Read the full judgment text of CACV 000181/1994 on BabelCite. This Court of Appeal judgment was delivered on 20 June 1995 before Power VP, Mortimer JA, Godfrey JA.
Practice and procedure – setting aside judgment in default obtained before process served by registered post is returned undelivered – whether 'regular' judgment – whether terms to be imposed on setting aside. Civil appeal concerning default judgment obtained by registered post that was returned undelivered. Plaintiff issued writ on 24 May 1994, attempted service by registered post, and obtained default judgment for HK$1,048,498 on 22 June 1994. Copy writ was returned undelivered on 1 July 1994. Plaintiff failed to make an application under O.13 r.7(3) RSC and instead obtained a charging order on 6 July 1994. Defendant, never served, applied to set aside both the judgment and charging order. First issue: whether default judgment obtained before return of undelivered copy writ should be set aside unconditionally. Held: yes; although the judgment was regularly obtained at the time, the fundamental principle that no one is to be made liable without fair notice of the proceedings (per Denning L.J. in R. v. County of London Quarter Sessions, Appeals Committee, Ex parte Rossi [1956] 1 QB 682) applies with equal force whether the judgment was obtained before or after the return of the undelivered copy writ. Following White v. Weston [1968] 2 QB 647 and Willowgreen Ltd. v. Smithers [1994] 2 All ER 533, the judgment must be set aside ex debito justitiae. The plaintiff was required by O.13 r.7(3) RSC to apply to set aside the judgment or for directions before taking any enforcement step. Second issue: whether terms should be imposed on setting aside. Held: no; where the defendant was never served, setting aside is a right and not an indulgence, and the defendant's costs of the application and of the appeal are costs in the cause (following Peter Cox Ltd. v. Thirwell (1981) 125 Sol.Jo. 48). The local authority Honour Finance Co. Ltd. v. Chui Mei-mei [1989] 2 HKLR 146 was distinguished on its facts. Appeal allowed; default judgment and charging order set aside unconditionally; defendant's costs of the application to set aside and of the appeal to be costs in the cause.
Legal issues: Whether default judgment obtained before return of undelivered copy writ should be set aside unconditionally · Whether terms should be imposed on setting aside judgment where defendant was never served
Outcome: Appeal allowed; the default judgment and the charging order obtained on the strength of it were set aside unconditionally.