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Moscow Narodny Bank Ltd v Edward Wong Wing Cheung

Judgment Cited authorities 6 Cited in Precedent Map Related
Vincent
Judgment Date06 May 1981
Year1981
Judgement NumberHCA797/1977
Subject MatterCivil Action
CourtHigh Court (Hong Kong)
HCA000797/1977 MOSCOW NARODNY BANK LTD v. EDWARD WONG WING CHEUNG

HCA000797/1977

Summons for judgment on admission - General Rule of Practice in litigation for disallowing a joinder of a cause of action non-existent at the date of the writ considered.

1977 No. 797

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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BETWEEN
MOSCOW NARODNY BANK LIMITED Plaintiff
and
EDWARD WONG WING CHEUNG Defendant

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Coram: LIU, J. in Chambers

Date of Judgment: 6th May, 1981.

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JUDGMENT

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1. In this application, I need only consider the plaintiff's claim for moneies lent allegedly repayable on demand. The assertion is that these loans were made in between January to December 1973. It would seem that the plaintiff bank made its demand for repayment by writ on the 1st April 1977.

2. By his Defence filed on the 25th October 1978, the defendant is said to have admitted US$7,000,000 as falling due. On that contended admission, the plaintiff now seeks to sign judgment pursuant to Order 27 rule 3 of the Rules of the Supreme Court.

3. It is conceded in the Defence that in January 1973 the plaintiff bank granted to the defendant facility, under which US$5,000,000 had been advanced and in July 1973 further banking facility was extended to him, under which monies lent amounted to US$2,000,000. However, no concession has been made as to the time at which and the manner in which these admitted advances were given. It was contended on behalf of the defendant that none of these US$7,000,000 advances could clearly be identified with any of the principal sums allegedly lent in between January and December 1973 and that the reference made in the Defence to these advances was not an unequivocal admission to any of the plaintiff's claim particularized in paragraph 1 of the Statement of Claim.

4. The defence to this part of the plaintiff's claim is that the advances were not repayable on demand but were orally agreed to be repayable either by profits generated in the Panamanian Building Development or in the absence of such sufficient profits to be repayable not later than 7 years from the respective dates of the advances. It is further claimed in the Defence that the defendant was entitled to capitalise the interim interests accrued.

5. The only clear admission seems to be one of advances totalling US$7,000,000. No particulars have been sought or delivered as to precisely when these advances were made and, if they were in fact made in between January and December 1973, whether they formed part of the plaintiff's claim for monies lent in this action. For the purposes of this application, it is assumed that of the plaintiff's claim for US$7,653,501.57 alleged to have been lent to the defendant, US$7,000,000 has been admitted and that the whole of these US$5,000,000 and US$2,000,000 advances was made in the month of January and in the month of July respectively. Thus, I will assume that by the 1st August 1980, both of these US$5,000,000 and US$2,000,000 advances had become repayable.

6. The plaintiff bank craves leave to sign judgment on the contended admission that US$7,000,000 of its claim has, at least since the 1st August 1980, fallen due. The plaintiff has not applied for leave to add a fresh cause of action arising since the issue of the writ, founded on the contended admission. In order to avoid any possible confusion, the plaintiff's very cause of action for this part of its claim must be constantly borne in mind. The plaintiff's claim is for monies lent repayable on demand made either prior to or by the commencement of this action. That is wholly traversed. The defence is that no part of the loans had fallen due at the date of the writ and therefore no cause of action had accrued. It was further pleaded in the Defence by way of confession and avoidance that none of the loans was repayable before the fulfilment of a condition subsequent or in any event until the expiration of 7 years from the respective date of each advance. On the contended admission of the defendant's, a cause of action for each advance made under these banking facilities would arise sometimes in 1980, latest by the 1st August 1980. Naturally, if the advances had been made just before the filing of the Defence on the 25th October, 1978, the 7-year period would not have expired until October 1985. Even on the effect of an admission as contended by the plaintiff, the defendant had no obligation to repay any of the advances before expiration of the alleged 7-year period. It follows that the defendant had incurred no legal liability as at the date of the writ. Now that the 7-year period has elapsed on the assumed facts, nevertheless the defendant remains recalcitrant on the plaintiff's claim for repayment. No admission has been made by the defendant to the plaintiff's alleged due date for repayment on demand.

7. A cause of action for the recovery of a debt allegedly accrued at the time of or before the commencement of an action cannot be said to have been admitted to by an averment that the obligation to repay the same or part of the same debt only arose some years thereafter. It is no admission to the plaintiff's claim in this case by conceding to a subsequent obligation, the breach of which would give rise to a future cause of action. In my view, there has been no admission, even on the contended true construction of the Defence, to the plaintiff's cause of action.

8. Furthermore, the plaintiff has not seen fit to adopt the factual basis relied upon by the defendant, if only for a claim in the alternative, and no leave to amend by adding a fresh cause of action has been sought. Even if the plaintiff were to recommence proceedings for the recovery of its loans to-day after the expiration of the alleged 7-year period, without setting up an alternative claim on the allegations of the defendant the plaintiff's cause of action would still be confined to the one accrued on demand prior to or in April, 1977. The only essential fact common to the case of the plaintiff and that of the defendant as understood by the plaintiff is that to the extent of US$7,000,000 the advances have become and are now being repayable, i.e. the sum is due but for different reasons and at different times. The identical consequence would not have the effect of merging the two distinct causes of action. Counsel for the defendant endeavoured to theorize as to why repayment was still being resisted. At this stage, forensic eloquence does not sound too persuasive, but the defendant has decidedly not abandoned his defence that the loans were not due as at the date of the writ.

9. Our present Order 37 rule 6 permits damages in respect of any continuing cause of action to be assessed down to the time of the assessment. The plaintiff's claim is not for an assessment of damages. It is a claim for monies lent repayable on demand on a date certain. Nor is the plaintiff's claim a continuing cause of action akin to an act in trespass or of nuisance or a continuing breach of a covenant. Order 37 rule 4 and its underlining principles cannot therefore aid the plaintiff.

10. Our present Order 18 rule 9 enables the plaintiff to plead "in any pleading" any matter which has arisen at any time whether before or since the issue of the writ. The effect of an amendment introducing a subsequent cause of action after the issue of the writ discussed at p.344 in volume 1 of the 1979 Annual Practice (marginal reference 20/5-8/2) must be read with the new cases given in its Fifth Cumulative Supplement. But the plaintiff is not praying for any amendment. Even if the plaintiff bank were so minded to make an application to amend by adding, in the alternative, a fresh cause of action arising at the expiration of the alleged 7-year period, it would still be precluded from introducing any new cause of action which has arisen since the issue of the writ. See p.281, 1979 White Book (marginal reference 18/9/1).

11. It has long been the standing practice that save for damages and consequences flowing from a single cause of action (eg. damages in a running down case or mesne profits in an action in ejectment) and save for damages in a continuing cause of action as envisaged by Order 37 rule 6, the plaintiff cannot so amend as to include a cause of action which did not exist at the commencement of the action. Nothing in the Rules of the Supreme Court seems to allow the incorporation of such a subsequent...

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