Hu Lan (胡蘭) v David Golden (達偉) [2024] 1 HKLRD 1252, [2024] HKCA 108

Jin Pao SC and Vincent Chen represented the defendant (respondent) in Hu Lan (胡蘭) v David Golden (達偉) [2024] 1 HKLRD 1252, [2024] HKCA 108.

P brought a claim against D for repayment of loans in the total sums of US$8,680,000 (the Sum), allegedly pursuant to a loan agreement entered between P and D (the Written Loan Agreement) and a subsequent oral agreement on an additional loan. D’s pleaded case was that the Sum was a wedding gift from his father, and did not admit that the signature on the Written Loan Agreement belonged to him as he had no recollection of signing the same. The Judge dismissed P’s claim, holding that P had failed to prove on the balance of probabilities that: (i) the Sum represented a loan to D as alleged; (ii) the Written Loan Agreement was signed by D in the circumstances as described by P; and (iii) the Written Loan Agreement encapsulated the parties’ intention at the material time. P appealed on the main ground that the Judge was wrong to find that the authenticity of the Written Loan Agreement was a live issue as D had not served a notice challenging its authenticity under O.27 r.4(1) of the Rules of the High Court (Cap.4A, Sub.Leg.) (the RHC) or denied it in his pleadings, such that D was deemed to have admitted its authenticity.

Held, dismissing the appeal, that:

• (1) There was a distinction between a non-admission and a denial in the pleadings for the purpose of the exception in O.27 r.4(1) of the RHC. Notwithstanding the pleading of non-admission in the defence, the effect of O.27 r.4(1) was that a notice was required to be served if, after inspection of the document on discovery, D was still minded to challenge the authenticity of a document. D was deemed to have admitted the authenticity of the Written Loan Agreement in the absence of a notice under O.27 r.4(1) (Yuen Minghwa Francois v Lo Mei Kin Stella (CACV 225/2011, [2012] HKEC 1094) distinguished). (See paras. 34-35.)
• (2) The courts in Hong Kong as well as in the UK retained a discretion to release a party who had not served a notice of non-admission under the rules from the deemed admission. The Court of Appeal had jurisdiction to release D from his deemed admission notwithstanding that the Judge did not appear to have considered the exercise of this power (Gotland Enterprises Ltd v Kwok Chi Yau (No 2) [2013] 3 HKLRD 490 applied). (See paras.36-37.)
• (3) The exercise of the discretionary power was subject to the underlying objective in O.1A r.2(2) of the RHC, namely, that the court shall always recognise that the primary aim in exercising the powers of the court was to secure the just resolution of disputes in accordance with the substantive rights of the parties. In the circumstances of this case, it was clearly right to release D from his deemed admission. From the pleadings, witness statement and affirmation of P, P was fully aware from an early stage that the authenticity of the Written Loan Agreement was put in issue and had conducted her case accordingly with that expectation. P should have asked the Court to rule on her contention on deemed admission by D before the issue of the authenticity of the document had been fully explored in evidence. No prejudice or unfairness was caused to P to release D from his deemed admission (Eco3 Capital Ltd v Ludsin Overseas Ltd [2013] EWCA Civ 413 applied). (See paras.33, 38-42, 44.)
• (4) The Judge had conducted a relevant fact-finding exercise towards the inherent probability of P’s case as to the execution of the Written Loan Agreement and was wholly justified in dismissing the claim. (See paras. 62-63.)

[The above is excerpted from the headnote to the report in HKLRD.]