ACTION NO. 1989 OF 1972





Coram: Pickering, J.

Date: 17th Nov., 1972.




1. This is an appeal from a decision of a Registrar who, in exercise of his powers under O.14 r.1, ordered summary judgment to be enteredfor the Plaintiff in respect of the latter’s claim to the sum of $75,144 and costs. The sum claimed represents the equivalentof an alleged loan by the Plaintiff to the Defendant of the sum of US$10,000 with interest thereon at 3% per month from the 1st November, 1971 to the 28th July, 1972.

2. Having reached the conclusion to which I have in fact come, the less I say about the apparent merits and demerits of the claim, thebetter.

3. At the time of the application before the Registrar there was before him the Statement of Claim, the Defendant’s Defence, whichlatter was to the effect that the sum US$10,000 was not in fact a loan but represented capital put up by the Plaintiff for the purposesof a joint venture between the Plaintiff and the Defendant and others, and an affidavit of the Plaintiff’s solicitor exhibitinga letter dated 1st October, 1971 written by the Defendant to the Plaintiff in which the capital sum of US$10,000 is referred to as a loan. Upon theappeal before me I had, additionally, an affidavit of the Defendant dated 9th November, 1972 alleging illegality in the joint venture which he pleads in that the venture included the intention of convertingsums, in excess of the permitted monthly amounts, from U.S. Dollars into Military Payment Certificates in Saigon, and a furtheraffidavit from the Defendant’s solicitor dated the 10th November, 1972 in support of that allegation.

4. The matter comes before me by way of rehearing and, accordingly, I treat it as coming before me for the first time, giving such weightto the Registrar’s decision as it appears to me to deserve, but being in no way bound by it. It is a common practice upon appealsof this nature to admit further or additional evidence and, whilst there was no affidavit evidence before the Registrar to supportthe allegation of illegality, an attempt was made to raise that issue verbally before him. In all the circumstances, I think itproper to admit the affidavits of the Defendant and his solicitor dated 9th and 10th November, 1972 respectively, alleging illegality although it may be that the case does not in fact turn upon the legality or otherwiseof the alleged joint venture.

5. It was submitted by Mr. Hwang, for the Plaintiff, that since the Defendant had not applied, before the Registrar, for an adjournmentto put in affidavit regarding the alleged illegality, he must be deemed to have taken his stand upon the material before the Registrarso that, in accordance with the principle enunciated in Krakauer v. Katz[1], it would be improper for me to admit the two affidavits relating to alleged illegality. I do not think, however, that the caseof Krakauer v. Katz assists me in that before the Registrar the Defendant was apparently represented merely by an articled clerk who, although he failedto ask for an adjournment, was apparently not asked specifically if he required one. In Krakauer v. Katz the defendant’s counsel was asked specifically whether he wanted to answer the affidavit of the plaintiff and whether he wantedan adjournment so to do, but said that he did not. It is, therefore, not possible to say that in the present cases the Defendant’srepresentative took the same unequivocal stand upon the material then before the Registrar as did counsel in the 1954 case.

6. Mr. Tang, for the Defendant, referred me to the Hong Kong case of Plaza Company and others v. TSO Kar-yin[2] in which the Full Court concluded that whilst the promissory note relied upon by the plaintiff in that case ostensibly imposed adistinct, separate and personal liability upon the defendants, the facts alleged in the affidavits, (relating to a joint venture)might possibly prove that such liability was in fact dependant upon the joint venture. Mr. Hwang, for the Plaintiff, contends thatthe whole issue is settled by the letter of the 1st October, 1971 addressed by the Defendant to the Plaintiff in which the Defendant refers to the sum of US$10,000 as a “loan” but,as it seems to me, if there was in fact a joint venture between the Plaintiff and the Defendant and others which involved, or wasthought to involve, illegality that might have been a very good reason for the Defendant to refer to the transaction as a loan ratherthan to describe its true nature, and in my view this letter is no more definitive of the issue between the parties than was thepromissory note in the case of Plaza Company and others v. TSO Kar-yin (2) .

7. I am unable, with respect to the learned Registrar, to agree that the case presented no triable issue, and I set aside his orderthat judgment be entered for the Plaintiff and grant unconditional leave to defend with costs of this application but not certifiedfit for counsel of that before the Registrar.

8. I will hear counsel as to the ancillary orders necessitated by the grant of leave to defend.

William Hwang (J.S. & Master) for Plaintiff.

Robert Tang (H.H. Lau) for Defendant.

[1] 1954 1 A.E. 244

[2] 1959 H.K.L.R. 390