Weizen Industry Co Ltd v. Yeung on Nan t/a Hing Ho International Group

CACV000037/1988

IN THE COURT OF APPEAL

BETWEEN

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Coram: Hon. Yang, C.J., Kempster & Penlington, JJ.A.

Date of hearing: 29th Apri1 1988

Date of delivery of judgment: 17th May 1988.

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J U D G M E N T

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Kempster, J.A. :

1. On 23rd December 1987 Master Hill heard two applications in this action in which the plaintiffs claimed an injunction and damages for infringement of their registered design in a camera. It had been commenced by writ issued on 5th May of that year. Relying on RSC Order 18 rule 1, Order 19 rule 1 and the inherent jurisdiction the defendant sought the dismissal of the proceedings for failure to serve a Statement of Claim and want of prosecution while the plaintiffs, relying on RSC Order 3 rule 5, sought a further seven days within which to serve their Statement of Claim. The Master acceded to the plaintiff's application and dismissed that of the defendant. The defendant, having appealed unsuccessfully to Barnett J, now appeals to this court. For their part the plaintiffs have filed a Respondents' Notice.

2. In Birkett v James⁽¹⁾ at p 318 Lord Diplock stated that the power to dismiss an action for want of prosecution

"should be exercised only where the court is satisfied either (1) that the default his been intentional and contumelious e.g. disobediance to a peremptory order of the court or conduct amounting to an abuse of the process of the court; or (2)(a) that there has been an inordinate and inexcusable delay on the part of the plaintiff or his lawyers and (b) that such delay will give rise to a substantial risk that it is not possible to have a fair trial of the issues in the action or is such as is likely to cause or to have caused serious prejudice to the defendants either as between themselves and the plaintiff or between each other or between them and a third party. In the instant appeal your Lordships are concerned with the application of principle (2) only. Contumelious default is not relied upon by the defendant".

Within those parameter Lord Diplock proceeded, at pp 321and 322, to the aspect of the matter with which we too are immediately concerned :

"Crucial to the question whether an action ought to be dismissed for want of prosecution before the expiry of the imitation period is the answer to a question that lies beyond it, viz, whether a plaintiff whose action has been dismissed may issue a fresh writ for the same cause of action .... I am of opinion that the fact that the limitation period has not yet expired must always be a matter of great weight in determining whether to exercise the discretion to dismiss an action for want of prosecution where no question of contumelious default on the part of the plaintiff is involved; and in cases where it is likely that if the action were dismissed the plaintiff would avail himself of his legal right to issue a fresh writ the non-expiry of the limitation period is generally a conclusive reason for not dismissing the action that is already pending".

He repeated his view at p 325. In the light of those words it is hardly surprising that Barnett J. exercised his discretion as he did; the limitation period for all relevant causes of action remaining unexpired.

3. By the time he was seized with the matter, early in February 1988, the Statement of Claim had at long last been filed. It alleged infringement of copyright as well as of registered design and also passing-off. Mr. Eddis, for the plaintiffs, told us, as the record confirms that it had been made clear before a division of this court during November 1987 that the plaintiffs were relying exclusively on passing off, that the pleading was a forensic disaster and that application will be made so to amend it as to conform with the earlier representation. This was grist to the defendant's mill. On his behalf Mr. Maxwell-Lewis contended that the plaintiffs have never really known the legal basis of their claim and that their temporarily successful application for Anton-Piller relief at the outset of the proceedings was no more than a fishing exercise and, thus, an abuse of the process. I would observe that the plaintiffs were reasonably sure of the facts upon which they relied and could scarcely have expected the execution of an Anton-Piller order to resolve such difficulties as they had in formulating a cause of action. Be that as it may, upon this submission the defendant grounds the appeal; contending that Lord Diplock's opinion in relation to limitation has no more application to a situation involving abuse than to one involving contumelious default.

4. The first authority, which appears to support the defendant's submission is Hytrac Conveyors Ltd v Conveyors International⁽²⁾. In that^-case, heard on 26th July 1982, the English Court of Appeal comprising Lawton, Templeman and Fox L.JJ. rejected an appeal from an order of Whitford J. dismissing an action for want of prosecution, the limitation period not having expired, in which he had said, in words with which that court, concurred :

"It is not right that the plaintiff should start this action without knowing what form his Statement of Claim would take until after the interlocutory proceedings are completed ....".

Lawton L.J. stated :

"Those who make charge must state right at the beginning what they are and what facts they are based upon. They must not use Anton piller orders as a means of findings out what sort of charges they can make. They must deliver their Statement of Claim within the time specified in the rules unless the court otherwise".

The following day counsel for the plaintiffs cited Birkett v James⁽¹⁾, which neither counsel had mentioned prior to the determination of the appeal, eliciting the response from Templeman L.J.

"....things are different entirely when you have Anton Pillar orders.....".

In Greek City.Co Ltd.v Demetriou⁽³⁾ Goulding J. sought to reconcile Hytrac⁽²⁾ with Birkett V James⁽²⁾ holding, at p 451, that the use of Anton-Piller orders "as a means of finding out what sort of charges the plaintiff can make" was "conduct amounting to an abuse of the process of the court which brought the Hytrac case within class"(1) of Lord Diplock's classification". This analysis was accepted by the English Court of Appeal in Steamship Mutual Underwriting v Trollope & Colls (City) Ltd⁽⁴⁾ at p 87 where May L.J. said

"For present purposes I am respectfully prepared to accept that the decision in Hytrac can be reconciled with the decision in Birkett v James on these lines. In my opinion to issue a writ against a party .... when it is not intended to serve a Statement of Claim and where one has no reasonable evidence or rounds on which to serve a Statement of Claim against that particular party is an abuse of the process of the court .... what is meant is an improper use of the process of the court".

5. With all due respect I do not share the opinions of Goulding J. and the English Court of Appeal. What Lord Diplock said in Birkett v James^(l) at p 318 was that the power to dismiss should only be exercised where the court was satisfied that "the default", that is the delay or "failure to comply with some of the more important steps in the preparation of the case for trial such as delivering the Statement of Claim ...." constituted conduct amounting to an abuse of the process of the court. Not where the plaintiff had been guilty of abuse at the outset or at some other stage in the litigation unrelated to delay. A defendant's appropriate course was explained by Lord Edmund-Davies at p 334 :

".... in a flagrant case the defendant can always seek peremptory orders which, if disobeyed, render the plaintiff liable to have his action struck out on the ground out of contumelious default".

The speeches of Lord Diplock and Lord Keith in Tolley v Morris⁽⁵⁾ were to like effect. Lord Diplock added, at p 603, that such contumelious conduct would justify striking out a fresh action for the same cause of action as an abuse of the process of the court". All this Barnett J. took into account.

6. Even if the facts disclosed in the affidavits warranted a finding that the plaintiffs made improper use of Anton-Piller procedures, which in my opinion they do not, the application relevant order was not a factor in the delay of which the defendant complains and which the judge found, for reasons with which it is unnecessary to burden this judgment, inordinate, inexecusable and prejudicial to the defendant. Much as I sympathise with his complaints it must be remembered that we are asked to find that the judge's exercise of discretion is vitiated by errors of law and fact as to the significance of the Anton-Piller application. I find no such errors and would dismiss the appeal.

Yang, C. J. :

7. I agree.

Penlington, J. A.:

8. I have seen the opinion of Kempster J.A. in draft and I agree that this appeal should be dismissed.

9. It seems quite extraordinary that in Hytrac⁽²⁾ the Court was not referred to Birkett v James⁽¹⁾ and no mention of it is made in the judgment. However even if Templeman L.J. was right in H trac⁽²⁾ that the situation is different if the Plaintiff has abused the process of the Court in wrongly applying for an Anton Piller order, here the defendant's real complaint is delay in serving a statement of claim and that having now been served it will require massive amendment. That brings the matter into the second category of Lord Diplock dicta in Birkett v James⁽¹⁾ and there is nothing here which calls for a departure fron the principle that the non-expiry of the limitation period is generally a conclusive reason for not striking out.

(1) [1978] AC 297

(2) [1983] 1 WLR 44; [1983] FSR 63

(3) [1983] FSR 442

(4) [1986] 33 BLR 81

Representation:

Mr. C. Maxwell-Lewis (Robin Bridge & John Liu) for Appellant/ Defendant

Mr. Francis Eddis, Q.C. and Mr. Horace Y.L. Wong (W.S. Lo & Co.) for Respondent/Plaintiff