NG NIM CHUNG, DECEASED AND ANOTHER v. NG WING MAN TERRY

HCA 2221/2016

[2022] HKCFI 673

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2221 OF 2016

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DECISION

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1.  The defendant foretold his absence and sought to adjourn the trial of this action. Refusing his request, this court allowed the plaintiffs to proceed and to prove their case in his absence. Judgment was eventually entered against the defendant. The defendant now applies to set aside the judgment. As directed, the parties have lodged and served written submissions for disposal of the application on paper only.

Background

2.  Essentially the defendant said that he was in the UK and unable to return to Hong Kong in time to attend the trial scheduled to commence on 16 August 2021.  After hearing the plaintiffs on the first day of the trial, this court refused the defendant’s request for adjournment.  The plaintiffs were allowed to formally prove their case.  The background of the defendant’s request and the reasons for this court’s decision were recorded in writing dated the same date (“the Decision”).

3.  On 27 August 2021, this court handed down the written judgment in this case tried in the defendant’s absence (“the Judgment”).  This court found that the plaintiffs have proved their case and entered judgment in their favour against the defendant.

4.  By summons filed on 2 September 2021, the defendant applies to set aside the Judgment.  Since then, the defendant has filed 3 affirmations purportedly in support of his application.

5.  The defendant used to be legally represented until sometime in March 2019.  He appeared in person in the hearing of the present application on 28 October 2021.  Since he somehow managed to fix the hearing for merely 3 minutes, this court gave directions for the parties to lodge and serve written submissions for the application to be disposed of on paper only. The defendant then resumed his legal representation, and had his written submission lodged by counsel.

The principles

6.  O35, r2 of the Rules of the High Court, Cap 4A provides for the statutory basis on which a party may seek to set aside a judgment entered after trial in his absence.  In the present case, apparently no issue is taken that there is no application for leave to appeal against the Decision at the same time.

7.  As to how the court will exercise the discretion under O35, r2, the principles, which are not disputed, were summarized in Chiu Tin Yau Lesley v Dickson Ng, HCA 105/2004 (19 March 2021) at §§38-39.  The following factors were described as general indications that the court is expected to take into consideration:

(1)  Where a party with notice of proceedings has disregarded the opportunity of appearing and participating in the trial, he will normally be bound by the decision.

(2)  Where judgment has been given after a trial, it is the explanation for the absence of the absent party that is most important. Unless the absence was not deliberate but was due to accident or mistake, the court will be unlikely to allow a rehearing.

(3)  Where the setting aside of the judgment would entail a complete retrial on matters of fact which have already been investigated by the court, the application will not be granted unless there are very strong reasons for doing so.

(4)  The court will not consider setting aside judgment regularly obtained unless the party applying enjoys real prospect of success.

(5)  Delay in applying to set aside is relevant, particularly if during the period of delay the successful party has acted on the judgment, or third parties have acquired rights by reference to it.

(6)  In considering justice between parties, the conduct of the person applying to set aside the judgment has to be considered: where he has failed to comply with orders of the court, the court will be less ready to exercise its discretion in his favour.

(7)  A material consideration is whether the successful party would be prejudiced by the judgment being set aside, especially if he cannot be protected against the financial consequences.

(8)  There is a public interest in there being an end to litigation and in not having the time of the court occupied by 2 trials, particularly if neither is short.

Discussion

8.  Various decided cases are referred to by counsel.  Nevertheless, each case should be decided on its own circumstances, which very much dictated how the relevant factors mentioned above came to be considered.  Having fully considered the written submissions of the parties, this court has the following observations in the circumstances of the present case.

9.  Unlike the case of default judgment, which is entered on the basis of the pleaded claim without reference to evidence, the present case is one of judgment after the plaintiffs have proceeded to prove their case at trial.  As mentioned in the Judgment, the evidence of the plaintiffs was accepted as inherently credible and, more importantly, un-contradicted in the absence of the defendant.  That formed the factual basis for the application of the relevant law in support of the plaintiffs’ claim.  Hence the conclusion that the plaintiffs have proved their case.

10.  As much of the dispute between the parties was factual, one would not conclude, on the basis of the contentions and materials before the court, that the defence would have had no real prospect of success in any event, had the defendant attended the trial and subject the plaintiffs’ evidence and witnesses to challenge in court.  General indication (4) above will have to be considered in such light in the circumstances.

11.  That said, by his affirmations filed in support of the present application, the defendant, amongst other things, seeks to respond to this court’s observations and findings on the facts almost paragraph by paragraph of the Judgment.  For that purpose, the defendant even seeks to adduce evidence never disclosed in this action before.

12.  This is illegitimate.  Save in exceptional circumstances, the state of the evidence adduced by the parties, subject to cross examination of witnesses, should be crystallised at the time when the trial commenced.  The defendant may not take advantage of the Judgment as a rehearsal of the consideration of the evidence by the court, and then tailor the supply of further evidence with a view to bettering his case.  In other words, even if the Judgment is set aside and this case is to be retried, the defendant would only expect such further evidence to be disregarded unless the court is somehow called upon to properly consider if leave should be granted for adducing them for the purpose of the re-trial.

13.  In the circumstances, the predominant consideration is the reason for the defendant’s absence.  This is in line with the observation of the court in Chiu Tin Yau Lesley (above) at §40.  Peculiar in the present case is that, as mentioned, the defendant’s absence was not unannounced before the trial but he has actually sought but failed to obtain an adjournment of the trial.

14.  The defendant’s reasons for his absence from the trial were considered by this court.  Only that this court then decided not to adjourn the trial after hearing the plaintiffs.  General Indications (1) and (2) above will have to be considered in such light for the purpose of the present application.

15.  This court will not repeat the discussion explained in the Decision.  It suffices to say that this court had reservation whether the defendant adequately explained with supportive evidence of certain aspects of the circumstances that he relied on to account for his inability to appear and attend the trial.  As mentioned, there is no application for leave to appeal against the Decision.  Instead of seeking to overturning the Decision, the defendant effectively seeks to better his explanation and evidential support for the purpose of the present application.

16.  Certain circumstances, despite his explanation, remain reflective, in an adverse way, of the defendant’s prudence once he was said to be prevented from boarding the scheduled flight to Hong Kong.

17.  First, one should note that he has had by then the experience of absence from the pre-trial review which led to the provisional striking out of his counterclaim.  Nevertheless, he has somehow waited for 3 weeks before informing the plaintiffs and this court of his situation.  As a result, the window for any alternative arrangement, such as securing his appearance via the videoconferencing facilities (“VCF”) of the court, became narrow.

18.  Second, whilst the defendant admitted to the court that he was incapable of utilizing the VCF for the purpose of appearing in the pre-trial review hearing, he apparently decided not to resume his legal representation which would have put him in a relatively better position to present his situation to the court and to explore alternatives such as VCF. Clearly it was not that he would not do so in any event.  He briefed counsel for the purpose of the present application.

19.  Harsh as this may seem, the duty to meet a milestone date in legal proceedings as important as the trial would have called for the taking of no less than all practicable steps as soon as possible.  The defendant could have been more vigilant in his circumstances.

20.  Rather in line with his approach mentioned above, the defendant’s explanation and materials in support of his inability to attend the trial produced at different stages, including those produced only now, resembles what is commonly known as a “toothpaste squeezing” manner.  That would not be conducive to gaining the court’s understanding of his situation at the first opportunity.

21.  This court needs no reminder of the balance between the desirability of finality instead of re-opening of legal proceedings and the justice of affording all parties the fair opportunity to advance their case in court.  This court has considered the further explanation and evidence in support of such explanation for the defendant’s absence.  While criticism of the defendant from the plaintiffs must be expected, this court does not consider that the defendant’s further explanation and evidence are all liable to be rejected for being allegedly inconsistent and self-contradictory.

22.  The trial that took place involved the plaintiffs’ witnesses confirming and adopting their statements under oath without cross examination.  The trial finished within the morning session of the first day.  The concern about repetition of the trial process, if the Judgment is set aside, under general indication (8) above will have to be considered in such light in the present case.

23.  This court does not lose sight of the prejudice to the plaintiffs if the trial is re-opened on the other side of the balancing scale either.  At the end, and with much reluctance, this court finally decides to grant such second chance to the defendant.  This of course will be subject to conditions, and specific directions in connection with the re-trial.

24.  Wasted costs could be adequately compensated. The defendant could only have expected to pay the plaintiffs’ costs of the first day of the trial even if his application for adjournment had then been granted.  There is no reason for him to expect any less than such costs liability even when his present application is granted.  It is not that the plaintiffs were wrong, particularly when there is no application for leave to appeal against the Decision.  This was and is at all times the defendant’s request for indulgence of the court.  Therefore, the defendant must bear the plaintiffs’ costs of the trial wasted and those of and occasioned by the present application.

25.  Further, it is only fair that the Judgment will be set aside only upon the defendant’s payment of the plaintiffs’ costs mentioned above.  The defendant’s argument that costs of the present application should be in the cause is rejected.

26.  A major concern of the plaintiffs apparently is the prejudice in the form of the uncertainty of the ability of the Widow in her current physical condition to testify again in court.  Different from the stage when the evidence, oral and documentary, was yet to be verified and adopted in the trial, the oral evidence of the Widow in terms of her statement was as a matter of fact confirmed and adopted on oath in court.  Insofar as necessary, appropriate direction could be sought and given for the purpose of adducing such evidence already given under oath in court similar to that by way of an affirmation or deposition.

Conclusion and order

27.  I am prepared to allow the application and, subject to what are said below, set aside the Judgment.

28.  First, the costs consequence of the Judgment being set aside shall be borne and paid by the defendant in any event.  They include (i) the plaintiff’s costs of and occasioned by the defendant’s application for adjournment already ordered on 16 August 2021; (ii) costs of the first day of the trial on 16 August 2021 wasted as well as (iii) the plaintiffs’ costs of and occasioned by the defendant’s present application to set aside the Judgment.  Such costs shall be taxed forthwith, if not agreed, with the plaintiffs’ own costs to be taxed in accordance with legal aid regulations.

29.  Second, in the circumstances of the present case, it is appropriate to exercise discretion to impose a condition of payment by the defendant of an appropriate sum into court on account of the abovementioned costs of the plaintiff pending taxation.  For that purpose, the plaintiffs’ statement of costs and the defendant’s comment have been considered. The Judgment will therefore be set aside on condition that the defendant pays into court a sum of HK$400,000 on account of the plaintiff’s costs pending taxation and payable by the defendant as mentioned above.

30.  Due to the general adjournment of court proceedings announced by the Judiciary on 4 March 2022 with effect until 11 April 2022 and the incidental general closure of the court registry, the above condition of payment into court shall be satisfied within 5 working days after the re-opening of the court registry for conducting such business.  It shall be the duty of the defendant and those acting for him to pay close attention to the relevant announcement of the Judiciary.

31.  Third, upon the setting aside of the Judgment as aforesaid, the parties do proceed to fix the date for the re-trial of the present case with 8 days reserved in consultation with counsel’s diaries.  There shall be a pre-trial review for 30 minutes before the trial judge not less than 42 days prior to the trial.  Further:

(1)  the re-trial of the present case shall be held other than before this court;

(2)  the affirmations and exhibits thereto as well as the documents lodged by the defendant in support of the present application shall be kept in sealed envelope and withheld from the trial judge;

(3)  unless the trial judge directs otherwise, the trial bundles for the re-trial should follow those used before this court in the previous trial;

(4)  insofar as this becomes relevant upon the plaintiff’s application, if any, the Widow’s evidence in trial on 16 August 2021 may serve as her evidence taken under oath; and

(5)  the parties shall jointly write to the trial judge not less than 14 days prior to the pre-trial review, proposing other directions necessary for the trial.

32.  Last, in default of satisfying the condition mentioned above, this order to set aside shall lapse without further order of the court, and the Judgment shall stand and the above directions will not take effect.