XCHRX LAW MAN KAI GARRY AND ANOTHER v. AUSTCITI PROPERTY LTD. AND OTHERS

HCA14750/98

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.14750 OF 1998

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J U D G M E N T

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1. The Plaintiffs obtained default judgment against the 2nd and 3rd Defendants for failure to file the Acknowledgement of Service to the Plaintiffs' claim. The 2nd and 3rd Defendants applied to set aside the judgment. The application was adjourned for argument. They also applied for stay of execution of the judgment until the application is heard. Mr Registrar Betts refused the stay. They now appeal.

2. When the matter was before the Registrar, there really was no material showing why the 2nd and 3rd Defendants said that they had a meritorious defence. The only evidence is an affidavit from their solicitor saying that they were not personally involved in the transaction and therefore they were not liable. Mr Clemence Yeung, who now appears for them, had set out fully in his skeleton argument the reasons why the claim discloses no reasonable cause of action against his clients : at most there was only a contract between the Plaintiffs and the 1st Defendant and no particulars were given of the trust which entitled the Plaintiffs to claim against the 2nd and 3rd Defendants. There is also a defect in the pleadings in regard to the matters of fraud and dishonesty.

3. In my view, this submission merits full argument at the adjourned hearing of the application to set aside the judgment. The Defendants have also lodged an application to strike out the Plaintiffs' claim on the basis that the claim does not disclose any reasonable cause of action. The judgment should, at the meantime, be stayed pending the determination of these applications. The jurisdiction to stay is by virtue of O.45, r.11, see London Permanent Benefit Building Society v. De Baer [1968] 1 All ER 372 and Tam Ho Man v. Wong Kwok Tai, HCA4736 of 1985, and also by virtue of the inherent jurisdiction of the Court.