Litigation matters are becoming increasingly complex, especially if they involve multiple parties and multi-jurisdictional issues. Many Hong Kong Court cases go on for years before judgments are delivered. This prolonged delay is most severe in cases where a bilingual judge is required.
To avoid the delay and expense of going through multiple interlocutory applications taken out by parties for strategic reasons or otherwise, adjournment of such applications by way of time extension applications or for substantive arguments, or delays simply because of the Court’s packed schedule made worse by COVID-19 public health measures, the claimant can apply to the Court for summary judgment on its claim on the ground that the opposing party has no arguable defence.
Order 14 of the Rules of the High Court (Cap. 4A) in Order 14(1) provides that :-
“…., the plaintiff may, on the ground that that defendant has no defence to a claim included in the writ, or to a particular part of such a claim, or has no defence to such a claim or part except as to the amount of any damages claimed, apply to the Court for judgment against that defendant.”
Is There An Arguable Defence or Not ?
To provide further guidance on the threshold of “no defence” and summary judgment generally, the case of Classic Star Investments Limited v. China Land Holdings International Limited & Ors [2019] HKCFI 141 sheds light on the relevant legal principles. Essentially :-
1. The defendant bears the burden of showing a triable issue or an arguable defence.
2. The defendant responding to an application to summary judgment must give particulars of the defence. The mere assertion of a defence is insufficient.
3. The defendant must satisfy the court that his evidence is capable of being believed and that on the basis of such evidence, there is a fair or reasonable probability of the defendant having a real or bona fide defence.
4. In assessing the credibility of the defendant’s factual case, while the Court will not embark on a mini-trial on affidavit evidence, the Court is not obliged to assume that the defendant’s evidence is accurate.
5. If having regard to inherent plausibility, inconsistency with contemporaneous documents and other compelling evidence, the defence is not credible, the Court must say so.
6. If the defendant’s defence is incredible in any material respect, it cannot be said that there is a fair or reasonable probability that the defendant has a real or bona fide defence.
Therefore, the filing of a defence alone is insufficient to disprove a claim that there is “no defence”. The defence, importantly, will have to contain sufficient particulars to describe what the defence is, and must be believable and consistent with contemporaneous evidence.
Recent Case
Our Litigation team has acted in a summary judgment application where the defence was that the signed written document contained mistakes and did not accurately reflect the true agreement reached and the parties’ true intentions before the signing of the written document.
In the case, the defendant being the issuer of an instrument alleged that the written document mistakenly recorded inaccurate repayment terms of the instrument and sought to deny obligation to pay as the due date has not arrived. To establish an arguable defence of mistake and counter claiming for notification of the mistake, the defendant must provide “convincing proof” that not only the document to be rectified was not in accordance with the parties’ true intentions at the time of its execution, but also that the document in its proposed form does accord with their intentions : e.g. Joscelyne v Nissen [1970] 2 Q.B. 86.
Cost Award In Summary Judgment Application
The Court of Appeal in the case of Greater China Capital Inc v Gbtimes Ltd [2017] HKEC 2602 clarifies the principles for awarding costs when a party’s application for summary judgment is unsuccessful. In this case on appeal to the High Court, the summary judgment application was unsuccessful and the defendant was granted unconditional leave to defend the claim and the costs of the application was cost in the cause (i.e. the successful party at trial will recover costs of the summary judgment application from the loser as well). Therefore, the claimant was not penalised for making the summary judgment application.
Therefore, if a plaintiff considers that he has a sufficiently strong claim and that the defendant cannot / does not put forward a defence, he may consider applying and obtaining a summary judgment against the defendant to save time and costs of the proceedings. A summary judgment application should ideally be made at the earliest possible stage in the proceedings, which often times may be just after the close of pleadings.
If you have any questions on the above eNews or require advice on dispute matters including whether to apply for summary judgment, experienced lawyers in our Litigation and Dispute Resolution team will be happy to assist you.