XCHRX EASEPLUS LTD. v. CHARTER VIEW HOLDINGS (H.K.) LTD.

1997 No. A10851

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

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J U D G M E N T

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1. This is an appeal from the master's refusal to extend the Defendants' time for filing evidence in opposition to the Plaintiff's summons for leave to enter judgment in default. I have decided to allow the appeal, and I propose to give my reasons in brief so that the master can see why I have taken a different view of the matter.

2. The action is a mortgage action to which Ord. 88 applies. The writ was issued on 15th October 1997, and the Defendants filed acknowledgements of service indicating their intention to defend the action. However, they did not file their Defence within the time provided for by the Rules, and accordingly the Plaintiff filed a summons on 21st November seeking leave to enter judgment against the Defendants under Ord. 88 r. 6(2). The summons came before a master on 3rd December. It was adjourned on that date to a date to be fixed, and the Defendants were ordered to file their evidence in opposition to the summons within 14 days. They did not do so. Indeed, on 16th December (which was the day before the Defendants' time for filing the evidence expired) the Defendants filed a summons seeking an extension of time to do so. That summons came before the master on 18th December. He dismissed the summons, and it is this dismissal to which this appeal relates.

3. By 18th December, the date for the hearing of the Plaintiff's summons had been fixed for 3rd February 1998. I have been told that that was brought to the attention of the master. Accordingly, giving the Defendants the extension of time which they sought would not have had any impact on the date when the Plaintiff's summons would have been heard. By the same token, refusing the Defendants the extension of time which they sought would have resulted in the Defendants having to argue the Plaintiff's summons on the Plaintiff's evidence alone. It follows that no prejudice would have been caused to the Plaintiff if an extension of time had been granted, whereas serious prejudice has been caused to the Defendants by the extension of time having been refused.

4. I have been told that no explanation was given to the master for the Defendants' failure to file their evidence by 17th December. However, the master knew that the Defendants' solicitors had not come on to the record until 16th December, and it may be that the Defendants were not as alive to the importance of complying with time limits as they should have been. In effect the Defendants are now saying, in evidence filed since the hearing before the master, that without legal representation (which they could not then afford) they could not file the necessary evidence.

5. In his helpful skeleton argument, Mr. Lee Tung Ming for the Plaintiff relied on the principle that if an explanation for delay is not given, no indulgence can be afforded: see, for example, Revici v. Prentice Hall Inc. [1969] 1 WLR 157 and Savill v. Southend Health Authority [1995] 1 WLR 1254. However, in those cases, the extension of time sought related to the filing of a notice of appeal against a final order, i.e. cases in which the rights and wrongs of the dispute had been finally determined. As was recently pointed out by the Court of Appeal in Po Kwong Marble Factory Ltd. v. Wah Yee Decoration Co. Ltd. (CA 82/97), it is important not to overlook what the extension is sought for. There is an obvious difference between an application to extend the time for taking a procedural step in the action, and an application to extend the time for filing a notice of appeal against a final order.

6. Although time requirements laid down by the Rules and orders of the Court are not merely targets to be aimed at, but are directions to be observed, the overriding principle is that justice must be done. In Costellow v. Somerset County Council [1993] 1 WLR 256, Sir Thomas Bingham M.R. (as he then was) said at p.264G-H:

"Save in special cases or exceptional circumstances, it can rarely be appropriate, on an overall assessment of what justice requires, to deny the plaintiff an extension (where the denial will stifle his action) because of a procedural default which, even if unjustifiable, has caused the defendant no prejudice for which he cannot be compensated by an award of costs."

This applies equally to the denial to a defendant of an extension where the denial would stifle his ability to defend a summons issued by the plaintiff.

7. For my part, I see no reason why this principle should not be applied to the present case. For these reasons, this appeal must be allowed, the order of the master of 18th December must be set aside, and in substitution for his order I direct that the Defendants' time for filing evidence in opposition to the Plaintiff's summons filed on 21st November be extended to 4.00 p.m. on Tuesday, 20th January, i.e. 7 days from today. That will give the Plaintiff some time to consider the evidence before the hearing of the summons on 3rd February.