NG WAH KWAI IDI AND OTHERS v. TSE YIM HING MARY

HCA1911/97

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.A1911 OF 1997

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J U D G M E N T

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1. I have before me a summons to set aside a default judgment issued by the Defendant on 23rd March 1998, the judgment in question being that of Hon Rogers J. (as he then was) dated 29th April 1997. By this judgment, it was adjudged that the Defendant do vacate the 1st Plaintiff's land upon which it was claimed that there was a trespass, and to remove part of a wall straddling that land, before noon on 1st May 1997; there was also a general injunction precluding further trespass. Last but not least in the present circumstances, it was further adjudged that the Defendant do pay the Plaintiff damages, if any, to be assessed, and the costs of this action be taxed if not agreed.

2. Mr Brian Wong appears on behalf of the Defendant/Applicant. He has put in an excellent skeleton outlining his main points, and as a result of an exchange at the outset (I hope helpful) between Bench and Bar, he was able to spotlight certain main arguments that he wished to put forward.

3. As is usual in these cases, the argument devolves under the following main headings :

(i) the regularity or irregularity of the judgment; and

(ii) if regular, the question of merits and the exercise of the Court's resultant discretion.

4. The broad principles in this area are well known. I have been referred by Mr Wong to the well known Court of Appeal case of Premier Fashion Wears Ltd. and Broadway Sportwear Ltd. v. Chow Cheuk-man and Li Hung-chung [1994] 1 HKLR 377, the principal appellate decision on the point, which alludes in detail to the benchmark required to be attained by a successful applicant seeking to set aside a regular judgment, and also, of course, to the principles enshrined in the White Book under Order 2, rule 2 dealing with applications to set aside for irregularity.

5. In a nutshell Mr Wong argues first, that on the evidence before the Court this judgment was irregular; and second, if he be wrong on that, that in any event on the merits of the case this Court should exercise its discretion to set aside the default judgment.

6. Mr Osmond Lam, who is instructed on behalf of the Plaintiff, argues to the contrary under both heads, and he has one further significant argument to put forward, that is, the question of delay. I confess that this is an issue which struck me forcefully when I read the papers before this hearing. In this regard, the position in my view is stark. As I have indicated, the judgment in question, which it is now sought to be set aside, is dated 29th April 1997. Mr Wong who conducted his argument with, if I may say so, great good sense, was constrained to accept on the evidence that his client had indeed received, and had had notice of this default judgment, sometime in June 1997, although she cannot recall precisely when. What seems to have happened thereafter is that there were negotiations between the parties, and in fact his client actually removed the offending wall; indeed by a letter dated 25th November 1997, written on behalf of his client to those instructing Mr Lam, the following, inter alia, is recorded :-

" We refer to your letter dated 19th November 1997.

In reply thereto, we wish to inform you that our client is set and ready to carry out the rectification works as per the terms of Mr Justice Anthony Rogers's Order of 19th April 1997 ('the Judgment')..."

As a matter of detail, the Judgment now sought to be set aside followed on the Order of the learned Judge by ten days, but nothing turns on that.

7. In any event, as I have said, thereafter, the structure in question was actually removed, and the key to this rather unhappy affair appears to have been a breakdown in communication between the Plaintiffs and the Defendant, in particular upon the issue of costs. At para.21 of her Affirmation leading the application, the Defendant says as follows :-

"However, sometime in December 1997 despite concessions made by me the Plaintiffs were still complaining that I was encroaching upon the property of them and that they would only be willing to vacate the registration of the writ of summons at the Land Registry against the record of my property upon my promise of payment of costs...."

and she goes on thereafter to exhibit some correspondence.

8. Payment of costs had of course been the integral part of the Order and Judgment of Mr Justice Rogers, but as I have indicated this appears to have been the catalyst for the present application. As Mr Lam for the Plaintiffs points out, this summons to set aside, which is dated 23rd March 1998, some nine months after the accepted date of notice in June 1997, actually was issued after the Defendant or her representatives had attended a taxation hearing on 17th February 1998. So the rather unusual situation arises in that after the judgment, the content thereof is acted upon with consent by the Applicant, and there is even participation in a taxation of costs hearing which is predicated upon the validity of that very judgment. This seems to me, from the Defendant/Applicant's point of view, to be an untenable situation, and as I have made clear to Counsel, this is a theme which pervades my reaction to this case. I turn briefly now to consider the particular headings pursuant to which one must approach this application.

Regularity or Irregularity?

9. The Defendant's primary position is that the judgment in this case is irregular. It is regular, she says, because she did not receive service or notice of process prior to that judgment. Naturally if she is correct and the judgment is regarded by this Court as irregular, then she is entitled ex debito justitiae to have the judgment set aside.

10. The evidence of service of process by one Mr Ng, a clerk of the Plaintiffs' solicitors firm, appears to be that service was effected (1) by post, (2) by physical insertion of the document into the Defendant's letterbox and (3) by posting up at a convenient adjacent place a copy of the writ. To this the Defendant asserts that she never received nor had notice of service of these proceedings.

11. As Mr Lam for the Plaintiffs points out, and with which I agree, it is incumbent upon a Plaintiff seeking to establish irregularity to produce evidence which is compelling on the point. There is evidence, which is uncontradicted, that prior correspondence upon the issue of the encroaching wall, an issue which appears to have vexed these two parties during the previous year, was previously sent to the Defendant's address without any difficulty. And it is noteworthy that in her Affirmation, whilst the Defendant specifically referred to the non-receipt of the writ through ordinary post and the non-sighting of the posting of the writ of summons at a conspicuous part to the main entrance, there is no specific reference to the non-receipt thereof when it was placed in the post box. Mr Wong says, understandably, that this may be a drafting omission, and indeed may be a function of a change of solicitors which his client has undergone. He may be right. But I do think that it does behove a Defendant/Applicant pressing an irregularity argument to cover every base.

12. But perhaps that is not solely to the point, for Mr Lam draws my attention to the provisions of the White Book at Order 2, rule 2(1) which provision reads as follows :-

"... An application to set aside for irregularity any proceedings any step taken in any proceedings or any document, judgment or order therein shall not be allowed unless it is made within a reasonable time and before the party applying has taken any fresh step after becoming aware of the irregularity...."

Commentary on this particular rule appears at Marginal Note 2/2/3. Naturally every case is different, and every set of facts must be regarded by the Court de novo. But in my view in this particular case this question of delay is insurmountable so far as the Applicant is concerned, so that quite apart from the specific arguments on the question of irregularity and receipt or non-receipt of proceedings, it seems to me that the delay that has taken place has been fatal not only in terms of duration, but also in terms of the step taken in the action which, as I have indicated, has been constituted by the attendance and presence of the Defendant and her representatives at, I am now told, two hearings with regard to the taxation of costs - the first on 17th February 1998 and to which I have earlier adverted, and the second, before Master Lok, on 24th March 1998 when the learned Master made an order that the matter be adjourned for one hour reserved for argument with leave to the Defendant to file her List of Objections within 28 days. In short, it is simply not open, it seems to me, to a Defendant to approbate and reprobate in this way. And that even if the judgment was irregular, I would in any event have held that Order 2, rule 2(1) operated to preclude the relief that would otherwise follow.

13. However, on the evidence, I do not find that the judgment in question was irregular. To the contrary. I intend to proceed on the basis that this is a regular judgment which then brings into play the well known principles enshrined in Order 13, rule 9 and in Premier Fashions op.cit.

Merits?

14. This again raises two issues - (1) the question of merits and (2) once again, the issue of delay; as Marginal Note 13/9/12 puts it :

"...the application should be made promptly and within a reasonable time but the Court will in a fit case disregard lapse of time...."

Let me cut straight to the point. I repeat the view I have taken that the lapse of time in this case, together with the approbation of the judgment by the Defendant, both in correspondence, in her actions and in attending the taxation hearings, combine to convince me that I should exercise my discretion against the Defendant save and except in an instance in which , for example, the clearest possible case of merits is made out, or where to permit the continuance of this judgment would result in severe hardship or oppression.

15. On the facts, in my judgment this case comes nowhere near that. It is not open, in my view, for the Defendant to come to Court, on this basis and against this background history, for this relief. And I would exercise my discretion against this application on this basis alone. However, I go on to hold that notwithstanding Mr Wong's brave efforts on behalf of his client, I do not find on the evidence a compelling case on the merits, and I am not minded to hold that the relevant benchmark has been reached, although I recognise that there appears now to be a dispute between the surveyors on various sides as to precisely where the boundary is in fact situated. However, in saying this I note that I am not at all sure that the firm assertion that the encroaching wall had been in place since 1988, that is prior to the Defendant's occupation of the property, is of any great moment. Whilst I appreciate the relief sought made reference to the issue of entry, the fact is that if you buy a property upon which there is an encroaching wall, then the trespass, if trespass it be, continues notwithstanding that you were not responsible for the initial incursion. So it seems to me, on a fair reading of the papers, that the argument of the Defendant in this case may well have been propounded on a slightly unstable premise. And in answer to Mr Wong's assertions of hardship in terms of title, it seems to me that it remains open to this Defendant to come to Court to apply to remove any outstanding blot on title there may be in terms of registration in the Land Office, or indeed in cases of real doubt, to come to Court to establish precisely where the boundary does lie; and in this latter context, I think Mr Wong accepts that a default judgment does not operate as an estoppel per rem judicatam.

16. Absent the issue of delay, therefore, I am in any event disinclined to exercise my discretion in favour of the Applicant on the merits.

Order

17. The result of the foregoing observations is that, after carefully considering the skeleton arguments that have been put before me, together with all the evidence as filed, and after hearing Counsel's arguments highlighting the specific areas they wish to address, I have come to the conclusion that this application must fail. It follows that the only order in the circumstances which is open to me is that the Defendant's summons is to be dismissed with costs to the Plaintiffs, such costs to be taxed if not agreed .

18. I will hear Counsel upon any consequential issues that may arise.

(Counsel address)

19. There being nothing further arising on this application, I merely wish to thank both Counsel for their considerable efforts in putting the case fairly before the Court; their assistance is much appreciated.