Read the full judgment text of HCA 014607/1999 on BabelCite. This High Court CFI judgment was delivered on 1 June 2001 before Kwan J.
Civil procedure – setting aside default judgment – appeal from Master – whether new point may be raised on appeal – estoppel by election – whether reliance on irregularity and reliance on meritorious defence are mutually exclusive courses – whether party to interlocutory hearing before Master entitled to rely on opponent's conduct as implied representation that case will be conducted the same way on appeal – Companies Ordinance (Cap 32) section 290A – company struck off register for failure to file annual returns – whether writ issued by company during period between dissolution and restoration to register is a nullity – retrospective validation of acts done in name of company upon restoration – comparison with section 291(7) – English authorities on equivalent Companies Act provisions – whether defendant has a defence with real prospect of success – test for setting aside regular default judgment – distinction between cases where provisional view of probable outcome can or cannot sensibly be formed – test whether defence 'could well be established' at trial – loan of HK$2 million by cheque – no written loan agreement – allegation that payment formed part of elaborate scheme involving property assignment as security for arrangement with third party who was an undischarged bankrupt – appeal by defendant against Master De Souza's dismissal of applications to set aside default judgment and to strike out the action – whether defendant should be allowed to rely on merits of defence for first time on appeal – court holds no estoppel by election; irregularity and meritorious defence are not mutually exclusive grounds; appeal from Master is by way of rehearing and new points may be raised – court exercises discretion to allow new point in interest of justice subject to costs penalty – on irregularity, court holds writ was validly issued because section 290A(6) retrospectively validates acts done in the name of company during period of dissolution – court follows English authorities on section 291(7) and its predecessors as section 290A(6) contains materially similar wording – on merits, court finds defendant's case carries some degree of conviction; provisional view of probable outcome cannot sensibly be formed without trial; defence could well be established at trial – appeal allowed; default judgment set aside without conditions; defendant to serve defence within 14 days; costs of appeal to be costs in the cause; costs of defendant's applications before Master not disturbed – subsequent appeal to Court of Appeal (CACV216/2004) dismissed.
Legal issues: Whether defendant allowed to raise merits of defence on appeal where not relied upon before Master · Validity of writ issued while plaintiff company struck off the register · Whether defendant has a defence with real prospect of success
Outcome: Appeal allowed; default judgment set aside; defendant permitted to defend the action.
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