Leader Civil Engineering Corporation Ltd. v. Well-pro Engineering Ltd.
Read the full judgment text of HCCT 42/1997 on BabelCite. This 高等法院原訟法庭 judgment was delivered on 27 January 1998 before The Hon Mr Justice Findlay.
Default judgment partially set aside in High Court of Hong Kong SAR where defendant demonstrated a real prospect of success for part of the claim. Court considered costs allocation, finding that because plaintiff proceeded with default judgment despite knowledge defendant intended to defend, costs for the set aside application should be equally borne. Plaintiff's subsequent application to vary costs order was unsuccessful, resulting in plaintiff bearing those costs. Defendant's application for stay of execution pending appeal was granted in the exercise of discretion, given inferred hardship to defendant and imminent appeal hearing, with costs awarded to plaintiff. Overall disposition involved partial setting aside of judgment, costs orders favoring equitable allocation and costs following event, and a stay of execution pending appeal.
Legal issues: Costs of application to set aside default judgment · Stay of execution pending appeal
Outcome: Default judgment partially set aside; costs orders adjusted accordingly; stay of execution granted pending appeal.
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HCCT000042/1997 1997 , No. Con 42 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE
Coram: The Hon Mr Justice Findlay, in Chambers Date of hearing: 22 January 1998 Date of handing down of judgment: 27 January 1998 ___________ JUDGMENT ___________ 1. The plaintiff (Leader) obtained default judgment against the defendant (Well-Pro) on 15 July 1997. This was a regular judgment. The judgment was for -
2. Well-Pro applied to set aside this judgment. I found that Well-Pro had a real prospect of success on the first item above, but not the other items. I set aside the judgment in respect of the sum of $9,059,883.12 . 3. Regarding costs, I said this -
4. Leader now applies to vary this order. Mr Aglionby points to the fact that the defendant was at fault - in the sense that it did not comply with the Rules - and, in this situation, the usual order is that the defendant bear the costs of the application. This is true, but it is also so that, when the plaintiff obtained judgment, it well knew that the defendant wished to defend the action. Given this, the plaintiff should have assumed that, if it proceeded with the application for default judgment, it would be faced with an application to have it set aside. The plaintiff must be taken to have known that it was at risk in such an application, but elected to proceed with the application for the default judgment. In this situation, it seems to me, I should look at the merits, and decide the question of costs on the basis of the degree of success of the parties. On that basis, I remain of the view that the fight resulted in a draw. Accordingly, my order is made absolute. 5. On this application, the plaintiff has been unsuccessful. There seems no obvious reason why costs should not follow the event. I make an order nisi that the plaintiff pay the costs of this application in any event. 6. The defendant applies for a stay of execution pending an appeal against my decision. The notice of appeal has been lodged and a hearing allocated on 5 March 1998 - some 6 weeks away. Unfortunately, the defendant's evidence in support of this application is not helpful. In such an application as this, the court wants to know why a defendant should not pay the judgment debt now and recover it from a plaintiff if it is successful in an appeal. The defendant says nothing about this. Miss Cheng says that her instructions are that the defendant is a small contractor, and having to pay now would cause hardship. This should have been in evidence. Nevertheless, I think I can infer from what the evidence I have read in these proceedings that the defendant is not a major contractor, and that for any smallish business to find over $5 million would be disruptive. The probabilities are that the defendant is entitled to be paid over $5 million by the employer, and this money will be channelled through the plaintiff. This being the case, and taking into account the fact that the appeal hearing will take place shortly, I do not think that the plaintiff will suffer any prejudice by a stay. In these circumstances, I exercise my discretion to grant a stay until judgment on the appeal or further order. 7. The costs of this application should, it seems to me, go to the plaintiff. The defendant was seeking an indulgence, and the plaintiff was entitled to oppose. I make an order nisi that the costs of this application be to the plaintiff in any event. Representation: Mr AJL Aglionby, of Baker & McKenzie, for the plaintiff. Miss Teresa Cheng, instructed by Messrs Norman MK Yeung & Co, for the defendant.
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