Ho Chung Yin and Another v. Chung Wai Chun Susanna

DCCJ7866/2002

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 7866 OF 2002

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Between

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Coram: Deputy District Judge Frederick HF Chan in Chambers (Open to public)

Date of hearing: 3^rd September 2008

Date of ruling: 3^rd September 2008

RULING

1.The present case bears the case number of DCCJ7866/2002 and the Writ of Summons (which was endorsed with a Statement of Claim) was filed about 6 years ago on 20^th December 2002.

2.The chequered history of the instant case arose from the fact that the Defendant is residing in the United States of America and the Plaintiff has encountered many unforeseeable difficulties on serving the Writ of Summons and the Statement of Claim on her.

3.A brief narrative of the Plaintiffs’ case is as follows. On 28^th October 2002, the Plaintiffs (as the purchasers) entered into a Provisional Agreement whereby they agreed to purchase from the Defendant a residential property known as 1^st Floor, Lot No. 2054 in DD449, Tsuen Wan, New Territories (“the Property”).

4.The purchase price was agreed to be HK$800,000 and the Plaintiffs paid the initial deposits of HK$80,000 to the Defendant. The scheduled completion date was agreed to be 2^nd December 2002.

5.Things did not go well and according to the Plaintiffs, the Defendant had consistently failed to answer crucial requisitions on title raised by the Plaintiffs’ solicitors. In common parlance, the sale and purchase of the Property fell through.

6.On 20^th December 2002, by way of the Writ of Summons and the Statement of Claim , the Plaintiffs sought the following reliefs from the Court:

(a)  A declaration that the Defendant had failed to answer the Plaintiffs’ requisitions satisfactorily and sufficiently and has failed to show good title to the Property in accordance with the Provisional Agreement;

(b) A declaration that the Plaintiffs shall be entitled to rescind the Provisional Agreement;

(c)  Return of the initial deposits to the Plaintiffs;

(d) An order that the Defendant shall pay a sum of HK$80,000 as liquidated damages under the Provisional Agreement, a sum of HK$100 being the stamp duty paid and HK$3,500 being the costs of investigating the title;

(e)  Interest;

(f)   A declaration that the Plaintiffs are entitled to an equitable lien on the Property to secure the return of the initial deposits.

7.By an inter parte summons filed about 4 years ago on 26^th April 2004, the Plaintiffs applied for default judgment pursuant to O. 19 r. 7 RDC against the Defendant (“the Judgment Summons”). Understandably, the contents of the Judgment Summons mirrored the reliefs sought by the Plaintiffs in the Writ of Summons and Statement of Claim.

8.The Plaintiffs again encountered procedural difficulties on serving the Judgment Summons on the Defendant and finally, the Plaintiffs succeeded in obtaining the substituted service of the Judgment Summons on 7^th July 2008. Hence, the hearing before me on 3^rd September 2008 for the Judgment Summons ensued. To date, the Defendant has not filed a defence.

9.Pausing here, I wish to point out that the subject matter of the Plaintiffs’ case could have been dealt with by way of a vendor and purchaser summons in accordance with section 12 of the Conveyancing and Property Ordinance (Cap. 219) which stipulates that:

“(1) A vendor or purchaser … of land may apply by petition or by originating summons to the court in respect of any question arising out of or connected with any contract for the sale … of land … and the court may make such order upon the petition or originating summons and as to costs as to the court appears just.

(2)  In this section, “court” means the Court of First Instance unless the vendor and purchaser submit to the jurisdiction of the District Court”.

10.Generally speaking, a petition and an originating summons would require a trial of the issues and matters in  open court where viva voce evidence and submissions will be ventilated by the parties and their legal representatives. I am not privy to the reasons why the Plaintiffs decided to issue legal proceedings before the District Court by way of the Writ of Summons and Statement of Claim.

11.Be that as it may, the Plaintiffs must overcome some legal hurdles before they can succeed in obtaining the reliefs under the Judgment Summons in the action herein.

12.At the hearing, I invited Mr. Simon Kwong Ting Chung (solicitor for the Plaintiffs) to consider some case law.

13.In Wallersteiner v. Moir [1974] 1 WLR 991, in an oft-quoted passage, Lord Justice Scarman (as he then was) made some pertinent observations on the Court’s power to grant a judgment for declaration in default of a defendant’s defence by saying at pp. 1029-1030:

“RSC Ord. 19 declares the consequence of a default of pleading. Rule 2 provides that, where a claim is for a liquidated demand only, the claimant may have final judgment. Rule 3 provides that, where a claim is for unliquidated damages, he may have judgment for damages to be assessed. Rules 4 and 5 deal with claims in detinue and for possession of land and rule 6 with the situation that arises where they are in one action several claims of the sort or sorts mentioned in rules 2 to 5. Rule 7 makes provision for all other descriptions of claim (of which claims for declaratory relief are one). RSC Ord. 19 r. 7(1) provides that in all such cases the consequence of a failure to serve a defence within the proper time shall be that the claimant “may … apply to the court for judgment, and … the court shall give such judgment as [he] appears entitled to on his statement of claim”.

Notwithstanding the word “shall”, the case law has established that the court retains the right to refuse the claimant judgment even when upon his pleading he appears entitled to it. If the court “should see any reason to doubt whether justice may not be done by giving judgment”, it may refuse judgment at this stage …

This discretion is a valuable safeguard in the hands of the court …

Generally speaking, the court should leave until after trial the decision whether or not to grant declaratory relief, and if so, in what terms …

Different considerations, however, apply when what is sought is a money or property judgment. When a defendant fails to plead, it is ordinarily in the interests of justice that the plaintiff should be able without more ado to obtain judgment for the money or property for which he is suing; the defendant is not without remedy after judgment in default, for, if he can show a bona fide defence, he can get it set aside before it is enforced. But, when what is sought is a declaration, there is the risk of irremediable injustice; the court has spoken and words cannot be recalled, even though later they be negatived …

The power of the court to give declaratory relief upon a default of pleadings, of course, exists, but … should be exercised only in cases in which to deny it would be to impose injustice upon the claimant” (case references were omitted by me).

14.Lord Justice Buckley agreed and said at p. 1029:

“It has always been my experience and I believe it to be a practice of long standing, that the court does not make declarations of right either on admissions or in default of pleading. A statement on this subject of respectable antiquity is to be found in Williams v. Powell [1894] WN 141, where Kekewich J., whose views on the practice of the Chancery Division have always been regarded with much respect, said that a declaration by the court was a judicial act, and ought not to be made on admissions of the parties or on consent, but only if the court was satisfied on evidence” (my emphasis).

15.The above approach was consistently applied in the local case law. In Wong Chi Ming v. Su Hsiu Ching, HCA4424/1987, unreported, 17^th June 1987, Liu J. (as he then was) dealt with the plaintiff’s appeal against the Master’s order to adjourn the plaintiff’s summons under O. 19 r. 7 RSC to a date to be fixed for oral evidence to be adduced in support of the plaintiff’s claim. The plaintiff’s claims contained, in the main, declarations. Mr. Justice Liu cited Wallersteiner v. Moir (ibid) and held at p. 3 that:

“It was eminently sensible of the learned Master to call for viva voce evidence at an adjourned hearing having voiced his concerns over the declaratory nature of the plaintiff’s relief”.

16.In Lam Shing Shou v. Lam Hon Man & Others, HCA361/2001, unreported, 31^st July 2001, the plaintiff claimed to be the adopted son of a deceased person who was the owner of 21 lots of land in the New Territories. The plaintiff sued the defendants to claim declarations to the effect he should be registered as the legal owner of the land lots. He issued a summons to seek for default judgment against them under O. 19 r. 7 RHC. The summons was listed for hearing before Mr. Recorder Robert Tang SC (as he then was) sitting in chambers. The learned judge scrutinized the available evidence which was placed before the court and adjourned the summons to allow the plaintiff to adduce further evidence in respect of the Plaintiff’s occupation of the land lots. The summons was adjourned sine dine with costs reserved.

17.The plaintiff then filed further evidence. The case was subsequently determined by Madam Justice Chu in Lam Shing Shou v. Lam Hon Man & Others, HCA361/2001, unreported, 15^th January 2002. Madam Justice Chu granted the declaratory reliefs to the plaintiff and said at pp. 5-6:

“13. In Patten v. Burke Publishing Co. Ltd. [1991] 1 WLR 541, Millett J. observed, at p.544A, that in the absence of a judgment reached after hearing evidence, a declaration can be based only on unproved allegations and that the Court ought not to declare as fact that which might not have proved to be such had facts been investigated. Millett J., however, went on to point out that the rule referred to in Wallersteiner v. Moir, supra, is only a rule of practice. Although it should normally be followed, it should only be followed when the plaintiff obtain the fullest justice to which he is entitled without the declaration he seeks”. 

18.Returning to the present case, Mr. Kwong for the Plaintiffs took time to consider the above case law and thereafter advisedly confirmed that the Plaintiffs would opt for a trial proper to determine the Judgment Summons. He agreed that absent the affirmation evidence from the Plaintiffs which sets out the factual details of their case and the relevant documents and correspondence, the Court would not be in a position to grant the declarations as per the Judgment Summons.

19.Indeed, Mr. Kwong conceded that the other reliefs, for example, the return of the initial deposits all hinge upon the making of the declarations by the Court. In short, he agreed that the Judgment Summons should be adjourned today for proper determination by the Court at a trial hearing on a later date.

20.In the circumstances, I therefore exercised my discretion under O. 19 r. 7 RDC to give the following directions in relation to the present case and the Judgment Summons:

(1)  The Judgment Summons be adjourned for a trial hearing before a District Judge sitting in open court, with 1 day be reserved;

(2)  The Plaintiffs shall, within 42 days herein, file and serve affirmation evidence which supports the Plaintiffs’ case;

(3)  Once the date of the trial hearing is fixed, the Plaintiffs shall given 14 days’ notice of the date of the trial hearing by way of substituted service on the Defendant;

(4)  7 days before the date of the trial hearing, the Plaintiffs shall file with the Court two hearing bundles; the 1^st hearing bundle shall contain all the relevant supporting affirmations and the 2^nd hearing bundle shall contain all the relevant documents and exhibits (if any);

(5)  The Plaintiffs do have leave to apply for any consequential directions from the Court in relation to the setting down and preparation for the trial hearing, if and when necessary;

(6)  3 days before the date of the trial hearing, the Plaintiffs shall file with the Court (a) a detailed Chronology of Events, (b) a detailed Written Submissions and (c) a draft minute of the orders which the Plaintiffs will be seeking from the Court;

(7)  Costs of today’s hearing of the Judgment Summons be reserved.

21.Needless to say, I leave it to the discretion of the presiding District Judge as to whether the Plaintiffs’ affirmation evidence could be adopted as their respective evidence in-chief at the trial proper.

22.Lastly, it is my sincere wish that the present case may proceed to judgment as soon as possible.

Representations:

Mr. Kwong Simon Ting Chung of Messrs. Kevin L. H. Kwong & Co.

Defendant was absent.