Chung Suet Wan v Chung Suet Hung

CourtDistrict Court (Hong Kong)
Judgment Date17 July 2015
Judgement NumberDCCJ4296/2013
Subject MatterCivil Action
DCCJ4296/2013 CHUNG SUET WAN v. CHUNG SUET HUNG

DCCJ 4296/2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 4296 OF 2013

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BETWEEN
CHUNG SUET WAN Plaintiff
and
CHUNG SUET HUNG Defendant

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Before: His Honour Judge Andrew Li in Chambers (Open to the public)
Date of Hearing: 26 June 2015
Date of Decision: 17 July 2015

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DECISION

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1. This is an appeal against Master D Ho’s Order dated 14 April 2015 (“the Impugned Order”) whereby the master ordered the time for the defendant to serve his witness statements be extended to 4:00 pm on 28 April 2015, which had the effect of granting leave from sanction of the unless order made by the same master on 12 December 2014 (“the Unless Order”).

BACKGROUND

2. The plaintiff and the defendant are natural sister and brother. The main dispute in this case revolves around 195,000 ordinary shares of a company set up by the plaintiff with her sister Chung Suet Han. The company carries on the business of selling and buying of electronic parts. The plaintiff's case is that the defendant was merely acting as a trustee for holding the shares on the plaintiff's behalf, which was fully paid up by the plaintiff. It is the plaintiff's case that the defendant has wrongfully refused to convey the legal title of the shares to the plaintiff. The defendant on the other hand contends that the shares were paid by his own money and he was the rightful owner of the shares.

3. By a Consent Order dated 1 September 2014, the master ordered that each party was to mutually serve and exchange witness statements on or before 28 October 2014. He further ordered that there was to be a case management summons hearing to be held on 12 December 2014.

4. At the case management summons hearing on 12 December 2014, the master imposed the Unless Order in the following terms:-

“Unless the parties do file and serve witness statements as to facts by 4:00 pm on 9 January 2015, the party in default shall be debarred from adducing such evidence at trial.”

5. The master also ordered that there was to be a case management conference ("CMC") to be held on 24 March 2015.

6. While the plaintiff has duly served her witness statement on the defendant by the specified deadline under the Unless Order, the defendant has failed to serve his in time. The plaintiff’s solicitors recorded the defendant's failure in a letter dated 12 January 2015 to which the defendant has not replied or contested.

7. On 15 January 2015, Registrar Lui granted the defendant’s solicitors application to cease to act for the defendant.

8. The defendant was absent from the CMC held on 24 March 2015. By an order in Chinese on the same date, Master To ordered, inter alia, that:-

“(1) The defendant do within 14 days explain in writing the reason of absence from the CMC and whether he intended to defend the action against him; and

(2) there would be a CMC re-fixed on 14 April 2015 if such explanation was provided.”

9. The defendant has failed to provide an explanation within the time imposed by Master To. However, just one day before the re-fixed CMC, the defendant by a letter written in Chinese dated 13 April 2015, explained to the court that he did not attend the CMC because (1) he had to work in the Mainland on a long term basis; and (2) his application for legal aid filed in January 2015 was rejected on 30 March 2015. The defendant therefore asked the court’s indulgence for him to instruct solicitors to handle the matter on his behalf and to defend the action.

10. The defendant attended the re-fixed CMC before the master on 14 April 2015. At the end of the CMC, the master imposed the Impugned Order purportedly pursuant to Order 2, rule 4 of the Rules of the District Court, Cap 336H ("RDC").

DISCUSSION

The Issue in dispute

11. The central issue in dispute in this appeal is whether the court ought to have exercised its discretion to grant relief to the defendant from sanction which had flowed from his non-compliance of the Unless Order. Further, there is a dispute as to whether the defendant had asked for relief from the sanction at the CMC under Order 2, rule 4 or the court had on its own motion made the Impugned Order under Order 1B, rule 2(4).

Relevant principles involved

(a) Nature of an “unless order”

12. Order 2, rule 4 of the RDC provides as follows:-

“Where a party has failed to comply with a rule or court...

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