WONG KAM WING v. CHENG PUI LUN AND ANOTHER

CACV 21/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 21 OF 2003

(ON APPEAL FROM DCCJ 3878/2002)

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J U D G M E N T

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Hon Rogers VP:

1. This is an appeal from an order of her Honour Judge H C Wong which was made on 16 December 2002.

2. The application before the judge on that occasion was an application to set aside a judgment which had been entered in default against the defendants. The explanation for the judgment having been entered was that the defendants, being unaware of the procedures of court, had expected to be called to court to answer the Statement of Claim with which they had been served. When they discovered that a judgment had been entered against them, they then contacted their solicitors and put in train what was eventually the application before the judge to set aside the judgment.

3. The action arises out of a co-operation between the plaintiff and the defendants which commenced in 1997 and came to an end in March of 1998. That co-operation was in respect of investment in various properties. There were altogether seven properties. The basis of the plaintiff's claim is that there is money owing from the defendants as a result of that joint venture into which they had entered.

4. There were accounts which were signed. They were all handwritten and were purported to be signed by the plaintiff's wife and the 1st defendant. One of those documents is disputed and it remains to be seen whether that dispute stands up or whether the document was, in fact, in the form it was said to have been signed by the 1st defendant.

5. The claim which was made by the plaintiff was twofold. First of all, there was a guarantee which had been given to the bank by the plaintiff on behalf of the 1st defendant and the total sum involved there was $203,157.51. Then there was the balance of what was said to be the account on four properties of $214,688.75.

6. For the most part, the defendants did not dispute the amounts, but the important part of what they said was that there were various payments which they had made, primarily in respect of one of the properties, which had not been taken into account. That is set out in paragraph 10 of the 1st defendant's second affirmation which was filed on 2 December 2002. The 1st defendant was specific as to the amounts which he said he had paid and there is some confirmation that those amounts may be accurate because they correspond very closely to amounts which the 1st defendant also paid, and it seems that it was agreed they were paid in respect of a similar and corresponding flat which had been purchased at the same time. That being so, the amount arising out of that which the

1st defendant says was not taken into account was some $400,000. In respect of the other flat, however, the 1st defendant concedes that there is a sum of some $82,000 which is payable.

7. The order which the judge made was that the judgment which had been entered in respect of the guarantee sum should remain, but that the judgment in the sum of $214,688.75 should be set aside on condition that that amount is paid into court.

8. It seems to me quite clear in this case that what is in dispute in these proceedings is the amounts involved and this is a clear case where an account needs to be taken. The defendants have conceded that some money was owing to the plaintiff and, indeed, the sum of $99,808.76, plus an amount of $3,539.14 relating to the interest thereon was, in fact, paid to the plaintiff. In my view, the proper order which should have been made on the application was that the judgment should have been set aside and the court should have ordered an account to be taken between the parties.

9. The question then arises as to whether there should be an order for payment in of the balance between what the 1st defendant had paid the plaintiff and what the plaintiff was claiming, or whether this was not an appropriate case for a payment in.

10. The judge, by setting aside at least part of the judgment, acknowledged that the defendants had some claim. In my view, the defendants have made out a claim which has not been disputed on affidavit. It was said that the second affirmation of the 1st defendant was filed late before the hearing but, in fact, there were two clear weeks for any refutation of the important allegations in that second affirmation to have been filed. The fact that it would have entailed a further round of evidence should not have deterred the plaintiff from disputing the payment of the various sums which were alleged in paragraph 10 of the 1st defendant's second affirmation.

11. In those circumstances, it seems to me that one has on one side the allegation by the 1st defendant made on affidavit that he has paid the sums and that they should be taken into account and there is nothing on the other side. In those circumstances, it seems to me that there are no grounds at the moment for ordering a payment into court of any sums. The right order, in my view, is therefore to set aside the judgment below and order that there be an account to be taken between the parties, and there is no justification, in my view, for an order for payment in in these circumstances.

Hon Le Pichon JA:

12. I agree.