CITYORK (HONG KONG) LTD. v. FAN TAK HUNG

DCCJ 1361/2002

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 1361 OF 2002

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J U D G M E N T

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1. This is an appeal by the Defendant from the Order of Mr Registrar A Chow made on 19 August 2002, whereby it was ordered, inter alia, that:

(i) The stay of proceedings of 42 days imposed on these proceedings pursuant to Section 15 of the Legal Aid Ordinance and Regulation 7A of the Legal Aid Regulations by virtue of the Defendant's application for legal aid dated 31 July 2002 be uplifted; and

(ii) The Defendant's application to set aside the default judgment dated 24 May 2002 be dismissed.

2. The appeal is brought by a Notice of Appeal issued by the Defendant on 17 September 2002. The Defendant is therefore 15 days out of time according to the time limit imposed by Order 58, rule 1 of the Rules of the District Court. The Defendant says that he was not aware of the time limit. Taking into account the length of the delay and the fact that the Defendant has been acting in these proceedings in person, I am prepared to hear the appeal notwithstanding that the notice was issued out of time.

Whether legal aid stay ought to be uplifted

3. This point can be disposed of very quickly. The Defendant had twice applied for legal aid in these proceedings. On both occasions, legal aid was refused. On the first application, a Memorandum of Notification of an Application for Legal Aid dated 31 July 2002 was filed in court on 1 August 2002. In respect of that application, a Memorandum of Notification that a party has been refused Legal Aid was filed on 9 August 2002. On the second occasion, a Memorandum of Notification of an Application for Legal Aid dated 16 August 2002 was filed on 19 August 2002, after the hearing before the Registrar had taken place.

4. Section 15(4) of the Legal Aid Ordinance provides for a stay of proceedings only where a memorandum is filed. At the hearing before the Registrar on 19 August 2002, the first application for Legal Aid had been refused, and the Memorandum of Notification in respect of the second application had not yet been filed. In the circumstances, the Registrar was clearly correct when he decided to uplift the stay which was in place by virtue of the first application. Further, the Defendant cannot have suffered any prejudice as the second application for Legal Aid was itself refused on 19 September 2002.

The amount of rent in arrears

5. By his affirmation made on 23 September 2002, the Defendant raised an issue as to how much rent is in arrears. According to the Defendant, the total outstanding rent as at the end of 2001 was $42,000. On 28 January 2002, he paid a sum of $35,000 to the Plaintiff. The Defendant, however, accepts that no further rent has been paid since 28 January 2002.

6. The Plaintiff did not accept that $35,000 was paid on 28 January 2002. According to the Plaintiff, only $5,000 was paid. However, Mr Lai, acting for the Plaintiff today, has confirmed that the Plaintiff would abandon and waive its claim for rent for the period prior to January 2002. In other words, the Plaintiff applies to amend the default judgment by limiting its claim for arrears of rent and/or mesne profits commencing from 1 January 2002, which undoubtedly the Defendant has not paid.

7. I am prepared to allow the Plaintiff's application to amend the default judgment, so as to reduce it to the amount undoubtedly due. The court clearly has jurisdiction to do so, see: for example, Pollard Construction Co. Ltd. v Yung Yat Fan (t/a Golden Year & Co.) [1999] 3 HKC 109.

Defendant's claim to deduct repair costs from rent

8. In his affirmation made on 25 June 2002, the Defendant alleged that the suit premises suffered from various structural, electrical and drainage problems. The Defendant went on to allege that he was entitled to deduct his loss and damage and the costs of repair from the rent.

9. In reply to the Defendant's allegation, the Plaintiff has in the affirmations filed on its behalf exhibited copy of various documents said to be signed by the Defendant acknowledging that he was late in the payment of rent and making no mention of the problems now alleged by him. Such documents include a Supplemental Agreement dated 8 December 2000 (Exhibit "CHS-2"), a letter dated 30 June 2001 (Exhibit "WX-3"), and a letter dated 16 January 2002 (Exhibit "WX-5"). At the hearing today, the Plaintiff is able to produce the original of Exhibits "CHS-2" and "WX-3", but not the original of Exhibit "WX-5". According to the Plaintiff, the original of Exhibit "WX-5" has been lost due to inadvertence.

10. The Defendant's answer is simply that all these documents are forged documents. His signature on Exhibit "CHS-2" is forged. The top portion of Exhibit "WX-5" has been deleted. The date on Exhibit "WX-3" has been altered.

11. Whilst these issues cannot be resolved on affidavit evidence, nevertheless the burden is on the Defendant to show that he has "a real prospect of success"; that his defence "could well be established" at trial. In my judgment, the Defendant has not been able to discharge the burden by making these bare allegations of forgery. Even on the Defendant's own case, no written complaint has ever been issued to the Plaintiff regarding the alleged serious problems concerning the suit premises. Up to now, no evidence has been adduced by the Defendant to substantiate the alleged loss and damage suffered by him or the costs of repair to rectify the problems. Frankly, I find this most surprising.

12. Accordingly, the order I make is as follows:

(i) The time for service of the Plaintiff's Summons dated 8 October 2002 on the Defendant be abridged;

(ii) The Judgment dated 24 May 2002 be amended in the manner set out in the draft attached to the said Summons; and

(iii) The Defendant's appeal by his Notice of Appeal dated 17 September 2002 be dismissed.

13. 13. Finally, there is before me a Summons issued by the Defendant dated 24 September 2002 seeking leave to appeal to the Court of Appeal against the order made by me on 23 September 2002, whereby I dismissed the Defendant's ex parte application for a stay of execution pending the appeal to me from the order of the Registrar. The appeal against the order of the Registrar has now been disposed of. The question of an interim stay pending that appeal has become academic. Accordingly, I make no order on the said Summons dated 24 September 2002.

14. 14. I shall now hear parties on the question of costs.

(Discussion re costs)