CHEUNG NGAM LAM v. CHEUNG CODY

DCCJ 4431/2017

[2018] HKDC 1381

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 4431 OF 2017

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DECISION

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Introduction

1.  By a notice of appeal issued on 24 August 2018 (“the appeal”), the defendant appeals against the decision made by Master David Chan on 3 May 2018 (“the decision”), by which the master has refused to set aside a default judgment entered against the defendant on 10 January 2018 (“the judgment”).

2.  The defendant has obtained an interim stay of execution of the judgment (“the interim stay”) pending the outcome of this appeal.

3.  The defendant has all together filed 4 affidavits in these proceedings.

(1)   Affidavit dated 18 January 2018 in support of the defendant’s application for setting aside the default judgment;

(2)   Affidavit dated 12 February 2018 in support of the setting aside application[1];

(3)   Affidavit dated 10 August 2018 in support of the defendant’s stay application; and

(4)   Affidavit dated 24 August 2018 in support of the appeal.

4.  Rules of the District Court (“RDC”), Order 58 rule 1(4) provides:-

“No further evidence (other than evidence as to matters which have occurred after the date on which the judgment, order or decision was given or made) may be received on the hearing of an appeal under this rule except on special grounds.”

5.  In my view, the defendant may only rely upon the first two affidavits in this hearing.  The matters in the 3^rd and in the 4^th affidavits are not matters which have occurred after the date of the decision.  Further, I do not see any special ground upon which leave should be given to the defendant to rely upon the 3^rd and the 4^th affidavits.  By the operation of RDC, Order 58 rule 1(4), I cannot receive the 3^rd and the 4^th affidavits as evidence in this hearing.

6.  The defendant has mentioned some factual matters in his written and oral submissions.  For the same reason, I would not consider these new factual matters as they are new evidence which is inadmissible in this hearing.

Background

7.  The plaintiff is the registered owner of a property known as Unit 3 on 5/F of Block A, Hutchison Estate, No 2 Lei Muk Road, Kwai Chung, New Territories (“A3”). His son, the defendant, is now in possession of A3.

8.  On 9 October 2017, the plaintiff commenced these proceedings against the defendant claiming for vacant possession of A3 and an order requiring the defendant to reinstate A3 to its former condition at the defendant’s own costs.  The plaintiff’s case as pleaded in the statement of claim is as follows:-

(1)   The plaintiff has been the sole legal and beneficial owner of A3 since 18 January 1991.  Since the acquisition of A3 by the plaintiff in 1991, A3 was solely occupied by the plaintiff’s father (“the Grandfather”) with the plaintiff’s consent up to 2010 when the Grandfather passed away.

(2)   In or about 2010, the defendant came back to Hong Kong from Australia from his studies and stayed in A3 together with the Grandfather for a short period of time prior to the Grandfather’s death.  After the death of the Grandfather, upon the defendant’s request, the plaintiff granted an oral licence to the defendant to allow him to stay in A3 with the following conditions:-

(a)    The defendant could stay in A3 for an indefinite period but would need to surrender possession of A3 to the plaintiff immediately upon the plaintiff’s request at any time;

(b)   The defendant could stay in A3 without paying any fee to the plaintiff but he had to contribute to the expenses incurred from and/or arising out of the defendant’s own occupation of A3 including but not limited to the management fees and utility fees of the unit; and

(c)    The defendant could only use A3 as his own residence and not for any other purpose.

(3)   In or about July 2014, the defendant for the first time told the plaintiff that the defendant had sublet A3 and converted the rent therefrom for his own use.  The plaintiff strongly objected to these.  The defendant further told the plaintiff that the defendant had changed the locks to A3.  The plaintiff has been kept out of A3 since then.

(4)   Notwithstanding the repeated requests made by the plaintiff, the defendant was not persuaded and did not stop the subletting.

(5)   On or about 17 May 2017, the plaintiff orally terminated the licence granted to the defendant and required the defendant to deliver vacant possession of A3 to the plaintiff.

(6)   By a letter of his solicitors dated 19 May 2017, the plaintiff demanded the defendant to deliver vacant possession of A3 to the plaintiff on or before 31 May 2017.

(7)   Notwithstanding all these demands, the defendant is still possessing A3 without the plaintiff’s consent.

9.  The writ of summons was served on the defendant by inserting a sealed copy of the same through the letter box at A3 on 11 October 2017.  No notice of intention to defend has ever been filed by the defendant.  On 10 January 2018, the plaintiff obtained the judgment.

Appeal out of time

10.  The master made the decision on 3 May 2018.  In accordance with the RDC, Order 58 rule 1(3), in respect of any appeal from the decision, unless the court otherwise orders, the notice of appeal must be issued within 14 days after the decision was made and must be served within 5 days after issue.  The defendant issued the notice of appeal on 24 August 2018.  In other words, there is a delay of more than 3 months by the defendant in lodging the appeal.  Unless this court grants the defendant an extension of time, the defendant is not allowed to pursue the appeal.

11.  I am not prepared to grant the defendant an extension of time.  The delay is substantial.  There is no reasonable explanation for the delay.  Further and most importantly, for the reasons set out below, I am of the view that the appeal is devoid of merit and is bound to fail.

Regular judgment

12.  In his 2^nd affidavit, the defendant claimed that he had moved to Unit A5 on the 15/F of the same building (“A5”) since July 2017 and he has not been properly served with the writ of summons. 

13.  The defendant has not produced any document in support of his claim that he has moved to live in A5 since July 2017.  If there is any truth in this claim, no doubt there would be documents in support of this, for example, a tenancy agreement, utilities bills bearing the address of A5 and the defendant’s name.  I do not regard this claim as believable.

14.  Further, even if the defendant has actually moved to live in A5 since July 2017, there is no doubt that A3 is still being possessed by the defendant.  The plaintiff is entitled to treat A3 as the defendant’s usual or last known address and to serve the writ of summons by inserting the same through the letter box at A3, in accordance with RDC, Order 10 rule 1.  There is no evidence from the defendant showing that he did not have notice of the writ of summons before the judgment was entered.

15.  The test for proper service of a writ of summons is whether it has been brought to the defendant’s notice[2]. There is no allegation, let alone evidence, suggesting that the defendant did not have notice of the writ of summons before the judgment was entered.  That being the case, the defendant’s challenge against the regularity of the judgment is bound to fail.

16.  The judgment is a regular judgment.

Setting aside a regular judgment – the principles

17.  In order to set aside a regular judgment, the applicant has to show a real prospect of success, which means that an applicant should show his purported defence carries some degree of conviction[3].

18.  In assessing whether the applicant has shown a real prospect of success, it should be borne in mind that that the court is handling an interlocutory application and there should be no mini-trial on affidavit evidence[4].

19.  In essence, the defendant is putting forward 3 grounds in support of his appeal.  In my view, none of these grounds has a real prospect of success.

Ground 1 – paying HK$330,000 to the defendant 

20.  The defendant is saying that the plaintiff has agreed to pay HK$330,000 to him in exchange for the delivery of the possession of A3 by the defendant to the plaintiff.

21.  In the plaintiff’s affirmation dated 12 March 2018 in opposition to the defendant’s setting aside application, the plaintiff has produced the whatsapp messages between him and the defendant from 9 May 2017 to 12 May 2017.  These messages show that during this period, the plaintiff did make an offer to the defendant – the plaintiff would give HK$330,000 to the defendant to help him to pay off his credit card debt, on the condition that the defendant would deliver possession of A3 to the plaintiff. However, the offer was not accepted by the defendant.  No agreement has been reached by the parties eventually.

22.  The aforesaid whatsapp messages are contemporaneous documents showing that in fact the parties have not reached any agreement.  The defendant has no real prospect of success in this ground.

Ground 2 - consent to subletting

23.  The defendant claims that the plaintiff has permitted the defendant to sublet A3 to others for an indefinite period of time. The plaintiff’s case is that he has never agreed so.

24.  The defendant’s case is contradicted and the plaintiff’s case is supported by the aforesaid whatsapp messages.  In the whatsapp messages, the plaintiff said to the defendant: “我估不到原本比層樓你本人住，你將分租比11個人 …”[5]  If there is any truth in the defendant’s case, the defendant would have immediately pointed out to the plaintiff in the whatsapp exchanges that what the plaintiff has said is not correct and the plaintiff has actually given consent to the defendant to sublet A3.  However, there is no response of this kind in the whatsapp messages.  In my view, the defendant’s case does not carry any degree of conviction.

25.  Further, whether the plaintiff has ever permitted the defendant to sublet A3 to others is neither here nor there.  The defendant is only in possession of A3 by reason of the licence granted by the plaintiff.  The defendant has not put forward any convincing reason explaining why the plaintiff is not entitled to revoke the licence.

26.  In his oral submissions, the defendant for the first time mentioned that as a result of the subletting permission given by the plaintiff, the defendant has spent a lot of money to renovate A3.  In the defendant’s submission, there is a promissory estoppel operating against the plaintiff.  However, the defendant has not adduced any evidence showing that he has relied upon the promise made by the plaintiff and spent a substantial sum to renovate A3 as a result.  This is simply no evidential basis for the promissory estoppel argument.

27.  There is no merit in this ground.

Ground 3: promise to transfer A3 to future child of defendant

28.  Another point taken by the defendant is that the plaintiff has promised that when the defendant gets married and has a child in future, the plaintiff would transfer the ownership of A3 to the defendant’s child.  This is a mere allegation made by the defendant without any corroborating evidence.

29.  Even if the plaintiff has made this promise, the defendant has not shown why this promise can be enforced against the plaintiff as a matter of law.  The defendant has provided no consideration in exchange for this promise.  The defendant has not demonstrated any estoppel operating against the plaintiff so that the promise is an irrevocable promise.

30.  Even assuming everything in the defendant’s favour, that the plaintiff has promised to transfer A3 to the defendant’s child in future does not mean that the plaintiff cannot enjoy and cannot have the possession of A3 now.

31.  There is nothing in this ground.

Disposition

32.  The defendant is not entitled to have leave to appeal out of time.  Further, the appeal is devoid of any merit.  The appeal must be dismissed.  Costs should follow the event.

33.  I dismiss the appeal with costs to the plaintiff forthwith, with a certificate for counsel.  Those costs are summarily assessed at HK$20,000.

34.  Since I have dismissed the appeal, the interim stay has come to an end.  The plaintiff is at liberty to enforce the judgment against the defendant.