BANK OF CHINA (HONG KONG) LTD v. SZE WANG AND ANOTHER

HCMP2825/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 2825 OF 2001

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(Pursuant to the Orders of The Honourable Mr Justice Suffiad to carry on dated 5 and 8 October 2001)

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J U D G M E N T

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1.  This is the 2^nd defendant’s appeal against the decision of the Master made on 4 September 2004, dismissing her application to set aside his previous order of 1 November 2002.

Background

2.  By a mortgage dated 4 August 1995, the 1^st defendant mortgaged to the plaintiff his property known as Flat H 19^th Floor Block 8 Nan Fung Sun Chuen, 23 Creig Crescent, Hong Kong (“the Property”). 

3.  In about August 2000, the 1^st defendant defaulted in his mortgage payments.  By a Chinese tenancy agreement dated 30 September 2000, the 1^st defendant let the Property to the 2^nd defendant for a period of two years commencing 1 October 2000.  Contrary to the terms of the mortgage between the plaintiff and the 1^st defendant, the consent of the plaintiff had not been sought or obtained before the making of the tenancy agreement.

4.  By two letters dated 16 March and 3 April 2001, the plaintiff informed the 2^nd defendant of the plaintiff’s interest in the Property and demanded the 2^nd defendant to vacate the property together with payment of any rent in arrears.

5.  On 23 May 2001 the plaintiff commenced these proceedings under Order 88 of Rules of the High Court claiming, inter alia, against the 1^st defendant for money owed, against both defendants for vacant possession of the Property and further against the 2^nd defendant for damages and mense profits for trespass. 

6.  On 9 April 2002, the Master gave judgment for the plaintiff against the 1^st defendant for money owed and against both defendants for vacant possession of the Property (“the Judgment”).  

7.  It is the 2^nd defendant’s case that she vacated and delivered to the 1^st defendant the Property on 30 June 2002.  It is the plaintiff’s case and as accepted and found by the Court in the assessment of damages proceedings, which I will come to later, the 2^nd defendant had not notified the plaintiff that she had vacated the Property.  On 18 July 2002, the plaintiff took out a Writ of possession and Writ of fi fa Combined.   On 10 September 2002, the bailiff executed the writ and obtained possession of the Property.

8.  On 13 September 2002, the plaintiff issued a summons seeking to amend the Judgment to include an order that “the 2^nd defendant do pay to the plaintiff mesne profits for trespassing”.   At the first hearing on 25 September 2002, the plaintiff’s solicitor was absent but the 2^nd defendant’s solicitor was present.  The summons was ordered to be adjourned.   The adjourned hearing resumed on 1 November 2002, when only the plaintiff’s solicitors appeared.  On that occasion, the Master granted the application and amended the Judgment to include an order that “the 2^nd defendant do pay to the plaintiff the amount as may be assessed to be due for damages and mesne profits for trespassing” (“the 1-11-02 Order”).

9.  On 15 April 2003, directions for assessment of mesne profits were given.  The hearing for the assessment took place on 23 December 2003 before another Master.  The 2^nd defendant was present on both occasions.  In a judgment handed down on 30 January 2004, the mesne profits for the period from 16 March 2001 to 10 September 2002 was assessed at $142,933.33.    The 2^nd defendant is appealing against the assessment.  Her application for a stay of execution had been refused.  Further on 21 September 2004, security for costs of the appeal in the amount of $90,000 had been ordered against the 2^nd defendant. 

The 2^nd defendant’s application

10.  In the meantime, on 30 June 2004, the 2^nd defendant applied by summons to set aside the 1-11-02 Order.  The summons was heard on 12 August 2004.  In a reserved decision handed down on 4 September 2004, the Master dismissed the application with costs.  On 17 September 2004, the 2^nd defendant filed the present Notice of Appeal.

11.  The 2nd defendant’s application to set aside the 1-11-02 Order is primarily founded on the ground that the Order was obtained irregularly.  The irregularity is said to be that: (1) the 2^nd defendant was not given notice of the 1 November 2002 hearing; and (2) the Master had no power to grant the amendment to the Judgment.  I will deal with them in turn below.  Before that, however, it is necessary to mention briefly the 2^nd defendant’s representation in these proceedings, a matter pertinent to the 2^nd defendant’s complaint that she was not properly served with notice of the application leading to the 1-11-02 Order. 

The 2^nd defendant’s representation in these proceedings

12.  After the 2^nd defendant had filed the Acknowledgement of Service in person, Messrs Cheng & Lo (“CL”) filed a Notice to Act for her on 28 June 2001.  At the hearing on 9 April 2002 when the Judgment was entered, a Mr Yang from CL was present.  He informed the Master that his firm had no further instructions from the 2^nd defendant, and the 2^nd defendant failed to return the Notice to Act in Person.  The Master then pointed out that CL should apply to withdraw as solicitors for the 2^nd defendant.

13.  Eventually on 2 September 2002, CL issued a summons seeking a declaration that it had ceased to act for the 2^nd defendant under Order 67 rule 6(1) of Rules of the High Court.  On 16 September 2002, the court granted the application.  Notwithstanding this Order, Order 67 rule 6(1) provides that CL only ceases to be the 2^nd defendant’s solicitors unless and until a certificate certifying that the requirements of the rule had been complied with had been filed.  CL filed the certificate of compliance on 25 October 2002.  Accordingly, it was only on 25 October 2002 that CL ceased to be the 2^nd defendant’s solicitors.  This explained why CL appeared at the hearing of the plaintiff’s summons to amend the Judgment on 25 September 2002.       

Notice of the 1 November 2002 hearing

14.  As mentioned above, at the 25 September 2002 hearing, only the solicitors for the 2^nd defendant appeared.  The plaintiff’s summons was ordered to be adjourned.  Subsequently the plaintiff’s solicitors went before the listing officer and restored the summons for hearing on 1 November 2002.  On 30 September 2002, the plaintiff’s solicitors wrote to both CL and the 2^nd defendant advising of the hearing date of 1 November 2002.

15.  According to the 5^th Affirmation of Kwong Ka Wah, the process server of the plaintiff’s solicitors, the letter to CL was served by hand on CL’s office on 30 September 2002.  As to the letter addressed to the 2^nd defendant, it was served on the same day by leaving at the Property, being the last known address of the 2^nd defendant.

16.  The 2^nd defendant complained that the service of the letters giving notice of the hearing was bad because she was then acting in person and had vacated the Property, and that the plaintiff had already recovered vacant possession of the Property.

17.  Contrary to the 2^nd defendant’s assertions, the mode of service adopted by the plaintiff is in compliance with the Rules of the High Court.  Firstly, until the certificate of compliance under Order 67 rule 6(1) had been filed, CL remained on record as the 2^nd defendant’s solicitors.  Service of documents and notices of hearing on CL would constitute good service.  Secondly, even assuming that by 30 September 2002, CL had ceased to be the 2^nd defendant’s solicitors and the 2^nd defendant was, as she claimed, already acting in person, Order 67 rule 7(b) provides that the last known address of the 2^nd defendant shall for the service on her of any document not required to be served personally, deemed to be her address for service.   This is because the 2^nd defendant had not appointed another firm of solicitors to act for her, and she had also not filed a Notice to Act in Person, giving an address for service.  Thirdly, Order 65 rule 1(1) provides that a document needs not be served personally on the recipient unless this is required by an express provision in the Rules of the High Court or by an order of the court.  There is no provision in the Rules of the High Court requiring notice of hearing to be served personally.  Order 65 rule 5(1)(a) further provides that a document may be served by “leaving the document at the proper address of the person to be served”.  Rule 5(2)(b) states that if at the time service is effected that person has no address for service, his proper address for service shall be his usual or last known address.  The plaintiff’s solicitors had therefore correctly served the 2^nd defendant by leaving the letter at her last known address.

18.  It follows that the service of the notice of the 1 November 2002 hearing is proper and regular.  In her affirmations and submissions, the 2^nd defendant has made repeated references to Order 13 rule 9 of Rules of the High Court and also to passages in the Hong Kong Civil Procedure 2004 on Order 13 rule 9 and service of Writs.  All these are however misplaced.  The service in issue is the service of the adjourned hearing on 1 November 2002, which was to deal with an application to amend the Judgment.   The present case is not about service of a Writ.  Order 13 rule 9 and the passages on the principles governing service of Writs are therefore wholly irrelevant.  Instead, the case falls to be governed by Order 65 rule 5.  Even if, as the 2^nd defendant contends, the notice of the adjourned hearing did not reach her, it will not render the 1-11-02 Order irregular and the 2^nd defendant cannot claim to set aside the Order as of right. 

19.  The 2^nd defendant has made criticisms of bad faith and unprofessional conduct against the plaintiff’s legal representatives in connection with the service of the 1 November 2002 hearing.  In my view, they are not warranted.  The 2^nd defendant has simply ignored the fact that she has failed to give an address for service upon and after CL ceased to be her solicitors.  It is to be noted that when asked by the plaintiff’s solicitors sometime after the 1 November 2002 hearing, the 2^nd defendant’s brother instructed that letters and papers be sent to the Property as they had made arrangement for re-direction of mail.  The 2^nd defendant cannot blame the plaintiff for serving the notice on CL at a time when it had not yet formally come off the record as her solicitors, and also at the Property, when that was evidently her last known address and was deemed by the Rules to be her address for service.  The 2^nd defendant only has herself to blame if the notice of hearing did not reach her.

Delay

20.  Given that the 1-11-02 Order was properly obtained, the burden is on the 2^nd defendant to explain the delay and to show good reasons for setting aside the Order.  While the 2^nd defendant has stated that she was not aware of the 1 November 2002 hearing, she has not explained satisfactorily why she only made the application to set aside 18 months after the Order was made.  In her affirmation filed on 17 September 2004 in support of this appeal, the 2^nd defendant accepted that shortly after the 1 November 2002 hearing, the plaintiff’s solicitor had spoken to her brother and informed him of the results of the hearing.  In her submissions, the 2^nd defendant further acknowledges that in about the end of November 2002, she had received the plaintiff’s solicitor’s letter dated 26 November 2002, enclosing the sealed copy of the 1-11-02 Order.  Yet it was only after her application to stay the judgment on assessment of damages failed and after she lodged an appeal against the results of the assessment that she applied to set aside the 1-11-02 Order.  The 2^nd defendant says that the application was brought late because she only came to learn of the “irregularity” of the 1-11-02 Order recently.  As held, there is no irregularity in the service of the 1-11-02 Order.  There is simply no plausible reason for the long delay.

21.  Not only had the 2^nd defendant failed to act promptly to set aside the 1-11-02 Order, but she had also with full knowledge of the Order taken part in the assessment of damages, which was carried out in pursuance of the 1-11-02 Order.  Among other things, the Notice of Appointment of Assessment of Damages stated expressly that the assessment was pursuant to the 1-11-02 Order.  If there is any irregularity leading to the 1-11-02 Order, which in my judgment there is none, the 2^nd defendant has effectively waived it by conduct.   The delay is thus both inordinate and fatal. 

Basis for the 1-11-02 Order

22.  The 2^nd defendant contends that the Master erred in allowing the amendment to the Judgment.  She argues that the amendment is a material change that carried detrimental effect on her such that it should not have been allowed under the slip rule.  It is also said that there had been delay in making the application to amend.

23.  The plaintiff’s application to amend the Judgment was made under Order 20 rule 11 of Rules of the High Court, which reads:

“	Clerical mistakes in judgments or orders, or errors arising therein from any accidental slip or omission, may at any time be corrected by the Court on motion or summons without an appeal.”

24.  The discretion to amend is exercised for the purpose of properly expressing the intention of the Court.  It may be exercised where there had been omissions to include in the judgment certain awards, such as interest or costs or where there had been accidental slip or omissions on the part of legal advisers in obtaining the judgment: Hong Kong Civil Procedure 2004 vol. 1 para.20/11/1 at p.361; see also Fritz v. Hobson (1880) 14 Ch D 542.  In the present case, the plaintiff had in the Originating Summons sought relief of damages and mesne profits.  The amendments sought by the plaintiff were therefore part of the plaintiff’s claim right from the beginning. The case ofCredit Agricole v. Crossland Industries Corp [1988] JKC 676, where amendment to include a relief not pleaded in the Statement of Claim was disallowed, is therefore irrelevant.  There is no evidence or indication that the plaintiff had intended to forgo or had given up the claims in damages and mesne profits.  There is also nothing inexpedient or inequitable in the amendments to the Judgment.  It is within the Master’s discretion to allow the amendments to the Judgment. 

25.  Further, undue delay is not itself a ground for refusing to amend a judgment or order, especially when the delay has not caused any prejudice to the other party: Hong Kong Civil Procedure 2004 vol. 1 para.20/11/1 at p.361.  In the present case, the amendment was sought some four months after the Judgment was made.  The 2^nd defendant, however, has not shown any prejudice occasioned as a result of the lapse of four months, other than saying that she had already moved out of the Property.  But the fact that she had moved away has not prevented the 2^nd defendant from participating in the assessment of damages and defending her interest in the proceedings.   In short, the Master is not at fault in dismissing the 2^nd defendant’s subsequent application to set aside the 1-11-02 Order and the appeal has no merits.

Conclusion

26. For all the above reasons, the 2^nd defendant’s appeal is dismissed.  Applying the usual rule of costs follow event, I make an order nisi that the 2^nd defendant pays the plaintiff the costs of the appeal, to be taxed if not agreed.