LIU TSZ WAH v. LUI KWOK FAI AND ANOTHER

[English Translation – 英譯本]
DCCJ 2098/2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 2098 OF 2013

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Decision

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Introduction

1.  By summons dated 21 January 2014, the 1^st and 2^nd defendants herein apply to:-

(1) set aside the interlocutory judgment entered on 30 August 2013;

(2) set aside paragraphs (3) to (8) of the order of Master Yip dated 21 October 2013; and

(3) strike out the plaintiff’s claim.

Background

2.  The 1^st and 2^nd defendants are the owners of 5/F, No.5 Catchick Street, Hong Kong (“the Premises”).

3.  On 28 June 2006, the 1^st and 2^nd defendants commenced proceedings in the Lands Tribunal against one Chan Cheng Kuen, a tenant of the Premises, seeking recovery of possession of the Premises and payment of arrears of rent or mesne profits from 30 May 2006 to the date of recovery of vacant possession (LDPD 1607/2006).

4.  On 1 December 2006, Judge Michael Wong ordered (inter alia) that the 1^st and 2^nd defendants were entitled to repossess the Premises.

5.  The Lands Tribunal issued a writ of possession on 22 December 2006. On 29 January 2007 the 1^st and 2^nd defendants, with the assistance of bailiffs, recovered possession of the Premises.

6.  There was property kept in the Premises, and on 30 January 2007 the Lands Tribunal granted leave to the 1^st and 2^nd defendants to confiscate such property as set-off against the rent in arrears.

7.  On 27 March 2007, Judge Wong ordered that after the expiration of 7 days from the date of the order, the 1^st and 2^nd defendants were at liberty to discard and/or destroy the property kept in the Premises.

8.  During the 7-day period after the order was made, no one contacted the 1^st and 2^nd defendants for the purpose of collecting the property. The 1^st and 2^nd defendants then discarded the property pursuant to the order of Judge Wong.

9.  On 10 June 2013, the plaintiff herein commenced the present action against the 1^st and 2^nd defendants, seeking recovery of the property and compensation.

10.  On 30 August 2013,  interlocutory judgment was entered against the 1^st and 2^nd defendants on the basis that they had not filed a Notice of Intention to Defend.

11.  I will first deal with the application by the 1^st and 2^nd defendants to set aside the judgment.

Legal principles applicable to setting aside a judgment

12.  Order 13 rule 9 of the Rules of the District Court provides that the court has power to set aside or vary any judgment entered pursuant to Order 13.

13.  The court is bound to set aside a judgment which has been irregularly obtained. In Po Kwong Marble Factory Ltd v Wah Yee Decoration Co Ltd [1996] 4 HKC 157, the plaintiff served the writ of summons at a wrong address, and the Court of Appeal held that the judgment must be set aside and in that case the court would not have to consider the prospect of success of the defence.

Discussion

14.  The plaintiff herein stated that the writ of summons was served at the last known address of the 1^st and 2^nd defendants, namely 2^nd Floor, No 333 Des Voeux Road West, Hong Kong.

15.  In his affirmation, the 1^st defendant deposed that he leased the unit out from 2011 to 2013. His tenant surrendered the lease in early November 2013, and it was not until he arrived at the unit that he discovered the order of Master Yip and became aware of the present action brought against him by the plaintiff.

16.  The 1^st defendant pointed out that in HCMP 995/2007, in which the plaintiff was the respondent, he used the address at Room 201, Mountain Court, 448 Nathan Road, Kowloon as his correspondence address, and the plaintiff could not possibly say he did not know of this address.

17.  I should accept what the 1^st defendant said, about which I can see nothing incredible: see Hong Kong Civil Procedure 2014 Volume 1, para 13/9/5[1].

18.  I accept that the 1^st and 2^nd defendants did not receive the writ of summons of the present action.

19.  This being the case, I must allow the application of the 1^st and 2^nd defendants. I order that the interlocutory judgment entered on 30 August 2013 and paragraphs (3) to (8) of the order made by Master Yip on 21 October 2013 be set aside.

20.  I now deal with the application of the 1^st and 2^nd defendants to strike out the claim.

Legal principles applicable to striking out a claim

21.  Order 18 rule 19 (1) of the Rules of the District Court provides that:

“The Court may … at any stage of the proceedings order to be struck out or amended any pleading or the indorsement of any writ in the action, or anything in any pleading or in the indorsement, on the ground that -

(a) it discloses no reasonable cause of action or defence, as the case may be; or

…

(d) it is otherwise an abuse of the process of the Court,

and may order the action to be stayed or dismissed or judgment to be entered accordingly, as the case may be.”

22.  Only in a plain and obvious case will the court exercise the said power to make striking-out order: see Hong Kong Civil Procedure 2014 Volume 1, para 18/19/4.

23.  In Chan Fong Wan (transliteration)v. Tsang Yam Kuen HCA 895/2006, Deputy High Court Judge Louis Chan (as he then was) gave the following explanation regarding the lack of any reasonable cause of action and abuse of the process of the court:

“… A reasonable cause of action means a cause of action with some chance of success when only the allegations in the pleadings are considered. … The third ground of the defendant’s application is that the contents of the plaintiff’s statement [of claim] are an abuse of the process of the court. This term connotes that the process of the court must be used bona fide and properly and must not be abused.”

Discussion

24.  The plaintiff claims that the property inside the Premises belongs to her.

25.  The 1^st defendant’s case is that as the tenant Chan Cheng Kuen or the plaintiff did not contact him to collect the property inside the Premises within 7 days of the order of Judge Wong made on 27 March 2007, he has discarded the property pursuant to the order.

26.  In fact, at the hearing of that case of HCMP 995/2007 on 8 June 2007 before Cheung JA, the plaintiff submitted that the defendants had not returned the property to her, and the 1^st defendant reported that he had discarded the property pursuant to the order of Judge Wong: See paras 11and 12 of the Decision of that case.

27.  The plaintiff’s case against the 1^st and 2^nd defendants is founded on tort allegedly committed by them which has caused loss to her.

28.  Section 4 of the Limitation Ordinance provides that:

“(1) The following actions shall not be brought after the expiration of 6 years from the date on which the cause of action accrued ... -

actions founded on simple contract or on tort ...”

29.  The 1^st and 2^nd defendants discarded the property inside the Premises after the expiration of 7 days from 27 March 2007, and the cause of action in tort against them, as alleged by the plaintiff, accrued on 3 April 2007.

30.  The plaintiff commenced the present action on 10 June 2013, which is after the expiration of the statutory limitation period.

31.  In the circumstances, it is obvious that the plaintiff is no longer entitled to bring an action against the 1^st and 2^nd defendants.

32.  I must therefore strike out the plaintiff’s claim.

Costs

33.  Costs should follow the event. I order that the plaintiff do pay the 1^st and 2^nd defendants costs of the present action (including this application).

34.  I order that the plaintiff do pay the 1^st and 2^nd defendants costs summarily assessed at $29,000.

Translated by the Judgment Translation Unit of the Judiciary and vetted by Mr. Edmund Cham, Solicitor