Huang Lidong v Kwong Wing Chung [2023] 2 HKLRD 927, [2023] HKDC 461

Hilda Wong appeared in an appeal against Master’s decision for the Defendant in Huang Lidong v Kwong Wing Chung [2023] 2 HKLRD 927, [2023] HKDC 461.

P applied for summary judgment against D. P’s pleaded case was that pursuant to an oral agreement between them, D agreed to arrange for P the issuance of a standby letter of credit and P agreed to pay D a handling charge for that service. P paid the handling charge, but D failed to arrange the standby letter of credit. The Master found D’s defence to be shadowy and gave conditional leave to defend, with P having liberty to enter final judgment against D if D failed to pay into court a specified sum on or before a stipulated deadline (the Condition). D then filed a notice of appeal. However, D failed to comply with the Condition and, upon P’s filing of a certificate of non-compliance, P obtained final judgment against D (the Judgment). The Judgment had since been sealed and perfected. At issue was whether the Court had jurisdiction to hear an appeal from the Master after final judgment had been sealed and perfected.

Held, dismissing the appeal by D, that:

• (1) It was for D to apply for a stay had it been her case that she had prospects of success in the appeal but was unable to comply with the Condition, or to apply for extension of time. D did not apply for a stay or extension of time and simply failed to comply with the Condition and let the Judgment be entered; nor did she appeal against the Judgment. In the circumstances, the Court was functus officio upon the Judgment being sealed and perfected, whereupon D’s notice of appeal became spent. Otherwise, the resultant irregularity would be fundamental (Chan Ping Che v Gao Gunter (HCMP 3043/2014, [2014] HKEC 2097), Quentin Keith Hills v Marlene Rita Wittman (HCA 2149/2016, [2008] HKEC 225) applied). (See paras.10-12, 14-17.)
• (2) (Obiter) An order granting conditional leave to defend is not an unless order (Quentin Keith Hills v Marlene Rita Wittman (HCMP 340/2008, [2008] HKEC 862) applied; DP Properties Ltd v E Cube Club (Tsuen Wan) Ltd [2020] HKCFI 1252, Charm Master Enterprises Ltd v Grand T G Gold Holdings Ltd [2021] HKCFI 326 considered). (See para.13.)
• (3) If one must consider the situation through the prism of estoppel by election, D acted inconsistently by failing to comply with the Condition on the one hand and pursuing the present appeal on the other. By allowing the Judgment to be sealed and perfected, D had elected to relinquish her right to appeal (Meng Leong Development Pte v Jip Hong Trading Co Pte [1985] AC 511 distinguished). (See paras.19-20.)
• (4) The analogy drawn by D between an application to set aside a default judgment and an appeal against a master’s decision giving conditional leave to defend was inappropriate. Default judgment was by its nature different from summary judgment. Contrasted with O.13 r.9 of the Rules of the District Court (Cap.336H, Sub.Leg.) (the RDC), a summary judgment may be set aside or varied pursuant to O.14 r.11 of the RDC if the judgment was given against a party who did not appear at the hearing. There was no statutory provision to set aside a conditional leave to defend (Fok Hing (HK) Trading Ltd v Gunawan-Indra (CACV 74/2014, [2014] HKEC 1108) considered; Bank of Scotland v Pereira [2011] 1 WLR 2391 distinguished). (See paras.21-24.)

[The above is excerpted from the headnote to the report in HKLRD.]