SINO PARKING SERVICES LTD v. WHARTON CULTURE & MEDIA (HONG KONG) CO LTD

DCCJ 4701/2021

[2022] HKDC 186

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO.4701 OF 2021

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DECISION

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Background

1.  On 24 November 2021, the plaintiff took out the subject inter-parte summons pursuant to O.13 r.6 & O.19 r.7 of the Rules of District Court (RDC)[1] for default judgment against the defendant, seeking divers monetary judgments, declarations and orders (the Summons).

2.  O.13 r.6(1), RDC, reads:

“Where a writ is indorsed with a claim of a description not mentioned in rules 1 to 4, then, if any defendant fails to give notice of intention to defend, the plaintiff may, after the prescribed time and, if that defendant has not acknowledged service, upon filing an affidavit proving due service of the writ on him and, where the statement of claim was not indorsed on or served with the writ, upon serving a statement of claim on him, proceed with the action as if that defendant had given notice of intention to defend”.

3.  And the material parts of O.19 r.7(1), RDC, reads:

“Where the plaintiff makes against a defendant …a claim of a description not mentioned in rules 2 to 5, then, if the defendant… fails … to serve a defence on the plaintiff, the plaintiff may, after the expiration of the period fixed by or under these Rules for service of the defence, apply to the Court for judgment, and on the hearing of the application the Court shall give such judgment as the plaintiff appears entitled to on his statement of claim”.

4.  On 7 October 2021, the writ of summons specially indorsed with statement of claim (SOC) was issued against the defendant. In SOC, the plaintiff claims, among others, declaratory relief i.e. a claim of a description not mentioned in O.13 rr.1-4 or O.19 rr.2-5, RDC.

5.  On 11 October 2021, the writ of summons was served on the defendant by being left at its registered office pursuant to s.827 of the Companies Ordinance[2].

6.  Despite the expiry of prescribed time, no notice of intention to defend was filed by the defendant. Hence, pursuant to O.13 r.6(1), RDC, the plaintiff proceeded with this action as if the defendant had given notice of intention to defend.

7.  When the defendant served no defence after the expiry of time under RDC for its service, the plaintiff took out the Summons to apply for judgment as it appears entitled to on SOC and served the Summons on the defendant by leaving it at its registered office on 25 November 2021.

8.  On the return date of the Summons, the defendant was absent. Having been satisfied that it had been duly served with the Summons and informed of change of venue for its hearing[3], I proceeded to hear Mr Shum appearing for the plaintiff (Mr Shum) on the Summons in the absence of the defendant.

Relevant legal principles

9.  In application under O.19 r.7, RDC, the court cannot receive any evidence, but must give judgment according to the pleadings alone: Hong Kong Civil Procedure 2022, Vol.1, para 19/7/11 at p.563.

10.  The statement of claim must show a case for the order that applicant seeks to obtain. A defective statement of claim which fails to prove the plaintiff’s case will result in dismissal of the application: Hong Kong Civil Procedure 2022, Vol.1, para 19/7/14 at p.564.

11.  The court’s power to grant judgment under O.19 r.7, RDC, is discretionary. The court’s task is to see whether the plaintiff appears to be entitled to judgment on his statement of claim: Hong Kong Civil Procedure 2022, Vol.1, para 19/7/14 at p.564.

12.  It is not the practice of the court to make a declaration of right in default of defence or without trial.However, this is only a rule of practice and not of law and will give way to the paramount duty of the court to do the fullest justice to the plaintiff to which he is entitled: Hong Kong Civil Procedure 2022, Vol.1, para 19/7/14 at p.564.

13.  The said rule of practice should not be followed when the plaintiff had a genuine need for the declaratory relief and justice would not be done if such relief were denied. Where declaratory relief is sought, the court will scrutinize the application for default judgment carefully and does not hastily grant the relief sought. The declaratory reliefs to be granted should not be in terms wider than what the plaintiff is entitled to and what is necessary to do justice to him: Hong Kong Civil Procedure 2022, Vol.1, para 19/7/20 at p.565.

Plaintiff’s pleaded case

14.  As pleaded in SOC, the plaintiff at all material time operated and operates a carpark located at lower basement floor to fifth floor of a building in Aberdeen (the Car Park).

15.  The defendant is the registered owner of 9 private vehicles (the Private Vehicles). Their registration numbers, their make[4] and model, and their colours etc are all particularized by way of a table in the SOC.

16.  The Car Park provides spaces for vehicle parking subject to “Conditions of Parking” promulgated by way of notice billboard standing at its entrance (the Conditions).

17.  The Conditions constituted the terms upon which each user of the Car Park shall accept and be deemed to have accepted before a licence is granted by the plaintiff to the said user parking vehicle in the Car Park (the Licence). The parking of vehicles at the Car Park was (and still is) subject to the Licence which contains such terms of the Conditions.

18.  Among others terms of the Conditions, parking charges in respect of any vehicle parked shall, pursuant to its clause 4, be accrued, calculated and paid in accordance with 2 tariffs of parking charges, with one set applicable to parking from Mondays to Fridays (Weekday Rate) and another set applicable to parking at Saturdays, Sundays and holidays (Weekend Rate).

19.  The plaintiff shall have, pursuant to clause 6 of the Conditions, a general lien upon vehicle parked until all sums due to the plaintiff have been paid. Parking charges payable by owner/user of any vehicle shall be due on demand by the plaintiff.

20.  Pursuant to clause 7 of the Conditions, on default of payment of any sum payable by owner/user of any vehicle within 7 days of demand, or in the event of any vehicle being parked for 32 continuous days or more and the plaintiff having given 7-day notice of its intention to sell such vehicle should it not be removed, the property in the relevant vehicle shall automatically pass to the plaintiff who shall upon expiry of said 7-day period be entitled to sell such vehicle by whatever means it deems fit and to recover from the proceeds of sale any moneys due to the plaintiff together with its costs and expenses (including legal fees) incurred in connection therein. Parking charges for any period up to date of sale of such vehicle shall continue to accrue due and to be payable as therein provided.

21.  The balance of the proceeds of sale obtained under the aforesaid clause 7 shall, pursuant to clause 8 of the Conditions, be held by the plaintiff and the plaintiff shall not be accountable to any person for them unless within 30 days after the date of sale any person satisfies the plaintiff that, at the time the said vehicle became plaintiff’s property, he was the proper legal owner of such vehicle, whereupon the plaintiff shall pay such balance to such person without interest.

22.  And, under clause 18 of the Conditions, the plaintiff shall have the authority to impound or tow away vehicles that are in breach of any of the terms and conditions as therein contained.

23.  As pleaded in SOC, the Defendant had on divers dates since 24 June 2020 parked the Private Vehicles at the Car Park. They have thereafter been left motionless occupying the same car parking spaces up to now. By not checking out, the defendant has failed to pay parking charges up to 30 September 2021 totaling $355,572 more particularized in paragraph 7 of SOC in respect of such different parking periods for each of the Private Vehicles.

24.  Numerous letters, including two dated 7 December 2020 and 17 December 2020, were sent by the plaintiff to the defendant demanding payment of parking charges in arrears in vain.

25.  By letter dated 28 September 2021, Messrs. Woo Kwan Lee & Lo acting for the plaintiff gave written notice to the defendant about plaintiff’s intention to sell the Private Vehicles upon expiry of 7 days should the defendant not remove them from the Car Park by paying off the arrears of parking charges.

26.  Despite expiry of the aforesaid written notice, the defendant has failed and/or refused to remove the Private Vehicles and to repay the said arrears.

27.  In the prayers of SOC, the plaintiff seeks:

(1)  $355,572 and interest thereon (no contractual interest clause was pleaded in SOC but ss.49 & 50 of the District Court Ordinance[5] were relied upon at paragraph 14 thereof);

(2)  Further parking charges at Weekday Rate and Weekend Rate from 1 October 2021 until removal of the Private Vehicles from the Car Park;

(3)  An order and/or declaration that the property in the Private Vehicles has passed to the plaintiff whereby the plaintiff is entitled to sell them and apply the sale proceeds realized towards settlement of arrears of parking charges and such expenses incurred thereof;

(4)  An order that, in exercise of plaintiff’s power under (3) above, the plaintiff shall have authority to tow away the Private Vehicles from the Car Park; and

(5)  Costs.

Discussion

28.  Having considered the SOC above, the plaintiff, I am satisfied, appears to be entitled to judgment on it. The SOC on its face does allow the plaintiff to obtain judgment against the defendant as the former prays for.

29.  Specifically, for prayers (3) & (4) in SOC, Mr Shum confirmed that the plaintiff no longer seeks any “order”. The plaintiff is contented to have mere “declaration” of plaintiff’s rights and powers pursuant to different clauses of the Conditions.

30.  Such plaintiff’s concession above is, I think, sensible. Declaration reflecting plaintiff’s existing rights under the Conditions already allows it to achieve its laudable aim of removing and selling the Private Vehicles to recoup arrears of parking charges and to free up parking spaces at the Car Park. Mandatory order to be directly enforced against, say, the defendant is, I think, uncalled for.

31.  Notwithstanding the rule of practice at [12] above, I agree with Mr Shum’s submissions that the plaintiff has a genuine need for the declaratory relief it seeks and full justice could not be done to it if this application is denied now.

32.  Were this application now denied, even if the plaintiff prevails after trial and obtains same declarations, such parking spaces of the Car Park occupied by the Private Vehicles would in the meantime not be available for meaningful use by other users in need (and thus unable to generate useful income to the plaintiff) and arrears of parking charges payable by the defendant would at the same time continue to climb with lesser and lesser chance of plaintiff recovering them in full from ultimate sale of the Private Vehicles (for they will inevitably depreciate over the course of time), especially in the unfortunate but possible scenario of futile enforcement by other means against the defendant of any money judgment obtained against it after trial[6].

33.  And, after careful scrutiny of SOC, this court can discern nothing special or suspicious that justifies or requires the plaintiff to prove its case by evidence at trial, which will inevitably cost further delay and expenses to the plaintiff. That does not advance either, I think, the underlying objectives of RDC.

34.  I therefore decide to depart from the said rule of practice and exercise my discretion to grant the declarations sought in the Summons without trial, but in terms no wider than they were pleaded in SOC and it is necessary to do justice to the plaintiff.

35.  The SOC, Mr Shum agreed, does not allege any clause that empowers the plaintiff to execute any document to procure transfer of the Private Vehicles to purchaser(s) as claimed in declaration sought in paragraph (1) of the Summons. The plaintiff therefore no longer claimed the same before this court.

36.  In addition, to be fair to defendant and others, Mr Shum agreed with suggestion of this court for another declaration to be made pursuant to clause 8 of the Conditions to reflect plaintiff’s parallel duty to account for, and pay over, balance of sale proceeds of the Private Vehicles to their proper legal owner(s) within 30 days of their sale.

37.  For paragraph (3) of the Summons, this court is only prepared to allow interest at commercial rate of 6% p.a. (and not the claimed judgment rate of 8% p.a.) for this commercial dispute for the period from 1 (sic) October 2021 to the date of judgment.

38.  For paragraph (4) of the Summons, Mr Shum fairly agrees to delete such rate(s) “as from to time prescribed by the plaintiff” for the Car Park and seeks further parking charges by sole reference to latest amounts of Weekday Rate and Weekend Rate.

39.  Finally, Mr Shum elected to recover plaintiff’s costs of this action by summary assessment instead of taxation sought in paragraph (5) of the Summons.

Disposition

40.  For default of defence served by the defendant, I enter final judgment in plaintiff’s favour against the defendant as follows:

(1)  a declaration that the property of the 9 private vehicles as per the Schedule[7] annexed to the Summons (Private Vehicles) has, pursuant to clause 7 of the Conditions of Parking (Conditions) of the subject car park located at JUMBO COURT, No.3 Wai Fook Road, Aberdeen, Hong Kong (Car Park), passed from the defendant to the plaintiff whereby the plaintiff is entitled to dispose of the Private Vehicles by sale (the Sale) and to apply the sale proceeds realized (Sale Proceeds) towards settlement of (a) arrears of parking charges of the Car Park due on the Private Vehicles (Parking Charges) and payable from the defendant to the plaintiff in paragraphs (4) & (5) below; (b) reasonable costs of the Sale; and (c) costs of this action payable from the defendant to the plaintiff;

(2)  a declaration that, pursuant to clause 18 of the Conditions, the plaintiff shall have the authority to impound and to tow the Private Vehicles away from the Car Park to such places it deems fit;

(3)  a declaration that, pursuant to clause 8 of the Conditions, the plaintiff shall hold balance, if any, of the Sale Proceeds, account for, and pay over, the same without interest to any person(s) who prove(s) to plaintiff’s satisfaction within 30 days after the Sale that it/they was/were the proper legal owner(s) of such of the Private Vehicles when the same became plaintiff’s property/properties;

(4)  arrears of Parking Charges accrued up to 30 September 2021 in the total sum of $355,572, together with interest thereon at the rate of 6% p.a. from 1 October 2021 to the date hereof; and

(5)  further Parking Charges from 1 October 2021 until such date all the Private Vehicles are removed away from the Car Park at (a) Weekday Rate of $95 from Mondays to Fridays per each remaining vehicle; and (b) Weekend Rate of $115 for Saturdays, Sundays and public holidays per each remaining vehicle.

Costs

41.  Costs follow the event.

42.  I further order the defendant to pay the plaintiff the costs of this action, including costs of this application.

43.  I assess the aforesaid costs by way of summary assessment in the total sum of $42,250 after considering statement of costs dated 8 February 2022 prepared by plaintiff’s solicitors.

44.  I have deducted 2 hours from the time spent on item C1 i.e. “preparation of documents”. And, notwithstanding the assistance given by Mr Shum, for which I am grateful, a practitioner charging $3,460/hour i.e. of 9 to 15 years of post-qualification experience should, in my view, be competent enough for this action.