Filmo (HK) Ltd v. Wylie Yau Chau Yeung t/a International (HK) Trade Ltd

HCA007625/1981

Practice and procedure - 0.14 - where defendant admits part of claim and shows defence as to residue, judgment should be ordered for sum admitted and leave to defend as to residue should not be made conditional on payment of admitted amount - Dennis v. Seymour applied.

Between

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Coram: Fuad, J.

Date: 12 February 1982

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ORDER

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1. It is necessary to set out the history of this action for the applications and appeals presently before me to be understood. The plaintiff issued a writ on the 30th October 1981 claiming $283,256.I5 from the defendant for goods sold and delivered, with interest. A defence was filed on the 26th November, and although it was drafted by the defendant in person it is perfectly clear that he -was admitting liability in the sum of $72,642.15 but denying liability for the balance, on the basis of a set-off. Some 19 days later, on the 15th December, the plaintiff took out an 0.14 summons in respect of the whole claim. The defendant opposed the application and his affirmation set out the facts and annexed the documents upon which he maintained the stand taken by his defence. The Registrar, on the 31st December, made an order in favour of the plaintiff that judgment be entered for the sum of $72,642.15, with interest at 17.25%. He further ordered -

"That the defendant do pay the said sum of $72,642.15 to the plaintiff's solicitors within 10 days and in default the plaintiffs may enter Judgment against the defendant for the balance of the amount endorsed on the writ being $210,614.00 [together with interest and costs]."

2. The defendant was unrepresented at the hearing of the 0.14 summons. On the 4th January 1982 he wrote to the plaintiff's solicitors explaining why he had unexpectedly found himself unable to pay $72,642.15 within the time limited and proposing how the judgment debt would be satisfied. On the following day he received a reply to the effect that the plaintiff's solicitors would be taking instructions and that in the meantime they had no instructions to waive their client's rights to enter judgment for the balance of the judgment debt. The defendant then himself instructed solicitors who wrote to the plaintiff's solicitors on the 11th January enclosing a cheque for $13,142.15 in part payment. On the next day the defendant's solicitors took out a summons to extend the 10 days time limit within which the $72,642.15 had to be paid; the summons was returnable on the 19th January. On the 13th January the plaintiff's solicitors wrote accepting the cheque in part payment "without prejudice to our right to appear and oppose your application returnable on the 19th January". On the 14th January the plaintiff's solicitors obtained final judgment against the defendant for $210,614 with interest and costs.

3. At the hearing of the defendant's summons on the 19th January, another Registrar granted the application, giving the defendant until the next day to pay the admitted amount. On the 19th January the defendant's solicitors sent a cheque to the plaintiff's solicitors on behalf of the defendant for $59,500, which when added to the sum paid over on the 11th January, made up the full amount the defendant always acknowledged be owed.

4. Then, on the 20th January, the plaintiff filed a notice of appeal against the Registrar's order giving the defendant an extension of the time with which the admitted amount had to be paid. On the 4th February the defendant took out a summons to extend the time limit imposed by the Registrar who determined the 0.14 summons and to set aside the final judg-ment entered in favour of the plaintiff. At the same time the defendant filed a notice of appeal against the whole order made by the Registrar under the 0.14 procedure, accompanied by an application for leave to appeal out of time.

5. I will deal with the defendant's appeal first because it seems to me to go to the root of the matter. Objection was taken to the application for leave to appeal out of time because it was not supported by an affidavit explaining the delay. Although the usual practice demands such an affidavit, I decided nevertheless to entertain the appeal because the chronology of events (which has been set out above) fully explains the position. It was the plaintiff's conduct of the proceedings that necessitated the appeal. Had the plaintiff not appealed against the order granting the defendant an extension of time, no more would have been heard of the matter at the inter-locutory stage and, as I will attempt to explain, the plaintiff had no right to the order obtained on the 31st December 1981 which governed the subse-quent conduct of the action.

6. On the hearing of an 0.14 summons the Registrar or Judge has a wide choice of orders that can be made but where a defendant admits part of the claim and shows a defence as to the residue, judgment should be ordered for the sum admitted and leave to defend granted as to the residue. What cannot be done is to make leave to defend as to the residue conditional on payment to the plaintiff of the amount due. Although the decision in Dennis v. Seymour⁽¹⁾ was per curiam and given at a time when the wording of 0.14 was somewhat different, I have no doubt that it is still good law. Mr. Cust, for the plaintiff, very properly concedes that the defendant had, by the facts and documents referred to in his affirmation, showed reasonable grounds for setting up a defence to the balance he did not admit. This is readily apparent and in such circumstances clearly the defendant should have been given unconditional leave to defence as to that balance. The order made by the Registrar on the 31st December was plainly wrong and led to the problems that have arisen.

7. I set aside the judgment entered on the 14th January 1982 and order that the defendant shall have leave to defend in respect of the sum of $210,614. I see nothing in 0.2 r.2 which can be taken as depriving the defendant of his rights. I do not regard anything he did as amounting to a waiver of the irregularity. On the view of the facts and the law that I have taken, it is unnecessary for me to go into the other matters that are before me. I should, however, mention that since the 0.14 summons was taken out after the defence was filed, the plaintiff should have explained the delay in applying for summary judgment in an affidavit, acknowledged the new situation created, and have stated why it was still possible to maintain the stand that the defendant had no arguable case.

8. As regards costs, I think it is only right that the plaintiff should, in any event, pay the costs of the hearing before the Registrar on the 31st December 1981 and of the hearing before me on the 8th February 1982. The order sought and obtained was wholly misconceived. I direct that there shall be no order as to costs in relation to the hearing before the Registrar on the 19th January.

9. I also order that the directions issued by the Registrar as to the further conduct of the proceedings on the 31st December 1981 (Nos. 2 - 5) shall stand.

(1)    (1879) 4 Ex. D. 80

Representation:

Mr. Cust of Deacons for plaintiff

Mr. B. Chaine instructed by K. M. So & Co. for defendant