STANDARD CHATERED BANK (HONG KONG) LTD v. MA LIT KIN, CARY

HCA 62/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 62 OF 2006

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J U D G M E N T

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I.   INTRODUCTION

1.  There are 2 issues.  The principal one is whether summary judgment was rightly granted in the Bank’s favour against Mr. Ma. The second is whether a telephone conversation was made by Mr. Ma “without prejudice” to his liability.

II.   BACKGROUND

2.  Mr. Ma had an account with an overdraft facility at the Bank.

3.  The Bank granted the facility by a letter dated 29 December 1999.  The overdraft was repeatedly renewed under terms set out in 4 facility letters issued between March 2002 and November 2003 and in a General Customer Agreement (GCA) dated 4 January 2000.

4.  The Bank now claims about $3.4 million as due from Mr. Ma on his overdraft.

5.  Mr. Ma is a director of Moulin Global Eyecare Holdings Ltd. (Moulin), formerly a listed company, now in liquidation. 

6.  He says that the facility was thrust upon him by the Bank. He says that he did not need the extra money from the overdraft.

7.  Mr. Ma alleges that, when the facility was granted, he told the Bank that:-

“If monies were drawn down from the OD account, they would have been for Moulin’s use, and would be repaid by Moulin, instead of myself.”

8.  Given the alleged understanding with the Bank, Mr. Ma denies liability.  He admits that from time to time he signed the various facility letters as well as the GCA.  But he claims that he signed these documents “upon request” and “as usual” did not read anything before signing.

9.  On 23 October 2006 Master Wong gave summary judgment for the outstanding amount on the overdraft.  Master Wong found Mr. Ma’s defence that Moulin (and no one else) was responsible for the overdraft as incredible.

10.  As part of its case, the Bank adduced evidence of a telephone conversation between Mr. Ma and Mr. Stephen Wong of the Bank’s solicitors on 3 February 2006.

11.  Mr. Ma initiated the call.  He told Mr. Wong that he owed money to the Bank as claimed.  But Mr. Ma said that he was already paying Hang Seng Bank (HSB) $30,000 a month under a debt settlement previously reached.  Mr. Ma claimed that he could not afford to pay more than a total of $30,000 to HSB and the Bank every month.  He proposed that HSB and the Bank discuss how they might apportion a $30,000 monthly payment as between themselves.

12.  Mr. Ma never informed Mr. Wong that what was being said over the telephone was “without prejudice”. 

13.  The telephone conversation described above was recorded by the Bank’s solicitors in a letter dated 6 February 2006 to Mr. Ma’s solicitors.  The summary in that letter of what was said is not substantially disputed by Mr. Ma.  Only the admissibility of what was said is disputed.

14.  Master Wong held that, independently of his views on Mr. Ma’s credibility, he would have granted judgment on the basis of Mr. Ma’s clear admission of liability over the telephone. 

15.  Mr. Kenneth Ng (appearing for Mr. Ma) challenges Master’s Wong’s reliance on the call.  Mr. Ng says that, even if not expressly so characterised, the telephone conversation was “without prejudice”.  It was thus inadmissible as evidence of anything against Mr. Ma.

16.  Mr. Ng goes further.  He submits that, having been presented with evidence of the call, Master Wong should immediately have recused himself.  His mind having been fatally poisoned by his knowledge of the call, Master Wong could not (Mr. Ng suggests) have gone on to find Mr. Ma liable.  In proceeding nonetheless, Master Wong (Mr. Ng suggests) would not be regarded by any fair-minded observer as having acted impartially.

17.  To the extent then that Master Wong found Mr. Ma to be liable independently of the telephone conversation, Mr. Ng says that Mr. Ma was denied a fair hearing.

III.   DISCUSSION

A.   Whether summary judgment rightly granted

18.  In my view, this was an appropriate case for summary judgment.

19.  First, assume that there was some sort of understanding that Moulin would pay Mr. Ma’s overdraft debt from time to time or, alternatively, that the Bank should look to Moulin first to pay off any overdraft.  Mr. Ma’s affidavit posits the former version of the understanding.  Mr. Ng in submission only advances the latter, more toned-down version. 

20.  Neither version of the understanding could mean that Moulin was solely responsible for outstanding monies or that Mr. Ma had no ultimate liability to make good any deficit of funds.  Even Mr. Ma does not explicitly state in his affidavit that there was an understanding that Moulin and Moulin alone would be liable for the overdraft account.

21.  Who remitted monies into Mr. Ma’s account to pay off any debts standing due from time to time, would be of little concern to the Bank.  The Bank’s main concern would be to ensure that ultimately Mr. Ma was liable for any shortage. 

22.  Thus, any understanding that Moulin would pay off any debts is neither here nor there.  It has little (if any) bearing on the real issue of contractual liability for any deficit.

23.  As to such contractual liability, there can be no doubt.  The fact that Mr. Ma did not read the facility letters or GCA before signing them does not constitute a defence at common law. Mr. Ma is liable to make good any overdraft in accordance with the contractual terms which he signed.

24.  Mr. Ng suggests that his version of the alleged understanding gives rise to a promissory estoppel.  This means (Mr. Ng suggests) that the Bank could not “pull the plug” and pursue a strict legal right of repayment until Mr. Ma had been given reasonable notice.

25.  But why is there an estoppel in the first place?  There is nothing inconsistent about Moulin paying off debts from time to time and being liable as primary debtor, but Mr. Ma being ultimately liable for any accrued debt in keeping with the documents which he signed.

26.  Second, consider either version of the alleged understanding.  Both are incredible. 

27.  Neither version is supported by any document.  On the contrary, over the years Mr. Ma simply signed facility letters and the GCA, acknowledging personal liability, without demur. 

28.  Mr. Ma alleges that the reason why Moulin would pay off any overdraft debts was because Moulin operated the account.  Mr. Ma claims to have signed blank cheques for Moulin to fill in as and when Moulin required funds.  The impression which Mr. Ma seeks to convey is that the account was almost exclusively used by Moulin.

29.  But that is plainly incorrect.

30.  A perusal of the relevant bank statements shows frequent debits for payments to the Hong Kong Jockey Club, the Aberdeen Marina Club and Park ‘N Shop.  These debits were routinely made at times when the account was in deficit and appear to have been personal expenses of Mr. Ma. 

31.  The Jockey Club debits, for example, concern a Jockey Club Telebet facility which Mr. Ma operated in conjunction with his account at the Bank and which the Bank (at Mr. Ma’s request) guaranteed.

32.  In relation to Jockey Club expenses, Mr. Ma says that the use of the overdraft facility was “exceptional”.  He states:-

“I had to use this account because the Plaintiff bank was the only bank with whom I had an account which was on the Jockey Club’s approved list of banks.  I could not use other accounts I had with other banks.”

33.  That is unconvincing.  Perusal of the account shows that Jockey Club expenses were regularly incurred. 

34.  Further, the purported explanation raises more questions than it answers.  Why did not Mr. Ma open his own truly personal account with the Bank or some other bank approved by the Jockey Club?  Why did he instead in potential breach of his fiduciary duties to Moulin allow his personal expenses to become mixed with those of Moulin?

35.  By the alleged understanding, Mr. Ma is asking the Court to believe that he told the Bank in no uncertain terms that he would not be responsible or would not be responsible as primary debtor for whatever happened to the account.  This would be regardless of the documents signed by him (which should then only be treated as mere formalities) and regardless of the fact that from time to time he would be using the account for his own personal matters. 

36.  As Master Wong cogently pointed out, a Bank would not enter into such an arrangement which defies commercial sense.  If the account was to be for Moulin, the Bank would have opened it with Moulin and entered into a direct contractual relationship with Moulin.

37.  Third, assume that there is some sort of promissory estoppel as Mr. Ng claims.

38.  Mr. Ng accepts that the estoppel would at best be suspensory of the Bank’s rights.  But (Mr. Ng maintains) the Bank would have to give reasonable time for Mr. Ma to pay the amount due on the overdraft.  Mr. Ng says that a reasonable period would be 6 months.

39.  Mr. Ng argues that the Bank’s letter of demand dated 20 June 2005 (which asked for payment by the next day) did not constitute reasonable notice.  Mr. Ng says that the letter was thus invalid as a demand and since then no valid demand has been made.  The Bank is thus (Mr. Ng. asserts) not entitled to bring the current action.

40.  I disagree.

41.  The requirement of a demand to trigger liability for repayment of Mr. Ma’s facility arises from GCA clauses 1 and 9.  Neither stipulate any period of time which should be allowed to the account-holder before he has to pay up.  Accordingly the demand letter of June 2005 complied with GCA clauses 1 and 9.

42.  If there is a promissory estoppel, the critical question is not whether the letter of demand stipulated a particular time frame for payment.  The critical question is instead one of fact: has the debtor had reasonable notice that his creditor will no longer abide by the alleged understanding, but will insist on his strict legal rights?

43.  The answer is self-evident.  The letter of demand was issued in June 2005.  The writ was not issued until January 2006. Master Wong heard the matter in September 2006.  By any yardstick, at the time of the writ and the hearing before Master Wong, Mr. Ma would surely have had ample notice of the Bank's intention to enforce its strict legal rights and reasonable time in which to pay up.

44.  Indeed, on Mr. Ng’s suggested requirement of 6 months, the writ itself should readily qualify as a valid demand for payment at law.

45.  Consequently, however one looks at the matter, Mr. Ma has no defence to the Bank’s claim.  Summary judgment was rightly granted.

B.   Whether admission made “without prejudice”

B.1  Law

46.  It is strictly unnecessary to consider the “without prejudice” issue in light of the conclusion in Section III.A.  Nonetheless, in deference to counsel’s submissions, I briefly set out my views.

47.  The law regarding “without prejudice” communications was recently considered by Kwan J in Re Jinro (HK) International Ltd. [2002] 4 HKC 90 (at §§13-18).  She discerned the following principles:-

(1)     For a claim of “without prejudice” privilege to succeed, the party claiming it must show that the communication was made:-

(a)     in a bona fide attempt to settle a dispute between the parties; and,

(b)    with the intention that, if negotiations failed, the communication could not be disclosed without the consent of the party making the communication.

(2)     In establishing that there was a bona fide attempt to settle a dispute, the party seeking to assert privilege must show that, at the time of his communication:-

(a)     a dispute existed between the parties in respect of which legal proceedings had commenced or were contemplated; and,

(b)    the communication was made in an attempt to further negotiations to settle that dispute.

(3)     The mere fact that a communication concerns a dispute between the parties is not sufficient to confer privilege.

(4)     The communication need not be expressed to be “without prejudice,” if it is clear from the surrounding circumstances that the parties were generally seeking to compromise their dispute.

(5)     But there is an exception to the “without prejudice” privilege.  This exception applies where the exclusion of the evidence would act as a cloak for perjury or other “unambiguous impropriety”.  This exception should only apply in the clearest of cases, since otherwise it could undermine the “without prejudice” privilege altogether.

B.2  Application of law to fact

48.  Mr. Ng submits that all Mr. Ma was doing when he telephoned Mr. Wong was to ask for further time to pay. 

49.  This (according to Mr. Ng) would have constituted little more than an attempt to settle a then ongoing dispute without further recourse to the Court.  This case (Mr. Ng says) is thus little different from Leung Kwok Tim v. Builders Federal (HK) Ltd. [2001] 3 HKC 527 or Forster v. Friedland, unrep., UKCA (Civil Division), 10 November 1992.

50.  In Leung the plaintiff sent invoices to the defendant.  The defendant neither admitted, nor denied liability.  It merely asked for more time in which to pay.  Burrell J held that there was no admission in those circumstances.

51.  In Forster, Friedland held a number of meetings with Forster. 

52.  Friedland told Forster that, although he regarded himself as bound in honour to acquire certain shares, he would nonetheless deny liability if it came down to litigation.  Friedland said that what he really wanted was more time in which to acquire the shares. 

53.  After several meetings, the parties prepared a document entitled “Interim Agreement” whereby Friedland was to make periodic payments.

54.  The question before the Court was whether secretly-made tape recordings of the meetings between Forster and Friedland were privileged or were admissible as evidence.  The meetings were never expressly stated to be “without prejudice”.

55.  The English Court of Appeal held that in all the circumstances the meetings constituted “without prejudice” negotiations aimed at settling the parties’ disputes to avoid litigation.

56.  In my view, we are far away from the situations in Leung and Forster.

57.  Unlike Leung, there was a clear admission here that Mr. Ma was indebted to the Bank.  Mr. Ma simply asked for more time to pay.

58.  Unlike Forster, the admission of liability was unequivocal.

59.  It is one thing for a person to say (as Friedland did) that he feels bound to stick to an agreement as a matter of strict honour or morality.  But it does not follow from such statement that the person accepts that he has a legally enforceable responsibility under the relevant contract.  Friedland was merely positing that, although morally bound, he had for technical reasons no actual legal liability to buy the shares.

60.  But here Mr. Ma made no qualification.  He simply admitted that he owed money to the Bank and needed time to pay.

61.  Thus, it cannot be said that the telephone conversation was within the policy of the “without prejudice” rule.  The conversation was a frank admission of liability coupled with a confession of an inability to pay up immediately.

62.  It is true that Mr. Ma asked for concessions in relation to the payment of what he admittedly owed.  But, as Hoffmann LJ observed in Forster, “not every request for more time [to pay] is automatically to be treated as opening a negotiation without prejudice”. 

63.  In the context of the admission of liability at the start of the telephone call, I do not think that the request for time to pay can here be characterised as part of a negotiation.  It was simply pointing out the stark reality of Mr. Ma’s cashflow difficulties to the Bank.

64.  Mr. Ng refers to Mr. Ma not having distinguished in his mind between Moulin’s debts and his own at the time of his call. Mr. Ng also suggests that at the time of his call Mr. Ma had not had sufficient opportunity to consider his position and discuss the matter with solicitors.  Thus, Mr. Ng submits any admission by Mr. Ma could not have been an informed one.

65.  I am unable to accept this.  As a director of a listed company, it can safely be assumed that Mr. Ma would have been aware of the elementary reality of his responsibility to discharge the amount standing due on an overdraft in an account opened in his personal name.  I do not for one moment believe that Mr. Ma made the admission without himself understanding all relevant facts and matters in relation to the overdraft.

B.3  Whether any unfairness to Mr. Ma    

66.  Assume, however, that I am wrong and the telephone communication is privileged.

67.  The reasoning in Section III.A above ignores the telephone conversation altogether, but still concludes that Mr. Ma has no defence.  The admissibility or otherwise of the telephone conversation is irrelevant to the question of summary judgment.

68.  Mr. Ng contends to the contrary.  He says that knowledge of the telephone conversation would so taint the mind of a master (or for that matter a judge) that he could not act fairly.  He should instead recuse himself.

69.  I disagree. 

70.  As part of its daily work, the Court (whether master or judge) must regularly sift through admissible and inadmissible evidence.  The Court habitually excludes from its mind irrelevant or inadmissible material and comes to a conclusion based solely on admissible and relevant evidence.

71.  The judge or master is different from a jury which is comprised of lay persons and which comes to a verdict without giving reasons.

72.  Even if the call were privileged, the present case would be little different from a trial or other hearing where inadmissible evidence is adduced and looked at “de bene esse” by a Court.  In such case, the Court (whether master or judge) simply rules the evidence inappropriate and proceeds with the hearing.  There is no question of recusal or unfairness.

73.  This is not an exceptional case.  I reject the suggestion that Master Wong ought to have recused himself in the circumstances here.

IV.  CONCLUSION

74.  Mr. Ma’s appeal is dismissed.  I shall hear the parties on costs and consequential orders.

HCA 62/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 62 OF 2006

______________________

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Coram : Before Master J. Wong in Chambers

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D E C I S I O N

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Application

1. The Plaintiff applied against the Defendant for summary judgment and/or judgment on admission.

Preliminary matter

2. A few days before the scheduled hearing for the substantive hearing of the said Plaintiff’s application, the Defendant issued a summons seeking leave to amend his Defence and to further rely on his second affidavit.  Ms. Janine Cheung of Counsel, representing  the Plaintiff, did not seriously oppose the matter.  With no objection from the Counsel for the Defendant, Mr. Alexandar Stock, I allowed the Defendant’s summons without prejudice to any of the rights of the Plaintiff, including adducing further evidence in reply and filing/serving its Reply, if necessary, in future.  The Amended Defence was required to be filed within 7 days but service of the same was dispensed with.

Background

3. The Plaintiff was and is a banking corporation carrying on business in Hong Kong.  The Defendant was the CEO of a company called Moulin Global Eyecare Holdings Ltd (“Moulin”) listed in the Stock Exchange of Hong Kong.

4. By a Facility Letter and a General Customer Agreement dated 29 December 1999 and 4 January 2000 respectively, the Plaintiff granted facilities to the Defendant for the sum of $1m.  The facilities was thereafter renewed and revised in both 20 April 2002 and 19 September 2002.  Subsequently, by a further Facility Letter dated 19 November 2003, they were increased to $3.5m overdraft facilities and $0.5m guarantee facilities.

5. It is the Plaintiff’s case that the Defendant, despite repeated requests and demands, has failed to repay it the outstanding overdraft facilities.  As on 8 January 2006, when the present proceedings were commenced, the Defendant owed the Plaintiff the sum of $3,384,259.58 and interest thereon until full payment.

The Defence

6. The Defendant filed his Defence on 7 March 2006.  In short, it was a defence containing non-admissions and denials.  Nonetheless, before me, for the purpose of this present Order 14 application, the Defendant’s case is to be founded on:

(a) the said Amended Defence;

(b) the 1^st Affidavit of the Defendant filed herein on 10 June 2006; and

(c) the 2^nd Affidavit of the Defendant filed herein on 30 August 2006.

7. Ms. Cheung and Mr. Stock took a different view as to how one should describe the Defence.  In the words of Ms. Cheung, it was non est factum only.

8. On the other hand, Mr. Stock described the Defendant’s case in the followings:

“ 8. If D’s version of events were to be accepted, the following legal consequences/defences would arise:

(a) Collateral agreement.  On D’s version of events, there was a collateral agreement to the effect that the overdraft facility created operated between P and Moulin rather than between P and D personally.  Of course, if this is correct, then there is no contract upon which P can sue D, and there is no doubt and owing from D to P ……

(b) Estoppel by Convention.  A closely related argument is that by virtue of the “common understanding” upon which D relied, P is estopped from denying that the Agreement and the Facility Letter and the debts which were created thereunder operated as between P and Moulin rather than as between P and D ……

(c) Misrepresentation.  On D’s version of events P may have misrepresented to D the terms and legal effect of the Agreement and the 2003 Facility Letter, which would entitle P to rescind the same …… Even if there was no express misrepresentation, it is well established that a misrepresentation may be implied or by conduct ……

(d) Non est factum.  Where a party has been misled into executing a deed or signing a document essentially different from that which he intended to execute or sign, that party can plead non est factum, which plea would render the instrument in question void ……

(paragraph 8 of the skeleton of Mr. Stock)

Mr. Stock further told me that the strongest Defence would be (b) Estoppel by Convention while the weakest, (d) Non est factum.

9. In my view, it does not matter how one would like to describe the case of the Defence according to the textbook.  The crux of the Defendant’s case can be located in his first affidavit:

“5. I told Ms. Cheung that I did not need any financial assistance from the Bank.  I had the impression that she was under some pressure for meeting the threshold for creating new business opportunities for the Bank imposed upon her by the Bank.  In view of this, I accepted her offer but I had very clearly made known to her that personally, I did not need financial assistance from the Bank and I would not use the monies for my personal purpose.  If monies were drawn down from the OD account, they would have been for Moulin’s use, and would be repaid by Moulin, instead of myself.  That was the understanding upon which the OD account was opened and operated.

6.      In or about late December 1999, I signed the document as Ms. Cheung requested.  A few days later, Ms. Cheung showed me another document and I signed this document upon her request.  As usual, I had not read the document before I signed it.  It was only after I have been shown (by my solicitor Messrs. F. Zimmern & Co (“FZC”)) Ms. Leung Yee Chun’s 2^nd Affidavit (the ‘Plaintiff’s Affidavit’) in this Application that I realized that I had signed a facility letter and a standard form agreement of the Bank known as the General Customer Agreement.

7.      A few years later, in or about September 2002, Ms. Cheung approached me again and advised me that the Bank was ready to increase the OD limit to HK$1,500,000.  A new facility letter was signed by me upon Ms. Cheung’s request.  The OD limit was further increased to HK$3,500,000 in or about November 2003.  I did not ask for these increases.  Instead, they were prompted and offered by the Bank.  It seems to me that there were the Bank’s commercial strategy to create more business with Moulin as it was known to the bank that Moulin was actually using the OD.”

Summary Judgment

10. I now turn to the legal principles in relation to application for summary judgment.  They are clear by now.  For our purpose, it suffices to summarize that the underlying policy of summary procedure is to prevent the defendant delaying the plaintiff from obtaining judgment in a case whereby the defendant clearly has no defence.  Two questions are to be dealt with.  First, factually, is what the defendant says believable in light of undisputed or indisputable circumstances?  In this respect, the Court is entitled to take into account of the commercial reality as well as of 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.

11. Applying the above principles to the present case, the Defendant fails me because, upon consideration, in my view, the Defence is unbelievable in the circumstances.  In so doing, I warn myself that I should never conduct a trial on affidavit evidence.  However, at the same time, I also remind myself that the Plaintiff’s right to summary judgment should not be delayed by the tactful skill of legal advisers in framing the Defendant’s case so that it looks as if there were disputed facts.

12. The Defendant is unbelievable because:

(a) It is not disputed that he was the CEO of a listed company.

(b) He did sign all the Facilities Letters and the General Customer Agreement.

(c) All monies were drawn from his bank account through cheques signed by him in his personal capacity throughout the years.

(d) It is against commercial sense that the facilities would be granted to Moulin when each and every document was issued in the personal capacity of the Defendant for years without any queries.  Quite to the contrary, directors are usually required to execute personal guarantees when facilities are extended to limited companies.

(e) It is also against common sense that the Defendant does not read the documents prior to the signing of them, especially in light of the following contemporaneous documents.

(i) General Customer Agreement dated 4 January 2000 :

“ Individual Signatory

Signed Sealed and Delivered by:

MA LIT KIN, CARY	(Signed)
(Name of Signatory in Block Letters)	___________________
	(Signature)

I/D Card No.
(or equivalent)> of Signatory:  G275171(1)

in the presence:
Name of Witness:  …”

(ii) Facility Letters dated 29 December 1999, 19 September 2002 as well as 19 November 2003 :

“Agreed.  I have read and understood the terms set out above (in English) and hereby agree to be bound by them.

_____(Signed)____________
MA LIT KIN, CARY”

As the CEO of a listed company, it is incredible that he would not pay attention in executing legal documents, especially when the same were done in his personal capacity as distinguished from “for and on behalf of” Moulin.

(f) The case of the Defendant is a bare allegation with no particulars provided.  The plaintiff can adduce evidence to point to the fact that some of the facilities could only be used for the personal benefit of the Defendant.  However, the Defendant has not satisfied this Court with any evidence or particulars that the facilities were for the benefit and use of Moulin only.

(g) Finally, the Defendant also disputed as to whether the amounts claimed including interest thereon were correctly calculated.  However, he did not attempt to show this Court his own figures or how the Plaintiff was wrong.  On balance, I see no reason why I should not accept the Plaintiff’s calculation as per its Certificates of Indebtedness produced.

Judgment on Admission

13. Having ruled that the Plaintiff is entitled to the summary judgment as aforesaid, I need not go further to deal with the other application by the Plaintiff upon judgment on admission, namely, an oral admission by the Defendant during a telephone conversation with the solicitor of the Plaintiff on 3 February 2006.  Nonetheless, if I had to decide on the same, in my view, judgment could also be entered against the Defendant on such alternative basis.

14. Both learned Counsel have addressed me on the applicable principles but I do not consider them differ much from each other.  It suffices to recap the submissions of Mr. Stock as follows:

“ 14.    The relevant law is summarized in Hong Kong Civil Procedure 2006, at §§27/3/1 to 27/3/10.  Key points include the following:

(a) The admission in question must be clear and unambiguous;

(b) Although it seems that admissions for the purposes of O.27 r.3 are usually made on the pleadings or by letter, an oral admission may suffice if it is proved;

(c) The jurisdiction to enter judgment on admission is discretionary.”

(paragraph 4 of Mr. Stock’s skeleton)

15. Judgment on admission is to be entered against the Defendant because I find the answers to the 3 points identified above have been satisfied.

(a) The only challenge by the Defendant is that:

“20. When I made the concessions and offers during the telephone conversation with Mr. Stephen Wong, I was desperate about reaching a settlement as soon as possible.  In my mind, I did not differentiate between the debts owed by Moulin and those allegedly by me.  As a result, I did not explain clearly to him that it was Moulin who had used the OD facilities, and that the concessions and offers made during our telephone conversation were not made on my own behalf.”

(1^st affidavit of the Defendant)

However, there was indeed clear and unambiguous admissions from the perspective of Mr. Stephen Wong as well as any bystander to the conversation, i.e. the Defendant asked to pay the debt by instalments.  With respect, the Defendant cannot escape the liability simply by trying to create a doubt by his subjective intent at this stage.

(b) The oral admission has been proved on balance before me.

(i) Uncontradicted contemporaneous document is produced to record the admission:

“Your client, Mr. Ma Lit Kin, Cary called us on telephone last Friday.  He admitted to our Mr. Stephen Wong on telephone that:-

(a) he does owe our client the debt as claimed in the subject proceedings;

(b) he has been paying Hang Seng Bank Limited, another creditor of his and how has also sued him, a monthly sum of HK$30,000.00 since 3 or 4 months ago in settlement of the debt due to Hang Seng Bank Limited in the sum of about HK$700,000.00;

(c) the said monthly sum of HK$30,000.00 is the maximum amount that the could afford each month to repay our client and Hang Seng Bank Limited;

(d) he would like to pay our client and Hang Seng Bank Limited a monthly sum of HK$30,000.00 in settlement of the two banks’ claims against him but we should discuss with Hang Seng Bank Limited as to the proportion that the two banks should be entitled to the said monthly repayment.”

(letter of the Plaintiff’s solicitors dated 6 February 2006)

(ii) The content of the above conversation and admission has not been denied and further confirmed by the said paragraph 20 of the 1^st Affidavit of the Defendant.

(c) Given my ruling on the unbelievable version of facts as advanced by the Defendant in defending the Order 14 application, I see no reason why discretion should be exercised in not granting the Plaintiff judgment on the monies advanced to the Defendant.

Conclusion

16. In the circumstances, I order that judgment is to be entered for the Plaintiff against the Defendant for payment of the sum of HK$3,396,128.06 together with interest thereof at the rate of 8% per annum over the Plaintiff’s Hong Kong prime rate (subject to fluctuation) from 9 January 2006 until full payment.  There is also an order nisi that costs of the proceedings and application, including all costs reserved and certificate for counsel on 4 September 2006, be to the Plaintiff and borne by the Defendant, on indemnity basis, to be taxed, if not agreed.

Ms J. Cheung instructed by Messrs. Tsang, Chan & Wong for Plaintiff.

Mr. A. Stock instructed by Messrs. F. Zimmern & Co. for Defendant.