The Hong Kong Settlers Housing Corp Ltd (香港平民屋宇有限公司) v Fung Tak Lok (馮德樂) [2025] 3 HKC 441, [2025] HKDC 261 (Lydia Leung, Christopher KH To)

Lydia Leung and Christopher KH To represented the defendant in The Hong Kong Settlers Housing Corp Ltd (香港平民屋宇有限公司) v Fung Tak Lok (馮德樂) [2025] 3 HKC 441, [2025] HKDC 261.

On 30 November 2023, a notice of termination was served by the plaintiff on the defendant, requiring vacant possession of a flat in Tai Hang Sai estate by 31 December 2023. The defendant refused and the plaintiff issued a writ of summons on 4 January 2024 in the District Court claiming possession of the flat, on the ground of termination of the defendant’s tenancy expiring on 31 July 2022 which had continued on a monthly basis. The defendant did not file a notice of intention to defend and the court entered final judgment on 12 April 2024 for the plaintiff. On 25 April 2024, the defendant applied to set aside of the judgment. One defence raised was essentially the same as the grounds for a judicial review, for which leave had been granted. The defendant also sought an order to join her brother, who also resided in the flat, as co-defendant.

Held, allowing the application and setting aside the default judgment, but refusing the joinder application, that:

(1) The grant of leave for judicial review meant that the grounds raised had a realistic prospect of success. The defendant raised one of those grounds in the present case. Grounds in public law might constitute a valid defence to a private claim. Wandsworth LBC v Winder [1985] AC 461, North British Housing Association v Matthews [2005] 1 WLR 3133 and Kay v Lambeth London Borough Council [2006] 2 AC 465 applied (paras 10-12).

(2) There was a real prospect of success in the defence of the judicial review to the plaintiff’s claim. There was therefore no need to scrutinise the merits of the defendant’s other defences. That would usually be sufficient to set aside the judgment. But in determining the court’s residual discretion, the court had to consider all relevant circumstances, why the default occurred, the defendant’s conduct after she had notice of the proceedings, and explanation for the delay and any prejudice to the plaintiff and third parties. There was insufficient evidence to find the defendant deliberately evaded service. If the defendant had a valid defence, it was her right that would be prejudiced if the default judgment were not set aside. As there was only a short delay and a lack of any real prejudice to the plaintiff, and especially as there was a real prospect of success in the defence of the judicial review, it was appropriate to exercise the court’s discretion to set aside the default judgment (paras 12-14, 20-22, 26, 28).

(3) The court should ensure that the intended party’s claim or defence had a serious issue to be tried. The burden to proof lay upon the applicant for the joinder. It was plain and obvious that the brother had no bona fide independent claim in the present matter. The mere fact that he would be affected as an occupant of the premises did not mean that there were any issues between the plaintiff and the brother that would require resolution by the court. The fundamental question was on what basis the brother occupied the premises. The brother had never been a party to the Tenancy Agreement, and thus there simply was no basis for such an implied covenant or implied term that would be enforceable by a non-party. Joining him to the present proceedings would be plainly and obviously pointless and futile and was not conducive to a complete and final determination of all the issues. Joining him would only unnecessarily waste the parties’ time and costs and the judicial resources (paras 40, 42, 43, 48).

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