TSE CHUN HUNG v. MA KING YING

DCCJ 3105/2008

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 3105 OF 2008

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BETWEEN

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DECISION

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1.  The defendant applies under Order 35, rule 2 of the Rules of the District Court to set aside the judgment entered against the defendant in her absence out of time.

2.  The defendant is asking for an extension of time under Order 3, rule 5 to extend the seven days’ requirement under Order 35, rule 2(2), despite the delay.  The application is opposed by the plaintiff.

3.  The background to these proceedings is set out in the defence counsel Mr Ah-weng’s chronology of events, I shall not repeat them here.  These proceedings commenced on 17 July 2008, when the plaintiff issued a writ against the defendant for the interests of the defendant, who is a joint tenant under the registered ownership of the suit property, to be transferred to him on the basis that she was holding her interest in trust of the plaintiff.

4.  Throughout the proceedings, the plaintiff, who was legally aided, affirmed repeatedly that he had no knowledge of the whereabouts of the defendant, who he claimed was his co-habitee or Common Law wife, with whom he had been living since 1964.  He admitted the defendant bore him four children and she left him in 1987, with two of his children.

5.  The plaintiff claimed in his affirmation he had no further contact with the defendant since she left him in 1987 and he had no knowledge of her or her whereabouts, that all of his four children had lost contact with him.

6.  It was on those bases that he was granted leave to serve the writ, the statement of claim and all documents filed to court by substituted service, mainly by placing an advertisement in the Sing Tao Daily.  No acknowledgement of service or defence was filed by the defendant, as a result, default judgment was applied for.

7.  The plaintiff’s solicitors served the summons and supporting affirmation of the application for default judgment to the suit address (ie, the suit premises jointly owned by the plaintiff and defendant) at which the plaintiff still resides.

8.  On being queried by Master Lai of the District Court on 15 July 2009 as to why the plaintiff should serve the summons and the supporting documents to his own address, the plaintiff’s then solicitor explained the suit address was the defendant’s last known address.  The Master rightly refused the plaintiff’s application to serve the defendant on the plaintiff’s address.  The plaintiff’s solicitor then asked the Master to dispense with service to the defendant, which, the Master rightly refused and ordered sub-service by placing an advertisement in the Sing Tao Daily.

9.  The case came to trial before me in the absence of the defendant on 12 February 2010.  Judgment was duly entered after the plaintiff gave evidence in support of his claim on the same day and an order declaring the plaintiff to be the sole beneficial owner of the suit property that the defendant was holding her half interest in the property on trust for the plaintiff and for the defendant’s share in the property to be transferred to the plaintiff’s name was ordered.

10.  The defendant in the present application filed a number of affirmations in support:  namely, two affirmations from herself, one from her eldest daughter and one from her eldest son.  They informed the court that the defendant had no knowledge of these proceedings or the judgment and orders entered against her until she received a letter in November 2011 from the Director of Legal Aid demanding that she should pay the taxed costs of these proceedings after trial.

11.  The defendant claimed it had come as a complete surprise to her, as she knew nothing about the proceedings against her and the letter sent to her residential address by the Director of Legal Aid demanding taxed costs against her was the first time she was ever informed of these proceedings.

12.  The defendant gave a full account of the background of the relationship between herself and the plaintiff since their union in 1964, the fact that she was constantly and repeatedly abused by the plaintiff, why she was forced to leave the suit premises in 1987 and how she was forced to live with her children in a public housing shop unit of 100 square feet after she was driven out of the matrimonial home (namely, the suit premises).  She explained the plight she went through after she was driven out of the matrimonial home in 1987. 

13.  She also explained that she had been contacted by clansmen known to herself and the plaintiff because she had maintained contact with the plaintiff’s home village clansmen in China and in Hong Kong, that there was no reason for the plaintiff not able to locate her or her whereabouts.

14.  She also said that she had tried to apply for Legal Aid after she received the notice of demand of taxed costs against her to set aside the costs order against her and the judgment against her, but her application for Legal Aid was refused. 

15.  She said she was told by Legal Aid officers that judgment had been entered against her and there is nothing she could do.  That probably means there is nothing that the Legal Aid Department would do to help her.  I do not know whether that is the truth or whether she was misled into thinking that they could not help her. 

16.  Eventually, she resorted to seeking help from District Board members and Legco members and, at the end of the day, she lodged an application to set aside the judgment on 29 May 2012, under Order 35, rule 2 and Order 3, rule 5 of the Rules of the District Court.

17.  I accept the defendant’s explanation as to why it took her 15 months before she lodged an application to set aside the judgment.  I also accept that she did not know there was a judgment and order entered against her until she received the demand from the Director of Legal Aid sent to her residential address.  For that reason, I allow the extension of time under Order 3, rule 5.

18.  As to the principles set out in the Hong Kong Civil Procedure 2013, pages 733 to 734 - which Mr Ah-weng referred to in the judgment of my brother Deputy Judge Clement Lee in his judgment of the case of Joyful Sparkle Company Limited v Ng Pik Chu t/a Shan Yau Co (an unreported decision dated 13 February 2012).  Those principles are set out in the notes in the White Book in Order 35, rule 2(1) :

“The following general indications should be taken into account when the court is asked to set aside judgment obtained when a party failed to appear:

(i) where a party with notice of proceedings has disregarded the opportunity of appearing at and participating in a trial, he will normally be bound by the decision;

(ii) where the judgment has been given after a trial, it is the explanation for the absence of the absent party that is most important: unless the absence was not deliberate but was due to accident or mistake, the court will be unlikely to allow a rehearing;

(iii) where the setting aside of judgment would entail a complete retrial on matters of fact which have already been investigated by the court, the application will not be granted unless there are very strong reasons for doing so;

(iv) the court will not consider setting aside judgment regularly obtained unless the party applying enjoys real prospects of success;

(v) delay in applying to set aside is relevant, particularly if during the period of delay the successful party has acted on the judgment, or third parties have acquired rights by reference to it;

(vi) in considering justice between parties, the conduct of the person applying to set aside the judgment has to be considered: where he has failed to comply with orders of the court, the court would be less ready to exercise its discretion in his favour;

(vii) a material consideration is whether the successful party would be prejudiced by the judgment being set aside, especially if he cannot be protected against the financial consequences; and

(viii) there is a public interest in there being an end to litigation and in not having the time of the court occupied by two trials, particularly if neither is short.’  Leggatt LJ in Shocked v Goldschmidt [1998] 1 All ER 372. ”

19.  After taking in consideration the background of these proceedings and the reasons given by the defendant of her lack of knowledge of these proceedings and the complicated relationship she had with the plaintiff during their cohabitation of over 20 years and the relationship with the four children, I accept she was ignorant of these proceedings and was not given an opportunity to protect her interests in the suit property in these proceedings before.

20.  I am satisfied she did not:

(i)  disregard the opportunity of appearing and participating in the trial because she had no idea there was an action against her at that time;

(ii)  I am satisfied that she was not served with any of the court documents or the writ, statement of claim, affidavits and other documents filed in these proceedings before she received the letter of demand from the Director of Legal Aid;

(iii)  the setting aside of the judgment entered would result inevitably in the retrial of the action.  It would give the defendant an opportunity to defend the action.  It would also give the defendant an opportunity to tell her side of the story in defence of the claim against her.  She was not given the opportunity before; it was not due to her fault in any way;

(iv)  I am satisfied that the defence has a real prospect of success in these proceedings, based on the affidavits filed by her;

(v)  though there was a period of 15 months’ delay after the judgment was entered, it is understandable from the efforts she described she had gone through in seeking help before the application was made.

I am most intrigued by the fact that the Director of Legal Aid did not offer her any assistance when she asked for help to sort out the matter.  She is and was a litigant in need of assistance.  I hope the Director of Legal Aid would conduct an investigation into this matter thoroughly;

(vi)  I find justice lies in setting aside the judgment, for the defendant was kept in the dark of these proceedings;

(vii)  I also find the plaintiff had not been honest with Court when he knowingly lied in his affirmations filed into court, claiming he had no knowledge of the defendant’s whereabouts, as he had two years before he commenced these proceedings against the defendant asked a clansman to contact the defendant and the clansman was able to drop a note of his contact phone number into the defendant’s mail box at her residential address. Furthermore, the plaintiff has also other means to contact her through his relatives and friends in Hong Kong and in his home village in China. 

He is by no means prejudiced if the judgment is set aside because he is living at the suit premises and he has been doing so and enjoying full use of the premises for the last 24 years.  If he was prejudiced by the setting aside of this judgment, I agree with Mr Ah-weng he had brought it upon himself.  As to his health, the heart condition that he suffered from had been with him since 1987 and he has, I believe, been well taken care of by the doctors at the Prince of Wales Hospital; and

(viii)  on the matter of public interest, I believe it is in the public interest to set aside the judgment which was obtained by deceit on the part of the plaintiff.

21.  Finally, I would like the Director of Legal Aid to conduct an investigation as to why the plaintiff’s previous solicitor should fail to ascertain the full background and assist the plaintiff in filing repeated affirmations telling the court the plaintiff had no knowledge of the defendant’s whereabouts, to the extent that applications were made to the court to dispense with service of the summons for default judgment and for the judgment and order to be dispensed with service to the defendant.  From the very start, the plaintiff’s solicitor was serving the defendant at the plaintiff’s own address.  Such action must be against the Law Society’s code of conduct.

22.  Further, there are queries on why the Director of Legal Aid should be able to obtain the defendant’s residential address in order to serve her a demand on taxed costs, when the plaintiff’s Legal Aid assigned solicitor had to seek a court order to serve the defendant by substituted service by placing an ad in the newspaper.  These queries needed to be fully investigated by the Director of Legal Aid.

23.  Coming back to the application, I order that the judgment and the order of 12 February 2010 be set aside.

24.  As to the costs of the application, I order the costs of the application to the defendant because of the appalling conduct of the plaintiff.

25.  I would also like the plaintiff’s former solicitor to explain to the court why they should not bear part of the plaintiff’s costs personally. 

26.  I will also give a certificate for counsel to the defendant and I order costs to be taxed on an indemnity basis.

27.  I would now like to give directions for filing of pleadings :

(1)   leave to the plaintiff to file and serve an amended statement of claim on or before 14 February 2013;

(2)   leave to the defendant to file and serve a defence on or before 22 March 2013;

(3)   leave to the plaintiff to file and serve a reply, if any, on or before 5 April 2013;

(4)   liberty to apply;

(5)   the plaintiff shall not dispose of the suit property, charge or mortgage it in any way until the end of trial or further order; and

(6)   the plaintiff’s own costs be taxed in accordance with Legal Aid Regulations.