Loh Hooi Sek v. Tong Po Lin Susan
Read the full judgment text of HCA 343/1977 on BabelCite. This High Court judgment was delivered on 12 November 1977 before Zimmern, J..
Civil procedure – default judgment – application to set aside – irregularity – substituted service – non-disclosure to Registrar – Order 65 rule 4 – Rules of the Supreme Court – affidavit of merits – discretion – security for costs – property purchase agreement – tenants-in-common – assignment into sole name – whether prior correspondence between solicitors must be disclosed on substituted service application – whether defendant showed defence on merits and explanation for default – Evans v. Bartlam [1937] A.C. 473 – oral agreement to purchase property as tenants-in-common for $132,000 with equal sharing of costs – plaintiff advanced $35,125 in instalments between June 1976 and January 1977 – property assigned solely into defendant's name on 24 July 1976 and mortgaged to Hang Seng Bank – writ issued 11 February 1977 – order for substituted service obtained 19 May 1977 – default judgment entered 22 July 1977 – defendant applied to set aside on grounds of irregularity and defence on merits – court held no obligation to disclose prior correspondence to Registrar under Order 65 rule 4 as letters were either irrelevant or supportive of application – court disbelieved defendant's claim of ignorance of proceedings finding ten of eleven communications unacknowledged beyond realm of possibility – court exercised discretion to set aside judgment conditionally on payment of $20,000 into court as security for costs within 14 days – costs of judgment, setting aside, application and execution to be paid by defendant in any event.
Legal issues: Whether default judgment was irregularly obtained due to non-disclosure on substituted service application · Whether default judgment should be set aside on the ground of a triable defence on the merits
Outcome: Default judgment set aside conditionally upon the defendant paying $20,000 into court as security for costs within 14 days.
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HCA000343/1977
----------------- Coram: Zimmern, J. Date of Judgment: 12 November 1977 ----------------- DECISION ----------------- 1. In this matter the plaintiff on 11th February 1977 issued a writ against the defendant and indorsed thereon a claim for a declaration that the plaintiff is entitled to half share of an ascertained property and another for an order that the defendant do forthwith transfer the property into the names of the plaintiff and the defendant as tenants-in-common. 2. On 19th May 1977 the plaintiff applied for and obtained an order to serve the writ of summons by sending a copy with a copy of the order by prepaid registered post to the address of the defendant indorsed on the writ of summons and by delivering the same to an adult at that address namely 18 Austin Road, 9th floor, Rear Portion, Wai On Mansion, Kowloon. 3. On 7th July 1977 the solicitors for the plaintiff certified that an affirmation of services of the writ of summons and statement of claim on 24th May 1977 and 4th June 1977 respectively had been filed and that no appearance had been entered. On 8th July 1977 they certified that no defence had been filed. The plaintiff by her summons of the 8th July 1977 applied for entry of judgment in default of appearance and defence and on 22nd July 1977 I made the order which the defendant now seeks to set aside with the execution issued thereon. 4. The grounds in support of the defendant's application are stated to be
5. The defendant filed two affidavits and her uncle TONG Kwong-sang filed one in support of the application and the plaintiff filed one and her solicitor filed another in reply. 6. Dealing with the first ground counsel for the defendant, after reading the first thirteen paragraphs of the defendant's first affidavit, which were said to cover the irregularity point, and developing arguments thereon was completely unable to pinpoint any step taken by the plaintiff beginning with the issue of the writ which amounted to non-compliance with the Rules of the Supreme Court. 7. Counsel's argument was thus summarised:- 8. Judgment was irregular in that the order for substituted service was irregularly obtained. The plaintiff's solicitors did not disclose to the Registrar that they had carried on correspondence with the defendant's then solicitors and that they did not divulge to the defendant's then solicitors that the writ had been issued. 9. I set out a summary of the correspondence:-
The second and third paragraphs contain denials of the plaintiff's allegations and the final paragraph reads:
10. From the affidavit of Mr. Robert LIE Ket-khong, the plaintiff's solicitor, it emerges that
11. Let it be noted that the defendant's own solicitors addressed their letter to her to the same address as indorsed on the writ of summons a matter which I have more to say later. 12. There is no dispute about these letters. They were all delivered and received. I now set out the defendant's complaints. Paragraphs 8 and 9 of her first affidavit read as follows :
13. Paragraphs 1 and 2 of her second affidavit reads as follows:
14. The court is not concerned with the indignation or feelings of the defendant that she was not informed in April 1976 that the writ had been issued in February 1976 against her. The plaintiff's solicitors on 30th April 1977 wrote to her then solicitors with a request to let them know by return of post whether her solicitors had instructions to accept service of the writ on her behalf. There was no reply by return of post and there was no reply until 7th July 1977. In the meantime the plaintiff's solicitors having found it impracticable to serve the defendant personally had in May obtained an order to serve the defendant by substituted service. In May 1977, only the first four of the six letters summarised above were in existence. The plaintiff's solicitors did not disclose them to the Registrar and I cannot see why under Order 65 rule 4 they ought to have done so. The application is based on facts why the plaintiff found it impracticable to serve the defendant personally and the first three letters are completely irrelevant. The plaintiff's solicitor's letter of 30th April 1977 is relevant but it would merely lend support to the plaintiff's application. The defendant's application to set aside the judgment and execution thereunder issued on the ground of irregularity therefore fails. 15. Turning now to the second ground, counsel for the defendant argues that in any event there is sufficient evidence in the affidavits filed on behalf of the defendant to satisfy the court that there is a triable issue on the merits of the case and as this is not a trial by affidavits I ought to set aside the judgment. I have something to say about this. When a judgment is obtained irregularly the defendant is entitled ex debito justitiae. This is a matter of right. Where a judgment is obtained regularly a court will usually set aside the judgment if a defence on the merits is shown. This does not give the defendant a right because it is always a matter of the court exercising its discretion. In my view where a judgment is regularly obtained the defendant besides showing a defence on the merits ought also to inform the court and the court is entitled to know the true reason why he let the judgment go by default for it is a matter which a court will take into consideration when exercising its discretion. This view comes within the dicta of Lord Atkin in Evans v. Bartlam(1) wherein he said:
The reason why the defendant let the judgment go by default is stated in paragraph 5 of her affidavit. It reads:
The defendant does not say that her address indorsed on the writ is not her residential address but she says this about it in her first affidavit: paragraphs 2, 3 and 4.
16. In view of what she says I have made an analysis of the number of communications made to her at the address indorsed on the writ.
A cursory glance at this analysis shows every communication totalling 11 pertaining to actual service save the last was unreceived. All other communications totalling three were received. Of the 11 what she said about the last was "I was not aware of the institution of the present proceedings against me by the plaintiff until Wednesday the 20th September 1977 when an envelope was mysteriously left at the front door of the Austin Road address ... It was then for the first time that I knew of these proceedings and that judgment by default had been obtained against me." She does not seek to say anything about documents delivered by hand to her residence alleged to be unreceived. Of the registered mail delivered and returned as unclaimed she says "I verily believe that all the said letters had been misdelivered." I accept the contents of paragraph 6(g) and (h) of the affirmation of Mr. Robert Lie Ket-khong the plaintiff's solicitor wherein he said:
17. I am totally unable to accept her assertion that she did not know of the plaintiff's proceedings till 20th September 1977. The communications were made to her at an address which was used by her own then solicitors. I would in a matter of this nature readily accept such explanations as given by the defendant if two or three communications are said to have gone astray; but when it is a matter of ten out of eleven and only the eleventh is said to have been to hand then to me it is beyond the realm of possibilities. I find and hold, her evidence on oath notwithstanding, that she knew the plaintiff had taken action against her and each step of such proceedings. It follows on my finding that the reason she gave for allowing the plaintiff to enter judgment by default was untrue. My consideration for her affidavit of merits will be circumspect. 18. The case for the plaintiff as shown in her statement of claim is simple. 19. She says that in June 1976 she and the defendant agreed to purchase a property as tenants-in-common for $132,000 of which $75,000 was to be raised by mortgage and the purchase price and outgoings to be shared equally. 20. She says pursuant to the agreement she advanced to the defendant the following sums of money:
She further says that the defendant caused the property to be assigned into the defendant's own name, a fact she did not discover till January 1977 thereby depriving her of her share and she now asks for her half share to be transferred into her name. 21. There is no dispute that the property was assigned to the defendant. The memorial of the assignment was on the 24th July 1976 registered in the Land Registry in the name of the defendant. The register also shows the property on 24th July 1976 was mortgaged to the Hang Seng Bank to secure general banking facilities to the extent of $75,000. 22. The date of assignment was on or about 24th July 1976 by when the plaintiff says she had paid the defendant three sums totalling $21,000. What does the defendant say about this? She confesses and avoids. 23. Paragraph 16 of her first affidavit reads:
24. Paragraph 21 reads:
25. The plaintiff denies these allegations. In view of the order I am going to make I would not go into the merits of the arguments any further save to say this. The defendant having confessed to the receipt of the sums of money avoids by evidence of her bare words only. I pay no heed to the affirmation of her uncle. When confronted with the plaintiff's solicitor's letter of 18th April, 1977 the defendant's answer through her then solicitor's letter of 26th April 1977 was no more than a bare denial of the claim and which goes on to say that any legal proceedings will be defended. On 7th July 1977 her then solicitors wrote to her in clear terms that if she wanted them to accept service on her behalf to let them have a further $3,500 on account. The defendant by paragraph 2 of her second affidavit says "Had I known that an action had already been instituted by the plaintiff, I would ...." obriously endurrour to obtain $3,500 instruct Mrs. Gunston & Chow to accept senice of the writ. 26. I am satisfied that at the time she received the letter of 7th July 1977, she already knew that the writ had been served on her personally by way of substituted service. She did nothing to defend the action and was not frank with the court why she did not defend the action. I am not going to close her out. As she however appears to be most concerned about costs and has said on oath that Plaintiff is not well off the plaintiff ought to be protected. The order of the court is that the judgment be set aside upon condition that the defendant do pay into court the sum of $20,000 as security for costs within 14 days from date of order. It is further ordered that the costs of and occasioned by the entry of the judgment and of its setting aside including the costs of this application and the costs and charges of the execution thereon be taxed if not agreed and be paid by the defendant in any event forthwith after taxation or agreement. Representation: Robert Lie of Fairbairn Kwok & Wang for plaintiff. Ronny Tong (W.K. Poon & Co.) for defendant. (1) [1937] A.C. 473 at pp.479, 480. |