ATL LOGISTICS CENTRE HONG KONG LTD v. WELLFIT CHUN YIP LOGISTICS LTD

DCCJ 3840/2023

[2023] HKDC 1682

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 3840 OF 2023

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BETWEEN

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JUDGMENT

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1.  This is an application for default judgment made by the plaintiff against the defendant pursuant to the latter having failed to give notice of intention to defend and to file a Defence. The plaintiff seeks various monetary judgments, declarations and orders pursuant to RDC O. 13 r. 6 and O. 19 r. 7, and costs of this action.

THE PLAINTIFF’S PLEADED CASE

2.  According to the statement of claim attached to the writ (“SOC”), the plaintiff operates a logistics centre, including a car park located at 12^th floor of ATL Logistics Centre B, located at Berth 3, Kwai Chung Container Terminal, New Territories, Hong Kong (“the Car Park”).

3.  The Car Park provides spaces for vehicle parking. Such parking is subject to certain “Terms and Conditions of Using the Roads and Parking within ATL Logistics Centre” (“Terms and Conditions”) promulgated by way of notice fixed at the entrance of ATL Logistics Centre and to a “tariff” (“Tariff”), which is also promulgated by a notice fixed at the entrance of the same building, and at the sides of the entrance lanes nos. 2, 3, 4, and 5. The Tariff provides for a rate of HK$140 per hour for “Van”-type vehicles.

4.  The Terms and Conditions constituted the terms on which each user of the Car Park accepts and is deemed to have accepted before a licence is granted by the plaintiff to a user parking its vehicle in the Car Park (“the Licence”). Hence it is pleaded that the parking of vehicles at the Car Park was and is subject to the Licence which contains the Terms and Conditions.

5.  The Terms and Conditions contain amongst other things the following:-

(1) Condition 3: “The [plaintiff] may move and drive any vehicle for the purpose of its being parked if it is left at or in this building in an unauthorized space or other tenants area is otherwise obstructing other users of this building. Moreover any vehicle may also be moved or driven by the [plaintiff] to such places the [plaintiff] deems fit during any period of detention pursuant to condition 9 or 10 below.”

(2) Condition 10: “The [plaintiff] shall have a general lien upon, or the right of retention of, any vehicle together with all of its accessories and contents until all sums due to the [plaintiff] for or in relation to parking such vehicle in this building or otherwise, or due by reason of any liability of the owner or user of such vehicle to the [plaintiff] hereunder or otherwise or due in respect of other services rendered by the [plaintiff], have been paid in full. For the purposes of these [Terms and Conditions], parking charges and/or other amounts payable hereunder by the owner/user of any vehicle shall be due on demand by the [plaintiff].”

(3) Condition 11: “On default of payment of any sum payable hereunder by the owner/user of any vehicle within seven (7) days of a demand therefore, or in the event of any vehicle being parked in this building for a continuous period of thirty (30) days or more and the [plaintiff] having given seven (7) days notice of its intention to sell such vehicle should the same not be removed from this building, the property in the relevant vehicle shall automatically (without the need for further notice of any other action on the part of the [plaintiff]) pass to the [plaintiff] who shall upon the expiry of the relevant seven (7) days period be entitled to sell vehicle and/or accessories or contents by whatever means it deems fit (whether by way of public or private tender, auction or treaty or otherwise) and to recover from the proceeds of sale any moneys due to the [plaintiff] together with its costs and expense (including legal fees) incurred in connection therewith. Parking charges for any period up to the date of sale of such vehicle shall continue to accrue due and to be payable as herein provided.”

6.  The defendant is the registered owner of 2 private vehicles XJ6822 and TG682 (collectively, “Private Vehicles”) which have, since 29 November 2022 and 2 December 2022, been left motionless occupying 2 car park spaces. They have incurred unpaid parking charges, which as of 5 July 2023 amounted, in relation to the Private Vehicle XJ6822, to HK$731,500 reflecting 5225 hours, and for the Private Vehicle TG682, to HK$720,020 reflecting 5143 hours, which figures reflect a rate of HK$140 per hour. The total of those amounts is HK$1,451,520.

7.  The plaintiff sent letters by ordinary and registered post dated 12 May 2023 to the defendant’s registered office address demanding payment of parking charges and arrears but there was no response to such.

8.  The plaintiff also sought to give the defendant notice, by ordinary and registered post, of the plaintiff’s intention to sell the Private Vehicles upon the expiry of 7 days, should the defendant not remove them from the Car Park by paying off the arrears of parking charges (“Notice of Intention to Sell”), by letters sent by ordinary and registered post dated 31 May 2023.

9.  The above demands and Notices of Intention to Sell were returned to the plaintiff’s solicitors marked “Moved”, “No such person” and “Unclaimed”.

10.  On 16 June 2023 a letter containing the Notice of Intention to Sell was also sent to the defendant’s sole director, Mr Chan Wai Hung, by registered post, ordinary post, and by hand at his last known address, none of which have been returned.

11.  The plaintiff had on 6 July 2023 also advertised a Chinese Notice of Intention to Sell in Sing Tao Daily, and an English Notice of Intention to Sell in The Standard. In both, the defendant was given 7 days’ notice for it to remove the Private Vehicles from the Car Park and to pay off the arrears of parking charges, failing which the plaintiff would sell the Private Vehicles.

12.  The Private Vehicles have not been removed from the Car Park, and the parking charges have not been paid. Hence the plaintiff claims it has suffered the following loss:-

(1) Arrears of parking charges of the Private Vehicles of HK$1,451,520 accrued up to 5 July 2023, plus further parking charges which continue to accrue until the removal of the Private Vehicles from the Car Park;

(2) Legal costs incurred by the plaintiff in seeking legal advice and services in relation to the removal and sale of the Private Vehicles as well as the recovery of the arrears of the parking charges; and

(3) Interest pursuant to s. 49 of the District Court Ordinance.

13.  The plaintiff hence claims for the following:-

(1) Payment of the arrears of parking charges accrued up to 5 July 2023 in the total sum of HK$1,451,520 plus interest thereon at judgment rate from 6 July 2023 up to the date of payment;

(2) Further parking charges at the rate stated in the Tariff at HK$140 per hour from 6 July 2023 until removal of the Private Vehicles from the Car Park by the defendant plus interest thereon;

(3) An order and/or declaration that the property of the Private Vehicles has, pursuant to Condition 11, passed from the defendant to the plaintiff whereby the plaintiff is entitled to dispose of the Private Vehicles by whatever means the plaintiff deems fit (whether by way of private tender, auction or treaty or otherwise) (“the Disposal”) and to apply the proceeds realised toward settlement of:-

(a) arrears of parking charges of the Car Park due on the Private Vehicles and payable by the defendant to the plaintiff in paragraphs (1) and (2) above;

(b) reasonable costs of the Disposal; and

(c) costs of this action;

(4) An order and/or declaration that pursuant to Condition 3, the plaintiff do have the authority to move and to drive the Private Vehicles away from the Car Park to such places it deems fit; and

(5) Interest, further and/or other relief, and costs of this action to be taxed if not agreed.

SERVICE AND THE SUMMONS

14.  The writ was served by leaving at, and by ordinary and registered post to, the defendant’s registered office. The defendant has not filed an acknowledgment of service or a defence.

15.  The copies of the writ served by post have been returned to the plaintiff. However, I agree with the submissions of Mr Wun of the plaintiff’s solicitors that there was good service of such pursuant to s. 827 Companies Ordinance (Cap. 622), pursuant to which “a document may be served on a company by leaving it at, or sending it by post to, the company’s registered office”. This is the case even if the plaintiff has actual knowledge that the company had moved out from the office at the time of service, hence the subsequent return of the writs by post is neither here nor there: see Chan Man Hing v Dong Wai Ba Fong Logistics Company & Anor [2018] HKDC 1144 at paragraphs 7 to 10.

16.  The summons, which seeks default judgment in terms of the relief set out at paragraph 13 above and the plaintiff’s costs of the application, was subsequently also served by ordinary post on the defendant’s registered office. A Hearing Bundle was also served on the same address by leaving. For the reasons given above, I also find that there has been good service of such documents on the defendant.

17.  Notwithstanding the matters set out above, the defendant was absent at the hearing, at which I heard from Mr Wun.

18.  Although RDC O. 19 r. 7 was mentioned in the margin notes to the summons, and was also addressed at length in the plaintiff’s written submissions, the body of the summons did not refer to judgment in default of defence. Given what was in effect a technical oversight and the non-attendance of the defendant at the hearing notwithstanding service as mentioned above, I heard the plaintiff’s application upon the plaintiff undertaking to file, and to serve on the defendant within 7 days, an amended summons with amendments to the body thereof specifying that the plaintiff also sought judgment in default of the Defence. In view of the filing of a subsequent affidavit of service, I am satisfied that such undertaking has been complied with.

THE RELEVANT APPROACH

19.  In considering this application I have had regard to RDC O. 13 r. 16, O. 19 r. 7, as well as Hong Kong Civil Procedure 2023 and 2024 Paragraphs 19/7/2, 19/7/11, 19/7/13 to 19/7/14 and 19/7/20, Sino Parking Services Limited v Wharton Culture & Media (Hong Kong) Company Limited [2022] HKDC 186 at paragraphs 9 to 13 and Sino Parking Services Ltd v Law Wei (羅蔚) [2022] HKDC 857 at paragraphs 3 to 5. The relevant principles are as follows:-

(1) For the Court to give judgment as a combined effect of RDC O. 13 r. 6 and O. 19 r. 7, it is necessary for the plaintiff to serve the statement of claim: paragraph 19/7/2;

(2) In such event, the court cannot receive any evidence but must give judgment according to the pleadings alone: see paragraph 19/7/11;

(3) The court’s power to grant judgment under RDC O. 19 r. 7 is discretionary. Its task is to see whether the plaintiff appears to be entitled to judgment on his statement of claim. The statement of claim must show a case for the order sought. A defective statement of claim which fails to prove the plaintiff’s case will result in the application being dismissed: see paragraphs 19/7/13 and 19/7/14; and

(4) Although it is not the practice of the court to make a declaration of right in default of defence or without trial (but rather to only state on what footing the relief is to be granted), this is only a rule of practice and not of law. It will give way to the paramount duty of the court to do the fullest justice to the plaintiff to which he is entitled. The rule of practice should not be followed if the plaintiff had a genuine need for the declaration sought, and if justice would not be done if such relief were denied. Where the plaintiff seeks declaratory relief in an application for default judgment, the court will not hastily grant the relief but will carefully scrutinise the application. The court expects maximum assistance to be provided for such relief, no matter how straightforward the kind of application may seem, such that the court should not be expected to deal with the matter on a do-it-yourself basis and rubber-stamp an uncontested application without further ado. The declaratory relief to be granted should not be in terms wider than what the plaintiff is entitled to and what is necessary to do justice to him: see paragraphs 19/7/14 and 19/7/20.

ORDERS MADE AND DISCUSSION

20.  On the basis of the matters set out in the SOC – which as mentioned above I find has been served on the defendant – I am satisfied that the Tariff and the Terms and Conditions were part of the Licence granted, by the plaintiff, to the defendant as the user parking the Private Vehicles in the Car Park.

21.  I am also satisfied that, with regard to the matters set out in the SOC, including the Tariff and the pleaded Terms and Conditions, on the facts of this case I should exercise my discretion to grant the following judgment in default of notice of intention to defend, and default of Defence:-

(1) the plaintiff do have judgment on the arrears of parking charges accrued up to 5 July 2023 in the total sum of HK$1,451,520 plus interest thereon at the Prime (or best lending) Rate + 1% (“P+1%”) from 6 July 2023 up to the date of this judgment, and at judgment rate thereafter on the outstanding principal; and

(2) the plaintiff do have judgment in the amount of further parking charges at the rate of HK$140 per hour from 6 July 2023 until removal of the Private Vehicles from the Car Park, plus interest at P+1% from 6 July 2023 up to the date of this judgment, and at judgment rate thereafter on the outstanding principal;

(3) a declaration that the property of the Private Vehicles has, pursuant to Condition 11 of the Terms and Conditions, passed from the defendant to the plaintiff whereby the plaintiff is entitled to sell the Private Vehicles and/or their accessories or contents by whatever means the plaintiff deems fit (whether by way of private tender, auction or treaty or otherwise) (“the Sale”) and to apply the proceeds realised toward settlement of:-

(a) arrears of parking charges of the Car Park due on the Private Vehicles and payable by the defendant to the plaintiff in paragraphs (1) and (2) above;

(b) reasonable costs of the Sale; and

(c) costs of this action.

22.  I am satisfied that the plaintiff is entitled to the monetary judgment above on the basis of the matters pleaded in the SOC. However, I do not see any reason for the plaintiff to be granted pre-judgment interest at judgment rate. In my view the plaintiff is only entitled to pre-judgment interest at P+1%. A similar approach to pre-judgment interest and its timing was adopted in Wharton Culture & Media and Law Wei.

23.  As for the declaration above, I have had regard to the approach set out in both cases and find, as submitted by the plaintiff, that it is necessary, and that there is a genuine need and it is in the interests of justice, for me to grant declaratory relief set out above pursuant to the summons, and hence to depart from the rule of practice mentioned above. This is for the following reasons.

24.  The Private Vehicles have been parked at the Car Park for nearly 1 year, incurring substantial unpaid parking charges of more than HK$1.4 million which continue to accrue. The defendant has not paid those charges or removed the Private Vehicles. This is in spite of service on the defendant of relevant demands for payment, and various Notices of Intention to Sell (also served on its sole director’s last known address), and advertisement of the latter in the press, as mentioned above.

25.  I have had regard to paragraphs 15, 20, 26 and 29 of the decision in Law Wei and note that the terms of Clause 7 in that case are materially similar to those of Condition 11 in the present case. On the materials before me, and in light of the approach adopted in Law Wei, I hence accept Mr Wun’s submission that pursuant to Condition 11, the 7 days referred to therein operate from the date of the relevant demand for payment or notice. Accordingly, given Conditions 10 and 11, and the defendant’s default in paying sums demanded by the plaintiff within 7 days of its demand for payment (Paragraphs 7 and 11 above), the plaintiff has obtained title to the Private Vehicles and the right to carry out the Sale and apply its proceeds as set out in Condition 11.

26.  In my view the declaration above is hence necessary to do the fullest justice to the plaintiff to which it is entitled, reflecting as it does its legitimate right to carry out the Sale and apply proceeds in accordance with the Terms and Conditions. Further, if I were to require the plaintiff to prove its case at trial by evidence at trial, this would increase the time and legal expenses incurred in relation to this case. There also appears to be a real possibility that the value of the Private Vehicles would have decreased in the meantime, and hence also the amount of any return recovered from any sale by the plaintiff. All of this would be to the detriment of the plaintiff.

27.  However, as title in the Private Vehicles has already passed to the plaintiff, it does not appear necessary for me to grant the declaration sought in relation to Condition 3.

28.  The declaration above is also made only in relation to the Sale, rather than the Disposal as formulated in the SOC. This is because under Condition 11 the plaintiff’s rights relate only to the Sale, and not to the term Disposal, which is wider in scope. No doubt the plaintiff’s solicitors will advise the plaintiff as to its attendant responsibilities.

COSTS

29.  The plaintiff has asked for costs of the action and the application. At the hearing Mr Wun proposed that a skeleton bill be submitted for the purposes of summary assessment.

30.  Given the above, I make a costs order nisi that the plaintiff do have its costs of the action and of this application. The said order nisi shall become absolute in the absence of application to vary (which, if any, shall be made by letter, and will be disposed of on paper) within 14 days hereof.

31.  The plaintiff’s costs of the action and of this application shall be summarily assessed. Unless an application for variation of the aforesaid costs order nisi is made within time, the plaintiff shall lodge and serve its statement of costs pursuant to Practice Direction 14.3 within 7 days after the expiry of the said 14-day period, and the defendant do within 7 days thereafter lodge and serve a summary of objections in respect of the statement of costs. Summary assessment of such costs will be conducted on paper (regardless of whether any statement of objection is lodged by the defendants within time) thereafter. The costs assessed shall be paid within 14 days after assessment.

32.  Lastly, I thank Mr Wun for his assistance.