胡少芬 v. 葉玉枝 AND ANOTHER

HCA 1210/2015

[2019] HKCFI 2329

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1210 OF 2015

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J U D G M E N T

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Introduction

1.  Before this Court is a summons issued by the two defendants D1 and D2, or collectively referred to as Ds, to set aside two substituted service orders of the relevant legal documents in these proceedings and also the default judgments obtained by the plaintiff, P, against them.

2.  The two substituted service orders (collectively “Service Orders”) and the two orders for default judgment (collectively “Default Judgments”) are:

(1) Order dated 18 May 2016 made by Master Chow for substituted service of the Amended Writ of Summons (and the Amended Statement of Claim) upon D1 (“1^st Service Order”);

(2) Order dated 24 March 2017 made by Master Au-Yeung for substituted service of the Amended Writ of Summons (and the Amended Statement of Claim) upon D2 (“2^nd Service Order”);

(3) Order and Judgment of 25 April 2017 entered against D1 (“D1 Default Judgment”);

(4) Amended Order and Amended Judgment of 22 August 2017 entered against D2 (“D2 Default Judgment”).

3.  Ds further sought a consequential order for leave to defend P’s claim, upon the above orders being set aside.

4.  Essentially, Ds seek to set aside the Service Orders on the ground that the service was irregular.

5.  Ds’ applications are opposed by P on the grounds that :

(1) service of the relevant legal documents upon Ds was regular; and

(2) in any event, Ds did not have a defence on the merits

6.  Counsel Mr KM Chong and Ms Yvonne Yip appeared for P and Mr CY Li SC and Mr Avery Chan appeared for Ds at the hearing.

Brief Background

7.  P was born in 1933 and is now about 86 years old.  She was married to Yip Hoi Bor (“Yip”) who died in 1993.

8.  P and Yip had a biological son Yip Wai Ki (“Wai Ki”).  Wai Ki has two sons.

9.  P and Yip adopted a daughter, ie D1 (“Juspine”). Juspine has a son, ie D2 (“Jason”).  P is thus the adoptive mother of Juspine and the adoptive grandmother of Jason.

10.  After Yip passed away, P inherited a number of properties from Yip including the following:

(1) A flat in Repulse Bay Garden and its carpark space, at Nos 18-40 Belleview Road Hong Kong (collectively “Repulse Bay Property”);

(2) 4 flats on ground floor and 4 flats on 1^st floor, Nos 152-156 Aberdeen Main Road, Hong Kong (collectively “Aberdeen 152 Property”);

(3) No 153 Aberdeen Main Road and No 2 Wu Pak Street, Hong Kong (collectively “Aberdeen 153 Property”);

(4) A flat in Discovery Bay (“Discovery Bay Property”).

(the above collectively called “4 Subject Properties”)

11.  After Yip’s death, Ds were residing with P in the Repulse Bay Property. Over the years after Yip’s death, P has had a number of boyfriends, including Mr Tse Chun Ming (“Tse”) who had passed away, and Mr Chen Jianqiang (“Chen”).

12.  Chen is 32 years younger than P and has a family of his own.   Chen met P when he was her Chinese opera/music teacher in 2004. In 2007, Chen moved into the Repulse Bay Property to cohabit with P. 

13.  Thereafter, Juspine moved out of the Repulse Bay Property in July 2007 and later Jason moved out in early 2008.  According to Ds, P and Chen have maintained their relationship till present.

14.  It was not disputed that P decided to transfer by way of gift part of her interests in the 4 Subject Properties to her son Wai Ki.  On 25 April 2007, by 4 Deeds of Gift, P and Wai Ki became joint tenants of 100% share of the Repulse Bay Property, 100% of the Aberdeen 152 Property, 100% of the Discovery Bay Property, and 6/7 share of the Aberdeen 153 Property.

15.  On 19 March 2009, Wai Ki served a Notice of Severance on P, since when P and Wai Kei have been each holding 50% of their interests in the 4 Subject Properties as tenants-in-common.

16.  Two days after Wai Ki served a Notice of Severance on P, on 21 March 2009, by 4 Deeds of Gift, P’s interests in the 4 Subject Properties (“P’s Interests”) were transferred into the names of (i) P herself, (ii) Juspine, and (iii) Chen as joint tenants.  This transfer was subject to a Deed of Undertaking dated 21 March 2009 signed by Chen and Juspine and witnessed by a solicitor (“Deed of Undertaking”)[1].  Pursuant to the Deed of Undertaking, Chen and Juspine undertook to P essentially the following :

(1) P to continue to be entitled to the sole right to occupy, possess, use, enjoy or to let out without restriction (all such rights referred to in the Deed of Undertaking collectively referred to as “Possession Rights”) the Repulse Bay Property , whilst the 3 of them remain joint tenants of 50% of the Repulse Bay Property until the voluntary surrender by P of such of her Possession Rights, and Chen and Juspine further undertook not to request P to move out of the Repulse Bay Property during her use and enjoyment of the property;

(2) P to continue to be entitled to the sole Possession Rights in respect of the other 3 of the 4 Subject Properties, including P’s absolute right to collect the rental therefrom without having to share such rental with Chen or Juspine;

(3) Without P’s prior consent or permission, neither Chen nor Juspine to alter or cause to be altered the status quo of P’s interest and that they will continue to hold P’s Interests with P as joint tenants;

(4) If either Chen or Juspine is in breach of any the undertakings or guarantees in the Deed of Undertaking, he/she shall transfer all his/her interests in the 4 Subject Properties unconditionally and at no consideration to P, and as a security for their undertakings and guarantees, they jointly and severally appoint P as the lawful attorney for each of them and upon his/her breach, and P shall be authorised to sign a Deed of Gift on behalf of whoever of them is in breach, or such necessary documents for the transfer of his/her interest.

17.  P had during her relationship with Chen also provided funds for Chen to purchase a number of properties including:

(1) 50% of a flat in Kingston Building, 2-4 Kingston Street, Hong Kong (the other 50% was held by P’s other boyfriend Tse);

(2) A house in Palm Springs Phase 1A, Yeung Long, New Territories;

(3) A flat in Banyan Garden, 863, Lai Chi Kok Road.

(“Gifted Properties”)

18.  Chen turned out to be a gambling addict and since 2011, P had been harassed by Chen’s creditors at the Repulse Bay Property.  Chen had also borrowed money from P and Juspine for his gambling, including two loans made by Juspine to Chen in the sum of HK$1,450,000 and HK$1,750,000 respectively evidenced by two loans notes dated 6 February 2013 and 2 March 2013[2].

19.  According to Ds, the Gifted Properties were subsequently mortgaged/sold by Chen to repay his gambling debts and one of the Gifted Properties was registered a charge by Juspine against Chen’s 50% interest.  Eventually the Repulse Bay Property came to be charged by Chen for his gambling debts, followed by charges against the Discovery Bay Property and the Aberdeen 153 Property.

20.  What can be seen from the registration record at the Land Registry, Chen had severed the joint tenancy of the Aberdeen 153 Property by a Notice of Severance of 16 June 2014 (registered on 23 September 2014).  On 16 June 2014, he also entered into a legal charge with a finance company called Credit One Finance Limited in respect of his share of P’s Interests in the Aberdeen 153 Property.

21.  It was common ground that due to Chen’s gambling habit, in about January 2014, P decided to revoke Chen’s interests in the 4 Subject Properties[3] (“Chen’s Interests”).  

22.  It was further P’s pleaded case that she instructed Juspine to revoke on behalf of P Chen’s Interests and further to transfer Chen’s Interests to 4 persons, namely P’s three grandsons (ie the two sons of Wai Ki and Jason) and a nephew[4] (“Intended Transferees”)[5].

23.  What then happened was that there were 6 documents and a cheque signed by P.  The 6 documents were (1) a written instruction signed by P on 7 February 2014 for Chen’s Interests to be transferred to Jason (“Written Instruction”)[6], (2) a general power of attorney appointing Juspine as attorney under section 7 of the Power of Attorney Ordinance (“POA”)[7], and (3) 4 Assignments dated 29 September 2014 respectively of the 4 Subject Properties (“4 Assignments”), and (4) a cheque dated 27 October 2014 signed by P in the sum of HK$1,200,000 drawn in favour of a firm of solicitors called Wilson Yeung & Co (“Cheque”) said to be for payment of the stamp duty for the 4 Assignments as well as to be used as costs on account for two litigations, namely an action issued by P under HCA 2153/2014 on the same day of the Cheque against Chen seeking a declaration that Chen ceased to have any interest in the 4 Subject Properties (“Chen Action”), and another earlier action issued by P under HCA 1414/2014 against the executrix of Tse, her other boyfriend (“Tse Action”). 

24.  The effect of the 4 Assignments was that Chen’s Interests were transferred to the sole name of Jason instead of to the 4 Intended Transferees and the 4 Assignments were signed by P herself as lawful attorney of Chen as the “Assignor” to P herself as the “Confirmor” and to Jason as the “Assignee”[8]. The 4 Assignments were stamped by the Stamp Duty Office on 28 October 2014 certifying that an adjudication fee of HK$50 was paid pending adjudication.  The 4 Assignments were then sent to the Land Registry for registration, but registration was later withheld by P and according to Ds, this was due to P’s change of heart.  

25.  It was Ds’ evidence that P was persuaded by Chen to withhold registration of the 4 Assignments and to hold off the Chen Action which was later withdrawn by P on 30 November 2014.  The 4 Assignments were all prepared by Wilson Yeung & Co on the instructions of Juspine.  Mr Wilson Yeung (“Mr Yeung”) was the sole practitioner of the firm Wilson Yeung & Co and was at the material times Juspine’s boyfriend. 

26.  However, according to P, it was only in about January 2015 that she found out from a weekly magazine that Juspine and/or Jason had acted contrary to her instructions, and had transferred Chen’s Interests to Jason solely instead of to the 4 Intended Transferees[9]. 

27.  On 24 February 2015, P instructed solicitors Messrs Henry Wan & Yeung to send a letter to Juspine to revoke the POA[10] (“24.02.15 Letter”).

28.  On 6 March 2015, P issued a writ under HCA 479/2015 as plaintiff against Jason as defendant for a declaration that the 4 Assignments were void and of no effect (“479 Action”).  This was then followed by Ds issuing a writ in person on 28 March 2015 as plaintiffs under HCA 682/2015 against P as defendant for, amongst other things, an injunction to restrain P from making untrue allegations against Ds. (“682 Action”). 

29.  P had made a complaint to the police in about March 2015 alleging that Juspine had defrauded her into signing blank pieces of paper and one of those was used to give effect to the POA[11] (“Police Report”).

30.  In the meantime, on 8 January 2015 Mr Yeung had ceased to practise as a solicitor and closed his firm due to his diabetes and depression. Subsequently, Mr Yeung succumbed to depression and committed suicide on 6 May 2015.

31.  It was P’s pleaded case that on 1 June 2015 she made a declaration declaring that the POA was revoked or void[12].

32.  On the same day, 1 June 2015, P issued the writ in the present action against Ds (“Writ”) and filed her statement of claim on 28 July 2015 (“SOC”).  The Writ was later amended on 19 April 2016 (“Amended Writ”) and P’s amended statement of claim was filed on 30 May 2016 (“ASOC”).  P claims essentially the following:

(1) A declaration against Ds that the 4 Assignments were void and of no effect;

(2) A declaration against Ds that the POA was void;

(3) A declaration against Ds that the Written Instruction was void;

(4) Damages against Jusspine for breach of trust including return of HK$1.2m.

33.  P’s pleaded case in the ASOC is that:

(1) she had never seen or signed the Written Instruction;

(2) she had never signed the POA, and that she had only signed on a piece of blank paper and she suspected that the POA was a forged document;

(3) she had no knowledge of the contents and the legal effect of the 4 Assignments[13], and she had never intended to transfer Chen’s Interests to Jason solely and that her intention was to transfer Chen’s Interests to all of the 4 Intended Transferees (which include Jason);

(4) she thought the Cheque was only in the sum of HK$12,000.

34.  It is further P’s pleaded case that upon Chen promising P not to indulge in gambling any more, her present intention is to maintain Chen’s Interests as before namely P, Chen and Juspine holding P’s Interests in the 4 Subject Properties as joint tenants subject to the Deed of Undertaking, and that she will never revoke or claim back Chen’s Interests[14].  In short, P’s present intention is to revert to the status quo prior to the 4 Assignments. 

35.  Ds deny all the allegations made by P in the ASOC against them, and it is Ds’ case that all the 6 documents and the Cheque were signed by P voluntarily.

36.  As mentioned earlier, P then obtained the Service Orders and the Default Judgments.

37.  It is Ds’ evidence that they only recently came to notice of the present action in August 2018 and once they did so they immediately took out their present summons to set aside the Service Orders and the Default Judgments. 

The service of the relevant documents in the present proceedings

38.  At the time of the commencement of the present action, P was legally represented by Messrs Iu, Lai & Li (“ILL”) and subsequently P’s present solicitors Messrs LCP (“LCP”) came on record to act for P on 22 July 2016.  Prior to instructing ILL, as mentioned earlier, in February 2015, P had instructed a solicitors’ firm Messrs Henry Wan & Yeung (“W&Y”).

39.  Service of the Writ and other legal documents leading up to the 1^st Service Order was carried out by two process servers at ILL, whom I shall refer to as “Shiet” and “Wong” respectively. 

40.  Shiet had filed a total of 4 affirmations of service and Wong a total of 2 affirmations of service.

41.  On the Writ, which was issued on 1 June 2015, the address of Ds was stated to be Room 2204, 22Floor, Lippo Centre, 89, Queensway, Hong Kong (“Lippo Address”).

42.  As deposed by Shiet in his 1^st affirmation, the Writ was served by registered post on 5 June 2015 on Ds respectively at the Lippo Address[15]. Shiet had also deposed to:

(1) at the time of his 1^st affirmation, the Writs sent by registered post had not been returned;

(2) in P’s opinion, the sealed copy of the Writ sent to Ds would have come to the knowledge of Ds within 7 days after the date of posting thereof.

43.  No acknowledgment of service was entered by Ds.

44.  The SOC was then filed on 28 July 2015 with an endorsement that service was effected on Ds by ordinary post at the Lippo Address by Wong[16]. Wong had in his 1^st affirmation deposed to the posting and that the Lippo Address was the last known or usual address of Ds.

45.  There was no defence filed by Ds.

46.  The Notice of Intention to enter judgment (“Notice”) was issued by P on 19 October 2015 and served on Ds by ordinary post on the same day at the Lippo Address[17]. Shiet had deposed to the posting in his 2^nd affirmation stating that the Lippo Address was the last known or usual address of Ds.

47.  On 23 October 2015, P issued a summons for judgment in default of defence under Order 19 rule 7 of Rules of the High Court (RHC) (“1^st Default Summons”), which was originally fixed for hearing before Chung J on 13 November 2015.

48.  Two days before the hearing, ie on 11 November 2015, ILL wrote to the Court to seek leave to withdraw the 1^st Default Summons explaining amongst other things that: -

(1) The Lippo Address was stated to be Ds’ address on the writ issued by Ds as plaintiffs in the 682 Action;

(2) On 12 May 2015, a solicitors’ firm Messrs Laracy & Co (“Laracy”) had filed a notice to act as Ds’ solicitors in the 682 Action;

(3) On 1 June 2015, ILL had sent a letter to Laracy (“01.06.15 Letter”) to enquire whether they had instructions to act for Ds in the present action and whether they had instructions to accept service of the Writ but there was no response from Laracy;

(4) On 5 June 2015, ILL sent a clerk to attend the Lippo Address to ascertain whether it was possible to effect personal service of the Writ on Ds at the Lippo Address and found that the Lippo Address was the registered office/business address of a firm of solicitors Messrs Cheng & Co;

(5) On 26 October 2015, the envelope to D2 containing the Notice sent to the Lippo Address was returned to ILL, bearing the words of “no such person”;

(6) On 5 November 2015, on advice of counsel, ILL wrote to Messrs Cheng & Co and, among other things, sought clarification as to whether the Lippo Address was the address or contact address of Ds;

(7) On 9 November 2015, Messrs Cheng & Co had replied indicating, amongst other things, that none of the persons by the names of Ds had occupied the Lippo Address and that Messrs Cheng & Co had duly returned any letters addressed to Ds at the Lippo Address to the sender (“Cheng Letter”).

(8) On 11 November 2015, the envelope to D1 containing the Notice sent to the Lippo Address was returned to ILL, bearing the words of “no such person”;

(9) As a result of the Cheng Letter, 1^st Default Summons had not yet been served on Ds.

49.  Leave was given by Chung J for P to withdraw her 1^st Default Summons based on what was stated in the above letter sent by ILL (“ILL Letter”).

50.  Thereafter, there was an unsuccessful attempt of personal service of the Writ on Ds by Wong on 24 March 2016.  In his 2^nd affirmation of service, Wong deposed to the following:

(1) He attended a restaurant in Aberdeen called Hsin Kuang Restaurant on 24 March 2016 at about 12:20 pm when P was present to assist him to identify Ds and with P’s identification, Wong had approached Ds and explained to them the nature of his business and when he tried to serve Ds personally, they refused to accept service and in particular the person identified by P to be Jason denied that he was Jason, and Ds then walked away promptly (“24.03.16 Incident”). The attempt for effecting personal service of the legal documents was unsuccessful.

(2) The envelopes with the SOC posted to Ds on 28 July 2015 by registered post were returned by the Post Office to ILL with “no such person” thereon, respectively on 6 and 13 April 2016;

(3) In light of the 24.03.16 Incident, Ds should have knowledge of the present proceedings and that they wilfully and deliberately evaded service.

51.  As said earlier, the Amended Writ was subsequently amended on 19 April 2016.

52.  Shiet then applied for s substituted service order of the Amended Writ and the draft ASOC (not yet filed) by his 3^rd affirmation filed on 21 April 2016 based on the following matters:

(1) There was no response from Laracy to the 01.06.15 Letter sent by ILL;

(2) Shiet referred to his visit to the Lippo Address on 5 June 2015 when he found that to be the registered office address of the frim of solicitors Messrs Cheng & Co;

(3) Shiet then sent by registered post the Writ to Ds at the Lippo Address and according to Shiet, the envelopes had not been returned by the Post Office, and later the SOC and the Notice were sent by ordinary post to Ds at the Lippo Address.  The Notices and SOCs sent to Ds at the Lippo Address were later returned by the Post Office respectively in October/November 2015 and April 2016 with “no such person” written thereon.

(4) Shiet produced copies of the letter ILL wrote to Messrs Cheng & Co on 5 November 2015 (as mentioned earlier) and the Cheng Letter indicating that the Lippo Address was their office address and neither of Ds was an employee of their firm nor were Ds occupying the Lippo Address.

(5) Shiet had referred to the 24.03.16 Incident as described by Wong in his 2^nd affirmation of service.

(6) Shiet alleged there was evasion of service on the part of Ds and sought leave for substituted service to be effected by advertisement in the Sing Tao Newspapers.

53.  There were certain requisitions raised by Master Chow on the application for the substituted service orders.  This resulted in a 4^th affirmation filed by Shiet on 10 May 2016, and amongst other things, Shiet stated that Ds are ordinarily resident in Hong Kong and that the Sing Tao Newspapers is a Chinese newspaper with wide circulation in Hong Kong and the proposed newspaper advertisement would likely be read by friends/relatives of Ds who would in turn notify Ds.

54.  Subsequently, on 18 May 2016, Master Chow granted the 1^st Service Order.  On 30 May 2016, the advertisements were duly published in the Sing Tao Newspapers.

55.  On 22 July 2016, as mentioned earlier, LCP came on record to act for P in this action.  The handling solicitor at LCP is Mr Chow Sik Lun (“Chow”).

56.  On 5 September 2016, P issued her 2^nd summons for default judgment against Ds, which was amended on 15 September 2016 (“2^nd Default Summons”). 

57.  The 2^nd Default Summons together P’s supporting affirmation and the Amended Writ were again served by ordinary post to Ds at the Lippo Address.  The envelopes containing the Amended Writs were later returned.

58.  On 8 December 2016, Master Chow raised a written requisition asking P to show cause why the 1^st Service Order should not be set aside since there was no disclosure by P that Jason’s address was stated by P to be the Repulse Bay Address on the writ in the 479 Action.

59.  As a result of the above non-disclosure on the part of P, on 19 January 2017. Master Chow decided to vary the 1^st Service Order for it to be in relation to Juspine only. 

60.  Thereafter, Chow had filed no less than 5 affirmations on behalf of P. 

61.  On 24 January 2017, Chow filed his 1^st affirmation in support of P’s application for the renewal and/or extension of the Writ in order to effect service of the Writ on Jason again.  The application was granted by Master Chow on 2 February 2017. 

62.  Chow then filed his 2^nd affirmation on 24 March 2017 to apply for substituted service of the Amended Writ on Jason[18].  He deposed to:

(1) posting through registered mail of the Amended Writ to Jason at the Repulse Bay Address (the address of Jason given by P on the writ in the 479 Action) and the Lippo Address but the envelope sent to the Lippo Address was returned through the post undelivered to LCP, with “no such person” written thereon.

(2) it was impracticable for P to effect personal service upon Jason.

(3) P had no knowledge of Jason’s residence.

(4) P was believed to be within the jurisdiction of Hong Kong that the option of service of P was by way of substituted service.

63.  The 2^nd Service Order was then granted by Master Au-Yeung   for the Amended Writ and the ASOC to be effected by advertisement in the Sing Tao Newspapers which was duly published on 8 April 2017.

64.  Notwithstanding the granting of the 1^st Service Order and the 2^nd Service Order, as seen in Chow’s 3^rd affirmation, on 3 April 2017, Chow sent the amended 2^nd Default Summons, the notice of hearing and covering letter by ordinary mail and registered mail to Juspine at the Lippo Address again and to Jason at both the Lippo Address and the Repulse Bay Address.  The envelopes sent to the Lippo Address were again duly returned in April 2017.

65.  On 25 April 2017, P obtained the D1 Default Judgment against Juspine.

66.  On 24 May 2017, P issued a further summons seeking default judgment against Jason, which was amended on 25 July 2017 (“3^rd Default Summons”).

67.  The 3^rd Default Summons was again served by registered post on Jason at the Lippo Address and the Repulse Bay Address on 31 May 2017 and the envelope sent to the Lippo Address was later returned in June 2017.

68.  Eventually on 22 August 2017, P obtained the D2 Default Judgment against Jason.

Ds’ ground for setting aside

69.  Ds’ ground for setting aside the Service Orders is that there was gross material non-disclosure by P in obtaining them, as there was clear evidence that P had actual or constructive knowledge of Ds’ current address but P failed to either effect service of the relevant legal documents on Ds at their current address or notify the Court of the same.

70.  It was Ds’ evidence in their supporting affirmations and they had been residing at a flat at Gold Jade Mansion, Lackhart Road, Wanchai (“Gold Jade Address”) since March 2012 long before their relationship with P turned sour, and that although P had not visited the Gold Jade Address, P clearly had knowledge of this address and how to contact Ds, which was evidenced by :

(1) the 24.02.15 Letter was sent by P’s then solicitors W&Y to D1 at her Gold Jade Address;

(2) P’s domestic helper, Judy, had regularly visited the Gold Jade Address bringing to Ds food and soup under P’s instructions;

(3) P had in her possession Ds’ respective mobile phone numbers but did not attempt to call them to inform them of the present action.

71.  According to Juspine, the Lippo Address was taken over by Messrs Cheng & Co and that as Mr Yeung could no longer represent Ds, Ds thus issued the 682 Action against P in person and only instructed Laracy on 12 May 2015 in the 682 Action after Mr Yeung committed suicide on 6 May 2015.

72.  It was Juspine’s evidence that P knew full well that the Lippo Address was the office address of Messrs Wilson Yeung & Co and also her relationship with Mr Yeung, and that P had knowledge of Mr Yeung’s cessation of practice and death as Juspine had told P on multiple occasions and further Mr Yeung’s death was reported in the newspaper[19] (“08.05.15 Newspaper Report”).

73.  Anyway, according to Ds, since instructing Laracy, the 682 Action had not moved forward at all.

74.  Juspine had also stated in her reply affirmation in the present application that after Messrs Wilson Yeung & Co ceased business, Mr Yeung had continued to occupy the office at the Lippo Address and that was why Ds used the Lippo Address as their address for service until 12 May 2015 when they instructed Laracy due to Mr Yeung’s death. 

75.  As for the 479 Action, that action was discontinued by P on 1 June 2015.  In the 479 Action, Jason had initially instructed Messrs Phyllis KY Kwong & Associates (“PKA”) to file the acknowledgment of service on his behalf, but later on 14 May 2015, Jason changed solicitors to Laracy.

76.  It was Juspine’s evidence that after instructing Laracy in the two actions, ie the 682 Action and the 479 Action, Juspine and/or Jason had not contacted or been contacted by Laracy at all.  Juspine stated in her affirmations that for avoidance of doubt, she had never heard from Laracy that the present case was issued against her or that enquiries had been made by P from Laracy as to whether they were representing her in the present case.

77.  On 24 August 2018, Ds instructed their present solicitors to replace Laracy to act for her in the 682 Action.

78.  As said earlier, it was Juspine’s evidence that P knew that the Lippo Address was the office address of Mr Yeung, as amongst other things, the Lippo Address was stated in the 4 Assignments which all along have been in the possession of P.

79.  As for the 24.03.16 Incident, Juspine said she recalled that she did have lunch with P at the Hsin Kuang Restaurant together with Jason and Chen on that day, as that was the last time she saw P in person.  According to Juspine, initially there was nothing out of ordinary as P and she would have lunch regularly in spite of the ongoing litigations between them.  During the lunch, P brought up the 4 Subject Properties and the 4 Assignments in an attempt to persuade Juspine and Jason to give up on the 4 Assignments, and that a heated argument soon ensued between them and P and that as everyone in the restaurant was staring at them, Juspine and Jason then quickly left the restaurant.  Juspine said on reflection, she was told by Jason a person was staring at them while walking past them in the hallway but she and Jason were never stopped by the said person or any other person when they left and that P never told them about the present action during the lunch meeting, nor did that person speak to them.

80.  Juspine said that since she had already brought the 682 Action, and also the 479 Action was brought by P against Jason which also concerned the 4 Assignments and Jason’s then solicitors PKA had filed the acknowledgment of service just 4 days after the writ was issued in the 479 Action, there was no reason why either of them would evade service of the Writ herein.

81.  Further, according to Juspine, she and Jason only found out about the present action when on about 10 August 2018, she was asked by Jason about the current status of the litigations between them and P as Jason was urged by his colleagues to conclude all litigations so that it would not affect his admission as a solicitor in two years’ time.  Juspine then told Jason she had not received any update in relation to the litigations between them except that on 28 March 2017, she had received an update on another action DCCJ 5311/2016 regarding the auction of one of the family properties.  Juspine said the update was provided by Mr Samuel Cheng, the principal of Messrs Cheng and Co and an old friend of Mr Yeung, in the form of digital photos through “Whatsapp” message on 28 March 2017.  The digital photos showed a letter sent by Messrs Lo, Wong & Tsui to Messrs Cheng and Co at the Lippo Address on 28 March 2017 (“LWT Letter”) and Juspine had produced a copy of the LWT Letter and its enclosures.

82.  Under the LWT Letter, Messrs Lo, Wong and Tsui was making enquiry as to whether Messrs Cheng and Co were acting for Juspine in the DCCJ 5311/2016 since the address of Juspine on the Writ in the present action was stated to be that of the Lippo Address.  The LWT Letter also enclosed the 1^st page of the writ in DCCJ 5311/2016 and the 1^st page of the Writ in the present action[20].

83.  P, Juspine and Jason were named as defendants in DCCJ 5311/2016.  The plaintiffs are two persons surnamed “Cheng” and who appeared to be the same persons who were assignees of 1/6 shares of the Aberdeen 153 Property under an assignment dated 10 June 2016 for a consideration of 7.5m. 

84.  Juspine said she did not pay much attention to the LWT Letter and its enclosures when it was first sent to her on 28 March 2017 and therefore she did not notice the Writ, which was in respect of a new action against her issued by P.  It was only when forwarding the photos of the LWT Letter and the enclosures to Jason in mid August 2018 that Juspine realised there had been a fresh action issued by P against her and Jason. Jason then carried out a case search at the High Court Registry and eventually found that the Default Judgment had already been entered against them.  Juspine and Jason immediately sought legal advice from their present solicitors on 14 August 2018 and formally instructed them on 24 August 2018 to issue their present summons.

85.  In Jason’s supporting affirmation, he confirmed Juspine’s evidence and explained in detail as to how he came to know about the present action by pure accident.

86.  On the other hand, P’s evidence was that :

(1) Ds had moved 4 times in 4 years and P did not know of the Gold Jade Address or that Jason was living there and that in the 4 Assignments, Jason’s address was given to be the Repulse Bay Address which was his most recent residential address;

(2) P said she did not know how W&Y knew and obtained the Gold Jade Address in February 2015 nor had she been informed of the Gold Jade Address, and that she did not understand English, and in any event the 24.02.15 Letter only concerned Juspine and not Jason;

(3) P’s domestic helper Judy had filed an affirmation denying  that she had regularly visited the Gold Jade Mansion on P’s instructions and that she could only recall that she was brought by Juspine to an address in Wanchai or Causeway Bay many years ago once or twice for cleaning purposes, but she was unable to remember the exact year[21].

(4) P did not have Ds’ respective telephone numbers;

(5) P did not serve Jason with the Amended Writ at the address of PKA in the 479 Action, because the said firm had ceased to practise on 1 October 2016.

Discussion

87.  Service of the writ by registered post to a defendant at his usual or last known address or if there is a letter box for that address, by insertion through a letter box, are alternative modes of service to personal service under Order 10 rule 1(2) of RHC.

88.  As set out in paragraph 65/5/5 of Volume 1 of the Hong Kong Civil Procedure, 2019 Ed (HKCP), and referring to The Hong Kong Mortgage Corporation Limited and Ching Kit Yu, HCMP 2226/2002, unrep, 13 April 2003, “Address” is not confined exclusively to a person’s residence; “Last known address” may be interpreted to mean the address last known to the plaintiff from whatever source and a defendant may have a number of addresses last known to the plaintiff, and “Usual address” means an address where a person may usually be reached, but it is not necessarily the one where a person may in most probability to be reached.

89.  Order 10 rule 1(3) provides that:

“Where a writ is served in accordance with paragraph (2)—

(a) the date of service shall, unless the contrary is shown, be deemed to be the seventh day (ignoring Order 3, rule 2(5)) after the date on which the copy was sent to, or as the case may be, inserted through the letter box for, the address in question;

(b) any affidavit proving due service of the writ must contain a statement to the effect that—

(i) in the opinion of the deponent (or, if the deponent is the plaintiff’s solicitor or an employee of that solicitor, in the opinion of the plaintiff) the copy of the writ, if sent to, or as the case may be, inserted through the letter box for, the address in question, will have come to the knowledge of the defendant within 7 days thereafter; and

(ii) in the case of service by post, the copy of the writ has not been returned to the plaintiff through the post undelivered to the addressee.”

90.  Further as stated in paragraph 10/1/23 of the HKCP, and referring to Law Kwok Hung v Tse Ping Man [1999] 4HKC 397, the opinion of the plaintiff in Order 10 rule 1(3)(b)(i) must be a reasonably held one and based on reasonable grounds.

91.  The question is whether the Lippo Address was the usual address of Ds or Ds’ address last known to P at the time of the service of the Writ, namely on 5 June 2015, and whether P’s opinion that the sealed copy of the Writ sent to Ds by registered post at the Lippo Address within 7 days after the date of posting would have come to the knowledge of Ds was a reasonable one.

92.  Although it is stated in the ASOC that P is elderly and cannot read Chinese or English, as seen earlier, she has throughout been represented by various firms of solicitors who would have acted in accordance with P’s instructions.

93.  The present action concerns the validity of the 4 Assignments, and according to Ds, the 4 Assignments or copies thereof have always been in the possession of P and this was not denied by P.  In my view, P should clearly be aware that the 4 Assignments were prepared by Messrs Wilson Yeung & Co.  The office address of Messrs Wilson Yeung & Co was typed on the back sheets of all the 4 Assignments.

94.  P had herself referred to the 4 Assignments being prepared by Messrs Wilson Yeung & Co of the Lippo Address in P’s opposing affirmation filed herein on 18 January 2019[22] (“Opposing Affirmation”). 

95.  Having considered the evidence, I am of the view that P and her solicitors must be aware that the Lippo Address was the former office address of Messrs Wilson Yeung & Co. 

96.  In his 1^st affirmation concerning the service of the Writ, Shiet did not disclose that the Lippo Address was the former office address of the firm Messrs Wilson Yeung & Co.

97.  Shiet also did not disclose in his 1^st affirmation that although Ds had issued the writ in the 682 Action in person giving the Lippo Address as their address, Laracy had come on record to act for Ds in the 682 Action on 12 May 2015 and he did not disclose ILL’s 01.06.15 Letter[23].

98.  More importantly, in his 1^st affirmation, Shiet did not disclose that on 5 June 2015, prior to sending the Writ to Ds by registered post, he had physically attended the Lippo Address and found that it was by then the address solely used and occupied by the firm of solicitors Messrs Cheng & Co and that Shiet had tried to locate Ds through the receptionist but was told by the receptionist at Messrs Cheng & Co that she did not know any persons by name of Ds. 

99.  According to the Cheng Letter[24], at the material times when the Writ and the SOC were allegedly served on Ds at the Lippo Address, a member of the staff at Messrs Cheng & Co had immediately notified ILL that neither of Ds occupied the Lippo Address, and their staff was told over the telephone by ILL to throw those court documents away, but Messrs Cheng & Co had asked ILL to collect them and ILL subsequently did so.  There was no disclosure nor any explanation or clarification of what was said by Messrs Cheng & Co in the 1^st affirmation of Shiet or the 1^st affirmation of Wong.

100.  It was also not disclosed by P that in the writ in the 479 Action issued on 6 March 2015, P and/or her solicitors had stated Jason’s address to be the Repulse Bay Address and that Jason had instructed PKA to file an acknowledgment of service on his behalf on 10 March 2015.  In fact, this non-disclosure on P’s part was the reason why Master Chow later varied the 1^st Service Order to be only in relation to Juspine.

101.  However, P must know that Jason was not residing at the Repulse Bay Address at the time of the 479 Action and it was not clear why she would state this address in the writ in the 479 Action as being the address of Jason.  There was no disclosure by P as to how Jason was served in the 479 Action.  In any event, P and/or her solicitors clearly had means in serving Jason or bringing to his attention the issue of the writ in the 479 Action, since it was not disputed that Jason had instructed PKA to file an acknowledgment of service only 4 days after the issue of P’s writ in the 479 Action. 

102.  Having considered the present evidence before this Court, I am of the view that P ought to be aware, whether by herself or through her solicitors, that the Lippo Address was only an office or business address occupied at all material times by solicitors and that at the time of the service of the Writ on 5 June 2015, Ds were no longer using the Lippo Address as their address for service, by reason of in particular the following matters:

(1) As said earlier, the Lippo Address was typed on the back sheets of the 4 Assignments and P and her solicitors ought to be aware at the time of the issue of the Writ at the time of the issue of the Writ that the Lippo Address was formerly the office address of Messrs Wilson Yeung & Co;

(2) On 6 March 2015, when P issued the 479 Action against Jason, P herself had given the Repulse Bay Address as Jason’s service address, and although Jason was not residing at the Repulse Bay Address, yet P was able to serve Jason or bring to Jason’s attention the writ in the 479 Action;

(3) In light of the 08.05.15 Newspaper Report, P and her solicitors ought to be aware that Mr Yeung had passed away and that latest by 8 May 2015 the Lippo Address could no longer be that of Mr Yeung’s office;

(4) On 12 May 2015, Laracy came on record to represent Ds in the 682 Action;

(5) On 5 June 2015, prior to sending the Writ to Ds at the Lippo Address, P and her solicitors had already found out that the Lippo Address was occupied by another firm of solicitors, namely Messrs Cheng & Co;

(6) There was no evidence as to why P would be of the opinion that the Writ would have come to the knowledge of Ds within 7 days of posting to the Lippo Address, other than this was the address of Ds on the writ in the 682 Action. 

(7) Further, as set out earlier, W&Y had sent the 24.02.15 Letter to Juspine at the Gold Jade Address.  P alleged in her Opposing Affirmation that she had not seen this letter until Juspine produced it in her supporting affirmation herein and as mentioned earlier she claimed she did not know how W&Y knew or obtained the Gold Jade Address.  Whether P had seen the 24.02.15 Letter and whether P understands any English or is able to read the contents of the letter or not, W&Y could only have acted on P’s instructions and they could not have obtained the Gold Jade Address other than on instructions from P and/or from documents provided by P.

103.  As stated in paragraph 10/1/12 of HKCP, where the plaintiff is aware that the defendant is no longer at the address at the time of service, Order 10 rule 1(3)(b)(i) cannot be satisfied.  In my view, for the above reasons, at the time of service of the Writ on 5 June 2015, P ought to be aware that Ds were no longer using the Lippo Address as their address of service by 5 June 2015.  Thus, P’s opinion that the Writ would have come to the knowledge of Ds within 7 days of being posted to the Lippo Address was not based on reasonable grounds. 

104.  In the above circumstances, Order 10 rule 1(3)(b) (i) would not be satisfied insofar as the service of the Writ on 5 June 2015 was concerned.  In any event, according to the Cheng Letter, the Writ was collected back by ILL and the copies of SOC posted to Ds at the Lippo Address were eventually returned by the Post Office to ILL respectively on 6 April 2016 and 13 April 2016 with the words “Addressee Unknown” and “no such person” thereon[25].

105.  In fact, it was quite clear that P and ILL must have also realised and/or accepted that the service of the Writ had not been properly effected by the posting to the Lippo Address, as otherwise there would not have been another attempt by ILL to effect personal service during the 24.03.16 Incident.  As it turned out, this attempt of effecting personal service on Ds of the Writ, the SOC and the Notice on 24 March 2016 was also unsuccessful.  However, the 24.03.16 Incident indicated that as Juspine had said, notwithstanding the various litigations, Ds were still seeing P until the 24.03.16 Incident, and that prior to that incident, P had means of contacting Ds. 

106.  The manner of effecting personal service was set out in detail in paragraph 65/2/3 of HKCP.  It was not clear why the attempt at personal service was not successful since even if Ds had refused to take the Writ or had Jason indeed denied he was Jason, it would be sufficient for Wong to inform Ds of the nature of the Writ or that the envelope or package contained court documents and then threw down in their presence or left the documents as near in Ds’ presence or control as he could once they had been identified to Wong by P.   

107.  In any event, it would seem clear that on P’s own case, there had not been proper or effective service of the Writ or the SOC on Ds.

108.  I now turn to the two Service Orders. These concerned the substituted service of the Amended Writ and the ASOC.

109.  Mr Chong had referred this Court to the following passage of A To J in Melco Crown Gaming (Macau) Ltd v Wong Yam Tak [2014] 3 HKLRD 267:

“The rationale behind this principle arose out of the distinction between ordinary service and substituted service. Substituted service is invoked where service in accordance with the ordinary rules of service is ineffective and impracticable. Usually, this situation is brought about by the defendant providing an incorrect address inadvertently or deliberately with a view to avoid service or is caused by some conduct of the defendant which prevented effective service and for which the defendant is responsible, even if not to blame. Substituted service is to provide a practical solution to such situation to enable the proceedings to progress and to do justice between the parties in circumstances where the ordinary rules of service would prevent justice from being done. A party seeking to serve any process by substituted service has to apply to the court for leave. The court decides its propriety and the adequacy of the mode of service. Leave is only granted if the court is satisfied that it can do no more than its best, within the realm of reasonable practicability, to bring the proceedings to the notice of the defendant by the mode of service prescribed in the order. This special mode of service in compliance with an order of the court, as distinct from ordinary mode of service pursuant to rules of the court, has the sanction of the court and is therefore treated as actual, effective and valid service as a matter of practical reality. This rationale could be seen running throughout the decisions in Watt v Barnett, Honour Finance, and Chan Yeuk Mui. This principle has never been doubted, except in Sopex International SA. To adopt the same test for the two modes of service would render substituted service an unnecessary and a meaningless waste of the court’s time and the plaintiff’s costs. Putting this in another way, if service in accordance with an order for substituted service is not to be treated as valid and actual service, the whole regime of substituted service would be rendered redundant and wasteful of the litigant’s time and costs. In my view, this principle which has stood unchallenged for over a hundred and thirty years is now cast in stone[26].”

110.  As stated in the above passage of A To J, substituted service is invoked where service in accordance with the ordinary rules of service is ineffective and impracticable.

111.  Whether the court is satisfied that service in accordance with ordinary rules of service is ineffective and impracticable will depend on the evidence placed before the court by the applicant.

112.  As submitted by Mr Li on behalf of Ds, the Service Orders were applied ex parte, and that P was placed under an onerous duty to provide full and frank disclosure in applying for the Service Orders. 

113.  The 1^st Service Order was obtained by P based on the 3^rd and 4^th affirmations of Shiet and the 2^nd affirmation of Wong.

114.  As summarised by Shiet in his 3^rd affirmation[27], he applied for a substituted service order based on:

(1) information in the Cheng Letter

(2) Ds’ evasion of service as stated in Wong’s 2^nd affirmation of service

(3) The fact that P did not have any other address of Ds for effecting service

115.  As for (1), apart from disclosing a copy of the Cheng Letter, there was no specific disclosure by Shiet in his 3^rd and 4^th affirmations that ILL was told by Messrs Cheng & Co to collect back the Writ and the SOC sent to the Lippo Address, which ILL did, as stated in the Cheng Letter.

116.  As for (3), as earlier said, the 24.02.15 Letter was sent by W&Y to Juspine at her Gold Jade Address and P did have another address for service, ie the Gold Jade Address.  The Gold Jade Address was not disclosed by Shiet in his 3rd or 4^th affirmations.

117.  It was also not disclosed by Shiet in his 3^rd or 4^th affirmation or in Wong’s 2^nd affirmation that in the 429 Action, Jason was served with the writ and 4 days after service Jason had filed an acknowledgment of service through PKA.  Further, PKA did not cease practice until 1 October 2016.  ILL never wrote to PKA when attempting service of the Writ to enquire whether PKA had instructions to accept service of the Writ on behalf of Jason in the present action.

118.  As for (2) in relation to evasion of service, the 3 main matters relied on by Shiet were:

(i) The Lippo Address was provided by Ds themselves as their address in the writ in the 682 Action issued on 28 March 2015;

(ii) Laracy was informed of the issue of the present action and did not reply to ILL’s 01.06.15 Letter as to whether they had instructions to accept service on behalf of Ds;

(iii) The 24.03.16 Incident

119.  ILL’s 01.06.15 Letter was received by Laracy at 4 pm on that day as seen from the receipt chop.  The letter bore no file reference of Laracy of either the 682 Action or the 479 Action.  In that letter, ILL had referred to the 479 Action stating that Laracy must be aware that P had discontinued the 479 Action against Jason that day and ILL informed Laracy that P had commenced another litigation against Juspine and Jason.  ILL had asked whether Laracy had instructions to accept service of the present action and provided a deadline of 2 pm on 3 June 2015 for Laracy to reply.  There was no reply.  However, there was also no follow up by P’s solicitors on the matter. Ds’ evidence was that Laracy did not get in touch with them.  In any event, Laracy’s failure to reply would not necessarily mean that there was evasion of service on part of Ds.

120.  There was no sufficient evidence that in the present case, Ds had provided an incorrect address inadvertently or deliberately with a view to avoid service.  Nor was there sufficient evidence that it was Ds’ conduct during the 24.03.16 Incident that had prevented effective personal service.

121.  Ds’ evidence and explanations as to the Lippo Address being used by them in the 678 Action and what had happened during the 24.03.16 Incident were not inherently improbable.  In any event, I do not find there was sufficient evidence that the unsuccessful attempts on Ds by post to the Lippo Address or by personal service of the Writ and the SOC were due to Ds’ evasion of service. 

122.  Further, having considered the evidence, I find that there were the following non disclosure on the part of P when applying for the 1^st Service Order:

(1) P ought to be aware of the Golden Jade Address and there was no disclosure by P of the Golden Jade Address or the 24.02.05 Letter in any of those affirmations filed in support of her application for the 1^st Service Order.

(2) There was no disclosure that Messrs Cheng & Co had informed ILL to collect the Writ and SOC sent to the Lippo Address, which were subsequently collected.

(3) There was no disclosure that PKA had acted for Jason in the 479 Action, which was also an action over the same 4 Subject Properties and validity of the 4 Assignments, and that there was no evidence that Jason had evaded service in that action, and Jason had filed an acknowledgment of service through PKA 4 days after the writ was issued.

123.  In my view, the above non disclosure in particular of the Golden Jade Address was material as had there been proper disclosure, Master Chow might not have made the 1^st Service Order.

124.  Having considered the above, I am of the view that the service pursuant to the 1^st Service Order against Juspine was irregular.

125.  As for the 2^nd Service Order, there was no mention by Chow of the 24.03.16 Incident nor was it Chow’s allegation that there had been any evasion of service on the part of Jason.  What Chow had deposed to was only that it was impracticable for P to effect personal service upon D2, without giving any reasons[28]. The reason given by Chow for leave to serve by way of advertisement in newspaper was only that P was unable to find out Jason’s residential address nor was it possible for P to name any person service on whom in substitution would probably be effective[29].  There was no disclosure of Gold Jade Address being the address of Juspine, the mother of Jason.

126.  I am of the view there had been non-disclosure on the part of P, and in addition to P’s non-disclosure as earlier set out, P further failed to disclose in relation to Jason that :-

(1) it was P herself who provided the Repulse Bay Address as Jason’s address on the writ in the 479 Action and not Jason[30].

(2) The Repulse Bay Address was where P has been residing with Chen and Jason had moved out therefrom in about early 2008, and no information as to how Jason was served with the writ in the 479 Action.

127.  I am of the view that the non-disclosure by P in obtaining the 2^nd Service Order was material in that had there been full disclosure, Master Au-Yeung might not have made the 2^nd Service Order.  The service pursuant to the 2^nd Service Order was, in my view, irregular.

128.  As mentioned earlier, as soon as Jason was served or had notice of the 429 Action, he had instructed PKA to file an acknowledgement of service.  As the present action is over the same subject matter as the 429 Action, it seemed improbable or there was no reason as to why Jason or Ds would not have acknowledged service had Ds been aware of the present action earlier. 

Conclusion on Service 

129.  Having considered all the above, I have come to the conclusion that the 1^st Service Order and the 2^nd Service Order should be set aside due to material non-disclosure on the part of P and that the Default Judgments were irregular judgments and should be set aside.

130.  I will consider below the merits of Ds’ defence in the event that the Defence Judgments were held to be regular judgments. 

Merits of Ds’ defence

131.  As set out in paragraphs 13/9/13-13/9/14 of the HKCP and as summarised by Mr Li in paragraph 86 of his Skeleton Submissions, the exercise of the Court’s unfettered discretion to set aside a regularly entered interlocutory judgment is highlighted by the following guiding principles :-

(1) The major consideration for the court is whether the defendant has shown a defence on the merits. This was because if the defendant can show merits, the court will not prima facie desire to let a judgment pass on which there has been no proper adjudication.

(2) Other relevant factors include: why the default occurred; the defendant’s conduct after he had notice of the proceedings; an explanation for the time taken where there has been delay in making the application; and whether there would be any prejudice caused to the plaintiff or third party if the default judgment were to be set aside.

(3) The consideration of merits would transcend any reasons given by the defendant for the delay in making the application.

(4) The defendant must show that he has a real prospect of success. To do so, he must satisfy the court that his case and the evidence that he adduces in support of it is potentially credible and carries some degree of conviction.

(5) Exceptional circumstances have to be shown before a court will refuse to set aside a default judgment where a real prospect of success in the defence has been demonstrated.

132.  The burden is on Ds to show a meritorious defence with a real prospect of success.

133.  P’s ASOC is in Chinese and attached to the ASOC are copies of the Written Instruction, the POA, and the 4 Assignments.  In Mr Chong’s Skeleton Submissions in relation the merits of Ds’ defence, he essentially submitted in relation to the following 3 areas of Ds’ defence[31]:-

(1) Jason’s defence in respect of the 4 Assignments;

(2) Juspine’s defence to revocation of the POA;

(3) Juspine’s defence to the Cheque and the sum of HK$1.2m.

Written Instruction

134.  In so far as the Written Instruction is concerned, this did not fall within the above 3 areas.  P’s pleaded case was that she had never seen or signed such a document and that the signature thereon was not her signature. P had referred to the Police Report and claimed that P never had the intention to transfer Chen’s interests to Jason alone, and that the Written Instruction was of no legal effect and invalid.

135.  P’s pleaded case of forgery and/or fraud is a very serious one but there was only a simple denial on her part that she had ever seen the Written Instruction or that she had signed it.

136.  Notwithstanding her having made the Police Report, it was not clear whether that there was any follow up by the police apart from obtaining statements from Ds.

137.  Ds had produced a transcript of a recorded conversation between P and Ds on 22 October 2014 allegedly regarding the transfer of Chen’s Interests to Jason (“Transcript”)[32] as evidence that P had instructed Juspine to arrange for the transfer to Jason immediately without notifying Chen.  Juspine had explained that Jason had recorded their conversation on his phone due to P’s fickleness and to avoid any future dispute[33].  It can be seen in the Transcript there was no mention by P about transferring Chen’s Interests to the Intended Transferees.  The recorded conversation was in fact after the signing of the 4 Assignments but before adjudication by the Stamp Duty Office. There was no reference or mention about the 4 Assignments in the Transcript. 

138.  However, P had never responded to the contents of the Transcript in her Opposing Affirmation.

The 4 Assignments

139.  Mr Chong had pointed out that Ds’ case was that the 4 Subject Properties were sold to Jason as evidenced by the 4 Assignments themselves. 

140.  The 4 Assignments were for the respective transfers of the 4 Subject Properties to Jason at agreed purchase prices of HK$2m, HK$2m, HK$2m and HK$1m.

141.  However, as set out by Juspine, the main purpose of P executing the 4 Assignments was to revoke Chen’s Interests in the 4 Subject Properties and transfer them to Jason and that against that background, it had all along been P’s intention when executing the 4 Assignments that P was to be paid later when Jason had the means to do so and that it was for the same reason that P had signed the Cheque of HK$1.2m which included the stamp duty for the 4 Assignments. 

142.  P’s case is that she had signed the 4 Assignments without knowing the contents and legal effect and mistakenly thought the documents were about another High Court Action, namely the Tse Action.

143.  One can see from the 4 Assignments that the 4 Assignments had been interpreted to P by one Ms Sweetie Chan of Messrs Wilson Yeung & Co and further it is not P’s pleaded case that she had signed the 4 Assignments because of any vitiating factors such as duress or misrepresentation.

144.  It is further not P’s pleaded case that the 4 Assignments should be set aside on the basis of there being no consideration or non payment of consideration.  I agree that the issue of payment or receipt clauses as raised by P in her Opposing Affirmation is irrelevant to P’s pleaded case, which is that she had intended to assign the 4 Subject Properties to the Intended Transferees rather than to Jason alone. 

The POA

145.  It was P’s case that she did not sign the POA or that P had only signed on a blank piece of paper which might be the POA.  However, according to Ds, a Mr Wong Man Chung was at the scene when the POA was executed.  Mr Wong had known P and Juspine for over 30 years, and Ds had produced a statement dated 14 August 2018 in which he stated he recalled that P did sign on a document described as a power of attorney[34].

146.  P had not made any response to Mr Wong Man Chung’s statement. 

147.  Further, that P had never signed the POA had never been mentioned in the 24.02.15 Letter sent by W&Y to Juspine in relation to the revocation of the POA.

148.  P had also alleged “conflict of interest” in her Opposing Affirmation as Juspine was then the girlfriend of Mr Yeung.  However, as pointed out by Mr Li, this case was not consistent with P’s pleaded case that she had never signed the POA.

The Cheque

149.  P’s pleaded case was that she had mis-read the figure on the Cheque and thought it was HK$12,000 for the payment of an allegedly unspecified debt owed by P to Juspine.  However, the payee of the Cheque was not in fact Juspine but Wilson Yeung & Co. 

150.  Anyway, P’s accounts clerk since 1994, Ms Chan Mee Ngan, has filed an affirmation to support Ds’ case that the Cheque was prepared upon P’s instructions when P was asking Juspine to transfer Chen’s Interests in the 4 Subject Properties to Jason[35].

Delay in Ds’ application

151.  Mr Chong had submitted that the Default Judgments were entered against Juspine and Jason respectively on 25 April 2017 and 22 August 2017, and Ds only issued their present summons to set aside the Service Orders and the Default Judgments on 5 October 2018, namely there had been a delay of some 14 to 18 months.  Mr Chong further submitted that latest by 28 March 2017 when the LWT Letter was sent to Juspine, she and Jason should have notice of this action.

152.  As mentioned earlier, Juspine had explained that as the LWT Letter was not directed to her, she did not pay much attention to the 1^st page of the Writ enclosed in that letter.  According to Juspine, Mr Samuel Cheng had forwarded the LWT Letter to her.  However, there was no mention by Juspine as to whether ILL’s Letter of 5 September 2015 or the Cheng Letter had been forwarded to her.  Juspine was silent on this. 

153.  As I have said earlier, since Jason had responded very quickly in the 469 Action which was over the same subject dispute over the 4 Assignments and the 4 Subject Properties, it would seem improbable that Ds would not have responded earlier had they had notice of the Writ or the present action.  There was no sufficient evidence that Ds would have gained any advantage by delaying, and in fact it was Jason’s evidence that he would like to finish all the litigations as he did not wish any allegations raised against him in any litigations to affect his admission as a solicitor. Having considered all the evidence, on a balance of probabilities, I am prepared to accept Ds’ reasons for delay and that they did not have notice of the present action until mid August 2018.  

Conclusion on Merits

154.  On P’s side, there was no sufficient evidence that there would be prejudice to P if the default judgments were set aside, save that it is obvious that she is not getting any younger and any delay may have an effect on her memory.  However, having considered Ds’ evidence, I am satisfied that they have demonstrated that they have more than a real prospect of success in their defence.  I am of the view that the Default Judgments should be set aside and Ds should be given unconditional leave to defend. 

Conclusion

155.  In light of all the above said, my order is as follows :-

(1) the Service Orders be set aside as a result of material non-disclosure on the part of P, and in any event,

(2) the Default Judgments be set aside,

(3) Leave for Ds to defend this action.

156.  Ds have sought costs on indemnity basis.  Although I find there was material non-disclosure in obtaining the Service Orders, I do not find there was sufficient evidence of any ulterior motive on part of P or other circumstances which merit costs on indemnity basis.  I order P to pay Ds costs of their application to be taxed and if not agreed on party and party basis.  This is an order nisi which will be final after 21 days.