Chiu Tin Yau Lesley v. Dickson Ng

HCA 105/2004

[2021] HKCFI 866

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 105 OF 2004

_________________

_________________

Before: Deputy High Court Judge Winnie Tsui in Chambers

Date of Hearing: 19 March 2021

Date of Decision: 19 March 2021

_______________

DECISION

_______________

Introduction

1.This is the hearing of the defendant’s summons taken out on 5 June 2020 to set aside the judgment entered against him on 10 November 2009 by Poon J (as he then was) (“the Judgment”) pursuant to Order 35, rule 2 of the Rules of the High Court.

2.The judgment was for a sum of $2,500,000 together with interest and costs.  It was entered after trial on the same day. The defendant was absent at the trial.

3.The defendant also applies to discharge the charging order nisi and charging order absolute made against his interest in a residential flat in Ede Road, Kowloon (“the Property”) based on the Judgment in December 2009 and January 2010 respectively pursuant to Order 50, rule 7.

4.Under Order 35, rule 2, an application to set aside a judgment obtained after trial must be made within seven days after the trial.  In this case, the trial took place on 10 November 2009.  The deadline for an application would fall on 17 November 2009.  The present application is therefore just over 10½ years out of time.

5.The defendant now seeks to extend time to make the application and, if granted, asks for an order that the Judgment be set aside.

6.In gist, the defendant says that he was absent at the trial through no fault of his own.  He was detained incommunicado in mainland China for 13 years and 7 months from June 2006 to January 2020.  He did not have any prior notice of the pre-trial review hearing and the trial which took place during the time when he was detained.  He contends that for that reason, the Judgment ought to be set aside so that his defence, which has a real prospect of success, can be heard in a re-trial.

The claim and the defence

7.The plaintiff commenced the action in January 2004. The plaintiff and the defendant were business friends.  The plaintiff’s case is that he made an oral agreement with the defendant on 29 April 2002.  The defendant had invited the plaintiff to tender for decoration work of a building construction project in Beijing.  Under the agreement, the plaintiff paid the defendant a sum of $2,500,000 as deposit in the form of a performance bond for the decoration work.  It was agreed that if the tender was unsuccessful, the defendant would repay the sum in full to the plaintiff.  In the end, the project did not materialise.  The defendant was therefore obliged to return the sum.  Despite repeated requests, the defendant failed to do so.  The plaintiff claims against the defendant the sum together with interest.

8.It is common ground that the sum was in fact paid by the plaintiff to the defendant.  However, the defendant puts forward an entirely different version of events.  The defendant’s case is that at around that time, the plaintiff was in financial difficulties.  It was the plaintiff who sought the defendant’s assistance to transfer the sum to the plaintiff’s company in the mainland.  The plaintiff arranged to have the sum given to the defendant by cashier order in Hong Kong in April 2002.  The defendant then returned the sum by giving the plaintiff the sums of RMB2,500,000 and RMB200,000 in cash in Beijing on two occasions in May and June of the same year.  The plaintiff had told the defendant that the bank account of the plaintiff’s company in Beijing was being watched by its creditors and any funds remitted into the bank account might be frozen and the creditors would be informed.  That was the reason why the plaintiff asked the defendant to help him to transfer the sum from Hong Kong to Beijing by cash.

9.The defendant contends in this action that the sum of $2,500,000 had nothing to do with the building construction project in Beijing.  He is therefore not liable to repay the sum again to the plaintiff.

Procedural history

10.Both parties were legally represented since the beginning of the action.  Pleadings were filed and discovery made in the course of 2004.  There was a period of time in 2005 when the defendant acted in person.  After a couple of extensions of time, witness statements were exchanged in November 2005.  At that time, the defendant was acting in person. He served three witness statements.  There was one made by him.  There was one from an individual who was present when the defendant gave RMB2,500,000 to the plaintiff in cash in Beijing in May 2002.  The last one was from another individual who was present when the defendant gave RMB200,000 to the plaintiff in cash in Beijing in June 2002.

11.In January 2006, a new law firm came on board acting for the defendant.  But since then the action seemed to have gone to sleep.  This is evident by the plaintiff filing a notice of intention to proceed in February 2007 and a further notice in February 2009.

12.It was only in or shortly before April 2009 that substantive steps were taken by the plaintiff again to take the action forward.

13.On 29 April 2009, leave was granted for the plaintiff to set the case down for trial.  The PTR and the trial were subsequently fixed for September and November of the same year.

14.I must pause here to highlight that according to the defendant’s present evidence, all these happened without his knowledge as he had been detained in the mainland without any communication with the outside world since June 2006.  In fact, his solicitors applied for and was granted a cease to act order in April 2009 as they were not able to get hold of the defendant in the period between February and April of that year.  Hence from around mid-2009, the defendant acted in person again on the court’s records.

15.It would appear that the plaintiff’s solicitors had since then served various court documents on the defendant at the address of the Property in Kowloon.

16.The PTR took place on 17 September 2009.  The defendant was absent.  His son, Mr Ng Kai Shing, appeared instead and informed the court that the defendant was being detained in Beijing.  He was not sure when the defendant was going to be released.  Then, a few days before the trial, the son sent a letter to the court, applying to adjourn the trial for three months on the ground that the defendant was still in detention in Beijing.  Poon J directed that the adjournment application be dealt with on the first day of the trial.  However, the son did not turn up.  The judge therefore took it that the application had been abandoned.  The trial proceeded in the defendant’s absence.  All these were recorded in the Reasons for Judgment handed down on 13 November 2009: see paras 9 to 11.

17.At the trial, the court heard evidence from the plaintiff and his witness.  The Judgment was entered.  Notwithstanding that the charging order was shortly afterwards granted to the plaintiff in respect of the Property, the plaintiff has apparently since taken no further step to realise the charge.

18.The next substantive step taken by the plaintiff in terms of execution was the issue of a statutory demand in the sum of about $5,900,000 based on the judgment sum and the interest accrued so far in May 2020 and the presentation of a bankruptcy petition against the defendant in July of the same year in HCB 4907/2020.

19.I understand that no substantive order has yet been made in those proceedings.

The defendant’s ground of the setting aside application

20.The defendant contends that in the interest of justice, the Judgment ought to be set aside as it was entered after a trial of which he had had no notice.  His absence at the trial was not deliberate and was beyond his control.  After his release in January 2020, he learnt of the Judgment and the charging order in February for the first time.  After his experience in detention in the mainland, he had had difficulties with trusting lawyers.  But he eventually engaged lawyers and took out the present application a few months later on 5 June 2020.  There is, he says, no undue delay on his part.

21.In support of the setting aside application, the defendant has filed four affirmations.  He gave an account of the ordeal he had gone through after his detention in June 2006 and how he was unable to attend the trial.

22.According to his evidence, one early morning in June 2006, he was forcibly taken from his hotel room in Beijing and was arrested by a group of individuals claiming to be from the PRC Ministry of State Security (Guangzhou City).  The defendant was not told the reason for his arrest.  He was forced to board on a train and taken to a detention centre at a deserted location.  He was tortured and denied access to the outside world.  He said in his 1^st affirmation:

“7. I constantly asked what I was being arrested for but I did not receive an answer. On the second day I was imprisoned, the officers forced me to sign some documents. I always refused to co-operate and I would then be beaten and tortured by the officers. Since then, this cycle repeated itself throughout the duration of my detention because I would not give in.

8. My detention was incommunicado.  I was not able to contact, call or write to any person in the outside world, whether in the Mainland or Hong Kong (not even my family members).  I was not allowed to seek legal advice either.”

23.On a later unknown date, the defendant was transferred to a prison in Dongguan, Guangdong Province where he “continued to be detained incommunicado”.

24.In his 3^rd affirmation, he supplemented as follows:

“… I hereby repeat that my detention in the Mainland between June 2006 and January 2020 was incommunicado throughout. …”

25.In the meantime, the Hong Kong police sent a letter dated 8 March 2007 addressed to the family of the defendant at the address of the Property, informing the family that the defendant was subject to compulsory enforcement measures in the mainland (“在內地被執行強制措施”).  The letter set out the contact details of three offices of the HKSAR government located in Hong Kong, Beijing and Guangzhou in the event that assistance was needed. Endorsed with the letter was a notice dated 5 February 2007 issued by the Ministry of State Security (Guangdong Province) stating that the defendant was detained on 25 June 2006 on suspected espionage offence and was arrested on 31 January 2007.  The notice further stated the present location of the detention, the handling person and a contact telephone number.  

26.It is the defendant’s case that his son received the letter and the notice on 8 March 2007 and he then tried to look for him and seek help from Interpol Hong Kong but to no avail.  As the defendant was completely cut off from the outside world while he was in detention, he only became aware of the content of the letter and the notice after his release in January 2020.  I shall refer to the letter and other notice together below as “the 2007 Letter”.

27.It is further the defendant’s case that his son attended the PTR in September 2009 informing the court of his detention.  His son also showed the 2007 Letter to the court at the hearing.  The son then applied for an adjournment of the trial by letter a few days before the trial. Notwithstanding the court’s direction that the adjournment application was to be dealt with on the first day of the trial, the son did not appear at the trial.

28.In his 1^st affirmation, the defendant gave the following explanation:

“… I was informed by Ng Jr. (after I was released back to Hong Kong) and verily believe that:

…

After Ng Jr. had shown the [2007 Letter] … to the Court, he was threatened by various people both in person and by calls in the middle of the night, asking him not to pursue the matter or otherwise both Ng Jr. and So Man (my ex-partner) may be kidnapped onto the Mainland.  This was why he did not appear at the trial to seek an adjournment.”

29.I must pause here to note that while the son has first-hand knowledge of the matter and is presently contactable by the defendant, the son has made no affidavit deposing to his knowledge in support of the defendant’s application.

30.In sum, Mr Victor Lui, counsel for the defendant submits that by his affirmation evidence, the defendant has given a genuine and credible explanation for his absence at the PTR and the trial.  He had no prior notice of either hearing because of his detention and his being cut off from the outside world in toto while detained.

31.Mr Lui further contends that the defendant has a defence which has (at least) a real prospect of success.

32.He argues that given that parties are putting forward rival versions of events, the case turns on the credibility of the witnesses.  Further, the defendant’s case is supported by contemporaneous documents.  As part of the background, the defendant says that he had advanced a loan of $4,000,000 to the plaintiff and it was in fact from this loan that the plaintiff paid to the defendant the sum of $2,500,000, the subject-matter of the plaintiff’s claim.  The loan is evidenced by an IOU signed by the plaintiff.  Furthermore, the allegation that the plaintiff was in financial difficulties at that time is evidenced by a written decision of the mainland authority revoking the business licence of the plaintiff’s company. 

33.Given the strength of the defendant’s evidence, Mr Lui submits that the defence enjoys at least a real prospect of success at the re-trial, if one is ordered.

34.Mr Lui also draws to the court’s attention that no order for sale of the Property has been applied for and no third party has yet acquired any right on the strength of the Judgment.  A re-trial should be allowed.  It would not be unduly costly as the volume of materials involved in this case is not significant.  Witness statements were already prepared and they would help refresh the memory of the witnesses despite the long lapse of time.

35.When all matters are taken into account, it is submitted on behalf of the defendant that the balance of justice lies in favour of setting aside the Judgment.

The plaintiff’s opposition

36.The plaintiff opposes the application.  The solicitor having the conduct of the case filed an affidavit in opposition.  But the present application really turns on whether the defendant has made good the justification for setting aside the Judgment.  The plaintiff has not in substance put forward any positive case as such.  The main points made by Ms Cyndi Ho, counsel for the plaintiff, are that the defendant’s allegation that his detention was incommunicado is unbelievable and that the defence has no real prospect of success.

Legal principles

37.There is no dispute on the legal principles applicable to an application to set aside a judgment under Order 35, rule 2.  Sub-rule (1) provides as follows:

“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.”

38.The court would consider the application with reference to the eight “general indications” set out by the English Court of Appeal in Shocked v Goldschmidt [1998] 1 All ER 372 at 381e-j.  This approach was applied by the Hong Kong Court of Appeal in, eg, Lau Kam Chuen v Lee Ching [2003] 2 HKLRD 1018 at paras 11 to 13 and, more recently, Joyful Sparkle Co Ltd v Ng Pik Chu CACV 102/2012, 20 November 2013 at paras 19 to 20.

39.The eight “general indications” are:

“(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 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; and

(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.”

40.The authorities also confirm that the predominant consideration for the court is the reason why the party against whom judgment was given absented himself: Shocked at 301j.  (This is to be contrasted with an application to set aside a regular judgment entered by default.  In that situation, the dominant feature is the merits of the defence, which is to be weighed against the defendant’s explanation both for the default and any delay, as well as against prejudice to the other party: Shocked at 379f; Lau Kam Chuen at para 12.)

41.The burden is squarely on the applicant to proffer a good reason why he was absent at the trial.  It must be something which the court concludes represents a full and accurate explanation and one which justifies depriving a plaintiff of a regular judgment and putting a plaintiff to the trouble of proceeding to prove a case, which he had thought had been successfully concluded in his favour.  The explanation should be backed by credible evidence.  If the evidence is clearly incomplete and invites skepticism, the criteria of a good reason is not met: Wong Wah On v Tsung Tsin Association [2019] HKCFI 3030, at paras 8 and 31, per Harris J.

42.Here, the defendant did not take out the setting aside application within the 7-day period prescribed by the rules.  In fact, the application was taken out more than 10 years later.  Accordingly, in the present case, the predominant consideration for the court should be slightly modified to be whether the defendant has an adequate explanation for (a) his absence at the trial and (b) his failure to come to court to apply to set aside the Judgment over the past 10 years.

Has the defendant demonstrated a proper reason for his absence at the trial and his delay in setting aside the Judgment?

43.I would say at the outset that if the defendant is able to demonstrate by adequate evidence that he was detained in mainland China from June 2006 to January 2020 and during that period he was altogether denied access to or contact with the outside world so that he had no means to know what was going on in the present action or to seek help from others, eg his family or his lawyers, to assist him in the action, that would be a good reason justifying his absence at the trial and the long delay in making the present application. It would be a strong, if not powerful, factor which weighs in favour of setting aside the Judgment.  That is so for the obvious reason that it would be prima facie unjust to bind him to the outcome of a trial, which he had no notice of and which he was unable to participate for reasons that were beyond his control.

44.My task is therefore to scrutinise his evidence to see whether his reason is properly made out.

45.I am satisfied that the defendant was detained in mainland China, initially in or around Beijing and later in Dongguan, from June 2006 to January 2020.  This is supported by contemporaneous documents, namely the 2007 Letter, the certificate of release which was given to him by the prison authority upon his release and the travel records obtained from the Immigration Department. The latter document shows that during the period from January 2011 to March 2021, there was only one instance of the defendant crossing the border of Hong Kong.  And that was January 2020 when he entered Hong Kong from mainland China.  (The records of the Immigration Department only go back for 10 years.)

46.I am, however, not satisfied that the defendant has produced sufficient or proper evidence to show that during the entire period of detention, he was cut off from the outside world such that he had no means to find out what was going on in the present action, including the trial in November 2009 and to seek assistance to take steps to protect his position in these proceedings subsequent to the trial.

47.According to his affirmations, he was first detained in an unknown location.  He was tortured there by unknown individuals for he refused to sign documents put to him.  He said he was not able to contact anyone.  After some time, he was transferred to the prison in Dongguan.  In his affirmations, he simply stated that he “continued to be detained incommunicado” (see para 23 above).

48.According to the 2007 Letter, the defendant was detained in Guangdong as of 5 February 2007.  And it would appear to be the case that the defendant had not been moved again since then.  It was then followed by a detection which lasted 13 years.

49.Here, the defendant did not elaborate in his evidence whether during this long period he made any effort at all to try to make communication with his family or his lawyers.

50.He simply made a generic assertion in his affirmations that his detention “was incommunicado throughout” (see para 24 above).

51.13 years is a long period of time.  The defendant mentioned in his evidence that he was tortured while he was detained in the first unknown location.  But he did not mention any continuous torture or sustained ill-treatment whilst he was in the Dongguan prison.  Assuming that he was not (as he did not say so), it is not quite conceivable that he would make no attempt at all during the 13 years to see if he could see his family or seek help from lawyers.  I do not know whether if he indeed tried, that would lead to any result.  But the important point here is that it is for the defendant to make good his case that he was allowed zero access to the outside world during the entire period of 13 years.  He should give full particulars in support of that assertion.

52.In his affirmations, the defendant denied that he had committed any wrongdoing and said that contrary to what was stated in the certificate of release, he did not attend any trial in the mainland.  Against this background, one would expect the defendant, whilst in detention and apparently completely in the dark as to what was happening to him, to make every effort to try to find out or see a local lawyer in order to defend himself so that he could be released at the earliest possible opportunity.

53.Further, in his affirmations, the defendant described himself as “a seasoned businessman in Mainland China” back in 2006.  As a seasoned businessman, one would expect the defendant had to attend to many personal and business affairs.  (One of them would be the present action.)  He would have been anxious to get in touch with the outside world for that purpose.  Had he tried during the 13 years?  It is hardly believable that he had not.  But he has said nothing about any effort made in his supporting affirmations.

54.Similarly, one would expect the defendant’s family would be equally anxious to find out what had happened to him and to secure his release or at least some fair treatment for him while detained after they had learnt of his “disappearance” in Beijing.  But the only thing that was apparently done was an attempt made by the son to seek help from Interpol Hong Kong after receiving the 2007 Letter but to no avail (see para 26 above).  No particulars were given in relation to such attempt – when made, how made and the police response? 

55.It is notable that the son has so far not sworn any affidavit in support of the defendant’s case.  He has first-hand knowledge of what he himself had done to look for his father.  The defendant has offered no reason why he did not ask his son to give affidavit evidence in this application.  The latter is clearly contactable in the course of this application, as the defendant has verified some of the evidence with him.  As submitted by Ms Ho, the court should have regard to this matter when considering the weight to be given to the defendant’s hearsay evidence: section 49(1) and (2)(a) of the Evidence Ordinance, Cap 8. 

56.The defendant now asks for the Judgment, which was entered in favour of the plaintiff back in 2009, to be set aside.  He could expect that his application would be hotly contested.  In any event, for him to succeed, he must make good his explanation by producing proper and sufficient evidence. Nevertheless, he did not procure the son to give evidence for him.  This is inexplicable.

57.In any event, apart from contacting the Hong Kong police, it would have been reasonable for the family to pursue, if not exhaust, other available means, such as approaching the HKSAR offices set out in the 2007 Letter for help.  Did the son approach these offices?  Further, the PRC notice included the name and telephone number of the handling person within the Ministry of State Security (Guangzhou Province).  Did the defendant’s son try to contact the authority direct or via local lawyers?

58.All these seem to me, as a matter of common sense, to be the obvious things or channels the family could pursue when the defendant was taken away in such abrupt manner.  Again, I do not know whether these steps, if taken, would produce any positive result.  But it seems to me to be inherently improbable and unbelievable that the family had not at least tried to do something more, apart from contacting the Hong Kong police.  The inference that I would draw is that the defendant has not presented the full picture here.  Instead what the defendant has opted to say in his affirmations is this:

“The Plaintiff has not provided any evidence in Cheung 1^st [ie the opposing affirmation] which can contradict my account. There is no indication that there was anyone in Hong Kong (whether the Plaintiff or otherwise) who was successful in contacting me during my detained period between June 2006 and January 2020.”

59.This is clearly unsatisfactory.  The burden is on the defendant to give a full account of how he was not able to contact anyone in the outside world.  It is clearly something that only he himself or his family (most notably his son) would have personal knowledge.  It does not assist his case to say that no one could contradict his account.

60.A related and material question also comes to mind in relation to the son’s appearance at the PTR.

61.If the defendant did not have any access to his family including his son at that time, why would the son take the initiative to attend the PTR?  What had prompted him to appear before the court in this action?  The defendant’s affirmations are markedly silent on this.  There are potentially legitimate reasons explaining the circumstances in which the son attended the PTR. 

62.In the course of his oral submissions, Mr Lui highlighted the fact that in 2009, there were court documents sent to the address of the Property.  It might be the case that the son got hold of the documents and became aware of the PTR hearing.  It may be the case or it may not.  One simply cannot tell from the defendant’s own affirmations.  It is not up to counsel or the court to speculate.  It is curious why the defendant chose not to give an account of this when he could have asked his son about this matter. 

63.In the circumstances, one may wonder whether it was in fact the defendant who had asked his son to help.  This may cast a doubt on the defendant’s assertion that he had no access to the outside world at all.

64.A few days before the trial, the defendant’s son wrote to the court asking for an adjournment of three months as the defendant was still being detained.  By that time, the defendant had already been in detention for three years.  According to the defendant’s case, there was no contact whatsoever between him and his family all along.  Why then would the son ask for an adjournment for just three months, when it must have been uncertain to him when the defendant was going to be released?

65.There may well be answers to these questions.  The defendant has however chosen not to give a full picture or account.

66.It must be borne in mind that in this application the defendant is asking the court to set aside a judgment which was made more than 10 years ago, and to thus deprive the plaintiff of his entitlement to a sizable sum awarded under the Judgment.  Instead of giving a full picture of the circumstances leading to his absence at the trial and his continued inability to come forward to the court to set aside the Judgment, the defendant has inexplicably chosen to make generic assertions and assertions based on second-hand knowledge in his affirmations in support of his case. 

67.In the circumstances, and in light of all these gaps in the evidence as identified above, the court should be skeptical of the veracity of the defendant’s assertions.  I am not prepared to accept them at face value.  As such, the defendant has failed to make out and establish his alleged reason for his absence at the trial and for his delay in taking step to set aside the Judgment.

Merits of the defence

68.Further, I am not satisfied that the defendant’s defence enjoys real prospects of success.  That is clearly a factor that weighs against setting aside the Judgment.  It would serve no purpose to order a re-trial if there is not much hope that the defendant would succeed in his defence.  I have arrived at this conclusion after having considered the pleadings, the witness statements and the latest affirmation evidence of the defendant.

69.Mr Lui is of course correct when he submits that the case is fact-sensitive and the outcome ultimately turns on the credibility of the witnesses.

70.In assessing credibility, the court looks at the inherent probabilities of the parties’ rival cases and test them against contemporaneous documents, if available.

71.The crux of the dispute in this action is what the sum of $2,500,000 was paid for.  The plaintiff’s version of events is supported by an acknowledgement of receipt signed by the defendant at the time which expressly stated that the defendant had received the cashier order from the plaintiff as a performance bond for the project in Beijing (“作為北京蝶翠華庭樓盤裝飾工程的施工保証金”).

72.The defendant does not dispute that he had signed it.  In fact, when he was asked to sign on the acknowledgment, he asked for the reason why the document should be signed.  But he was told that it did not matter and the document was only to prove that the defendant had received the money.  He therefore proceeded to sign it, even though the content was not accurate and was in fact wrong.

73.The defendant describes himself as “a seasonal businessman” back in 2006.  It seems to me to be against inherent probabilities that he would proceed to sign a document which he was fully aware did not correctly reflect the underlying commercial arrangement.  His case that the money was paid to him for onward transfer into the mainland China is directly contradicted by the contemporaneous document.

74.The defendant’s case is further premised on his allegation that he later repaid the sum in two tranches in RMB to the plaintiff in cash in Beijing. There is no documentary proof in support of this allegation.  There was apparently no receipt signed by the plaintiff in respect of such repayment. Asking the plaintiff to sign an acknowledgement would seem to be a reasonable thing to do, just as the plaintiff had previously asked the defendant to sign one when the sum was originally paid over.  Yet that was not done.

75.Again, this goes against the inherent probabilities of the assertion that repayment was made.  The defendant has produced documents which he says are contemporaneous documents in support of his factual case (see para 32 above). However, those documents, even if accepted, only go to support the allegations concerning some earlier dealings alleged by the defendant which formed the background leading ultimately to the payment of the sum of $2,500,000.  They do not shed any direct light on the veracity of the parties’ conflicting cases on the crux of the dispute, namely the purpose for which the sum of $2,500,000 was paid.

76.The success of the defence turns on the resolution of the factual dispute and as such, it may not be liable to be struck out.  But it must follow from my analysis above that the defence does not stand a much higher chance of success than that.  It certainly does not meet the threshold of “real prospects of success”.

77.In conclusion, the defendant has failed to adduce proper evidence to make out his alleged reason for his failure to attend the trial and his subsequent delay in setting aside the Judgment.  In any event, there is no real prospect of success in his defence.  For these reasons, his application to set aside the Judgment must fail.  There is no need for me to deal with the other factors which Ms Ho has highlighted, save to say that I accept that some of the factors are neutral and some others would work in the plaintiff’s favour but they are plainly not as significant as the “reason” factor and the “merits” factor as discussed above.

Conclusion

78.For the above reasons, I refuse to extend time for the defendant to apply to set aside the Judgment and, consequently, I dismiss the rest of his summons.

[Submissions on costs]

79.The plaintiff do have costs of the summons.  The costs are summarily assessed at $180,000.

Ms Cyndi TY Ho, instructed by Peter Cheung & Co, for the plaintiff

Mr Victor CI Lui, instructed by Henry Yu & Associates, for the defendant