CHAN PAT HUNG EVA suing by her attorney, PUN SAU YUK v. WONG HAU KI

DCCJ 4401 / 2016

[2018] HKDC 585

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 4401 OF 2016

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DECISION

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Introduction

1.  This is the defendant’s application, made by a summons filed on 31 October 2017 (“the Summons”), for an order that the judgment and order of HH Judge Li dated 26 June 2017 (“the Default Judgment”) be set aside.

2.  The Summons is opposed by the plaintiff, who suggests that (1) the Default Judgment is regular; and (2) the defendant has no defence.

3.  Having considered the submissions of counsel, my decision is to set aside the Default Judgment.  The reasons are as follows.

Factual Background

4.  The plaintiff owned a flat in Kowloon (“P’s Property”).  The defendant owned the flat above it (“D’s Property”).  It was alleged by the plaintiff that by the defendant’s fault, water leaked from D’s Property into P’s Property.  The pleaded causes of action are (1) nuisance; (2) negligence; and (3) breach of DMC.

5.  Neither party lived in these flats.  They were rented out as sub-divided rooms (劏房).  The plaintiff was aware of this, as she pleaded it in her Statement of Claim dated 2 September 2016 (“the SoC”).

6.  According to the first affidavit of service filed by the plaintiff on 20March 2017 (“the 1^st Affidavit of Service”), a process server called Tony Hui (“Mr Hui”) attempted to serve the writ (with the SoC annexed) on the defendant by inserting it into “the letterbox” for D’s Property on 12 December 2016.  In the opinion of the plaintiff, the writ would have come to the defendant’s knowledge within 7 days from the date of insertion (i.e. within 7 days from 12 December 2016).

7.  The 1^st Affidavit of Service did not mention the fact that D’s Property was, as the plaintiff was fully aware, rented out to tenants so that presumably, its letterbox was also primarily there for those tenants (instead of the defendant) to use.

8.  On 31 October 2017, the defendant filed his first affirmation (“D’s Affirmation in Support”) where he asserted he did not have the key to the letterbox and never received the writ inserted into it.

9.  That assertion was met with a fresh allegation from Mr Hui to the effect that he had also made a phone call to the defendant through the defendant’s mobile phone number, during which he asked the defendant to pick up the writ from “his letterbox” [B/34, para 4].

10.  On 10 January 2018, the defendant filed another affirmation (“D’s Affirmation in Reply”) where he asserted he thought the phone call was “a swindling call” and “did not pay attention” to what was said.

11.  In D’s Affirmation in Reply, the defendant also said the Joint Office for water seepage complaints established by the Government of the HKSAR inspected D’s Property on not less than 3 occasions and concluded that “no sign of seepage could be found” from D’s Property, so he did not anticipate he would receive any “legal document”.

12.  It is against the above factual background that I must decide (1) whether the Default Judgment is regular; and (2) whether the defendant has no defence.

Discussion

13.  Mr Vincent Kwong, counsel for the defendant, helpfully drew my attention to a large number of authorities.  Mr Vincent Kee, counsel for the plaintiff, likewise helpfully drew my attention to further authorities.  I considered all of them carefully. In my view, it would be quite unnecessary to set out all of them in this Decision.

14.  The most relevant authority cited by counsel to me is the case of Phillip Securities (HK) Ltd v Lam Chi Bin Stanley [2002] 1 HKC 432, where at 436-H to 437-B (para 9 & 10), DHCJ Lam (as Lam VP then was) said this: -

“… If the plaintiff was aware that the defendant was no longer at the Address at the time of service, that could not be a proper address for service because the plaintiff could not properly authorize an affidavit of service to be sworn in compliance with O 10 r 1(3)(b)(i) deposing to a belief that the writ would come to the knowledge of the defendant within seven days.

…. On the material before me, I find on the balance of probabilities that the plaintiff was aware in November 1999 when the writ was purportedly served that the defendant was no longer at the Address. By reason thereof, the writ was not properly served whether by registered post or by insertion of the same in the letter box at the Address. The judgment entered on 30 December 1999 was therefore irregular.”

15.  Also of relevance is the earlier case of Law Kwok Hung v Tse Ping Man [1999] 4 HKC 397 where Yuen J (as Yuen JA then was) said (at 404-D): -

“… Order 10 r 1(3)(b)(i) RHC stipulates that the affidavit of service of a writ by post must state that the writ had been served at the address last known to the plaintiff and that in the plaintiff’s opinion it would come to the defendant’s knowledge within seven days. That opinion must be a reasonably held one.

… If a defendant impeaches the good faith of that opinion, the court can determine whether the plaintiff did or did not have any reasonable grounds to hold the opinion asserted in the affidavit of service.  If there were no reasonable grounds, then the service would have been irregular for non-compliance with the rules.”

16.  The two cases cited above had been consistently applied ever since including, relatively recently, by DHCJ Anson Wong SC in Hung Lai Wan v Ngo Sam (HCA 3189/2016, 2 February 2017, para 11 to 14).

17.  The rule of law established by these cases is to the effect that if the belief of the plaintiff on service stated in the affidavit of service was “not reasonably held”, the service in question is irregular.

18.  Applying that rule of law to the facts of our present case, it is crystal clear that the service in question was irregular.  The plaintiff in our present case knew D’s Property was rented out, so that the defendant could not have treated D’s Property as his own home and broken into its letterbox whenever he wished.  There was no reasonable ground for the plaintiff to believe that the writ would have come to the defendant’s knowledge within 7 days from the date of insertion (i.e. within 7 days from 12 December 2016) or indeed at all.

19.  Mr Vincent Kee, counsel for the plaintiff, relies heavily on the phone call made by Mr Hui to the defendant [B/34, para 4] and says that by the phone call, the defendant had been made aware of the writ.  Mr Kee also relies on the contemporaneous attendance note made by Mr Hui [C/56], which shows that Mr Hui and the defendant did have a phone conversation with each other.  Mr Kee emphasizes that the plaintiff was only required to make reasonable inquiries, but not a perfect inquiry, when it comes to the defendant’s address for service.

20.  In reply to those submissions, Mr Vincent Kwong, counsel for the defendant, says the phone call should be disregarded because if I were to hold that for as long as a defendant received a phone call which alluded to a writ the service would be good, then I would be making a mockery of Order 10 of the Rules of the District Court, and all litigants would just be making calls instead of serving writs (or other originating documents) in accordance with statutory provisions.  Service by phone calls, suggests Mr Kwong, is not in line with the legislative intention which resulted in Order 10 being the way it is.

21.  On the phone call, I agree with the submissions of Mr Kwong for the defendant.  The plaintiff was at liberty to make her applications for substituted service but in the absence of a valid order for substituted service, making a phone call could not have the effect of regularizing an otherwise irregular service.

22.  By reason of the above, the Default Judgment was irregularly obtained.

23.  Mr Vincent Kee, counsel for the plaintiff, agrees in paragraph 15 of his Skeleton Submissions that if the Default Judgment is ruled to be irregular, it should be set aside as of right without this Court going into the merits of the defendant’s defence.

24.  The defendant plainly has an arguable defence but in light of the concession by Mr Kee, and the fact that this matter may well go to trial, the less I say about the merits of the defence the better it would be.

Disposition

25.  For the reasons set out above, I order as follows: -

(1) The Default Judgment be set aside;

(2) There be an order nisi that the costs of and occasioned by the Summons, including costs previously reserved, be paid by the plaintiff to the defendant, to be taxed if not agreed, with certificate for counsel; and

(3) Unless a party takes out a summons within the next 14 days and applies to have the said order nisi varied, the said order nisi be automatically made absolute.

26.  Last but not least, I do thank Mr Kwong and Mr Kee for their able assistance.