CHU KIN CHUNG AND ANOTHER v. HUNG HAU YAN

DCCJ 1130/2020

[2021] HKDC 483

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 1130 OF 2020

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D E C I S I O N

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1.  There are 3 summonses before this court:

(1)  the plaintiffs’ summons dated 22 January 2021 (“1^st Default Judgment Summons”) for judgment in default of defence under Order 19, rule 7 of the Rules of the District Court (Cap 336H) (“RDC”);

(2)  the defendant’s summons dated 19 February 2021 (“Time Summons”) for an extension of time to file and serve the defence under RDC Order 3, rule 5; and

(3)  the plaintiffs’ summons dated 13 April 2021 (“2^nd Default Judgment Summons”) for (a) leave to withdraw the 1^st Default Judgment Summons, and (b) judgment in default of defence under RDC Order 19, rule 7.

Background

2.  The 1^st plaintiff is the registered owner of Flat 2012, Block C, Siu Hei Court, 201 Wu Chui Road, Tuen Mun, New Territories (“Flat 2012”).  The 2^nd plaintiff is the 1^st plaintiff’s daughter and an occupier of Flat 2012.  The defendant is the registered owner of Flat 2112, Block C, Siu Hei Court, 201 Wu Chui Road, Tuen Mun, New Territories (“Flat 2112”), which is situated directly above Flat 2012.

3.  According to the plaintiffs’ case, they discovered water leakage on the ceiling of Flat 2012 in early January 2019. Shortly thereafter, they engaged a company called Silver Consultants Engineering Limited (“Silver Consultants”) to investigate the source of water leakage.  In a report dated 1 February 2019, Silver Consultants concluded that the waterproofing system of the shower tray in the toilet of Flat 2112 was defective, causing water seepage to the ceiling of the toilet and living room of Flat 2012.  In a further report dated 11 July 2019, Silver Consultants concluded that the floor slab, shower tray, bathtub, waterproofing system and water outlet of the toilet of Flat 2112 was defective, causing water seepage to the toilet and kitchen ceiling of Flat 2012.

4.  On 19 March 2020, the plaintiffs commenced these proceedings against the defendant by a specially endorsed writ.  The principal reliefs sought are as follows: (i) an order requiring the defendant to carry out proper maintenance and repair works to stop water leakage from Flat 2112 to the ceiling of Flat 2012; (ii) an injunction restraining the defendant from allowing or causing water leakage from Flat 2112 to the ceiling of Flat 2012; (iii) the plaintiffs’ costs of engaging Silver Consultants to investigate the source of water leakage; (iv) the plaintiffs’ costs of repair and remedial works; and (v) damages for discomfort and inconvenience to be assessed.  The writ was served on the defendant by insertion through her letter box on 20 March 2020.

5.  On 8 May 2020, the defendant, then acting in person, filed and served her notice of intention to defend these proceedings.

6.  On 11 May 2020, the defendant sent a 3-page written statement (with attachments) setting out her representations and broad grounds of defence (“Statement”) to the court by mail.  In essence, the defendant stated that she had already performed repair and remedial works in late February and early March 2019 to stop water leakage from the toilet of Flat 2112 to the ceiling of Flat 2012, and that she should not be held responsible for any further water leakage to the ceiling of Flat 2012.

7.  On 15 May 2020, the defendant was informed by the Court Registry that if she wished to submit a defence, it had to be in the prescribed form and filed with the Court Registry.  The Statement was returned to the defendant.  No defence has since been filed by the defendant.

8.  On 19 November 2020, the plaintiffs amended the statement of claim without leave of the court pursuant to RDC Order 20, rule 3(1).  The amended statement of claim was served on the defendant by insertion through her letter box on 24 November 2020, with the deemed date of service to be 7 days thereafter, viz. 1 December 2020, pursuant to RDC Order 10, rule 1(3)(a).

9.  On 8 December 2020, the plaintiffs filed a notice of intention to enter judgment against the defendant under RDC Order 19, rule 8A.

10.  Meanwhile, the defendant applied for legal aid. On 10 December 2020, the Director of Legal Aid filed a memorandum of notification of an application for legal aid herein, thereby staying these proceedings for 42 days, viz. until 21 January 2021, pursuant to section 15 of the Legal Aid Ordinance (Cap 91) and regulation 7A of the Legal Aid Regulations (Cap 91A).

11.  On 11 January 2021, the Director of Legal Aid filed with the court a memorandum of notification that the defendant had been refused legal aid.

12.  There is no dispute between the parties that, upon refusal of the defendant’s legal aid application, her defence was due to be filed and served by 27 January 2021.

13.  Before the expiry of time for the defendant to file and serve her defence, the plaintiffs issued the 1^st Default Judgment Summons on 22 January 2021.

14.  On 25 January 2021, the defendant’s solicitors filed a notice of act in these proceedings.

15.  By letter dated 1 February 2021, the defendant’s solicitors wrote to the plaintiffs’ solicitors to state that the 1^st Default Judgment Summons was issued prematurely.  The defendant also sought the plaintiffs’ consent for a time extension for her to file and serve the defence by 22 March 2021, on the ground that her solicitors would require more time to take instructions given the intervening Chinese New Year holidays.

16.  The plaintiffs’ solicitors, by letter dated 18 February 2021, denied that the 1^st Default Judgment Summons was issued prematurely, and did not consent to the defendant’s request for time extension.  On the following day, viz. 19 February 2021, the defendant issued the Time Summons for an extension of time to file and serve her defence within 28 days from the date of the order to be made.

17.  On 13 April 2021, the plaintiffs issued the 2^nd Default Judgment Summons, under which they seek leave to withdraw the 1^st Default Judgment Summons, and default judgment to be entered against the defendant under RDC Order 19, rule 7.

The 1^st Default Judgment Summons

18.  It is well established that the court has no jurisdiction to enter judgment in default of defence if the application is made before the expiration of the period for service of the defence, even if such period has expired by the time of the hearing of the application: see Yau Kar Kwai v Shan Jigesh Rajnibhai and Anor, DCCJ 4752 of 2017 (22 December 2017), §§13-18, per HH Acting Chief District Judge Ko (as he then was); Hong Kong Civil Procedure 2021, Volume 1, §19/7/3.

19.  In the present case, the parties are in agreement that the 1^st Default Judgment Summons was issued before the expiration of the period for service of the defence, and is thus premature.  The parties also agree that leave be granted to the plaintiffs to withdraw the 1^st Default Judgment Summons, subject to the issue of costs.

The Time Summons and the 2^nd Default Judgment Summons

20.  The relevant legal principles applicable to the present applications are not in dispute.

21.  Where the court is presented with an application by the plaintiff for default judgment and, at the same time, an application by the defendant for the filing of her defence out of time, it is logical to consider the application for extension of time first.  This is because if an extension is given, the application for default judgment falls away.  On the other hand, if the application for default judgment were first to be dealt with and then granted, the defendant would have to set aside this judgment in accordance with the usual principles before an extension of time could be considered, which would be potentially time-consuming and inefficient: see Schindler Lifts (Hong Kong) Ltd v Ocean Joy Investments Ltd [2002] 1 HKLRD 279, §19, per Ma J (as he then was); Koo Ming Kown v The Baptist Convention of Hong Kong operating as Pui Ching Primary School, HCA 731 of 2017 (30 October 2017), §34, per Lisa Wong J.

22.  I shall therefore consider the Time Summons first.  RDC Order 3, rule 5 relevantly provides as follows:

“(1) The Court may, on such terms as it thinks fit, by order extend or abridge the period within which a person is required or authorized by these Rules, or by any judgment, order or direction, to do any act in any proceedings.

(2) The Court may extend any such period as is referred to in paragraph (1) although the application for extension is not made until after the expiration of that period.”

23.  These rules confer upon the court a wide discretion, “designed to enable justice to be done between the parties”: Astro Nusantara International B.V. and Others v PT Ayunda Prima Mitra and Others (2018) 21 HKCFAR 118, §53, per Ribeiro PJ.  In Astro, the Court of Final Appeal (at §55) approved the Court of Appeal’s approach in The Decurion [2012] 1 HKLRD 1063, §11, as follows:

“It is clear that the applicable principle in deciding whether time should be extended is to look at all relevant matters and consider the overall justice of the case. A rigid mechanistic approach is not appropriate …”

24.  In Fortune Asset Development Ltd v De Monsa Investments Ltd [2009] 4 HKLRD 439, §14, Registrar Queeny Au-Yeung (as Au-Yeung J then was) set out a non-exhaustive list of matters that should be considered in an application for time extension under Order 1B, rule 1(2)(a) of the Rules of the High Court (Cap 4A), which has been applied in the context of Order 3, rule 5 by Anthony Chan J in Built Procurement Pty Limited v Sheng Ji Trade Limited and Others [2020] HKCFI 582, §29.  The matters relevant to the present case are:

(1)  What was the original time allowed and when has it expired.  The more the original time allowed, the more difficult it is to justify an extension.

(2)  Why was the original time not adhered to.

(3)  When was the application for extension of time taken out.  The greater the delay, the more difficult it is to obtain an extension.

(4)  What realistically is the further time needed to complete and file the pleading.  An applicant should not just casually pick a multiple of seven days without regard to its adequacy for completing the pleading.

(5)  Whether there was any de facto extension of time already enjoyed by the applicant, whether by way of consent, or in waiting for her time summons to be heard.

(6)  Whether the extension of time sought will have any impact on any hearing date or milestone date.

25.  In the present case, there is no dispute that although the original time allowed for the filing and service of the defence had expired on 8 May 2020, the deadline was subsequently extended to 27 January 2021 in view of the plaintiffs’ filing of the amended statement of claim.

26.  The Time Summons was issued on 19 February 2021, around 3.5 weeks after the defence was due to be filed and served.  The Time Summons is not supported by any affidavit giving reasons for the defendant’s failure to file and serve the defence within time.  Nevertheless, Mr Cheung, counsel for the defendant, informed me of the following matters:

(1)  The defendant had acted in person and only instructed her solicitors 2 days before the defence was due to be filed.  Her solicitors required time to go through the facts, and to obtain instructions from the defendant.

(2)  Because of the Chinese New Year holidays, the defendant’s solicitors required more time to take instructions from her and to prepare the defence on her behalf.

(3)  When the Time Summons was issued, the defendant and her solicitors were under an impression that the defence could only be filed after the disposal of the 1^st Default Judgment Summons.  Thus, the Time Summons was fixed to be returnable at the same time as the 1^st Default Judgment Summons.

27.  In my view, the reasons provided by the defendant do not seem to be good reasons for the de facto extension of 3 months’ time for her to file and serve the defence.  On the other hand, I take into account the following matters:

(1)  This is the first application for an extension of time by the defendant.

(2)  The defendant, upon being served with the 1^st Default Judgment Summons, acted expeditiously by instructing solicitors and requesting for the plaintiffs’ consent for a time extension for her to file and serve the defence.  Failing agreement between the parties, the defendant immediately took out the Time Summons.

(3)  As acknowledged by Ms Yu, counsel for the plaintiffs, the proceedings are still at an early stage and no hearing date or milestone date would be affected.

(4)  No real prejudice would be caused to the plaintiffs if time were to be extended.

28.  Mr Cheung indicated in his oral submissions that the defence is now ready, pending the defendant’s signing of the statement of truth, and the same could be filed and served within 3 days.

29.  Looking at the matter as a whole, and considering the overall justice of the case, I am of the view that time should be extended for the filing and service of the defence for 3 days from the date hereof, on an unless basis.

30.  As explained above, since the defendant is allowed time to file and serve the defence, the 2^nd Default Judgment Summons would fall away: see Schindler Lifts, supra, §19.

Disposition

31.  For all these reasons, I would make the following orders:

(1)  leave be granted to the plaintiffs to withdraw the 1^st Default Judgment Summons;

(2)  unless the defendant files and serves her defence by 4:00 pm on 22 April 2021, judgment be entered for the plaintiffs with costs; and

(3)  the 2^nd Default Judgment Summons be dismissed.

(Submissions on costs)

32.  Taking a global view and broadbrush approach, and having regard to the history of the disputes between the parties, instead of ordering costs to follow the respective events, I would make an order in respect of each of the 1^st Default Judgment Summons and the 2^nd Default Judgment Summons that there be no order as to costs.  As for the Time Summons, costs be paid by the defendant to the plaintiffs in any event, with certificate for counsel, to be taxed if not agreed.