FAN KWOK FONG v. YU POK SANG

DCCJ746/2015

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 746 OF 2015

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DECISION

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1.  This is the plaintiff’s application to appeal against the decision of Master dated 23 June 2016.

2.  The Master ordered, inter alia, that:-

(a) Leave be granted to the defendant to file and serve the 3^rd Affirmation of Yu Pok Sang affirmed on 21 June 2016 ( “the 3^rd Affirmation”);

(b) The default judgment entered on 26 June 2015 (“the Judgment”) be set aside; and

(c) Costs of the application be to the defendant in any event.

3.  The plaintiff contends that leave should not be granted to the defendant to file and serve the 3^rd Affirmation as there are no exceptional circumstances.  The Judgment is regular and costs should be awarded in his favour.

Whether leave to file the 3^rd Affirmation should be granted

4.  On 29 March 2016, it was ordered that leave be granted to the defendant to file and serve affidavit(s) in reply (if any) on or before 24 May 2016, and no further affidavit to be filed by any party without leave of the court.

5.  On 22 June 2016, one day before the hearing of the setting aside application, the defendant took out a summons to file and serve the 3^rd Affirmation.

6.  In the 3^rd Affirmation, the defendant deposed that he moved from the address at Fairview Park to Kam Tin, Pat Heung in about September 2012.  He also exhibited copy of the land search record showing he was one of the registered owners of the property at Kam Tin, Pat Heung since October 2012.  He exhibited three bank statements for the months of April, May and June 2015 showing his address at Pak Heung.  He also explained that he did not update his address at the annual return of the Company Registry because he was given only the signing page of the annual return by the accountant and was not aware of the mistake.

7.  No explanation was given in the 3^rd Affirmation as to why the above evidences were disclosed so late.

The law

8.  An appeal of a Master’s decision before a Judge is by nature a hearing de novo.

9.  O 32 r 16A (4) of the Rules of the District Court (“RDC”) stipulates that:-

“(4) Where the determination of the application is adjourned for the hearing of the summons, no further evidence may be adduced unless it appears to the Court that there are exceptional circumstances making it desirable that further evidence should be adduced.”

10.  Paragraph 32/11A/3 of the Hong Kong Civil Procedure 2016 provides that “the sort of exceptional circumstances envisaged under r  11A(4)( which is the same as O 32 r 16A(4) of RDC) are likely to be along the lines of those exceptions laid down in Ladd v Marshall[1954] 1 WLR1489, …… Exceptional circumstances will not exist in circumstances where a proper review of the potential issues that might arise in the proceedings ought to have resulted in the information contained in an affidavit being filed within the time limits imposed (Fortune Asset Development Ltd v De Monsa Investments Ltd (unrep, HCA 167/2009, [2009] HKEC 1369)].”

11.  There is no doubt that the information and the exhibits in the 3^rd Affirmation could and should be stated and disclosed in the earlier affirmations.  The exhibits could be located earlier with due diligence.  Coupled with the fact that no explanation was given in the 3^rd Affirmation as to why it was filed so late, I find that there are no exceptional circumstances and leave should not be given.

12.  It is submitted that a judge had a greater discretion to admit further evidence.  Be that as it may, I am not persuaded that the evidence should be admitted.

Whether the Judgment is regular or not

13.  It is submitted by Mr Cheung, counsel for the plaintiff, that the court was not bound by the mere allegation of the defendant that he did not have notice of the proceedings.  It had a duty to examine the evidence to see if such allegation should be disbelieved.

14.  The defendant’s case was that he had moved out of Fairview Park before the writ was served upon him in around May 2015.  He had even told the plaintiff on one occasion that he was then living in Kam Tin, Pat Heung when they drove past his home.  The process server of the writ had visited the Fairview Park address on 20 July 2015 and 31 July 2015, in around 2 months after the service of the writ.  He was told by the female domestic helper of the address that she had no knowledge of the defendant and there was no one living at the address by the name of the defendant.  On the second occasion, he was told by the male caretaker of the management company that he did not know the defendant.

15.  I am of the view that given the close proximity of time, the evidence of the process server indirectly supported the defendant’s allegation that he was not living at Fairview Park at the material time.  In these circumstances, I am convinced that he was not living at Fairview Park at the material time.  The court has to consider when deciding whether the service of a writ is effective is whether it has been brought to the attention of the defendant, but not whether it has been sent to the defendant’s last known address.

16.  The process server chose to serve the writ by inserting into the letter box only and not to make any enquiry as to the whereabouts of the defendant when attending the address.  Not all the blame should be put to the defendant if it turned out to be an incorrect address.  I find that the Judgment is irregular.

Costs

17.  The plaintiff conceded that the defendant had a meritorious defence in this case.  He only wished to set aside the consequential costs order.  Notwithstanding that I find the 3^rd Affirmation should not be admitted as evidence, I arrive at the same conclusion that the Judgment is irregular.  If the defendant had a meritorious defence, the plaintiff should not oppose the defendant’s application for setting aside the Judgment at the hearing on 23 June 2016.  The Judgment is found to be irregular, although a different rationale has been adopted.  The defendant is entitled to set it aside as of right.  The costs order of the Master should not be disturbed.

18.  On the other hand, the plaintiff succeeded in appealing against the order relating to the 3^rd Affirmation.  He should be entitled to costs of the application.  The plaintiff lost on the issue of regularity of the Judgment.  He should be liable for costs on that part.  Mr Cheung of the plaintiff submitted that more time was spent on the argument relating to the 3^rd Affirmation, but such success did not have any impact on the main concern of the plaintiff, that is the costs order made by the Master.  Miss Chan, counsel for the defendant, agreed that it was fair to order that costs of the appeal be in the cause.  I make an order nisi that costs of the appeal be in the cause.  Unless application for variation is filed within 14 days, the order shall become absolute 14 days thereafter.

Conclusion

19.  It is ordered that:-

(a) The leave granted to file and serve the 3^rd Affirmation of Yu Pok Sang be set aside and the defendant’s summons for leave be dismissed;

(b) The costs order of the Master do stand;

(c) Order nisi that costs of the appeal, with certificate for counsel, be in the cause.

20.  It remains of me to thank counsel for their assistance.