ANTELOPE INTERNATIONAL LTD v. DINING PLUS LTD

DCCJ 1894/2016

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 1894 OF 2016

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DECISION

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Introduction

1.  On 25 April 2016, the plaintiff issued a writ of summons against the defendant.  The claim is for services rendered and/or work done by the plaintiff for the defendant in the sum of $240,000.

2.  No notice of intention to defend having been given by the defendant, on 16 June 2016 the plaintiff entered judgment in default against the defendant for that sum, together with interests and costs (“the Default Judgment”).  That judgment was served on the defendant shortly afterwards. 

3.  On 26 July 2016, more than a month later, the defendant took out a summons seeking to set aside the Default Judgment pursuant to Order 13 rule 9 of the Rules of the District Court.

Service of the writ

4.  The plaintiff’s solicitors served the writ on the defendant by leaving the same at the defendant’s registered office, which is situated at the 4th floor of an office building in Hunghom, Kowloon.

5.  Mr Yip Wai Kit, a legal executive of the plaintiff’s solicitors, has made two affirmations in the present proceedings deposing to the service of the writ, which was handled by him.  In his first affirmation, relied upon by the plaintiff for the entering of default judgment, he stated that he had left the writ at the defendant’s registered office.

6.  The defendant’s initial position on service can be found in the first affirmation of Mr Ma Kwai Yung. Mr Ma has been the managing director of the defendant and is also the main deponent giving evidence on its behalf in this application. 

7.  According to Mr Ma, the defendant learnt of the court action for the first time on 20 June 2016 when the Default Judgment was received at the reception on the 4th floor.  Prior to that, the defendant had not received or seen a copy of the writ.

8.  Mr Ma set out the layout of the 4th floor in his first affirmation explaining that the 4th floor premises were shared by the defendant and a related company and that one had to go through a number of glass doors and through a “common corridor” in order to reach the main office of the defendant.   Mr Ma surmised in his first affirmation that Mr Yip might not have attempted to locate the office of the defendant and “might probably have left the writ outside the lift (if at all)”.

9.  In response to this, in his further affirmation on service, Mr Yip deposed in great detail to the steps he had taken to effect service, including going through all the glass doors and the “common corridor”, identifying the defendant’s office by reference to a name plate showing the defendant’s English and Chinese name displayed there, knocking repeatedly on the glass door trying to alert the staff inside, and having been ignored by the staff inside, inserting the writ under the glass door into the office area.  He took some photographs showing the writ lying on the floor. 

10.  Based on Mr Yip’s evidence, it does seem to be the case that all reasonable steps had been taken to effect service and it can safely be said that the writ was properly served.

11.  In his written submissions, having considered the above evidence, Mr Johnny Ma, counsel for the defendant, accepts that the Default Judgment is a regular judgment.

12.  Notwithstanding that Mr Yip’s photos do show clearly that the writ was placed within the defendant’s office premises, it remains unknown as to what has become of it, where it has gone and why it has not been brought to the notice of the defendant’s management, including Mr Ma.  This may have a bearing on the issue of costs but that would be dependent on how the summons is ultimately being disposed of today.

The parties

13.  The plaintiff is an IT company and, according to its own description, its business is to “provide document management and workflow solutions to customers in Hong Kong, Macau and the greater China Regions”.  It was founded in 2012.  Mr Clement Hong and Mr Kay Hong, who are brothers, are its directors and they together run the business of the plaintiff.

14.  Though the plaintiff was established only for a few years, it seems to be the case that the Hong brothers are experienced players in this field and they previously ran their business under a different company or companies.  As I understand from its evidence, the plaintiff devises and designs tailor-made IT systems for its customers to help them manage or streamline their business flows including systems to deal with documentation and to facilitate business processes etc. 

15.  According to the evidence of the plaintiff, the Hong brothers have throughout the years acquired a fairly impressive list of customers, including government departments, multinational corporations and well-known brands.

16.  Both Mr Clement Hong and Mr Kay Hong made affirmations opposing the defendant’s summons.  (In this decision, I shall refer to them as “the Hong brothers”, which would be a reference to either one of them or, as the case may be, both of them, as it is not material as to which of the two brothers actually did or said things in the events that happened.) 

17.  The defendant was established in July 2014 and it is in the food and beverage business selling, amongst other things, festive food for Chinese New Year including (1) “Poon Choi” and (2) traditional Chinese cakes such as New Year cakes.  “Poon Choi” is a transliteration of two Chinese words which refer to the traditional dishes served in a wash basin or big bowl.  Hence its Chinese name “盤菜”.

18.  As shown in the defendant’s marketing materials, including its Facebook posts, the food products sold by the defendant seem to be rather high-end products and the defendant collaborates with a team of celebrity chefs in marketing these products.   It does not seem to be in dispute that the defendant sold quite a number of these two food products for the Chinese New Year in 2015, via telephone sales, online sales and third party outlets, such as department stores.

19.  Mr Ma is one of the three directors of the defendant.  As mentioned above, he is the main person giving evidence on behalf of the defendant in this application.  Apart from him, the following individuals, who were at the material time staff of the defendant, also made affirmations in support of the defendant’s application.  They are (1) Ms Lorraine Ho, Brand Development Manager; (2) Ms Lo Suet Mei, Accounting Officer of a related company providing, amongst other things, accounting service to the defendant; and (3) Mr Terry Tang, Senior Business Development Manager of the defendant.

20.  Another important individual who features prominently in the evidence of both the plaintiff and the defendant is Mr Andy Wong, who joined the defendant as Channel Development Manager in September 2015.  Mr Andy Wong, however, has made no affirmation for either party.

21.  According to Mr Ma, he last had contact with Mr Andy Wong on about 21 July 2016, which was a few days before the defendant took out the present summons and Mr Ma made his first affirmation.  Since then, Mr Andy Wong has simply disappeared and is nowhere to be found.  I shall return to this later.

Factual background

22.  Set out below are facts which are common ground or not in any serious dispute. 

23.  The events which give rise to the present dispute took place from September 2015 to April 2016. 

24.  Prior to that, the Hong brothers and Mr Ma did know each other and their acquaintance goes back to about 2011.  They had been engaged in some business dealings together but it seems to be the case that the dealings had been brief and limited in scope. The Hong brothers also knew Mr Andy Wong prior to the latter joining the defendant in September 2015.

25.  The first major event in this dispute is a meeting held on 24 September 2015 (“the Meeting”) and attended by Mr Ma, Mr Andy Wong and the Hong brothers.  What was said in the Meeting is in dispute and, in my view, is likely to have a significant bearing on one of the defences raised, namely, the apparent authority of Mr Andy Wong.  I shall return to this in due course.

26.  The background to the Meeting is that the defendant was exploring the feasibility of an IT system known as “CRM” which stands for customer relationship management.  Mr Andy Wong was in fact hired for, amongst other things, finding ways of developing the defendant’s business through different sales channels, for example, direct marketing, online sales, direct sales and developing a CRM system which helps to manage client ordering and client information. 

27.  Briefly speaking, for the 2015 Chinese New Year sales, the defendant had managed the sales orders and consolidated and organised the processes “manually”, namely that the staff would input all the data and information relating to the sales, order by order, into spreadsheets using Microsoft Excel as the defendant did not have in place any computer software or programme to “automate” this process.

28.  The defendant had been looking for IT vendors who could come up with a suitable tailor-made CRM system for this process for the 2016 Chinese New Year sales.

29.  At the Meeting, the Hong brothers introduced a CRM system with a budget of $300,000.  Mr Ma commented that it was too costly and he would be interested in having a mere “ordering system” (as opposed to a full-blown CRM system) for the sale of the defendant’s “Poon Choi” and Chinese cakes for the upcoming Chinese New Year in 2016 (the first day fell on 8 February 2016). 

30.  As mentioned above, the plaintiff and the defendant have put forward different versions of what was exactly said at the Meeting.  As to what happened after the Meeting, the parties have also put forward starkly different versions. 

The plaintiff’s case

31.  The plaintiff’s case is broadly as follows. 

32.  At the Meeting, Mr Ma and Mr Andy Wong made clear that the defendant wanted to set up a CRM system.  (It was only after Mr Ma had learned of the cost that he subsequently wanted to explore an ordering system instead which would come with a lower price tag.) It is not the case that the defendant wanted to hear from the plaintiff an analysis of the benefit of having a CRM system so that it could then decide whether to install such a system. 

33.  Shortly after the Meeting, the Hong brothers sent an email to Mr Andy Wong attaching a proposal for an ordering system.  The proposal included a web-based ordering system for internal use by staff, together with an iPhone application and an Android application.  The latter applications are to enable customers to make orders on mobile phones.

34.  Then followed correspondence between the Hong brothers and Mr Andy Wong via email and an in-person meeting.  Information was provided by Mr Andy Wong to the Hong brothers regarding the products.  All these culminated in the Hong brothers sending a quotation dated 18 October 2015 in the sum of $240,500 for the provision of an “a2 system for Diningplus (Phase 1)” to Mr Andy Wong via email.

35.  On 24 November 2015, Mr Andy Wong sent an email to the Hong brothers attaching the quotation signed by the defendant.  One can see a signature and a company chop with the defendant’s name stamped in the place where the defendant as customer was supposed to sign.  In the covering email, Mr Andy Wong apologised for sending back the quotation so late as he was “quite busy”. 

36.  It is not entirely clear whether the plaintiff did any substantial work during the period from 18 October 2015 to 24 November 2015 and indeed in December 2015.  But the Hong brothers and Mr Andy Wong were engaged in a flurry of activities in January 2016.  Numerous emails were exchanged.  A whatsapp chat group was set up amongst the Hong brothers and Mr Andy Wong in early January 2016.  The system was being built up and tweaks were being made along the way.  Finally, the ordering system and the related apps were ready, with PayPal business account to be set up as one of the final steps.

37.  On 28 January 2016, the app was approved by Apple and on 29 January 2016, the app went “live” on both the Apple and Android platforms.  Ms Lorraine Ho in fact tried the Android app on that day but had some issues.  She emailed the Hong brothers about these issues and the Hong brothers had them fixed immediately.  Mr Clement Hong also ordered a “Poon Choi” using the app and he had enjoyed the “Poon Choi” with his family.

38.  For the project, the plaintiff issued four invoices to the defendant in a total sum of $240,000 in January, February and April 2016.  In late March 2016, Mr Andy Wong called the Hong brothers and said that due to some restructuring the defendant was not able to settle the invoices but it would need to “somehow get around to these payments”.  Since then, the Hong brothers have not heard further from Mr Andy Wong.  The invoices remaining outstanding, the plaintiff issued legal proceedings in April 2016 to claim the sum of $240,000 for the work that it had provided to the defendant. 

39.  The above is broadly the plaintiff’s case and I would pause here to make two observations. 

40.  First, the plaintiff has adduced evidence in the form of contemporaneous documents to support its case that the Hong brothers were in active and constant communication with Mr Andy Wong in relation to the ordering system.  The content of the contemporaneous documents, mainly in the form of email and whatsapp messages, is consistent with and supports the plaintiff’s case on the whole.

41.  Secondly, it is immediately apparent that after the Meeting, such communication was solely between the Hong brothers and Mr Andy Wong, and on one occasion also involving a staff of the defendant, ie, Ms Lorraine Ho.  None of these messages were sent or copied to Mr Ma.   On that note, I now turn to the defendant’s case.

The defendant’s case

42.  The defendant puts forward a wholly different story which is broadly as follows. 

43.  At the Meeting, Mr Ma requested the Hong brothers to provide the defendant with their concepts and proposals of a potential system, including an analysis of why customers would use such a system and how such systems would be beneficial and the plaintiff’s experiences with other customers and their “success stories”.  This is because the defendant was still at the stage of exploring the feasibility and efficiency of such system. 

44.  Mr Ma also asked the Hong brothers to provide him with a demo for his consideration and indicated that the ordering system should be up and running around one and a half months before the 2016 Chinese New Year, and he would decide whether any order would be placed with the plaintiff for an ordering system after having considered their proposals and the demo for such system.

45.  Mr Ma stated in his affirmation:-

“I said that during the process of gathering information for the purpose of preparing for the demo that I wanted, they could contact Andy Wong directly. But the actual demo would have to be seen by me, and my consent obtained before going ahead ... I told them that I was the one making the final decision as to whether any order would or would not be placed with the Plaintiff for such a system after having considered their proposals and demo for such a system.”

46.  After the Meeting, however, Mr Ma did not hear anything further from the Hong brothers.  Apart from the Meeting, there was no other direct communication between the Hong brothers and Mr Ma on the subject.  Mr Ma enquired a few times with Mr Andy Wong whether there was anything from the Hong brothers and Mr Andy Wong said there was none.  In the end, the defendant’s staff handled the sales order for the 2016 Chinese New Year in the same way as in 2015, ie, using Microsoft Excel to input and manage the sales orders information manually without any new ordering system.

47.  On this point, Mr Terry Tang gave evidence to the effect that in November 2015, he specifically asked Mr Andy Wong whether or not there would be a new ordering system for the 2016 Chinese New Year and the latter said there would be none.

48.  Mr Tang’s responsibility was in the handling and processing of the defendant’s sales order and supervising the sales and marketing team.  But he confirmed in the evidence that he had never seen, let alone used, any new ordering system or mobile app for the 2016 Chinese New Year sales.  He had never heard from Mr Andy Wong or anyone else about a new system being available for use.  Also, as he was the registered user of the PayPal service on behalf of the defendant, he had never received any notification from PayPal with regard to a new platform, such as a mobile app. 

49.  As to the Apple and Android apps allegedly developed by the plaintiff, the defendant says that as far as it is concerned, it does not exist. The defendant refers to its posts on Facebook, highlighting that apart from the existing sales channels, ie, phone, web and outlets, no reference was made at all to any mobile app.  If the defendant in fact had had available a new mobile app for customers to place orders, there would have been no reason why it did not advertise it on its Facebook posts. 

50.  Separately, the plaintiff has never provided to the defendant the information and demo as requested by Mr Ma at the Meeting. 

51.  Further, as regards the ordering of “Poon Choi” by Mr Clement Hong via the mobile app in February 2016, the defendant’s staff had found out some related documents.  But they seem to cast doubt on how exactly the transaction took place. 

52.  To sum up, at that time Mr Ma and the defendant’s management knew nothing about the quotation sent by the Hong brothers, the signature and the company chop on the quotation returned to the Hong brothers by Mr Andy Wong, the email and whatsapp communication between the Hong brothers and Mr Andy Wong and the invoices sent by the plaintiff.  The defendant was totally unaware of any ordering system or any related apps developed by the plaintiff.

53.  The first time Mr Ma came to know about these matters was when he received the opposing affirmations filed by the plaintiff in these proceedings, namely, in September 2016 (with the exception of the unsigned quotation of which the defendant became aware when it prepared for its summons).

54.  He explained the chronology as follows:-

(1) He became aware of the Default Judgment on 20 June 2016.

(2) He immediately engaged solicitors to act on the defendant’s behalf.

(3) On about 29 June 2016, Mr Andy Wong told Mr Ma that his mother passed away in a traffic accident and he had to take annual leave to attend to funeral matters.

(4) In Mr Andy Wong’s absence, Mr Ma tried to retrieve emails which might relate to the dispute.  The problem was that the defendant had moved office and the old computers were no longer accessible and Mr Andy Wong had been responsible for the backup of staff emails.  With the assistance of the IT staff, Mr Ma could only retrieve those very few emails which he exhibited to his first affirmation.

(5) On 18 July 2016, Mr Andy Wong returned to the office from his leave.  Mr Ma made enquiries with him on the dispute.  Mr Andy Wong confirmed that he had not signed any confirmation or quotation.

(6) Then on 21 July 2016, Mr Andy Wong told Mr Ma that his father had suffered from a stroke and he had to take annual leave again to go to Shenzhen to take care of his father.

(7) Mr Ma proceeded to sign his first affirmation on 25 July 2016 and the defendant filed the present summons on the following day.  At that time Mr Ma did not realise that there was anything wrong with Mr Andy Wong. 

Mr Ma was naturally taken very much by surprise when he received and read the plaintiff’s opposing affidavits.  As it transpired, Mr Andy Wong did not return to the office after 21 July 2016 and has simply disappeared.  On 4 November 2016, Mr Ma made a report to the police as he suspected Mr Andy Wong of misappropriation of the defendant’s funds (which is a separate matter unrelated to the present dispute).

55.  Based on the above factual case, the defendant now raises three lines of defence:-

(1) There was no binding contract between the plaintiff and the defendant because the person who signed the plaintiff’s quotation purportedly on the defendant’s behalf had no actual, apparent or ostensible authority to do so.

(2) Further or alternatively, there was no contractual obligation on the defendant’s part to pay anything as the condition precedent was not satisfied in that the plaintiff had failed to provide any or any workable demo for the ordering system for the defendant’s consideration as per the defendant’s request.

(3) Even if (contrary to the above) there was a binding contract, there was non-performance of the contract or at most part but defective performance thereof in that the plaintiff has failed to deliver any system to the defendant, or if it has, the plaintiff was guilty of serious delay in delivering such product as on the plaintiff’s own case, the mobile apps only went “live” on 29 January 2016 whereas the defendant’s initial requirement was to have the new system available about one and a half months before the Chinese New Year, ie, late December 2015 or early January 2016.

56.  In gist, in order for the defendant to succeed at trial, it will have to prove its factual case to the requisite standard of proof.  On the basis of the factual case, it would seem that the three defences are at least potentially viable defences as a matter of law. 

57.  I would also note that on the first line of defence as regards apparent authority, it is a mixed question of facts and law.

Legal principles

58.  The principles governing the setting aside of a regular judgment is well settled.  The major consideration is whether the defendant has a defence on the merits which has a real prospect of success.  The evidence adduced should be potentially credible and should carry some degree of conviction.  If so established, the court still retains the residual discretion to determine whether the judgment should be set aside.  Relevant factors may include the reason of default, the defendant’s conduct after becoming aware of the proceedings etc.  But the merits of the case would generally be the dominant factor in the court’s deliberation process.  See Hong Kong Civil Procedure 2017 at paragraphs 13/9/13 to 13/9/14.

59.  It has also been recognised that there will be cases where the outcome of an action is very much dependent on whose evidence is likely to be accepted and therefore the material factual disputes cannot be resolved properly without an assessment of the witnesses at trial.  In such cases, the appropriate test to determine whether the defendant has a real prospect of success is to ask whether the defence “could well be established”.  If so, the case ought to proceed to trial for the parties’ respective cases to be tested and tried.  See Hong Kong Civil Procedure 2017 at paragraph 13/9/14, citing leading cases including Guangdong International Trust & Investment Corp HK (Holdings) Ltd v Yuet Wah (Hong Kong) Wah Fat Ltd  [1997] HKLR 489 at 494I-495C.

Analysis

60.  Having considered the evidence before me, I am of the view that the Default Judgment ought to be set aside.  The present case is one of those cases where the factual disputes which are material and relevant to the issue of liability cannot properly be resolved on affidavits and ought to be tried when the court will have the opportunity to see the witnesses and assess their testimony before determining whose evidence is to be believed and making appropriate factual findings.

61.  In view of the above decision, I shall not go into the merits of the parties’ cases save as is necessary to dispose of the present application.  I will start my analysis with the observation that, overall speaking, the plaintiff’s factual case is prima facie plausible and largely coherent and consistent and seems generally to be well supported by contemporaneous documents.  The next question is whether the same can be said of the defendant’s factual case.

62.  At first blush, the defendant’s case is in stark contrast with the plaintiff’s case in a number of major respects and it would appear that the two versions cannot possibly be reconciled.  Of great, if not most, significance is the issue on whether the plaintiff had indeed come up with an ordering system for the defendant when the defendant had all along known nothing about the system which the plaintiff purportedly had spent time and efforts on developing.

63.  Yet, on a closer analysis, it is possible that both versions of facts are (broadly) true.  This is because according to the defendant’s case, if Mr Andy Wong had been dealing with the Hong brothers and doing all the things that the plaintiff now says he had, Mr Andy Wong had not told the defendant, in particular Mr Ma, about it. Worse still, when asked by Mr Ma and Mr Terry Tang on different occasions, Mr Andy Wong definitively confirmed that no new system would be forthcoming for the 2016 Chinese New Year.

64.  If what the plaintiff now says is true, Mr Andy Wong had been working behind the defendant’s back and consciously keeping the defendant in the dark.  In this regard, the defendant’s case is supported by the fact that no correspondence that took place in December 2015 and January 2016, as exhibited to the plaintiff’s evidence, was ever copied or sent to Mr Ma.  When looked at this way, the defendant’s case is, on its own, at least potentially plausible. 

65.  Obviously, one thing which stands out from the defendant’s case is the behaviour of Mr Andy Wong. It is quite inexplicable as to why Mr Andy Wong would behave in the way the parties now say he had.  One cannot readily come up with any possible motive for his behaviour as alleged by the defendant.  However, I agree with the submissions of Mr Ma, counsel, that it would be premature to rule out any ulterior motive on the part of Mr Andy Wong.

66.  Ultimately, in this action, the court needs to decide whether Mr Ma’s words and Mr Tang’s words, in each case with regard to their dealings with Mr Andy Wong at the relevant time, are to be believed, and it seems to me that this is not something that can be resolved and determined on the basis of affidavit evidence alone.

67.  It should be borne in mind that while Mr Ma appears to be the person in charge of the defendant and may arguably have a great incentive to tailor his evidence to advance the defendant’s case, the same cannot be safely said of Mr Tang, who was merely a member of the staff of the defendant and who was no longer employed by the defendant at the time of his affirmation.

68.  Mr Danny Chan, counsel for the plaintiff, mounted a number of challenges against the defendant’s case.  He pointed out that it was only after Mr Ma had read the plaintiff’s opposing affirmations to which contemporaneous documents exchanged between Mr Andy Wong and the Hong brothers are exhibited that he modified his version of events and placed all the blame on Mr Andy Wong who has now mysteriously disappeared. 

69.  Mr Chan also criticised that Mr Ma exhibited only those emails which are in the defendant’s favour to his first affirmation and after the plaintiff’s case emerged in its opposing affirmations, Mr Ma then explained that due to the defendant’s computer system being inaccessible, all the emails referred to by the plaintiff and not in the defendant’s favour were “conveniently” lost. 

70.  On these two points, it is necessary to look at the chronology of events regarding how Mr Ma had prepared the two sets of affirmations for the defendant and how that timing coincides with Mr Andy Wong’s two prolonged periods of annual leave and his eventual disappearance, as alleged.  The point underlying Mr Chan’s submission is that what Mr Ma says about the “change” in his story and Mr Andy Wong’s whereabouts is not true and hence the court should disbelieve him and his story as a whole. 

71.  Again, here, I need to ask myself whether it is possible at this interlocutory stage to find conclusively that Mr Ma is lying about Mr Andy Wong and the lost emails.  Is there too much coincidence in the defendant’s case so as to render it unbelievable or to lead to the conclusion that it could not be established at trial?  I am of the view that I cannot possibly come to any positive conclusion on these questions.

72.  Mr Ma went on affidavit to say that a lot of the emails were lost and Mr Andy Wong has gone missing. On the latter point, he even went to make a report to the police.  He may or may not be telling the truth but, notwithstanding the doubt raised by Mr Chan, I am not satisfied that any conclusion can be properly reached without these issues be tried and tested at trial.

73.  To sum up, there are a number of material factual disputes which, in my view, cannot be determined by the court without a proper assessment of the witnesses at trial.  Such determination is very much dependent on whose evidence is to be believed. These disputes include but are not limited to whether Mr Ma had knowledge of the dealings between Mr Andy Wong and the Hong brothers, what was said and what was requested of the plaintiff at the Meeting and whether the ordering system was developed at all etc. 

74.  As indicated above, I consider that given the nature of the dispute, it can be said that the defendant’s case “could well be established at trial” and hence the defendant has shown a real prospect of success.   I do not consider that there are other factors against the exercise of the discretion for the defendant.  Hence the Default Judgment ought to be set aside.

75.  Counsel have made fairly lengthy written submissions on the issue of apparent authority.  It would not be appropriate for me to go into any analysis on this issue as the defendant is to be allowed to proceed to trial.   However, as touched on in this afternoon’s hearing, clearly what was said by Mr Ma at the Meeting as to decision-making would be relevant to whether Mr Andy Wong had apparent authority to act for the defendant, in addition to the other factors referred to by both counsel, for example, the signing of the quotation with the company chop.  Again, a finding of exactly what was said in this regard can only be properly made after hearing evidence on this issue at trial.  It is only to those facts as found that legal principles on apparent authority are to be applied.  This shows yet another reason why the case should proceed to trial.

Condition to be imposed?

76.  Mr Chan argued that if the court is to set aside the Default Judgment, it ought to do so subject to the condition that the defendant do pay into the court the whole sum of the claim.  That is in view of the past evasive conduct of the defendant and to ensure proper future conduct of the action.

77.  While the authority is clear that the court does have a discretion to impose terms on setting aside a default judgment, there must be something specific in the defendant’s conduct or in the case which justifies a condition being imposed.

78.  Mr Chan has not managed to point to anything in the defendant’s conduct so as to justify such a condition.  I do not agree with his submissions that what Mr Ma said in his affirmations regarding the service of the writ amounts to evasive conduct.  I am not therefore inclined to impose any condition on the defendant. 

79.  I would also add that it has been said that a suitable order for costs would often be the only appropriate term to impose: see Dah Chong Hong (Engineering) Ltd v Boldwin Construction Co Ltd HCA 1291/2002, 11 October 2002, at paragraphs 29 to 31 per Ma J.  So if a term is to be imposed in the present case, it will be for costs rather than the claim.  But the present case is likely to be one of those unfortunate instances where costs leading up to trial would probably exceed the claimed amount, given the modest size of the plaintiff’s claim.

Conclusion

80.  For the above reasons, I order that the Default Judgment be set aside. 

81.  I shall now hear from counsel on costs and consequential case management directions.

(Discussion re costs and consequential case management directions)

82.  On costs, the usual practice is that where the defendant asks to set aside a default judgment, the plaintiff should have costs of the summons if the defendant can be said to be at fault in the conduct of the proceedings.

83.  As mentioned at the outset of the decision, I consider that the defendant was “at fault” in the present case and I order that the plaintiff do have costs of the summons, with certificate for counsel, to be summarily assessed.  On that, I direct that:

(1) The plaintiff do lodge and serve its statement of costs by noon on 28 November 2016;

(2) The defendant do lodge and serve its list of objections, if any, by noon on 29 November 2016;

(3) Summary assessment be conducted on the papers.

84.  I further make the following directions consequential upon my decision:

(1) The defendant do file and serve its defence within 28 days from today; and

(2) The plaintiff do file and serve its reply, if any, within 28 days thereafter.