XCHRX FERROMET FERROUS RAW MATERIALS TRADING AKTIEBOLAG v. NEW CHINA UNITED GROUP (HK) LTD.

HCA9921/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.9921 OF 2000

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J U D G M E N T

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1. This is an appeal from the decision of the Master of the High Court made on the application of the defendant to set aside a default judgment entered by the High Court against the defendant. I do not think it is necessary for me here to recite the story that led to the making of the default judgment in the High Court or the reasons the defendant has now advanced as to the events leading to the default judgment being entered or the fact that it contended that it has merits on the defence.

2. What is important is that after the making of the default judgment in the High Court, the matter was transferred from the High Court to the District Court by an order of the High Court for damages to be assessed. So the matter then went to the District Court. Upon notice being given to the defendant of assessment damages in the District Court, the defendant then first appeared on the scene, took out an application in the District Court for setting aside the default judgment. That went before the District Court Master. At a 3 minutes hearing, the District Court Master apparently, upon being shown that it was a default judgment of the High Court, took the view that only the High Court should have jurisdiction to set aside, dismissed the application of the defendant in the District Court for setting aside the default judgment. The defendant then issued a new application in the High Court to set aside the default judgment. It was unfortunate, in a way, that both parties (the plaintiff and the defendant) did not take the matter up from the District Court Master to the District Court Judge on the jurisdiction question. A cursory reading of the District Court rules might suggest that the District Court has jurisdiction to set aside a judgment made by the High Court in an action which subsequently was transferred to the District Court.

4. But be that as it may that was how it went and at the hearing before the High Court Master apparently the question of jurisdiction was again visited upon and the High Court Master took the view that the High Court has jurisdiction to set aside its own default judgment and gave directions for the hearing of the setting aside application.

5. The matter is now before me and I have heard only partial submissions from solicitors of the plaintiff, Mr Lintern-Smith, and I have yet to hear the full submissions from him or submissions from Mr Chong for the defendant. But it seems to me, having ascertained from the party, that they are both agreeable that the proper forum for the setting aside of the default judgment being the District Court that I should refrain from hearing further arguments or considering the somewhat technical and by no means easy legal points advanced as to whether the High Court still retains some jurisdictions to set aside a default judgment made by the High Court notwithstanding the transfer to the District Court after that default judgment had been made.

6. It seems to me, having regard to the small amount at stake and the willingness of the parties to get on as quickly as possible with be setting aside application at minimum cost, that I should take the practical course of treating that there is a proper application before me for the setting aside of default judgment and order, in these circumstances, that application be transferred to the District Court and, in particular, to a District Court Judge rather than to District Court Master for a proper full hearing of the setting aside of the default judgment. The timetable for the filing of affidavits should be agreed between the parties as soon as possible and the hearing should also take place as soon as possible.

7. So far as the costs that had been incurred before me is concerned, it seems to me that in the circumstances the best costs order should be that the costs of today's hearing be costs in the cause of the setting aside application before the District Court Judge.