Lam Hoi Kit v. Lam Tin Ling Liang Kindergarten
Read the full judgment text of DCCJ 1267/2024 on BabelCite. This District Court judgment was delivered on 26 March 2025.
1. This is the Plaintiff’s appeal against the decision of Master Raymond Chu dated 16 December 2024 whereby the Plaintiff’s claim was struck out with costs on the ground of abuse of process.
Cites 14 cases
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DCCJ 1267/2024 [2025] HKDC 466 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO 1267 OF 2024 ------------------------------ BETWEEN
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------------------------- DECISION ------------------------- A. INTRODUCTION 1.This is the Plaintiff’s appeal against the decision of Master Raymond Chu dated 16 December 2024 whereby the Plaintiff’s claim was struck out with costs on the ground of abuse of process. 2.The Plaintiff was represented by Messrs M C A Lai, Solicitors LLP (“MCAL”) at the hearing before the Master. On 24 December 2024, he filed a Notice to Act in Person. He is acting in person at today’s hearing. B. BACKGROUND 3.On 28 September 2020, a traffic accident (“Accident”) occurred in Kwun Tong between a private car (“Private Car”) and a school bus (“School Bus”). At the time of the Accident, the Plaintiff was the registered owner of the Private Car and his then girlfriend Ms Yu May Yee (“Ms Yu”) was the driver whereas Mr Leung Kin Fung (“Mr Leung”), an employee of the Defendant, was the driver of the School Bus. 4.After the Accident, Ms Yu was charged with careless driving. She was acquitted after trial on 12 July 2021. 5.On 24 June 2022, the Plaintiff commenced proceedings in Small Claims Tribunal against Mr Leung under SCTC 16686/2022 (“SCT Case”) for (a) cost of repair at HK$36,900; and (b) 5 days’ loss of earnings of HK$38,100 (based on an hourly rate of HK$1,100), totaling HK$75,000. 6.On 13 March 2023, the Plaintiff obtained a judgment in default against Mr Leung in the SCT Case (“SCT Judgment”) for (a) the sum of HK$75,000 (“SCT Judgment Sum”); (b) the costs of HK$15,560 (“SCT Costs”); (c) post-judgment interest on the SCT Judgment Sum and the SCT Costs (“SCT Interest”). 7.After obtaining the SCT Judgment, the Plaintiff attempted to enforce it against Mr Leung but in vain because Mr Leung could not be located. 8.On 20 December 2023, MCAL, acting on behalf of the Plaintiff, sent a pre-action letter to the Defendant. It was alleged in the said letter that, at the time of the Accident, Mr Leung was employed by the Defendant to drive the School Bus and the Accident took place in the course of his employment. Therefore, the Defendant was vicariously liable for “the … damages, costs and interest arising from his negligence in the Accident”. 9.On 8 January 2024, Messrs H F Yip & Co (“HFY”), acting for the Defendant, sent a letter to MCAL asking for information and documents for their investigation. 10.By the letter dated 29 January 2024, MCAL provided various documents to HFY. By the letter of even date, HFY replied that they would take instructions from the Defendant and would revert by 19 February 2024. HFY asked MCAL to withhold initiating legal action. 11.On 6 March 2024, the Plaintiff commenced the present proceedings against the Defendant for (a) SCT Judgment Sum of HK$75,000; (b) SCT Costs of HK$15,560; (c) SCT Judgment interest at HK$8,037.20 (up to 12 March 2024); (d) costs of enforcing the SCT Judgment at HK$7,000; and (e) Carpark fees at HK$144,854.84 (HK$3,500 per month from 1 October 2020 to 12 March 2024), totaling HK$250,452.04. 12.By the letter dated 7 March 2024, MCAL served the court documents of the present case (including the Writ of Summons and the Statement of Claim) on HFY. A receipt chop “H F YIP & Co 7 MAR 2024 14:14” was stamped on MCAL’s covering letter (“Covering Letter”). 13.On 14 March 2024, the Defendant’s current solicitors, Messrs Kao, Lee & Yip (“KLY”) sent a letter to MCAL requesting the Defendant to discontinue the present action within 7 days on the ground of abuse of process. 14.On 5 April 2024, the Plaintiff made an application for default judgment. 15.By the letter dated 24 April 2024, KLY said that HFY had no authority to accept service on behalf of the Defendant and did not indorse on the Covering Letter that they accepted service on the Defendant’s behalf in accordance with Order 10 rule 1(4) of the Rules of the District Court. KLY requested MCAL to withdraw the application for default judgment. 16.On 29 April 2024, the Plaintiff obtained an interlocutory judgment against the Defendant with damages to be assessed on the ground that no notice of intention to defend had been given by the Defendant (“Default Judgment”). The Default Judgment was served on KLY on 2 May 2024 17.On 6 August 2024, the Defendant applied to (a) set aside the Default Judgment; and (b) strike out the Plaintiff’s claim. 18.On 11 September 2024, the Default Judgment was set aside by consent with costs reserved and determined at the substantive hearing of the Defendant’s application for striking out. 19.The Defendant’s application for striking out was heard by Master Raymond Chu on 16 December 2024. At the end of the hearing, the Master ordered that:-
20.On 24 December 2024, the Plaintiff filed a Notice to Act in Person. 21.On 30 December 2024, the Plaintiff filed the Notice of Appeal to Judge in Chambers to “set aside” the Master’s decision. C. GROUNDS FOR STRIKING OUT 22.The Defendant relies on the following two alternative grounds to strike out the Plaintiff’s claim:-
23.The principles on striking-out are well-established:-
24.It is also trite law that an appeal from a master’s decision to judge in chambers is a de novo hearing, and the judge will deal with the matter in question as if it comes before him or her for the first time. The judge will of course give the weight it deserves to the previous decision of the Master; but he is in no way bound by it; Hong Kong Civil Procedure 2025 §58/1/2. D. FIRST GROUND – HENDERSON ABUSE D1. Legal principles 25.The legal principles on Henderson abuse, which is derived from the name of the case Henderson v Henderson (1843) 3 Hare 100, is well settled. The essence of the principle is that a party ought generally not be permitted to raise in subsequent proceedings matters which that party could have and should have raised in earlier proceedings; Ko Ho Yue v Chiu Pik Yuk (2012) 15 HKCFAR 72 at §83 per Ma CJ. 26.Ma CJ set out the principles at §84 at follows:-
27.These principles apply where a plaintiff fails to join a defendant who should have been joined in the earlier proceedings; Barrett v Universal Island Records Ltd [2006] EWHC 1009 at §193 per Lewison J, cited by Deputy High Court Judge Carlson in Lee Ming Mang Sharon v Ng Siew Seng Richard, HCA 1536/2006, 30 April 2009 at §39. 28.In Park Young Sook v Chu Dean Yuen Franklin, HCA 2353/2009, 15 July 2010, To J referred to Lee Ming Mang Sharon (supra) and Norman Eric Tomlin v Michele Helene Tomlin, HCA 4036/1994, 30 September 1996 and said at §19:-
29.The abuse usually takes the form of a party or his privy being vexed twice. But it can also take other forms including bringing the administration of justice into disrepute or manifest unfairness to the other party in the subsequent proceedings; Yifung Properties Ltd v James Nicholas Barries Smith [2019] 1 HKLRD 36 at §17 per Lam V-P (as he then was) 30.The Plaintiff does not seriously challenge the above principles but he argues that these principles do not apply to the present case because none of the cases cited by Mr Yeung for the Defendant involves claims for damage to movable property in a traffic accident. 31.I reject the Plaintiff’s argument. The Plaintiff has not cited any authority to support his argument that the legal principles on Henderson abuse do not apply to any specific type of cases. As Mr Yeung rightly points out, the Plaintiff’s claim is based on tort and there is nothing special about it. In my judgment, the legal principles on Henderson abuse, which have been developed and affirmed in numerous authorities since 1843, are of general application and apply squarely to the present case. 32.Therefore, the question that I need to consider is whether it is an abuse of process for the Defendant to be subjected to this action and the burden is on the Defendant and the main issue is whether it is manifestly unfair to the Defendant. D2. The Plaintiff’s reason of not joining the Defendant in the SCT Case 33.In the Affirmation, the Plaintiff explains that he did not join the Defendant in the SCT Case because he wished to settle the matter in “a simple manner” and did not want to “complicate the matter”. If he could get the reasonable compensation from Mr Leung, it was not necessary to name other parties such as the Defendant who was the employer of Mr Leung as a party to the SCT Case. He also held the view that “Such a small claim was not worth it to pull many people into it”. The Plaintiff stresses that he had never thought that Mr Leung would evade his liability before he commenced the SCT Case against Mr Leung. Owing to the failure of enforcing the SCT Judgment against Mr Leung, he had no alternative but to commence the present case against the Defendant. 34.It is the Plaintiff’s stance that Mr Leung’s liability and quantum has been adjudicated in the SCT Case and the mere legal issue in the present case is whether the Defendant is vicariously liable for Mr Leung’s negligence. Therefore, there is no need to re-open the issue of Mr Leung’s liability in the present proceedings and there is no room for the Defendant to argue on it. 35.At the oral submissions, the Plaintiff repeatedly says that, as a victim of a traffic accident, he has no obligation to find out who was the driver’s employer. The Plaintiff denies that there is any abuse to claim against the Defendant in the present proceedings because he is just seeking redress through the legal system. D3. The alleged unfairness to the Defendant 36.Mr Yeung submits that the present proceedings are manifestly unfair to the Defendant in at least two ways. 37.Firstly, it is manifestly unfair to seek to bind the Defendant to the effect of the SCT Judgment without giving the Defendant any opportunity to contest the same. 38.Secondly, the Plaintiff’s litigation conduct exposes the Defendant to the risk of being liable to compensate the Plaintiff under the doctrine of vicarious liability but without the protection of an indemnity from Mr Leung in the event that the SCT Judgment is set aside subsequently. Such risk would have been avoided if the Plaintiff had joined the Defendant in the SCT Case in the first place such that any finding on negligence would be binding on the Defendant and Mr Leung. It is manifestly unfair to ask the Defendant to bear the risk because of the Plaintiff’s decision to sue only Mr Leung in the SCT Case. D4. Discussion 39.It is trite law that an employer is liable for a tort committed by an employee against a third party, provided that tort was committed by the employee in the course of his employment, or while he was engaged on his employer’s business. In order to establish vicarious liability against the employer, the plaintiff must first establish liability against the employee. If the employee is not liable, there will not be any vicarious liability on the part of the employer. 40.Since there is no conviction against Mr Leung (Mr Leung was not even prosecuted), the burden of proof of Mr Leung’s negligence should rest on the Plaintiff. 41.It is noted that the Accident was recorded by the dashcam installed in the School Bus. According to the dashcam footage, prior to the Accident, traffic had come to a halt due to a red traffic light. The School Bus was in the middle lane whilst the Private Car was in the left lane with its right signal light flashing. When the traffic light turned green, the vehicle in front of the School Bus began to move forward, creating a gap with the School Bus. Whilst the Private Car tried to make use of the gap to cut from the left lane to the middle lane, the School Bus began to move forward, resulting in the collision. 42.I do not intend to delve further into the details of the Accident. Suffices it to say that had the Plaintiff joined the Defendant in the SCT Case, the Defendant could have used the dashcam footage to contest Mr Leung’s liability and/or raise the issue of contributory negligence on the part of Ms Yu, even if Mr Leung did not participate in the proceedings. I agree with Mr Yeung that it is manifestly unfair to the Defendant to seek to bind it to the effect of the SCT Judgment but at the same time deprive it of the opportunity to contest Mr Leung’s liability, which is a fundamental element of vicarious liability. 43.In addition to liability, I am of the view that it is also manifestly unfair to deprive the Defendant of the opportunity to dispute the quantum of the Plaintiff’s claim because of the following:-
44.Furthermore, I agree with Mr Yeung that it is manifestly unfair to ask the Defendant to bear the risk of not being able to seek indemnity from Mr Leung because of the Plaintiff’s decision to sue only Mr Leung in the SCT Case. 45.It is important to note that the SCT Judgment was obtained due to procedural default, and Mr Leung may apply to set it aside under section 32A of the Small Claims Tribunal Ordinance (Cap 338). However, setting aside the SCT Judgment would not reverse any decision in the present case. If the Plaintiff establishes vicarious liability against the Defendant in the present case but Mr Leung later sets aside the SCT Judgment and proves he was not negligent in the Accident, the Defendant would effectively have compensated the Plaintiff for a “non-negligent” act of Mr Leung. If Mr Leung was not negligent in the Accident, it would mean that the Defendant cannot claim indemnity from him and would have to bear the compensation itself. This awkward situation could have been avoided if the Plaintiff had joined the Defendant in the SCT Case. 46.Regarding the Plaintiff’s oral argument that, as a victim of the Accident, he was under no obligation to ascertain the identity of Mr Leung’s employer. I am of the view that such argument is completely misplaced. The issue here is not about the obligations of a victim in a traffic accident. Rather, the issue is about the duties of a plaintiff in legal proceedings, and the law on this is clear. 47.In his oral submissions, the Plaintiff alleges that he did not join the Defendant in the SCT Case because he did not know the identity of Mr Leung’s employer when he commenced the proceedings in Small Claims Tribunal. However, it appears that this allegation is directly contradicted by his own evidence in the affirmation, which indicates that he made a conscious decision not to include Mr Leung’s employer as a party in the SCT Case. It is noted that the Plaintiff’s solicitors openly argued before Master that it was a deliberate choice in not suing the Defendant in the Small Claims Tribunal; see transcript at 29L. 48.Further, one can see from the photographs taken after the Accident that the Defendant’s name appeared in large font size behind the School Bus’s windscreen. In response, the Plaintiff states that he did not trust the information displayed on the School Bus’s windscreen. With respect, I find the Plaintiff’s response to be absurd and unreasonable. In my view, the Plaintiff could have joined the Defendant in the SCT Case had he chosen to do so. 49.In his oral submissions, the Plaintiff also repeatedly asserts that pursuing a claim against the Defendant in the present proceedings does not constitute an abuse of process because he is merely seeking legal redress in light of Mr Leung’s evasion of liability to satisfy the SCT Judgment. In my view, while it is open to the Plaintiff to seek redress through the legal system, it does not mean that he can do so at the expense of others’ rights. As established in Ko Ho Yue, the Court must engage in a balancing exercise, with the key consideration being whether the present proceedings result in manifest unfairness to the Defendant 50.Balancing the considerations discussed above, I am satisfied that the Defendant has demonstrated that it is manifestly unfair to the Defendant to allow the Plaintiff to proceed with the present case and the Plaintiff’s claim should be struck out on the ground of Henderson abuse. E. SECOND GROUND – FOR WANT OF JURISDICTION 51.In light of my ruling that the Plaintiff’s claim should be struck out on the ground of Henderson abuse, it is strictly speaking unnecessary to deal with Mr Yeung’s alternative ground based on for want of jurisdiction. However, in deference to the parties’ submissions, I would continue to deal with it for the sake of completeness. 52.Mr Yeung submits that the Plaintiff’s claim is inflated and, if the inflated parts are excluded, the Plaintiff’s claim would be less than HK$75,000 which falls within the exclusive jurisdiction of the Small Claims Tribunal. As the Court does not have the power to transfer a case to the Small Claims Tribunal, it can only strike it out for want of jurisdiction. 53.According to Mr Yeung, the items that have been inflated are as follows:-
54.As held by the Court of Appeal in Chan Chiu Tung v Cheng Ka Fai Philip [2024] 1 HKLRD 82, the proper time to consider whether the plaintiff’s claim is within the jurisdiction of the Small Claims Tribunal is at the commencement of the action (§27). 55.I agree with Mr Yeung that there is no evidence to show that the Plaintiff had actually paid the cost of HK$36,900 and the only evidence available is the estimate of HK$29,400 provided by the Plaintiff’s motor surveyor. Therefore, a sum of HK$7,500 should be deducted from the Plaintiff’s claim. 56.I also agree with Mr Yeung that, based on the Plaintiff’s own evidence, there is an overlapping between the Plaintiff’s claim for loss of earnings of HK$38,100 and the SCT Costs of HK$15,560. Since the Plaintiff is claiming the SCT Costs, there is no basis for him to claim the loss of earnings of HK$38,100 at the same time and therefore the whole sum of HK$38,100 should be deducted from the Plaintiff’ claim. 57.Insofar as the carpark fees, the plaintiff in Ma Kwan Ho was involved in a traffic accident for which the defendant was held liable. Prior to the accident, the plaintiff had agreed to rent a carpark space with a term of 2 years. One of the items claimed by the plaintiff was a sum equivalent to 3-month rent which the plaintiff said had been “wasted” because of the traffic accident. Master Maurice Lam held that the plaintiff’s liability to pay the rental carpark fee arose from the tenancy agreement, instead of the accident for which the defendant was held liable, and such “wasted” carpark fees could not constitute a loss which could be recoverable as a matter of law. I take the view that the Master’s decision in Ma Kwan Ho was found on its own fact. 58.In my view, whether the Plaintiff can claim the carpark fees in the present case depends on whether he can establish the causation between the Accident and the payment of carpark fees. 59.In his oral submissions, the Plaintiff says that he needs to rent a carpark space to park the Private Car in order to “preserve the evidence” because he fears that the Defendant may sue him for the Accident. 60.It is noted that the reason given by the Plaintiff in his oral submissions is completely different from the one given in his affirmation. In his affirmation, the Plaintiff says that he retained the Private Car because it “contained a lot of sweet and romantic memories” with his ex-girlfriend (ie Ms Yu) who broke up with him after the Accident and he did “not want to throw [the Private Car] away” even though it had been seriously damaged. The Plaintiff even says that he would “keep [the Private Car] as long as [he] can afford to pay the car park fees”. 61.I refuse to accept the reason given by the Plaintiff during the oral submissions as it is not supported by affidavit evidence. In any event, I agree with Mr Yeung that the damage to the Private Car has been recorded in the Motor Survey Report and the Plaintiff could have taken photos on the damaged parts of the Private Car if he so wished. It is wholly unreasonable to rent a car park space at the monthly rent of HK$3,500 merely for purpose of preserving the evidence. 62.Insofar as the reason given in the Plaintiff’s affirmation, it is clear that the necessity to rent a carpark space for the Private Car is due to a personal reason and is not caused by the Accident. 63.Thus, I agree with Mr Yeung that, based on the evidence adduced by the Plaintiff, the carpark fees are not recoverable. 64.Upon deducting the inflated parts (ie HK$7,500 from the claim for repair cost, $38,100 for the loss of earnings, HK$144,854.85 for carpark fees), the Plaintiff’s claim would be reduced to HK$59,997.19 which falls within the jurisdiction of the Small Claims Tribunal of HK$75,000. 65.Section 5(2) of the Small Claims Tribunal Ordinance (Cap 338) provides that, save as provided in the said Ordinance, no claim within the jurisdiction of the tribunal shall be actionable in any other courts. As the Court has no power to transfer the Plaintiff’s claim to the Small Claims Tribunal, the wrongly commenced or maintained action in the District Court can only be struck out; Sit Ka Yee v Lai Wai Ho, DCPI 271/2000, 29 October 2001 at §9 per His Honour Judge Carlson, and Chan Chiu Tung v Cheng Ka Fai Philip [2021] HKDC 994 at §46 per His Honour Judge Andrew Li. 66.By reason of the aforesaid, if necessary, I would strike out the Plaintiff’s claim on the alternative ground of for want of jurisdiction as well. F. COSTS OF SETTING ASIDE OF DEFAULT JUDGMENT 67.As pointed out by Mr Yeung, an appeal against the costs order of a Master to a Judge in Chambers is not a hearing de novo and the judge will not intervene the Master’s exercise of discretion on costs unless it can be shown that the costs order made by the Master was “demonstrably unreasonable or that he erred in law”; See Success Lane Development v IFC Development (Suite) Ltd [2024] HKDC 1369 at §32 per His Honour Judge Alan Kwong. 68.Order 10 rule 1(4) of the Rules of District Court provides that:-
69.Mr Yeung argues that HFY’s receipt chop stamped on the Covering Letter does not contain the required indorsement that HFY accepted the service on behalf of the Defendant and the Plaintiff did not serve the Writ of Summons on the Defendant by other means. Thus, the service is plainly defective and the default judgment was entered irregularly. 70.The Plaintiff argues that the service of court documents on HFY was valid. When MCAL served court documents on HFY on 6 March 2024, HFY did not forewarn MCAL of its lack of authority to receive it. Instead, HFY accepted the documents by stamping the receipt chop on the Covering Letter. Therefore, the Plaintiff verily believed that HFY had the authority to deal with all legal matters in the present case on behalf of the Defendant, including the acceptance of service on 6 March 2024. 71.Relying on Cheung Sai Lon v Cheung Sai Ho [2021] HKCFI 904, the Plaintiff argues that the “real test” for whether service is regular is whether the proceedings are brought to the defendant’s attention. The Plaintiff submits that the present proceedings were brought to the attention of the Defendant within the period from 6 March 2024 to 14 March 2024 through HFY or KLY (which replaced HFY on 14 March 2024). Thus, the service on the Defendant was valid and the Default Judgment was regular. 72.In the oral submissions, the Plaintiff makes the point that if the Default Judgment was irregular, it was the fault of the handling solicitor in MCAL and the costs should not be borne by him. 73.I agree with Mr Yeung that the case of Cheung Sai Lon is not applicable to the present case as it concerns the situation where the service was effected through letterbox, rather than via solicitors. Whilst service through letterbox requires proof of the defendant’s knowledge, no similar requirement exists for service via solicitors; Order 10 rule 1(3)(b) and Order 13 rule 7 of the Rules of the District Court. 74.It is undisputable that the service on HFY does not satisfy the requirement of Order 10 rule 1(4). The fact that HFY put a receipt chop on the Covering Letter does not mean that HFY had the authority to accept service on behalf of the Defendant. It was for MCAL to ascertain before service whether HFY had such authority. 75.Since the service on HFY did not satisfy the requirements of Order 10 rule 1(4), it follows that the Default Judgment was entered irregularly, and the costs of setting aside should be borne by the Plaintiff. If the Plaintiff considers that it was MCAL’s fault in entering the Default Judgment irregularly, he is at liberty to seek redress against MCAL through the legal system, but this is not the reason why he should not be liable for the costs of setting aside to the Defendant. 76.By reasons of the aforesaid, I would dismiss the Plaintiff’s appeal on costs of setting aside the Default Judgment. G. DISPOSAL 77.I dismiss the Plaintiff’s appeal in its entirety. 78.There is no reason why costs should not follow the event. Mr Yeung asks for indemnity costs by reasons of the Plaintiff’s conducts, including brining a claim which falls foul of the Henderson abuse and exaggerated; the total lack of merit of his appeal; the baseless allegation of dishonesty in evidence and allegation of deceit in hearing; the ulterior motive to pressure the Defendant into settling the SCT Judgment. It is noted that these complaints were made before the Master but at the end the Master was not inclined to order indemnity costs. 79.Having carefully considered Mr Yeung’s submission, I do not consider that the Plaintiff’s conduct in this appeal is so unreasonable that it justifies an order for indemnity costs against him. In particular, I note that some of the submissions made before the Master are not repeated on appeal (such as the additional claim of HK$700,000 for “loss of love”). Thus, I would make an order that the Plaintiff should pay the Defendant’s costs of appeal on a party-to-party basis with Certificate for Counsel. 80.I am of the view that this is an appropriate case to assess the costs summarily and would make the following directions:-
81.Lastly, it remains for me to thank Mr Yeung for his very helpful submissions.
The plaintiff acts in person Mr Alex Yeung, instructed by Kao, Lee & Yip., for the Defendant | |||||||||||||||||||
Cases cited in this judgment
Further hearings and rulings under DCCJ 1267/2024