JINGDONG SECURITIES LTD formerly known as EWIN ASIA CAPITAL LTD v. GOLDEN WORLD MOTORS (INTERNATIONAL) LTD

DCCJ 5041/2018

[2021] HKDC 636

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 5041 OF 2018

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REASONS FOR DECISION

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1.  Before me for determination was the plaintiff’s summons dated 29 December 2020 applying:-

(a)  pursuant to O25 r4(4), for the restoration of its claim out of time; and

(b)  for an order to set aside the Final Judgment (defined below), particularly to set aside the Judgment on Counterclaim (defined below) contained therein pursuant to O2 r2 as being irregularly entered.

2.  At the conclusion of the hearing, I acceded to the plaintiff’s application and made an order essentially in terms of paragraphs 1 and 3 of the summons, with the plaintiff paying 60% of the defendant’s costs in opposing the restoration of the plaintiff’s claim taxed on party and party basis and the defendant paying the plaintiff’s costs to set aside the Judgment on Counterclaim taxed on indemnity basis.   I also gave certain directions for the further conduct of this action, including an order that unless the plaintiff files its Listing Questionnaire on or before 4:00 pm on 28 June 2021, the plaintiff’s claim be automatically dismissed.

3.  I said reasons for my decision will be given.  Here are my reasons.

The plaintiff’s claim and the defendant’s counterclaim

4.  The plaintiff’s claim and the defendant’s counterclaim are both straight forward and arose out of the same transaction.

5.  On around 1 February 2018, the parties signed a provisional agreement in the defendant’s standard form for the purchase by the plaintiff and sale by the defendant of a 2015 Rolls Royce Phantom EWB (“the Phantom”) at the price of HK$7,601,785.

6.  The plaintiff at the time of signing paid a deposit of HK$760,000.

7.  It is common ground that the parties agreed on an additional provision which was in Chinese and hand-written onto the provisional agreement (“the Clause”):-

“如未能上會，須退回訂金，但買方需提供足夠批會文件予銀行審批，買方可於出牌或交車前安排上門驗車一次”

8.  The plaintiff’s case is that in performance of the Clause, it has made a formal Auto Loan Application to finance the purchase of the Phantom with China Construction Bank (Asia) Limited (“the Bank”), which application the Bank refused by its letter dated 25 April 2018.  In the letter, the Bank stated that it could no longer proceed with the loan application and only mentioned that reference had been made to certain credit report.

9.  Pursuant to the Clause, the plaintiff demanded the return of the deposit but was refused by the defendant.  The plaintiff now claims for the return of the same.

10.  The defendant’s case is that by the Clause “it was, expressly or implied [sic], stated that the Plaintiff should use its best endeavours and did all that were necessary to seek the approval of bank in granting the loan to finance the purchase of the Car” (paragraph 4 of the Defence and Counterclaim).

11.  The defendant then pleaded that “it is an usual practice of the bank in Hong Kong to request the director(s) of limited company to provide personal guarantee to secure any loan so granted to a limited company” and it “understands and avers that the director(s) of the plaintiff failed to provide, inter alia, the personal guarantee to China Construction Bank (Asia) Limited” (paragraphs 7 and 8 of the Defence and Counterclaim).

12.  The defendant then pleaded that the plaintiff has breached and repudiated the agreement “by failing to use its best endeavours and did all that were necessary to seek the approval of bank in granting the loan” (paragraph 11 of the Defence and Counterclaim).

13.  The defendant counterclaims for a declaration that it is entitled to forfeit the deposit in the sum of HK$760,000 and, “further and/or alternatively”, for damages in the sum of HK$1,089,680 (which consists of parking fees in the sum of HK$33,600 and price difference of the Phantom: HK$7,601,785 – HK$6,545,705) (paragraphs 24 and 25 of the Defence and Counterclaim).

Order 25 rule 4 of the Rules of the District Court

14.  O25 r4 provides:-

“Failure to appear at case management conference or pre-trial review (O. 25, r. 4)

(1) Where the plaintiff does not appear at the case management conference or pre-trial review, the Court shall provisionally strike out the plaintiff’s claim.

(2) Where the defendant has made a counterclaim in the action and he does not appear at the case management conference or pre-trial review, the Court shall provisionally strike out the defendant’s counterclaim.

(3) Where the Court has provisionally struck out a claim or counterclaim under paragraph (1) or (2), the plaintiff or the defendant may, before the expiry of 3 months from the date of the case management conference or pre-trial review, as the case may be, apply to the Court for restoration of the claim or counterclaim.

(4) The Court may restore the claim or counterclaim subject to such conditions as it thinks fit or refuse to restore it.

(5) The Court shall not restore the claim or counterclaim unless good reasons have been shown to the satisfaction of the Court.

(6) If the plaintiff or the defendant does not apply under paragraph (3) or his application under that paragraph is refused, then –

(a) the plaintiff’s claim or the defendant’s counterclaim stands dismissed upon the expiry of 3 months from the date of the case management conference or pre-trial review, as the case may be; and

(b) (i) in the case of the plaintiff’s claim, the defendant is entitled to his costs of the claim; and

     (ii) in the case of the defendant’s counterclaim, the plaintiff is entitled to his costs of the counterclaim.”

The final judgment

15.  On 24 July 2020, the plaintiff failed to appear at the hearing of the Case Management Conference (“CMC”).  Pursuant to O25 r4(1), Master W Y Ho ordered that the plaintiff’s claim be provisionally struck out.

16.  The plaintiff has not applied for the restoration of its claim pursuant to O25 r4(3) within 3 months.

17.  On 5 November 2020, the Master entered final judgment against the plaintiff that its claim be struck out pursuant to O25 r4(6).  However, at the same time the Master also ordered “Judgment be entered against the plaintiff for the defendant’s counterclaim in the sum of HK$980,080” (“Judgment on Counterclaim”).  It would be noted that the sum entered in the Judgment on Counterclaim was HK$109,600 less than the amount claimed in the Counterclaim.

Setting aside the Judgment on Counterclaim

18.  It is convenient first to deal with the application to set aside the Judgment on Counterclaim.

19.  How exactly the Judgment on Counterclaim came to be entered and pursuant to what provision it was entered is not entirely clear.

20.  The order of Master W Y Ho dated 24 July 2020 (“July Order”) recorded that:-

“IT IS ORDERED that:

1. The Plaintiff’s claim be provisionally struck out pursuant to Order 25 rule 4 of the Rules of the District Court for failure to appear at today [sic] Case Management hearing.

2. Costs of today ….”

21.  The “FINAL JUDGMENT DATED THIS 24^TH DAY OF JULY 2020” (“the Final Judgment”) (which was filed and approved on 5 November 2020), however, recorded that:-

“IT IS THIS DAY ADJUDGED that:-

1. The Plaintiff’s claim be struck out pursuant to Order 24, rule 4(6) of the Rules of the District Court.

2. Judgment be entered against the Plaintiff for the Defendant’s counterclaim in the sum of HK$980,080.00.

3. Costs of the proceedings including all costs reserved be to the Defendant and to be assessed on party and party basis if not agreed.”

22.  The Final Judgment did not recite any application by the defendant for the entering of the Judgment on Counterclaim or refer to the provision under which it was entered.

23.  Despite the plaintiff’s present solicitors Messrs Tsui & Co’s request by letter dated 20 January 2021 for a copy of the draft judgment the defendant’s solicitors sent to the court for approval and 2 chasers dated 28 January 2021 and 4 February 2021, the defendant’s solicitors Messrs Louis K.Y. Pau & Co (“LKYP”) refused to produce the draft and by letter dated 4 February 2021 said that they would exhibit documents as they thought appropriate in the defendant’s affirmation in opposition.  However, the draft judgment was subsequently not exhibited in the affirmation in opposition of LKYP’s assistant solicitor filed on 11 February 2021.

24.  Mr Kirpalani, counsel for the plaintiff (Mr Chin with him), pointed out that attached to the Defendant’s Listing Questionnaire filed on 11 June 2020 was a document setting out, among others, the brief factual background of this action, as well as containing a table entitled “Computation of the Damages Claimed” (which totalled to HK$980,080, which was the same sum entered in the Judgment on Counterclaim) and “proposed directions” which included the “direction” that:-

“Judgment be entered for the Defendant’s counterclaim against the Plaintiff and the Plaintiff do pay the Defendant the sum of HK$980,080 together with interest on the said sum at judgment rate until payment.”

25.  It seems that the Master might have entered the Judgment on Counterclaim based on this “proposed direction” sought by the defendant.  This court has tried to ascertain from the court file but cannot gauged from the same as to how the Judgment on Counterclaim came to be entered.

26.  Any how, O25 r4(1) clearly only stipulates that in the event the plaintiff does not appear in the case management conference, the court shall provisionally strike out his claim.  O25 r4(2) stipulates mutatis mutandis regarding a defendant who has made a counterclaim but does not appear in the case management conference.

27.  It is thus very clear that O25 r4(1) and O25 r4(2) do not stipulate that the Defence to Counterclaim (where there is a counterclaim) of the non-appearing plaintiff would be provisionally struck out or the Defence of the non-appearing defendant would be provisionally struck out upon their failure to appear in a case management conference.  It is in my view clear that only the claim of the non-appearing party, and not his Defence against the claim of the opposite party, would be so provisionally struck out.  Therefore and in my judgment, under O25 r4 the court is not given the power to strike out (provisionally or otherwise) the Defence of the non-appearing party, or to summarily enter judgment against him, in favour of the claim made by the opposite party.

28.  With respect, the Master had no power under O25 r4 to enter the Judgment on Counterclaim against the plaintiff, which was therefore entered irregularly.

29.  Ms Lau, counsel for the defendant, contended that the Judgment on Counterclaim was not entered irregularly as the court could in the exercise of its general case management power to further the underlying objectives so enter the Judgment on Counterclaim summarily.

30.  She argued in her written submissions[1] (which she re-emphasized in her oral submissions) :-

(a)  by 2 short paragraphs to the effect that the defendant’s claim was straight forward and the plaintiff’s Defence to Counterclaim consisted of bare denials (both of which I disagree);

(b)  extensively by 31 paragraphs on the “procedural history” of the action with a view to show that the plaintiff had failed to follow court orders/directions (which I do not entirely agree);

(c)  that “the plaintiff’s conduct is entirely inconsistent with what a reasonable litigant would do … and more consistent with a lack of intention to further pursue this case”;

(d)  citing O 1A rr1 and 2, that “in light of the strong inference that the plaintiff no longer wishes to take part in this action and the counterclaim, it is proper and in line with the underlying objectives … that the plaintiff would face judgment in full sum”; (my emphasis) and

(e) “no reason why the defendant should still be required to spend the time and incur the costs to prove its case”.

31.  With respect, I must reject this argument firmly as being totally unmeritorious.  I cannot agree with her submission as to what the court’s general case management power entails and that it would have been a proper exercise of such power to enter the Judgment on Counterclaim.

32.  O1A r2(2) states definitively that “In giving effect to the underlying objectives of these rules, the Court shall always recognize that the primary aim in exercising the powers of the court is to secure the just resolution of disputes in accordance with the substantive rights of the parties”.  It is trite as it is fundamental that “the just resolution in accordance with the substantive rights of the parties” is secured by, among others, due process, proper procedures, and the exercise of the court’s powers according to sound and established principles.  The dispute as to the parties’ substantive rights is invariably resolved by a trial (or a substantive hearing, in cases originated other than by writ) proper, save the Rules of the court expressly provide otherwise.  Usual examples of such include entering default judgment upon the failure to give notice of intention to defend pursuant to O13, application for summary judgment under O14, certain instances upon the striking out of the Statement of Claim or the Defence under O18 r19, and upon default of pleadings under O19.  An unless or peremptory order to summarily dismiss a claim or enter judgment upon failure to comply is a case management measure of last resort to coerce a party to comply, properly or in time, with the Rules or a case management order.

33.  Entering judgment summarily against a party merely based on that party “lacking the intention to pursue” or “no longer wishes to take part” or that “there is no reason to require this party to prove its case”, whether in the guise of “exercising the court’s general case management power to achieve the underlying objectives”, as is now strenuously advocated or otherwise, in my view, is unheard of, unsupported by authorities and is clearly wrong and even dangerous.

34.  In the premises, the Judgment on Counterclaim was entered irregularly.  It is trite that where a judgment was entered irregularly, the party aggrieved is entitled to set it aside ex debito justitiae without consideration of the relative merits of the parties’ case or other conduct.  The Judgment on Counterclaim must be set aside.

Principles to be applied in an application to restore a claim under O25 r4

35.  The parties did not dispute over the following applicable principles.

36.  The court will not lightly accede to the request of the defaulting party to restore a claim without sufficient explanation and consideration of the merits.  The court should adopt a three-stage test when dealing with an application to restore a claim:-

(a)  The applicant should first meet the threshold of showing “good reason”;

(b)  Then the court will consider whether, as a matter of discretion, it should grant the restoration; and

(c)  If it decided to restore the claim or counterclaim, the court may consider conditions to be imposed.

(World Chinese Business Investment Foundation Ltd v World Outstanding Chinese Investment Holding Ltd[2] ; Hong Kong Civil Procedure 2021 §25/1C/1)

37.  The court has jurisdiction to consider an application to restore the claim notwithstanding the expiry of the three month grace period (Leung Kwai Ying v Luk Man Yeung[3])

Good reason shown?

38.  The plaintiff filed two affirmations by its Company Secretary Guo Lin Fang (“Guo”) respectively on 29 December 2020 and 8 April 2021.  His explanation for the failure to attend the CMC is as follows.

39.  The plaintiff had all along been represented by Messrs Huen & Partners (“H&P”).

40.  On 13 September 2019, certain case management orders were given by consent, among others, an order fixing the date of the CMC to be 18 May 2020 at 11:00 am.

41.  In this order, there contained a warning that if the plaintiff fails to attend the CMC, its claim will be provisionally struck out without further notice pursuant to O25 r4.  H&P however sent a copy of this order to the address of the old registered office of the plaintiff at Unit 4A, 11/F, Kai Tai Commercial Building, 317-319 Des Voeux Road Central which was on 18 September 2018 had already been changed to Rooms 401-403, 4/F, Tower 1, South Seas Centre, 75 Mody Road, Tsim Sha Tsui (“Former Address”).  I am satisfied that was so by H&P’s cover letter dated 7 October 2019 enclosing this order and by the Notice of Change of Address of Registered Office received by the Company Registry, both exhibited by Guo.  The plaintiff therefore was not made aware of the warning.

42.  Guo has set out the personnel in the plaintiff responsible for handling this piece of litigation since its commencement.  I need only pick up from the time since May 2019.  The personnel then was the Human Resources Manager Ms Anita Fong.  She was however on maternity leave since 30 November 2019.  One Ms Janifa Woo took over.  Ms Woo’s employment however was terminated on 28 February 2020 due to the impact of the Covid 19 pandemic on the plaintiff’s business and operation.  Ms Woo however did not hand over the matter properly when she left.  On 30 July 2020, Ms Anita Fong also left the plaintiff’s employment.

43.  I pause to note that the Covid 19 pandemic began in Hong Kong in around late January early February 2020. 

44.  Guo explained that because of the change in the plaintiff’s staff and the Covid 19 pandemic, the plaintiff did not have proper communication with H&P since around the time Ms Woo left in late February 2020.

45.  In the meantime and on 17 February 2020, the plaintiff changed its address again and filed a Notice of Change of Address of Registered Office with the Company Registry changing its registered address from the Former Address to Unit 1290A, 12/F, Cosco Tower, 183 Queen’s Road Central (“New Address”).

46.  By letter dated 6 February 2020, H&P informed LKYP that they were in the course of preparing an application for an order to cease to act as they could not contact the plaintiff.  On 18 March 2020, H&P issued a summons seeking an order that they do cease to be the solicitors acting for the plaintiff.  The hearing of this cease-to-act summons was adjourned to 11 June 2020 due to the General Adjournment Period of the courts.  However, H&P served all their cease-to-act papers, and subsequent communications to the Former Address. 

47.  Six days before the scheduled hearing of the CMC on 18 May 2020 and upon reading a letter from H&P dated 12 May 2020 explaining the reason for failing to file the plaintiff’s Listing Questionnaire, Master S H Lee vacated the CMC hearing on 18 May 2020 and refixed it to 24 July 2020.

48.  On 11 June 2020, another Master granted the order for H&P to cease to act, but with an undertaking that they do inform the plaintiff of the coming CMC hearing.  H&P did so by their letter dated 19 June 2020, which unfortunately was sent to the Former Address.

49.  Guo explained that in these circumstances, the plaintiff never received notice of the CMC hearing on 24 July 2020, nor was it generally aware of the importance of making sure that it or its legal representative attended the CMC.

50.  The plaintiff was only made first aware of the July Order (sealed around 27 August 2020) when it received the letter of LKYP dated 2 September 2020 sent to the New Address.

51.  According to Guo, he then immediately enquired with Ms Anita Fong, the ex-Human Resources Manager about this.  Ms Fong said she did not understand what that was about.  He then called LKYP who understandably did not see it their responsibility to explain and hung up shortly.  Guo then called H&P more than 10 times from September to October 2020, but every time he was asked to leave a message and H&P did not return his calls.

52.  On around 10 November 2020, the plaintiff received the letter from LKYP enclosing the Final Judgment.

53.  Realizing the seriousness of the situation, on 18 November 2020 Guo was able to meet with Mr Huen Ching of H&P who apparently gave some explanations absolving H&P from responsibility.  Upon some enquiries, the plaintiff engaged its present solicitors in mid December 2020 and issued the present summons on 29 December 2020.

54.  I am satisfied by true copies of the letters exhibited that despite the change of the plaintiff’s address on 17 February 2020, all communications by H&P to it since then had been sent to the Former Address, as Guo affirmed. I accept what Guo said that therefore the plaintiff did not receive any of the letters and their enclosing documents and that the plaintiff therefore was not made aware of the CMC hearing date of 24 July 2020 or the importance of making sure that someone would attend it on the plaintiff’s behalf.

55.  Ms Lau submitted that it was incumbent upon the plaintiff to produce an affirmation from H&P to verify, and that in the absence of such evidence from H&P, I could or should not be satisfied that the threshold of “good reason” is met.  In fact, LKYP had themselves taken the initiative to write to H&P direct by letter dated 25 January 2021[4], enclosing the present summons and the 1^st affirmation of Guo, asking H&P to reply to Guo’s affirmation.  H&P refused to respond without the plaintiff’s consent.  A number of letters[5] were then exchanged regarding legal privilege and related matters.

56.  I was not given any cogent reasons and/or principles by the defendant as to why evidentially an affirmation from H&P was a prerequisite before I could or should accept the plaintiff’s explanation.  I do not think I am so hand-tied at all.  I accept Guo’s affirmations which had given the plaintiff’s said explanation with details supported by documents. 

57.  Ms Lau also submitted that the plaintiff should have proactively chased after H&P regarding progress of this action and that the change of personnel and such were the plaintiff’s internal matters that should not afford it good explanation.  I would tend to give this submission more weight had it not been for the onset of the Covid 19 pandemic the scale and extent of the impact of which was unprecedented and had caught many businesses unprepared and apparently did so catch the plaintiff.  I also accept that the timing of its onset also unfortunately coincided with the ending of the maternity leave of Ms Anita Fong.

58.  In the premises and looking at the matter in the round, I am prepared to accept that the plaintiff has shown good reason for the restoration of its claim.

Merits and other considerations, restoring the plaintiff’s claim out of time

59.  The parties’ dispute centers on whether the plaintiff was entitled to the return of the deposit by virtue of the Clause or whether it has breached the Clause.  Such depends on the interpretation of the Clause.

60.  As mentioned in paragraph 10 above, the defendant’s case is that the Clause meant “expressly or implied [sic], … that the Plaintiff should use its best endeavours and did all that were necessary to seek the approval of bank in granting the loan to finance the purchase of the Car”.   However, it is not readily apparent to me how the wording of the relevant part of the Clause -“買方需提供足夠批會文件予銀行審批”,which literally translated seems to mean that the buyer needs to provide sufficient documents to the bank for its approval, imports the alleged requirement on the plaintiff’s part to “use best endeavours” and to “do all that were necessary to seek the approval of the bank”.

61.  The gravamen of the defendant’s complaint is that the director(s) of the plaintiff failed to provide personal guarantee(s) to the Bank.  Mr Kirpalani disputed, among others, that “provision of sufficient documents” concerns provision of documents by the plaintiff and not by a non-contracting third party or that it includes the giving of a personal guarantee by a non-contracting third party.  In the witness statement of Mr 麥富雄, witness for the defendant, he does not say that the provision of personal guarantee(s) was ever discussed with, or ever mentioned to, the representative of the plaintiff at the time.  The effect of his evidence and the defendant’s pleaded case both are that “it is an usual practice of the bank in Hong Kong to request the director(s) of limited company to provide personal guarantee to secure any loan so granted to a limited company”.

62.  The plaintiff’s case is that it had enquired with other banks and only the Bank gave a favourable response.  However, the Bank turned the loan down for the stated reason that reference was made to certain credit report, and not for the failure to provide documents.

63.  In short, I think the plaintiff’s case has arguable merits.  That said, I would refrain from making further comments on the merits at this juncture.

64.  Importantly, and it is also not disputed that, the same issues of interpretation of the Clause and whether the plaintiff has breached it would still need to be litigated in the Counterclaim, even if the plaintiff’s claim is struck out.

65.  In sum, I am satisfied that in the exercise of my discretion I should restore the plaintiff’s claim.

66.  I also accept what Guo explained as to what the plaintiff did since early September 2020 after receiving the July Order until this application was made in December 2020.  While the plaintiff could not be regarded as acting with the greatest haste, I do not find the plaintiff was guilty of undue delay either.  Thus, I am also satisfied that I should restore the plaintiff’s claim out of time.

Payment of security for costs as a condition to restore the plaintiff’s claim?  Imposing the unless order

67.  The defendant asked that a condition of payment of security for costs by the plaintiff in the sum of HK$630,000 be imposed for the restoration of the plaintiff’s claim.

68.  The defendant sought the imposition of this condition on the basis that:-

(a)  The plaintiff could not obtain the Auto Loan;

(b)  Because the plaintiff had not been keeping in touch with H&P, it is doubtful whether the plaintiff had paid H&P costs on account;

(c)  Therefore, it is believed that the plaintiff would be unable to pay the defendant’s costs should the defendant ultimately prevail; and

(d)  The plaintiff has no reasonable prospect of success.

69.  I do not accept those bases.  The loan to purchase the Phantom amounted to millions.  Its rejection did not mean that the plaintiff was not financially good for the defendant’s costs estimated at HK$630,000, which is very much less than millions.  The defendant’s point that it is doubtful whether the plaintiff has paid H&P costs on account is pure conjecture.  I also do not agree that the plaintiff has no reasonable prospect of success.

70.  I also accept the Mr Kirpalani’s submission that according to Guo’s explanation, which this court accepted, while the plaintiff might not be entirely faultless, its fault was relatively minor, such that a stringent condition of paying this substantial amount as security for costs was far from warranted.

71.  I therefore would not impose such a condition.

72.  However, the complaint by the defendant that the plaintiff had been dragging its feet in the prosecution of its claim, I think, has some validity. Rather than imposing a condition, I consider it just and appropriate to make an unless order to coerce the plaintiff to file its Listing Questionnaire in time to move this action forward.

Conclusion and costs

73.  The above are my reasons for acceding to the plaintiff’s application to set aside the Final Judgment, including the Judgment on Counterclaim, and for restoring the plaintiff’s claim out of time.

74.  I have also heard parties on the costs of this application.  I considered it appropriate to treat separately the costs to apply for the restoration of the plaintiff’s claim and the costs for setting aside the Judgment on Counterclaim.

75.  On the costs of the application to restore the plaintiff’s claim, while Mr Kirpalani did not dispute that the plaintiff was seeking an indulgence and should usually pay the defendant’s costs, he submitted, and I accepted, that the manner and extent of the defendant’s opposition was unreasonable, such as spending extensive time and costs on the so called “procedural history”, on the various correspondences seeking to have H&P reply to the 1^st affirmation of Guo, on seeking the security for costs in a substantial amount as a condition, and on the many points that this court has found to be unmeritorious.  Mr Kirpalani asked that the costs be made in the cause.  I think rather that the more appropriate and fairer order was to deprive the defendant part of its costs and, having heard counsel in that regard and in a broad-brush manner, I awarded the defendant 60% of its costs with certificate for counsel.

76.  On the costs to set aside the Judgment on Counterclaim, Mr Kirpalani asked that such costs be paid by the defendant taxed on indemnity basis.  Having considered the defendant’s whole conduct including :

(a)  Quite clearly, under O25 r4, the court was not empowered and the defendant should not have sought pursuant thereto a judgment to be summarily entered against the plaintiff on the Counterclaim;

(b)  I find the defendant’s conduct of refusing to produce the draft judgment upon the plaintiff’s requests quite unacceptable;

(c)  Despite clearly not entitled to the Judgment on Counterclaim in the first place, the defendant has strenuously opposed the application to set it aside and has made extensive but wholly unmeritorious submissions.  In my view, the defendant should not have opposed it at all,

I found it appropriate and therefore ordered the defendant to pay the plaintiff the costs to set aside the Judgment on Counterclaim with certificate for counsel to be taxed on indemnity basis.

77.  After taxing these costs summarily, a net balance of HK$25,000 was owed by the defendant to the plaintiff, which should be paid forthwith.

78.  Lastly, I thank counsel for their assistance.