further jurisdiction to set aside that judgment as sought by the defendant by its summons dated 11 January 2008.

25. For these reasons above, the application must be dismissed.

26. Even if I am wrong in dismissing this application on the above two procedural grounds and for the reasons given, I find that there is no substantive merits in the application for the following reasons.

27. The entire basis upon which this application is made is that the plaintiff or his legal advisers had misled the defendant by failing to inform the defendant or her legal advisers that the Garnishee Order had been discharged, and letting the defendant to believe that the Garnishee Order had been made absolute on 3 August 2007.

28. The garnishee application by the plaintiff was a part of these proceedings with the same action number as herein.

29. The defendant had all along in this matter been represented by Messrs Erving Brettell, solicitors.

30. The garnishee application was served on Messrs Erving Brettell being the solicitors on record for the defendant herein.

31. The defendant’s solicitors having been served could have attended the hearing on 3 August 2007 when the Garnishee Order was discharged but chose not to be present.

32. The Order of Master de Souza discharging the Garnishee Order nisi was duly served on HSBC by the plaintiff.

33. It is conceded by the defendant in her affidavit in support of this application that upon checking with HSBC, her bankers, it was discovered and accepted that HSBC had failed to inform the defendant of the discharge of the Garnishee Order despite HSBC having been served with the order discharging same.

34. At the hearing on 16 November 2007, Mr Erving was informed by the plaintiff that the Garnishee Order had been discharged and it was upon being so told that Mr Erving invited the court to dismiss the defendant’s application which was made by summons dated 12 November 2007.

35. Therefore it would follow that when Mr Erving invited the court to dismiss the defendant’s summons dated 12 November 2007, he or the defendant could not have been under any further misconception about the Garnishee Order having been made absolute.

36. Moreover, when told of the discharge of the Garnishee Order on 16 November 2007, Mr Erving did not ask for an adjournment of that application or for time to consider the defendant’s position.

37. As for the submission that had the defendant been informed of the discharge of the Garnishee Order, she would have been able to comply with the condition imposed by the order of 23 October 2007, I am unable to accept that submission for these reasons.

38. Firstly, the Garnishee Order nisi was made by Registrar Chan on 26 June 2007. That order nisi was served on HSBC on 4 July 2007, being the Garnishee, to show cause why that order should not be made absolute.

39. By an affirmation of Choi Gin, made on behalf of HSBC, it was deposed that at the date of service of the Garnishee Order nisi on HSBC, namely 4 July 2007, the accounts of the defendant with HSBC “was in debit after set off the debit balances against the credit balances” amongst the accounts of the defendant. In short there was no debt due or accruing due to the defendant from HSBC.

40. Bearing in mind that the effect of a Garnishee Order was for a judgment creditor to attach any debt due or accruing due from the garnishee to the judgment debtor, and unlike a Mareva injunction, it does not freeze the judgment debtor’s accounts with the bank (being the garnishee), I frankly cannot understand how the defendant in this case was prevented from complying with the condition imposed even if she was under the mistaken belief that the Garnishee Order nisi had been made absolute.

41. In any event, since the totality of the defendant’s accounts with HSBC showed a total debit balance, whatever funds she may have to comply with the condition imposed would have to come from elsewhere other than those accounts with the HSBC.

42. For these reasons, I do not consider that there is or can be any substantive merits in this application by the defendant.

43. Accordingly for the reasons given, this application must be dismissed.

Cost

44. This application was wholly devoid of merit, both procedurally as well as substantive merits and should not have been taken out at all.

45. There will be a costs order nisi that the defendant pays the plaintiff’s costs of this application on an indemnity basis.

(A.R. Suffiad)
Judge of the Court of First Instance
High Court

Mr Jonathan Chang, instructed by Messrs Hampton, Winter & Glynn, for the Plaintiff

Mr C.P. Erving of Messrs Erving Brettell, for the Defendant

58885-EN-2007-10-23

QUENTIN KEITH HILLS v. MARLENE RITA WITTMAN

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HCA2149/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2149 OF 2006

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

BETWEEN

	QUENTIN KEITH HILLS	Plaintiff
	and
	MARLENE RITA WITTMAN	Defendant

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

Before : Hon Suffiad J in Chambers

Date of Hearing : 4 September 2007

Date of Judgment : 23 October 2007

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J U D G M E N T

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1. This is an appeal by the defendant against the decision of Master J. Wong given on 26 April 2007 wherein the Master gave summary judgment to the plaintiff on the plaintiff’s claim and accordingly dismissed the defendant’s application for security for costs against the plaintiff.

Background

2. The plaintiff and the defendant were, prior to their breakup, engaged to be married.

3. Their relationship took a turn for the worse some time between Thanksgiving in 2005 and February 2006 resulting in their breakup.

4. The present writ was taken out by the plaintiff on 28 September 2006.

5. The plaintiff’s claim is for the return of the sum of $135,000 being the outstanding balance of a loan made to the defendant while they were engaged.

6. It is the plaintiff’s case that he made an original loan of US$150,000 to the defendant on 13 November 2001.

7. Subsequently, a further or additional loan of US$10,000 was also made by him to the defendant on 9 March 2005.

8. On 4 November 2005, the defendant repaid US$10,000 to the plaintiff and on 9 December 2005, the defendant made a 2^nd repayment of US$15,000 to the plaintiff, leaving the claimed amount outstanding.

9. The defendant does not dispute that the sum of US$10,000 paid to her on 9 March 2005 was a loan and which she had repaid to the plaintiff on 4 November 2005.

10. The defendant, however, disputes that the US$150,000 was a loan by the plaintiff. It is the defendant’s case that this amount was paid over to her by the plaintiff by way of a gift.

11. It is also the defendant’s case that the US$15,000 which she paid to the plaintiff (which the plaintiff says reduced the US$150,000 to the claimed amount of US$135,000) was made at the plaintiff’s request to enable him to pay his taxes in the United States when he was short of funds.

12. At the hearing before the Master, the plaintiff exhibited to his affirmation a number of emails from the defendant (Exh. QKH–1). These emails were all dated between May and August 2006 in answer to the plaintiff chasing up for the repayment of the US$135,000.

13. The Master, in his written decision in this matter given on 26 April 2007, found that the allegation by the defendant that the US$150,000 to be a gift by the plaintiff to her to be wholly unbelievable in the light of these emails from the defendant because in all these emails from the defendant, the stance taken by the defendant was that she was prepared to repay the money to the plaintiff, but because of her financial situation, she required time to do so. Moreover, there was no mention of that money being by way of a gift in any of the emails exhibited.

14. On that basis, the Master acceded to giving summary judgment to the plaintiff.

Further evidence from the defendant in this appeal

15. When this matter came before me by way of appeal by the defendant from the decision of the Master, the defendant had, with leave of Deputy Judge Carlson, filed a 2^ndaffidavit exhibiting further emails between the parties which were not before the Master (Exhs. MRW–2, MRW–3 and MRW–4).

16. The other exhibit contained in the 2^ndaffidavit of the defendant, being MRW–1, is a part of the Reports and Financial Statements of Aquitaine Investment Advisors Limited for the year ended 31 March 2002 which showed that by a special resolution passed on 5 November 2001, the authorised share capital was increased from HK$5,000,000 to HK$7,325,575 by the creation of 2,325,575 ordinary shares of HK$1 each, to rank pari passu with the existing shares.

17. Since an appeal from a master’s decision to a judge in chambers is by way of rehearing, I will need to consider not only the evidence which was before the Master, but also the further evidence now before me.

18. Exh. MRW–2 is an email dated 12 November 2001 from the defendant to the plaintiff. The relevant part of that email gives details of the defendant’s bank account, no doubt for the plaintiff to remit the initial amount of US$150,000 to the defendant.

19. After giving the bank details, the email goes on to state :

“ If faxed your Sunday, will deal with tue/wed and then put in the proper paperwork with the corporate secretary before I get on the plane friday morning and will continue with my NY chap to close on our deal.”

20. This email was produced by the defendant to counter the plaintiff’s claim that he had no knowledge of the rights issue which the defendant says the US$150,000 was used for in purchasing the shares in the defendant’s name.

21. Exh. MRW–3 is an email dated 11 August 2004 from the plaintiff to the defendant. It is produced by the defendant to show that the plaintiff “gave” her the money, the subject of his claim. The relevant part of that email reads :

“ Ok, I can be stupid.
But the last time I tried to help with money ($150,000) I just gave it to you — no questions asked. I didn’t get an itemized invoice like the last email that looked like a demand payment!”

22. Exh. MRW–4 contain four emails all from the plaintiff to the defendant and respectively dated 10 March 2006, 19 April 2006, 9 June 2006, 18 June 2006 and 11 July 2006.

23. In paragraph 13 of the 2^ndaffidavit of the defendant, the defendant says that prior to the end of February 2006, the plaintiff had never referred to the money being a loan. Exh. MRW–4 was produced as being examples of the email exchanges between the parties and the defendant says that it can be inferred from these emails that the plaintiff decided to treat the money as a loan because he was in need of funds.

24. In so far as the issue in this case, whether the money claimed was a loan or gift, the relevant part of the email dated 10 March 2006 reads :

“ Unfortunately, I will need the balance of the loan back this year. It is my college fund and I am simply not able to carry the mortgage any more. I realize your cash flow starts about now and am happy for you to pay it back over time but I do need it. We have not discussed the issue of interest — I have had to draw on my Australian mortgage to fund this. I do not propose passing on the full cost but do think an element of interest is fair. How does 4% sound? Let me know and I will work out some numbers. By my calculation the remaining balance is USD 135,000 (165–25K).”

25. The last part, the calculation in bracket “(165–25K)” is quite obviously a typo. It should correctly read “(160–25K)” as can be seen from the calculation in the Statement of Claim. Nothing however turns on this typo in the email.

26. Again on that same issue of loan or gift, the relevant part of the email dated 19 April 2006 reads :

“ PS I have a right to be upset about the money — I do not have the funds to pay school fees and will have to begin selling assets. It is just not right.”

27. The relevant part of the email dated 9 June 2006 reads :

“ Finally, I know I keep asking but I need a repayment schedule for the loan please — I need to plan my cash flow over the next 6 – 18 months and receiving payment is crucial for me. As I mentioned, $25,000 per quarter will work from side.”

28. The relevant part of the email dated 18^th June 2006 reads :

“ Have you told your friends about the $160,000 you borrowed from the kids’ college fund with no strings attached and now refuse to pay back, causing me significant liquidity problems? Don’t even start to tell me how I should spend my own money — I don’t tell you how to spend yours as it is none of my business. I am funding your loss making business and multimillion dollar properties. Have you told them that?
No of course not.
…
In terms of sorting things out here are my suggestions.
…
loan — instead of avoiding the issue you need to let me know how you plan to repay me.”

29. The email dated 11 July 2006 reads :

“ I’ll call after 9.00.
It makes sense to resolve all the outstanding issues including your effects, the ring, the outstanding loan and money I owe you for items purchased for Tahoe and Wilkins Ct. I have outlined my suggestions in an earlier email and suggest we use that as a starting point.
I hope you are recovering from your procedure.”

Decision

30. The Master had come to the decision that he did on the basis that the defendant had never denied the claimed amount to be a loan in her emails, but had only asked for time to make the repayment. In those circumstances the defence now raised that the claimed amount was a gift was quite unbelievable.

31. On the material placed before the Master, he could not be faulted for coming to the conclusion that he did.

32. Now that further evidence had been put before me, I would have to consider anew the application for summary judgment on all the material before me.

33. In so far as the plaintiff’s emails exhibited in MRW–4 are concerned, they would not appear to have made much difference to the view taken by the Master since in all those emails of the plaintiff, he consistently referred to the claimed money as being a loan. There being no emails from the defendant, again there is nothing to show that the defendant had, in any email, disputed or challenged that the money now claimed was a loan and not a gift.

34. If only these emails were to be looked at together with those before the Master, I would have no hesitation in upholding the Master’s decision.

35. However, there is a further email from the plaintiff (Exh. MRW–3) which was not before the Master. The defendant relies on the contents of this email to show that the money was “given” to her by the plaintiff.

36. The context in which the sentence “I just gave it to you — no questions asked” appears is not entirely clear looking at this one email alone.

37. While it might lend some support to the plaintiff’s case, it is also arguable that the word “gave” used in that email was used in a neutral sense referring to the handing over of the money, rather than referring to whether the money was in the nature of a gift or a loan.

38. As for MRW–2, it does not directly refer to the issue of gift or loan, but rather to the question whether the plaintiff knew of the rights issue or not at the time. Looking at the relevant part of that email, it does not make mention of any rights issue, but rather seem to give a timetable of the defendant only.

39. Given the new material which was not before the Master, and together with all the evidence before the Master, I take the view that the defence now put forward is “shadowy”. I was very nearly prepared to give summary judgment for the same reason as the Master, but for MRW–3, and even then it does not necessarily follow that the defence raised now is not a sham defence.

40. Accordingly, I shall give conditional leave to defend, the condition being that the defendant pays the claimed amount of US$135,000 into court within 21 days failing which judgment be entered on behalf of the plaintiff.

Security for costs

41. Security for costs is claimed in the amount of HK$500,000 on the grounds that the plaintiff is ordinarily resident out of the jurisdiction and pursuant to Order 23 of RHC.

42. That application is supported by a skeleton bill of costs from the defendant’s solicitors estimating the costs in this case (up to trial) to be just under HK$600,000 for both disbursements and profit costs.

43. The address given by the plaintiff in his affidavits is a California address which would tend to support the plaintiff being ordinarily resident out of jurisdiction.

44. However, having regard to the view that I have taken of the defendant’s defence, the corollary being that the plaintiff has a strong claim, I am only prepared to order security in the amount of HK$100,000 and that to be made only after 21 days upon the defendant paying into court the amount claimed of US$135,000.

The order

45. The order will be as follows :

(a) leave to the defendant to defend the plaintiff’s claim upon the condition that the defendant pays into court the amount of US$135,000 claimed by the plaintiff within 21 days failing which the plaintiff be at liberty to enter judgment against the defendant;
(b) upon the payment into court of the US$135,000 being met by the defendant, being the condition ordered above, the plaintiff do, within 21 days thereafter, pay into court by way of security for the defendant’s costs, the sum of HK$100,000; and
(c) failure to comply with the security for costs ordered above would result in these proceedings be stayed until such security for costs as ordered have been met.

Costs

46. There will be a costs order nisi as follows :

(a) the costs order made by the Master at the Order 14 hearing before him do stand;
(b) the costs of the hearing in respect of this appeal from the Master for the Order 14 application to be —
(i) costs in the cause upon the condition for leave to defend being complied with by the defendant; and
(ii) to the plaintiff as being a part of the costs of this action should the defendant fail to comply with such condition and judgment is entered in favour of the plaintiff;
(c) the costs of the application for security for costs be to the defendant but only upon the condition for leave to defend being met by the defendant; and
(d) upon the defendant failing to comply with the condition for leave to defend and judgment being entered for the plaintiff, there be no order as to costs in respect of the application for security for costs.

(A.R. Suffiad)
Judge of the Court of First Instance
High Court

Mr Jonathan Chang, instructed by Messrs Hampton, Winter & Glynn, for the Plaintiff

Mr C.P. Erving of Messrs Erving Brettell, for the Defendant

56882-EN-2007-04-26

QUENTIN KEITH HILLS v. MARLENE RITA WITTMAN

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HCA 2149/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2149 OF 2006

______________________

BETWEEN

	QUENTIN KEITH HILLS	Plaintiff
	And
	MARLENE RITA WITTMAN	Defendant

______________________

Coram : Before Master J. Wong in Chambers

Date of Hearing : 20 March 2007

Date of Decision : 26 April 2007

_______________

D E C I S I O N

_______________

Applications

1. There are two applications before me. The Plaintiff asks for summary judgment and the Defendant seeks security of costs.

Preliminary matter

2. The Defendant raised a preliminary matter in relation to her application for security of costs. Upon hearing from the parties, I granted leave to her to rely on the 2^nd Affidavit of Christopher Paul Erving at the hearing before me with costs in the cause of her summons.

Background

3. On 28 September 2006, the Plaintiff commenced the present proceedings against the Defendant for recovery of balance of loan in the sums of US$135,000.

Particulars

US$
US$

13 Nov 2001 Original Loan 150,000
9 Mar 2005 Additional Loan 10,000
160,000
4 Nov 2005 1^st Repayment 10,000
9 Dec 2005 2^nd Repayment 15,000 25,000
135,000

4. The Defendant contested the proceedings and filed her Defence on 27 October 2006. Briefly, she did not dispute the Additional Loan and the 1^st Repayment. However, she denied the Original Loan and pleaded that:

“ 1. ……It is admitted and averred that in or about November 2001, in order to comply with new Securities and Futures Commission Regulations the Defendant’s Company required to arrange a rights issue in order to raise funds to increase the company’s capital base.
2. At that time the Plaintiff and the Defendant were engaged to be married. The Defendant discussed the rights issue with the Plaintiff who, rather than allow an existing minority shareholder to take up the rights issue and thereby become the majority shareholder, suggested that he should utilize funds he had available to take up the rights issue. The Defendant agreed and offered to reflect this investment in a shareholders agreement. The Plaintiff declined.
3. In the circumstances, at the time the payment of US$150,000 was made by the Plaintiff neither party regarded it as a repayable loan.”

As to the 2^nd Repayment, the Defendant explained that:

“ 7. The payment made on 9^th December 2005 was made at the Defendant’s request to enable him to pay property taxes in respect of his property at Tiburon, California, United States of America as at the time he claimed to be short of funds. In view of the parties continuing relationship the Defendant was content to advance the money with no strings attached.”

5. On 10 November 2006, the Defendant took out a summons against the Plaintiff for security of costs. The Plaintiff opposed to it and further issued an application for summary judgment on 18 December 2006. The Plaintiff deposed that:

“ 3. Indeed, in the Defendant’s Defence filed on 27^th October 2006, she did not dispute that the total sum of US$160,000 were deposited into the Defendant’s nominated account. She merely denied that the money was advanced as a loan, but rather as an alleged “investment” in certain rights issue in the Defendant’s Company some time in November 2001. I deny that the money was advanced to the Defendant for this alleged purpose. I further deny having any knowledge of the “rights issue” or any discussion with the Defendant in relation thereof.”
(Affidavit of the Plaintiff filed on 18 December 2006)

6. On the other hand, by her affidavit in opposition filed on 10 January 2007, the Defendant said that:

“ 3. I regret that what is said in paragraph 3 of the Plaintiff’s affidavit is simply untrue. The payments we made to each other during the course of our engagement to be married were never regarded by either of us as anything other than a demonstration of our love and affection for each other and our commitment for our joint future. All this changed when I broke off our engagement even to the extent of the Plaintiff demanding the return of the engagement ring he bought me.”

7. The parties appeared before me on 20 March 2007. Mr. Jonathan Chang of Counsel acted for the Plaintiff and Mr. B. Erving of Messrs. Erving Brettell represented the Defendant. Having heard from the parties, I reserved my decision to be handed down. I now do so.

Ruling

8. Upon consideration of all the evidence authorities and submissions, I have come to the conclusion that summary judgment should be granted to the Plaintiff and the security for costs application is to be dismissed. My reasons appear as follows.

Reasons

9. The applicable law relating to summary judgment is clear now. There should not be any dispute. The underlying policy of summary procedure is to prevent the defendant from delaying the plaintiff from obtaining judgment in a case in which the defendant clearly has no defence. Two questions are to be asked. First, factually, is what the defendant says believable in light of disputed or indisputable circumstances? The Court is entitled to have regard to the commercial reality as well as to the contemporaneous documents. However, mini-trial on affidavit evidence shall not be embarked. Bare assertion is insufficient and the defendant must condescend upon particulars. Second, legally, if what the defendant says is believable, does it amount to an arguable defence in law. After all, the burden lies on the defendant to show triable issue or some other reason to be a trial.

10. Applying the above principles to the present case, the Defendant has failed me in a number of areas.

(a) I agree with Mr. Chang that the Defendant has changed her case from “investment in her company” (as per the Defence) to “gifts to her” (as per her affidavit in opposition). Mr. Erving attempted to argue that the defence was always “gifts” only. I respectfully disagree.
(b) Even assuming that the Defendant has always been pleading an alternative defences, investment or gift, both of them are unbelievable in light of the contemporaneous evidence adduced. The Plaintiff produced a series of e-mails communicated by the parties. These communications are fatal to the Defendant’s case because she had never denied the debt when the Plaintiff chased up her for the same. As extracted by Mr. Chang in paragraph 10 of his skeleton:
“ (1) 18/5/2006
P to D [B/19]: “We need to start reaching an agreement on the repayment of the loan. Ignoring me is not going to make me go away nor is it going to help.”
D to P [B/18]: “I’ve given you a response on your question on three different occasions in e-mail. I’d look them all up for you but trust you can find them. Nothing has changed, other than I’ve added one more obligation to the current two and involving monthly payments for mum. My hands are tied for a few months yet due to these obligations.”
(2) 28/5/2006
P to D [B/21]: “I am being forced to sell assets in a desperate attempt to survive and you are deliberately ignoring me and refusing to discuss repayment of the loan.”
D to P [B/20]: “… with the payment of my father’s estate’s debts, plus the repayment to my brother, in addition to the loss of two retainers as of March, I could only begin to estimate a start to a repayment at the end of summer.”
(3) 19/7/2006 [specific reference to US$135,000 not disputed]
P to D [B/23]: “Based on your comment that your business has never done better I would prefer payment of the full $135,000 immediately please. Otherwise, $30,000 per quarter beginning with Q3 2006.”
D to P [B/23]: “I haven’t heard back from my accountant as to my tax liability and I am asking him all the time for this. I can then figure out my total obligations.”
(4) 8/8/2006
D to P [B/25]: “I am awaiting one item from my tax person re my US obligation and date due and can then give you a date and timing [i.e. for repayment of the loan].”
(5) 9/8/2006
D to P [B/26]: “Finally got a response on my side re tax obligation, which is substantial due to amount of time spent in the US during 2005 and being taken away from shelters due to foreign residency. As it is due in one lump sum Sept 15, if you wish me to I will default on the US taxes owed and start on that date your previously quarterly plan. Pls let me know if this what you want.””
(c) To these e-mails, I have asked Mr. Erving to help me identifying those parties that might help his client. However, he was unable to dig out anything to support the defence(s) in any respect.
(d) The Defendant further fails this Court to condescend any particulars or produce any evidence to support her case(s). Mere assertions are clearly insufficient to establish triable issues.

10. Since I have decided that summary judgment should be awarded to the Plaintiff, the security of costs application will collapse automatically.

Costs

11. There is an order nisi that the Defendant shall pay costs of the Plaintiff in the proceedings and the 2 applications before me, including all costs reserved and Certificate for Counsel for hearing on 20 March 2007.

(Jack Wong)
Master of the High Court

Mr. Jonathan Chang instructed by Messrs. Hampton Winter & Glynn for Plaintiff.

Mr. B. Erving of Messrs. Erving Brettell for Defendant.

“	Ok, I can be stupid.
	But the last time I tried to help with money ($150,000) I just gave it to you — no questions asked. I didn’t get an itemized invoice like the last email that looked like a demand payment!”

“	Have you told your friends about the $160,000 you borrowed from the kids’ college fund with no strings attached and now refuse to pay back, causing me significant liquidity problems? Don’t even start to tell me how I should spend my own money — I don’t tell you how to spend yours as it is none of my business. I am funding your loss making business and multimillion dollar properties. Have you told them that?
	No of course not.
	…
	In terms of sorting things out here are my suggestions.
	…
	loan — instead of avoiding the issue you need to let me know how you plan to repay me.”

“	I’ll call after 9.00.
	It makes sense to resolve all the outstanding issues including your effects, the ring, the outstanding loan and money I owe you for items purchased for Tahoe and Wilkins Ct. I have outlined my suggestions in an earlier email and suggest we use that as a starting point.
	I hope you are recovering from your procedure.”

(a)	leave to the defendant to defend the plaintiff’s claim upon the condition that the defendant pays into court the amount of US$135,000 claimed by the plaintiff within 21 days failing which the plaintiff be at liberty to enter judgment against the defendant;
(b)	upon the payment into court of the US$135,000 being met by the defendant, being the condition ordered above, the plaintiff do, within 21 days thereafter, pay into court by way of security for the defendant’s costs, the sum of HK$100,000; and
(c)	failure to comply with the security for costs ordered above would result in these proceedings be stayed until such security for costs as ordered have been met.

(a)	the costs order made by the Master at the Order 14 hearing before him do stand;
(b)	the costs of the hearing in respect of this appeal from the Master for the Order 14 application to be —
	(i)	costs in the cause upon the condition for leave to defend being complied with by the defendant; and
	(ii)	to the plaintiff as being a part of the costs of this action should the defendant fail to comply with such condition and judgment is entered in favour of the plaintiff;
(c)	the costs of the application for security for costs be to the defendant but only upon the condition for leave to defend being met by the defendant; and
(d)	upon the defendant failing to comply with the condition for leave to defend and judgment being entered for the plaintiff, there be no order as to costs in respect of the application for security for costs.

	Particulars
		US$	US$
13 Nov 2001	Original Loan		150,000
9 Mar 2005	Additional Loan		10,000
			160,000
4 Nov 2005	1^st Repayment	10,000
9 Dec 2005	2^nd Repayment	15,000	25,000
			135,000

“	1.	……It is admitted and averred that in or about November 2001, in order to comply with new Securities and Futures Commission Regulations the Defendant’s Company required to arrange a rights issue in order to raise funds to increase the company’s capital base.
	2.	At that time the Plaintiff and the Defendant were engaged to be married. The Defendant discussed the rights issue with the Plaintiff who, rather than allow an existing minority shareholder to take up the rights issue and thereby become the majority shareholder, suggested that he should utilize funds he had available to take up the rights issue. The Defendant agreed and offered to reflect this investment in a shareholders agreement. The Plaintiff declined.
	3.	In the circumstances, at the time the payment of US$150,000 was made by the Plaintiff neither party regarded it as a repayable loan.”

“	3.	Indeed, in the Defendant’s Defence filed on 27^th October 2006, she did not dispute that the total sum of US$160,000 were deposited into the Defendant’s nominated account. She merely denied that the money was advanced as a loan, but rather as an alleged “investment” in certain rights issue in the Defendant’s Company some time in November 2001. I deny that the money was advanced to the Defendant for this alleged purpose. I further deny having any knowledge of the “rights issue” or any discussion with the Defendant in relation thereof.”
		(Affidavit of the Plaintiff filed on 18 December 2006)

(a)	I agree with Mr. Chang that the Defendant has changed her case from “investment in her company” (as per the Defence) to “gifts to her” (as per her affidavit in opposition). Mr. Erving attempted to argue that the defence was always “gifts” only. I respectfully disagree.
(b)	Even assuming that the Defendant has always been pleading an alternative defences, investment or gift, both of them are unbelievable in light of the contemporaneous evidence adduced. The Plaintiff produced a series of e-mails communicated by the parties. These communications are fatal to the Defendant’s case because she had never denied the debt when the Plaintiff chased up her for the same. As extracted by Mr. Chang in paragraph 10 of his skeleton:
	“	(1)	18/5/2006
			P to D [B/19]: “We need to start reaching an agreement on the repayment of the loan. Ignoring me is not going to make me go away nor is it going to help.”
			D to P [B/18]: “I’ve given you a response on your question on three different occasions in e-mail. I’d look them all up for you but trust you can find them. Nothing has changed, other than I’ve added one more obligation to the current two and involving monthly payments for mum. My hands are tied for a few months yet due to these obligations.”
		(2)	28/5/2006
			P to D [B/21]: “I am being forced to sell assets in a desperate attempt to survive and you are deliberately ignoring me and refusing to discuss repayment of the loan.”
			D to P [B/20]: “… with the payment of my father’s estate’s debts, plus the repayment to my brother, in addition to the loss of two retainers as of March, I could only begin to estimate a start to a repayment at the end of summer.”
		(3)	19/7/2006 [specific reference to US$135,000 not disputed]
			P to D [B/23]: “Based on your comment that your business has never done better I would prefer payment of the full $135,000 immediately please. Otherwise, $30,000 per quarter beginning with Q3 2006.”
			D to P [B/23]: “I haven’t heard back from my accountant as to my tax liability and I am asking him all the time for this. I can then figure out my total obligations.”
		(4)	8/8/2006
			D to P [B/25]: “I am awaiting one item from my tax person re my US obligation and date due and can then give you a date and timing [i.e. for repayment of the loan].”
		(5)	9/8/2006
			D to P [B/26]: “Finally got a response on my side re tax obligation, which is substantial due to amount of time spent in the US during 2005 and being taken away from shelters due to foreign residency. As it is due in one lump sum Sept 15, if you wish me to I will default on the US taxes owed and start on that date your previously quarterly plan. Pls let me know if this what you want.””
		(c)	To these e-mails, I have asked Mr. Erving to help me identifying those parties that might help his client. However, he was unable to dig out anything to support the defence(s) in any respect.
		(d)	The Defendant further fails this Court to condescend any particulars or produce any evidence to support her case(s). Mere assertions are clearly insufficient to establish triable issues.