Tsang Yuen Wang t/a Second Brother（二師兄） v. Leung Wang Hong

DCCJ 2772/2022

[2025] HKDC 747

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 2772 OF 2022

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REASONS FOR DECISION

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The Plaintiff’s application for adjournment

1.At the beginning of the pre-trial review (“PTR”) hearing on 16 April 2025, at which the Defendant who had filed a Notice to Act in Person did not appear, the Plaintiff through his counsel, Mr Sin, applied for an adjournment of the hearing to either a 2^nd PTR or a hearing for case management summons (“CMS”).

2.Mr Sin submitted that the adjournment would give the Defendant a chance to state his position clearly as to whether he still intends to defend the Plaintiff’s claim. Mr Sin further submitted that he would like the Court to make an order that the Defendant’s Defence be struck out pursuant to Order 25, rule 9, paragraph (6)(b)(i) of the Rules of the District Court, Cap 336H (“RDC”) on the ground that the Defendant has failed to give certain information to the Court and to the Plaintiff, namely, whether the Defendant still intends to defend the Plaintiff’s claim in these proceedings.

3.The aforesaid application was made orally without taking out a Summons, and was not supported by affidavit evidence.

4.At first, Mr Sin submitted that if an adjournment was granted, the Plaintiff would during the adjournment take out a Summons for striking out the Defence as aforesaid, returnable at the hearing of the 2^nd PTR or CMS. However, in the course of the exchanges between Mr Sin and this Court, Mr Sin informed the Court that during the adjournment, (the solicitors for) the Plaintiff would by letter enquire with the Defendant and ascertain whether he is prepared to attend the hearing of the 2^nd PTR or CMS, and whether he would attend the trial fixed for 24 June 2025. If the Defendant did not give an answer to their enquiry, which means the Defendant has failed to give such information to the Court, and then the Court may order his Defence be struck out under Order 25, rule 9(6)(b)(i). At one stage, Mr Sin also suggested that the failure to attend hearing is by itself a piece of information showing that the Defendant had no intention to proceed with his defence against the Plaintiff’s claim.

The parties’ respective cases

5.It is worth for me to set out the parties’ respective cases briefly before I go into the Plaintiff’s said application.

6.As set out in the Joint Statement of Issues in Dispute, the Plaintiff’s claim and the Defendant’s defence are quite straightforward, and not many issues are involved in this case.

7.The Plaintiff says that the parties had reached a compromise and subsequently entered into a written settlement agreement that the Defendant was to pay him a settlement sum of HK$1,000,000 for the breach of a tenancy agreement made between the Plaintiff as tenant (sub-tenant) and a limited company, of which the Defendant was a director and shareholder with 20% shareholding, as landlord (principal tenant). It is alleged that the said company was in breach of the said tenancy agreement due to its early termination.

8.Since the Defendant has failed to pay the said settlement sum to the Plaintiff, the Plaintiff alleges that he was in breach of the settlement agreement and is liable to pay the said sum together with contractual interest to the Plaintiff.

9.The Defendant does not dispute that he has signed on the settlement agreement. However, he pleads duress, want of consideration, and that the terms of the settlement agreement were too vague as his defence.

The law for striking out defence for failing to give information

10.First, it is noted that under Order 25, rule 4 of the RDC, if it is the plaintiff who has not appeared at the case management conference or PTR, the Court shall provisionally strike out the plaintiff’s claim. However, there is no similar provision in the RDC providing for striking out a defendant’s defence upon his absence at a PTR.

11.For Order 25, rule 9 of the RDC, the relevant provisions are as follows:

“9. Duty to give all information at determination of case management summons (O 25, r 9)

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(2) Subject to paragraph (7), it is the duty of the parties to the action and their advisers to give all such information and produce all such documents as the Court may reasonably require for the purposes of enabling it properly to deal with the summons.

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(6) If the Court at the determination of the case management summons requires a party to the action or his solicitor or counsel to give any information or produce any document and that information or document is not given or produced, then, subject to paragraph (7), the Court may—

(a) cause the facts to be recorded in the order with a view to such special order, if any, as to costs as may be just being made at the trial; or

(b) if it appears to the Court to be just so to do—

(i) order the whole or any part of the pleadings of the party concerned to be struck out; or

(ii) if the party is plaintiff or the claimant under a counterclaim, order the action or counterclaim to be dismissed on such terms as may be just.

(7) Notwithstanding anything in this rule, no information or documents which are privileged from disclosure are required to be given or produced under this rule by or by the advisers of any party otherwise than with the consent of that party.”

12.Hence, in the context of the Plaintiff’s intended application for striking out the Defendant’s Defence to be made at the adjourned hearing of 2^nd PTR or CMS, there are two essential requirements to be satisfied before the Court can strike out the Defence, namely, (1) the Court has required the Defendant to give certain information, and (2) that information is not given.

13.Further, I respectfully agree with the following observations made by Deputy High Court Judge H. Au-Yeung (as he then was) in Asiam Holdings Limited v Shin Kai Lok & Anor, HCA 771/2020, 30 January 2024, [2024] HKCFI 375:

“12. In this regard, the following underlying objectives as provided in Order 1A rule 1 of the Rules of the High Court (Cap.4A, Laws of Hong Kong) (“RHC”) should be borne in mind:

(1) to increase the cost-effectiveness of any practice and procedure to be followed in relation to proceedings before the Court (Order 1A, rule 1(a));

(2) to ensure that a case is dealt with as expeditiously as is reasonably practicable (Order 1A, rule 1(b));

(3) to promote a sense of reasonable proportion and procedural economy in the conduct of proceedings (Order 1A, rule 1(c));

(4) to ensure fairness between the parties (Order 1A, rule 1(d)); and

(5) to ensure that the resources of the Court are distributed fairly (Order 1A, rule 1(f)).

13. The Court can take any step or make any order for the purpose of managing the case and furthering the underlying objectives set out in Order 1A (Order 1B, rule 1(2)(l) of the RHC). Moreover, when the Court makes an order, it may specify the consequences of failure to comply with the order (Order 1B, rule 1(3)(b) of the RHC).

14. Having said that, I am of the view that the Court should take note of the followings when exercising its discretion:

(1) it is a draconian measure to take away a defendant’s right to defend the plaintiff’s claim at the trial. Therefore, the discretion should be exercised carefully;

(2) there should be at least prima facie evidence in support of the assertion that the defendant is no longer interested in contesting the claim;

(3) the Court should take into account the nature of the plaintiff’s claim. For example, whether the plaintiff has made any declaratory claim;

(4) the Court should consider the pleaded case and the evidence adduced by the plaintiff, so as to decide whether it is likely that the plaintiff will be able to prove his case successfully at the trial in the absence of the defendant thereat;

(5) the Court should also consider all the circumstances before coming to the conclusion as to what should the appropriate period be for the defendant to indicate whether he is still minded to contest the plaintiff’s claim. In this regard, it is noted that, pursuant to Order 25 rule 1C of the RHC, if it is the plaintiff who has not appeared at the case management conference or pre-trial review, the Court shall provisionally strike out the plaintiff’s claim, and in such circumstances, the plaintiff may apply to the Court for restoration of his claim before the expiry of 3 months from the date of the case management conference or the pre-trial review, as the case may be. That being the case, I am of the view that, even if the defendant is required to confirm whether he is still minded to contest the plaintiff’s claim, the time limit imposed should not be too short.”

Discussion

14.First, from the wordings of Order 25, rule 9(6) of the RDC, the request for the Defendant to give information must be made by the Court. Sending a letter to the Defendant by the Plaintiff or his solicitors as suggested by Mr Sin would not be sufficient for the purposes of Order 25, rule 9(6). Hence, taking out a proper application, like what the plaintiffs in the cases of Asiam Holdings Limited (supra) and Air Charter Service (HK) Limited v Mega-Transporter Shanghai Co, Ltd, HCA 974/2018, 5 November 2020, [2020] HKCFI 2863 have done, for an Unless Order by way of Summons may be required.

15.Further, even on the assumption that the Plaintiff would during the adjournment take out an application for an Unless Order, I am still of the view that adjourning the PTR to a hearing of 2^nd PTR or CMS may not serve any meaningful purpose under Order 1A, rule 1 of the RDC. My reasons are as follows.

16.All necessary steps for the litigation between the Plaintiff and the Defendant have been taken by them in these proceedings, including respective witness statements have been filed and exchanged by them. It seems that both parties are ready for the trial.

17.All along, the Defendant was legally represented until 7 October 2024 when he filed and served a Notice to act in person. The Defendant has attended all the previous court hearings by his legal representative. This is the first time that the Defendant has been absent in court. It cannot be said that there is sufficient evidence in support of an assertion that the Defendant is no longer interested in contesting the Plaintiff’s claim.

18.The 3-day trial has been fixed for 24 to 26 June 2025, ie less than two and half months from the PTR.

19.The trial of the Plaintiff’s claim is not going to be complicated. If the Defendant shall fail to attend the trial and therefore the Plaintiff is required to prove his claim, it will only involve one factual witness from the Plaintiff, ie the Plaintiff himself. Mr Sin agreed that it would take only half day or one whole day at most for such exercise.

20.On the other hand, if the PTR is adjourned, the parties would have to attend one extra hearing. If the Defendant shall appear at the adjourned hearing and indicate that he still intends to contest the Plaintiff’s claim, then what the Plaintiff now proposes to do would be a fruitless and costs wasting exercise. Even on the assumption that the Defendant shall not attend the adjourned hearing and that ultimately his Defence is struck out and therefore the trial can be vacated, it seems to me that not much time and costs could have been saved.

21.Debarring a defendant from defending a claim because of failure to provide information is a draconian one. I agree with H. Au-Yeung J that even if a defendant is required to confirm whether he is still minded to contest the plaintiff’s claim, the time limit imposed should not be too short. A 3-month period, which is the same duration under Order 25, rule 4 of the RDC for the plaintiff to make application for restoration of his claim when the same has been provisionally struck out upon his absence at a case management conference or PTR, was considered by His Lordship as reasonable. However, since the trial of the present case would start on 24 June 2025, it is very likely that the time between the adjourned hearing and the first day of trial would be less than two months.

22.Judging from the nature of the Plaintiff’s claim, I am of the view that it is neither unjust nor disproportionate to require the Plaintiff to prove his case during the trial, even if the Defendant ultimately chooses not to attend the same.

Order

23.In the circumstance, I do not agree with Mr Sin that I should adjourn this PTR to a 2^nd PTR or a CMS hearing. I therefore refused the Plaintiff’s application for adjournment with no order as to costs.

24.The trial is to proceed as scheduled on 24 June 2025, with 25 and 26 June 2025 also reserved.

Mr Oscar Sin, instructed by Huen & Partners, for the plaintiff

The defendant was acting in person and did not appear