CHAN KA YI v. YEUNG HON KEUNG LARRY

DCMP 2949/2017

[2018] HKDC 921

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 2949 OF 2017

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DECISION

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1.  This is the defendant’s appeal against para 3 of the order of Registrar Ho dated 17 May 2018, in which he was ordered to pay the plaintiff’s costs forthwith upon the discharge of a charging order nisi, summarily assessed at HK$2,630.00.

BACKGROUND

2.  The plaintiff was the defendant’s tenant at Flat 3, 19/F, Block D, Golden Lion Garden Stage I, Shatin (“the Property”).  They had a dispute as to whether the plaintiff damaged some fittings in the Property, and whether she ought to pay for the repair and/or replacement.

3.  The plaintiff commenced a claim at the Small Claims Tribunal (SCTC 25253/2017) for the return of HK$17,000.00, the deposit she paid on the tenancy agreement.  She obtained a default judgment on 31 July 2017.

4.  The plaintiff then applied to the District Court for a charging order against the Property, based on the default judgment.  A charging order nisi was granted by Master S H Lee on 12 December 2017.  The return date was fixed for 30 January 2018.

5.  The defendant claims that he was only made aware of the proceedings at the Small Claims Tribunal, and the charging order nisi, on 24 January 2018 by the then sitting tenant of the Property.  The sitting tenant told him that a letter from the plaintiff’s then solicitors was posted up at the Property regarding the charging order nisi.

6.  The defendant appeared before the court and opposed to the charging order nisi being made absolute.  After several hearings, on 17 May 2018, Registrar Ho ordered the charging order nisi be dismissed, and the registration of the same at the Lands Registry be vacated.  He also awarded costs to the plaintiff for the application for the charging order, and summarily assessed those costs to be HK$2,630.00.  It is this costs order that the defendant is appealing against.

7.  Subsequent to the hearing on 17 May 2018, the defendant successfully set aside the default judgment granted under SCTC 25253/2017.  In his 2^nd affirmation, the defendant exhibited an Order by the Adjudicator (Ms Susan Wong) dated 18 April 2018, in which the default judgment was ordered to be set aside with no order as to costs.  It appears to me that the proceedings at the Small Claims Tribunal are still ongoing. 

8.  At the appeal hearing, the defendant accepted that Registrar Ho was exercising his discretion in awarding costs in favour of the plaintiff. According to para 58/1/6 of Hong Kong Civil Procedure 2018, generally a judge in chambers will not allow an appeal from a master’s costs order unless it is unreasonable or the master erred in law. 

THE DEFENDANT’S GROUNDS

9.  The defendant argues that the learned Registrar failed to give sufficient weight to the fact that the service of the plaintiff’s claim in SCTC 25253/2017 was irregular.  He submits that the plaintiff knew full well that he did not reside at the Property, so she knew that the claim form would not have been brought to his notice.  As he successfully set aside the default judgment, he submits that “costs should follow the event”, and he should be paid the costs for discharging the charging order nisi.

10.  For the purpose of this appeal, there is no need for me to determinatively find whether the plaintiff’s service of the claim form in SCTC 25253/2017 was indeed irregular.  Whilst there may be well established principles concerning what costs order a court should grant on setting aside a default judgment, the hearing before the learned Registrar was not to set aside any default judgment.  I do not think the authorities cited by the defendant assists him for this appeal.

11.  Rather, the learned Registrar had complete discretion under O 50 r 7(1) of the Rules of the District Court to decide what ought to be the costs on discharging the charging order nisi.  I accept the learned Registrar had to exercise his discretion judiciously, but he was entitled to take into account all the circumstances, and to assign the weight to each piece of fact as he thought appropriate.

12.  The defendant submits that the learned Registrar was wrong to characterise the plaintiff as the innocent party in applying the charging order nisi.  In my judgment, there was ample ground for the learned Registrar to come to his view:-

(1)  In his 1^st affirmation put before the learned Registrar, the defendant exhibited the tenancy agreement he entered into with the plaintiff on 22 May 2016.  On page 3, the defendant did not enter his address, but supplied instead his email address.  There is no evidence to explain why the defendant chose to do so at that time.

(2)  The defendant further exhibited his Whatsapp correspondence with the plaintiff[1]. It can be seen that the plaintiff twice requested the defendant on 3 July 2017 to provide a correspondence address, so that a claim form[2] could be sent to him. 

(3)  It appears that, by the time the plaintiff commenced her claim in SCTC 25253/2017, she already moved out of the Property. There is no evidence as to whether the defendant would actually go back to the Property for whatever purpose after the plaintiff moved out.

(4)  Therefore, I am not surprised that the plaintiff had to write down the defendant’s address as that of the Property when she commenced her claim at the Small Claims Tribunal.  And in my judgment, it is perfectly reasonable for the learned Registrar to describe the plaintiff as being “innocent” in not being able to bring the defendant’s notice to the existence of her claim.

13.  I reject the defendant’s argument based on irregular service.

14.  The defendant’s second argument is that the learned Registrar did not give him due opportunity to present his submissions during the oral hearing. As a result, the hearing before the learned Registrar did not proceed in a fair manner.

15.  In his written submissions, the defendant referred to 3 instances where the learned Registrar addressed the parties.  As a matter of completeness, I set out what the defendant claims to have been said by the learned Registrar during the hearing on 17 May 2018:-

“(1) To the Defendant:

僅僅夠八天 通知被告人出庭，嘅撤銷原因，只不過係原先嘅基礎係冇咗

(2) To the Plaintiff:

我而家當初幫你 釘人契嘅基礎都冇咗，係一個法律基礎，我仲有咩權，我講緊係我有咩權 去將臨時押記令留喺度 … 係新嘅押記令 … 唔公道

(3) To the Defendant:

我唔需要你插嘴，楊先生，楊先生（好大聲鬧 Defendant with emphasis）而家法庭喺度判緊案，吳  需要插嘴（Defendant replied: 等你講），我冇俾機會你講嘢，亦唔會俾機會你再講嘢啦…而家判嘅亦都唔係大是大非”

16.  Irrespective whether the defendant accurately recorded what transpired during the hearing on 17 May 2018, or whether he quoted what the learned Registrar said out of context, I do not think the defendant’s second ground adds anything to the merits of his appeal:-

(1)  As the defendant accepted before me, the current appeal is to proceed by way of a rehearing.  I am in no way bound by what transpired before the learned Registrar, nor am I bound by his reasoning.

(2)  I invited the defendant to make any submission he saw fit with respect to the costs order.  He confirmed that he had sufficiently set out his arguments in his written submissions.  I also took into account what he supplemented orally at the hearing before me.

(3)  In any event, both (1) and (2) quoted above appear to show that the learned Registrar actually agreed with him that there was no legal basis to make the charging order absolute.  In my judgment, the defendant was not prejudiced as a result of those statements.

17.  I also reject the defendant’s argument about him being deprived of the opportunity to make submissions to the learned Registrar.

18.  The parties also mentioned other points in their respective written submissions.  I have given them my consideration, and I conclude that the other points do not affect the way I analyse the merits of the present appeal, as I endeavor to set out above.

DECISION

19.  I dismiss the defendant’s appeal, with costs to the plaintiff, to be taxed if not agreed.  This costs order nisi is to be made absolute unless there is an application to vary the same within 14 days after this decision is handed down.

20.  I decide to prepare this decision in English, as the defendant filed the Notice of Appeal in English, and also prepared his written submissions in English.  Parties may make an appointment with my clerk for interpreting this decision to them in Chinese, if they so wish.