China Steel Works Ltd v. Wing Cheong Wing Construction Co Ltd and Another

HCA003697/1977

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Coram: Li, J. in Chambers

Date of Judgment: 17 January 1979

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JUDGMENT

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1. This is an appeal by the 2nd Defendant against the Registrar's decision in setting aside a Judgment obtained by default of appearance and granting leave to file a defence. In this case, the writ issued was served by the Plaintiff on the 2nd Defendant on 27th January, 1978. No appearance was entered and a Certificate of Non-Appearance obtained on 4th February, 1978. Judgment in default of appearance was obtained against the 2nd Defendant on 10th February, 1978. Subsequent to that, the 2nd Defendant applied to the Registrar to set aside the said Judgment against the 2nd Defendant on the ground that there had been irregularity in the service and on the merit of his defence. The question of irregularity can be disposed of fairly quickly. The facts leading up to the complaint are that the writ was first served on 24th December, 1977 on the 2nd Defendant's factory or premises which was not the 2nd Defendant's registered office. It was served on the 2nd Defendant at the 11th flloor of 857 Lai Chi Kok Road, Kowloon. When the Plaintiff realised the error the Plaintiff obtained an amendement to the original writ so served and re-service was effected on the registered office of the 2nd Defendant at the 1st floor of 857 Lai Chi Kok Road, Kowloon. The time for entering an appearance after the re-service expired on 4th February. The Plaintiff's solicitors properly obtained a Certificate of Non-Appearance. By 10th February 14 days had expired after the re-service. Solicitors for the Plaintiff properly obtained Judgment in default of appearance. If there was anything to be said for this I must say that solicitors for the Plaintiff acted with alacrity and efficiency. For this reason I cannot see any justification whatsoever for the General Manager of the 2nd Defendant complaining that the irregularity was due to the inefficiency of the service of the writ on the part of the Plaintiff. On the contrary he should have blamed himself or his own staff for not having noticed the writ served on the 2nd Defendant and for their inertia. There is nothing to be said for any irregularity in support of the 2nd Defendant's application to set aside the judgment.

2. However the 2nd Defendant relied more fully on the merit of his defence. In order to understand this proposition I have to refer very generally to the Plaintiff's statement of claim. By its statement of claim the Plaintiff alleged that on 15th December, 1976 there was a contract between the Plaintiff and the 1st Defendant whereby the Plaintiff agreed to sell and supply some steel windows to the 1st Defendant. The goods were delivered and supplied to the 1st Defendant but the balance of the purchase price amounting to $73,710 had not been paid to date. The Plaintiff further alleged that by the end of May, 1977 the 2nd Defendant agreed to pay the Plaintiff all the amount due by the 1st Defendant. In short it was an allegation that the 2nd Defendant agreed to the assignment of the debt and to take over the 1st Defendant's liabilities. On the affirmation of Mr. Lee Ming-bi dated 20th July, 1978 he alleged that the 2nd Defendant acting on such an agreement paid $14,610 to the Plaintiff -vide the receipt in Exhibit LMB-8 thereto. On 9th July the Plaintiff wrote to the 2nd Defendant giving them the details as to the taking over the 1st Defendant's debt and asserted, in no uncertain terms, that in future, they (the Plaintiff) would look to the 2nd Defendant for payment and would appreciate the 2nd Defendant clearing the balance of the purchase price forthwith - letter in LMB-9. There was no reply to this letter at all. Apparently inertia on the part of the 2nd Defendant applied not only to attending to a writ of summons but also to business letters written to them. Then on 22nd July another $22,000 was paid to the Plaintiff and on 10th August, 1977 another $10,000 paid. All these payments had been given credit to, leaving a balance of $73,710 unpaid. Indeed on 12th August, 1977 the Plaintiff sent to the 2nd Defendant a statement of account, addressed to the 1st Defendant together with a letter demanding payment from the 2nd Defendant. On 17th February, 1978, 1st March, 1978, 10th May, 1978 the 2nd Defendant repeatedly requested that Plaintiff to make good any defects of the steel windows that had been supplied and sold to the project undertaken by the 1st Defendant. Work of repairs were carried out and acknowledgment of completed work was signed by the staff of the 2nd Defendant as to these repairs.

3. In his affidavit in reply Mr. Richard Hwang seized upon the allegation that there had been agreement on the part of the 2nd Defendant to pay for the accounts of the 1st Defendant. The defence used the term "tripartite agreement". He said there was no evidence to substantiate any tripartite agreement. The draft defence, as exhibited in an affidavit deposed to by the legal representative of the 2nd Defendant, contended that whatever contract entered into between either the 1st Defendant and the 2nd Defendant the Plaintiff was never a party thereto. Nor was the 2nd Defendant a party to whatever agreement between Plaintiff and the 1st Defendant. Mr. Richard Hwang in his own affidavit dated 13th January, 1979 referred to two documents - LMB-6 and LMB-7 - to show that whatever agreement there was it was a matter between the Plaintiff and the 1st Defendant and that between the 1st Defendant and the 2nd Defendant in the first instance. There was no contract between the Plaintiff and the 2nd Defendant. However, Mr. Hwang has not dealt with the other exhibits and other allegations made by the Plaintiff as substantiated by various exhibits, namely: Exhibits LMB-8 to 16 of the exhibits attached to Mr. Lee Ming-bi's affirmation date 20th July, 1978. That is not all. There is a further affirmation on 13th December, 1978 by Mr. Lee Ming-bi. To this is exhibited as LMB-1 showing that as late as 22nd September, 1978 one firm Messrs. Chen Yi Kuen, a public accountant who is the accountant of the 2nd Defendant, admitted and acknowledged that the sum of $73,710 was due on the account from the 2nd Defendant to the Plaintiff. This again was never dealt with by Mr. Richard Hwang's affirmation. Nor was it dealt with in the draft defence at all. In view of the circumstances even if the judgment were set aside and the defence were allowed to be filed there is nothing to bar the Plaintiff from obtaining judgment under an Order 14 Summons by saying that the Defendant has shown no defence at all. Accordingly, there is no merit in the defence as shown either in Mr. Richard Hwang's affirmation or in the draft defence so exhibited. Accordingly, the appeal must be allowed. The judgment in default of appearance must be restored and the Registrar's decision set aside. Costs having to follow the events, the Plaintiff will have costs of this Application as well.

Representation:

Mr. Lee (Fairburn, Kwok & Wang) for Appellant

Mr. D. Fung (Chu & Lau) for Respondent