XCHRX WEALTHY UNIT INTERNATIONAL ENTERPRISES LTD. v. CHAN WAI TING

1998 HCA No. 6715

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

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J U D G M E N T

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Introduction

1. On 21st May 1998 and 26th May 1998, judgments in default of notices of intention to defend were entered against the 2nd Defendant and the 1st Defendant respectively for the sum of $385,515.30 plus interest and costs. After some considerable time, the Defendants applied for those judgments to be set aside. That application was dismissed by Master Lok on 15th March 1999. The Defendants now appeal. They contend that the default judgments entered against them should be set aside. That appeal is before me today.

2. In the meantime, the Plaintiff took steps to enforce the judgment against the 1st Defendant. An order was made for her oral examination, and on 14th November 1998 she was ordered to pay the judgment debt within two months. It was only after that that the Defendants applied for the judgments to be set aside. The 1st Defendant did not pay the judgment debt within two months, and after the summons to set aside the judgments had been dismissed, the Plaintiff sought her committal to prison for her failure to pay the judgment debt and the interest which had by then accrued on it. Master Jones adjourned that application to be heard at the same time as the appeal from Master Lok's refusal to set aside the judgments. Accordingly, that application is before me today as well.

The automatic stay

3. On 20th March 1999, the Director of Legal Aid filed a memorandum to the effect that the Defendants had applied for legal aid. The effect of the filing of that memorandum is that the proceedings were to be automatically stayed for 42 days unless the court ordered otherwise. The Plaintiff applied for that automatic stay to be lifted. Master Jones adjourned that application, also to be heard at the same time as the appeal from Master Lok's refusal to set aside the judgments. Accordingly, that application is before me today as well.

4. The Plaintiff's application to lift the automatic stay is based on the fact that the 1st Defendant has had a previous application for legal aid refused. On 14th January 1999, the Director of Legal Aid filed a memorandum to the effect that the 1st Defendant's application for legal aid had been refused. Mr. Richard Leung for the Plaintiff told me that the 1st Defendant appealed to the Registrar against the refusal of legal aid, but I do not know what the outcome of that appeal was. Be that as it may, however, the 1st Defendant has filed an affirmation which explains why it was appropriate for her to apply for legal aid again. She claims that at a meeting with officers of the Department of Legal Aid after her first application had been refused, she pointed out that the basis on which her means had been calculated had been erroneous. She was advised to apply for legal aid again, and she did so.

5. Because it was important for me to know whether a decision had been made on her second application for legal aid, I instructed my clerk this morning to ascertain the up-to-date position from the Department of Legal Aid. He was informed that, although no final decision has yet been made, the Director was minded to grant the 1st Defendant legal aid.

6. In view of these circumstances, I am not prepared to lift the stay. If the 1st Defendant is likely to be granted legal aid, it would require exceptional circumstances for the stay to be lifted. That is because the lifting of the stay would result in the 1st Defendant being denied the benefit of legal representation on both the appeal and the application which would then be before me today. No such exceptional circumstances exist. I know that the Plaintiff's advisers say that the Defendants are adopting delaying tactics. I also recognise that the Plaintiff's attempts to enforce the regular judgments which it obtained against the Defendants are being frustrated. But no evidence has been filed demonstrating an exceptionally urgent need for the Plaintiff to have now the money to which the judgments relate. And if the proceedings against the 1st Defendant remain stayed, it would not be right to require the 2nd Defendant to proceed with his appeal today. That is because the case of the 1st and 2nd Defendants on the appeal appear on the evidence filed so far to be indistinguishable.

Conclusion

7. For these reasons, the Defendants' appeal from the order of Master Lok of 15th March, and the Plaintiff's application for the committal of the 1st Defendant, must be adjourned to a date to be fixed. That hearing cannot take place until after 1st May, being 42 days from the Director of Legal Aid's memorandum of 20th March.