YEUNG SAU CHUEN SAMMY v. SHING SING SUI

DCCJ 883/2001

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 883 OF 2001

(transferred from the Court of First Instance HCA 15372/1999)

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REASONS FOR DECISION

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1. This is an application by the Defendant to set aside the judgment entered in default of notice of intention to defend. In the hearing before myself on 15th June 2001, I allowed the application and set aside the said default judgment. I now give my reasons.

2. The Plaintiff was at all material times the registered owner of the premises known as Flat 407, 4th Floor, Block E, Healthy Gardens, 560 King's Road, Hong Kong ("the Plaintiff's Premises"). He brought the present action against the Defendant to claim for damages allegedly caused by the water leaked from the Defendant's premises ("the Defendant's Premises"), which was one floor above the Plaintiff's Premises.

3. The writ herein was purportedly served on the Defendant by inserting through the letter box of the Defendant's Premises on 24th September 1999. As this action was first commenced in the Court of First Instance, the said service was effected pursuant to O. 10 r. 1(2)(b) of the Rules of the High Court, Cap. 4. Unfortunately, the Defendant had emigrated to Canada and so he was not within the jurisdiction at the time of the service. Consequentially, no notice of intention to defend was filed, and the Plaintiff obtained interlocutory judgment against the Defendant on 24th November 1999. The assessment of damages was heard by Master B. Kwan of the High Court, and final judgment was entered against the Defendant on 27th May 2000.

4. According to the record shown in the Defendant's passport, he was only in Hong Kong in the following periods:

(i) from 6th to 19th September 1999; and

(ii) from 21st to 26th October 1999.

After the said two brief visits, the Defendant came back to Hong Kong again on 23rd November 2000. By that time, he found out that the mail box of the Defendant's Premises was broken and was left open, and he did not find that there was any mail inside. He claimed that he only knew about the present proceedings when he saw the posting of certain court documents in the Defendant's Premises on 1st December 2000.

5. It is not disputed that the Defendant was not within the jurisdiction at the time of the service of the writ. The authorities are clear that for service under O. 10 r. 1(2)(b) to be effective, the defendant has to be physically within the jurisdiction at the time of the service. Hence the service herein was not an effective one, and the judgment entered relying on such service was an irregular judgment.

6. Miss Lam for the Plaintiff, however, seeks to argue that the service in the present case was not necessarily an ineffective one. According to her submission, if it is proved that the defendant subsequently returned to the jurisdiction and knew about the writ, the service was still an effective one even if the defendant was not within the jurisdiction at the time of the service of the writ. Whilst I have great reservation whether this proposition truly reflects the law, I do not need to resolve this issue in determining the Defendant's application. As I will demonstrate below, I accept the Defendant's evidence that he only knew about the present proceedings when he saw the posting of the court documents on the Defendant's Premises on 1st December 2000, and so it is not open to the Plaintiff to argue that the judgment herein was obtained regularly.

7. In the case of an irregular judgment, there is still some uncertainty in the law as to whether the defendant is entitled to set aside the judgment as of right. In Desirable International Fashions Ltd. v. Chiang Shi Chau [1997] 3 HKC 170, Waung J. listed three possible views of an application under O. 13 r. 9 to set aside a default judgment irregularly obtained: (i) the "absolute right" view; (ii) the "limited right" view; and (iii) the "no right" view. In the more recent case of Law Kwok Hung v. Tse Ping Man [1999] 4 HKC 397, Yuen J. considered the decision of the Court of Appeal in Chu Kam Lun v. Yap Lisa Susanto [1999] 3 HKC 378, and accepted that the "limited right" view, as set out in the decision of the Court of Appeal in Po Kwong Marble Factory Ltd. v. Wah Yee Decoration Co. Ltd. [1996] 4 HKC 157, is still good law. I agree with such observation of Yuen J., and I therefore adopt the "limited right" view in considering the present application.

8. According to the "limited right" view, the court has a residual discretion to look at all the circumstances of the case, but not the merits of the defendant's defence, in deciding whether to set aside a judgment irregularly obtained. In this regard, Miss Lam for the Plaintiff urges the court to accept that the Defendant should have had knowledge of the writ when he returned to Hong Kong for a brief visit in October 1999. As the Defendant has not taken out any necessary action to defend the Plaintiff's claim, it is quite inequitable now for the court to set aside the judgment. In order to persuade the court to draw the said inference, Miss Lam relies on the following observations:

(i) as the Defendant was able to receive the water charges account bill dated 13th September 1999, the Defendant should also have been able to receive the writ inserted in his letter box on 24th September 1999; and

(ii) the Defendant did not dispose in his affirmation as to whether he had checked his letter box for mail when he returned to Hong Kong for a brief visit in October 1999.

9. However despite these observations, I still accept the Defendant's evidence that he had not known about the present proceedings before 1st December 2000. As the Defendant was in Hong Kong in the period from 6th to 19th September 1999, it might well be the case that he had received the water charges account bill before he departed Hong Kong on 19th September 1999. That does not necessary mean that he could have obtained any documents inserted in his letter box after his departure. On the other hand, I agree that there was some doubt as to whether the Defendant did check his letter box when he came back to Hong Kong for a brief visit from 21st to 26th October 1999. However, I do not accept that any reasonable person, with property and asset in Hong Kong, would have deliberately ignored any court proceedings and left Hong Kong for more than one year. Even a layman would have known that there is grave risk that the plaintiff in the court proceedings would seize his property and asset to satisfy any judgment debt. In particular, the Plaintiff in the present case would have known that the Defendant was the owner of the Defendant's Premises, which was only one floor above his premises. In such circumstances, there is some degree of truth in the Defendant's allegation. Hence despite the lack of evidence as to whether the Defendant had checked his letter box for mail during his visit in October 1999, I accept his evidence that he did not know about the present proceedings until 1st December 2000.

10. By reason of the aforesaid, there is no justification not to set aside the default judgment irregularly obtained, or to impose condition for the setting aside of such judgment.

11. Based on my reasoning stated above, it is not necessary for me to consider the merits of the defence. However for the sake of completeness, I would also like to express my view on this issue. According to the evidence filed on behalf of the Plaintiff, an electrician and a property surveyor engaged by the Plaintiff found that there was dampness in the ceiling of the Plaintiff's Premises, and they concluded that such water leaked from the Defendant's Premises. However unlike expert such as building surveyor, these two "experts" did not have right qualification or experience in expressing professional opinion on matters such as the cause of water leakage, which is the crucial issue in the present case. Indeed, the basis for their conclusion is unclear. They had not examined the pipe system in the building, whether by reference to drawings or findings made in any actual inspection, before they made their conclusion. In such circumstances, I myself have some reservation about their opinion.

12. On the other hand, the expert engaged by the Defendant inspected the Defendant's Premises and found that there was no sign of water leakage. I agree that certain renovation work had been done to the Defendant's Premises recently, and as a result such observation might not reflect the condition about two years ago. However, the record of the Water Authority clearly showed that no water had been consumed in the Defendant's Premises during the relevant period of complaint from January to June 1999. With no source of water originated from the Defendant's Premises, it might well be the case that the water that leaked to the Plaintiff's Premises came from a source other than the Defendant's Premises. Hence based on the available evidence at this stage, I accept that the Defendant has managed to establish a meritorious defence in the present case.

13. In her submission, Miss Lam for the Plaintiff further argues that if the court were to set aside the judgment, it would cause the Plaintiff serious prejudice. As the water leakage occurred about two years ago and the condition of both premises had changed, it would not be easy now for the Plaintiff to prove his case. I appreciate such concern. However if the Plaintiff had engaged a proper expert to conduct an investigation about the cause of the leakage before he commenced the present action, he may not have any problem in proving his case even two years later. In any event, the proceedings has been prolonged through no fault on the part of any parties, and so the Plaintiff cannot complain now that he has to prove his case again.

14. Based on the aforesaid, I allowed the Defendant's application and set aside the default judgment without imposing any conditions.