Sino Estates Management Ltd v. Daw Khin Vivienne and Others
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DCCJ 2925 of 2009 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO. 2925 OF 2009 ____________ BETWEEN
____________ Coram: Temporary Registrar C. Lee of District Court in Chambers Date of Hearing: 26th January 2011 Date of Handing Down Decision: 27thJanuary 2011 _______________ DECISION _______________ A. Application 1.The 3 named Defendants took out summons dated 10th November 2010 to set aside the default judgment entered against the Defendants on 15th October 2009. The judgment was entered pursuant to O.13 of the Rules of the District Court (RDC) in default of giving notice of intention to defend. This is the decision upon hearing full arguments. B. The Plaintiff's claim 2.The Plaintiff is the manager of the estate known as the Villa Horizon situated at No. 8 Silver Stream Path, Silverstrand, Sai Kung, New Territories, Hong Kong. It acted on behalf of the incorporated owners of the said estate pursuant to the deed of mutual covenant (DMC) and the management agreement as stated in the Statement of Claim. The Defendants are the registered owners of House 29 and 2 car parking spaces of the Estate. By virtue of the resolutions made on 3rd November 2006 during an extraordinary meeting of the owners, renovation works were conducted for road maintenance and replacement of public fresh water pipes of the said Estate. 3.According to sub-clause 3 of the DMC, owners are required to pay the proportion of such expenses in accordance with the Third Schedule of the DMC. The Defendants refused to pay such expenses. 4.As a result, the Plaintiff claims against the Defendants for the contribution to expenses incurred for the said renovation works in the sum of $136,664. C. Judgment entered 5.The Plaintiff relied on two affirmations of Tam Kwok Hung Andy filed on 2nd October 2009 to prove that service of the writ and the statement of claim were effected on the Defendants by inserting into the letter box of House 29 of the Estate on 23rd June 2009. No notice of intention to defend was filed by the Defendants. Judgment against the Defendants was entered on 15th October 2009 under O.13 of the RDC. D. 1st call over 6.1st and 2nd named Defendants were absent in the 1st call over hearing held on 18th November 2010. The 3rd named Defendant all along claimed to represent 1st and 2nd Defendants who are the mother and elder sister of the 3rd Defendant respectively. 7.Since the 3rd named Defendant was acting in person, this Court explained to her the considerations in setting aside a judgment, such as whether the judgment is regular or irregular (whether the writ and the statement of claim was properly served on the Defendants), if the judgment is regular, whether the defence disclosed has a real prospect of success. 8.This Court gave the Defendants extra opportunity to file supplemental affirmation with focus on the said framed issues and gave further directions on the preparation of the argument on setting aside, including the following orders:-
9.The 1st call over was adjourned to 20th January 2011 as the 2nd call over hearing with 2 reasons: to monitor the parties and ensure they comply with the said timetable before fixing date for full argument, bearing in mind that the Defendants are litigants in persons; to let parties have a sight of the other side’s documents before deciding whether a full argument is necessary (because the costs of litigation may increase for tens of thousand dollars after full argument and it is to be assessed summarily). 10.No supplemental affirmation was filed on the Defendants’ behalf on or before the ordered date on 2nd December 2010 until 13th January 2011, 7 days before the 2nd call over hearing, the 3rd named Defendant’s 2nd affirmation was filed. On the other hand, the Plaintiff filed the affirmation of Cheung Kwok Leung in opposition on 30th December 2010. Together with an earlier affirmation of the 3rd named Defendant filed on 10th November 2010 in support of the Defendants’ application, the Parties appeared to be ready for full argument as at the date of the 2nd call over on 20th January 2011. E. 2nd call over 11.The 1st and 3rd named Defendants appeared at the 2nd call over hearing on 20th January 2011. Beforehand, the Plaintiff took out a summons returnable on the 2nd call over to correct two typing errors in respect of the Plaintiff’s name in the orders dated 18th November 2010 and by seeking leave to file Cheung’s 2nd affirmation to change the date of EGM referred to in Cheung’s 1st affirmation. The Defendants objected and maintained that the judgment obtained was unlawful. I see no compelling reason not to allow the summons to correct the typing errors or clerical mistakes so long as the Defendants would be given opportunity to have a full argument. Leave was so granted. Directions were given to fix the summons for full argument with the date fixed on 26th January 2011 after consulting the 1st and 3rd named Defendants. F. Gist of the 3rd named Defendant's affirmations 12.The Defendants' summons and the 3rd named Defendant's 1st affirmation dated 10th November 2010 stated in essence that: (i) the 1st named Defendant filed a “defence letter” on 15th July 2009 (it must be noted that the Defendants did not exhibit a copy in the affirmations for this argument); (ii) (Presumably upon enquiry), a Ms Ku of the registry’s staff said that there was no “defence letter” in the court’s file. The 1st named Defendant purported to file the alleged defence letter again on 19th October 2009 (it must be noted again that the Defendants did not exhibit a copy of the alleged defence letter in the affirmations for this argument) but Ms. Ku refused because the judgment was entered already; (iii) the Plaintiff lost 4 similar claims in the Small Claims Tribunal (SCT) and it was perverting the course of justice (it must be noted that the relevant SCT’s orders were not exhibited but they were enclosed in one of her voluminous similar letters and I shall come to this later). 13.The 3rd named Defendant's 2nd affirmation dated 13th January 2011 stated in essence that: (i) the management fee has to be reduced; (ii) the management company has to be changed because of poor management; (iii) it is necessary to enhance the transparency of the income and expenditure of the Estate; (iv) the “defence letter” dated 15th July 2009 was filed, hence the judgment obtained on 15th October 2009 was unlawful; (v) the Plaintiff lost in the SCT, presumably on similar claims; (vi) there was suspected cheating in respect of the renovation expenses; (vii) the amount of contribution was unequal; (viii) the repair works are sub-standard. The 3rd Defendant said at page 8 of this 2nd affirmation: “In this connection, we are not liable at all to pay the plaintiff the aforesaid amount and the interest and the fixed costs of HK$7,830.” 14.Despite the Court's orders of not to file further affirmation to avoid endless affirmation, the Defendants filed another document labeled as an affirmation in Chinese dated 24th January 2011 but was not an affirmed document. I nevertheless take into account this document in this hearing. The Defendants said in gist that: (i) the case number should be “DCMP”, not “DCCJ’; (ii) the Plaintiff was unable to produce copies of cheques and invoices for the repair works; (iii) the Plaintiff cheated by amending the date of EGM from 11th March 2006 to 3rd November 2006 (from 11/3/06 to 3/11/06). 15.The 1st and 3rd Defendants also made submissions during the hearing for full arguments. In gist, they submitted that they had enough and suffered from mental torture. Secondly, the Plaintiff did not listen to the SCT’s adjudicators in turning down their offer to pay a lesser sum. Their children suffered by having school suspended for a period. The Defendants were all along cooperative and reasonable. They were not liable to pay so much. The memorandum of charge shall be discharged. They did not borrow money and there is no reason why interest of 8% was levied. They requested written judgment in Chinese (I must note that most, if not all of the documents are prepared by the Defendants in English). G. Gist of the Plaintiff’s affirmation (Cheung’s 1st affirmation) 16.In gist, Cheung of the Plaintiff deposed that the renovation expenses were genuinely incurred and the relevant resolution was passed at the EGM of the owners held on 3rd November 2006. Thereafter, the Plaintiff issued 4 separate demand notes in 2007, followed by 4 separate claims lodged in the SCT after the Defendants’ failure to pay. Due to the prohibition of splitting the claim in the SCT (for example, splitting a claim for $100,000 by filing 2 separate claims for each claim in the amount of $ 50,000 so as to make it within the jurisdiction of SCT, i.e. not exceeding $50,000), the Plaintiff withdrew the claims lodged in the SCT. There is no adjudication on merits. Secondly, according to the 3rd named Defendant’s summons dated 10th November 2010, as early as in October 2009, the 1st named Defendant knew that the judgment was entered already but this summons was taken out on 10th November 2010, there was a delay of more than 1 year. Thirdly, the judgment entered was a regular judgment as a matter of law and procedure and fourthly, the Defendants failed to show a meritorious defence. H. Focus 17.The material questions are (i) whether the judgment entered was regular, if so, whether the Defendants have shown a real prospect of success on its defence (see Hong Kong Civil Procedure (HKCP) 2011 edition paragraphs 13/9/4; 13/9/13). I. Analysis 18.From the Plaintiff’s affirmations of service, it is apparent that the writ and the statement of claim were properly served on the Defendants in accordance with O.10, r.1 and O.13, r.7 of the RDC. Further, it is not the Defendants’ version that they never received the writ and the statement of claim. What the Defendants alleged was that the 1st named Defendant filed a “defence letter” on 15th July 2009, so it must be the case that they knew the Plaintiff’s claim before preparing the alleged defence letter. Further, the writ was accompanied with the prescribed forms with descriptions in both English and Chinese languages. The accompanied documents include: (i) the acknowledgement of service of writ as to whether a defendant will contest the proceedings or not with the warning about its importance and delay may result in judgment entered; (ii) a form no. 16 giving a defendant an option to make admission and request payment by instalments. 19.As a result, it is unknown as to the reason why the Defendants did not follow the instructions as stated in the said documents, instead they acted in their own way by allegedly prepared a defence letter. After all, the Defendants failed to exhibit a copy of the alleged defence letter or to provide a version of what the alleged defence letter suggests, bearing in mind that they should have kept a copy. The 1st named Defendant purported to “write the defence letter for the second time on 19th October 2009” and to re-file the same on the same day but the said Ms. Ku refused on the ground that the judgment was already entered. As a result, the judgment entered was regular. 20.Next question is whether the Defendants establish a meritorious defence. In spite of an unknown reason why up till now the defence letter is not exhibited or what did the letter suggest, it is still open to the Defendants to state their defence again in the application to set aside so that the Court can consider whether it is fair and just to set aside a regular judgment. The relevant considerations are set out in HKCP, para. 13/9/13.
21.In the present case, the Defendants failed to explain why they did not read the writ and statement of claim (with English and Chinese versions), why they failed to give the notice of intention to defend and allowed the judgment entered. From the 3rd named Defendant’s 1st affirmation, they knew that the judgment was entered against them as early as in October 2009 and the Defendants failed to explain why the application to set aside was made in November 2010, more than a year later. 22.In respect of the merits of the defence, except obscure and bare allegations of mismanagement; conspiracy theory and other owners have paid lesser sums, it seems that the Defendants’ allegations did not address on the reasons why they needed not contribute to the renovation expenses or they are entitled pay a lesser sum. Further, had there been copies of a defence letter dated 15th July 2009 and the 2nd version or the 2nd copy of a defence letter was available on 19th October 2009, there is no reason why such copy is not exhibited. After all, the 3rd Defendant did not say what the alleged defence letter suggests. All these could have been done by a litigant in person who is desirous to defend with reason and who is desirous to submit contemporaneous documents to support their contention. Such failure could not simply be explained away by “ignorance” or “misunderstanding”. Regarding the claims in the SCT, both parties agreed that the Plaintiff lodged a few claims on such renovation expenses in the SCT. As revealed in one of the voluminous letters from the 3rd Defendant dated 6th December 2010 and was received by the Registry on 6th December 2010, the 3rd Defendant enclosed 9 copies of SCT’s orders. It is apparent that the claims were withdrawn from SCT without adjudication on merits. For easy reference, a chart of the relevant SCT’s claims and orders is set out hereunder.
23.The Plaintiff says that the claims for renovation expenses were withdrawn on technical point of split claims as aforesaid while the Defendants say that the Plaintiff’s claims were dismissed on merits. 24.From the above SCT’s orders, it is clear that none of the above court orders show that the claims were dismissed on merits. The Defendant failed to establish that the Plaintiff lost in the said claims and should not re-litigate. J. Conclusions 25.Had the resolutions and apportionment of contribution been considered as unlawful as early as in 2006 and 2007, there was no reason why the Defendants did not take action to challenge that. As early as in 2007, the Defendants could have sought inspection of the relevant documents under Building Management Ordinance Cap. 344, Schedule 7 so as to explore if there is any sign of impropriety. In the absence of any evidence that may shed light on the propriety of the resolution and the apportionment of the renovation expenses, the Court cannot simply accept bare assertions, otherwise, this will erode the core value of the requirement of law and evidence. In short, I am of the view that the Defendants failed to establish a meritorious defence. I refuse to set aside the judgment entered. K. Orders 26.The Defendants’ summons dated 10th November 2010 be dismissed. Costs order nisi of and occasioned by the said summons be to the Plaintiff to be taxed if not agreed. This costs order nisi shall become absolute after the expiration of 14 days from the date hereof unless any party applies by way of summons to vary the said costs order nisi.
Mr. William Miller of Messrs Patrick KH Lam & Co for the Plaintiff. The 1st, 2nd and 3rd named Defendants, acting in person with the 2nd named Defendant absent | ||||||||||||||||||||||||||||||||||||