Introduction
Background
Decision
Comment
Chung v Hung(1) is a recent judgment of the Court of First Instance that serves as a useful reminder of the procedural prerequisites for a plaintiff to apply for summary judgment or obtain judgment in default of a defence. In this case, the plaintiff's claim included declaratory relief that the defendant held certain land on trust for him. The plaintiff applied for summary judgment. However, a prerequisite for summary judgment is that the defendant must have given notice of intention to defend in acknowledging service of the plaintiff's writ. Here, no such notice had been given; therefore, the plaintiff's summary judgment application could not proceed. The plaintiff's attempt to amend the application to seek declaratory relief on an alternative basis – namely, that the defendant had not filed a defence – also failed, as a necessary procedural prerequisite for such an application was absent. These procedural requirements can serve as a trap for the unwary.
On 25 November 2020, the plaintiff commenced proceedings against the defendant, which were deemed to have been served on 2 December 2020. In brief, the plaintiff sought a declaration that the defendant held a three-storey house and the land on which it was built on trust for the plaintiff. The defendant had until 15 December 2020 (14 days inclusive) to acknowledge service of the writ and give notice of his intention to defend – no such notice was given.
Nothing much appears to have happened in the action until 8 November 2021, when the defendant acknowledged service of the writ, stating that he did not intend to contest the proceedings.
On 19 November 2021, the plaintiff filed his statement of claim (at the court registry) and applied for summary judgment. Given the plaintiff's summary judgment application, the defendant was not required to serve a defence but, should he have decided to do so, he would have had to have served it by 20 December 2021.
The problem with the plaintiff's application for summary judgment was that it is a prerequisite to obtain summary judgment that the defendant must have filed an acknowledgment of service specifying an intention to defend – the defendant had not done this.(2)
Realising the problem, on 20 December 2021 the plaintiff's lawyers applied to amend the summary judgment application to seek the same declaratory relief but on an alternative basis – namely, that the defendant had not filed a defence in time.(3)
At the hearing, the plaintiff's lawyers appear to have conceded that the summary judgment application had been misconceived. The principal issue for determination by the Court was whether to allow the plaintiff to amend the application to seek judgment in default of defence in the alternative.
Summary judgment
With respect to the summary judgment application (and despite the plaintiff's lawyers conceding as much), the Court stressed that, in the absence of a defendant giving notice of intention to defend, an application for summary judgment could not succeed. The Court stated:
Where a defendant does not intend to contest, the Order 14 machinery is not suitable for the plaintiff to invoke in order to enter judgment. It has been explained that in the absence of such an intention, there is no need for the court to assess whether the defendant has shown that there is an issue to be tried or whether there is a credible or believable defence.(4)
Therefore, it fell to the Court to decide whether to allow the plaintiff to amend his application by seeking judgment in default of a defence in the alternative.
Judgment in default of defence
The plaintiff also faced a procedural hurdle in this regard. The plaintiff was not seeking simple relief in the form of a monetary amount but declaratory relief as regards ownership of the property. In the event that the Court allowed the plaintiff to amend his summary judgment application, the amendments would have taken effect from the date of the original application – namely, 19 November 2021. The problem for the plaintiff was that it is a prerequisite to obtaining default judgment for declaratory relief that not only must the plaintiff have served a statement of claim, but the time for service of the defence must have expired.(5) In this case, as at 19 November 2021, the plaintiff's statement of claim had not been served on the defendant and the time for service of the defence had, therefore, not yet fallen due.(6) The Court stated: "Due to the fundamental procedural flaw, the plaintiff's proposed application for default judgment therefore does not come within Order 19, rule 7 and must therefore fail."(7)
Accordingly, the Court dismissed both the plaintiff's summary judgment application and the application to amend it.
Both of the plaintiff's applications suffered from fatal procedural defects. It is not entirely clear why the plaintiff's lawyers (realising the first procedural error) sought to amend the summary judgment application rather than deciding (for example) to withdraw the application and apply afresh for judgment in default.
The procedural prerequisites for obtaining summary judgment and judgment in default serve a good purpose. If a defendant does not give notice of intention to defend, there is no need for the Court consider whether there is a credible defence – therefore, the option of summary judgment does not arise. Where a plaintiff seeks declaratory relief and applies for judgment in default, the Court will require the plaintiff to proceed as if the defendant has given notice of intention to defend (even if the defendant has not) and to serve their statement of claim – declaratory relief is often not straightforward and, at the very least, the Court must know the factual basis for the relief sought.
The case illustrates some of the important procedural prerequisites for the Court to grant summary judgment or certain types of judgment in default. While the court rules were recently amended to expand the scope of summary judgment by abolishing the "fraud exception" to summary judgment, these prerequisites remain important (for further details, please see "Important litigation updates in Hong Kong"). The case also serves as a useful case study and is, perhaps, a good "starter for 10" in a civil procedure exam, in the knowledge that examiners quite like these sorts of unusual scenarios.
For further information on this topic please contact Jonathan Crompton or Flora Leung at RPC by telephone (+852 2216 7000) or email ([email protected] or [email protected]). The RPC website can be accessed at www.rpc.co.uk.
Endnotes
(1) [2022] HKCFI 166, 5 January 2022.
(2) Rules of the High Court, Order 14, rule 1(1).
(3) Rules of the High Court, Order 19, rule 7(1) and Order 20, rule 8.
(5) Rules of the High Court, Order 13, rule 6(1) and Order 19, rule 7(1).