Tse Yik Kei v. Angel Lee Yoga Company Ltd

DCPI 3367/2022

[2025] HKDC 678

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

PERSONAL INJURIES ACTION NO. 3367 OF 2022

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REASONS FOR DECISION

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INTRODUCTION

1.This is the appeal of the Defendant (“D”) under O 58 of the Rules of the District Court (“RDC”) against the decision of Master J Chow dated 4 February 2025 (“Appeal”) dismissing its application by way of Summons filed on 26 November 2024 (“Summons”) to set aside a default judgment obtained by the plaintiff (“P”) against it with costs.

2.In support of the Appeal filed on 18 February 2025, D filed another summons on 7 March 2025 seeking to adduce new evidence of 3 Affirmations (“New Evidence Summons”).

3.P opposes the Appeal and the New Evidence Summons.

4.I read the written submissions and authorities referred to, and heard the submissions in court of P’s counsel Ms Velda Yau and D’s counsel Mr Tim Wong.

5.At the end of the hearing, this Court dismissed the Appeal as well as the New Evidence Summons with indemnity costs payable by D to P. Here are the reasons for my decision.

THE LEGAL PRINCIPLES

6.An appeal against a master’s decision pursuant to O 58 of RDC is by nature of a re-hearing. The judge hearing the appeal would give the weight it deserves to the previous decision and reasons of the master, but is not bound by it.

7.Parties do not dispute that the default judgment against D in question is a regular judgment.

8.In the case of a regularly obtained judgment, the defendant has the burden of satisfying the court that its defence carries a “real prospect of success”, not a merely “arguable” defence: see Law Kwok Hung v Tse Ping Man [1999] 4 HKC 397; L & M Specialist Construction Ltd v Wo Hing Construction Co Ltd [2000] 3 HKLRD 262; Hong Kong Civil Procedure 2025, Vol.1 at 13/9/12-14.

9.By the New Evidence Summons, D seeks to adduce new evidence of 3 Affirmations at the appeal stage.

10.O 58 r 1 (4) of RDC provides that no further evidence may be received on appeal except on “special grounds”, which term refers to the conditions laid down in Ladd v Marshall [1954] 1 WLR 1489 as follows:-

“Leave to adduce further evidence on appeal will only be granted (1) if it is shown that the evidence could not have been obtained with reasonable diligence for use at the trial, (2) if the further evidence is such that, if given, it would probably have an important influence on the result of the case, thought it need not be decisive, and (3) if the evidence is such as is presumably to be believe.”

See also commentaries in Hong Kong Civil Procedure 2025, Vol.1 at 58/1/3 on the equivalent rule.

P’S CLAIM FOR PERSONAL INJURIES

11.The present action arose from an accident that took place on 5 May 2022 when P, a member of a yoga centre operated by D, attended a “Deep Stretching” yoga class and allegedly sustained injuries to her right shoulder (“Accident”).

12.P’s case is that during the yoga class, instructor Chea Ho Lun (“Chea”) stretched her shoulders and pressed against her back too hard, as a result causing her injuries. Subsequent MRI of P done on 24 May 2022 showed interstitial partial tear of supraspinatus tendon, partial tear of infraspinatus tendon and mild subacromial subdeltoid bursitis. A diagnosis of right shoulder rotate cuff tear was made. P was later referred to the orthopaedic surgeon and physiotherapist and received treatment and rehabilitation.

13.P claims in this action against D for damages for personal injuries premised on negligence and breach of duties under the Supply of Services (Implied Terms) Ordinance (Cap 457).

14.P’s claims as pleaded in the Statement of Damages filed on 18 September 2023 (“SOD”) are relatively modest in the total sum of $262,200 (plus interest), comprising damages for PSLA of $200,000, loss of earning capacity of $50,000 and medical ($12,000) and travelling ($200) expenses incurred and paid.

PROCEDURAL HISTORY

15.It is noteworthy that despite being legally represented since commencement of the action and upon accepting service of the Statement of Claim (“SOC”) and SOD on 18 September 2023 by Messrs M K Lam & Co (“1^st Solicitors”), D has all along not taken any steps to defend the claim, other than responding through the 1^st Solicitors by consenting to applications for directions and attending court hearings.

16.The following procedural events are particularly relevant to this Court’s consideration of the Appeal and D’s litigation conduct:-

(1)  By an order (by consent) dated 3 October 2023, D was to file a Defence on or before 24 October 2024;

(2)  Interlocutory judgment in default of defence was entered on 21 November 2023;

(3)  D breached an unless order dated 5 March 2024 and was debarred from adducing witness statements;

(4)  D breached an unless order (by consent) dated 22 August 2024 and was debarred from filing an Answer to SOD;

(5)  At the hearing before Master J Leung on 21 November 2024, the action was set down for assessment of damages, not to be warned before 19 February 2025;

[It is noteworthy that at the hearing for setting down, D was attended by counsel Ms Virginia Leung who confirmed in court that (i) the action was ready for setting down; (ii) D had no comments on the assessment bundles prepared by P’s solicitors; (iii) D would not have further interlocutory application to make before trial; and (iv) D would not require time for seeking further counsel advice.] Shortly after the setting down hearing, D filed the Summons on 26 November 2024 seeking to set aside the default judgment;

(6)  On 5 December 2024, D changed its legal representatives to Messrs T C Wong & Co (“2^nd Solicitors”);

(7)  On 4 February 2025, the Summons to set aside the default judgment was heard and dismissed by Master Chow with costs. On the same day, parties filed a consent summons for setting down (for the second time) for assessment of damages on the running list not to be warned before 22 May 2025. The order (by consent) was subsequently granted on 20 February 2025;

(8)  On 18 February 2025, D filed a Notice of Appeal seeking to overturn Master Chow decision. On the same day, it changed its legal representatives to its current solicitors Messrs GT Lawyers; and

(9)  On 7 March 2025, D filed the New Evidence Summons.

THE AFFIDAVITS/AFFIRMATIONS BEFORE THE MASTER

17.In support and opposition of the Summons filed on 26 November 2024 to set aside the default judgment, the parties have filed the following Affirmations/Affidavit:-

(1)  Affirmation of Leung Ka Lok of the 1^st Solicitors (superseded and not relied on) filed on the same day as the Summons on 26 November 2024;

(2)  D’s 2^nd Affirmation of Leung Ka Lok filed on 29 November 2024 (“2^nd LKL Affm”)[1];

(3)  P’s 2^nd Affidavit in opposition filed on 23 December 2024 (“2^nd P Affdt”)[2];

(4)  D’s Affirmation in reply of Chan Ping Wah, D’s director, filed on 17 January 2025 (“CPW Affm”)[3]; and

(5)  D’s Affirmation in reply of Wong Ting Chun of the 2^nd Solicitors filed on 17 January 2025 (“WTC Affm”) enclosing a draft Affirmation of Chea (which was later signed and filed on 4 February 2025 immediately after hearing of the Summons before Master Chow) (“Chea Affm”)[4].

18.2^nd LKL Affm supersedes and replaces in whole the one filed on 26 November 2024. It is stated that the entry of interlocutory judgment was due to administrative errors of a former legal executive of the 1^st Solicitors. D was promptly informed of the interlocutory judgment whereupon counsel’s advice was immediately sought. Instructions were obtained from D and a Defence was drafted (exhibited as “LKL-2”)[5] in conference on 19 December 2023 by counsel Mr Victor Gidwani. It does not explain further what had followed and why no application for setting aside the default judgment was made until almost a year later on 26 November 2024.

19.2^nd LKL Affm goes on to state that D has a good defence by referring to instructions obtained from D and yoga instructor Chea who denies that P had shown any discomfort or complained of pain or injury at or after the yoga class held on 5 May 2022, or that the Accident had ever occurred.

20.2^nd P Affdt sets out the factual disputes along the lines of P’s pleaded case. It contains mainly submissions in opposition of the setting aside application rather than evidence.

21.By CPW Affm, D puts all blame for the delay on the 1^st Solicitors who according to D had not informed it of the interlocutory judgment nor progress of the action until after the setting down hearing on 21 November 2024. D was not even aware of the fact that the 1^st Solicitors had engaged counsel to appear for it at the setting down hearing, or that counsel appearing for D had confirmed in court that no interlocutory application would be taken out and the case was ready to proceed to assessment of damages.

22.On merits of the defence, CPW Affm states that:-

(i)  P has entered into a membership agreement which stipulates an express exemption of liability clause in respect of accidents occurring during classes;

(ii)  There have been a lot of false reports of injuries from classes in D’s centre since the outbreak of COVID-19; P’s claim is believed to be one of them;

(iii)  There are substantial disputes on facts of P’s claim; and

(iv)  P has not to date disclosed a video which she alleged would show how the Accident had occurred.

23.By WTC Affm, the 2^nd Solicitors encloses a draft Affirmation of Chea and states that Chea was out of Hong Kong and would not return until 4 February 2025 after the Chinese New Year holiday.

24.In Chea Affm, Chea states his qualification and experience teaching yoga. On merits of the defence, Chea denies the occurrence of the Accident, or that he had exerted excessive force pressing on P’s back, or that P had shown discomfort or complained of pain or injuries. Further, P’s pleaded case of sustaining right shoulder injuries in the Accident on 5 May 2022 is incredible and is contradicted by the fact that she had attended other courses in D’s centre after 5 May 2022 according to the attendance record, that she did not seek medical treatment until 18 May 2022 and that a different date of the Accident of 15 May 2022 is stated in one of the medical reports.

25.The above Affirmations/Affidavit evidence was before the court at the hearing of the Summons for setting aside the default judgment on 4 February 2025 before Master Chow, who dismissed the same with costs.

THE NEW EVIDENCE

26.By the New Evidence Summons filed, D seeks to adduce the following new evidence (annexed thereto) in support of the Appeal:-

(1)  Draft Affirmation of Chan Ping Wah (“CPW 2^ndAffm”)[6];

(2)  Draft Affirmation of Chea referring to Chea Affm (already filed on 4 February 2025), but added with new §§5 and 14 confirming the contents in Chea Affm being true and correct and stating his absence from Hong Kong during Chinese New Year holiday until 4 February 2025[7]; and

(3)  Draft Affirmation of Ng Chun Yeung (“NCY Affm”), another yoga instructor of D[8].

27.D repeats in CPW 2^nd Affm that D had no knowledge of the default judgment nor counsel being briefed to appear for D at the setting down hearing on 21 November 2024. D was kept in the dark all along as the case was mishandled by a staff member named Calvin Chan who changed from the 1^st Solicitors to the 2^nd Solicitors in about mid-2024. It further explains that D was not able to obtain earlier the evidence of Chea Affm and NCY Affm as Chea and Ng Chun Yeung were not in Hong Kong during the Chinese New Year holiday.

28.Ng Chun Yeung, the other yoga instructor, states in NCY Affm that P had attended his yoga classes on 8 and 29 May 2022 shortly after the alleged Accident. He observed that P could perform the poses taught without pain or difficulty and did not seem to have any injury in her right shoulder.

THE NEW EVIDENCE SUMMONS – DISCUSSION

29.It is not D’s case that the new evidence of CPW 2^nd Affm could not have been obtained with reasonable diligence for use at the hearing before Master Chow. There is no explanation why such evidence could not be included in his previous CPW Affm filed earlier in the hearing below.

30.In any event, CPW 2^nd Affm adds nothing new to D’s case but merely repeats the reasons for the delay, ie D did not have knowledge of the interlocutory judgment nor progress of these proceedings until late November 2024. It also states that Chea and Ng Chun Yeung were out of town hence D was not able to adduce their affirmations in the hearing below.

31.The inability to adduce the affirmations of Chea and Ng Chun Yeung is a bare allegation not supported by evidence. No details have been provided as to the period during which Chea and Ng Chun Yeung were absent from Hong Kong.

32.This is in my view a lame excuse which I have no hesitation rejecting.

33.The first condition in Ladd v Marshall (supra), namely the evidence could not have been obtained with reasonable diligence for use at the hearing below is not satisfied.

34.As stated by Tang VP (as he then was) in Dr Kwok-Hay Kwong v The Medical Council of Hong Kong [2007] 3 HKLRD 213 in §24:-

“24. … The first condition is the critical condition. It underlines the importance of finality in litigation. If the second and third conditions are not satisfied there would be no reason for the admission of the further evidence at all. If the first condition is not satisfied, the fulfilment of the second and third conditions would normally not be enough.”

[emphasis added]

35.The decision was reversed on appeal in CACV 373/2006 (unrep., 5 September 2007) on the ground of public interest in judicial review, but Tang VP’s comment remain undisturbed. Ma CJHC (as he then was) further added at §11:-

“It is difficult to conceive in a private law case how the wider discretion will ever be exercised if the Ladd v Marshall test is not satisfied.”

36.There is no explanation as to why, if the evidence of Chea and Ng Chun Yeung was of an important influence on the result of the case (the second condition), their affirmations could not be prepared and adduced earlier during the past year, or the latest by 26 November 2024 upon the filing of the Summons for setting aside the default judgment.

37.As to the nature of the evidence of Chea and Ng Chun Yeung, there are obviously substantial disputes on facts (versus P’s pleaded case) which can only be resolved by the court hearing the trial when witnesses are called and examined.

38.The evidence of Ng Chun Yeung concerning P’s attendance and performance, presumably amongst a group of many students, in 2 of the classes he conducted back in May 2022 almost 3 years ago, is dubious. There is no explanation as to why P’s attendance and performance would have caught the special attention of the yoga instructor given there was no particular occurrence, eg complaint or report of pain or injury from P.

39.This is clearly not the kind of evidence which is presumably to be believed (the third condition).

40.None of the 3 conditions of Ladd v Marshall (supra) is met. The New Evidence Summons must be dismissed.

41.I will not take into account the new evidence of the 3 Affirmations in considering the Appeal.

THE APPEAL – SETTING ASIDE DEFAULT JUDGMENT

Real Prospect of Success

42.The medical evidence supports P’s case of a right shoulder injury reportedly sustained after being manipulated by a trainer during yoga exercise or playing yoga[9] on 5 May 2022 for which she sought treatment starting from 18 May 2022.

43.The fact that the Accident date is stated to be 15 May 2022 (instead of 5 May 2022 in P’s case) in one of the medical reports[10] would, subject to any explanation that may come from P or correction by the treating doctor subsequently, would unlikely in my view be accepted to have the effect of negating occurrence of the Accident altogether.

44.D’s defence of non-occurrence of the Accident completely hinges on the credibility of Chea. It is a bare denial not corroborated by any evidence.

45.Even also considering the recently adduced evidence of Ng Chun Yeung (first raised under the Summons filed on 7 March 2025), the defence would not be strengthened. As discussed, such evidence of a yoga instructor’s observation of P’s performance and nil expression or complaint of pain or injury, presumably amongst a group of students in 2 classes some 3 years ago, must be viewed with caution and subject to close scrutiny.

46.Merits of the defence will turn on the highly disputed factual evidence of P on the one hand, and Chea and Ng Chun Yeung on the other. Their evidence, even all taken into account, would at most raise an “arguable” defence.

47.The defences raised by D of P’s voluntary acceptance of risk by attending the yoga class and of the exemption of liability clause contained in the membership agreement is a non-starter.

48.As pointed out by P’s counsel, s 7(1) of the Control of Exemption Clauses Ordinance (Cap 71) prohibits exclusion or restriction of liability for death or personal injury resulting from negligence by reference to any contract term or to a notice given to persons generally or to particular persons. S 7(3) further provides that where a contract term or notice purports to exclude or restrict liability for negligence, a person’s agreement to or awareness of it is not of itself to be taken as indicating his voluntary acceptance of any risk. The common law position, premised on a duty to take reasonable care for oneself, is no different regarding consent to risk of injury.

49.D’s counsel made no reply to the above and did not pursue the arguments.

50.Considering all evidence, I found that D’s defence has no real prospect of success.

51.The above conclusion alone should suffice for dismissing the Appeal. I will consider the other factors for the sake of completeness in case they, considered together, would militate against this decision.

Delay

52.D’s application for setting aside the default judgment was made a year after it was entered. The action proceeded and had been set down for assessment of damages.

53.D’s explanation for the delay is that it only came to have knowledge of the default judgment after the setting down hearing on 21 November 2024 due to mishandling of the 1^st Solicitors.

54.This is contradicted by its own lawyer Leung Ka Lok of the 1^st Solicitors who states in 2^nd LKL Affm that D was promptly informed of the interlocutory judgment. Immediately thereafter on 19 December 2023, a working conference was arranged for counsel to confirm instructions of D and draft a Defence.

55.The draft Defence, exhibited as “LKL-2” in 2^nd LKL Affm, sets out details of the yoga class in question, Chea giving clear and safe instructions to P and Chea providing assistance to P in doing deep yoga stretch by pressing on the latter’s back. The draft Defence in its present form could not have been prepared without detailed instructions from D. It is wholly incredible that D was not at that time informed of progress of the action or the interlocutory judgment.

56.It was also wholly unreasonable that the 1^st Solicitors would, without the instructions or even knowledge of D (as submitted by D’s counsel), engage counsel for a working conference and drafting a Defence shortly after entry of the default judgment in 12/2023, and engage another counsel to attend the setting down hearing on 21 November 2024. In between, the 1^st Solicitors had filed joint applications with D’s solicitors seeking various orders including an unless order (granted on 22 August 2024) in proceeding the action.

57.It was highly unlikely, and I refuse to accept, that D would in these circumstances have no knowledge of the interlocutory judgment or progress of the case during 2024.

58.When asked at the hearing by this Court why the 1^st Solicitors would have incurred costs to engage counsel in drafting the Defence and attending the setting down hearing without instructions from or even knowledge of D, Mr Wong first gave a dramatic answer of “I don’t know!”. He then submitted that these were probably the 1^st Solicitors’ attempt to “cover up” their negligence and for “buying time” to resolve and deal with the mess.

59.Such speculative, unfounded and serious allegations against a professional legal firm by counsel in court without specific instructions from the client are wholly inappropriate.

60.D’s explanation for the delay, basically putting all the blame on the 1^st Solicitors, in making the set aside application, is wholly unreasonable and incredible, and is rejected.

61.P’s counsel submits and I accept that the court should not tolerate delay particularly in personal injuries actions in which the memory of witnesses of accidents which usually occurred in a split second would be crucial. I was referred to the judgment of Wong Pak v Ng Po Chui HCA 5463/1981 in which Rhind J summarised the rationale on p.6 as follows:-

“Accidents giving rise to personal injuries frequently occur in a split second while confusion reigns. Because eye-witness testimony is usually so important in this type of case and taking into account the frailty of human recollection, the law provides a comparatively short limitation period for the bringing of personal injuries claims. As an exception to the general rule laid down by section 4(1)(a) of the Limitation Ordinance, Cap. 374 that actions founded on tort can be brought within six years of the cause of action arising, section 27(1) of that same Ordinance provides that where the damages claimed are in respect of personal injuries the limitation period is three years only.

Of modern times, starting with the landmark decision of Allen v. Sir Alfred McAlpine and Sons Ltd,(5) the courts have made it abundantly clear that they are no longer willing to tolerate delays, particularly in the hearing of personal injuries cases, because delay militates against a fair trial, as the more the witnesses' memories become impaired with the passage of time, the less becomes the likelihood that the court will be able to establish the truth of what happened.

Were the default judgment to be set aside now, it would result in the irreparable mischief that a trial will take place at a time when the memories of the witnesses will be six months more stale than they need otherwise have been. Such a trial will almost inevitably be less fair than it would have been if heard earlier because the chances of the court arriving at the truth have been diminished. The policy of the law in setting its face against delays calls for implementation in the context of applications to set aside default judgments just as much as it does in other areas such as striking out actions for want of prosecution.”

[emphasis added]

62.The inordinate and unexplained delay of 12 months in D’s application for setting aside the default judgment is a factor militating against the relief sought. The delay will render a trial less fair, particularly in the context of this personal injuries action given the subtlety of the Accident involving manipulation of a yoga pose.

63.Mr Wong heavily relies on the decision of HHJ T Au (as he then was) in Leung Tsui Chun v Yick Tat Property Management Co Ltd & Anor DCPI 283/2008 in which there was a 9-month delay in the defendant taking out the application. The delay was found not intentional or contumelious on the part of D, and the court exercised its discretion to set aside the default judgment.

64.The cited authority is wholly distinguishable from the present case and in my view does not assist D herein. In that case the defendant was found to have shown a meritorious defence with a real prospect of success. The defendant’s explanation of delay was accepted by the court, and the unexplained delay was only 2 months, hence there was no intentional or contumelious delay on the part of the defendant. In any event, delay was one of the few factors considered by the court which were found not sufficient to outweigh the factor that the defendant had a meritorious defence.

Alleged Negligence of the Legal Representatives

65.D’s relies heavily on its argument that the entry of the interlocutory judgment in the first place, and the delay in taking out the Summons, was all due to the fault of the 1^st Solicitors.

66.I have found as discussed earlier herein that D’s case of being kept in the dark of the interlocutory judgment and progress of these proceedings all along and until end-November 2024, contradicted by the 1^st Solicitors’ evidence, is wholly unreasonable and incapable of belief.

67.In any event, a party in civil proceedings is bound by the conduct of his or her legal team, even if the delay was accepted to be due to mishandling/ negligence of the 1^st Solicitors or counsel as alleged by D.

68.The principle is stated clearly in the authority cited by P’s counsel in Progetto Jewellery Co Ltd v Lau Chiu Ying & Anor [2022] 2 HKLRD 845: A litigant alleges her own lawyers mishandled her case in civil proceedings and deprived her rights to a fair trial in civil proceedings and sought to appeal on that basis. At §§26, 27, the Court of Appeal states:-

“26. In Chong Ching Yuen v HKSAR (2004) 7 HKCFAR 126 at 143, the Court of Final Appeal quoted with approval the judgment of Gleeson CJ in R v Birks (1990) 48 A Crim R 385: As a general rule, a party is bound by the conduct of his or her counsel, and counsel have a wide discretion as to the manner in which proceedings are conducted. Decisions as to … what lines of argument to pursue and what points to abandon, are all matters within the discretion of counsel and frequently involve difficult problems of judgment. …

27. …Generally, a litigant in a civil litigation is confined to remedies against her own lawyers if she has lost a case due to mishandling by her lawyers”

[emphasis added]

69.Therefore, the proper remedy/ course of action, even if the delay is proved to have been caused wholly by the legal team through no fault of D, is for D to pursue its claim based on professional misconduct or negligence against its legal representatives in a separate action. It is however not a ground for setting aside the default judgment in this action.

Prejudice on P

70.There was an unexplained delay of 12 months in D’s application for setting aside the default judgment.

71.By reason of breach of various court orders, D has been debarred from adducing evidence or disputing quantum.

72.Leave was granted on 21 November 2024 for setting the case down for assessment of damages on the running list, not to be warned before 19 February 2025.

73.But for D’s last minute Summons issued on 26 November 2021 to set aside the default judgment, trial would have taken place.

74.Allowing D’s appeal now would not only mean filing of the Defence. D would have to seek relief from sanctions in respect of a number of court orders. Parties would have to virtually re-litigate the whole action through the processes of discovery, exchange of witness statements, etc.

75.Substantial time and costs will be incurred by both parties, of sums wholly disproportionate to P’s modest claim. Trial will be deferred by at least another 1 to 2 years, ie 4 to 5 years after the Accident. The longer the delay, the slimmer the chance would be for P to execute successfully a judgment granted, particularly bearing in mind the irresponsible litigation conduct of D.

76.P will also suffer substantial prejudice in terms of fading memory of the split-second Accident and non-availability of witnesses or documentary evidence due to the lapse of time. It would be difficult for P to deal with eg Ng Chun Yeung’s evidence which first came to light on 7 March 2025 under the New Evidence Summons.

77.Allowing D to set aside the default judgment at this stage will result in irreparable mischief and prejudice to P that cannot be compensated by costs as stated in Wong Pak v Ng Po Chui (supra).

The Milestone Date of Trial

78.D’s late application to set aside the default judgment had varied the milestone date of trial.

79.Under O 25 r 3(3) of the RDC, “exceptional circumstances” must be demonstrated in order to justify the variation of a milestone date. None has been demonstrated.

80.In considering the appeal, I should also bear in mind the underlying objectives set out in O 1A r 1 of RDC and the court’s duty under r 2 of the RDC regarding promotion of cost-effectiveness, reasonable proportion and procedural economy in the conduct of proceedings.

81.It is trite that lateness without explanation itself is a ground for refusal of applications which will result in an imminent trial being vacated.

82.I have considered the judgment of Hon Mimmie Chan J in Hong Kong Changyi Real Estate Development Limited v Neo-China (Group) Infrastructure Investment Limited & Anor, unreported, HCA 1576/2011, 25 February 2014 at §1:-

“Nearly 5 years after the implementation of the Civil Justice Reform, parties should be under no doubt by now that the courts will have no hesitation now to reject a late application, made when trial is imminent, for either amendment of pleadings, discovery or the filing of witness statements, which application has the effect of disrupting the preparation for trial with the risk of milestone dates such as a pretrial review or the trial dates themselves being affected. Delay itself is a ground justifying refusal of leave, since delay of a trial is prejudice to a party, who has every right to expect that a trial fixed months ahead with due notice to the parties can proceed without disruption and time and costs being wasted. I can add very little to what has already been summarized and set out in Kinetics Medical Health Group Co Ltd v Dr Tse lvan Cheong Yau , HCA 1115/2010, unreported, 8 May 2013 and in the decision of the Court of Appeal in Li XiaoYun v China Gas Holdings Limited , CACV 38/2013, 11 March 2013. The applicant for leave must establish, by affidavit evidence, exceptional circumstances to explain and justify the delay….”

[emphasis added]

83.In Waddington Limited v Chan Chun Hoo Thomas & Ors, unreported, HCA 3291/2003, 7 May 2013, DHCJ Lok (as he then was) dismissed the late applications on the basis of delay alone, despite the learned judge considered most of the applications did have merits but for the timing of the applications.

CONCLUSION

84.Considering all other factors apart from my finding that D’s defence has not demonstrated a real prospect of success, I have no hesitation concluding that the Appeal should be dismissed.

COSTS

85.Costs of the Appeal and the New Evidence Summons should follow the event. Upon dismissal, D should pay P’s costs.

86.P seeks indemnity costs against D.

87.D’s counsel accepts liability on costs, but argues that party and party costs instead of indemnity costs would be appropriate.

88.I have heard and considered the parties’ arguments on costs.

89.The following authorities in which indemnity costs orders were made against the parties who took out last minute pre-trial applications disrupting the milestone dates are applicable:-

(1)  In Li Xiao Yun & Anor v China Gas Holdings Limited, unreported, HCCL 18/2011, 6 March 2013, the plaintiffs took out urgent applications by summons seeking leave, inter alia, to add new defendants and to amend the pleadings to advance claims against those new defendants on 25 February 2013, about 2 weeks before the 12-day trial of the action was due to commence on 12 March 2013. The trial date was fixed a year earlier in March 2012. Hon Mimi Chan J dismissed the applications with costs. The plaintiffs’ appeal (unreported, CACV 38/2013, 11 March 2013) in relation to the joinder of new parties and amendments applications were rejected by the Court of Appeal on 11 March 2013 as being obviously and utterly without merits. The appeal was dismissed with indemnity costs to the defendant. The trial commenced on 12 March 2013 and proceeded as scheduled. Lam JA (as he then was) stated in §18, inter alia, “…Last minute pre-trial applications also disrupt the preparation for the trial on the part of a trial judge in terms of reading into the case. Instead of getting himself or herself familiar with the issues that have to be tackled at the trial, the judge would have to divert attention and spend time and efforts on such applications. Thus, such practice has to be discouraged and, unless there are good justifications, the unsuccessful appellant should normally be expected to face an order for indemnity costs.”

[emphasis added]

(2)  The indemnity costs reasoning in Li Xiao Yun (supra) was applied by DHCJ MK Liu in Liu Hon Wong & Ors v Liu Chee Kwan & Anor [2022] HKCFI 3157. In that case the plaintiffs’ late applications made at the PTR, a month before the scheduled 9-day trial was scheduled to commence on 15 November 2022, were dismissed with indemnity costs. It was commented (in §51) that “…last minute pre-trial application is a practice which must be discouraged…(the plaintiffs) have not put forward any satisfactory reason to justify the lateness (of the applications)…to show the court’s disapproval of such practice, I order indemnity costs…”;

90.In the present case, for reasons stated above, I conclude that D’s appeal and the New Evidence Summons are likewise obviously and utterly without merits. No satisfactory reason is put forward to justify the lateness.

91.The procedural history of this action and the litigation conduct of D show that the delayed application for setting aside of default judgment was a last minute attempt to derail trial, and delay or evade the responsibility of paying the judgment; and

92.I consider it appropriate to order indemnity costs against D in favour of P, with certificate for counsel, in respect of both the Appeal and the New Evidence Summons.

DISPOSITION

93.I made the following order at the hearing:

(1)  The Appeal be dismissed;

(2)  The New Evidence Summons be dismissed; and

(3)  Costs of the Appeal and the New Evidence Summons be to P, payable by D forthwith, on an indemnity basis, with certificate for counsel.

94.I consider it appropriate to deal with costs of the Appeal and the New Evidence Summons by way of summary assessment. For those purposes, I made further directions at the hearing for P to submit a Statement of Costs within 14 days, and D a Statement of Opposition, if necessary, within 7 days thereafter.

95.Summary assessment of costs will be conducted by paper disposal (no matter whether any Statement of Objection is lodged within time) thereafter. The assessed costs shall be paid forthwith after assessment.

Ms Velda Yau instructed by Messrs Kenneth Lam, Solicitors, for the plaintiff

Mr Tim Wong instructed by Messrs GT Lawyers, for the defendant