Forever Property Finance Company Ltd v. Barretto, Bernice Mary

HCA 2189/2015

[2024] HKCFI 685

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2189 OF 2015

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HCA 505/2021

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 505 OF 2021

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DECISION

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INTRODUCTION

1.On 13 October 2023, this Court handed down a Judgment (“the Judgment”)[1] in the two money lender actions herein, and made the following orders:

HCA 2189/2015

(1)  The defendant do pay the plaintiff $2,932,515.58 with interest on $680,000 at the rate of 3% per month from 20 September 2023 until payment;

(2)  The defendant do pay the plaintiff $477,127.33 with interest on $99,282.07 at the rate of 3.5% per month from 20 September 2023 until payment;

(3)  The defendant do deliver to the plaintiff vacant possession of the Property known as Flat B on 19^th Floor of Wah Koon Building, No.191 Hollywood Road, Hong Kong.

HCA505/2021

(1)  The 2^nd named defendant do pay the plaintiff $196,059.60 being interest on overdue interest in respect of the loan advanced under the 3^rd Agreement calculated up to 19 September 2023 with interest thereon at the rate of 3.5% per month from 20 September 2023 until payment;

(2)  The 2^nd named defendant do deliver to the plaintiff vacant possession of the Property known as Flat B on 19^th Floor of Wah Koon Building, No.191 Hollywood Road, Hong Kong.

2.By summons filed on 9 November 2023 (“the November Summons”), the defendant (Barretto Bernice Mary) applied to:

(1)  strike out or set aside the inaccurate judgment; and

(2)  stay the execution of the Judgment.

3.Her grounds in support of the above applications, insofar as they are comprehensible, may be summarised as follows:

(1)  The “inaccurate Judgment” will damage her creditworthiness which is crucial;

(2)  She has suffered from adjustment disorder which was resulted from being exploited since 17 October 2012;

(3)  The submissions made by the plaintiff were the same as those made in two hearings in DCCJ 4339/2015 (case number of the 2021 Action while it was still pending in the District Court) (“the DC Action”);

(4)  The trial herein was conducted:

(a)  not on the basis of the defendant’s clarifications made in the hearings on 9 May 2016 and 10 June 2016 in the DC Action.  Further, the audio recordings of in the DC Action had not been considered by this Court;

(b)  in the defendant’s absence;

(c)  on the basis of the plaintiff’s “partial extractions of documents”;

(5)  She had made full repayments including excess interest and charges payments;

(6)  Contrary to [4] of the Judgment, Helena (i.e. the co-defendant) in fact had not admitted liability;

(7)  She was absent from the trial because Dr Lai Wing Him’s clinic and other clinics would not adjust their opening hours specifically for the sake of this trial, and her psychiatrist appointment was 9:30am on 19 September 2023 (i.e. the first day of the trial).

4.While the defendant has referred to some other matters in her affirmation in support, those matters are not referred to herein as they are incomprehensible.

5.On 26 January 2024, the defendant has taken out another summons in HCA 505/2021 (“the January Summons”), seeking to strike out/set aside the Judgment and to stay the execution of the same.  Since the defendant has asked for the same relief, this Court ordered (with the defendant’s consent) on 28 February 2024 that the January Summons shall be disposed of together with the November Summons.

DISCUSSION

Striking out/Setting aside the Judgment

6.In the circumstances where a Judgment is given in the absence of a party, the Court has discretionary power to set aside such a Judgment.  Order 35 rule 2 of the Rules of the High Court provides that:

(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.

7.The Judgment was handed down on 13 October 2023.  Hence, by the time when the Summons was filed on 9 November 2023, the time for the defendant to make such an application has already expired by slightly more than 2 weeks.

8.The defendant has failed to explain why she did not make the application earlier.  Indeed, on 18 October 2023 (i.e. when it was still within time), she had applied to this Court by letter to vary the costs order nisi made in the Judgment.  In that application letter, she stated that:

“I will take further actions to oppose and strike out the above inaccurate Judgment Paragraphs 1 to 43 as repeated in my 5^th letter dated 17 October 2023.”

9.It is unclear why she did not make such an application there and then.  However, what is clear is that she was able to make an application to the Court shortly after the handing down of the Judgment.

10.In such circumstances, there is simply no basis upon which the Court may exercise its discretion in extending the time for her to make the present application, and therefore her application to set aside may be dismissed on this ground alone.

11.Having said that, out of abundance of caution, I will consider the merit of her application.

12.In Lau Kam Chuen v Lee Ching [2003] 2 HKLRD 1018 at [11], the Court of Appeal followed the approach adopted by the English Court of Appeal in Shocked v Goldschmidt [1998] 1 All ER 372 in which the following list of “general indications” of when the power to set aside will be exercised has been set out as follows:

“These authorities about setting aside judgment after a trial indicate that each case depends on its own facts and that the weight to be accorded to the relevant factors will alter accordingly. But from them I derive the following propositions or ‘general indications’ as Lord Wright might have called them. (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.”[2]

13.I will consider the above factors which are relevant herein in turn below.

Notice of the proceedings

14.The first general indication reads: “Where a party with notice of proceedings has disregarded the opportunity of appearing at and participating in the trial, she will normally be bound by the decision”.

15.In the present case, there is no doubt that the defendant had received the notice of hearing, and that she was well aware that the trial would commence on 19 September 2023. As explained in [7] of the Judgment, she had informed the Court on the day before the trial that she would not attend.

Explanation of absence

16.Where judgment has been given after a trial, it is the explanation for the absence of the absent party that is the most important.

17.I have explained in [7] – [8] of the Judgment that the defendant did inform the Court on the day before the trial that she would not attend the hearing.  However, this Court took the view (and I maintain that view) that the trial should proceed in her absence.

18.In fact, this was not the first time that she was absent from court hearings.  She did not attend the pre-trial review on 27 June 2023.  Neither did she attend the Case Management Conference on 17 January 2023 before Master Hui, nor the Case Management Summons hearing on 13 September 2022, and various hearings before Master on 14 July 2022, 23 June 2022, 7 June 2022, 18 November 2021, 12 October 2021, 8 July 2021, and 21 April 2021.  In short, she had failed to attend any court hearings of these cases for more than 2½ years.

19.Although the defendant did present the Court with a sick leave certificate on many of those occasions, those certificates show that the defendant was only suffering from impetigo and dermatitis, and that she usually obtained the sick leave certificates on the day of the hearing or on the day before.  Normally only 3 to 4 days’ sick leave were granted by virtue of those certificates.

20.Having taken all the circumstances into account, I am of the view that:

(1)  Although sick leave certificates had been granted by various doctors, I do not accept that the defendant’s condition was so bad that she could not attend the hearings;

(2)  The persistent absence from hearings prior to the trial sheds light on the real reason why the defendant did not attend the trial.  In my view, she simply did not want to face the legal consequence of not repaying the debts;

(3)  The medical evidence which the defendant produced on the day before the trial was even weaker.  Her absence from the trial was totally unjustified;

(4)  The defendant has now produced a medical certificate which states that she is suffering from adjustment disorder and was unfit to work on 19 September 2023 (for 2 days).  That is inadequate to prove that she was not even fit to attend court hearings.

21.Hence, I do not accept the defendant’s explanation of absence.  I am of the view that the defendant has consciously made the decision not to attend the trial.

Prospects of success

22.The court will not consider setting aside judgment regularly obtained unless the party applying enjoys real prospects of success.

23.I have referred to the defendant’s case in the Judgment.  It suffices for me to say that she has no defence to the plaintiff’s claim, not to mention real prospects of success.

Delay

24.Delay in applying to set aside is a relevant matter to take into account, though I should add that I would not attach much weight on this factor since the delay on the part of the defendant in taking out this application is not substantial (putting aside the question of extension of time at the moment as discussed in [6] – [10] above).

Public interest

25.There is a public interest in there being an end to litigation.  The Court should not allow the setting aside of Judgment lightly.

Conclusion

26.To conclude, I am of the view that the Court should not exercise its discretion in setting aside the Judgment.

27.For the avoidance of doubt, I make it clear that I have considered the grounds relied on the defendant as summarised in [3] above.  However, I do not think they can assist the defendant.

Stay of execution

28.The legal principles governing stay of execution are trite.  In Star Play Development Limited v Bess Fashion Management Co. Ltd. [2007] 5 HKC 84, it was held by Ma J (as his Lordship then was) that the existence of an arguable appeal (that is, one with reasonable prospect of success) is the minimum requirement before a court would even consider granting a stay. However exceptional the circumstances may be otherwise justifying a stay of execution, if there exist no arguable grounds of appeal, no stay will be granted.

29.In the event the court is satisfied that there is a strong likelihood that the appeal would succeed, that in itself would enable a stay to be granted because this would constitute a good reason for a stay.

30.If there is just an arguable appeal instead of a strong one, the appellant has to provide additional reasons as to why a stay is justified.  The demonstration of an appeal being rendered nugatory in the absence of a stay is a common example.

31.As explained above, I am of the view that the defendant has no defence to the plaintiff’s claim. 

32.Although she has filed a Notice of Appeal under CACV 355/2023 to appeal against the Judgment, the grounds of appeal included therein are nearly identical to the matters referred to in her grounds in support of the setting aside application herein.  In my view, they are simply not arguable. 

33.I therefore do not agree that the execution of the Judgment should be stayed.

ORDER

34.By reasons of the aforesaid, the November Summons and the January Summons are dismissed.

COST

35.Costs should follow the event. 

36.I therefore order the defendant to bear the plaintiff’s costs of the November Summons and of the January Summons (including all costs reserved), to be taxed if not agreed.