LOK WAI YUK v. CHEUNG CHE HUNG

DCCJ 4275/2007

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 4275 OF 2007

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BETWEEN

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DECISION

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1.  This is an appeal against the decision of the Master who dismissed the plaintiff’s application for default judgment against the defendant pursuant to Order 19 rule 7 of the Rules of District Court (“RDC”).

THE PLAINTIFF’S CLAIM

2.  The plaintiff issued a specially endorsed Writ on 25^th September 2007, under which the plaintiff sued the defendant for breach of a contract (“the Contract”) which was said to have been entered into between the deceased and the defendant’s lawful attorney on 22^nd June 1973.

3.  Pursuant to the Contract, the defendant agreed to sell and the deceased agreed to purchase a property known as Car Parking Space No.11 on the Lower Ground Floor of Kenne Mansion, Kennedy Terrace, 20 Kennedy Road, Hong Kong erected on Section J of Inland Lot No.1381 (“the Property”) at the purchase price of HK$45,000.

4.  The purchase price of HK$45,000 was pleaded to have been fully paid upon the signing of the Contract.

5.  It was agreed that the transaction would be subject to a condition, namely, that the defendant would obtain judgment in O.J. Action No.1311 of 1972 (“the 1972 Action”).  In the event that he failed to do so, the Contract would be automatically cancelled.

6.  Immediately after the entering into the Contract between the defendant and the deceased, vacant possession of the Property was given to the deceased.  He and his family members had since then been enjoying the Property without interruption by the defendant or by any other person.  The plaintiff and the deceased had never been informed by the defendant or anyone else that the Contract had to be cancelled.

7.  After the death of the deceased, the plaintiff found that the Property was still registered under the name of the defendant.  It was also discovered from the search record of the Property at the Land Registry that there was no registration of any lis pendens or judgment or order in any legal proceedings against the Property.

8.  As a result, by this action, the plaintiff sought, among other things, specific performance of the Contract and damages. 

THE SERVICE OF THE WRIT AND EVENTS THEREAFTER

9.  On 27^th September 2007, a clerk of the plaintiff’s solicitors served the Writ on the defendant by inserting the same through the letter box of the last known address of the defendant in Jordon, Kowloon.  This address was used by the defendant in a Declaration which he made on 3^rd December 1987.  This was the latest document registered in the Land Registry which contained the address of the defendant.

10.  Despite such service, the plaintiff heard nothing from the defendant.

11.  The plaintiff then proceeded to apply for default judgment under Order 19 rule 7 of the RDC by summons filed on 7^th November 2007.  In support of the said application, the plaintiff also filed an affirmation of service deposed by the said clerk who affirmed that in the opinion of the plaintiff, the said Writ would have come to the defendant’s knowledge within 7 days after the service on 27^th September 2007.

12.  In the course of the application, the plaintiff had made further enquiries of the whereabouts of the defendant.  Nearly one year after the service of the Writ, the plaintiff’s solicitors sent their clerk to attend the said last known address of the defendant again on 17^th September 2008.  On this occasion, a female answered the door of the said address and she said she did not know the defendant nor whether the defendant had ever resided at the said last known address.

13.  On the same day, the plaintiff’s solicitors sent a letter to the defendant to the said address and requested him to attend the District Court Registry and fix a hearing date.  However, the said letter was returned on around 6^th October 2008 and the envelope of which was marked “Return to poster, Cheung Che Hung has passed away”.

14.  In the light of the note written on the said envelope, the plaintiff’s solicitors had made enquiries with the Immigration Department as to whether the defendant had passed away.  However, the Immigration Department replied that there was no record of the death of the defendant.

15.  For some reasons, the plaintiff decided not to proceed with her summons filed on 7^th November 2007.  With leave of this Court, the said summons was withdrawn on 28^th October 2009.

THE PRESENT APPLICATION

16.  By summons filed on 31^st May 2010, the plaintiff applied for default judgment again pursuant to Order 19 rule 7 of the RDC on the ground that the defendant had failed to file Notice of Intention to Defend and Defence.

17.  Order 19 rule 7 (1) of the RDC provides:

“Where the Plaintiff makes against a defendant or defendants a claim of a description not mentioned in rules 2 to 5, then, if the defendant or all the defendants (where there is more than one) fails or fail to serve a defence on the plaintiff, the plaintiff may, after the expiration of the period fixed by or under these Rules for service of the defence, apply to the Court for judgment, and on the hearing of the application the Court shall give such judgment as the plaintiff appears entitled to on his statement of claim.”

18.  Under the said summons, the plaintiff sought an order for specific performance of the Contract, a declaration that the Property was vested in the plaintiff as administratrix of the estate of the deceased, an order that the Registrar or some other fit person be appointed to convey or assign the Property to the plaintiff, damages and costs of the action.

19.  The plaintiff’s application was dismissed by Master on 23^rd July 2010. 

20.  By a Notice of Appeal filed on 27^th July 2010, the plaintiff appealed against the Master’s decision and this matter was therefore heard before me today.  It is trite that I should deal with this matter by way of an actual rehearing of the plaintiff’s application for default judgment.

21.  To succeed, the plaintiff has to satisfy this Court that:

(a) The Writ had been duly served on the defendant;

(b) The defendant had failed to file Notice of Intention to Defend and Defence; and

(c) She is entitled to the relief claimed under the Statement of Claim.

22.  There is no doubt that the defendant had never filed any Notice of Intention to Defend nor Defence.  Therefore, the only matters which I have to deal with are (a) and (c) above which I will now do in turn.

Service of the Writ

23.  Under Order 10 rule 1(1) of the RDC, the Writ had to be served personally on the defendant.

24.  By virtue of Order 10 rule 1(2)(b) of the RDC, the Writ for service on the defendant within the jurisdiction might, instead of being served personally on him, be served by inserting through the letter box of the defendant’s usual or last known address a copy of the Writ enclosed in a sealed envelope addressed to the defendant.

25.  As aforesaid, the Writ of this action had been served by the clerk of the plaintiff’s solicitors on 27^th September 2007.  Affirmation of service was filed in which the plaintiff’s opinion of the service was deposed. 

26.  I am aware that upon further enquiries made by the plaintiff’s solicitors at the defendant’s last known address in Jordon in September 2008, it was suggested by a female who answered the door that the defendant no longer lived at that address. However, it was not known why that female was there nor who she was in the first place, and even if she was living at the address, it was not known how long she had lived there.  I therefore hold the view that this does not amount to evidence which may rebut the “deemed service” in 2007 under Order 10 rule 3(a) of the RDC.

27.  I have also considered the note marked on the envelope which was posted to the defendant to his last known address in Jordon in September 2008.  The said envelope together with the letter contained therein were returned to the plaintiff’s solicitors on about 6^th October 2008.  Despite the remarks that the defendant had passed away, according to a Death Search Result issued by the Births and Deaths Registry of the Immigration Department, there was no record found which showed that the defendant had passed away in the period between 1^st January 1970 and 9^th May 2010.

28.  There being no evidence that the Writ did not reach the defendant, the Writ should be deemed to have been served on the defendant on the seventh day after 27^th September 2007.

29.  I am therefore satisfied that the Writ of this action had been duly served on the defendant.

The plaintiff’s entitlement under the Statement of Claim

30.  In an application under Order 19 rule 7 of the RDC, the Court’s task is to see whether the applicant appears to be entitled to judgment on his Statement of Claim.  The Statement of Claim must show a case for the orders the applicant seeks to obtain.  However, it is not necessary for the applicant to prove his case by evidence. In fact, it has been held that the Court cannot receive any evidence but should decide on the case according to the pleadings alone (see China Construction Realty Limited v Sino Business Services Proprietary Limited and Others (HCA 1294 of 2005, unreported, 24^th March 2006) and Hong Kong Civil Procedure 2010, volume 1, paragraphs 19/7/11 and 19/7/14).

31.  I am satisfied that on the facts pleaded in the Statement of Claim, the plaintiff has made out a case against the defendant. 

32.  The plaintiff seeks, among other things, a declaration in the Statement of Claim. In paragraph 19/7/20 of Volume 1 of the Hong Kong Civil Procedure 2010, it was stated that:

“It is not the normal practice of the court to make a declaration without a trial, particularly where the declaration is that the defendant in default of defence has acted fraudulently (Wallersteiner v Moir (No.1) [1974] 1 WLR 991). However, this is only a rule of practice and should only be followed when the plaintiff can obtain the fullest justice to which it is entitled without the declaration he seeks (Lam Shing Shou v Lam Hon Man & Others [2002] 1 HKLRD D3; Lai Wai Kuen v Wong Shau Kwong, unreported, HCA No.3424 of 2003, November 12, 2004). This rule of practice does permit limited exceptions (Kin Ming Holdings International Ltd. v Lam Moon Yuen, unreported, HCA 2350 of 2005, [2006] H.K.E.C. 269 and John Robert Lees & Another v Dragon Investment Co. II LLC, unreported, HCA No.1180 of 2003, [2006] H.K.E.C. 214).”

33.  In my view, the plaintiff cannot obtain fullest justice to which she is entitled without the declaration which she seeks. 

34.  As it is apparent that the defendant cannot be found after reasonable enquiry, I am also satisfied that this is a case where I should direct a person to execute the necessary legal documents for the transfer of title of the Property from the defendant to the plaintiff.

35.  I will therefore order that the Registrar of the District Court be appointed to execute an assignment to take effect as if the same were executed by the defendant. The form and terms of the assignment should be submitted by the plaintiff to the Registrar for his approval and execution.  If there is any disagreement as to the form or terms of the assignment, the plaintiff should return to this Court.  Therefore I also order that there be liberty to apply.

36.  The plaintiff also seeks damages in her Statement of Claim.   However, I have been informed by Mr. Parker who appeared for the plaintiff that in the event an order for specific performance is granted, the plaintiff would abandon her claim for damages.

Service of the Notice to Appeal

37.  I should specifically mention that this appeal was heard in the absence of the defendant. According to the affirmation of service filed by the plaintiff, the Notice of Appeal was served at the defendant’s last known address in Jordon on 30^th July 2010.  However, given the incidents in September and October 2008 which I referred to paragraphs 26 and 27 above, I doubt whether such a Notice should be regarded as having been successfully served on the defendant.

38.  Having said that, Order 65 rule 9 of the RDC provides that:

“Where by virtue of these rules any document is required to be served on any person but is not required to be served personally or in accordance with Order 10, rule 1(2) and at the time when service is to be effected that person is in default as to acknowledgment of service or has no address for service, the document need not be served on that person unless the Court otherwise directs or any of these rules otherwise provides.”

39.  Pursuant to Order 19 rule 7(3) of the RDC, it was stipulated that an application under Order 19 rule 7(1) of the RDC must be by summons.

40.  Further, pursuant to Order 58 rule 1(3) of the RDC, the notice of appeal “must be issued within 14 days after the judgment, order or determination appealed against was given or made and must be served within 5 days after issue and an appeal to which this rule applies shall not be heard sooner than 2 clear days after such service.”

41.  There is nothing in Order 19 rule 7 or Order 58 rule 1 of the RDC which expressly excludes the application of Order 65 rule 9.[1]

42.  Given the fact that the defendant has not filed Notice of Intention to Defend, I am satisfied that the summons filed on 31^st May 2010 and notice of appeal filed on 27^th July 2010 are not required to be served on the defendant pursuant to Order 65 rule 9 of the RDC.

CONCLUSION

43.  By reasons of the aforesaid, I allow the plaintiff’s appeal and make the following orders:

(a) Specific performance of the Contract;

(b) A declaration that all rights, title and interest in the Property is vested in the plaintiff as administratrix of the estate of Tang Chuen Sui, the deceased;

(c) The Registrar of the District Court be appointed to execute an assignment to take effect as if the same were executed by the defendant for the purpose of conveying or assigning all rights, title and interest in the Property from the defendant to the plaintiff as administratrix of the estate of the deceased;

(d) Costs of this action including the costs of the hearing today and the costs below be to the plaintiff, with certificate for counsel for the hearing today and the hearing on 23^rd July 2010, to be taxed if not agreed;

(e) There be liberty to apply.

[1] See for example, Order 84A rule 3(2) which provides that “An application for the grant of the leave under this rule must be made by summons supported by an affidavit…The summons and a copy of the affidavit in support and of any exhibits referred to therein must, notwithstanding anything in Order 65 rule 9, be served on the defendant not less than 4 clear days before the day fixed for the hearing of the summons.”; and Order 88 rule 6(2) which reads: “An application for the grant of leave under this rule must be made by summons and the summons must, notwithstanding anything in Order 65 rule 9, be served on the defendant”.