XCHRX KAN CHI KEUNG AND ANOTHER v. CHU SIU BUN AND ANOTHER

HCA 4091/1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 4091 OF 1998

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J U D G M E N T

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1. This is an appeal from a decision of the master imposing a condition, namely, the payment of $350,000 into court, as a condition of setting aside a default judgment irregularly (for want of proper service) obtained by the plaintiffs against the defendants, who now appeal against the imposition of this condition.

2. The law on the point is fully and helpfully reviewed by Waung, J. in Desirable International Fashions Ltd. v. Chiang Shi Chau [1997] 3 HKC 170, in which the judge followed a judgment of the Court of Appeal in Po Kwong Marble Factory Ltd v. Wah Yee Decoration Co. Ltd [1996] 4 HKC 157. The importance of the latter case for present purposes is that it establishes, in my judgment, that even in the case of an irregular judgment, "there is always a residual discretion in the court to have regard to the conduct of the parties" in deciding whether to set aside the judgment and if so, on what terms : see per Sears, J. at p.161. I therefore hold that I should not, as the law now stands, set the default judgment here aside without considering the conduct of the parties. As it seems to me, the conduct of the defendants here was blameless (although they blotted their copybook on one occasion by failing to attend a hearing before the master at the appointed time). On the other hand, the conduct of the plaintiffs, on which both sides have addressed the court at length, is said by the defendants (but denied by the plaintiffs) to have been oppressive and an abuse of the process of the court. I do not feel able to come to a definitive view about this aspect of the case, but there does seem to me, on the materials before the court, to be sufficient support for the defendants' position to dictate the conclusion that the only proper exercise of discretion here, having regard to the conduct of the parties, would be an exercise of discretion in favour of setting aside the default judgment unconditionally. I have come to the conclusion that the master was wrong to impose the condition which she imposed here and accordingly, I will allow this appeal, with costs here and below.