Case Document

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HCA001851/2003

HCA1851/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.1851 OF 2003

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BETWEEN
	WU KA (胡卡)	Plaintiff

	AND

	WU KUO CHENG (吳國正)	1st Defendant
	HAN-FANG CHINESE MEDICINE COMPANY LIMITED (漢方醫藥有限公司)	2nd Defendant

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Coram: Deputy High Court Judge Wong Yan Lung, SC in Chambers

Date of Hearing: 25 July 2003

Date of Decision: 25 July 2003

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D E C I S I O N

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1.By a summons filed on 9 July 2003, the plaintiff applied for judgment against the two defendants, pursuant to Order 19, rule 7 of the Rules of the High Court ("the Rules") on the ground that the defendants had defaulted in filing a Defence. The judgment applied for includes an injunction restraining the defendants from publishing certain defamatory words about the plaintiff and for damages to be assessed.

2.Before me this morning, Mr Christopher Lam, appearing on behalf of the plaintiff, conceded that the application was misconceived and agreed that the application should be dismissed with cost. However, there is an outstanding issue as to whether the cost should be taxed on an indemnity basis, and that is the only contentious matter between the parties before me this morning.

3.In dealing with this matter, it is necessary for me to go back to the chronology of the steps taken in this action. The Writ of Summons with a general Endorsement of Claim was filed and served on 23 May 2003. At that time, the defendants were both acting in person. They filed their Acknowledgement of Service respectively on 3 and 5 June 2003. On 5 June 2003, the 1st and 2nd defendants each filed a Defence with the court and served it on the plaintiff's solicitors. The Defence sought to traverse the claim set out in the general Endorsement of claim and is essentially a general denial of liability for the publication of the defamatory words.

4.Thereafter, the plaintiff filed and served her Statement of Claim on 17 June 2003. No further Defence has been filed by either the 1st or the 2nd defendants to date. The plaintiff's original contention as can be seen in the supporting affidavit was that under the Rules, the defendants had to file a Defence to the Statement of Claim within 14 days after service of the letter, i.e. on or before 2 July 2003. The application for default judgment is based upon there being no Defence filed by 2 July 2003.

5.The defendants have been acting in person until 22 July 2003 when they appointed Messrs Yip, Tse and Tang to represent them.

6.The provisions regarding the filing of Defence is set out clearly in Order 18, rule 2(1) of the Rules. Since Mr Lam has conceded the application was misconceived, it is unnecessary for me to go into the details of the relevant rule. However, I think it is important to point out that the basis upon which default judgment can be obtained in the circumstances where no Defence is filed is that of implied admission, i.e. the reason why the plaintiff can obtain judgment in default of Defence is because where the defendant failed to file a Defence, the court will assume that the Statement of Claim has been impliedly admitted and that is the reason why in an application for judgment in default of Defence, the court will only consider the Statement of Claim without admitting any evidence.

7.Here, in this case, the defendants did each serve a Defence on the plaintiff within 14 days after the time limited for Acknowledgement of Service of Writ. Although the Defence merely traversed the claims in the general endorsement, it did expressly deny liability. Although this is not a document in response to the more detailed allegations in the Statement of Claim, its very existence and contents mean that the court cannot proceed on the basis that there is any implied admission of the matters set out in the Statement of Claim. This conclusion is admitted by the plaintiff and confirmed by the plaintiff's further application to strike out the Defence and for summary judgment. It is clear that whether a Defence filed is sufficient or not is a completely different matter. There is no doubt that the application for default judgment was misconceived and cost should be to the defendants and the concession is well made. The question is whether in these circumstances, the court should order indemnity cost.

8.Mr Colin Wong, appearing for the defendants, urges upon me that the conduct on the part of the plaintiff has been scandalous, vexatious and also oppressive. He emphasised that the conduct of the plaintiff is such that the defendants were driven to engaging legal representation and that is a matter the court can take into account to assess whether indemnity cost should be awarded. He also emphasised that the original application for default judgment was only withdrawn upon the defendants appointing a legal representative to represent them. He said that in the document served on the plaintiff it was made very clear that the document amounted to a Defence. Further, it is a fact that the Defences were filed with the court as a defence document.

9.In opposition to the application for indemnity cost, Mr Lam referred me to the well-known passage in the White Book, which is in fact trite law, as to when indemnity cost should be awarded. If I could just refer to the passage he read out to me in the White Book at page 896 under the heading "When to order indemnity cost" :

"The Court of Appeal in Choi Yee Chun v. Bondstar Development Limited, HKLRD 1327 refuted the cases and summarised the law as follows. A taxation of the successful party's cost on an indemnity basis could properly be ordered where the proceedings were scandalous or vexatious, or had been initiated or prosecuted maliciously, or for an ulterior motive, or in an oppressive manner."

I don't think I need to read on save and except that usually indemnity cost would be ordered when the court feels that there is an affront to the court which ought to be dealt with by way of the indemnity cost order.

10.Mr Lam emphasised that there was no oppression on the part of the plaintiff as is evidenced by the immediate concession of the original summons for default judgment being misconceived and the plaintiff did not in fact pursue the matter before me.

11.In all the circumstances of this matter, I am not satisfied that the conduct on the part of the plaintiff has been scandalous, vexatious or oppressive which would justify the indemnity cost. No doubt there was an error made on the part of the plaintiff and those acting for the plaintiff. The position probably was not very clear in relation to whether there is a need to file a Defence subsequent to the Statement of Claim in these circumstances, and whether the document originally filed and served dealing only with the general Endorsement of Claim amounted to a Defence. I do not believe that there was any deliberate intention on the part of the plaintiff to oppress the defendants as such.

12.As regards the need for legal representation, I do not believe that there was a deliberate attempt to force the defendants to engage legal representation and to incur cost because so far as the plaintiff is concerned, even now they are still pursuing the contention that the Defence does not disclose any reasonable cause of defence and ought to be struck out. In those circumstances, the defendants would most probably have to engage legal representation to deal with this matter. In any event, I do not believe that the decision by the defendants to engage legal representation was only occasioned by the plaintiff's conduct as alleged.

13.I therefore would not allow any cost to be taxed on an indemnity basis. I think this is the only outstanding matter and the remaining matters have been subject matters of agreement between the parties. If I could then just deal with these matters. On the summons filed on 9 July 2003 for default judgment, it is dismissed with costs, to be taxed if not agreed. In relation to the other summons, i.e. the summons taken out by the plaintiff yesterday for striking out an Order 14A, the parties have reached agreement on the directions that the court should give and upon that agreement, I make the following directions :

(1) the defendants are to file affidavit evidence in opposition to the summons within 21 days from today;

(2) the plaintiff to file affidavit evidence in reply within 21 days thereafter;

(3) no further affidavit evidence without the leave of the court;

(4) the hearing of summons be adjourned to a date to be fixed with consultation of counsel's diary with three hours reserved; and

(5) the cost of the summons be reserved.