Chow Ching Man and Others v. Sun Wah Ornament Manufactory Ltd and Others
Read the full judgment text of CACV 207/1995 on BabelCite. This Court of Appeal judgment was delivered on 10 July 1996 before Nazareth VP, Bokhary JA, Liu JA.
Civil procedure – writ – extension of validity – Order 6, rule 8(2) – two-stage approach – where plaintiff chooses not to serve writ within normal validity period – whether discretion to extend arises – whether good reason for extension must be shown before discretion arises – balance of hardship – collapse of concrete canopy at To Kwa Wan factory building on 26 November 1990 causing serious injuries and five deaths – writ issued three days before limitation expired – plaintiffs deliberately chose not to serve writ in order to serve it together with statement of claim and statement of special damages – ex parte one-year extension granted by Master – defendants' applications to discharge extension and set aside service allowed by Findlay J – whether the desire to serve the statement of claim with the writ amounts to good reason for extension – held: no discretion to extend arises unless plaintiff first establishes matters amounting to good reason for extension, or at least capable of so amounting – balance of hardship only considered if discretion arises at stage two – there is some overlap between the two stages but two-stage approach preserved – desire to serve statement of claim with writ incapable of amounting to good reason following The Birka and Kleinwort Benson (The Myrto (No. 3)) – a perfect reason not necessary but nothing short of good reason is enough – sympathy cannot supply the missing good reason – case management advantages and justice of defendants' case do not transform absence of good reason into good reason – appeals dismissed with costs to respondents on party and party basis – order nisi for costs – order for legal taxation of plaintiffs' own costs – plaintiffs left to pursue such remedy as fresh legal advisers may advise against their present legal advisers.
Legal issues: Whether discretion to extend writ arises under O.6 r.8(2) when plaintiff chooses not to serve within normal validity period
Outcome: Appeals dismissed; plaintiffs' claims left to be pursued only as fresh legal advisers may advise against their present legal advisers.
Cites 1 case
HEADNOTE Where the failure to serve a writ within its normal validity period is the result of a choice, then it is necessary to decide whether the choice was made for a good reason, meaning one which supports a deliberate failure to comply with the time limit involved. And no discretion to extend the writ would arise unless the choice was made for a reason which is at least capable of amounting to a good reason.
----------------- Coram: Nazareth VP and Bokhary & Liu JJA Date of Hearing: 28 May & 25 - 27 June 1996 Date of Handing down Judgment: 10 July 1996 ----------------- JUDGMENT ----------------- Bokhary JA: Introduction 1. These consolidated appeals concern the proper approach for the court to adopt when a plaintiff chooses not to serve his writ within its normal validity period even though he could do so but chooses instead to seek an extension of the validity of the writ. I emphasise the word "chooses". This is not a case of intervening mishap or even of mere inadvertence. 2. If the appeals succeed, the appellant plaintiffs will be able to pursue their claims against the respondent defendants on the merits. The failure of the appeals may mean that the plaintiffs will be left to pursue such remedy as fresh legal advisers may advise them to pursue against their present legal advisers. So the case is an unfortunate one all round. And if the appeals were to be decided on sympathy alone, I would unhesitatingly decide them in the plaintiffs' favour. But they cannot be decided on sympathy alone. It is necessary to look at the law. And I will do so. But first a word has to be said on the facts. The accident 3. On November 26, 1990, a large portion of a massive concrete canopy projecting from the side of a factory building in To Kwa Wan collapsed on to the pavement below. Several persons were badly injured. Tragically, five persons lost their lives. 4. This case arises out of that accident. The parties and the claims 5. The first three plaintiffs are persons who were badly injured. And the remaining plaintiffs are the legal personal representatives of the five persons who lost their lives. 6. Turning to the defendants, this is the position. The 1st to 6th, 8th to 10th and 12th to 13th defendants are sued as co-owners of the common parts of the building. The 7th defendant is sued as a co-owner of the common parts of the building, the previous manager of the building and a person who gave instructions to 18th defendant. The 11th defendant is sued as the manager of the building and a person who gave instructions to the 18th defendant. The 15th defendant, which is in liquidation, is sued as the 1st defendant's agent who instructed the 18th defendant and who caused the canopy to be extended. The 16th and 17th defendants are sued as constituting the alter ego of the 15th defendant, which was the agent through which the 1st defendant had instructed the 18th defendant and extended the canopy. The 18th defendant is sued as a structural engineer who had advised that the canopy was structurally safe. The 19th defendant is sued as the Building Authority's representative. 7. Public nuisance and negligence are the causes of action relied upon. The writ and the applications below to extend it 8. The writ was issued on October 22, 1993. That was just three days before the period of limitation expired on the 25th. 9. On October 19, 1994-when the writ was due to expire two days later at midnight on the 21st but still had not been served - the plaintiffs launched an ex parte application under Order 6, rule 8(2) for a one-year extension of the validity of the writ. That application came before Master Britton on the 22nd and was granted. 10. The writ thus extended was amended on the same day. 11. Over the next few days, the writ, the Statement of Claim and the Statement of Special Damages were served. 12. That was followed by applications by all the defendants except the 4th, 9th and 12th to 15th for the discharge of the Order extending the writ and for the setting-aside of the service of the writ. 13. The 4th and 9th defendants have filed defences. Default judgments have been entered against the 12th to 14th defendants. And the 15th defendant is in liquidation. The Order appealed against 14. Those discharge and setting-aside applications were heard before Findlay J on September 19 - 22 last year. On the 26th of that month, he acceded to them. He discharged the Master's Order extending the writ and set aside the service of the writ on the applicant defendants. 15. The appeals now before us are the plaintiffs' appeals against Findlay J's Order. They seek the setting-aside of his Order and the restoration of the Master's Order. The respondents are the defendants who obtained Findlay J's Order. 16. Mr Sarony and Mr Ozorio appear for the plaintiffs. Mr Scott appears for the 1st to 3rd, 7th, 11th and 16th to 19th defendants. Mr Franklin appears for the 5th and 6th defendants. Miss Leong appears for the 10th defendant. We thank them all for their assistance. "Good reason" needed 17. It is clear from the decisions of the House of Lords in Kleinwort Benson Ltd v. Barbrak Ltd [1987] AC 597, Waddon v. Whitecroft Scovell Ltd [1988] 1 WLR 309 and Baly v. Barrett [1988] NI 368 that (i) Order 6, rule 8(2) is to be construed so that the discretion to extend the validity of a writ does not arise unless the plaintiff first establishes matters amounting to good reason for extension or at least capable of so amounting; and that (ii) matters such as the balance of hardship only fall to be considered if the discretion to extend arises in the first place. 18. Subject to that, just because a factor would be relevant to which way the discretion ought properly to be exercised if it arose does not mean that such factor is necessarily irrelevant to whether or not the discretion arises in the first place. At no stage is justice irrelevant. After all, whether or not a reason is a good one is a question which falls to be determined by a court of law administering justice: justice according to law rather than palm tree justice of course but justice nevertheless. 19. As Waite LJ pointed in Lewis v. Harewood, "Times", March 11, 1996, there can be a degree of overlap between the two stages. And, as I see it, such overlap does not undermine the two-stage approach. It merely shows that the two stages are not watertight compartments for all purposes. The judge's view of the case 20. Findlay J indicated that he would have exercised his discretion in the plaintiffs' favour if a discretion to extend arose. But he was of the view that no such discretion arose because the plaintiffs had failed to show any good reason for an extension. That is the basis on which they lost before him. Further evidence 21. In his judgment, Findlay J set out a number of specific questions on the facts which he considered were important to the ultimate question of whether there was any good reason for an extension but had been left unanswered by the evidence filed on behalf of the plaintiffs. 22. Mr Sarony submitted that the judge ought in all fairness to have raised those questions with the plaintiffs' counsel in the course of the hearing. And there is a dispute as to whether or not the judge had in fact done so. 23. All things considered, we took the view that justice would be best served by allowing further evidence on the facts bearing upon the question of whether there is any good reason for an extension. Accordingly, we granted an adjournment, with costs against the plaintiffs on a common fund basis for them to prepare such further evidence, giving the opposite parties leave to prepare evidence in answer if they saw fit. 24. At the resumed hearing, the plaintiffs proferred such further evidence. None of the opposite parties proferred any evidence in answer. Instead, they all opposed the plaintiffs' application to file their further evidence. 25. As we shall see in a moment, all of the questions raised by the judge in his judgment go to matters within the actual knowledge of the plaintiffs' legal advisers. Had the judge raised those questions with Mr Sarony in the course of the hearing, Mr Sarony would have been able to provide the answers from his own knowledge, that of his junior and that of their instructing solicitor. 26. It was not suggested by any of the defendants that they would wish to file any evidence in answer if the plaintiffs were given leave to file their further evidence. 27. All things considered, we took the view that in these interlocutory appeals the just course was to give the plaintiffs such leave. So we did so, albeit with the costs of the argument on leave to the opposite parties on a common fund basis. 28. The judge's questions and the answers to be found in the plaintiffs' further evidence are as follows:
The reason for the choice 29. The plaintiffs' writ could have been served within its normal validity period. But a choice was made not to serve it within that period. And the reason for that choice appears to be as follows. 30. All along the plaintiffs' legal advisers had planned to serve the writ endorsed with a statement of claim and accompanied by a statement of special damages. 31. And they chose to adhere to that plan even when it began to look as if no statement of claim or statement of special damages would be ready in time for service within the writ's normal validity period. So instead of serving a generally endorsed writ first and following it up with a statement of claim and a statement of special damages afterwards, they chose to seek an extension of the writ. 32. As things turned out, the Statement of Claim and the Statement of Special Damages were delivered to the defendants no later than the plaintiffs would have been entitled to deliver them under the Rules of Court if the writ had been served within, albeit at the very end of, its normal validity period and the pleadings were delivered after such service. I am therefore in complete agreement with the judge's view that it would be right to extend the writ if a discretion to do so arises. Does the discretion arise? 33. But does such a discretion arise? 34. I have already identified the reason why the plaintiffs' legal advisers chose not to serve the writ within its normal validity period. 35. In The Birka [1996] 1 Lloyd's Rep. 31, the Court of Appeal in England was confronted with the sort of situation now before us. Giving the first judgment in that case, Sir Stephen Brown P said this (at p. 34):
36. It is of course to be noted that the President did use the expression "on the facts of this case". But there is nothing really special about the facts of that case. 37. Russell LJ said this (also at p. 34):
(The Myrto (No. 3) is of course the name by which the Kleinwort Benson case (supra) is sometimes cited) 38. Roch LJ simply agreed that the appeal must be allowed. 39. So The Birka (supra) is unhelpful to the plaintiffs. 40. But the plaintiffs' greatest difficulty lies, as I see it, in the actual decision in the Kleinwort Benson case (supra) itself. 41. There the plaintiff bank to which a ship had been mortgaged had claims against a large number of cargo-owners for their share of the cost of discharging the ship's cargo. To minimize its costs of recovery, the bank began by bringing a test case against the cargo-owner who had the greatest amount of cargo. However, it had to issue an "omnibus" writ against 164 other cargo-owners to prevent the claims against them becoming time-barred. 42. The bank's scheme for minimizing costs involved holding back service of the omnibus writ while obtaining a favourable decision in the test case and then calculating the remaining claims in accordance with the principle established by such decision. Since obtaining that decision and calculating those claims took some time, the bank's scheme necessitated two extensions of the omnibus writ: an initial extension of 12 months and a further one of three months. Those extensions were obtained ex parte from the Admiralty Registrar. In due course, the omnibus writ was served within the further extended period. 43. The bank's scheme achieved substantial success. Of the remaining cargo-owners: 35 paid up even before service of the omnibus writ, and 79 did not defend the action begun thereby. 44. However, five cargo-owners applied to the Admiralty Registrar for the setting-aside of the extensions. He dismissed their applications; whereupon four of them appealed to Sheen J who dismissed their appeals. They then appealed to the Court of Appeal; and that court allowed their appeals and set aside the extensions. The bank then appealed to the House of Lords; and their Lordships allowed the bank's appeal and reinstated the extensions. 45. Lord Brandon, with whose speech all the other members of the House agreed, said this (at p. 624C) when identifying the good reason for extensions which the bank had shown:
Such saving was, as we have seen, the reason for the bank's scheme in the first place. And it was for such scheme that the extensions were needed, sought and granted. 46. On the strength of the principle laid down by the House of Lords in the Kleinwort Benson case (supra) and of how their Lordships applied it in that and subsequent cases, the law seems to me to be this. Where the failure to serve a writ within its normal validity period is the result of a choice, then it is necessary to decide whether the choice was made for a good reason, meaning one which supports a deliberate failure to comply with the time limit involved. And no discretion to extend the writ would arise unless the choice was made for a reason which is at least capable of amounting to a good reason. 47. A perfect reason is not necessary. But nothing short of a good reason is enough, however well-intentioned it may have been and wherever one's sympathies lie. We are, after all, in this context dealing with a deliberate decision not to comply with a highly important and already generous time limit. Our system cannot work efficiently in the interests of the general public if litigants and their advisers can simply presume upon the court's indulgence. There is already quite enough delay in litigation through mere inattention to time limits; and things would only get worse if the courts were to countenance deliberate failures to serve writs within time in the absence of good reason for the choice. 48. As I understand the relevant law, there is nothing in the present case capable of amounting to a good reason for the extension in question. The judge did his best to find one. So have I. He could not find one. Neither can I. Result 49. In the result, I have, with considerable regret, come to the conclusion that these appeals must be dismissed, even if that means leaving the plaintiffs to pursue such remedy as fresh legal advisers may advise them to pursue against their present legal advisers. 50. Accordingly, I would dismiss these appeals. And I would make an order nisi awarding the costs (other than those which we have already dealt with) to the respondent defendants to be taxed on a party and party basis. An order for legal taxation of the plaintiffs' own costs must of course follow. Liu J A: 51. For the reasons given by Bokhary, JA, I agree that the appeals should be dismissed with the order nisi for costs he proposes. I merely wish to add one observation of my own. The evidential aspect in an O. 6 r.8(2) application is now settled. There must be matters, at least, capable of amounting to good reason for extension before the question of balance of hardship between the parties could come into play although relevant circumstances for establishing good reason and balance of prejudice or hardship often overlap. In his judgment delivered on 23 February 1996 in Claire Lewis v. Andrew Harewood, Times Law Reports 11 March 1996, Waite L.J. provided the following helpful guidelines:
52. Morritt, LJ agreed. 53. The two-stage approach had, some eight years ago, been affirmed by Lord Brandon in Baly v. Barrett (H.L.) [1988] N.I. 368 at 417 H - 418 A:
At p. 418 H - p. 419 A, Lord Brandon continued:
Nazareth V-P: 54. I agree with my Lords and would only add this. For one of his submissions, Mr Sarony relied upon the following dictum of Waite LJ in Claire Lewis v Andrew Harewood upon the two-stage inquiry that is to be conducted:
He submitted that the justice of the defendants' case was to be take into account not only in the exercise of discretion at stage two but the identification of good reason at stage one. Thus, he contended that in determining whether the advantages of "case management" (the defendants receiving the writ and Statement of Claim together, and all of them receiving these at the same time avoiding a multiplicity of pleading and amendments coming in at different stages) constituted good reason, justice was also to be taken into account. I confess to some difficulty in apprehending how that would assist. But be that as it may, I have no doubt in this specific instance that it would not transform that which is clearly not good reason, into that which is -- notwithstanding that the considerations of justice weigh heavily in favour of the defendants not least in the large number of blameless individuals injured and even killed whose claims will be time barred.
Representation: Mr Neville Sarony QC and Mr Michael Ozorio QC (instructed by Messrs Robin Bridge & John Liu) for the appellant plaintiffs Mr John Scott QC (instructed by Messrs Tai, Tang & Chong) for the respondent 1st, 16th and 17th defendants; (by Messrs Deacons) for the respondent 2nd and 3rd defendants; (by Messrs Iu, Lai & Li) for the respondent 7th and 11th defendants; (by Messrs McKenna Minter Ellison) for the respondent 18th defendant; and (by the Attorney General's Chambers) for the respondent 19th defendant Mr Stephen Franklin (instructed by Messrs Johnson Stokes & Master) for the respondent 5th and 8th defendants; and (by Messrs Cheung, Tong & Rosa) for the respondent 6th defendant Miss Susanna Leong (instructed by Messrs Knight & Ho) for the respondent 10th defendant |
Cases cited in this judgment