OCEAN FIRST CONTAINER STORAGE LTD v. EASY 2 LEARN LTD

HCSA 44/2020

[2021] HKCFI 200

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

SMALL CLAIMS TRIBUNAL APPEAL NO 44 OF 2020

(ON APPEAL FROM SMALL CLAIMS TRIBUNAL CLAIM

NO 7053 OF 2020)

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BETWEEN

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D E C I S I O N

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Introduction

1.  This is the hearing of an application dated 11 December 2020 for leave to appeal against the award/order of Mr Eric Tam, Deputy Adjudicator, made on 3 December 2020 (“Decision”), made in respect of a claim in the Small Claims Tribunal (“Tribunal”). 

2.  The Decision was to dismiss an application to set aside an award previously made by a different member of the Tribunal.  The Deputy Adjudicator gave his written Reasons for Decision on 4 January 2021.

3.  The application for leave is made by the defendant to the claim brought in the Tribunal.

4.  The claim was a straightforward claim for storage fees, at the monthly cost of $4,100, for the 8 months October 2019 to May 2020 inclusive, totalling $32,800, together with a sum of interest of $1,804.  The total amount claimed was subsequently reduced to take account of a prepayment amount of $1,554 made by the defendant, and payments made by the defendant after the filing of the claim totalling $10,000.  That left the balance of claim at $23,050.

5.  The application for leave to appeal is made pursuant to section 28 of the Small Claims Tribunal Ordinance, which limits appeals from the Tribunal to appeals on points of law (including matters of jurisdiction).

6.  The application for leave to appeal says that the grounds on which leave to appeal is desired are that the award/order is outside the jurisdiction of the Tribunal in that (capitals in original, sic):

1. THE ORDER WAS TOOK ON THE ABSENCE OF THE DEFENDANT’S REPRESENTATIVE.

2. THE DEFENDANT REPRESENTATIVE HAS ASKED THE COURT TO ADJOURN THE HEARING DATE.

3. THE ADJOURNMENT REQUEST BY THE DEFENDANT REPRESENTATIVE WAS REFUSED BY COURT.

4. THE DEFENDANT’S REPRESENTATIVE HAS ALREADY PRESENTED TO THE COURT EVIDENCE DOCS SHOWING THAT SHE IS OUT OF HONG KONG.

7.  The application is signed by a Guilda Kabalan, as Managing Director, for and on behalf of the defendant.

8.  Notice of today’s hearing date was sent to the defendant at its given address on 15 December 2020.

9.  Notwithstanding that fact, no person has appeared this morning to represent the defendant.  An attempt this morning to contact the representative of the defendant at the mobile phone number given met the message that the service had been suspended.

Reasons for Decision of the Deputy Adjudicator

10.  In his Reasons for Decision, the Deputy Adjudicator identified the basis of the claim and the procedural history of the matter before the Tribunal.

11.  The original hearing of the claim was scheduled for 17 July 2020.  On 5 July 2020, the defendant applied by letter to adjourn that hearing for the reason that there were no staff in the company in Hong Kong to represent the defendant.

12.  By letter dated 19 July 2020, the Tribunal refused the application.  The defendant was informed that it might send a representative to attend the hearing.  The defendant was also warned that if the defendant (or its representative) failed to attend the hearing, the Tribunal might make such order in its absence as the Tribunal deemed fit.

13.  However, the defendant was absent on 17 July 2020.  On that date, the hearing was adjourned to 28 August 2020 (mis-typed as ‘2010’ in the Reasons).  But by fax dated 24 August 2020, the defendant applied to postpone the hearing.  The Deputy Adjudicator then dealing with the case, Miss Eliza Ching, directed the matter to be dealt with at the hearing on 28 August 2020.

14.  On 28 August 2020, the defendant failed to attend the hearing.  Judgment in default in the sum of $23,050 was entered by Miss Ching. 

15.  As an aside, it was plainly within the jurisdiction of Miss Ching to have dealt with the hearing in this way, and (other than the point relating to the stated difficulty for the representative of the defendant to attend the hearing) no error of law is suggested.

16.  On 8 September 2020, the defendant filed an application to set aside the award.  The hearing was fixed on 3 December 2020.

17.  The defendant complied with the direction to file a full and complete statement, by filing a statement dated 18 September 2020.  That statement alleged that: (1) the managing director Ms Kabalan was the only representative in the case and the only person who knew about the facts of the case, and there was no other employee in the defendant company; (2) the representative of the case was out of Hong Kong; and (3) the defendant had a dispute on the amount claimed by the claimant.

18.  The statement also mentioned that Ms Kabalan’s husband, who was the manager of the defendant, was locked in Saudi Arabia and she could not leave the office as that might make them face heavy loss in their business and there would be problems if the office was left unattended.  She had been using the storage service and paying monthly rent since 2017.  She believed the amount claimed by the Claimant was not correct, and it was very important to check the account files when she would be back in Hong Kong, as all record files were in Hong Kong.

19.  On 17 November 2020, the defendant applied by letter to postpone the hearing of the application to set aside the award scheduled for 3 December 2020.  The defendant relied on the same reason that Ms Kabalan could not return to Hong Kong.

20.  A direction was given on 19 November 2020 that the defendant might apply for adjournment of the hearing to an agreed date, if the claimant provided written consent.  If no such consent, the hearing would be conducted as scheduled.  The defendant wrote to the claimant to request it to us the Tribunal to postpone the hearing date until 15 or 16 December 2020, because Ms Kabalan was planning to come to Hong Kong by the end of November 2020.  Nevertheless, Ms Kabalan later failed to attend any such hearing.  In fact, against the claimant’s given refusal to consent to the adjournment – and its pointing out that if the defendant had any questions or enquiries about the claim it could have directed them to the claimant, but had simply been delaying payment – the defendant was notified that the hearing would be conducted as scheduled.

21.  The defendant was absent at the hearing on 3 December 2020.  The claimant attended and informed the Tribunal that the failure to pay storage fees had continued from June 2020 to December 2020 as well.

22.  The claimant also relied on various WhatsApp and email messages passing between the parties.  The content of those materials was rehearsed by the Deputy Adjudicator in the Reasons for Decision.  Without my repeating them all, it can be pointed out that the Deputy Adjudicator identified that the only enquiries made by the defendant were as to the payment or calculation of interest, but that the defendant had otherwise not disputed the amount due.  Rather, the defendant had agreed to pay all outstanding payments, and to take the goods in storage.

23.  The Deputy Adjudicator also identified that as a matter of fact there could not be any technical difficulties in arranging payment, not least where the defendant had made payments twice in July 2020 in the total sum of $10,000.  He also pointed out that the storage fee formula is not complicated, comprising a simple fixed monthly charge of $4,100 and contractual interest of overdue payments at 2% per month.  The defendant having been informed as to how the interest was calculated, there could be no misunderstanding.

24.  The Amended Defence put forward by the defendant dated 15 July 2020 only alleged the need to check the account.  The Deputy Adjudicator pointed out that such checking could easily be done through WhatsApp and email communications, but no figure had been put forward by the defendant as the correct figure.  He also expressed the view that there should not be any doubt as to the monthly fee, and even if there were a genuine dispute as to past fees, the defendant should continue to pay the monthly fees being incurred.

25.  The Deputy Adjudicator also noted that it was not Ms Kabalan’s case that she could not come to Hong Kong, but rather her excuse was that it would cost too much money.  Further, the defendant could always appoint a representative to attend the hearing, who might not even need to be an employee if leave of the Tribunal were to be sought.

26.  The Deputy Adjudicator pointed to the eight factors which might be taken into account as guidelines on an application to set aside an award having been made in the Tribunal.  Applying those factors, and noting that the defendant had no meritorious defence and no real prospect of success, the Deputy Adjudicator doubted the significance of having Ms Kabalan to attend the hearing to defend the claim.  In the absence of any concrete evidence to support the chance of successfully overturning the judgment, the Deputy Adjudicator dismissed the application to set aside the previous award.

Whether Leave to Appeal

27.  There is actually no point of law sought to be raised by the intended appeal, and the place on the application form where any point of law might have been raised is struck through.

28.  Rather, the application for leave suggests only that the making of the award/order was outside the jurisdiction of the Tribunal.  I have already set out above the stated grounds for that suggestion.

29.  There has been no attendance by anyone on behalf of the defendant at this hearing to support the application.  Nor has there been any prior filing of any argument or other materials as might be put forward to support the application.

30.  Irrespective of the absence of any representative for the defendant, there is clearly no merit whatsoever in the application for leave to appeal.

31.  The defendant was afforded every proper opportunity to attend hearings, and was properly informed of its ability to appoint representatives who might attend on its behalf.  The defendant must be taken to have chosen not to attend, by its apparent insistence that Ms Kabalan be the representative notwithstanding her continued absence from Hong Kong.

32.  Plainly, it was within the jurisdiction of the Deputy Adjudicator to have dismissed the application to set aside the previously entered award.

33.  But in any event, the Deputy Adjudicator carefully considered the materials and formed the view that no defence had been raised with any reasonable prospect of success.  Not only is there no proper basis to interfere with that view, I consider it to be entirely correct.

34.  It is abundantly clear that there is no defence to the claim, and that the defendant has simply delayed payment of storage charges for which it is liable.  The defendant cannot have misunderstood the basis of the charges, or the basis of interest accruing on unpaid charges.  The defendant has also continued to avail itself of the storage services, whilst apparently continuing in its failure to pay for them.  No proper basis for not paying has ever been identified.  I do not think the fact that the claimant acknowledged the small prepayment only after commencing the small claim, or the fact that the defendant made a “good intention” payment of $10,000 in July 2020, in any way alter the analysis.

35.  There is no basis for the grant of leave to appeal.

Result

36.  The application for leave is dismissed.