WAH BAO COMPANY v. LEE CHUNG CHEONG TRADING AS WING CHEONG CONSTRUCTION AND ENGINEERING COMPANY

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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BETWEEN

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JUDGMENT

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1. This is an appeal from an order made by Master Perrior on the 2nd June 1987 whereby he granted leave to the defendant to file a defence and counterclaim on the condition that the defendant pay into Court the sum of $343,251.89 within 14 days.

2. The ground on which the appellant relies is an allegation that he did not receive the writ which was sent to him by ordinary post on the 24th April 1987 and would therefore be presumed to have been served on the 2nd of May. It was sent by the plaintiff's solicitors to the defendant at No. 28 Hang On Street, 5th floor, Kwun Tong, Kowloon. It is not disputed that that is the appellant's business address. It has not been returned to the plaintiff's solicitors by the Post Office "dead letter" service.

3. No notice of intention to defend the action having been filed the plaintiffs entered an interlocutory judgment on the 20th of May. On the 25th of May the appellant applied to have the judgment set aside on the grounds that he had not received the writ. He filed an affidavit in support which alleged that he had already paid $75,220 to the plaintiffs, denys owing them the liquidated amount claimed $343,251 and saying that he had a counter-claim for $800,000.

4. The appellant has now filed a further affidavit in which he claims that at the hearing before Master Perrior a registered letter receipt was produced and shown to the Master but the appellant was not allowed to see it.  This receipt was for the writ sent on the 23rd April. He says that the Master told him to go to the Post Office to find out what had happened to the registered letter containing the writ. He could not do so as he did not know the number of the receipt.

5. I am satisfied from the affidavit sworn by Miss Pauline Lam that the postal receipt produced at the hearing before the Master was in respect of a letter of demand sent on the 18th of March and not to the writ.  I am also satisfied that the appellant is well aware of that fact. In his affidavit sworn on the 8th of June he exhibited a copy of a letter to the plaintiff's solicitors requesting a copy of the receipt. He goes on to say he received no reply. It is clear from Miss Lam's affidavit that a reply was sent, by registered post, explaining the position fully and enclosing a copy of the receipt for the demand letter.

6. At the hearing before me the appellant insisted that the Master was told that the writ had been served by registered post. I do not accept his version of that. I am satisfied that he was told that it was only the demand letter which was sent by registered post. I also reject the appellant's allegation that he was not allowed to argue his case before the master and I accept Miss Lam's account of what happened at that hearing.

7. This matter comes before me for re-hearing. I have considered the evidence, as contained in the affidavits filed, and the submissions made by the appellant and by Miss Spruce for the plaintiff. This is a building dispute in which it is alleged that the appellant as principal contractor to the Housing Authority, was supplied with progress certificates by the plaintiff, his sub-contractor on the basis of which he has received payments but has failed to pass all those payments on to the defendant. The plaintiff has a liquidated claim for $343,251.89, giving credit for the payments made. There are, however, other claims for unliquidated damages and interest.

8. I am doubtful indeed, as clearly was the Master, as to the appellant's claim that he did not receive the writ. The Master however gave leave to defend on payment into Court of the amount of the liquidated damages which the appellant said he could do if given reasonable time. While this is a re-hearing I see no reason to interfere with that decision except that more time has now elapsed and the period of 14 days should be reduced to 7 days.

9. There will therefore be an Order that the appellant have leave to defend on condition that the sum of $343,251.89 is paid into Court within 7 days, the Defence and counterclaim to be filed within 7 days thereafter. Plaintiff to file defence to counterclaim, if any, within 14 days thereafter.

10. The plaintiff to have its costs here and before the Master with certificate for counsel.