高等法院（民事訴訟）Deputy High Court Judge Kent Yee25/11/2025[2025] HKCFI 5750
HCA1287/2022
A A
B HCA 1287/2022 B
[2025] HKCFI 5750
C C
IN THE HIGH COURT OF THE
D HONG KONG SPECIAL ADMINISTRATIVE REGION D
COURT OF FIRST INSTANCE
E E
ACTION NO 1287 OF 2022
F ______________________ F
BETWEEN
G G
SERES PROPERTIES B.V. Plaintiff
H and H
LEE HOCK PUN 1st Defendant
I I
WANG XULU 2nd Defendant
J J
_______________________
K K
Before: Deputy High Court Judge Kent Yee in Chambers
L Date of Hearing: 27 August 2025 L
Date of Decision: 26 November 2025
M M
_________________
N N
DECISION
O _________________ O
P Introduction P
Q Q
1. Default judgment was entered against D1 on account of his
R failure to file a Notice of Intention to Defend on 26 April 2023 (“the Default R
Judgment”) in the amount of €3,628,157.97 (“the Judgment Sum”).
S S
By summons dated 22 January 2025 (“the Set Aside Summons”),
T D1 applies to set aside the Default Judgment on the basis of its alleged T
irregularity.
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A - 2 - A
B 2. By another summons of the same date (“the Discharge B
Summons”), D1 applies for discharge of the ex parte Mareva cum
C C
proprietary injunction granted by Andrew Chan J on 6 January 2025 and
D continued by the order of DHCJ Grace Chow dated 10 January 2025 D
(“the Injunction Order”).
E E
F 3. On the other hand, P applies for an order that the Amended F
Charging Order nisi dated 13 March 2025 (“the CO nisi”) be made absolute.
G G
H 4. Lastly, by summons dated 9 January 2025 (“the Relief H
Summons”), D1 makes an application for relief from sanction from the
I I
unless order dated 24 October 2024 made by this court (“the Unless Order”).
J The Unless Order was made upon D1’s application by his summons dated J
9 October 2024 for an extension of time to comply with paragraph 1 of the
K K
consent order dated 11 July 2024 (“the Consent Order”), which, among
L other matters, provided that the Default Judgment should be set aside on the L
condition that D1 do within 90 days thereof pay into court the amount of
M M
€2,650,000 (“the Security”). The Unless Order provided that unless D1 do
N pay into court the Security on or before 28 November 2024, D1 be debarred N
from doing so.
O O
P 5. D1 has never complied with the Unless Order by paying the P
Security.
Q Q
R 6. There is another application made by D1 for leave to adduce his R
further affirmation which seeks to update his financial condition. P does
S S
not oppose this application provided that the Ruling of the Mainland court
T dated 26 January 2025 could be adduced. This court allow both documents T
to be adduced.
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B 7. This is the substantive hearing of all the foregoing contested B
applications. Mr Payne appears for P and Mr Hui appears for D1. D2 is
C C
not involved and does not appear.
D D
8. Mr Hui stresses that the Default Judgment is irregular and it
E E
must be liable to be set aside as of right. The focus of Mr Payne’s argument
F is on the binding effect of the Consent Order and the abusiveness of D1’s Set F
Aside Summons. I should resolve the issue of regularity of the Default
G G
Judgment in the first place.
H H
9. Before doing so, it is necessary to give a brief account of the
I I
background facts for the understanding of the disputes between the parties.
J The following is my summary of the narratives of Mr Payne and Mr Hui in J
their skeleton submissions.
K K
L 10. On around 30 April 2020, P and XLHP Group Limited L
(“XLHP”) entered into a loan agreement whereby a loan in the principal
M M
amount of €2,800,000 (as a minimum) or €3,500,000 (as a maximum) would
N be advanced to XLHP (“the Loan Agreement”). N
O O
11. The sole shareholder of XLHP is VCL Holding Limited
P (“VCL”). VCL is beneficially owned and controlled by Ds and it was P
incorporated in the British Virgin Islands in September 2016. D2 is its sole
Q Q
director.
R R
12. Pursuant to the Loan Agreement, P caused a total amount of
S S
€3,586,717.30 to be transferred to XLHP from August to September 2020.
T T
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B 13. Ds allegedly agreed to be the guarantors to the Loan B
Agreement under a 2-page document entitled “Additional Protocol” dated
C C
1 October 2020 (“the Guarantee”). Ds now dispute the authenticity of the
D Guarantee and, alternatively, they challenge its enforceability on account of D
its purported lack of consideration.
E E
F 14. XLHP defaulted payment under the Loan Agreement and on F
3 October 2022, P issued a statutory demand on XLHP. D1 was notified of
G G
the statutory demand by P’s email dated 7 October 2022.
H H
15. XLHP did not comply with the statutory demand and eventually
I I
P issued a creditors winding up petition against XLHP. The petition was
J not contested and a winding up order was made against XLHP on J
29 March 2023.
K K
L 16. Subsequently, the liquidators of XLHP found out that XLHP L
had transferred approximately €2.6 million to the personal account of D1 and
M M
€125,000 to the personal account of D2. Both Ds have been unresponsive
N to the enquiries of the liquidators. N
O O
17. On 3 October 2022, P issued the writ in this action (“the Writ”)
P to enforce the Guarantee against Ds. The Writ was purportedly served on P
D1 by placing the same in the letter box of D1’s address at Fortress Hill
Q Q
(“the Fortress Hill Address”) on the same day.
R R
18. D1 did not respond to the Writ at all and the Default Judgment
S S
was entered against D1 on the basis that P abandoned its claim for contractual
T interest in the Writ. T
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B 19. On 18 March 2024, P commenced legal proceedings against Ds B
in the Shanghai Changning District People’s Court (“The Mainland Court”)
C C
to enforce the Guarantee whilst the Default Judgment could not be enforced
D in the Mainland. D
E E
20. The Mainland Court imposed a travel ban on Ds and they could
F not leave the Mainland unless they provided the like amount of the Judgment F
Sum to the Mainland Court as security.
G G
H 21. By summons dated 22 May 2024 (“the Previous Set Aside H
Summons”), D1 applied to set aside the Default Judgment primarily on the
I I
ground that the Default Judgment was irregular. By summons dated 28
J May 2024 (“the ASI Summons”), D1 applied for an anti-suit injunction to J
restrain P from continuing the legal proceedings in the Mainland against him.
K K
L 22. P and D1 signed a consent summons dated 10 July 2024 L
(“the Consent Summons”) to dispose of the Previous Setting Aside
M M
Summons and the ASI Summons. The Consent Order was made in terms
N of the Consent Summons. By the Consent Order, leave was granted to D1 N
to withdraw the Previous Setting Aside Summons and the ASI Summons.
O O
P 23. On 29 November 2024, upon D1’s non-compliance with the P
Unless Order, P proceeded to enforce the Default Summons by way of an
Q Q
ex parte application for a charging order over the shares of We Doctor
R (“the We Doctor Shares”) in an account with I Win Securities Limited R
(“I Win Securities”). The We Doctor Shares were disclosed by D1 in his
S S
affirmations to be his properties. The CO nisi was granted.
T T
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B 24. P served the CO nisi on I Win Securities but was informed on B
3 January 2025 that D1 had already transferred the We Doctor Shares to D2.
C C
D 25. A few days later, P applied for and was granted the Injunction D
Order on 6 January 2025.
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F
26. Shortly afterwards, D1 took out the Relief Summons and then F
the Set Aside Summons and the Discharge Summons.
G G
H
Regularity of the Default Judgment H
I 27. The evidence of D1 is that due to the outbreak of COVID-19, I
he was able to travel to Hong Kong only once in 2021 and was not within
J J
the jurisdiction in the entire year of 2022. He and D2 have all along been
K K
residing in Shanghai with their children to the knowledge of P. D1 claims
L
that he only received the Writ from his cousin who is the registered owner L
of the flat at the Fortress Hill Address on 14 June 2023. His cousin allowed
M M
him to use the Fortress Hill Address as his correspondence address in Hong
N
Kong. N
O O
28. P has adduced no contrary evidence in this regard.
P
Mr Hasancebi who is the ultimate sole owner of P in his Affidavit frankly P
accepted that he had no knowledge of D1’s whereabouts when the Writ was
Q Q
served on him as D1 had avoided all contacts with him for over 1 year.
R
He merely gathered from his previous discussion with D1 that he had R
maintained residences in both Shanghai and Hong Kong.
S S
T T
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B 29. On this evidence, Mr Payne fairly did not argue that D1 was B
within the jurisdiction when the Writ was served on him by the use of the
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Fortress Hill Address.
D D
30. O.10 r. 1(2) provides that a writ for service on a defendant
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within the jurisdiction may, instead of being served personally on him, be
F served (a) by sending a copy of the writ by registered post to the defendant F
at his usual or last known address or (b) if there is a letter box for that address,
G G
by inserting through the letter box a copy of the writ enclosed in a sealed
H envelope addressed to the defendant. H
I I
31. Apparently, P relied on O.10 r.1(2)(b). It is not in dispute that
J the Fortress Hill Address was the usual or last known address of D1 in J
Hong Kong as evidenced by some records filed with the Companies Registry
K K
and D1’s correspondences. The problem is that P did not satisfy the
L requirement that D1 must be within the jurisdiction at the time of the L
service of the Writ: Deng Minghui v Chau Shuk Ling [2007] 1 HKLRD 905,
M M
per Cheung JA at §11.
N N
32. In the circumstances, I come to the conclusion that the Default
O O
Judgment is irregular and is liable to be set aside.
P P
Residual discretion
Q Q
R
33. Mr Hui refers to Hong Kong Civil Procedure 2025 Vol.1 R
§13/9/5 where the learned editors state that where a defendant was not
S S
physically within the jurisdiction at the time the writ was served, the
T defendant should be entitled, as of right, to have default judgment set aside T
citing Deng Minghui, supra.
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B 34. Mr Payne, on the other hand, refers to Luen Tat Watch B
Band Manufacturer Limited v Li Shu Chung [2020] HKCFI 984 in which
C C
Keith Yeung J at §29 cited the following citation of the observation made by
D the Court of Appeal in Russell Peter Brown & Ors. v Edward Eugene D
Lehman [2017] 4 HKC 6 (at §28):
E E
“Where a default judgment is irregular, it is usually said that it will
F be set aside ex debito justitiae. Mr Barlow [for the defendant] F
submits that this means that it must be set aside. However, it was
established in Po Kwong Marble Factory Ltd v Wah Tee Decoration
G Co Ltd [1996] 4 HKC 157 that the court retains a residual discretion G
to decline to set aside an irregular default judgment, or to impose
H terms when setting it aside, where the circumstances of the case call H
for such a course to be taken.”
I I
35. Keith Yeung J at §28 referred to the following observation of
J Bokhary JA in Po Kwong Marble Factory Ltd made when setting aside the J
default judgment with terms imposed (at p.162E),
K K
“Ex debito justitiae’ or as of right means without going into the actual
L merits of the defence. It does not mean shutting one’s eyes the L
circumstances surrounding the question of service and why things
went wrong in that regard. The court statutory jurisdiction is
M M
unfettered.”
N N
36. Mr Payne, however, does not point to any particular facts which
O this court should consider in the exercise of the residual discretion and does O
not suggest any terms to be imposed in the event that the Default Judgment
P P
is to be set aside.
Q Q
37. Mr Payne relies heavily on the binding effect of the Consent
R R
Order and submits that it is an abuse of process for D1 to make the present
S application after the withdrawal of the Previous Set Aside Summons. S
T T
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B 38. Mr Payne refers to Leung Yee & Anor. v Ng Yiu Ming & Anor. B
[2001] 1 HKLRD 309 where Woo JA explained the binding nature of a
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consent order.
D D
39. I believe that it is well established that a consent order is an
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enforceable contractual agreement between the parties and it cannot be
F lightly set aside. In CML v LMH [2010] HKLRD 818, Cheung JA at §§4-5 F
had this to say about a consent order,
G G
“A “consent order”, which is made pursuant to an agreement between
H the parties, is an agreement or a contract binding on the H
parties…A party to a “consent order” must establish the existence
of exceptional circumstances which justify rescission of the
I underlying agreement. Exceptional circumstances include: the I
applicant erroneously consented to the agreement, he was misled by
J the misrepresentation of the other party into giving his consent to J
the agreement, or the court considers it grossly inequitable to require
the parties to abide by the agreement.”
K K
40. I have studied the terms of the Consent Order. It provided D1
L L
with a fast route by which the Default Judgment could be set aside without
M substantive argument of the Previous Set Aside Summons. By paying a M
lesser amount as the Security into court within the prescribed period of time,
N N
the Default Judgment would be set aside and D1 should accordingly
O withdraw the Previous Set Aside Summons. O
P P
41. The Consent Summons was signed by the parties legally
Q represented. The Consent Order did not show any acceptance on the part Q
of D1 that the Default Judgment was not irregular. It was not made on such
R R
a basis. It did not preclude D1 from challenging the integrity of the Default
S Judgment for want of proper service of the Writ. Nor did it address the S
consequences of D1’s failure to pay the Security into court within the
T T
prescribed time. In my view, on a plain reading of the Consent Order,
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B it merely gave D1 an option as to how to set aside the Default Judgment other B
than pursuing his Previous Set Aside Summons.
C C
D 42. The Unless Order set a final deadline for D1 to pay the Security D
and did not change the nature of the Consent Order.
E E
F
43. Thus, even if D1 fails to comply with the Consent Order F
(and the Unless Order), as a matter of contract, I see no reason why D1
G G
should be debarred from taking out the Set Aside Summons.
H H
Abuse of process
I I
44. If there is evidence of an abuse of process, this court should not
J J
exercise the discretion to set aside the Default Judgment.
K K
45. Given the undisputed irregularity of the Default Judgment,
L L
it was perfectly understandable why D1 took out the Previous Set Aside
M Summons with a view to setting aside the Default Judgment. I note that D1 M
did not in his affirmation explain why he agreed to the terms of the Consent
N N
Order and agreed to pay the Security for the Default Judgment to be set aside
O O
in the first place. He just explained that he had made a genuine effort to
P
raise fund to pay the Security. In my view, there is nothing to suggest that P
D1 did not genuinely intend to comply with the payment term of the Consent
Q Q
Order and he only deceived P into signing the Consent Summons.
R R
46. On the other hand, P did not adduce evidence to show any
S
prejudice or loss caused to it by reason of D1’s non-payment of the Security S
T
and hence non-compliance of the Consent Order. T
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B 47. D1 claims that he is not financially capable of paying the B
Security despite making efforts. There is no contrary evidence.
C C
The upshot is that D1 could not rely on the fast and more certain track in the
D Consent Order to set aside the Default Judgment. There being no D
restriction that D1 could not seek to set aside the Default Judgment by way
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of a genuine challenge to its validity, D1 has taken out the Set Aside
F Summons and asks for its determination. I am unable to find any abuse of F
process.
G G
H 48. Mr Payne relies on M & R Marking Systems, Inc v Tse Mee H
Shuen Wilson & Ors. (unreported, HCA1598/2001, 20.12.2001) to support
I I
his submission that the Set Aside Summons being a second interlocutory
J application for the same relief is an abuse of process. J
K K
49. I do not think M & R Marking Systems, Inc can assist P on the
L facts of the present case. There, Chu J (as she then was) (at §22) referred L
to Wong Kam Hung t/a Continental Knitting Factory v Triangle Motors Ltd
M M
[1998] 2 HKLRD 330 in which Cheung J (as he then was) explained that
N where a summons is dismissed whether on procedural grounds or on merits, N
a dissatisfied party should appeal against that decision and not to issue a fresh
O O
summons on the same subject matter (at p.336A-F).
P P
50. In the present case, the Previous Set Aside Summons was not
Q Q
dismissed but was withdrawn by D1 with leave only. No adjudication of
R the same was ever made. I reject the submission of Mr Payne and I do not R
agree that it was an abuse of process for D1 to issue the Set Aside Summons.
S S
T 51. There is no evidence that P had conducted any investigation to T
ascertain whether D1 was in Hong Kong before service of the Writ.
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B Mr Hasancebi accepted that he knew that D1 had his residences in both B
Hong Kong and Shanghai. P should have taken a prudent step to make sure
C C
that D1 was in his Hong Kong residence and not in Shanghai. There is no
D allegation that D1 did anything to mislead P that he was within jurisdiction D
at the time of the service of the Writ.
E E
F 52. I should make it clear that despite counsel’s submissions, F
I refuse to examine the merits of the parties’ respective cases. I also do not
G G
find it necessary to consider all other grounds put forth by Mr Hui to set aside
H the Default Judgment. H
I I
53. In conclusion, I see no grounds that would tilt my residual
J discretion towards upholding the irregular Default Judgment or setting it J
aside on terms. The Default Judgment should be set aside ex debito
K K
justitiae.
L L
54. In light of this conclusion, the Relief Summons serves no
M M
meaningful purposes. On his evidence, there is no real chance that D1
N could pay the Security even more time is given. Mr Hui does not argue that N
it should be granted anyway.
O O
P 55. For the Discharge Summons, Mr Hui indicates at the hearing P
that in the event that the Default Judgment is set aside, D1 would agree to
Q Q
the continuation of the Injunction Order. The Discharge Summons falls to
R be dismissed. R
S S
56. For the CO nisi, with the setting aside of the Default Judgment,
T it is clearly untenable and must be set aside. The application of P to make T
it absolute must be dismissed.
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B Dispositions and orders B
C C
57. For the reasons given above, the Set Aside Summons should be
D granted and I set aside the Default Judgment. Both the Relief Summons D
and the Discharge Summons should be dismissed. The CO nisi application
E E
should be dismissed as well.
F F
58. If D1 had performed the agreement embodied in the Consent
G G
Order, he would not have found it necessary to take out the Set Aside
H Summons. On the other hand, the opposition mounted by P to the Set Aside H
Summons is unmeritorious even though P’s frustration is perfectly
I I
understandable.
J J
59. I believe that the fairest costs order to be made on the Set Aside
K K
Summons should be costs in the cause. I so order on a nisi basis.
L L
60. For each of the Relief Summons and the Discharge Summons,
M M
I make a costs order nisi that D1 do pay costs of P, to be taxed if not agreed.
N N
61. For the application relating to the CO nisi, costs should be to
O O
D1, to be taxed if not agreed.
P P
62. Lastly, I thank Mr Payne and Mr Hui for their able assistance in
Q this matter. Q
R R
S S
(Kent Yee)
T T
Deputy High Court Judge
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B Mr Sonny Payne, Solicitor Advocate, of GPS Legal LLP, for the Plaintiff B
Mr Norman Hui, instructed by CMS Hong Kong LLP, for the 1st Defendant
C C
The 2nd Defendant was not represented and did not appear
D D
E E
F F
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H H
I I
J J
K K
L L
M M
N N
O O
P P
Q Q
R R
S S
T T
U U
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HCA1287/2022 SERES PROPERTIES B.V. v. LEE HOCK PUN AND ANOTHER - LawHero
A A
B HCA 1287/2022 B
[2025] HKCFI 5750
C C
IN THE HIGH COURT OF THE
D HONG KONG SPECIAL ADMINISTRATIVE REGION D
COURT OF FIRST INSTANCE
E E
ACTION NO 1287 OF 2022
F ______________________ F
BETWEEN
G G
SERES PROPERTIES B.V. Plaintiff
H and H
LEE HOCK PUN 1st Defendant
I I
WANG XULU 2nd Defendant
J J
_______________________
K K
Before: Deputy High Court Judge Kent Yee in Chambers
L Date of Hearing: 27 August 2025 L
Date of Decision: 26 November 2025
M M
_________________
N N
DECISION
O _________________ O
P Introduction P
Q Q
1. Default judgment was entered against D1 on account of his
R failure to file a Notice of Intention to Defend on 26 April 2023 (“the Default R
Judgment”) in the amount of €3,628,157.97 (“the Judgment Sum”).
S S
By summons dated 22 January 2025 (“the Set Aside Summons”),
T D1 applies to set aside the Default Judgment on the basis of its alleged T
irregularity.
U U
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A - 2 - A
B 2. By another summons of the same date (“the Discharge B
Summons”), D1 applies for discharge of the ex parte Mareva cum
C C
proprietary injunction granted by Andrew Chan J on 6 January 2025 and
D continued by the order of DHCJ Grace Chow dated 10 January 2025 D
(“the Injunction Order”).
E E
F 3. On the other hand, P applies for an order that the Amended F
Charging Order nisi dated 13 March 2025 (“the CO nisi”) be made absolute.
G G
H 4. Lastly, by summons dated 9 January 2025 (“the Relief H
Summons”), D1 makes an application for relief from sanction from the
I I
unless order dated 24 October 2024 made by this court (“the Unless Order”).
J The Unless Order was made upon D1’s application by his summons dated J
9 October 2024 for an extension of time to comply with paragraph 1 of the
K K
consent order dated 11 July 2024 (“the Consent Order”), which, among
L other matters, provided that the Default Judgment should be set aside on the L
condition that D1 do within 90 days thereof pay into court the amount of
M M
€2,650,000 (“the Security”). The Unless Order provided that unless D1 do
N pay into court the Security on or before 28 November 2024, D1 be debarred N
from doing so.
O O
P 5. D1 has never complied with the Unless Order by paying the P
Security.
Q Q
R 6. There is another application made by D1 for leave to adduce his R
further affirmation which seeks to update his financial condition. P does
S S
not oppose this application provided that the Ruling of the Mainland court
T dated 26 January 2025 could be adduced. This court allow both documents T
to be adduced.
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A - 3 - A
B 7. This is the substantive hearing of all the foregoing contested B
applications. Mr Payne appears for P and Mr Hui appears for D1. D2 is
C C
not involved and does not appear.
D D
8. Mr Hui stresses that the Default Judgment is irregular and it
E E
must be liable to be set aside as of right. The focus of Mr Payne’s argument
F is on the binding effect of the Consent Order and the abusiveness of D1’s Set F
Aside Summons. I should resolve the issue of regularity of the Default
G G
Judgment in the first place.
H H
9. Before doing so, it is necessary to give a brief account of the
I I
background facts for the understanding of the disputes between the parties.
J The following is my summary of the narratives of Mr Payne and Mr Hui in J
their skeleton submissions.
K K
L 10. On around 30 April 2020, P and XLHP Group Limited L
(“XLHP”) entered into a loan agreement whereby a loan in the principal
M M
amount of €2,800,000 (as a minimum) or €3,500,000 (as a maximum) would
N be advanced to XLHP (“the Loan Agreement”). N
O O
11. The sole shareholder of XLHP is VCL Holding Limited
P (“VCL”). VCL is beneficially owned and controlled by Ds and it was P
incorporated in the British Virgin Islands in September 2016. D2 is its sole
Q Q
director.
R R
12. Pursuant to the Loan Agreement, P caused a total amount of
S S
€3,586,717.30 to be transferred to XLHP from August to September 2020.
T T
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A - 4 - A
B 13. Ds allegedly agreed to be the guarantors to the Loan B
Agreement under a 2-page document entitled “Additional Protocol” dated
C C
1 October 2020 (“the Guarantee”). Ds now dispute the authenticity of the
D Guarantee and, alternatively, they challenge its enforceability on account of D
its purported lack of consideration.
E E
F 14. XLHP defaulted payment under the Loan Agreement and on F
3 October 2022, P issued a statutory demand on XLHP. D1 was notified of
G G
the statutory demand by P’s email dated 7 October 2022.
H H
15. XLHP did not comply with the statutory demand and eventually
I I
P issued a creditors winding up petition against XLHP. The petition was
J not contested and a winding up order was made against XLHP on J
29 March 2023.
K K
L 16. Subsequently, the liquidators of XLHP found out that XLHP L
had transferred approximately €2.6 million to the personal account of D1 and
M M
€125,000 to the personal account of D2. Both Ds have been unresponsive
N to the enquiries of the liquidators. N
O O
17. On 3 October 2022, P issued the writ in this action (“the Writ”)
P to enforce the Guarantee against Ds. The Writ was purportedly served on P
D1 by placing the same in the letter box of D1’s address at Fortress Hill
Q Q
(“the Fortress Hill Address”) on the same day.
R R
18. D1 did not respond to the Writ at all and the Default Judgment
S S
was entered against D1 on the basis that P abandoned its claim for contractual
T interest in the Writ. T
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B 19. On 18 March 2024, P commenced legal proceedings against Ds B
in the Shanghai Changning District People’s Court (“The Mainland Court”)
C C
to enforce the Guarantee whilst the Default Judgment could not be enforced
D in the Mainland. D
E E
20. The Mainland Court imposed a travel ban on Ds and they could
F not leave the Mainland unless they provided the like amount of the Judgment F
Sum to the Mainland Court as security.
G G
H 21. By summons dated 22 May 2024 (“the Previous Set Aside H
Summons”), D1 applied to set aside the Default Judgment primarily on the
I I
ground that the Default Judgment was irregular. By summons dated 28
J May 2024 (“the ASI Summons”), D1 applied for an anti-suit injunction to J
restrain P from continuing the legal proceedings in the Mainland against him.
K K
L 22. P and D1 signed a consent summons dated 10 July 2024 L
(“the Consent Summons”) to dispose of the Previous Setting Aside
M M
Summons and the ASI Summons. The Consent Order was made in terms
N of the Consent Summons. By the Consent Order, leave was granted to D1 N
to withdraw the Previous Setting Aside Summons and the ASI Summons.
O O
P 23. On 29 November 2024, upon D1’s non-compliance with the P
Unless Order, P proceeded to enforce the Default Summons by way of an
Q Q
ex parte application for a charging order over the shares of We Doctor
R (“the We Doctor Shares”) in an account with I Win Securities Limited R
(“I Win Securities”). The We Doctor Shares were disclosed by D1 in his
S S
affirmations to be his properties. The CO nisi was granted.
T T
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B 24. P served the CO nisi on I Win Securities but was informed on B
3 January 2025 that D1 had already transferred the We Doctor Shares to D2.
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D 25. A few days later, P applied for and was granted the Injunction D
Order on 6 January 2025.
E E
F
26. Shortly afterwards, D1 took out the Relief Summons and then F
the Set Aside Summons and the Discharge Summons.
G G
H
Regularity of the Default Judgment H
I 27. The evidence of D1 is that due to the outbreak of COVID-19, I
he was able to travel to Hong Kong only once in 2021 and was not within
J J
the jurisdiction in the entire year of 2022. He and D2 have all along been
K K
residing in Shanghai with their children to the knowledge of P. D1 claims
L
that he only received the Writ from his cousin who is the registered owner L
of the flat at the Fortress Hill Address on 14 June 2023. His cousin allowed
M M
him to use the Fortress Hill Address as his correspondence address in Hong
N
Kong. N
O O
28. P has adduced no contrary evidence in this regard.
P
Mr Hasancebi who is the ultimate sole owner of P in his Affidavit frankly P
accepted that he had no knowledge of D1’s whereabouts when the Writ was
Q Q
served on him as D1 had avoided all contacts with him for over 1 year.
R
He merely gathered from his previous discussion with D1 that he had R
maintained residences in both Shanghai and Hong Kong.
S S
T T
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B 29. On this evidence, Mr Payne fairly did not argue that D1 was B
within the jurisdiction when the Writ was served on him by the use of the
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Fortress Hill Address.
D D
30. O.10 r. 1(2) provides that a writ for service on a defendant
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within the jurisdiction may, instead of being served personally on him, be
F served (a) by sending a copy of the writ by registered post to the defendant F
at his usual or last known address or (b) if there is a letter box for that address,
G G
by inserting through the letter box a copy of the writ enclosed in a sealed
H envelope addressed to the defendant. H
I I
31. Apparently, P relied on O.10 r.1(2)(b). It is not in dispute that
J the Fortress Hill Address was the usual or last known address of D1 in J
Hong Kong as evidenced by some records filed with the Companies Registry
K K
and D1’s correspondences. The problem is that P did not satisfy the
L requirement that D1 must be within the jurisdiction at the time of the L
service of the Writ: Deng Minghui v Chau Shuk Ling [2007] 1 HKLRD 905,
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per Cheung JA at §11.
N N
32. In the circumstances, I come to the conclusion that the Default
O O
Judgment is irregular and is liable to be set aside.
P P
Residual discretion
Q Q
R
33. Mr Hui refers to Hong Kong Civil Procedure 2025 Vol.1 R
§13/9/5 where the learned editors state that where a defendant was not
S S
physically within the jurisdiction at the time the writ was served, the
T defendant should be entitled, as of right, to have default judgment set aside T
citing Deng Minghui, supra.
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B 34. Mr Payne, on the other hand, refers to Luen Tat Watch B
Band Manufacturer Limited v Li Shu Chung [2020] HKCFI 984 in which
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Keith Yeung J at §29 cited the following citation of the observation made by
D the Court of Appeal in Russell Peter Brown & Ors. v Edward Eugene D
Lehman [2017] 4 HKC 6 (at §28):
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“Where a default judgment is irregular, it is usually said that it will
F be set aside ex debito justitiae. Mr Barlow [for the defendant] F
submits that this means that it must be set aside. However, it was
established in Po Kwong Marble Factory Ltd v Wah Tee Decoration
G Co Ltd [1996] 4 HKC 157 that the court retains a residual discretion G
to decline to set aside an irregular default judgment, or to impose
H terms when setting it aside, where the circumstances of the case call H
for such a course to be taken.”
I I
35. Keith Yeung J at §28 referred to the following observation of
J Bokhary JA in Po Kwong Marble Factory Ltd made when setting aside the J
default judgment with terms imposed (at p.162E),
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“Ex debito justitiae’ or as of right means without going into the actual
L merits of the defence. It does not mean shutting one’s eyes the L
circumstances surrounding the question of service and why things
went wrong in that regard. The court statutory jurisdiction is
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unfettered.”
N N
36. Mr Payne, however, does not point to any particular facts which
O this court should consider in the exercise of the residual discretion and does O
not suggest any terms to be imposed in the event that the Default Judgment
P P
is to be set aside.
Q Q
37. Mr Payne relies heavily on the binding effect of the Consent
R R
Order and submits that it is an abuse of process for D1 to make the present
S application after the withdrawal of the Previous Set Aside Summons. S
T T
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B 38. Mr Payne refers to Leung Yee & Anor. v Ng Yiu Ming & Anor. B
[2001] 1 HKLRD 309 where Woo JA explained the binding nature of a
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consent order.
D D
39. I believe that it is well established that a consent order is an
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enforceable contractual agreement between the parties and it cannot be
F lightly set aside. In CML v LMH [2010] HKLRD 818, Cheung JA at §§4-5 F
had this to say about a consent order,
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“A “consent order”, which is made pursuant to an agreement between
H the parties, is an agreement or a contract binding on the H
parties…A party to a “consent order” must establish the existence
of exceptional circumstances which justify rescission of the
I underlying agreement. Exceptional circumstances include: the I
applicant erroneously consented to the agreement, he was misled by
J the misrepresentation of the other party into giving his consent to J
the agreement, or the court considers it grossly inequitable to require
the parties to abide by the agreement.”
K K
40. I have studied the terms of the Consent Order. It provided D1
L L
with a fast route by which the Default Judgment could be set aside without
M substantive argument of the Previous Set Aside Summons. By paying a M
lesser amount as the Security into court within the prescribed period of time,
N N
the Default Judgment would be set aside and D1 should accordingly
O withdraw the Previous Set Aside Summons. O
P P
41. The Consent Summons was signed by the parties legally
Q represented. The Consent Order did not show any acceptance on the part Q
of D1 that the Default Judgment was not irregular. It was not made on such
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a basis. It did not preclude D1 from challenging the integrity of the Default
S Judgment for want of proper service of the Writ. Nor did it address the S
consequences of D1’s failure to pay the Security into court within the
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prescribed time. In my view, on a plain reading of the Consent Order,
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B it merely gave D1 an option as to how to set aside the Default Judgment other B
than pursuing his Previous Set Aside Summons.
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D 42. The Unless Order set a final deadline for D1 to pay the Security D
and did not change the nature of the Consent Order.
E E
F
43. Thus, even if D1 fails to comply with the Consent Order F
(and the Unless Order), as a matter of contract, I see no reason why D1
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should be debarred from taking out the Set Aside Summons.
H H
Abuse of process
I I
44. If there is evidence of an abuse of process, this court should not
J J
exercise the discretion to set aside the Default Judgment.
K K
45. Given the undisputed irregularity of the Default Judgment,
L L
it was perfectly understandable why D1 took out the Previous Set Aside
M Summons with a view to setting aside the Default Judgment. I note that D1 M
did not in his affirmation explain why he agreed to the terms of the Consent
N N
Order and agreed to pay the Security for the Default Judgment to be set aside
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in the first place. He just explained that he had made a genuine effort to
P
raise fund to pay the Security. In my view, there is nothing to suggest that P
D1 did not genuinely intend to comply with the payment term of the Consent
Q Q
Order and he only deceived P into signing the Consent Summons.
R R
46. On the other hand, P did not adduce evidence to show any
S
prejudice or loss caused to it by reason of D1’s non-payment of the Security S
T
and hence non-compliance of the Consent Order. T
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B 47. D1 claims that he is not financially capable of paying the B
Security despite making efforts. There is no contrary evidence.
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The upshot is that D1 could not rely on the fast and more certain track in the
D Consent Order to set aside the Default Judgment. There being no D
restriction that D1 could not seek to set aside the Default Judgment by way
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of a genuine challenge to its validity, D1 has taken out the Set Aside
F Summons and asks for its determination. I am unable to find any abuse of F
process.
G G
H 48. Mr Payne relies on M & R Marking Systems, Inc v Tse Mee H
Shuen Wilson & Ors. (unreported, HCA1598/2001, 20.12.2001) to support
I I
his submission that the Set Aside Summons being a second interlocutory
J application for the same relief is an abuse of process. J
K K
49. I do not think M & R Marking Systems, Inc can assist P on the
L facts of the present case. There, Chu J (as she then was) (at §22) referred L
to Wong Kam Hung t/a Continental Knitting Factory v Triangle Motors Ltd
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[1998] 2 HKLRD 330 in which Cheung J (as he then was) explained that
N where a summons is dismissed whether on procedural grounds or on merits, N
a dissatisfied party should appeal against that decision and not to issue a fresh
O O
summons on the same subject matter (at p.336A-F).
P P
50. In the present case, the Previous Set Aside Summons was not
Q Q
dismissed but was withdrawn by D1 with leave only. No adjudication of
R the same was ever made. I reject the submission of Mr Payne and I do not R
agree that it was an abuse of process for D1 to issue the Set Aside Summons.
S S
T 51. There is no evidence that P had conducted any investigation to T
ascertain whether D1 was in Hong Kong before service of the Writ.
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B Mr Hasancebi accepted that he knew that D1 had his residences in both B
Hong Kong and Shanghai. P should have taken a prudent step to make sure
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that D1 was in his Hong Kong residence and not in Shanghai. There is no
D allegation that D1 did anything to mislead P that he was within jurisdiction D
at the time of the service of the Writ.
E E
F 52. I should make it clear that despite counsel’s submissions, F
I refuse to examine the merits of the parties’ respective cases. I also do not
G G
find it necessary to consider all other grounds put forth by Mr Hui to set aside
H the Default Judgment. H
I I
53. In conclusion, I see no grounds that would tilt my residual
J discretion towards upholding the irregular Default Judgment or setting it J
aside on terms. The Default Judgment should be set aside ex debito
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justitiae.
L L
54. In light of this conclusion, the Relief Summons serves no
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meaningful purposes. On his evidence, there is no real chance that D1
N could pay the Security even more time is given. Mr Hui does not argue that N
it should be granted anyway.
O O
P 55. For the Discharge Summons, Mr Hui indicates at the hearing P
that in the event that the Default Judgment is set aside, D1 would agree to
Q Q
the continuation of the Injunction Order. The Discharge Summons falls to
R be dismissed. R
S S
56. For the CO nisi, with the setting aside of the Default Judgment,
T it is clearly untenable and must be set aside. The application of P to make T
it absolute must be dismissed.
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B Dispositions and orders B
C C
57. For the reasons given above, the Set Aside Summons should be
D granted and I set aside the Default Judgment. Both the Relief Summons D
and the Discharge Summons should be dismissed. The CO nisi application
E E
should be dismissed as well.
F F
58. If D1 had performed the agreement embodied in the Consent
G G
Order, he would not have found it necessary to take out the Set Aside
H Summons. On the other hand, the opposition mounted by P to the Set Aside H
Summons is unmeritorious even though P’s frustration is perfectly
I I
understandable.
J J
59. I believe that the fairest costs order to be made on the Set Aside
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Summons should be costs in the cause. I so order on a nisi basis.
L L
60. For each of the Relief Summons and the Discharge Summons,
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I make a costs order nisi that D1 do pay costs of P, to be taxed if not agreed.
N N
61. For the application relating to the CO nisi, costs should be to
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D1, to be taxed if not agreed.
P P
62. Lastly, I thank Mr Payne and Mr Hui for their able assistance in
Q this matter. Q
R R
S S
(Kent Yee)
T T
Deputy High Court Judge
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A - 14 - A
B Mr Sonny Payne, Solicitor Advocate, of GPS Legal LLP, for the Plaintiff B
Mr Norman Hui, instructed by CMS Hong Kong LLP, for the 1st Defendant
C C
The 2nd Defendant was not represented and did not appear
D D
E E
F F
G G
H H
I I
J J
K K
L L
M M
N N
O O
P P
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R R
S S
T T
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