Kays Impex Corporation (HK) Ltd v. Arbuthnot Export Services Ltd
Read the full judgment text of CACV 32/1974 on BabelCite. This Supreme Court of Hong Kong (Appellate Jurisdiction) judgment was delivered on 26 July 1974 before Briggs CJ, Trainor J.
Civil procedure – summary judgment under Order 14 – application of Order 14 to actions including a claim based on an allegation of fraud – writ issued November 6, 1973 with statement of claim containing allegations of fraudulent conduct by defendants – respondents' summons under Order 14 Rule 1 taken out before appearance – Registrar's conditional leave to defend appellant company on payment into court of HK$1,185,460.40 with 8% interest from June 22, 1973 – judge entered judgment for respondents on remittal – appeal and cross-appeal – agreement between counsel to argue only whether respondent was the proper plaintiff – whether Court bound by counsel's agreement limiting grounds of appeal – appellate court raised jurisdiction point of its own motion notwithstanding agreement – Order 14 Rule 2 expressly excludes actions begun by writ that include a claim by the plaintiff based on an allegation of fraud – plaintiff cannot elect to proceed under Order 14 on a non-fraud claim while keeping a fraud claim on the writ – court has no jurisdiction to entertain Order 14 application where writ includes fraud-based claim – appeal allowed – appellants to have costs of appeal – criticism of appellants' bundle of documents as disgracefully prepared, with illegible documents, omissions, wrong order and inconsistent pagination – reference to Order 66 Rule 2(4) on photographic reproductions.
Legal issues: Application of Order 14 to actions that include a claim based on an allegation of fraud
Outcome: Appeal allowed.
Cited by 1 case
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CACV000032/1974 IN THE SUPREME COURT OF HONG KONG (APPELLATE JURISDICTION) CIVIL APPEAL NO. 32 OF 1974 -----------------
Coram: Briggs, C.J. and Trainor, J. Date of Judgment: 26th July 1974 ----------------- JUDGMENT ----------------- 1. The history of this case is as follows. The writ was issued on November 6th, 1973. The statement of claim is a claim which contains certain allegations based upon the alleged fraudulent conduct of the defendants. This is acknowledged by counsel for the respondents. It would not be proper to particularise those paragraphs of the statement of claim which are based on allegations of fraud. Some paragraphs are equivocal and may or may not be so based. There may be a question of amendments to the statement of claim in the future. 2. The respondents took out a summons under Order 14 rule 1 on November 15th, 1973, half an hour before the first appellant entered an appearance to the writ. The summons was heard on November 28th, 1973, when the Registrar gave the appellants ten days to file an affidavit in reply with judgment to the respondents in default. 3. No affidavit was filed and so judgment was entered for the respondents on December 10th, 1973. This was set aside on December 14th, 1973 on certain conditions, one of which was that the summons be reheard. 4. The summons was reheard by the Registrar on December 18th, 1973 when unconditional leave to defend was given to the second defendant. In addition, conditional leave to defend was given to the appellant company, which was then the first defendant, upon payment into court of the sum of $1,185,460.40 with interest at 8% from June 22nd, 1973 until payment. 5. Against this order the appellants appealed and the respondents cross-appealed. Upon the appeal and cross-appeal coming before the judge the respondents took the preliminary point that the appeal was out of time. The judge ruled in their favour so the cross-appeal by the appellants was not heard. 6. Against this decision on the preliminary point, there was an appeal to the Full court which found in favour of the present appellants. The matter was therefore referred back to the judge. 7. At the further hearing the judge decided in favour of the respondents. He ordered judgment to be entered for the respondents for $1,185,460.40 with interest and the cross-appeal of the appellants was dismissed. The appeal now before us is against that decision. 8. At or immediately after that decision was given counsel who appeared for both parties agreed that only one ground of appeal would be argued. This was that the present respondent. Arbuthnot Export Services Ltd., was not the proper plaintiff in the action; that though the present appellants might be liable to some other person, Arbuthnot Export Services Ltd., had no claim against them. 9. The agreement between counsel was mentioned to the judge in court. But it was not made a term of the order of the court as drawn up on July 8th, 1974. A stay of execution pending the appeal is included as a term of that order but no mention is made of the agreement between counsel. 10. This court was told about this agreement between counsel by Mr. Ching, who was a party thereto and who has represented the present respondents throughout. Mr. Lee, who appeared for the appellants was not a party to that agreement but he does not deny that such an agreement was made. And he accepts that the agreement was in the terms stated by Mr. Ching in court. 11. As is stated above, the agreement was not made part of the order of the court. And the effect of this has been pointed out to this court. However, we were told that the judge made a record of it in his notes. At the time of the hearing of this appeal both the judge and the counsel who appeared for the appellants were not in Hong Kong. It is impossible, therefore, for Mr. Ching to make an application to correct the order under the slip rule. 12. In view of this agreement between counsel it is surprising that the appellants filed no less than twelve grounds of appeal against the decision of the judge on July 11th, 1974. These were increased to fourteen on July 22nd, 1974. One of these grounds of appeal is the one which it was agreed by counsel at the hearing in the court below should be the only ground to be argued. 13. We considered ourselves bound by the terms of the agreement of counsel. So we were prepared to deal with that ground only. 14. However, Mr. Lee drew our attention to ground 14. This reads as follows:-
15. This raises a question of the jurisdiction of the court. It is true that the matter has never been raised until now. And the Order 14 proceedings were first heard some eight months ago. The course that these proceedings have taken would have enabled this point to be raised on more than one occasion. It is also true that it is a ground of appeal other than the sole ground which it was agreed between counsel should be argued. 16. However, it is, as counsel for the respondents has conceded, a question which goes to the jurisdiction of the court and we felt, albeit with the greatest reluctance, that we must deal with it. 17. It is a simple point. Order 14 rule 2 reads in part thus:-
18. The present action is an action which was begun by a writ and it includes a claim by the plaintiff based on an allegation of fraud. The summons under Order 14 should therefore never have been taken out, or if taken out, should have been dismissed. 19. In Order 14 proceedings it is always open to a plaintiff to proceed on part of his claim. For example, if a plaintiff has two claims included in the writ, and he knows that there is a possible defence to the first claim but not to the second, he may ask for judgment for the second claim, the first claim will then be tried. However, such a case presupposes that the claims are not excluded from the operation of that Order by rule 2. Once a claim based on an allegation of fraud appears on the writ order 14 is inapplicable. It is not open to a plaintiff to elect not to proceed with the claim based on fraud and to ask for judgment on an alternative claim not based on fraud. To do so would violate the clear wording of the order itself. 20. It follows, therefore, that this appeal must succeed. The only order for costs will be that the appellants do have the costs of this appeal. 21. There is another matter to which we must refer. The bundle of documents placed before the court in this case were disgracefully prepared. Very many of the documents were illegible - in particular copies of two letters of credit. These are documents which, if the substantive ground of appeal had been argued, would have been of the greatest importance. In addition, certain documents were omitted - including the order of the Registrar - while a large number of unnecessary documents were included. Finally the documents were not even in the correct order and the pagination between the two judges' copies differed. All of this is inexcusable. And we will say this, that if the substantive ground of appeal had been argued and we had had to read through and refer to the documents in detail we would either have adjourned the case for a proper bundle of documents to be prepared at the case of the appellants' solicitors or have ordered them to pay the costs of the preparation of the appeal. 22. In this connection, we draw the attention of the solicitors for the appellants to the provision of Order 66. Not only does this Order state that carbon copies of documents which are prepared for use in court are not allowed, but rule 2(4) of that order reads as follows:-
23. I concur.
Representation: M. LEE (J.S.M.) for appellant C. GHING (Deacons) for Respondent. Civil Appeal No. 32 of 1974 Order of Full Court
Civil appeal No. 32 of 1974 List of cases cited in argument
Representation: M. LEE (J.S.M.) for appellant C. GHING (Deacons) for Respondent. |
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