KING PARK DEVELOPMENT LTD v. GREATLEY LTD AND ANOTHER

DCCJ 4687/2023

[2024] HKDC 203

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 4687 OF 2023

————————————

————————————

————————————

REASONS FOR DECISION

————————————

Background

1.  By Summons dated 18 December 2023, the Plaintiff seeks a default judgment against the 2^nd Defendant under O.13 r.6 and O.19 r.7 of the Rules of the District Court (Cap. 336H) (“RDC”) (the “Summons”).

2.  The Plaintiff claimed, inter alia, that it had the sole and exclusive right to the external wall of the building at Sincere House, No. 83 Argyle Street, Kowloon (the “Building”). It said that its right was interfered by the 1^st Defendant, being the owner of a ground floor shop known as “G2” and “G3” (the “Shop”) of the Building, as well as the 2^nd Defendant, being occupiers of the Shop who were under a tenancy or otherwise granted by the 1^st Defendant. The allegation is that the 1^st and 2^nd Defendants had without prior consent of the Plaintiff erected advertising boards and structures at the external wall.

3.  The Plaintiff issued the Writ together with the Statement of Claim on 25 October 2023. The 1^st Defendant filed an Acknowledgment of Service on 10 November 2023 showing intention to contest the proceedings. A consent order was granted for an extension of time for the 1^st Defendant to file and serve its Defence and Counterclaim (if any). At the hearing, Mr Yan, appearing on behalf of the Plaintiff, informed the court that the 1^st Defendant had indicated that it would seek a further extension of time. The 2^nd Defendant did not file any Acknowledgment of Service or Defence.

4.  The Plaintiff issued the Summons seeking judgment against the 2^nd Defendant for a declaration on trespass, damages and/or mesne profits for trespass, injunction requiring the 2^nd Defendant to forthwith remove the advertising boards and structures, and accounts and/or inquiries.

Applicable legal principles under O.19 r.7 of the RDC

5.  Where the plaintiff makes against a defendant or defendants a claim, if the defendant fails to serve a defence on the plaintiff by the expiration of the period for service of the defence, the plaintiff may apply to the court for judgment: O.19 r.7(1) of the RDC.

6.  Where there are several defendants, if one of the defendants makes default, the plaintiff may, if his claim against the defendant in default is severable from his claim against the other defendants, apply for judgment against that defendant, and proceed with the action against the other defendants: O.19 r.7(2)(a) of the RDC; Halliburton BV Merkezi Hollanda Ankara Merkez Turkiye Subesi v. Sheng Yi (HK) Trade Co Ltd & Others, HCA 1627/2016 (unrep., 8 February 2017) at paragraph 20.

7.  The court’s power to grant judgment under O.19 r.7 is discretionary rather than mandatory. In deciding whether to exercise discretion to enter judgment, the court has to consider the overall circumstances of the case, including whether it is fair and just to enter default judgment and the effect of the default judgment on the non-defaulting defendants: Hong Kong Civil Procedure 2024, Volume 1, paragraph 19/7/13; Mary Kay Inc. & Others v Zhejiang Tmall Network Co., Ltd and Others [2021] HKCFI 1403 at paragraph 137.

8.  Where there are matters affecting other parties waiting to be decided, the court may order the motion to stand over until trial or to stand over generally: Hong Kong Civil Procedure 2024, Volume 1, paragraph 19/7/13; Chan Chun Hang v Cao Ming Nan [2021] HKDC 470.

Discussion

9.  In the present case, it is the Plaintiff’s case that both the 1^st and 2^nd Defendants have erected the advertising boards and structures at the external wall. The 1^st and 2^nd Defendants are asserting the same rights over the advertising boards and structures.

10.  If I enter judgment against the 2^nd Defendant as requested by the Plaintiff, the 2^nd Defendant will be subject to an injunction to forthwith remove those objects. The rights of the 1^st Defendant who had indicated intention to defend the action would be affected. This would in effect be depriving the 1^st Defendant of its right to defend the action and making an order against the 1^st Defendant without going through a proper trial.

11.  Mr Yan fairly accepted that even though the liability of joint tortfeasors is joint and several, the practical effect of the order sought would involve the same subject matter in relation to the claims against the 1^st and 2^nd Defendants. I do not consider it to be fair and just to enter default judgment against the 2^nd Defendant in light of the effect it would have on the 1^st Defendant.

12.  Accordingly, I made the following order:-

(1)  The Summons to be stood over until trial; and

(2)  Costs in the cause.