YESLAND LTD AND OTHERS v. CHINA FURNITURE CITY LTD

HCA 2091/2004

 IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2091 OF 2004

____________

____________

_______________

J U D G M E N T

_______________

Background

1.  By Summons dated 15 October 2004, the plaintiffs applied under Order 14 of The Rules of the High Court, Cap. 4, for summary judgment against the defendant.

2.  On 7 February 2005, the Master acceded to the plaintiffs’ application and entered judgment against the defendant.

3.  The defendant’s appeal against the Master’s judgment was heard by Mr Recorder B Yu, SC, on 24 & 30 November 2005.  By his Judgment handed down on 16 December 2005, the learned Recorder allowed the appeal and granted conditional leave to the defendant to defend.  His conclusion appears at paragraph 19 which reads as follows:-

“19.   In the circumstances, I would allow this appeal and grant leave to defend subject to the following conditions:

(1) the defendant shall pay into Court the sum of $1,400,000 within 14 days from the date of this Order;

(2) thereafter, the defendant shall pay into Court the sum of $200,000 per month, the first of which shall be paid on or before 1st January 2006 until judgment or further order.”

4.  The Order made by the learned Recorder was drawn up and perfected on 13 January 2006.  The operative part reads as follows:-

“IT IS ORDERED THAT:-

1. the said appeal be allowed;

2. the Defendant be granted leave to defend subject to the following conditions:-

(a) the defendant shall pay into Court the sum of HK$1,400,000.00 within 14 days from the date of this Order

(b) thereafter, the Defendant shall pay into Court the sum of HK$200,000.00 per month, the first of which shall be paid on or before 1st January 2006 until judgment or further order;

3. an order nisi that the costs of this appeal [be] in the cause.”

5.  The defendant admitted that it has not paid the sum of HK$1,400,000, or any thereof, into Court, within 14 days or at all and has not paid any of the monthly sums of HK$200,000, or any part thereof, into Court, within 14 days or at all.

The plaintiffs’ application

6.  By summons dated 8 March 2006, the plaintiffs applied to the Master for “final Judgment be entered against the Defendant” and for costs.  The summons was adjourned by Mr Registrar Chan to be heard by a judge.

7.  The wording of this summons is less than satisfactory.  A draft judgment was handed up at my request.  The contents of the draft were amended as a result of my queries.

8.  The defendant complained about the summons’ imprecise wording, but made no submission about the contents of the revised draft judgment, apart from a mere assertion that the figures were controversial.

Analysis

9.  On an Order 14 application, a judge may dismiss the application, or enter judgment, or give leave to defend, either unconditionally or on terms.

10.  Order 14 rule 4(3) provides that:-

“The Court may give a defendant against whom such an application is made leave to defend the action with respect to the claim, or the part of a claim, to which the application relates either unconditionally or on such terms as to giving security or time or mode of trial or otherwise as it thinks fit.”

11.  The learned Recorder did not dismiss the Order 14 summons.  He did not think that judgment should be entered against the defendant.  He granted the defendant leave to defend on terms.

12.  Where a judge gives leave to defend on terms, the defendant does not have unconditional leave to defend.  The defendant must satisfy the terms before he has leave to defend.  This is to state the obvious.  If leave to defend is effective without complying with terms, this becomes unconditional leave to defend.

13.  The learned Recorder granted the defendant leave to defend “subject to” 2 conditions.  Not having complied with or satisfied the terms imposed by the learned Recorder, the defendant has no leave to defend.  It follows that judgment should be entered in favour of the plaintiffs against the defendant.

14.  In paragraph 31 of its Skeleton Argument, the defendant commended the judgment of Woo VP to me.  I find support for my view in paragraph 17 of his Reasons for Decision acceding to the plaintiffs’ application for security for costs of the defendant’s appeal against the judgment of the learned Recorder where the learned Vice-President said:-

“The sum of $1,400,00 that the Recorder ordered the defendant to pay into Court within 14 days from his judgment was apparently for the defendant’s use and occupation of the shops on the ground floor and mezzanine floors between 26 May and 16 December 2005.  The monthly sum of $200,000 as from 1 January 2006 that the Recorder ordered the defendant to pay as another condition for leave to defend was apparently assessed to be a fair monthly sum for the use and occupation of the ground and mezzanine floors.  However, neither of these conditions has so far been satisfied.” 

15.  The defendant made numerous points in opposition to the plaintiffs’ application.  Except the complaint about the “delay” in drawing up the Order, I do not intend to deal with any of them because the points are irrelevant having regard to my approach and construction of the judgment and Order of the learned Recorder. 

16.  Although the Order was not perfected until 13 January 2006, a judgment or order of the Court takes effect, not from the date of perfection of the Order, but from the day of its date, see Order 42 rule 3(1):-

“A judgment or order of the Court takes effect from the day of its date.”

17.  Further, as it was the defendant which appealed against the judgment of the Master, the defendant should have drawn up the Order.  Even if it was incumbent on the plaintiffs to draw up the Order in the first place, the defendant could have drawn up the Order as from 7 days after 16 December 2005, see Order 42 rule 5(5):-

“Every order made and required to be drawn up must be drawn up by the party initiating the application upon which the order was made and if that party fails to draw up the order within 7 days after it is made any other party affected by the order may draw it up.” 

18.  In my judgment, there is no substance in the defendant’s complaint.  In any event, the defendant could have applied for an extension of time.  There is no application for more time.  The defendant simply ignored the conditions imposed by the learned Recorder.

Order/Judgment

19.  I make the following order and enter the following judgment:-

“ORDER

UPON the application of the Plaintiffs by way of Summons filed herein on 8 March 2006

AND UPON hearing Counsel for the Plaintiffs and the Defendant appearing in person

AND UPON reading the 3^rd Affidavit of Or Tit Mang, Tony and the exhibits therein referred to filed herein on 8^th March 2006 in support of the Plaintiffs’ application

IT IS ORDERED that:-

1. Final judgment be entered for the Plaintiffs against the Defendant;

2. The Defendant do deliver vacant possession of Shop Nos. 3-15, 17-36, 38-54, 57-67, 72-105, 108, 110 and 118-124 on the Ground Floor and Shop Nos. 1-2, 4-56, 61, 67-119 on the Mezzanine Floor of Kwun Tong Harbour Plaza, No. 182 Wai Yip Street, Kwun Tong, Kowloon, Hong Kong to the 1^st, 2^nd and 3^rd Plaintiffs;

3. The Defendant do pay the 1^st, 2^nd and 3^rd Plaintiffs a sum of HK$1,729,606.54 and mesne profits at the rate of HK$379,877.00 per month from the 1^st day of September 2004 to 21^st May 2005 and at the rate of HK$200,000.00 per month from 22^nd May 2005 until delivery of vacant possession of the aforesaid shops on the Ground Floor and the Mezzanine Floor to the 1^st, 2^nd and 3^rd Plaintiffs;

4. The Defendant do deliver vacant possession of Shop Nos. 37, 55-56, 106-107, 109, 112-117 on the Ground Floor of the Kwun Tong Harbour Plaza, No. 182 Wai Yip Street, Kwun Tong, Kowloon, Hong Kong to the 3^rd Plaintiff;

5. The Defendant do pay the 3^rd Plaintiff a sum of HK$13,316.18 and mesne profits at the rate of HK$10,098.00 per month from the 1^st day of September 2004 to 21^st May 2005; and

6. The Defendant do pay the 1^st, 2^nd and 3^rd Plaintiffs costs of this action and of this application on a solicitor and own client basis, to be taxed if not agreed.”

“FINAL JUDGMENT

The Defendant having failed to pay into Court the sum of HK$1,400,000.00 within 14 days from the date of the Order made by Mr. Recorder B. Yu on 16 December 2005, and thereafter the sum of HK$200,000.00 per month, the first of which shall be paid on or before 1 January 2006 until judgment or further order, as set out in the said Order.

IT IS THIS DAY ADJUDGED that the Defendant do deliver vacant possession of Shop Nos. 3-15, 17-36, 38-54, 57-67, 72-105, 108, 110 and 118-124 on the Ground Floor and Shop Nos. 1-2, 4-56, 61, 67-119 on the Mezzanine Floor of Kwun Tong Harbour Plaza, No. 182 Wai Yip Street, Kwun Tong, Kowloon, Hong Kong to the 1^st, 2^nd and 3^rd Plaintiffs.

IT IS THIS DAY FURTHER ADJUDGED that the Defendant do pay the 1^st, 2^nd and 3^rd Plaintiffs:-

1. A sum of HK$1,729,606.54;

2. Mesne profits at the rate of HK$379,877.00 per month from the 1^st day of September 2004 to 21^st May 2005 and at the rate of HK$200,000.00 per month from 22^nd May 2005 until delivery of vacant possession of the aforesaid shops on the Ground Floor and the Mezzanine Floor to the 1^st, 2^nd and 3^rd Plaintiffs;

3. Costs of this action and of this application on a solicitor and own client basis.

AND IT IS THIS DAY ADJUDGED that the Defendant to deliver vacant possession of Shop Nos. 37, 55-56, 106-107, 109, 112-117 on the Ground Floor of the Kwun Tong Harbour Plaza, No. 182 Wai Yip Street, Kwun Tong, Kowloon, Hong Kong to the 3^rd Plaintiff.

AND IT IS THIS DAY ALSO ADJUDGED that the Defendant do pay the 3^rd Plaintiff:-

1. A sum of HK$13,316.18; and

2. Mesne profits at the rate of HK$10,098.00 per month from the 1^st day of  September 2004 to 21^st May 2005.”