ABS BUILDING SYSTEMS (FAR EAST) LTD v. NG KWOK MAN t/a HANG SHING ENGINEERING CO

DCCJ4634/2006

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 4634 OF 2006

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D E C I S I O N

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1.  This is an appeal against the master’s refusal to set aside the default judgment entered on 27 November 2006 at the hearing to set aside on 14 February 2007.  The defendant was unrepresented at the hearing before the master on 14 February 2007.  After that hearing, he retained a firm of solicitors and counsel appearing at today’s hearing.  The defendant filed a full second affirmation in support of his defence and application to set aside in his appeal against the master’s decision.

2.  The defendant alleged he was negotiating settlement with the plaintiff after the writ of summons was served on him.  Therefore, he failed to file a notice of intention to defend or lodge a defence.  Upon receiving notice of the judgment in default, which was entered on 27 November last year, he took out a summons to set it aside on 15 December 2006. 

3.  In the first affidavit in support of the application to set aside written in Chinese, he raised the defence that the Choi Hung Road tennis court or badminton court contract performed by the plaintiff was defective due to the cracks appearing on the surface of the tennis court.  This defence is repeated in his second affirmation with photographs exhibited showing the extent of the cracks on the surface. 

4.  The defendant further claims that it would cost over $150,000 to repair the surface; and in addition, he had already paid over $86,000 to repair the surface.

5.  Mr Ng, the defendant, further alleged that he had already settled part of the payments demanded under two invoices of the plaintiff.  Mr Alan Ng, counsel for the defendant, submitted that the defendant has a realistic prospect of success on the merits.

6.  Mr Wong, counsel for the plaintiff, referred to the plaintiff’s latest second affirmation which exhibited the plaintiff’s account with the defendant on various contract works between the two of them.  It is clear that they had a running account for the project conducted since 2002 and the plaintiff claims the two payments referred to by the defendant were payments for different projects.

7.  I am satisfied that the defendant did try to set aside the judgment in default within three weeks of the date of the judgment.  Therefore, there was no prolonged delay.  As to the merits of the defendant’s defence, I find the defendant had raised a triable issue on one of the three contract jobs between the parties.  He referred only to the Choi Hung Road tennis court job where he alleged there were defects which he attributed to have been caused by the plaintiff’s work.  The plaintiff’s affidavit in reply answered some of the issues raised by the defendant.

8.  More importantly, it has been raised by the plaintiff that the work done was merely one part of the contract between the defendant and the Architectural Services Department that the cracks could have been caused by other subcontractors of the defendant.

9.  This seems to me requires further investigation.  As the defendant did not raise a counterclaim or ask for a setoff in the draft defence, the proper way of dealing with the matter is for judgment that has been entered to be varied because the other two invoices under the statement of claim do not seemed to have been disturbed by the defence of the defendant.  I am satisfied that they should remain, leaving the setting-aside of the third invoice affected by the defence raised by the defendant and that the Choi Hung Road tennis court contract was defective, and this part of the claim should go to trial.

10.  I am satisfied that the defendant has raised sufficient merits in his defence of this particular invoice for this part of the judgment to be set aside.  Although I am not completely convinced the defects were due to the plaintiff’s performance of the contract, the matter should be further considered by the trial judge, with possibly expert evidence to be or adduced.

11.  I therefore allow the judgment entered in default to be set aside in part, namely, under the invoice no. I-296/ABS/HSEL/04 (adj) of 25 October 2004 for the sum of $39,718.26 and the invoice no. I-313/ASB/HSEL/05 of 6 October 2005 for the sum of $95,278.30 to remain in the judgment, leaving invoice no. I-37a/ASB/HSEL/05 of 15 February 2005 for the sum of $185,284.30 to be set aside with leave to the defendant to defend on this part of the judgment.

(Discussion re costs)

12.  Costs be to the defendant, to be taxed if not agreed, with certificate for counsel. 

(Discussion re statement of claim or filing a reply)

13.  Leave to the defendant to file and serve the defence within 14 days hereof and the plaintiff to file and serve a reply within 14 days thereafter.