Wu Nai Sang v. Fellowship Engineering Ltd and Others

DCEC 243/2011

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO 243 OF 2011

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DECISION

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Introduction

1.In July 2016, this case was tried before me, in the absence of the 1^st respondent (“R1”).  Judgment was handed down on 14 September 2016 whereby, inter alia, R1 was held liable to pay compensation to the applicant (“A”) in the sum of $1,559,882.00 with interest.

2.On 17 October 2016, R1 took out a summons applying to set aside the said judgment.

Procedural history

3.The application was taken out on 22 February 2011 with R1 as the only respondent.

4.A notice to act was filed by Messrs Alan Ho & Co (“Alan Ho & Co”) on behalf of R1 on 7 July 2011 and the answer of R1 was filed on 20 July 2011, which was subsequently amended on 21 October 2011.

5.Alan Ho & Co conducted the proceedings on behalf of R1 until a notice to act in person was filed on 28 November 2013, which was signed by Mr Kwok Lai Wah (“Kwok”).

6.Pursuant to the Order of HHJ Levy dated 15 January 2016, the trial of this case was fixed to be held on 20, 21, 22, 25 and 26 July 2016 and the pre-trial review to be held on 24 May 2016.

7.Thereafter, R1 took no step in the proceedings and did not appear at the trial.

Legal principles

8.Order 35 rule 2 of the Rules of the District Court provides:-

“(1) Any judgment, order or verdict obtained where one party does not appear at the trial may be set aside by the Court, on the application of that party, on such terms as it thinks just.

(2) An application under this rule must be made within 7 days after the trial.”

9.In dealing with an application to set aside a judgment, the court should take into account the following “general indications”:-

“(1) Where a party with notice of proceedings has disregarded the opportunity of appearing at 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 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 prospects 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 two trials, particularly if neither is short.”

See Hong Kong Civil Procedure 2017 Vol 1 at 35/2/1.

10.In relation to the time limit of 7 days under sub-rule (2), the court has a discretion under Order 3 rule 5 to extend the period.  In doing so, the court must consider all the circumstances and decide whether the overall justice of the case requires the exercise of the discretion to extend time : see Hong Kong Civil Procedure 2017 Vol 1 at 35/2/2.

Discussion

11.In his affirmation, Kwok said R1did not appear at the trial because R1 did not know the trial dates.  He said R1 believed that Alan Ho & Co would inform R1 once the date of the trial has been fixed.  However, Alan Ho & Co did not inform R1 of the trial dates.

12.Kwok said at all time up to September 2016, R1 was never told that Alan Ho & Co would cease acting for it, nor did R1 tell Alan Ho & Co to cease acting for it.

13.Kwok confirmed that he did receive documents sent from Court or the solicitors firm acting for A.  However, he would only take them to Alan Ho & Co without opening them.  He was told that Alan Ho & Co had also received the same documents.  Thereafter, he stopped redirecting the envelopes that he received to Alan Ho & Co.

14.In September 2016, he received an envelope (which he later came to know to have contained the judgment in this case).  He did not open it but instead called Mr Tse of Alan Ho & Co but to no avail.  He then sought advice from another law firm and was told that judgment was entered against R1.

15.In relation to the notice to act in person, Kwok said it was not signed by him and he had no knowledge of it being filed.

16.Put it simply, Kwok is denying everything that would have linked him to have the knowledge of the scheduled trial and shifting the blame to Alan Ho & Co.

17.As a matter of fact, starting from February 2014, there were no less than 7 affirmations of service deposing that the documents of this case had been sent to Kwok’s residential address at Room 1112, 11^th Floor, Chung Tak House, Chung On Estate, Ma On Shan, New Territories, Hong Kong.  On top of that, there were no less than 7 notices of fixing date; 1 notice of pre-trial review and 1 notice of trial sent to the same residential address by the Court. Kwok did not turn up at anyone of the occasions.

18.It is hard to believe that Kwok did not open any of the aforesaid envelopes but instead took them to Alan Ho & Co.  To any normal people, regardless of his or her educational background, one must have asked why this was happening as a lawyer was already engaged to conduct the proceedings.  The behaviour of Kwok is at odd with common sense.

19.Serious as it may be of the allegation that the notice to act in person was filed without Kwok’s knowledge and that Kwok did not sign on the said notice.  In my view, however, it does not serve to enhance the credibility of Kwok’s explanation.

20.I must say that I am not at all persuaded by Kwok’s explanation.  In my view, Kwok deliberately ignored the proceedings until the time he realised that judgment has already been entered against R1.  Kwok is the author of the predicament R1 is in now and he has only himself to blame.

21.Kwok has filed a brief witness statement on 10 April 2012.  He denied any involvement in the steel binding works and shifted the burden to R3.  Yet, he admitted having completed the Form 2 and sent back to the Labour Department.  Having heard the evidence of the other witnesses at the trial, I am unable to say that R1 is having a prospect of success.

22.That being the case, there is no need to consider the implication of a re-trial.  However, I would note in passing that if a re-trial is necessary, it must be a re-trial involving all the parties because they are all connected to the project of works one way or the other.  It would be wrong to hold a re-trial just between A and R1.

Conclusion and order

23.For the foregoing reasons, R1’s application is dismissed.

Costs

24.I order that R1 shall pay A costs of this application with certificate for counsel, to be taxed if not agreed.

25.A’s own costs shall be taxed in accordance with Legal Aid Regulations.

Mr Dennis Law, instructed by K Y Woo & Co, assigned by the Director of Legal Aid, for the applicant

Mr Michael Chai, instructed by Cham & Co, for the 1^st respondent