Hang Lung Bank Ltd v Datuk Tan Kim Chua

• Jurisdiction: Singapore
• Judge: Lai Kew Chai J
• Judgment Date: 31 October 1986
• Neutral Citation: [1986] SGHC 37
• Docket Number: Suit No 3672 of 1984
• Date: 31 October 1986
• Published date: 19 September 2003
• Year: 1986
• Plaintiff Counsel: Christine Lee (Robert WH Wang & Woo)
• Citation: [1986] SGHC 37
• Defendant Counsel: Johnny Cheo (Shook Lin & Bok)
• Court: High Court (Singapore)
• Subject Matter: Contract,Express terms,Whether defence had merits,Summary judgment,Conflict of Laws,Whether Hong Kong law or Macau law,Conflict of laws issue,Choice of law,Assignability of debt,Contractual terms,Proper law of debt,Civil Procedure

In September 1981 the defendant, a businessman, borrowed HK$20m from Banco Do Pacifico SARL of Macau (hereinafter referred to as Pacific Bank Ltd). In November 1983, when the loan and accrued interest were outstanding and unpaid, Pacific Bank Ltd by a deed of assignment assigned all `rights, title and interest to and in` the loan and interest due thereunder to the plaintiffs, a bank in Hong Kong. By cl 7 of the deed of assignment, it was provided, as between the assignors and assignees, that the assignment shall be governed by and construed in accordance with the laws of Hong Kong. Notice of the assignment was duly given to the defendant. The defendant failed to pay the loan and interest outstanding in spite of repeated demands by the plaintiffs who commenced proceedings in the High Court and successfully obtained summary judgment against the defendant. They signed final judgment against the defendant for HK$20m together with interest thereon at the rate of 19% per annum from 8 September 1981 until judgment and costs.

The defendant brought this appeal before me and contended that the learned senior assistant registrar was wrong as he has an arguable defence, that there is plainly a question of law and fact to be tried which touched on the assignability of the debt under the law of Macau. On the other hand, the plaintiffs submitted that the proper law of the debt is plainly the law of Hong Kong under which neither the assignability of the debt nor the intrinsic validity of the assignment could be questioned.

Indeed, if that submission is right, I did not understand the defendant to challenge the consequences of that submission under the law of Hong Kong. I shall refer to this issue as the `proper law issue`. Although the issue is important and is pivotal and dependent on the acceptance of the contradictory expert evidence of the experts on the law of Macau and, possibly, of Portuguese law, which will be questions of fact if this matter goes to trial, I merely need to say at this threshold stage that I have to determine if there is `argument in law on this point which presents an arguable defence`: per Deputy Judge Eddis QC in Hang Lung Bank Ltd v World-Wide Properties Corp Ltd [1985] 1 HKC 444 in the Supreme Court of Hong Kong where a substantially similar, if not a similar, issue arose under materially similar circumstances and in which the plaintiffs as against another party failed to obtain final judgment and even failed to obtain an order that the defendants in that case be only given a conditional leave to defend.

I must at once refer to another contention in this case of the plaintiffs, which did not feature at all in the other case and which only arose on the adjourned hearing of this appeal, and it is that the defendant had agreed in writing not to appeal against the order for leave to sign final judgment granted in this case and that, at any rate, the defendant must in all the circumstances be estopped from asserting and acting otherwise. I will later return to this agreement/estoppel point.

The matter arose in this way. On 8 September 1981, the defendant applied to the Pacific Bank Ltd for a term loan of HK$20m to be repaid with interest thereon at 19% pa on 8 December 1981. It was to be secured by 24 million shares in a company known as Denison Estates Limited. The loan was `credit screened` by and it was effected through the plaintiffs in Hong Kong with whom Pacific Bank Ltd had maintained an account. The cheque drawn by Pacific Bank Ltd was subsequently endorsed by the defendant in favour of a company in Hong Kong by the name of `Dollar Credit and Financing Ltd`. These are most of the principal facts relied on by the plaintiffs in their contention that as Hong Kong had the closest and most real connection to the debt created as a result of the loan granted to the defendant the law of Hong Kong is the proper law governing the debt.

By a deed of assignment dated 24 November 1983, Pacific Bank Ltd assigned all its rights, title and interest in the loan and interest payable thereunder to the plaintiffs. Notice of the assignment was given to the defendant by a written notice dated 21 December 1983. After a series of prevarications on the part of the defendant, which included initially a bold denial of having taken the loan at all, calling it `an outrageous claim`, and empty promises, the plaintiffs lost their patience and instituted proceedings in the High Court.

In his affidavit of 25 September 1984 the defendant relied on the expert opinion of one Mr Delfino Jose Rodriques Ribeiro who opined as follows: (a) that legal proceedings could only be instituted in the Macau Judicial Court and not elsewhere unless it was previously agreed otherwise by the parties which, it was argued, was not the case here; (b) that an assignment of a debt did not...