Rillionaire Finance Co Ltd v. Cheung Yim and Another

HCA008271/1982

BETWEEN

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Coram: The Honourable Mr. Justice Jones in Chambers.

Date: Monday, 17th October 1983

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J U D G M E N T

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1. There are two applications before me, the first a summons issued by the plaintiff to strike out the defence and the second a summons by the defendant for leave to serve a defence within 14 days.

2. The suit premises were mortgaged by the defendants to the plaintiff under a mortgage dated the 7th April 1981 to secure credit facilities granted by the plaintiff to a third party, Yea Sang Enterprises Company. Default was made by the defendants in repayment of the mortgage which resulted in the plaintiff issuing proceedings for possession on the 13th September 1982.

3. On the 14th March 1983, an order for possession under O. 88 of the Rules of Supreme Court was made by Master Betts in favour of the plaintiff, but not to be enforced without leave of the Court whilst payments were made under the mortgage. The defendants were unpresented at the hearing and vacated possession of the premises within 28 days of the order.

4. On the 31st May 1983 the defendants, who were now legally represented, filed an appeal against the order of Master Betts. The appeal was heard by Jackson-Lipkin J. on the 29th June 1983 when various orders were made by consent including an order that the defendants' counterclaim be served within 14 days of the amendment of the legal aid certificate. A defence and counterclaim was served on the 14th July 1983.

5. Mr. Woo for the plaintiff has argued that by virtue of the order the defendants are precluded from filing a defence. However, I reject this argument for Order 15 rule 2(1) of the Rules of Supreme Court provides,

"Subject to rule 5(2), a defendant in any action who alleges that he has any claim or is entitled to any relief or remedy against a plaintiff in the action in respect of any matter (whenever and however arising) may, instead of bringing a separate action, make a counterclaim in respect of that matter, and where he does so he must add the counterclaim to his defence."

Also relevant is a passage in the Supreme Court Practice 1982 Volume 1 under reference 14/3-4/12A:-

"Moreover, where the defendant sets up a bona fide counterclaim arising out of the same subject matter of the action, and connected with the grounds of defence, the order should not be for judgment on the claim subject to a stay of execution pending the trial of the counterclaim, but should be for unconditional leave to defend, even if the defendant admits the whole or part of the claim (Morgan & Son Ltd. v. S. Martin Johnson & Co. [1949] 1 K.B. 107, C.A. (whole claim admitted):"

The order of Jackson-Lipkin J. necessarily includes the service of a defence.

6. The plaintiff's summons is therefore dismissed. This was an unmeritorious application with the result that I award the defendants costs on a common fund basis. As the order of Jackson-Lipkin J. has been complied with there is no necessity to make any order on the defendants' summons which will be dismissed with no order as to costs.

Representation:

Mr. K.H. Woo (Deacons) for the plaintiff.

Miss Linda Siddal (Director of Legal Aid) for the defendants.