OON KIM KOH, the person appointed to represent the estate of KOH KIM CHAN, deceased v. QUEST INVESTMENTS LTD AND ANOTHER

DCCJ 6960/2019

[2025] HKDC 1198

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 6960 OF 2019

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DECISION
(ON VARIATION OF COSTS ORDER NISI)

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(I)  Introduction

1.  On 24 December 2024, I handed down my judgment[1] (“Judgment”) in favour of the Plaintiff, with a costs order nisi that the 1^st Defendant do pay the Plaintiff costs of the action including all reserved costs, to be taxed if not agreed, with certificate for counsel (“Costs Order Nisi”).

2.  On 21 January 2025, the Plaintiff took out a summons pursuant to Order 42 rule 5B(6) of the Rules of the District Court (Cap 336H, sub leg)(“RDC”) for an order that the Costs Order Nisi be varied, such that the Plaintiff has her costs of the action with certificate for counsel be taxed on an indemnity basis, if not agreed.

3.  I have considered parties’ written submissions and decided to determine the application on paper.

4.  On 8 July 2025, the Plaintiff through her solicitors informed this Court that the 1^st Defendant had been wound up on 18 June 2025. Pursuant to section 186(1) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap.32), no action or proceeding shall be proceeded with or commenced against the company except by leave of the court when a winding up order has been made. The Plaintiff shall take steps to seek leave from the Court of First Instance to proceed with the present application.

5.  On 23 October 2025, the Plaintiff through her solicitors informed this Court that upon her application jointly made with the provisional joint and several liquidators of the 1^st Defendant, the Court of First Instance had granted leave to proceed with this application.

6.  In this Decision, I adopt the same definitions and abbreviations used in the Judgment.

(II)  Legal Principles

7.  Order 62 rule 5 RDC set out the special matters to be taken into account when the court exercises its discretion as to costs. Matters relevant to the present case include (a) the underlying objectives in Order 1A rule 1 RDC, (b) the conduct of all the parties, and (c) whether a party has succeeded on part of his case, even if he has not been wholly successful. Conduct of the parties includes:-

(1)  whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;

(2)  the manner in which a party has pursued or defended his case or a particular allegation or issue; and

(3)  conduct before, as well as during, the proceedings.

8.  The Plaintiff referred to the Court of Final Appeal’s decision of Commissioner of Inland Revenue v Poon Cho Ming John (2020) 23 HKCFAR 74 which set out the following guidelines (paragraph 4 thereof):-

(1)  In certain circumstances, costs may be awarded on a more generous than usual basis of taxation so as to achieve a fairer result.

(2)  It is for the receiving party to show that the case has some special or unusual feature.

(3)  Such features are not confined to an ulterior motive, an improper purpose, deception or underhand conduct on the part of the paying party.

(4)  Neither the attributes of the parties nor the character of the proceedings are irrelevant to the question of whether a more generous than usual basis of taxation should be ordered.

(5)  The discretion to order a more generous than usual basis of taxation is not to be fettered or circumscribed beyond the requirement that such taxation be ordered only when it is appropriate to do so.

(6)  As to that, the grounds on which a more generous than usual basis of taxation is to be ordered must be connected with the case. That extends to – but not further than to – any matter relating to the litigation and the parties’ conduct in it, and also to the circumstances leading to the litigation.

9.  The 1^st Defendant pointed out that Commissioner of Inland Revenue v Poon Cho Ming John (supra) referred to another Court of Final Appeal’s decision of Leung Chun Kwong v Secretary for Civil Service (No 2) (2019) 22 HKCFAR 282 which refused to award costs on indemnity costs:-

“14. The appellant submits that it is appropriate that costs should be taxed on the indemnity basis because these proceedings involve the public interest, the conduct of the respondents was unreasonable and their cases were wholly unmeritorious, and the appellant will be out of pocket because of the substantial contribution he was required to make in order to obtain legal aid for these proceedings.

15. Whilst we have some sympathy for the appellant because of the extent to which he will be out of pocket despite winning this litigation, we are satisfied that this is not an appropriate case for indemnity taxation of the appellant’s costs. We do not consider that the behaviour of the respondents in making the challenged decisions and thereafter in contesting the judicial review proceedings, then pursuing the appeal to the Court of Appeal and thereafter resisting the appeal to this Court was so unreasonable and without merit as to be deserving of a costs sanction usually reserved for those cases in which there has been something improper or inappropriate or wholly unreasonable in the administrative decision under challenge or in the conduct of the proceedings.”

10.  The Plaintiff also cited China Shanshui Cement Group Ltd and Others v Tianrui (International) Holding Co. Ltd and Others[2021] HKCFI 2745, in which Keith Yeung J applied the legal principles on awarding indemnity costs set out in Commissioner of Inland Revenue v Poon Cho Ming John (supra). In relation to the first summons for adducing an affirmation, the court granted indemnity costs because (a) the summons had been filed and served late without explanation as to the lateness and the relevance of the affirmation, (b) the summons was only withdrawn in the course of the hearing despite earlier invitation for withdrawal by the plaintiffs, and (c) as a result the plaintiffs’ time and costs had been unnecessarily wasted and their resources had been diverted. In relation to the second summons, the defendants filed extensive written submissions in relation to three out of five paragraphs of the second summons. In their written submissions in reply, the defendants on one hand stated that they would no longer rely on a part of those three paragraphs of the summons, but on the other hand continued to make submissions on other parts of those three paragraphs. It was only at the beginning of the hearing and at the court’s invitation for clarifications that the defendants clearly and unequivocally abandoned those three paragraphs. The court agreed (at paragraph 28 thereof) that the pursuit of unarguable, weak or thin points, or points which are plainly wrong in law, can result in indemnity costs. The court, while accepting that the abandonment had saved some of the hearing time, decided that the late abandonment resulted in wastage of time, costs and resources of the court and the plaintiffs, and in particular the costs, time and resources incurred by the plaintiffs’ team in dealing with those paragraphs could have been saved and the distraction could have been spared. The court found that such late and equivocal abandonment constituted on the facts of that case special and unusual features which justified indemnity costs. On a broad brush approach, the court apportioned 35% in respect of the costs of and occasioned by those three abandoned paragraphs of the summons, so that the same be assessed on an indemnity basis.

11.  The Plaintiff further referred to Three Rivers DC v Bank of England [2006] 5 Costs LR 714, paragraph 25, which summarised the principles on awarding indemnity costs. In particular, the court can and should have regard to the conduct of an unsuccessful claimant during the proceedings, both before and during the trial, as well as whether it was reasonable for the claimant to raise and pursue particular allegations and the manner in which the claimant pursued its case and its allegations. Where a claim is speculative, weak, opportunistic or thin, a claimant who chooses to pursue it is taking a high risk and can expect to pay indemnity costs if it fails.

12.  The Plaintiff submitted that notwithstanding that Three Rivers DC (supra) concerned an unsuccessful claimant, the said principles apply equally to a defence run by an unsuccessful defendant. In my view, since the said principles were summarised from authorities decided on Civil Procedure Rules rules 44.3(4) and (5) which have the same wording as those parts of Order 62 rule 5 RDC set out above, the Plaintiff’s submission is correct.

13.  The 1^st Defendant submitted that indemnity costs was awarded in Three Rivers DC (supra) after the claimants’ abandonment of their claim on the 256^th day of the trial. It was a substantial and complex case involving serious allegations of dishonesty against many bank officials. There were many reasons justifying the court’s award of indemnity costs.

14.  The 1^st Defendant also cited H Au-Yeung J’s decision of Holinail HK Limited v Mathias Pou & Ors[2025] HKCFI 1157. I summarise the principles relating to an application for costs on indemnity basis as follows:-

(1)  Costs are in the discretion of the court, and such discretion is not fettered or circumscribed beyond the requirement that taxation on an indemnity basis must be appropriate.

(2)  The successful party has to show, either that the case is one of a type already recognised in the practice of the court as warranting a taxation on indemnity basis or that there is some feature in the case even more special or unusual than one which would justify a taxation on the common fund basis. Costs could properly be awarded on indemnity basis where (a) the proceedings were initiated or prosecuted by the unsuccessful party in a manner which constitutes that party’s proceedings an abuse of the process of the court, (b) the proceedings were scandalous, vexatious, had been initiated or prosecuted maliciously, or for an ulterior motive, or in an oppressive manner, and (c) any proceedings instituted or prosecuted in such circumstances as to constitute an affront to the court.

(3)  Litigants who conduct their cases with an ulterior motive or for an improper purpose, or in bad faith, or as a personal vendetta, or in an improper or oppressive manner, or who cause costs to be incurred irrationally or out of all proportion as to what is at stake, may also expect to be ordered to pay costs on an indemnity basis if they lose, and have part of their costs disallowed if they win.

(4)  Indemnity costs can be awarded if the conduct of the party was unreasonable to a high degree, and unreasonable in this context certainly does not mean merely wrong or misguided in hindsight.

(5)  The above are not determinative of the sort of case in which indemnity costs may be ordered.

(6)  While each application has to be considered on a case-by-case basis, legal representatives should be able to exercise their good common sense when deciding whether the seriousness of the case is to the extent that it worth incurring costs on pursuing for indemnity costs. Legal representatives should also consider proportionality in the process. As parties normally rely heavily on the advice of their legal representatives especially in relation to matters concerning costs, it is of utmost importance that appropriate advice be given, so that costs would not be incurred unnecessarily. Legal representatives should think through the matter including the merits carefully before suggesting their clients to apply for an indemnity costs order, and they should not simply “try their luck”.

(III)  Plaintiff’s Grounds of Application

15.  The Plaintiff’s grounds for her present application are as follows:-

(1)  The 1^st Defendant ran an unreasonable and hopeless defence which lacked particulars from the outset up to trial.

(2)  The 1^st Defendant acted unreasonably by constantly changing its position throughout the litigation.

(3)  The 1^st Defendant wasted the Court’s time in running arguments at trial that had neither been foreshadowed in its pleadings nor its written opening submissions.

(4)  Therefore, the 1^st Defendant should pay the Plaintiff costs of the action on an indemnity basis in order to achieve a fairer result between the parties.

(IV)  Discussion

16.  In its Defence, the 1^st Defendant, apart from:-

(1)  making no admission to the Plaintiff’s Grant of Probate by the Supreme Court of Queensland in paragraph 1 thereof; and

(2)  pleading, in paragraph 8 thereof, and I quote verbatim, that “…any right of action the Plaintiff had against the 1^st Defendant (which is denied) is “statute barred” and consequently the Plaintiff is prevented at law, statute and pursuant to the Limitation Ordinance (Cap.347 of the Laws of Hong Kong) (“LO”) from commencing, continuing and obtaining the relief sought against the 1^st Defendant”,

  denied all the paragraphs of the Amended Statement of Claim against it (ie paragraphs 1 to 8).

17.  In other words, the 1^st Defendant essentially denied the entire Plaintiff’s case including all factual allegations but pleaded no factual allegation at all or put forward no version of events which was different from that given by the Plaintiff. The only positive defence pleaded was one of limitation, yet no particulars such as the alleged date(s) of accrual of cause(s) of action or the alleged limitation period(s) was pleaded. In short, the Defence contained bare denials and a bare assertion of limitation defence.

18.  I am aware that the Defence was signed by Chiang as director and filed by the 1^st Defendant without legal representation. However, the 1^st Defendant has been represented by its present solicitors since 23 February 2023 including at the trial, but no application for amendment of the Defence was made. Further:-

(1)  In the Listing Questionnaire filed by its former solicitors on 22 April 2022, the 1^st Defendant confirmed that its pleadings were in order and required no amendment.

(2)  In the Listing Questionnaire filed by its former solicitors on 22 October 2022, the 1^st Defendant again confirmed that its pleadings were in order and required no amendment, though also proposed to deal with the issue whether the Plaintiff’s claim under the Promissory Note was time-barred as a preliminary issue to save the costs of trial.

19.  In paragraphs 43 to 50 of the Judgment, I ruled that the 1^st Defendant had pleaded bare denials such that all the facts pleaded in paragraphs 4 to 7 in support of the Plaintiff’s claim were deemed admitted. Such facts included:-

(1)  the 1^st Defendant’s promise, under the Promissory Note, to pay Mr Koh the Sum by 25 equal calendar monthly instalments in Australian dollars at an exchange rate equivalent to SGD$21,000 on the 28^th day of each month commencing on 28 December 2011;

(2)  the last day of payment under the Promissory Note being 28 December 2013;

(3)  the 1^st Defendant’s failure to pay any of the instalments due under the Promissory Note;

(4)  the 1^st Defendant’s payment of AUD113,300.00 in instalments of different sums on various dates; and

(5)  the 1^st Defendant’s failure to pay the balance under the Promissory Note.

20.  The ruling on the deemed admitted facts was based on fundamental principles and requirements relating to pleadings set out in Order 18 rule 13 RDC and Hong Kong Civil Procedure (paragraphs 44 and 49 of the Judgment). The 1^st Defendant had pleaded not even a single factual allegation or version of event of its own, while barely denied all the paragraphs of the Amended Statement of Claim which constituted the Plaintiff’s claim against it. With legal representation, the 1^st Defendant must have, or at least should have, realised the negative consequences, namely that it could only run its only positive defence of limitation based on the facts as pleaded by the Plaintiff which were deemed admitted.

21.  In paragraph 47 of the Judgment, I dismissed the 1^st Defendant’s contention that the Plaintiff only raised the argument of bare denials and deemed admissions for the first time at trial. In paragraph 48 of the Judgment, I also dismissed the 1^st Defendant’s argument that paragraph 6 of the Plaintiff’s Reply operated as an express joinder to join issue with the bare denials in the Defence. I repeat my reasoning therein without reproduction of the same, and suffice it to say that those arguments were hopeless.

22.  With the Defence containing deemed admitted facts which constituted the Plaintiff’s claim, the 1^st Defendant sought to rely on the “limitation defence”. However, such limitation defence was just a one-liner without stating how the Plaintiff’s claim was time-barred. No date(s) of accrual of cause(s) of action, corresponding limitation period(s) or date(s) of time-bar of the cause(s) of action was pleaded. Order 18 rule 8(1) RDC clearly provides that a party must in any pleading subsequent to a statement of claim plead specifically any matter, for example, any relevant statute of limitation which he alleges makes any claim of the opposite party not maintainable, or which if not specifically pleaded might take the opposite party by surprise. Hong Kong Civil Procedure 2025, Volume 1, rubric 18/8/26 also states that it is necessary to deal with each pleaded cause of action separately and individually, and to set out when the defendant says those causes of action first accrued and when the relevant limitation periods expired. These, again, are fundamental principles and requirements of pleadings.

23.  The 1^st Defendant argued that the Plaintiff could have sought further and better particulars if considered necessary. I disagree. It is not the function of particulars to take the place of necessary averments in the pleading, nor to state the material facts omitted by filling the gaps, nor to make good an inherently bad pleading. See Hong Kong Civil Procedure 2025 (supra), rubric 18/12/1.

24.  Whilst the 1^st Defendant did not particularise its limitation defence, I went on to consider the Plaintiff’s pleaded case at paragraph 4 of the Reply (see paragraph 58 of the Judgment), namely:-

(1)  the primary position that the maturity date of the Promissory Note was 28 December 2013 and so the Plaintiff’s claim was made within the limitation period which expired on 28 December 2019 (“Primary Position”);

(2)  the first alternative position relying on 3 confirmation letters of the 1^st Defendant’s auditors, which the Plaintiff no longer pursued at trial; and

(3)  the second alternative position that by operation of section 23(3) of LO, the cause of action was deemed to have accrued on 17 June 2016 being the date on which the 1^st Defendant made part payment of the debt owed to the Plaintiff, and therefore the Plaintiff’s claim was within the limitation period which expired on 17 June 2022 (“Second Alternative Position”).

25.  Notwithstanding that written opening submissions was no substitute for a proper pleading, the 1^st Defendant ought to have made clear arguments on the limitation defence in its written opening submissions for trial in order to inform the Court and the Plaintiff as to what to expect from the 1^st Defendant on the issue. Nonetheless, the 1^st Defendant’s 5-page written opening submissions for the trial did not contain any submission on the limitation defence. Instead, it contained the following paragraph:-

“20. It is for [the Plaintiff] to prove her case on the balance of probabilities. [The 1^st Defendant] reserves its position on this until [the Plaintiff] closes her case, and will decide how to proceed with its Defence.”

26.  The 1^st Defendant’s stance was totally unsatisfactory, particularly in the absence of a proper plea of the limitation defence. As stated in paragraph 26 of the Judgment, at trial I exercised my case management power to request the 1^st Defendant to make oral submissions on its pleaded case before Madam Koh’s oral evidence, citing Hong Kong Civil Procedure 2024, Volume 1, rubric 62/5/6, which read “the judge should consider whether or not the parties have conducted the litigation in accordance with a system of civil litigation which is designed to enable the parties to know where they stand at the earliest possible stage and at the lowest practicable cost, so that they may make informed decisions about their prospects and the sensible conduct of their cases”. Eventually, Mr Andrew Hart, Solicitor Advocate for the 1^st Defendant, made three points which were not submissions substantiating the limitation defence but simply further replies to the three alternative positions of the date of accrual of cause of action in paragraph 4 of the Plaintiff’s Reply. Mr Hart submitted that the three alternative dates were all incorrect and in any event the relevant limitation period had expired. See paragraph 58 of the Judgment.

27.  Worse still, in its written closing submissions, the 1^st Defendant, for the first time at trial, made the Multiple Maturity Date Argument. The Plaintiff was completely taken by surprise as this new point had never been pleaded or raised in the written opening submissions or in the course of the trial, and the Plaintiff did not have any opportunity to deal with this point. In any event, costs and time were wasted for this Court and the Plaintiff to deal with this new point, despite my ruling that the 1^st Defendant was not entitled to pursue this unpleaded point. See paragraph 60 of the Judgment.

28.  Turning to the merits, in paragraph 62 of the Judgment, I found in favour of the Plaintiff’s Primary Position, holding that time started to run on 28 December 2013 which was the maturity date of the Promissory Note, and that the relevant limitation period expired on 28 December 2019, and so the present action was not time-barred. In paragraphs 64 and 65 of the Judgment, I went on to consider the merit of the Multiple Maturity Date Argument in any event and dismissed the argument. In paragraph 68 of the Judgment, I further ruled that even if I was wrong in ruling in favour of the Primary Position, and even if I was wrong in dismissing the Multiple Maturity Date Argument on merit, the Second Alternative Position would prevail, namely that by operation of section 23(3) of LO, time ran afresh on 17 June 2016, as it was a deemed admitted fact by the bare denials (or otherwise the fact found on evidence) that on 17 June 2016 the 1^st Defendant made a partial payment of AUD 20,000.00 under the Promissory Note to Mr Koh.

29.  It is crystal clear that, by reason of the deemed admitted fact that the 1^st Defendant made a partial payment of AUD 20,000.00 under the Promissory Note to Mr Koh on 17 June 2016, irrespective of whether the Plaintiff’s Primary Position or the 1^st Defendant’s Multiple Maturity Date Argument should prevail, time was deemed to have started to run afresh by operation of section 23(3) of LO, and the limitation period only expired on 17 June 2022, and the Plaintiff’s claim was brought well within time. Therefore, even if benefit were given to the unparticularised limitation defence or the unpleaded Multiple Maturity Date Argument, the limitation defence was hopeless and bound to fail as the Plaintiff’s Second Alternative Position would prevail.

30.  In my judgment, applying the principles in Order 62 rule 5 RDC, Commissioner of Inland Revenue v Poon Cho Ming John (supra), Leung Chun Kwong (supra), China Shanshui Cement Group Ltd (supra), Three Rivers DC (supra) and Holinail HK Limited (supra) cited above:-

(1)  the 1^st Defendant’s plea and the subsequent maintenance (through trial) of a hopeless defence, namely bare denials of essentially the entirety of the Plaintiff’s Amended Statement of Claim, and an unparticularised, one-liner “defence of limitation”, without pleading a single factual allegation or version of event;

(2)  the 1^st Defendant’s failure to make any submission on the only pleaded positive defence, namely the one-liner “defence of limitation”, in the written opening submissions; and

(3)  the running of the unpleaded Multiple Maturity Date Argument for the first time in the written closing submissions, which was dismissed and was bound to fail by reason of the Second Alternative Position,

are such conduct being highly unreasonable and constituting an abuse of the process of the court and an affront to the court, and an award of costs on indemnity basis should be made. Time and costs of the Court and the Plaintiff were unnecessarily but seriously wasted by such conduct of the 1^st Defendant. An award of indemnity costs against the 1^st Defendant is conducive to the underlying objectives of (a) increasing the cost-effectiveness of any practice and procedure to be followed in relation to proceedings before the court, (b) promoting a sense of reasonable proportion and procedural economy in the conduct of the proceedings, (c) ensuring fairness between the parties, and (d) ensuring that the resources of the court are distributed fairly.

31.  Further, during the cross-examination of Madam Koh, Mr Hart sought to ask questions on the unpleaded Capacity to Sue Point, but those questions were rejected by this Court. Yet, the 1^st Defendant raised and argued the Capacity to Sue Point again in its written closing submissions. I declined to consider the Capacity to Sue Point. See paragraphs 76 to 80 of the Judgment. Nonetheless, the costs and time of the court and the Plaintiff were unnecessarily wasted and diverted by this unpleaded point. This is another unusual and highly unreasonable feature of this case that justifies an award of indemnity costs.

32.  The 1^st Defendant submitted that the Plaintiff had not found its defence to be so hopeless as to warrant an application for summary judgment. However, the 1^st Defendant did not cite any authority suggesting that no indemnity costs can be awarded if a plaintiff did not apply for summary judgment but chose to participate at trial. In my view, applying the legal principles in Commissioner of Inland Revenue v Poon Cho Ming John (supra) cited above, if, having considered all circumstances of the case including parties’ conduct and the fact that the plaintiff did not apply for summary judgment but chose to participate at trial, it is still appropriate to grant indemnity costs, then the same should be ordered.

33.  At this juncture, I have to mention that the Plaintiff also relied on the 1^st Defendant’s ever-changing position during the course of this action and its attempts to reserve its position on various matters including the making of various potential interlocutory applications to perfect its case as such conduct warranting the award of indemnity costs. The conduct complained of are as follows:-

(1)  in the Timetabling Questionnaire filed by its former solicitors on 9 June 2021, the 1^st Defendant indicated that if mediation fails, it will “…apply to amend its Defence to plead, inter alia, that in view of agreements/promises made or given between [Mr Koh] and [Chiang] (a director of the 1^st Defendant), the Plaintiff is estopped from making a claim against the 1^st Defendant.”

(2)  In the Timetabling Questionnaire filed by its former solicitors on 24 November 2021, the 1^st Defendant indicated that “…after the witness statement of the [1^st Defendant’s] replacement witness has been prepared, [the 1^st Defendant] intends to obtain counsel’s advice on whether an application should be made to strike out [the Plaintiff’s] claim on the ground that the claim is statute barred under the [LO]. [The 1^st Defendant] intends to make the appropriate application if so advised by counsel.”

(3)  As mentioned above, in the Listing Questionnaire filed by its former solicitors on 22 April 2022, the 1^st Defendant confirmed that its pleadings were in order and required no amendment.

(4)  As mentioned above, in the Listing Questionnaire filed by its former solicitors on 20 October 2022, the 1^st Defendant, despite its confirmation of no amendment to pleadings required, proposed to deal with the issue of time-bar by preliminary issue to save the costs of a trial.

(5)  In the 1^st Defendant’s Pre-Trial Review Note dated 13 March 2024, Mr Hart indicated that his solicitors’ firm was taking steps to issue a summons to cease acting for the 1^st Defendant. However, at the Pre-Trial Review hearing, Mr Hart confirmed to the Court that he had instructions to proceed.

(6)  As mentioned above, in its written opening submissions for the trial, the 1^st Defendant reserved its position and failed to address its case, and there was no mention of any requirement to amend the Defence.

34.  In the 1^st Defendant’s written submissions, an explanation was given for the conduct in paragraph 33 above, namely that upon the death of its crucial witness Mr Chiang during these proceedings in July 2021, the 1^st Defendant was forced to review its options regarding the running of its Defence, and while different ways forward were considered, it hardly amounted to an “ever-changing position” on the part of the 1^st Defendant. It should be noted that such an explanation is not contained in any sworn evidence adduced by the 1^st Defendant, so I decline to consider the same. In any event, even without the said explanation from the 1^st Defendant, I accept that a party may re-evaluate its position from time to time in the course of the proceedings especially before the setting down for trial, and this is the reason why the court gives directions, especially at case management conferences, for parties to seek counsel’s advice and thereafter take out all interlocutory applications. Hence, I do not find the 1^st Defendant’s conduct in paragraph 33 above as so highly unreasonable or constituting an abuse of the process of the court or an affront to the court which warrant indemnity costs.

35.  That said, the various indications and reservations made by the 1^st Defendant before setting down for trial (paragraph 33(1)-(4) hereof) suggested that the 1^st Defendant had not committed to a definite position as to whether its defence would be perfected or how its defence would be conducted, be it by amendment application or application for striking out or for trial of a preliminary issue. In the circumstances, it was totally understandable that the Plaintiff acted cautiously without making any application for summary judgment, in which she would have to carry the heavy burden of showing no triable issues or no defence. After the setting down for trial, generally speaking interlocutory applications should not be lightly made, and in the present case the absence of any summary judgment application on the Plaintiff’s part after the setting down cannot be faulted, especially having regard that such an application would probably waste rather than save time and costs of the court and the Plaintiff.

36.  Therefore, I do not find that the absence of any application for summary judgment on the Plaintiff’s part militates against the unusual features in this case which warrant an award for indemnity costs.

37.  The 1^st Defendant also contended that the Plaintiff, by not seeking indemnity costs in the written closing submissions for trial or at the hearing for oral closing submissions, did not consider its defence was hopeless. I reject this argument. At the end of the oral closing submissions, I indicated that judgment was reserved to be handed down later. As I had not heard parties on costs, I made the Costs Order Nisi in the Judgment, and the Plaintiff is entitled to apply for variation of the same pursuant to Order 42 rule 5B(6) RDC. I add that it is not uncommon that the court makes, or the parties invite the court to make, a costs order nisi in the reserved judgment, which may contain comments or observations on parties’ conduct which are relevant to the award of costs. As stated in Holinail HK Limited (supra), an authority cited by the 1^st Defendant, legal representatives should think through the matter including the merits carefully before suggesting their clients to apply for an indemnity costs order, and they should not simply “try their luck”.

38.  The 1^st Defendant further submitted that its case was not hopeless as it had filed an application for leave to appeal to the Court of Appeal against the Judgment. In fact, by another decision today[2], I dismissed the 1^st Defendant’s application for leave to appeal. As I made it clear above, irrespective of whether the Plaintiff’s Primary Position or the 1^st Defendant’s Multiple Maturity Date Argument should prevail, time was deemed to have started to run afresh by operation of section 23(3) of LO, and the limitation period only expired on 17 June 2022. I held in that other decision that since no palpable error could be pinpointed against the finding of deemed admitted facts including the payment of AUD 20,000.00 on 17 June 2016 or the conclusion on the Second Alternative Position, the intended appeal was bound to fail. As I said above, the legal consequences of bare denials and deemed admitted facts are based on fundamental legal principles and requirements of pleadings which the 1^st Defendant must have, or at least should have, known. Yet, the 1^st Defendant pursued the trial with the hopeless defence containing bare denials of essentially the entire Plaintiff’s claim and an unparticularised one-liner defence of limitation, and further pursued the intended appeal without identifying any palpable error in the Judgment.

39.  I should also add that by paragraph 81(3) of the Judgment, I ordered parties to agree to such rate or rates for calculating pre-judgment interest awarded to the Plaintiff, and failing such agreement each party shall file and serve evidence and written submissions so that this Court shall determine the rate or rates on paper. However, as noted in paragraphs 2 to 4 of my decision on pre-judgment interest handed down on 28 March 2025[3], the 1^st Defendant did not reply to the letter of the Plaintiff’s solicitors which sought to reach agreement on the rate(s), and further did not file any evidence or written submissions. The 1^st Defendant did not offer any explanation for its failure to comply with my order. This is highly unreasonable and also constitutes an affront to this Court. I find this as another unusual feature, in addition to those identified above, which warrants an award of costs on indemnity basis.

(V)  Conclusion

40.  I allow the Plaintiff’s application and order that the Costs Order Nisi be varied, such that the Plaintiff has her costs of the action including all reserved costs, with Certificate for Counsel, to be taxed on an indemnity basis if not agreed.

(VI)  Costs of this Application

41.  In the summons, the Plaintiff asks for her costs of this application. In her written submissions, the Plaintiff asks for her costs be summarily assessed on an indemnity basis and payable forthwith.

42.  Costs should follow the event. The consideration of the written submissions on costs should be regarded as part of the trial. Hence, I make the following costs order nisi:-

(1)  The 1^st Defendant do pay the Plaintiff’s costs of this application on an indemnity basis, to be taxed if not agreed.

(2)  This order nisi shall become absolute in the absence of application to vary within 14 days.

Munros, for the plaintiff

Hart Giles, for the 1^st defendant

DCCJ 6960/2019

[2025] HKDC 1196

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 6960 OF 2019

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DECISION
(ON LEAVE TO APPEAL AND PAYMENT OUT)

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(I)  Introduction

1.  After a 2-day trial, on 24 December 2024, I handed down my judgment[1] (“Judgment”) in favour of the Plaintiff. At paragraph 81 of the Judgment, I ordered:-

(1)  the 1^st Defendant do pay the Plaintiff the sum of SGD$395,896.43 or its equivalent in Hong Kong dollars;

(2)  the 1^st Defendant do pay the Plaintiff its pre-judgment interest on the said sum from 28 December 2013 up to the date of the Judgment, at the commercial borrowing rate of Australian Dollars in Australia; and

(3)  the 1^st Defendant do pay the Plaintiff its judgment interest on the said sum at judgment rate from the date of the Judgment until full payment.

2.  On 28 March 2025, I handed down my decision[2], adopting the pre-judgment interest rates in Australian courts as the pre-judgment interest rates in this action.

3.  Meanwhile, the parties took out the following applications:-

(1)  on 21 January 2025, the Plaintiff took out a summons pursuant to Order 22 rule 18(4) of the Rules of the District Court (Cap 336H, sub.leg.)(“RDC”) for an order that the sum of HK$624,240 paid into Court on 12 October 2022 as security for the 1^st Defendant’s costs together with any interest accrued thereon be paid out to the Plaintiff through her solicitors, Messrs Munros, forthwith (“Payment Out Application”).

(2)  On 21 January 2025, the 1^st Defendant took out a summons pursuant to sections 63 and 63A of the District Court Ordinance (Cap 336) (“DCO”) and Order 58 rule 2 RDC for leave to appeal against the Judgment to the Court of Appeal (“Leave to Appeal Application”), and for an order that there be a stay of the payment out of the sum in sub-paragraph (1) hereof pending the final determination of the 1^st Defendant’s intended appeal (“Stay of Payment Out Application”).

4.  On 17 January 2025, HHJ Harold Leong ordered that the Payment Out Application be adjourned to be heard together with the Leave to Appeal Application.

5.  Hence, the Leave to Appeal Application, the Stay of Payment Application and the Payment Out Application are dealt with together. Having considered parties’ written submissions, I have decided to determine all the applications on paper.

6.  On 8 July 2025, Messrs Munros informed this Court that the 1^st Defendant had been wound up on 18 June 2025. Pursuant to section 186(1) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap.32), no action or proceeding shall be proceeded with or commenced against the company except by leave of the court when a winding up order has been made. The Plaintiff shall take steps to seek leave from the Court of First Instance to proceed with the Payment Out Application.

7.  On 23 October 2025, Messrs Munros informed this Court that upon the joint application of the Plaintiff and the provisional joint and several liquidators of the 1^st Defendant, the Court of First Instance had granted leave to proceed with the Payment Out Application and the Leave to Appeal Application.

8.  In this Decision, I adopt the same definitions and abbreviations used in the Judgment.

(II)  Legal Principles on Leave to Appeal

9.  The following legal principles on leave to appeal cited by the Plaintiff are well-established, and they are not disputed by the 1^st Defendant.

10.  Section 63A(2) of DCO lays down the test for granting leave to appeal from a judgment to the Court of Appeal, namely (a) the appeal has reasonable prospect of success; or (b) there is some other reason in the interest of justice why the appeal should be heard. A reasonable prospect of success means an appeal with prospects that are more than “fanciful” but which does not need to be shown to be “probable”.

11.  In 秦錦釗 v 香港特別行政區 [2018] HKCA 167, Kwan JA (as she then was), giving judgment of the Court of Appeal, stated (at paragraph 8 thereof) that an appellant should pinpoint the errors of the judgment of the first instance judge and succinctly set out the reasons, and the appeal is not an occasion to regurgitate the same arguments which were rejected by the first instance judge.

(III)  Draft Grounds of Appeal

12.  The Draft Grounds of Appeal appended to the Leave to Appeal Application contains seven paragraphs. In my view, the 1^st Defendant essentially raises three grounds of appeal.

(A)  Ground 1 – Draft Grounds of Appeal paragraphs 1 to 2

13.  In a nutshell, Ground 1 is that this Court erred in preventing the 1^st Defendant from pursuing the Multiple Maturity Date Argument by holding that the Plaintiff had been completely taken by surprise by this new argument. Paragraphs 1 to 2 of the Draft Grounds of Appeal read:-

“1. In paragraph 59 of the Judgment, the Deputy Judge refers to [the 1^st Defendant]’s contention that time started to run for limitation purposes from the date upon which each instalment became due (“the “Multiple Maturity Date Argument”). The Deputy Judge then ruled (in paragraph 60) that [the 1^st Defendant] was not entitled to pursue the Multiple Maturity Date Argument because [the Plaintiff] was “completely taken by surprise” with this “new” argument. The Deputy Judge erred in making such a ruling since, besides the fact that the full basis of the Multiple Maturity Date Argument was confirmed in [the 1^st Defendant]’s written closing filed and served 15 days before the trial resumed, the argument concerned a matter of law fundamental to the case.

2. In such circumstances, while [the Plaintiff] contended throughout that the maturity date of the [Promissory Note] was 28 December 2013, the Deputy Judge was wrong to seek to prevent [the 1^st Defendant] from pursuing the Multiple Maturity Date Argument which, in brief, is as follows:

a) [the Plaintiff]’s contention that the maturity date of the [Promissory Note] was the date when the last instalment payment became payable is wrong at law.

b) A cause of action arises upon each default by a debtor in failing to make an instalment payment as it becomes due.

c) Time starts to run for limitation purposes from the date that the cause of action arises.”

14.  In my view, Ground 1 has no merit.

15.  First, in paragraph 60 of the Judgment, I took the view that the Multiple Maturity Date Argument caught the Plaintiff by surprise for the reason that neither the various dates of accrual of cause of action nor the corresponding limitation periods had been pleaded or raised in the written opening submissions or in the course of the trial. It is a pleading requirement to deal with each pleaded cause of action separately and individually, and to set out when the defendant says those causes of actions first accrued, and when the relevant limitation periods expired. See, for example, Hong Kong Civil Procedure 2025, Volume 1, rubric 18/8/26. The 1^st Defendant never disputed the said pleading requirement. Without any plea of the Multiple Maturity Date Argument clearly formulating the alleged dates of accrual of cause of action and the alleged corresponding limitation periods, the Plaintiff could not deal with this point or raise any point of law in response.

16.  Secondly, as admitted by the 1^st Defendant, “the full basis” of the Multiple Maturity Date Argument was only set out in its written closing submissions filed and served 15 days before the date for oral closing submissions, and such practice was deplored by the Court of Appeal in Choi Yuk Ying v Ng Ngok Chuen[2019] HKCA 171, an authority cited by the Plaintiff but not disputed by the 1^st Defendant:-

“62.1 This brings me to the CT Appeal. Reading the oral final submissions, one can see arguments advanced as if litigation were a game, with references to the other side falling into “traps” laid in ambiguous pleadings setting out only basic facts, thereby leaving the pleader room to spring on the other side as many legal consequences as can be fashioned at trial (without setting them out).

62.2 This attitude should be discouraged. It has been said many times that “trial by ambush” has no place in modern litigation. “Trial by ambush” includes advancing new legal consequences in opening submissions (and in present case, oral additions to written opening submissions). This is unfair to the other side and also inconvenient for the court.

62.3 One of the purposes of having unambiguous pleadings is to let the court know the issues thrown up by the parties’ respective cases in as full an extent as possible. This not only assists in the listing of cases by providing an accurate estimate of the time required for the hearing. It is also essential for judges who now have to read extensively into the case before trial so as to reduce sitting time and hence save parties’ costs. In the present case, if the judge had allowed the amendment, NC’s team would have had to consider possible defences to constructive trust, take instructions and possibly call evidence on e.g. issue of unconscionability. In my view, she was clearly right to reject the application.” [emphasis added]

17.  The fact that limitation was the only positive defence pleaded by the 1^st Defendant, albeit with no particulars at all (see paragraph 12 of the Judgment), and is thus contended by the 1^st Defendant as an argument concerning “a matter of law fundamental to the case”, is no exception to the pleading requirement. The unpleaded Multiple Maturity Date Argument was clearly a recently thought up issue during the course of the trial, and the Court of Final Appeal has clearly indicated that such an issue is not allowed. See Sinoearn International Ltd v Hyundai-CCECC Joint Venture (2013) 16 HKCFAR 632, at paragraph 30.

18.  In paragraph 2 of its skeleton submissions dated 21 January 2025, the 1^st Defendant also referred to paragraph 50 of the Judgment which said that “there is nothing barring the 1^st Defendant from arguing the limitation defence”. Whilst not expressly spelt out, I take it as the 1^st Defendant’s argument that this Court was inconsistent in ruling that the Multiple Maturity Date Argument could not be run at paragraph 60 of the Judgment. In fact, the quote from paragraph 50 of the Judgment was taken out of context:-

(1)  In paragraphs 44 and 45 of the Judgment, I first ruled that due to the bare denials in the 1^st Defendant’s Defence, each and every fact pleaded in paragraphs 4 to 7 of the Statement of Claim is deemed admitted by the 1^st Defendant. The deemed admitted facts included the last date of payment under the Promissory Note being 28 December 2013, the 1^st Defendant’s payment of AUD113,300.00 in instalments of different sums on various dates, and the 1^st Defendant’s failure to pay the balance due under the Promissory Note.

(2)  In paragraph 50 of the Judgment, I ruled that the limitation defence in paragraph 8 of the 1^st Defendant’s Defence did not deal with the alleged facts in paragraphs 4 to 7 of the Amended Statement of Claim, and therefore did not premise on the determination of the said alleged facts.

(3)  It was in such circumstance that I stated that ‘there is nothing barring the 1^st Defendant from arguing the limitation defence with the facts in paragraphs 4 to 7 of the Amended Statement of Claim admitted”. To put it another way, the 1^st Defendant could still argue its limitation defence as pleaded in paragraph 8 of its Defence based on the facts as pleaded and deemed admitted in paragraphs 4 to 7 of the Amended Statement of Claim. Paragraph 50 of the Judgment did not deal with the Multiple Maturity Date Argument.

19.  For Ground 1, the 1^st Defendant did not pinpoint any error in the Judgment which warrants the intervention by the Court of Appeal.

(B)  Ground 2 – Draft Grounds of Appeal paragraphs 3 to 5

20.  In essence, Ground 2 is that this Court erred in finding that the maturity date of the Promissory Note was 28 December 2013 and the relevant limitation period expired on 28 December 2019, and I should have ruled in favour of the Multiple Maturity Date Argument and held that the claims for all instalments except the last instalment of SGD21,000 payable on 28 December 2013 were time-barred. Paragraphs 3 to 5 of the Draft Grounds of Appeal read:-

“3. Having given his ruling, the Deputy Judge made various comments (in paragraphs 64 and 65) stating that in any event the Multiple Maturity Date Argument “would not have assisted the 1^st Defendant”.

4. At the trial, in support of the Multiple Maturity Date Argument, [the 1^st Defendant] relied on six authorities in support of its contention that, in respect of an agreement repay a loan by instalments, the limitation period starts to run from the date upon which each instalment becomes due. However, the Deputy Judge erred in dismissing five of those authorities out of hand saying that they “do not concern the ascertainment of the maturity date of a promissory note” (paragraph 65). The Deputy Judge failed to explain why, in the absence of authority directly applicable to promissory notes, it was not relevant or desirable to consider decided contract cases relating to the time when a cause of action arises under loan agreements repayable by instalments. As for the sixth authority, the Deputy Judge was wrong in saying that Irving & Anor. v Veitch (1837) 3 M&W 90 is “clearly distinguishable”, without considering the possible relevance to this case.

5. After considering [the 1^st Defendant]’s Multiple Maturity Date Argument, the Deputy Judge confirmed his ruling (in paragraph 66) that the maturity date of the [Promissory Note] was 28 December 2013 which, the Deputy Judge said, “is sufficient to dismiss the limitation defence”. This is wrong as a matter of law.”

21.  I reached the conclusion that the maturity date of the Promissory Note was 28 December 2013 and the relevant limitation period ended on 28 December 2019 in paragraphs 61 to 66 of the Judgment. Contrary to the 1^st Defendant’s contention of the absence of authority directly applicable to promissory notes, I applied the extract of Chalmers and Guest and Bills of Exchange, Cheques and Promissory Notes (in paragraph 61 of the Judgment) cited by the Plaintiff, which stated the general rule to be that the liability to the holder of the maker of a promissory note payable at a fixed or determinable future time arises on the maturity of the instrument, and thus if a promissory note is payable on a fixed date, time will begin to run in favour of the maker against the holder from the date on which the promissory note falls due. The 1^st Defendant never disputed with the said extract, whether at trial or during this Leave to Appeal Application.

22.  The Promissory Note clearly provided that the last day of payment was 28 December 2013, and this fact was also deemed admitted by the 1^st Defendant. According to the general rule in the said extract, the Promissory Note was payable on the fixed date of 28 December 2013, which was the maturity date when the Promissory Note fell due and time began to run (see paragraph 62 of the Judgment).

23.  Moreover, the Multiple Maturity Date Argument was inconsistent with the 1^st Defendant’s own stance and conduct. At paragraph 63 of the Judgment, I relied on YCA’s Confirmation 5.9.2012 and YCA’s Confirmation 12.8.2013, both of which specified that the outstanding balance owed by the 1^st Defendant to Mr Koh was “unsecured, bear 2.5% pa interest due on 28 December 2013”. I rejected the 1^st Defendant’s argument that the two confirmations were not written by or at the instruction of the 1^st Defendant, and I further accepted that they were signed by Mr Koh confirming the outstanding balance owed by the 1^st Defendant to him. In other words, according to the 1^st Defendant, the Sum fell due on 28 December 2013. The 1^st Defendant does not dispute with these findings.

24.  At paragraph 64 of the Judgment, I came to the view that the Multiple Maturity Date Argument would not have assisted the 1^st Defendant in any event. I commented that nothing in the Promissory Note suggested that each instalment had its own maturity date or that the failure to settle one instalment would entitle Mr Koh to sue for that instalment. I further commented that it is against commercial reality and common sense to suggest that there were 25 maturity dates, and that parties did not dispute that the Promissory Note contained no acceleration clause. The 1^st Defendant does not dispute with these comments.

25.  Further, and again contrary to the 1^st Defendant’s contention, as stated in paragraph 65 of the Judgment I had considered the six authorities cited by the 1^st Defendant. I came to the view that the first five authorities did not concern the ascertainment of the maturity date of a promissory note, and the sixth authority was clearly distinguishable from the present case. At trial, the 1^st Defendant failed to demonstrate how each of the cited authorities could be relevant to the determination of the maturity date of the Promissory Note in the present case or a promissory note in general. Each case depends on the particular terms of the contract in question and the particular circumstances:-

(1)  In Kallinicos & Anor v Hunt & Ors [2008] NSWSC 149, clause 14 of the Heads of Agreement expressly provided that in the event that payment is not made within 3 business days of the due date, the plaintiffs may enter judgment for the whole sum or such balance is at that time outstanding.

(2)  In Equuscorp Pty Ltd v Rigert [2003] VSC 343, the Loan Contract expressly provided at (i) clause 2.1(b) that the Debtor agrees to pay to the Credit Provider all other sums of money that from time to time fall due under the terms therein, (ii) clause 3.1(a) that the Debtor shall be in default upon failure to make payment of any amount due under the Loan Contract or the Mortgage, and (iii) clause 5 that if the Debtor defaults in payment on any amount payable when due, the Debtor shall pay on demand a default charge calculated by applying the daily percentage rate (being the annual percentage rate divided by 365) to the daily balance of the amount due and unpaid.

(3)  Wittersheim v The Countess Dowager of Carlisle (1791) 126 ER 360 involved several bills of exchange each having a definite date of repayment.

(4)  In Reeves v Butcher [1991] 2 QB 509, there was an agreement that the defendant would duly and regularly pay interest on the loan from the date of the agreement by equal quarterly payments, and the plaintiff thereby agreed not to call in the principal sum or any part thereof during the term of five years from the date of agreement, if the defendant should duly and regularly pay the said interest, provided that in case the defendant should make default in payment of any quarterly payment of interest for the period of 21 days next after the same should become payable, it should be lawful for the plaintiff immediately upon the expiration of such 21 days to call in and demand payment of the said principal sum and all interest then owing or accruing.

(5)  Irving v Anor v Veitch (1837) 3 M&W 90 concerned the failure to pay an annual instalment, being part of the consideration of a new, settlement agreement struck as a result of the defendant’s overdue promissory note. In light of the background for the formation of the settlement agreement, failure of payment of one annual instalment entitled the plaintiffs to sue on the promissory note.

26.  Neither has the 1^st Defendant made good its point at all with any argument or authority in this Leave to Appeal Application. Applying秦錦釗 (supra), this is not the occasion for the 1^st Defendant to regurgitate the same arguments which were rejected by this Court.

27.  Therefore, in the Judgment, I considered the merit of the Multiple Maturity Date Argument despite my earlier ruling that the 1^st Defendant was not allowed to run the same due to lack of proper plea. Based on my finding of 28 December 2013 as the maturity date and my rejection of the substance of the Multiple Maturity Date Argument, I held (in paragraph 66 of the Judgment) that it was sufficient to dismiss the limitation defence.

28.  In the premises, Ground 2 has no merit.

(C)  Ground 3 – Draft Grounds of Appeal paragraphs 6 to 7

29.  By Ground 3, the 1^st Defendant contends that this Court erred in accepting the Plaintiff’s second alternative position regarding the maturity date of the Promissory Note and the corresponding limitation period, in that there was insufficient evidence to show that the 1^st Defendant had made a payment of AUD20,000 under the Promissory Note. The 1^st Defendant also contends that this Court erred in deeming facts pleaded by the Plaintiff in the Amended Statement of Claim as admitted by reason of the 1^st Defendant’s bare denials in the Defence, such error having prejudiced the 1^st Defendant and put it at a severe disadvantage. Paragraphs 6 and 7 of the Draft Grounds of Appeal read:

“6. In considering the two alternative positions put forward by [the Plaintiff], the Deputy Judge noted that [the Plaintiff] had decided at trial not to pursue her first alternative position that, taking account of certain letters from [the 1^st Defendant]’s auditors, the limitation period ran from dates different from the alleged maturity date of 28 December 2013 (paragraph 67). However, as regards the second alternative position, the Deputy Judge held that, if he was wrong on the Plaintiff’s primary position that the maturity date of the [Promissory Note] was 28 December 2013, then the limitation period ran afresh from 17 June 2022, being the date upon which the sum of AUD20,000 “was paid by the 1^st Defendant to Mr. Koh”. The Deputy Judge erred in coming to such conclusion as regards this payment, particularly taking account of the following:

1) As stated in paragraph 35, at the trial “Madam Koh admitted that she had no knowledge of Mr. Koh’s businesses including his directorship in companies”.

2) As stated in paragraph 36, at the trial “Madam Koh testified that the payment of AUD20,000 from the 1^st Defendant on 17 June 2016 as stated in paragraph 4 of her witness statement was not the same payment pleaded in paragraph 4(c) of the Reply”.

3) There was insufficient evidence to show that the AUD20,000 payment was a payment made by [the 1^st Defendant] under the Note.

7. As stated in paragraph 47, [the Plaintiff] only raised her argument of the “bare denials” made in the Defence by [the 1^st Defendant] for the first time at the trial. At that stage, the Deputy Judge was wrong to treat those denials as admissions in respect of the items listed in paragraph 45, thereby prejudicing [the 1^st Defendant] and putting it at a severe disadvantage. By way of example, at the end of paragraph 45, the Deputy Judge made a ruling that [the 1^st Defendant] should not be allowed to cross-examine Madam Koh on the date of the delivery of the [Promissory Note], and the Deputy Judge refused to admit Madam Koh’s answer in that respect as evidence. Although, in response, [the 1^st Defendant] submitted that paragraph 6 of [the Plaintiff]’s Reply was a joinder of issue which meant that the allegations in the Statement of Claim were in issue and should be determined by the Court, the Deputy Judge rejected that submission. [The 1^st Defendant] considers that the Deputy Judge was wrong in doing so.”

30.  First and foremost, I have to point out that the 1^st Defendant is wrong in alleging, at paragraph 6 of the Draft Grounds of Appeal, that this Court ruled that the limitation period ran afresh from 17 June 2022 if the ruling on the Plaintiff’s primary position was wrong. In fact, I held, at paragraph 68 of the Judgment, that if I was wrong on the Plaintiff’s primary position, the right of action had accrued on 17 June 2016, and the limitation period ran afresh on that date and expired 6 years therefrom on 17 June 2022. The 1^st Defendant acknowledged its mistake in paragraph 8 of its written submissions dated 6 June 2025.

31.  By reason of the 1^st Defendant’s bare denial of paragraph 6 of the Amended Statement of Claim, the pleaded fact that AUD20,000.00 was paid by the 1^st Defendant to Mr Koh under the Promissory Note on 17 June 2016 was deemed admitted (paragraph 68 of the Judgment). Here, it is appropriate to deal with paragraph 7 of the Draft Grounds of Appeal, which is about the legal consequences of the 1^st Defendant’s bare denials in its Defence, first.

32.  To begin with, paragraph 7 of the Draft Grounds of Appeal contains an inaccurate recount of the conduct of trial. Faced with the Plaintiff’s argument regarding the bare denials in the Defence, this Court permitted the 1^st Defendant to cross-examine Madam Koh, on de bene esse basis, on matters (including the date of delivery of the Promissory Note) which would be deemed admitted facts should the bare denials argument be accepted. It was only in the Judgment that I ruled on and accepted the Plaintiff’s argument that the facts pleaded in paragraphs 4 to 7 of the Amended Statement of Claim were deemed admitted because they were not specifically traversed, and held that the 1^st Defendant was not entitled to cross-examine Madam Koh on the date of delivery of the Promissory Note and refused to accept Madam Koh’s evidence in this regard. See paragraphs 43 to 53 of the Judgment. The contention that this Court treated the bare denials as admissions at trial, thereby prejudicing the 1^st Defendant and putting it at a severe disadvantage, is groundless.

33.  The rest of paragraph 7 of the Draft Grounds of Appeal concerns my ruling on the legal effect of the bare denials and simply regurgitates the same arguments made at trial but rejected by this Court. See paragraphs 43 and 48 of the Judgment.

34.  I return to paragraph 6 of the Draft Grounds of Appeal, which deals with the second alternative position and my conclusion on the 1^st Defendant’s payment of AUD20,000.00 under the Promissory Note to Mr Koh on 17 June 2016.

35.  In paragraph 36 of the Judgment, I considered Madam Koh’s answer under cross-examination that the payment of AUD20,000 from the 1^st Defendant on 17 June 2016 stated in her witness statement was not the same payment pleaded as the second alternative position of the Plaintiff in the Reply. In fact, I made myself clear, in paragraphs 37 and 68 of the Judgment, that the fact of payment of AUD20,000 from the 1^st Defendant to Mr Koh under the Promissory Note on 17 June 2016 was deemed admitted by reason of the 1^st Defendant’s bare denial. I considered Madam Koh’s answer under cross-examination and expressed my acceptance of the said payment of AUD20,000.00 to reach my conclusion on the credibility and reliability of Madam Koh (paragraph 37 of the Judgment).

36.  Even if I was wrong on the legal effects of bare denials, the 1^st Defendant’s present challenge of the finding of its payment of AUD20,000 to Mr Koh under the Promissory Note on 17 June 2016 has no merit for the following reasons.

37.  First, in paragraph 36 of the Judgment, I accepted that Madam Koh might be confused about the question due to her advanced age because I had considered the evidence as a whole particularly the contemporaneous documents, namely bank statement, handwritten note dated 31 January 2012 and the Manuscript Record.

38.  Secondly, in paragraph 37 of the Judgment, I accepted Madam Koh as a credible and reliable witness, and in particular the Plaintiff’s case of partial payments under the Promissory Note was supported by the handwritten note dated 31 January 2012 and the Manuscript record which in turn, was partly corroborated by the monthly bank statements.

39.  Thirdly, for the sake of completeness, in paragraph 72 of the Judgment, I was satisfied that in any event the Plaintiff had proved partial payments made by the 1^st Defendant, including Item Nos 11, 13, 14, 15, 16 and 18 of paragraph 6 of the Amended Statement of Claim which were supported by the relevant monthly statements of the joint bank account of Mr Koh and Madam Koh, with entries marked “Deposit Quest Return loan”, “Deposit Quest Rtn loan”, etc with the handwritten word “Chiang”, and these payments were further supported by the Manuscript Record. In particular, the partial payment of AUD3,300.00 on 18 September 2013 (Item No 11 of paragraph 6 of the Amended Statement of Claim) lent support to the finding that the payment of AUD20,000 on 17 June 2016 was a partial payment under the Promissory Note, in that it was recorded in the statement covering 26 August 2013 to 26 September 2013 that “18 Sep, Deposit Quest return loan, 3,300.00 (Credit)” with the handwritten word “Chiang”, ie in the same manner as the payment of AUD20,000 made on 17 June 2016 was recorded. Both these two payments were included in the Manuscript Record as partial payments under the Promissory Note.

40.  In Yu Pak Kan v Busy Firm Investment Limited[2023] HKCA 105, the Court of Appeal summarised (at paragraph 19) the well-settled principles concerning appeals against findings of fact made by a primary judge, including:-

(1)  The Court of Appeal can only intervene in a finding of fact by a primary judge where the finding is plainly wrong.

(2)  In an appeal, the Court of Appeal focuses on the question whether the primary judge has fallen into palpable errors which could give rise to grounds for intervention by the appellate court. It is not germane that the Court of Appeal may reach a different conclusion from that of the judge.

(3)  It is not helpful for counsel and litigants in person to merely repeat submissions already advanced and considered by the primary judge at the trial. The starting point should be the judgment of the primary judge and the identification of palpable errors. The mere assertion that the finding of the judge is against the weight of the evidence or that the judge should have reached another conclusion because of points advanced in the closing submissions below are not errors coming within that category.

(4)  Where a trial judge has reached a conclusion on the primary facts, the kind of mistake which could engage the appellate court’s power of intervention are: (1) where there was no evidence to support the conclusion, (ii) the conclusion was based on a misunderstanding of the evidence, or (iii) the conclusion was on which no reasonable judge could have reached.

41.  Clearly, the finding of fact that a payment of AUD20,000 was made by the 1^st Defendant under the Promissory Note on 17 June 2016 does not fall within any palpable error which could give rise to grounds for intervention by the Court of Appeal. In addition, Madam Koh’s answer under cross-examination had been criticised by the 1^st Defendant in its closing submissions and this is not the occasion to repeat the same contention.

42.  In the circumstances, even if I was wrong in rejecting the Multiple Maturity Date Argument in substance, by reason of the 1^st Defendant’s partial payment of AUD20,000 on 17 June 2016, the right to sue for each of the 25 instalments shall be deemed to be accrued on 17 June 2016 pursuant to section 23(3) of the Limitation Ordinance (Cap 347), and so none of the 25 instalments was time-barred when the Plaintiff commenced this action on 24 December 2019.

43.  In the premises, Ground 3 has no merit.

(IV)  Conclusion and Costs on Leave to Appeal Application

44.  The 1^st Defendant has failed to show any palpable errors in the Judgment which could give rise to intervention by the Court of Appeal. The intended appeal has no reasonable prospect of success, and there is no reason in the interest of justice why the intended appeal should be heard.

45.  The Leave to Appeal Application is dismissed.

(V)  Plaintiff’s Payment Out Application and 1^st Defendant’s Stay of Payment Out Application

46.  There is no dispute that the sum of HK$624,240 was paid into Court by the Plaintiff on 12 October 2022 as security for the 1^st Defendant’s costs because the Plaintiff resides outside the jurisdiction and has no asset within the jurisdiction.

47.  According to the 5^th Affidavit of Mark Alexander Pierrepont filed on behalf of the 1^st Defendant on 16 January 2025, the said sum held in court should remain in court as security for costs pending the appeal until the 1^st Defendant’s application for leave to appeal has been determined.

48.  As a result of the dismissal of the Leave to Appeal Application, there is no reason to continue holding the said sum in court. I allow the Plaintiff’s Payment Out Application and order in terms of paragraph 1 thereof. I dismiss the 1^st Defendant’s Stay of Payment Out Application.

(VI)  Costs

49.  The Plaintiff asks for her costs be taxed on indemnity basis, relying on China Shanshui Cement Ltd & Ors v Tianrui (International) Holding Company Ltd & Ors[2021] HKCFI 2745, at paragraph 28. In that case, Keith Yeung J applied the legal principles on awarding indemnity costs set out in Commissioner of Inland Revenue v Poon Cho Ming John (2020) 23 HKCFAR 74. In relation to the second summons in question, the defendants filed extensive written submissions in relation to three out of five paragraphs of the summons. In their written submissions in reply, the defendants on one hand stated that they would no longer rely on a part of those three paragraphs of the summons, but on the other hand continued to make submissions on other parts of those three paragraphs. It was only at the beginning of the hearing and at the court’s invitation for clarifications that the defendants clearly and unequivocally abandoned those three paragraphs. The court agreed with the plaintiffs (at paragraph 28 thereof) that the pursuit of unarguable, weak or thin points, or points which are plainly wrong in law, can result in indemnity costs. The court held that the late abandonment, though saved some hearing time, had resulted in wastage of time, costs and resources, and in particular those incurred by the plaintiffs’ team in dealing with those paragraphs could have been saved and the distraction could have been spared. The court found that such late and equivocal abandonment constituted on the facts of that case special and unusual features which justified indemnity costs. On a broad brush approach, the court apportioned 35% in respect of the costs of and occasioned by those three abandoned paragraphs of the summons, so that the same be assessed on an indemnity basis.

50.  In the present case, the 1^st Defendant’s Defence contained bare denials of essentially the entirety of the Plaintiff’s Amended Statement of Claim, with an unparticularised, one-liner “defence of limitation”, but without a single plea of the 1^st Defendant’s factual allegation or version of event. The drastic, negative legal consequences of the bare denials, as well as the requirement of particulars for a limitation defence, are based on fundamental principles of pleadings which the 1^st Defendant with legal representation must have, or at least should have, been aware of. By reason of the deemed admitted fact that the 1^st Defendant made a partial payment of AUD20,000.00 under the Promissory Note to Mr Koh on 17 June 2016, irrespective of whether the Plaintiff’s primary position of 28 December 2013 as maturity date or the 1^st Defendant’s Multiple Maturity Date Argument should prevail, time was deemed to have started to run afresh by operation of section 23(3) of the Limitation Ordinance, and the limitation period only expired on 17 June 2022, and the Plaintiff’s claim was brought well within time. Therefore, even if benefit were given to the unparticularised limitation defence or the unpleaded Multiple Maturity Date Argument, the limitation defence was hopeless and bound to fail as the Plaintiff’s reliance on section 23(3) of the Limitation Ordinance would prevail.

51.  In this Leave to Appeal Application, the 1^st Defendant did not pinpoint any palpable error of the Judgment, particularly in relation to the findings and legal consequences of deemed admitted facts, and the conclusion on the Plaintiff’s second alternative position. The intended appeal is hopeless. Based on the principles set out in Commissioner of Inland Revenue v Poon Cho Ming John (supra) and China Shanshui Cement Ltd (supra), the Leave to Appeal Application warrants an award of costs on indemnity basis.

52.  The Plaintiff’s Payment Out Application and the 1^st Defendant’s Stay of Payment Out Application were two sides of the same coin. To the 1^st Defendant, the intended appeal was the only basis in support of its Stay of Payment Out Application and in opposition to the Plaintiff’s Payment Out Application. Given my decision above that the intended appeal is hopeless and the Leave to Appeal Application is dismissed with an award of indemnity costs to the Plaintiff, it is appropriate to award the Plaintiff her costs of the Payment Out Application and Stay of Payment Out Application on an indemnity basis as well.

53.  The 1^st Defendant has not made submissions on costs. Also, the Plaintiff has filed a Statement of Costs for Summary Assessment in respect of the Leave to Appeal Application dated 23 May 2025. It is unsure whether the said statement of costs has already covered the Plaintiff’s costs of its Payment Out Application and the 1^st Defendant’s Stay of Payment Out Application. In the circumstances, I make a costs order nisi that:-

(1)  The 1^st Defendant do pay the Plaintiff’s costs of the Leave to Appeal Application (ie paragraph 1 of the 1^st Defendant’s summons filed on 21 January 2025) on an indemnity basis, to be summarily assessed if not agreed, with certificate for counsel, to be paid within 14 days after assessment.

(2)  The 1^st Defendant do pay the Plaintiff’s costs of the Payment Out Application (ie the Plaintiff’s summons filed on 14 January 2025) on an indemnity basis, to be summarily assessed if not agreed, with certificate for counsel, to be paid within 14 days after assessment.

(3)  The 1^st Defendant do pay the Plaintiff’s costs of the Stay of Payment Out Application (ie paragraph 2 of the 1^st Defendant’s summons filed on 21 January 2025) on an indemnity basis, to be summarily assessed if not agreed, with certificate for counsel, to be paid within 14 days after assessment.

(4)  This order nisi shall become absolute in the absence of application to vary within 14 days.

(5)  Unless any application for variation of this order nisi is made within time:-

(a)  the Plaintiff shall lodge and serve its statement of costs for summary assessment in respect of the Payment Out Application (if any) and the Stay of Payment Out Application (if any) within 7 days after the expiry of the said 14-day period. If the Statement of Costs dated 23 May 2025 has already included costs in respect of the Payment Out Application and the Stay of Payment Out Application, the Plaintiff shall inform this Court and the 1^st Defendant in writing within 7 days after the expiry of the said 14-day period.

(b)  the 1^st Defendant shall lodge and serve its Statement of Objections against the Plaintiff’s Statement of Costs for Summary Assessment in respect of the Leave to Appeal Application dated 23 May 2025, as well as the Plaintiff’s Statement of Costs for Summary Assessment in respect of the Payment Out Application and/or the Stay of Payment Out Application (if any) within 7 days thereafter.

(c)  Summary assessment of the Plaintiff’s costs will be conducted on paper (no matter whether any Statement of Objection is lodged by the 1^st Defendant within time) thereafter.

Mr Lavesh Kirpalani, instructed by Munros, for the plaintiff

Mr Andrew Hart (Solicitor Advocate), of Hart Giles, for the 1^st defendant

DCCJ 6960/2019

[2025] HKDC 428

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 6960 OF 2019

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BETWEEN

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DECISION

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(I) Introduction

1.  After a 2-day trial, on 24 December 2024, I handed down my judgment (“Judgment”) in favour of the Plaintiff. At paragraph 81(2)-(3) of the Judgment, I ordered:-

(1) the 1^st Defendant to pay the Plaintiff its pre-judgment interest on the judgment sum (SGD$395,896.43 or its equivalent in Hong Kong dollars) from 28 December 2013 up to the date of the Judgment, at the commercial borrowing rate of Australian dollars in Australia; and

(2) the parties to agree to such rate or rates within 14 days, failing such agreement each party to file and serve evidence by affirmation and written submissions, and I shall determine the rate or rates by paper disposal.

2.  On 7 January 2025, the Plaintiff’s solicitors wrote to the 1^st Defendant’s solicitors, seeking agreement to adopt the statutory pre-judgment interest rates in Australia. Nevertheless, the 1^st Defendants’ solicitors did not reply.

3.  As a result, the Plaintiff filed and served the 2^nd Affirmation of Yue Wing Man (“Yue 2^nd Aff”), her handling solicitor, on 14 January 2025 and her written submissions on 21 January 2025, seeking to adopt the statutory pre-judgment interest rates in Australia for calculating the pre-judgment interest awarded herein.

4.  The 1^st Defendant did not file any evidence or written submissions.

(II) Plaintiff’s Case

5.  According to Yue 2^nd Aff, financial institutions in Australia lend money to individuals and corporations at different interest rates based on different factors. An extract of an Excel spreadsheet downloaded from the official website of the Reserve Bank of Australia, the central bank of Australia (exhibit YWM-3), demonstrated that from 2013 to 2023, the bank adopted lending rates from 2.14% pa to 10.51% pa depending on the purpose (business loan or housing loan for a property for self-use or investment), term, whether a discounted or standard rate should be adopted, etc.

6.  Moreover, there is no prime rate (ie best lending rate) in Australia which is similar or equivalent to the prime rate adopted by the Hong Kong courts for pre-judgment interest rate. Instead, according to its official website, the Reserve Bank of Australia sets a cash rate (“Cash Rate”) being the interest rate on unsecured overnight loans between banks, which is the (near) risk-free benchmark rate for the Australian dollar.

7.  Yue 2^nd Aff referred to section 51A(1)(a) of the Federal Court of Australia Act 1976, which provides that:

“(1) In any proceedings for the recovery of any money (including any debt or damages or the value of any goods) in respect of a cause of action that arises after the commencement of this section, the Court or a Judge shall, upon application, unless good cause is shown to the contrary, either:-

(a) order that there be included in the sum for which judgment is given interest at such rate as the Court or the Judge, as the case may be, thinks fit on the whole or any part of the money for the whole or any part of the period between the date when the cause of action arose and the date as of which judgment is entered; …”

8.  The Australian courts are therefore allowed to grant pre-judgment interest. According to the website of the Federal Court of Australia and the General Practice Note on judgment interest (GPN-INT), from 2011 to 2024, the pre-judgment interest rate in Australia was 4% on top of the Cash Rate per annum for the respective period of time (“the Australian Court Rate”), adjustable half-yearly, and such rate being agreed upon by the Discount and Interest Rate Harmonisation Committee established following a referral by the Council of Chief Justices of Australia and New Zealand. By comparison, the post-judgment interest rates were Cash Rate plus 6% per annum.

9.  Yue 2^nd Aff then set out the applicable pre-judgment interest rates, viz the Australian Court Rates, if this action were tried in Australia:-

Period	Cash Rate (% pa)	Australian Court Rates (% pa)
28/12/2013 – 31/12/2013	2.75	6.75
1/1/2014 – 30/6/2014	2.5	6.5
1/7/2014 – 31/12/2014	2.5	6.5
1/1/2015 – 30/6/2015	2.5	6.5
1/7/2015 – 31/12/2015	2	6
1/1/2016 – 30/6/2016	2	6
1/7/2016 – 31/12/2016	1.75	5.75
1/1/2017 – 30/6/2017	1.5	5.5
1/7/2017 – 31/12/2017	1.5	5.5
1/1/2018 – 30/6/2018	1.5	5.5
1/7/2018 – 31/12/2018	1.5	5.5
1/1/2019 – 30/6/2019	1.5	5.5
1/7/2019 – 31/12/2019	1.25	5.25
1/1/2020 – 30/6/2020	0.75	4.75
1/7/2020 – 31/12/2020	0.25	4.25
1/1/2021 – 30/6/2021	0.1	4.10
1/7/2021 – 31/12/2021	0.1	4.10
1/1/2022 – 30/6/2022	0.4	4.10
1/7/2022 – 31/12/2022	0.85	4.85
1/1/2023 – 30/6/2023	3.1	7.10
1/7/2023 – 31/12/2023	4.1	8.10
1/1/2024 – 30/6/2024	4.35	8.35
1/7/2024 – 24/12/2024	4.35	8.35

10.  Pausing here, I note that Yue 2^nd Aff made a mistake with respect to the period from 1 January 2022 to 30 June 2022 – the Cash Rate should be 0.1% p.a. instead of 0.4%, but the relevant Australian Court Rate was correctly stated to be 4.1% p.a.

11.  The Plaintiff submitted that the Australian Court Rates are realistic references of prime commercial borrowing rates in Australia and should be adopted for the purpose of calculating the pre-judgment interest on the judgment sum herein.

(III) Discussion

12.  In paragraphs 74 and 75 of the Judgment, I applied Chow How Yeen Margaret v Wex Pharmaceuticals Inc [2018] 3 HKLRD 163 (CA) and awarded pre-judgment interest to the Plaintiff by adopting the commercial borrowing rate for Australian dollars in Australia.

13.  In Chow How Yeen Margaret, a case involving fraudulent misrepresentation to induce the entry of an agreement for sale and purchase of company shares as well as distributorship agreements, the Court of Appeal reaffirmed that:-

(1) Though pre-judgment interest is a matter of discretion under section 48 of the High Court Ordinance (Cap 4), the norm in Hong Kong is prime rate plus 1%, and this norm is the starting point in considering what rate should be used for pre-judgment interest (paragraph 45).

(2) As stated in Tadjudin Sunny v Bank of America, National Association CACV 12/2015, unreported, 20 May 2016, any suggestion that this starting point should be changed is something that should be considered only where there is evidence before the court to support such a change, and it is not satisfactory to proceed on the basis of the impressions (however well founded they may turn out to be) of the individual judge (paragraph 51). That is not to say that there may not be a case in the future in which the necessary evidential foundation (which might, for example, consist of banking evidence as to the manner in which rates for unsecured lending are fixed, that shows clearly that prime rate is no longer, or very rarely used as a starting point) will be laid for a consideration of whether or not the time has come to move away from prime rate plus 1% as the starting point for the awarding of pre-judgment interest (paragraph 52).

(3) An award of pre-judgment interest is to compensate the plaintiff for being deprived of the money during the relevant period, and in commercial cases such compensation is reflected in interest at a rate at which a person in similar position as the plaintiffs generally would have had to pay to borrow money (paragraph 56).

14.  The Court of Appeal further held in Chow How Yeen Margaret that:-

(1) If judgment is given in a foreign currency, interest is usually taken at the rate at which that currency could be borrowed in the country in which the debt should have been paid (paragraph 68). That said, this is not an immutable rule because the court may adopt other interest rates to avoid injustice, for example due to the inability to borrow such currency in the money market at the place where the money should have been paid (paragraph 69).

(2) The fact that the plaintiffs in that case were required by the defendants to pay the consideration (in Canadian dollars) by way of Hong Kong dollars and US dollars in the 2^nd defendant’s bank accounts in Hong Kong, and the fact that the plaintiffs were Hong Kong resident and Hong Kong companies, were relevant circumstances such that it was within the reasonable options for the trial judge to exercise the discretion in awarding pre-judgment interest by reference to a reasonable notional borrowing to make good for the deprivation of the judgment sum by the plaintiffs by way of borrowing rates available in Hong Kong (paragraph 72).

(3) In that connection, since there was no evidence on the borrowing rates for Canadian dollars in Hong Kong, and no presumption that banks would lend Canadian dollars in Hong Kong based on rates published in Canada should be made, the court should proceed on the basis that the plaintiffs would not be able to borrow Canadian dollars in Hong Kong at the rates published in Canada (paragraph 73). For the purpose of the notional borrowing in Hong Kong to facilitate the interest calculation, the court adopted the notion that the plaintiffs would have to borrow Hong Kong dollars equivalent of the judgment sum at Hong Kong dollar borrowing rates (paragraph 74), and the relevant interest rates should be the Hong Kong dollar borrowing rates, viz prime rates plus 1% (paragraph 75).

15.  Recently, in PT Asuransi Tugu Pratama Indonesia TBK v Citibank NA (No 2) [2023] 6 HKC 406, the Court of Final Appeal had to determine the applicable pre-judgment interest rate for a judgment sum in US dollars. An issue arose because the period for which pre-judgment interest was to be paid included a period prior to 2009, for which HSBC had not retained a record of its prevailing best lending rate. The defendant submitted that since HSBC’s best lending rates were consistently 0.75% lower than the corresponding historical US dollar prime rates published by JP Morgan Chase & Co (“the JP Morgan US Rates”) from at least 1 January 2009 to the date of judgment in that appeal, rates that were 0.75% lower than the JP Morgan US Rates should be used as a proxy for HSBC’s best lending rate in question, and such a proxy shall be the substitute for “prime” in the applicable “prime plus 1%” rate for pre-judgment interest. The plaintiff disagreed and proposed to use US dollar prime rates published by JP Morgan and the Bank of America, and subsequently proposed that the US dollar prime rates published by Citi (i.e. the defendant) should instead be used as the basis of calculating pre- and post-judgment interest.

16.  The Court of Final Appeal reaffirmed (at paragraph 6) that pre-judgment interest is awarded on a judgment sum as a way to compensate a successful plaintiff for being kept out of his money for a period of time, and the usual practice in Hong Kong is to award interest at a rate which represents the theoretical cost to the plaintiff of going into the commercial market to borrow the amount withheld. Traditionally, this rate has been taken to be 1% above the HSBC best lending rate, unless there is evidence in a particular case which makes the adoption of an alternative rate of interest appropriate for the pre-judgment period.

17.  The Court of Final Appeal further stated (at paragraph 8) that as the judgment sum in that case was denominated in US dollars, the relevant HSBC best lending rate was HSBC’s US dollar best lending rate, applying Fargo Shipping v Hwa Haur Trading [1979] HKLR 327 at 328, as qualified by Chow How Yeen Margaret at paragraphs 65 to 68.

18.  The Court of Final Appeal accepted (at paragraph 10) that in the absence of HSBC’s US dollar best lending rate for the period prior to 2009, the proxy suggested by the defendant was an acceptable methodology for calculating the relevant prime rate for pre-judgment interest prior to 2009. The Court declined to resolve the issue raised by the plaintiff, namely whether the US dollar prime rate published by JP Morgan and the Bank of America or Citi’s own US dollar prime rate should be used in place of the HSBC best lending rate, because the plaintiff did not put affidavit or expert evidence before the Court.

19.  Here, applying PT Asuransi Tugu Pratama Indonesia TBK and Chow How Yeen Margaret, the norm of “prime rate plus 1%” should be used as the starting point for pre-judgment interest. Moreover, by reason of my ruling (see paragraph 75 of the Judgment) to adopt the commercial borrowing rate for Australian dollars in Australia, the pre-judgment interest should be calculated at the prime rate for Australian dollars in Australia plus 1%. There is no evidence or submission that the pre-judgment interest rate in this case should deviate from the norm.

20.  I accept the Plaintiff’s evidence, as supported by information published on the official website of the Reserve Bank of Australia, that different interest rates for borrowing are applied by financial institutions based on different factors, and further that the Cash Rate, being the interest rate on unsecured overnight loans between banks, has been set as the (near) risk-free benchmark rate for the Australian dollar. Moreover, in the absence of contrary evidence, I accept the Plaintiff’s evidence that there is no prime rate (ie best lending rate) in Australia which is similar or equivalent to the HSBC best lending rate in Hong Kong.

21.  I note that there is no banking evidence as to the manner in which the Cash Rate in Australia and the HSBC best lending rate in Hong Kong are fixed, or as to whether there is any formula or mechanism for converting the Cash Rate into something similar or equivalent to the HSBC best lending rate in Hong Kong.

22.  The Plaintiff submitted that the Australian Court Rates are realistic references of prime commercial borrowing rates in Australia and should be adopted for the purpose of calculating the pre-judgment interest on the judgment sum herein. Following PT Asuransi Tugu Pratama Indonesia TBK, I treat this as the proxy suggested by the Plaintiff to substitute for “prime” in the applicable “prime plus 1%” rate for pre-judgment interest.

23.  I accept, based on the website of the Federal Court of Australia and the General Practice Note on judgment interest, that from 2011 to 2024, pre-judgment interest was granted pursuant to section 51A(1)(a) of the Federal Court of Australia Act 1976 at the rate of 4% on top of the Cash Rate, such rate being reviewed and adjusted half-yearly. Nonetheless, there is no evidence or submission on the rationale for granting pre-judgment interest under the said section and adopting “Cash Rate plus 4%” as the rate.

24.  Having said that, it is well-established that in the absence of evidence of foreign law, the court will usually assume that the law is the same as Hong Kong – Hong Kong Civil Procedure 2025, Volume 2, rubric J1/59/1. Judging from the adoption of the Cash Rate with the adjustment of 4% on top as the Australian Court Rate, it can be assumed, in my judgment, that pre-judgment interest is awarded in Australia for the same rationale in Hong Kong, viz to compensate the plaintiff for being deprived of the money during the relevant period, and such compensation is reflected in interest at a rate of reasonable notional borrowing in Australia.

25.  Further, and more importantly, exhibit YWM-3, ie the extract of the Excel spreadsheet downloaded from the Reserve Bank of Australia official website, lends support to the Plaintiff’s case. The Excel spreadsheet covered the period from December 2013 to June 2023. For every month in this period, there were 5 to 9 lending rates. Some of these lending rates were for loans for small businesses, others were for housing loans for investors or owner-occupiers, at standard or discounted rates, etc. I note that the spreadsheet did not say whether the lending rates therein were exhaustive for the periods concerned. Neither was there evidence showing the exact criteria and considerations for applying a certain lending rate, or the frequency of the application of each of these lending rates during the periods concerned. For present purposes, for every half-year period, I take the average of all the lending rates, and set out such average lending rates and the corresponding Australian Court Rates in the table below:-

Period	Average lending rate (% pa) based on exhibit YWM-3)	Australian Court Rates (% pa)
1/1/2014 – 30/6/2014	6.46	6.5
1/7/2014 – 31/12/2014	6.43	6.5
1/1/2015 – 30/6/2015	6.15	6.5
1/7/2015 – 31/12/2015	5.82	6
1/1/2016 – 30/6/2016	5.80	6
1/7/2016 – 31/12/2016	5.53	5.75
1/1/2017 – 30/6/2017	5.62	5.5
1/7/2017 – 31/12/2017	5.71	5.5
1/1/2018 – 30/6/2018	5.72	5.5
1/7/2018 – 31/12/2018	5.77	5.5
1/1/2019 – 30/6/2019	5.79	5.5
1/7/2019 – 31/12/2019	5.29	5.25
1/1/2020 – 30/6/2020	4.90	4.75
1/7/2020 – 31/12/2020	4.64	4.25
1/1/2021 – 30/6/2021	4.61	4.10
1/7/2021 – 31/12/2021	4.60	4.10
1/1/2022 – 30/6/2022	4.93	4.10
1/7/2022 – 31/12/2022	6.96	4.85
1/1/2023 – 30/6/2023	8.00	7.10

26.  It can be seen that save and except perhaps the last 3 periods, the average lending rate roughly matched with the corresponding Australian Court Rate for the same half-year period. The differences in the last 3 periods may be explained by the probabilities of the existence of other lending rates not shown in exhibit YWM-3, of the more loans being granted on higher lending rates, etc. On balance, I am satisfied that the Australian Court Rates reflected the commercial borrowing rates in Australia.

27.  On the other hand, the Cash Rate for a given half-year period was much lower than any lending rate in the same period, indicating that the Cash Rate was unlikely the commercial borrowing rate in Australia.

28.  On balance of probabilities, I accept the methodology of treating the Australian Court Rate as the commercial borrowing rate of a reasonable notional borrowing in Australia. I adopt the Australian Court Rates as the pre-judgment interest rates in the present case. For clarity, given my finding that the Australian Court Rate represents the rate for a reasonable notional borrowing but not just the “prime rate” in Australia, the “plus 1%” in the norm has been factored in the Australian Court Rate, and therefore there is no additional 1% on top of the Australian Court Rate in the present case.

(IV) Disposition

29.  I order that the Australian Court Rates set out for the corresponding periods in the table in paragraph 9 above be adopted as the pre-judgment interest rates in this action.

30.  Costs should follow the event. I make a costs order nisi that the 1^st Defendant do pay the Plaintiff costs of preparing the evidence and submissions on the issue of pre-judgment interest, to be taxed if not agreed.

Munros, for the plaintiff

Hart Giles, for the 1^st defendant

DCCJ 6960/2019

[2024] HKDC 2105

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 6960 OF 2019

________________________

________________________

________________________

J U D G M E N T

________________________

(I)  Introduction

1.  In this action, the Plaintiff claims against the 1^st Defendant for money owed under a promissory note together with interest and costs.

(II)  Plaintiff’s Case

2.  The Plaintiff in this action is Oon Kim Koh (“Madam Koh”), the person appointed to represent the estate of Koh Kim Chan (“Mr Koh”), deceased (“the Estate”).  There is no dispute that Mr Koh and Madam Koh were husband and wife.

3.  The 1^st Defendant and the 2^nd Defendant were and still are companies incorporated in Hong Kong.

4.  On 28 November 2011, the 1^st Defendant made and delivered to Mr Koh a promissory note (“the Promissory Note”)  in the sum of SGD$525,000.00 (“the Sum”).  I set out the Promissory Note in full:-

“Quest Investments Limited CR 563455

[Address omitted]

(“Borrower”)

And

Kim Chan Koh

[Address omitted]

(“Promissory Note Holder”)

PROMISSORY NOTE

SGD$525,000.00

For value received the Borrower promises to pay the Promissory Note Holder the sum of SGD$525,000.00 by twenty-five (25)  calendar monthly instalments in Australian dollars at the exchange rate applicable at the date of payment equivalent to SGD$21,000 per calendar month payable on the 28^th day of each month commencing on 28^th December 2011 and ending on 28^th December 2013.

Dated this 28^th day of November 2011.

_________(Sd.)__________

Chiang Wee Tiong

Director

Quest Investments Limited CR 563455”

5.  On or around 28 November 2011, the 1^st Defendant directed Mr Koh to advance to the 2^nd Defendant the sum of SGD$500,000.00 by way of a cheque numbered 090393 dated 28 November 2011 drawn on Mr Koh’s bank account numbered 1183003033 held with United Overseas Bank Limited (“the Cheque”).  The 2^nd Defendant duly presented the Cheque for payment, which was duly honoured on 29 November 2011.  This payment to the 2^nd Defendant by Mr Koh is supported by the relevant monthly statement of the said bank account of Mr Koh. 

6.  The Plaintiff’s case is that the 1^st Defendant failed to pay any of the instalments due under the Promissory Note, but instead paid Mr Koh the sum of AUD113,300.00 (equivalent to SGD$129,103.57)  in instalments on the dates and in the sums appearing in the second and third columns respectively of the table below (see paragraph 6 of the Amended Statement of Claim):-

Item No.	Date	Sum (AUD)	Sum (SGD)	Exchange rate
1	14 Feb 2012	$3,000.00	$4,032.90	1.3443
2	8 Mar 2012	$5,000.00	$6,666.50	1.3333
3	13 Apr 2012	$3,000.00	$3,916.20	1.3054
4	23 May 2012	$5,000.00	$6,222.00	1.2444
5	23 Jul 2012	$5,000.00	$6,529.00	1.3058
6	10 Sep 2012	$2,000.00	$2,587.20	1.2936
7	30 Nov 2012	$2,000.00	$2,553.40	1.2767
8	5 Feb 2013	$3,000.00	$3,855.90	1.2853
9	6 May 2013	$5,000.00	$6,310.00	1.2620
10	30 May 2013	$4,000.00	$4,870.40	1.2176
11	18 Sep 2013	$3,300.00	$3,910.17	1.1849
12	2 Dec 2013	$15,000.00	$17,173.50	1.1449
13	19 May 2014	$5,000.00	$5,834.50	1.1669
14	7 Oct 2014	$10,000.00	$11,231.00	1.1231
15	22 May 2015	$8,000.00	$8,366.40	1.0458
16	9 Jul 2015	$10,000.00	$10,065.00	1.0065
17	5 Nov 2015	$5,000.00	$5,025.00	1.0051
18	17 Jun 2016	$20,000.00	$19,954.00	0.9977
	Total	$113,300.00	$129,103.57

7.  According to the Plaintiff, the 1^st Defendant thereafter failed to pay the balance due under the Promissory Note, which remains due.

8.  On 9 July 2016, Mr Koh passed away. 

9.  On 11 January 2017, the Supreme Court of Queensland, Australia, on the strength of Mr Koh’s will dated 7 September 1999 (“the Will”), granted probate and appointed Madam Koh as the executrix of the Estate.

10.  The Plaintiff, on behalf of the Estate, claims against the 1^st Defendant:-

(1)  the sum of SGD$395,896.43, being the Sum less SGD$129,103.57, due under the Promissory Note, or its equivalent in Hong Kong dollars;

(2)  interest on the sum above pursuant to section 57(a)(ii)  of the Bills of Exchange Ordinance (Cap 19)  from the date of maturity of the Promissory Note (28 December 2013)  at the commercial rate, presently amounting to 5 per cent per annum, and amounting at the date of the Statement of Claim (8 July 2020)  to SGD$120,558.60, or its equivalent in Hong Kong dollars; and

(3)  interest pursuant to sections 49 and 50 of the District Court Ordinance (Cap 336)  (“DCO”).

11.  Further or alternatively, the Plaintiff, on behalf of the Estate, claimed against the 2^nd Defendant the sum of SGD$370,896.43 (being the sum of SGD$500,000 advanced by the Plaintiff to the 2^nd Defendant at the direction of the 1^st Defendant less the sum of SGD$129,103.57 repaid by the 1^st Defendant under the Promissory Note), being the sum in respect of which the 2^nd Defendant was unjustly enriched at the Plaintiff’s expense.  The Plaintiff further claimed against the 2^nd Defendant interest under sections 49 and 50 of DCO.

(III)  1^st Defendants’ Case

12.  The 1^st Defendant denied the Plaintiff’s claim and pleaded, in paragraph 8 of its Defence, that any right of action the Plaintiff had against the 1^st Defendant (which is denied)  is “statute barred” and consequently the Plaintiff is prevented at law, statute and pursuant to the Limitation Ordinance (Cap 347)  (“LO”)  from commencing, continuing and obtaining the relief sought.

13.  In addition, apart from making no admission as to the Plaintiff’s Grant of Probate by the Supreme Court of Queensland, the 1^st Defendant denied the entire Plaintiff’s case and put the Plaintiff to strict proof.

14.  In other words, the only positive defence pleaded by the 1^st Defendant was one of limitation.

(VI)  Plaintiff’s Reply

15.  The Plaintiff averred that by letters dated 5 September 2012 (“YCA’s Confirmation 5.9.2012”)  and 12 August 2013 (“YCA’s Confirmation 12.8.2013”)  respectively, the auditors of the 1^st Defendant, namely YCA Partners CPA Limited, acknowledged on behalf of the 1^st Defendant that the debt owed to the Plaintiff pursuant to the Promissory Note was HK$2,871,962 as at 30 June 2012 and HK$2,705,251 as at 30 June 2013.

16.  The Plaintiff further averred that by an undated letter, the auditors of the 1^st Defendant, Messrs Kenny KY Chan & Co acknowledged on behalf of the 1^st Defendant that the debt owed to the Plaintiff was HK$2,688,739.10 as at 30 June 2014 (“KKYC’s Confirmation”).

17.  The Plaintiff contended, in paragraph 4 of her Reply, that her right of action against the 1^st Defendant for payment of outstanding amounts under the Promissory Note accrued, under the common law, on the date of the maturity of the Promissory Note, namely 28 December 2013, and the limitation period expired 6 years from that date on 28 December 2019.  As the first alternative, by operation of section 23(3)  of LO, her right of action was deemed to have accrued on 5 September 2012, 12 August 2013 and/or on an unknown date on or after 30 June 2014 (to be ascertained), being dates on which the 1^st Defendant, through its auditors, acknowledged the debt owed to the Plaintiff in writing, and the limitation period ran afresh from the aforesaid dates expiring 6 years therefrom.  As the second alternative, by operation of section 23(3)  of LO, the right of action was deemed to have accrued on 17 June 2016, being the date on which the 1^st Defendant made part payment of the debt owed to the Plaintiff, and the limitation period ran afresh on that date expiring 6 years therefrom on 17 June 2022.

(IV)  Procedure

18.  On 22 May 2020, pursuant to the Plaintiff’s ex parte application (“Ex Parte Application”), Master Maurice Lam ordered, inter alia, that Madam Koh be appointed to represent the Estate for the purpose of carrying on this action as the Plaintiff.

19.  On 9 March 2021, Master B. Mak ordered, inter alia, that the Plaintiff’s claim against the 2^nd Defendant in this action be wholly discontinued.

20.  On 27 April 2022, Master B. Mak ordered, inter alia, that all interlocutory applications, if any, shall be taken out on or before 17 August 2022.

21.  At the hearing on 13 September 2022, upon the application of the 1^st Defendant by summons filed on 16 August 2022, Master Michelle Soong (as she then was)  ordered, inter alia, that unless the 1^st Defendant takes out any further interlocutory applications, including the application for security for costs, by 4:00 pm on 16 September 2022, no further interlocutory applications shall be made by the 1^st Defendant without leave of the Court.  Eventually, no interlocutory application had been made by the 1^st Defendant before this trial.

22.  At the hearing on 1 March 2023, Master B. Mak, inter alia, set the action down for trial and granted leave to the Plaintiff to give evidence via video conferencing facilities.

23.  At the Pre-Trial Review on 14 March 2024, Deputy District Judge Alan Kwong (as he then was)  ordered parties to file and serve opening submissions with list of authorities before this trial.

(V)  Trial

24.  Pursuant to the said Order of Deputy District Judge Alan Kwong, the Plaintiff filed her written opening submissions with a list of authorities. The 1^st Defendant also filed its 5-page written opening submissions, but there was no submission on its pleaded case including its only pleaded defence of limitation. 

25.  As a matter of fact, apart from the words “statute barred”, the 1^st Defendant did not state in its Defence as to how the limitation defence operated, and notably there was no allegation of the date of accrual of the Plaintiff’s cause of action or the date of expiration of the relevant limitation period which are crucial to the limitation defence. 

26.  At trial, I exercised my case management power to request the 1^st Defendant to make oral submissions on its pleaded case before Madam Koh’s oral evidence.  As a result, Mr Andrew Hart, Solicitor Advocate for the 1^st Defendant, made oral submissions on the limitation defence before Madam Koh’s testimony.  I shall refer to those oral submissions below. 

27.  Madam Koh testified in English by video link from Australia for the Plaintiff.

28.  Initially, the 1^st Defendant intended to call one factual witness only, namely Mr Grant Anthony Robertson (“Mr Robertson”).  Remarkably, Chiang Wee Tiong (“Chiang”), the director who signed the Promissory Note on behalf of the 1^st Defendant as well as the Statement of Truth for the 1^st Defendant’s Defence herein, did not provide any witness statement.  After the close of the Plaintiff’s case, Mr Hart informed the Court that the 1^st Defendant was not calling Mr Robertson.  I therefore ordered the witness statement of Mr Robertson dated 19 December 2021 be expunged from the trial bundle and shall not be treated as evidence of this trial.  As a result, the 1^st Defendant called no factual witness.

(VI)  Agreed Issues

29.  Pursuant to the Joint Statement of Issues filed on 14 September 2022, the agreed issues are:-

(1)  Issue 1 – Whether the Plaintiff’s claim against the 1^st Defendant under the Promissory Note is time-barred.

(2)  Issue 2 – Whether the 1^st Defendant is liable under the Promissory Note and, if so, the amount of principal, and interest (if any), due under the Promissory Note from the 1^st Defendant to the Plaintiff.

(VII)  Factual Evidence of Madam Koh

30.  Madam Koh adopted her witness statement as her evidence-in-chief. 

31.  Pursuant to the grant of probate by the Supreme Court of Queensland, Australia, Madam Koh became the sole executrix of the Estate.  She was also the sole beneficiary of the Estate under the Will.  On 20 May 2020, Madam Koh applied for probate with the Probate Registry in Hong Kong, which application was still ongoing.

32.  Madam Koh had never had direct communication with the 1^st Defendant, but she had been aware of the outstanding sums owed to Mr Koh/the Estate based on the Promissory Note, the Cheque and the said relevant monthly statement of Mr Koh’s bank account, as well as the following documents in her possession:-

(1)  Mr Koh’s handwritten note dated 31 January 2012 to Chiang of the 1^st Defendant providing his bank account details.

(2)  her own manuscript record of the 1^st Defendant’s payments to Mr Koh (“Manuscript Record”).  Madam Koh recorded a payment of AUD20,000 on 17 June 2016 from the 1^st Defendant, which was made approximately 3 weeks before Mr Koh’s passing on 9 July 2016.

(3)  the said confirmations for audit purposes, ie YCA’s Confirmation 5.9.2012, YCA’s Confirmation 12.8.2013 and KKYC’s Confirmation.

33.  Mr Koh had never informed Madam Koh of any arrangement to waive any part of the debt under the Promissory Note.

34.  After Mr Koh’s passing, the 1^st Defendant stopped making payment of the outstanding amount under the Promissory Note.  Madam Koh continued to keep track of any further payments in the Manuscript Record until the end of 2018 when she decided to take legal action against the 1^st Defendant for the outstanding amount due.

35.  Under cross-examination, Madam Koh admitted that she had had no knowledge of Mr Koh’s businesses including his directorship in companies.  Mr Koh, Madam Koh and Chiang were good friends.  Madam Koh was able to tell the 18 items of partial payments by the 1^st Defendant to Mr Koh as pleaded in paragraph 6 of the Amended Statement of Claim from her bank statements and her own record.  She updated the Manuscript Record every month when the monthly bank statement was issued.

36.  Under cross-examination, Madam Koh testified that the payment of AUD20,000 from the 1^st Defendant on 17 June 2016 as stated in paragraph 4 of her witness statement was not the same payment pleaded in paragraph 4(c)  of the Reply (ie the second alternative position of the Plaintiff).  I accept that Madam Koh might be confused about the question due to her advanced age of 87 years old.  The part payment of AUD20,000 is supported by the statement covering 26 May 2016 to 24 June 2016 of the joint bank account of Mr Koh and Madam Koh which recorded “17 Jun, Deposit Quest Rtn Loan, 20,000.00 (Credit)” with the handwritten word “Chiang”.  The bank account number matched the one stated in the said handwritten note dated 31 January 2012 from Mr Koh to Chiang.  This part payment was also recorded in the Manuscript Record. 

37.  As set out below, the factual allegations in the Plaintiff’s case are deemed admitted by the 1^st Defendant’s pleaded bare denials.  In any event, the Plaintiff’s case is supported by contemporaneous documents including the Promissory Note, the Cheque, monthly bank statements, the Manuscript Record and the said confirmations for audit purposes, and Madam Koh’s evidence did not play much role in the fact-finding exercise.  Anyway, I find Madam Koh as a credible and reliable witness.  In particular, the Plaintiff’s case of partial payments made by the 1^st Defendant was supported by the said handwritten note dated 31 January 2012 and the Manuscript Record which, in turn, was partly corroborated by the monthly bank statements.

(VIII)  Legal Validity of Promissory Note

38.  The Plaintiff has the burden to prove her claim as pleaded on the balance of probabilities.

39.  First, I consider the validity of the Promissory Note as a matter of law.

40.  Section 89(1)  of the Bills of Exchange Ordinance (Cap 19)  (“BEO”)  provides that a promissory note is an unconditional promise in writing made by one person to another signed by the maker, engaging to pay, on demand or at a fixed or determinable future time, a sum certain in money to, or to the order of, a specified person or to bearer.

41.  In my judgment, the Promissory Note met the requirements set out in section 89(1)  of BEO.  The Promissory Note was an unconditional promise in writing made by the 1^st Defendant and signed by Chiang as director for and on behalf of the 1^st Defendant to Mr Koh, engaging to pay Mr Koh the Sum at a fixed future time, namely 28 December 2013. 

42.  The engagement of the maker to pay is a contract on the note, and it can be enforced only by a payee who has given valuable consideration for the promise or by a holder for value of the instrument.  See Chalmers and Guest on Bills of Exchange, Cheques and Promissory Notes, 18^th Edition, paragraph 15-009.  Section 27(1)  of the BEO, which applies to promissory notes by virtue of section 95, provides that valuable consideration for a promissory note may be constituted by any consideration sufficient to support a simple contract, or an antecedent debt or liability, such a debt or liability being deemed valuable consideration whether the note is payable on demand or at a future time.  As set out below, I accept that Mr Koh had given valuable consideration for the 1^st Defendant’s promise to pay the Sum.

43.  Section 90 of BEO further provides that a promissory note is inchoate and incomplete until delivery thereof to the payee or bearer.  Under cross-examination, Mr Hart asked Madam Koh as to when the Promissory Note was delivered, and Mr Sebastian Hughes, Counsel for the Plaintiff, raised his objection on the ground that the 1^st Defendant had simply pleaded a bare denial in paragraph 4 of its Defence against the Plaintiff’s plea of the making and delivery of the Promissory Note in paragraph 4 of the Amended Statement of Claim.  I allowed Mr Hart to put his question on de bene esse basis, and Madam Koh answered that she did not remember the date of delivery of the Promissory Note but it might have been delivered in the first week of December 2011.

44.  The Plaintiff submitted that the effect of the bare denials in paragraphs 4 to 8 of the 1^st Defendant’s Defence is that each and every fact pleaded in paragraphs 4 to 8 of the Statement of Claim is admitted under Order 18 rule 13(1)  of the Rules of the District Court (Cap.336H, sub.leg.)  (“RDC”), which provides that subject to paragraph (5)  thereof, an allegation of fact made by a party in his pleading is deemed to be admitted by the opposite party unless it is traversed by that party in his pleading or a joinder of issue under rule 14 operates as a non-admission of it.  Rule 13(3)  provides that every allegation of fact made in a statement of claim or counterclaim which the party on whom it is served does not intend to admit must be specifically traversed by him in his defence or defence to counterclaim, as the case may be; and a general denial of such allegations, or a general statement of non-admission of them, is not a sufficient traverse of them. Further, rule 13(4)  provides that where an allegation made in a statement of claim or counterclaim is traversed by a denial, the party who denies the allegation shall in his defence or defence to counterclaim state his reasons for doing so, and if he intends to put forward a different version of events from that given by the claimant, state his own version.

45.  I accept the Plaintiff’s submission on the legal effect of the bare denials insofar as paragraphs 4 to 7 of the Statement of Claim and the 1^st Defendant’s Defence are concerned.   By reason of the bare denials:-

(1)  the date of making and delivering of the Promissory Note, ie 28 November 2011;

(2)  the 1^st Defendant’s promise to pay Mr Koh the Sum by 25 equal calendar monthly instalments in Australian dollars at an exchange rate equivalent to SGD$21,000.00 on the 28^th day of each month commencing on 28 December 2011;

(3)  the last date of payment under the Promissory Note being 28 December 2013;

(4)  Mr Koh’s Cheque drawn in favour of the 2^nd Defendant at the direction of the 1^st Defendant;

(5)  the encashing of the Cheque by the 2^nd Defendant;

(6)  the 1^st Defendant’s failure to pay any of the instalments due under the Promissory Note;

(7)  the 1^st Defendant’s payment of AUD113,300.00 in instalments of different sums on various dates; and

(8)  the 1^st Defendant’s failure to pay the balance due under the Promissory Note,

were not specifically traversed and were therefore deemed to be admitted by the 1^st Defendant.  In the premises, I rule that the 1^st Defendant was not entitled to cross-examine Madam Koh on the date of delivery of the Promissory Note, and Madam Koh’s answer shall not be admitted as evidence.

46.  On the other hand, paragraph 8 of the Statement of Claim did not make any allegation of fact.  Instead, the paragraph dealt with liability and relief which were met by the 1^st Defendant’s limitation defence in paragraph 8 of its Defence, and therefore there is no admission pursuant to Order 18 rule 13 RDC.

47.  The 1^st Defendant contended that the Plaintiff only raised the argument of bare denials and deemed admissions for the first time at trial.  I do not see any impropriety with the Plaintiff taking the pleading point – after all this Court is entitled to and, indeed, must consider the legal effect of the bare denials. 

48.  The 1^st Defendant went on to submit that paragraph 6 of the Plaintiff’s Reply, being an express joinder of issue, operated to join issue with the denials in paragraphs 4 to 7 of the 1^st Defendant’s Defence, such that the Plaintiff’s allegations in paragraphs 4 to 7 of the Amended Statement of Claim were in issue and were to be determined by this Court.  I disagree.  As I held above, the allegations of fact in paragraphs 4 to 7 of the Amended Statement of Claim were deemed to be admitted by the bare denials in paragraphs 4 to 7 of the 1^st Defendant’s Defence.  There is no allegation of fact or other issue for joinder in the Reply insofar as paragraphs 4 to 7 of the 1^st Defendant’s Defence is concerned.

49.  The 1^st Defendant further submitted that the allegations in paragraphs 4 to 7 of the Amended Statement of Claim were relevant to its limitation defence pleaded in paragraph 8 of the Defence, and the Plaintiff is required to prove those allegations pursuant to Order 18 rule 13(6).  I notice that there is no rule 13(6)  in Order 18 RDC, and I suppose the 1^st Defendant was referring to Order 18 rule 13(5)  RDC, which provides that a party who fails to deal with an allegation, but has set out in his defence or defence to counterclaim the nature of his case in relation to the issue to which that allegation is relevant, is to be taken to require that allegation to be proved.  The 1^st Defendant did not cite any authority as to how Order 18 rule 13(5)  RDC should be interpreted and applied.  According to Hong Kong Civil Procedure 2024, Volume 1, rubric 18/13/11 cited by the Plaintiff:-

“…Reading both rr.13(1)  and (3)  together, a general denial would be considered a failure to deal with an allegation under [r.13(5)(a)  RDC]. The outcome for a general denial or bare denial would therefore attract three possible consequences: (i)  if the defendant has set out in his defence in such a way that deals with that particular alleged fact, then that issue will still be required to be proved ([r.13(5)(b)  RDC]); (ii)  if the defendant does not in his defence deal with that particular alleged fact at all, r.13(1)  would deem such fact to be admitted; (iii)  if there are ambiguities as to whether the defendant has dealt with that particular fact, it is always possible for the plaintiff to apply to the court for further information from the defendant under r.12(3).

However, practitioners are not advised to always rely on [r.13(5)  RDC], as whether [r.13(5)(b)  RDC] is engaged is a matter of degree of relevance (see Laerdal Medical Limited v Hong Kong Haocheng International Trade Limited (HCA 2193/2016, [2017] HKEC 1257, HCA 2193/2016, [4]-[9]).”

50.  I reject the 1^st Defendant’s argument.  It is plain that paragraphs 4 to 7 of the 1^st Defendant’s Defence are bare denials of paragraphs 4 to 7 of the Amended Statement of Claim.  Nowhere else in the Defence did the 1^st Defendant dealt with the alleged facts in paragraphs 4 to 7 of the Amended Statement of Claim.  The limitation defence in paragraph 8 did not deal with the said alleged facts either.  To put it another way, the limitation defence as pleaded was not premised on the determination of the said alleged facts.  In the circumstances, the second consequence in the said extract of Hong Kong Civil Procedure 2024 is engaged, namely that the alleged facts in paragraphs 4 to 7 of the Amended Statement of Claim are deemed admitted.  I disagree with the 1^st Defendant that the Plaintiff failed to take steps such as seeking further and better particulars under Order 18 rule 12(3)  RDC or serving a notice to admit under Order 27 rule 2 RDC.  There is no ambiguity as the 1^st Defendant simply denied paragraphs 4 to 7 of the Amended Statement of Claim without any plea of reason for traversing the same or any plea of its own version of events, and therefore the third consequence in the said extract of Hong Kong Civil Procedure 2024 is not engaged at all.  That said, there is nothing barring the 1^st Defendant from arguing the limitation defence with the facts in paragraphs 4 to 7 of the Amended Statement of Claim admitted.

51.  Moreover, based on the deemed admission of the alleged facts in paragraph 5 of the Amended Statement of Claim by reason of the bare denial pleaded in paragraph 5 of the Defence, I accept that Mr Koh provided valuable consideration for the Promissory Note by advancing, at the direction of the 1^st Defendant, the sum of SGD$500,000 to the 2^nd Defendant by the Cheque which was duly presented on 29 November 2011. 

52.  Even if I am wrong on the deemed admission, insofar as the requirement of delivery is concerned, I accept Madam Koh’s evidence that the Promissory Note was in her possession as the sole executrix of the Estate, and this infers that the Promissory Note must have been delivered by the 1^st Defendant to Mr Koh. 

53.  Again, even if I am wrong on the deemed admission, in relation to the requirement of valuable consideration, it is clear from the plain reading of the unchallenged Promissory Note that the 1^st Defendant as Borrower had received value for its promise to pay the Sum to Mr Koh as the Promissory Note Holder.  Next, both YCA’s Confirmation 5.9.2012 and YCA’s Confirmation 12.8.2013 provided that the outstanding balance owed by the 1^st Defendant to Mr Koh was “unsecured, bear 2.5% pa interest due on 28 December 2013”.  I accept below that the two confirmations were written at the instruction of the 1^st Defendant.  On one hand, the sum advanced by Mr Koh to the 2^nd Defendant was SGD$500,000.  On the other hand, a loan of SGD$500,000 at the interest rate of 2.5% per annum and payable in 2 years yields simple interest of SGD$25,000, and the total amount of principal and interest payable at maturity is SGD$525,000, and such total amount matches the Sum (i.e. SGD$525,000)  owed by the 1^st Defendant under the Promissory Note to Mr Koh.  Therefore, the two confirmations lend support to the allegation that the 1^st Defendant directed Mr Koh to pay SGD$500,000 to the 2^nd Defendant, while promised Mr Koh, under the Promissory Note, to repay the sum as a loan payable in 2 years with simple interest at the rate of 2.5% per annum.  Further, the information in the Annual Returns suggest that the 1^st Defendant and the 2^nd Defendant were related entities, and it was the 1^st Defendant which directed Mr Koh to draw the Cheque in favour of the 2^nd Defendant:-

(1)  Both the 1^st Defendant and the 2^nd Defendant had 2 shareholders only, and Chiang was the common shareholder of the two companies.

(2)  Chiang was the sole director and secretary of the 1^st Defendant.  The other shareholder with equal shareholding of the 1^st Defendant, namely one Tan Gek Huang (“Tan”), appeared to be related to Chiang as they shared the same address.

(3)  Tan was one of the two directors of the 2^nd Defendant.

(4)  Both the 1^st Defendant and the 2^nd Defendant shared the same registered office.

54.  I have considered the said evidence, the absence of suggestion of any prior duty, obligation or reason for Mr Koh to draw the Cheque in favour of the 2^nd Defendant, as well as the inherent probabilities and improbabilities.  I find that Mr Koh paid SGD$500,000 to the 2^nd Defendant at the direction of the 1^st Defendant.

55.  In my judgment, the Promissory Note is a valid promissory note as a matter of law.

(IX)  Issue 1 – Time-Barred?

56.  It is common ground that pursuant to section 4 of LO, the relevant limitation period in this case is 6 years from the date of accrual of the cause of action.  The question is when the Plaintiff’s present cause of action accrued and when the relevant limitation period expired.

57.  As stated above, upon my request, Mr Hart made oral submissions on the 1^st Defendant’s limitation defence before Madam Koh’s testimony.  Mr Hart made three points.  First, it was submitted that nothing in the said confirmations for audit purposes, ie YCA’s Confirmation 5.9.2012, YCA’s Confirmation 12.8.2013 and KKYC’s Confirmation, suggested that they were written by or at the instruction of the 1^st Defendant, and in any event the first two confirmations were not signed by the auditors and were outside the limitation period.  The third confirmation was not signed at all.  Secondly, there was a part payment of AUD20,000 on 17 June 2016 which Mr Hart wished to cross-examine Madam Koh on.  Thirdly, it was submitted that there was no authority cited to support the Plaintiff’s plea that the maturity date of the Promissory Note was 28 December 2013 under common law.

58.  With respect, Mr Hart’s three points were not submissions substantiating the limitation defence but simply further replies to the three alternative positions of the date of accrual of cause of action as pleaded in paragraph 4 of the Plaintiff’s Reply.  That said, based on the three points made by Mr Hart, this Court took it that the 1^st Defendant’s limitation defence was that the three alternative dates of accrual of cause of action were all incorrect, and in any event the relevant limitation period had expired.

59.  Nonetheless, in its written closing submissions, the 1^st Defendant, for the first time in this trial, argued that the maturity date, for the purpose of calculating the date from when the limitation period started to run, should not be taken as 28 December 2013 simply because that was the date for payment of the last instalment.  Rather, submitted by the 1^st Defendant, there were different maturity dates, being the dates upon which each instalment became due and payable.  The 1^st Defendant further contended that when applying the 6-year limitation period with regard to each of the monthly instalment payments due under the Promissory Note, any claims the Plaintiff might have had in respect of the first 24 monthly instalments from 28 December 2011 to 28 November 2013 were all time-barred, and the only monthly instalment payment which could possibly still be payable within the 6-year period prior to the issue of the Writ of Summons herein on 24 December 2019 was the last instalment for SGD$21,000 payable on 28 December 2013. (“Multiple Maturity Date Argument”)

60.  This Multiple Maturity Date Argument has never been pleaded by the 1^st Defendant.  Neither was it one of the alternatives pleaded by the Plaintiff in paragraph 4 of her Reply.  I agree with Mr Hughes that the Plaintiff was completely taken by surprise as this new point (as well as the various dates of accrual of cause of action and the corresponding limitation periods)  had never been pleaded or raised in the written opening submissions or in the course of the trial, and the Plaintiff did not have any opportunity to deal with this point or raise any point of law in response.  I rule that the 1^st Defendant is not entitled to pursue the Multiple Maturity Date Argument.

61.  Turning back to the maturity dates as pleaded in paragraph 4 of the Reply, the Plaintiff submitted, as her primary position, that the date of maturity of the Promissory Note was 28 December 2013 as the last date of payment that was clearly stipulated in the Promissory Note, and so the limitation period expired 6 years from that date on 28 December 2019. According to Chalmers and Guest on Bills of Exchange, Cheques and Promissory Notes, 18^th Edition, paragraph 7-056, as a general rule the liability to the holder of the maker of a promissory note payable at a fixed or determinable future time arises on maturity of the instrument, and thus if a promissory note is payable on a fixed date, time will begin to run in favour of the maker against the holder from the date on which the promissory note falls due. 

62.  In my judgment, the Promissory Note falls within the general rule.  Time started to run on 28 December 2013 which was the maturity date of the Promissory Note.  The relevant limitation period expired on 28 December 2019. The present Writ of Summons was issued within the limitation period, and therefore this action was not time-barred.

63.  This maturity date of 28 December 2013 is supported by YCA’s Confirmation 5.9.2012 and YCA’s Confirmation 12.8.2013.  These two confirmations recorded the outstanding balance owed by the 1^st Defendant to Mr Koh up to 30 June 2012 and 30 June 2013 respectively, and both of them specified that the outstanding balance was “unsecured, bear 2.5% pa interest due on 28 December 2013”.  Moreover, both confirmations were signed, though the person who signed was not identified.  Mr Hart argued that these two confirmations were not signed by the auditors and there was nothing to suggest that they were written by or at the instruction of the 1^st Defendant.  However, in the course of the trial, Mr Hart accepted that the 1^st Defendant had never served any notice pursuant to Order 27 rule 4(2)  RDC to challenge the authenticity of the two confirmations and require it to be proved at the trial.  I reject Mr Hart’s argument that the two confirmations were not written by or at the instruction of the 1^st Defendant.  In relation to the signature, I notice that both confirmations contained a sentence requesting the recipient to sign at the bottom of the page if the stated outstanding balance agreed with the recipient’s records.  On balance of probabilities, I accept that the two confirmations were signed by Mr Koh confirming the outstanding balance owed by the 1^st Defendant to him. 

64.  I have ruled that the 1^st Defendant is not entitled to run the Multiple Maturity Date Argument.  In any event, the argument would not have assisted the 1^st Defendant.  The Promissory Note simply set out the method of payment of the Sum by 25 equal monthly instalments until 28 December 2013, but nothing suggested that each instalment had its own maturity date or that the failure to settle one instalment would entitle Mr Koh to sue for that instalment.  It is against commercial reality and common sense to suggest that there were 25 maturity dates when, in fact, the 1^st Defendant owed the Plaintiff one sum of SGD$525,000 under the Promissory Note but not 25 sums of SGD$21,000 each.  Moreover, parties did not dispute that the Promissory Note contained no acceleration clause to the effect that the whole Sum would be due immediately upon the failure to settle any instalment. 

65.  I have considered the authorities cited by the 1^st Defendant.  Five of the authorities, namely (a)  Chitty on Contracts (35^th Edition), paragraph 30-010, (b)  Kallinicos & Anor v Hunt & Ors [2008] NSWSC 149, (c)  Equuscorp Pty Ltd v Rigert [2003] VSC 343, (d)  Wittersheim v The Countess Dowager of Carlisle (1791)  126 ER 360 and (e)  Reeves v Butcher [1991] 2 QB 509 do not concern the ascertainment of the maturity date of a promissory note.  In the sixth authority, namely Irving & Anor v Veitch (1837)  3 M&W 90, the defendant owed the plaintiffs certain balance of money for which they held his overdue promissory note.  Subsequently, the plaintiffs and the defendant reached a new agreement for the defendant to pay the balance partly in cash and the remainder by annual instalments and by proceeds of certain wines consigned by the defendant to India, while the plaintiffs shall hold the promissory note as a security for the payment of the balance.  After making part payment in cash and the first two annual instalments, the defendant defaulted in making any payment.  It was held that the plaintiffs were entitled, at any time within six years from the date of default of making the third annual instalment, to sue the defendant on the promissory note, for the balance remaining due.  That case is clearly distinguishable from the present case.

66.  My ruling that the maturity date of the Promissory Note was 28 December 2013, and hence this action was brought within the relevant limitation period, is sufficient to dismiss the limitation defence.  That said, I say a few words on the two alternative positions of the Plaintiff.

67.  The first alternative position of the Plaintiff was that by operation of section 23(3)  of the LO, the right of action for payment of outstanding amounts under the Promissory Note was deemed to have accrued on 5 September 2012, 12 August 2013 and/or on an unknown date on or after 30 June 2014 (to be ascertained), being the dates of the YCA’s Confirmation 5.9.2012, YCA’s Confirmation 12.8.2013 and KKYC’s Confirmation, through which the 1^st Defendant acknowledged the debt owed to the Plaintiff in writing.  The limitation period ran afresh from these dates expiring 6 years therefrom.  Nonetheless, as accepted by Mr Hughes during the trial and in the written closing submissions, the Plaintiff no longer pursued this alternative position in light of the dates of the first 2 confirmations, ie 5 September 2012 and 12 August 2013, and the fact that the third confirmation was undated and unsigned.

68.  The second alternative position was that by operation of section 23(3)  of the LO, the right of action was deemed to have accrued on 17 June 2016, being the date on which the 1^st Defendant made part payment of the debt owed to the Plaintiff, and the limitation period ran afresh on that date expiring 6 years therefrom on 17 June 2022.  As I ruled above, the effect of the 1^st Defendant’s bare denials of the Plaintiff’s alleged material facts is that such facts are deemed to have been admitted, and they included the fact that AUD20,000.00 was paid by the 1^st Defendant to Mr Koh on 17 June 2016 as pleaded in paragraph 6 of the Amended Statement of Claim. Even if I am wrong, such part payment was recorded in the relevant monthly statement of the joint bank account of Mr Koh and Madam Koh.  Hence, if I am wrong on the Plaintiff’s primary position that the maturity date of the Promissory Note was 28 December 2013, I hold that the right of action under the Promissory Note had accrued on 17 June 2016, such that the limitation period ran afresh on that date and expired 6 years therefrom on 17 June 2022. 

(X)  Issue 2 – 1^st Defendant’s Liability under the Promissory Note

69.  I have ruled that the Promissory Note is a valid promissory note as a matter of law.  Under the Promissory Note, the 1^st Defendant owed the Plaintiff the Sum and the maturity date was 28 December 2013.

70.  As I ruled above, the effect of the 1^st Defendant’s bare denials of the Plaintiff’s alleged material facts is that such facts are deemed to have been admitted, and they included:-

(1)  from 14 February 2012 to 17 June 2016, the 1^st Defendant having paid Mr Koh a total sum of AUD113,300.00 (equivalent to SGD$129,103.57)  only (paragraph 6 of Amended Statement of Claim); and

(2)  the 1^st Defendant thereafter failed to pay the balance due under the Promissory Note, which remains due (paragraph 7 of Amended Statement of Claim).

71.  The 1^st Defendant therefore owes the Plaintiff SGD$395,896.43 being the outstanding balance under the Promissory Note.

72.  If I am wrong, I turn to the evidence.  Interestingly, the 1^st Defendant disputed the partial payments which it had made as alleged by the Plaintiff, while adducing no evidence showing its own version of payments made.  I would have thought that the 1^st Defendant agreed with the alleged partial payments which would reduce the outstanding balance owed under the Promissory Note.  In any event, I am satisfied that the evidence adduced by the Plaintiff supports the partial payments made by the 1^st Defendant:-

(1)  Item Nos 11, 13, 14, 15, 16 and 18 of paragraph 6 of the Amended Statement of Claim are supported by the relevant monthly statements of the joint bank account of Mr Koh and Madam Koh, with entries marked “Deposit Quest Return loan” or “Deposit Quest Rtn loan” or “Deposit Quest Quest” or “Deposit Quest Investment Quest Investments” with the handwritten word “Chiang” denoting such partial payments made by the 1^st Defendant.  These payments are further supported by the Manuscript Record, which I accept as I held that Madam Koh was a credible and reliable witness.

(2)  Item No 17 of paragraph 6 of the Amended Statement of Claim is supported by the statement from 26 October 2015 to 26 November 2015 of the joint bank account of Mr Koh and Madam Koh, where there was an entry described as “Proceeds Overseas Telegraphic Transfer 114400 Chiang Wee Tiong” with the handwritten word “Chiang”.  This is further supported by the Manuscript Record.

(3)  Item Nos 1 to 10 and 12 of paragraph 6 of the Amended Statement of Claim are supported by the Manuscript Record.

73.  I hold that the 1^st Defendant is liable to the Plaintiff under the Promissory Note for the outstanding balance of SGD$395,896.43.

74.  The Plaintiff sought interest pursuant to section 57(a)(ii)  of BEO from the date of maturity of the Promissory Note (28 December 2013)  at the commercial rate, presently amounting to 5 per cent per annum, and amounting to SGD$120,558.60 at the date of the Writ of Summons herein.  In my judgment, this is an appropriate case to award pre-judgment interest to the Plaintiff from 28 December 2013, ie the date when the Plaintiff has been kept out of the outstanding balance under the Promissory Note, up to the date of this Judgment.  However, it is unclear whether the Plaintiff sought commercial borrowing rate of Singapore Dollars or Australian Dollars or Hong Kong Dollars as applicable in Hong Kong or anywhere else.  In any event, the Plaintiff adduced no evidence of the prevailing commercial borrowing rate of any currency whether in Hong Kong or anywhere else.  

75.  In my judgment, taking into account:-

(1)  the Sum was supposed to be paid to Mr Koh and Madam Koh’s bank account in Australia in Australian Dollars;

(2)  Mr Koh and Madam Koh were, to say the least, Australian residents with no apparent connection with Hong Kong; and

(3)  the absence of evidence showing the feasibility of borrowing Singapore Dollars in Australia and, if so, the requisite interest rate,

I exercise my discretion to adopt the commercial borrowing rate for Australian Dollars in Australia for pre-judgment interest.  See Chow How Yeen Margaret v Wex Pharmaceuticals Inc [2018] 3 HKLRD 163 (CA)  at paragraphs 68 to 74.  As there is no evidence in this regard, I direct the parties to agree to such rate or rates from 28 December 2013 until today.

(XI)  Capacity to Sue?

76.  In its written closing submissions, the 1^st Defendant submitted that it was only after a recent court file search that it became aware of the Ex Parte Application for leave to appoint Madam Koh to represent the Estate for the purpose of carrying on this action.  As submitted by the 1^st Defendant, from the Affirmation of Yue Wing Man filed on 8 May 2020 in support of the Ex Parte Application, it was evident that Madam Koh had not at that time applied for a grant of probate in Hong Kong. The 1^st Defendant relied on the case of Nativivat v Nativivat [2012] 3 HKLRD 752 in which Deputy High Court Judge Lok (as he then was)  quote the following paragraph from The Conflict of Laws in Hong Kong (2005)  paragraph 8.018:-

“A personal representative entitled under foreign law is not entitled to sue in a Hong Kong court in the capacity of personal representative without first obtaining a Hong Kong grant. The only personal representative who may sue in that capacity before a Hong Kong court without a Hong Kong grant is an executor appointed pursuant to a will the essential validity of which is determined by Hong Kong law.”

77.  The 1^st Defendant went on to submit that this Court, while allowing the inclusion into the trial bundle of three documents namely (a)  the Ex Parte Summons filed by the Plaintiff on 8 May 2020, (b)  the said Affirmation of Yue Wing Man with exhibits filed on 8 May 2020, and (c)  the Court Note of Master Maurice Lam dated 22 May 2020 (collectively “the Ex Parte Documents”), refused to allow questions to be put to Madam Koh regarding Madam Koh’s application for a grant of probate in Hong Kong and, in particular, if and/or when she had obtained a grant of probate in Hong Kong (“the Capacity to Sue Point”).

78.  Before Madam Koh’s testimony, I ordered the Ex Parte Documents be included in the trial bundle, having regard to all relevant circumstances particularly the fact that the Ex Parte Documents had been referred in Master Maurice Lam’s order dated 22 May 2020, and the just resolution of the disputes between the parties.  As Mr Hughes rightly put it, the Ex Parte Documents served to inform about the background of this case only.  I expressly stated that no blanket leave was granted to the 1^st Defendant to cross-examine on those documents, as I would consider individually each of the questions to be put to Madam Koh. 

79.  I agree with the Plaintiff that the Capacity to Sue Point was not pleaded in the 1^st Defendant’s Defence and was not an agreed issue in the Joint Statement of Issues.  A party must raise all the issues he wishes to raise to be dealt with at the trial, and is not entitled to have issues recently thought up dealt with separately and piecemeal.  See Sinoearn International Ltd v Hyundai-CCECC Joint Venture (2013)  16 HKCFAR 632, at paragraph 30.  In the circumstances, this Court did not allow Mr Hart to cross-examine Madam Koh on the Capacity to Sue Point.  During his oral closing submissions, Mr Hart sensibly informed this Court that the 1^st Defendant would not push the Capacity to Sue Point further. 

80.  As the Capacity to Sue Point was not pleaded and did not form part of the agreed issues, I decline to consider the same. 

(XII)  Disposition

81.  By reason of the foregoing, I order that:-

(1)  The 1^st Defendant do pay the Plaintiff the sum of SGD$395,896.43 or its equivalent in Hong Kong dollars.

(2)  The 1^st Defendant do pay the Plaintiff its pre-judgment interest on the sum in sub-paragraph (1)  hereof from 28 December 2013 up to the date of this Judgment, at the commercial borrowing rate of Australian Dollars in Australia.

(3)  The parties do agree to such rates or rates for the said period in sub-paragraph (2)  hereof within 14 days from today, failing such agreement each party to file and serve evidence in this regard by affirmation within 7 days thereafter and written submissions within 7 days thereafter, and the court shall determine the rate or rates by paper disposal.  For this purpose, there be liberty to apply.

(4)  The 1^st Defendant do pay the Plaintiff its judgment interest on the sum in sub-paragraph (1)  hereof at judgment rate from the date of this Judgment until full payment.

82.  Costs should follow the event.  I make a costs order nisi that the 1^st Defendant do pay the Plaintiff costs of the action including all reserved costs, to be taxed if not agreed, with certificate for counsel.

Mr Sebastian Hughes, instructed by Munros, for the plaintiff

Mr Andrew Hart (Solicitor Advocate)  of Hart Giles, for the 1^st defendant