Read the full judgment text of CACV 000076/1988 on BabelCite. This Court of Appeal judgment was delivered on 17 November 1988 before Cons, V.-P., Kempster, J.A., Clough, J.A..
Civil procedure – Order 14 – summary judgment – whether delay in bringing Order 14 proceedings is fatal – contract – sub-contract for supply and erection of skylight – variations ordered by Architect – whether defendant estopped by silence from denying acceptance of additional work – whether triable issue exists on defence of delay and on quantum of set-off. Order 14 provides a procedure for summary judgment where the court is satisfied that there is no defence to a claim. Although the rules contemplate that an application will ordinarily be made before a defence has been filed, they impose no express time limit and the court should not impose one indirectly as a matter of practice. The concluding observation in McLardy v. Slateum [1890] 24 Q.B.D. 505 should not be regarded as requiring summary judgment to be denied by reason only that delay is not satisfactorily explained; the modern English practice, reflected in Bath Press Ltd. v. Rose (Times, 13 July 1987) and approved in Kaufman v. Maker Industrial Co. Ltd. [1982] H.K.L.R. 20 and WOC Finance Co. Ltd. v. Fullrate Enterprises Ltd. [1982] H.K.L.R. 474, is that delay is one factor to be weighed, and may be reflected in costs. The approach in Timur Jaya Co. Ltd. v. United Asia Trading Co. [1980] H.K.L.R. 768 was not followed. An order setting aside a regular default judgment under Order 13 rule 9 does not give rise to issue estoppel precluding a subsequent Order 14 application, because the merits of the defence are not a necessary issue on an application to set aside. Following Evans v. Bartlam [1937] A.C. 473, there is no rigid rule of law that a court setting aside a default judgment must be satisfied that an arguable defence exists; the affidavit of merits is an almost invariable rule of practice, not a rule of law, and may be departed from in appropriate cases. In a commercial main-contractor/sub-contractor context, a party who remains silent in the face of detailed quotations and invoices while additional work is carried out and completed, and who only objects when litigation is threatened, may be estopped by silence from denying acceptance of the additional work. Looking for what is 'indisputably due' to the plaintiff in the manner indicated by Lord Denning in Ellis Mechanical Services Ltd. v. Wates Construction Ltd. [1976] 2 B.L.R. 57, the court held that there was no triable issue as to the additional work but that there was a triable issue on the defendant's pleaded set-off for delay, limited to the $458,000 deducted by the Project Architect as liquidated damages under the main contract. The appeal was therefore allowed to the extent of reducing the judgment sum to $820,120.06, directing payment into court of $458,000, and granting the defendant unconditional leave to defend up to that amount of set-off.
Legal issues: Effect of delay in bringing Order 14 proceedings · Issue estoppel arising from order setting aside default judgment · Implied finding of arguable defence when setting aside default judgment · Triable issue on additional work and variations · Triable issue on delay and set-off
Outcome: Appeal allowed in part. The order of Mayo J. giving the plaintiff summary judgment for $1,278,120.06 was varied by reducing the judgment sum to $820,120.06 and granting the defendant unconditional leave to defend up to the amount of $458,000 by way of set-off.