Bernell v. Shaw v. James F. Brown, Jr.
Read the full judgment text of CACV 38/1970 on BabelCite. This Court of Appeal judgment was delivered on 30 April 1971.
1. On 21st October 1969, one Bernell V. Shaw, describing himself as "the intended plaintiff", took out a summons (numbered "M.P.O.J. 199 of 1969") in which he gave notice of his intention to apply to court, under O.11 r.1, for leave to issue a writ of summons, and to serve notice thereof, upon one James F. Brown, Jr. (who was described in the summons as "the ... intended defendant") at an address in the United States of America. Strictly speaking, I suppose the summons should also have made refe
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CACV000038/1970 IN THE SUPREME COURT OF HONG KONG APPELLATE JURISDICTION CIVIL APPEAL NO. 38 OF 1970 (On appeal from O.J.M.P. No. 199 of 1969) -----------------
----------------- Coram: Full Court (Blair-Kerr, Mills-Owens and Pickering JJ.) in Court. Date of Judgment: 30 April 1971 ----------------- JUDGMENT ----------------- Blair-Kerr, J.: 1. On 21st October 1969, one Bernell V. Shaw, describing himself as "the intended plaintiff", took out a summons (numbered "M.P.O.J. 199 of 1969") in which he gave notice of his intention to apply to court, under O.11 r.1, for leave to issue a writ of summons, and to serve notice thereof, upon one James F. Brown, Jr. (who was described in the summons as "the ... intended defendant") at an address in the United States of America. Strictly speaking, I suppose the summons should also have made reference to O.6 r.7(1). 2. The application was supported by two affidavits by Mr. Shaw dated 21st October in which he alleged that Mr. Brown had failed to repay various sums which he (Shaw) had loaned to Brown in 1968 and 1969 and that Mr. Brown was also indebted to Mr. Shaw in respect of board and lodging. Relevant portions of Mr. Shaw's affidavits read as follows:-
3. In England, an intended plaintiff is not required to take out a summons in chambers when applying for leave to issue a writ and for leave to serve it, or notice thereof, out of the jurisdiction. He simply takes a copy of his affidavit together with the writ to the Master who, if satisfied, endorses his fiat on the writ and returns it to the intended plaintiff, who then files it. However, in Hong Kong the practice is to apply to a judge by summons in chambers supported by affidavit. The evidence upon which the intended plaintiff is going to rely is summarised in the affidavit. But, when the application is made, the Court should also be shown the writ duly signed and ready for sealing. 4. In this case, the application was made ex parte to Mr. Commissioner Morley-John. The record of the proceedings does not indicate that the writ was shown to him. Nevertheless, the Commissioner gave the intended plaintiff leave to issue "a writ". The order reads:-
5. A few minutes after this summons had been dealt with on 22nd October 1969, the Commissioner dealt with another summons taken out by the plaintiff under O.44A r.7(1). This summons was also numbered "M.P.O.J. 199 of 1969"; and the application was made ex parte. The Commissioner ordered that
6. There is nothing in the papers before this Court to suggest that any attempt was made to serve this order immediately on Mr. Brown. But it came to the knowledge of the plaintiff that Commercial Investment Co. Ltd. had received a letter dated 18th. October 1969 from Mr. Brown, who gave his address as P.O. Box 276, South Lake Tahoe, California. It was addressed to a member of that firm - a Mrs. Patricia Will. It read:-
7. This was clear evidence that Mr. Brown was attempting "to remove his moneys from ...... Commercial Investment Co. Ltd.". No security had been paid into court in compliance with the order of 22nd October; and, pursuant to the liberty given to him by that order, on 31st October 1969 the plaintiff made a further application under O.44A r.7(1) for an order that Mr. Brown's account be attached forthwith; and Mr. Commissioner Morley-John granted this application. The hearing commenced at 3.27 p.m. and concluded at 3.30 p.m. 8. I have ascertained from the Court records that the writ of summons was sealed (pursuant to 0.6 r.3) and filed at 3.45 p.m. on 31st October 1969. It was marked "O.J. 1353 of 1969". 9. By October 1970 notice of the writ had not been served on Mr. Brown who, according to the plaintiff, is a free-lance aircraft pilot; but it appears that the order of 31st October 1969, attaching his investment account, had been brought to Mr. Brown's notice (presumably by Commercial Investment Co. Ltd.) because on 1st October 1970 he applied to Mr. Justice Briggs under 0.2 r.2 for an order to set aside the Commissioner's order of 31st October 1969 on the ground of irregularity. This application was dismissed by the learned judge. who ordered that all proceedings in the action be re-numbered "M.P.O.J. 199 of 1969". 10. From that decision, Mr. Brown appealed to this Court. Mr. Martin Lee appeared on his behalf. Mr. Sanguinetti, who appeared for the plaintiff (respondent) informed the Court that he was not opposing the appeal; and on 30th April we allowed the appeal and ordered that the two orders made by Mr. Commissioner Morley-John under 0.44A r.7(1) on 22nd and 31st October 1969, be set aside. We also ordered that the writ of summons and all subsequent proceedings be re-numbered "O.J. 1353 of 1969". We indicated that we would record the reasons for our decision later; and we now proceed to do so. 11. Order 44A r.7 reads as follows:-
12. Clearly, no application may be made under r.7 prior to "the institution" of the action; and the first question discussed on the hearing of the appeal was this: When the respondent made his application under O.44A on 22nd October 1969, had the action been instituted? Mr. Justice Briggs was of the opinion that the action had been "instituted or commenced" because the respondent had applied for, and had been given, leave to issue the writ, and to serve notice thereof, out of the jurisdiction. 13. With respect, I find myself unable to agree with this view. Mr. Martin Lee cited Briggs v. Calverly (1), a case decided in 1800. The claim was one for goods sold and delivered. The plaintiff had instructed his attorney to sue out a writ of latitat, and the attorney had actually applied for the writ; but, 12 hours before it was issued, the defendant tendered payment of his debt. Lord Kenyon, C.J. said that it was impossible to contend that the tender came too late, it having been made before the commencement of the suit. The Chief Justice went on to say:
14. The word "action" is defined in s.2 of the Supreme Court Ordinance, Cap.4 as meaning "a civil proceeding commenced by writ of summons or in such other manner as may be prescribed by enactment". An action may, of course, be commenced by originating summons; and it is perhaps not without significance that the summons dated 21st October 1969 under O.11 r.1 was marked "originating summons". But, clearly, this action was not commenced or instituted by the filing of that summons. The claim was endorsed on the writ which was eventually issued at 3.45 p.m. on 31st October 1969. That was when the action was instituted. The application for, and granting of, leave to issue the writ and to serve notice thereof out of the jurisdiction, was nothing more than a necessary preliminary step to enable the respondent to institute his action. 15. An analogous situation arises when, in a case of urgency, an intended plaintiff applies for an interlocutory injunction prior to the issue of the writ or originating summons. Special provision is made for this by 0.29 r.l(3); and it is clear from the language of that sub-rule that the action is not "begun" by the making of an application for, or the granting of, the interlocutory injunction, 0.29 r.1(3) reads:-
16. In my view, the respondent's application on 22nd October 1969 under O.44A r.7(1) was not made "at the institution of the action", but 9 days prior thereto. 17. The plaintiff's purpose in making a further application on 31st October was to obtain a variation of the order of 22nd October, that is to say the period of 10 days which was given to Mr. Brown to put up the necessary security was reduced to 9 days; and, as no security had in fact been deposited in Court, it was ordered that the investment account be attached forthwith. But, whereas the order of 22nd October was provisional in the sense that the attachment was to stand "until further order", there was nothing provisional about the order of 31st October; and it was also made prior to the sealing and filing of the writ, i.e., prior to the institution of the action. 18. On these grounds alone, this Court had no alternative but to set aside the two orders made under O.44A. 19. However, the applications for these orders were defective in other respects. True, in the affidavits, it was alleged that the appellant had failed to repay the sum alleged to be due and owing by him; that when he left the jurisdiction he had told the respondent. that he intended to ask Commercial Investment Co. Ltd. to remit to him in the United States the balance of his account; and the respondent (to use his own words) "had a very real expectation" that the appellant would try to avoid paying the alleged debt. Furthermore, by 31st October 1969, the Court had before it the appellant's letter to Mrs. Will requesting her to send him the balance of his account because, accoring to him, he required these funds "temporarily". Undoubtedly, there were grounds for suspicion. 20. On the other hand, there was nothing before the Court to indicate that the appellant had received any prior warning that legal proceedings were being instituted. At that stage, there was no suggestion that he would evade service; and there was no allegation in the affidavits that the appellant had no other property within the jurisdiction sufficient to satisfy any judgment which might be given against him in the action. 21. There are no provisions in the English Rules of the Supreme Court similar to the Hong Kong O.44A; and, clearly, unless the rules are strictly followed, this Order could operate harshly on a defendant. Far be it from me to suggest that attachment of a defendant's property under rr.7-9 should be viewed in the same light as personal attachment by arrest under r.2, which procedure was described in 1910 by the then Chief Justice as:-
Nevertheless, the rules must be followed strictly. 22. The affidavit in support of the application under r.7 should contain a specific allegation that the defendant is about to dispose of certain property belonging to him situated within the jurisdiction, or that he is about to remove such property from the jurisdiction of the Court; and, in either case, that his intention in doing so is "to obstruct or delay the execution of any judgment that may be given against him in the action" [r.7(3)]. Of course, a bald allegation to that effect, unsupported by evidence, might well be insufficient. Be that as it may, in this case the affidavits did not allege specifically that the appellant's intention was to obstruct or delay the execution of any judgment that might be given against him; and, to that extent, they were, in my view, defective. 23. These were the only irregularities to which Mr. Martin Lee referred; but it seems to me that the appellant might well have argued that the Court had no power to make an order of any kind under r.7 of O.44A. 24. This Order appears to be based on various rules forming part of Order 38 of the Rules contained in the First Schedule to the Indian Code of Civil Procedure Act No.5 of 1908. Rules 1,2 and 4 of Order 38 provide that , in certain circumstances, a defendant who has absconded from the local limits of the jurisdiction of the Court, or is about to do so, may be arrested before judgment. So far as relevant to this appeal, these rules read as follows:-
25. Rules 5 and 6 provide that, in certain circumstances, the property of a defendant may be attached before judgment. So far as relevant to this appeal, these rules read as follows:-
26. Likewise, our O.44A is in two parts. Rules 1-6 make provision for the arrest, in certain circumstances, of an absconding defendant. Rule 1 states, in effect, that if the defendant is about to leave the jurisdiction of the Court, or if he has disposed of, or removed, his property from the jurisdiction, the plaintiff may apply to the Court to call upon the defendant to furnish sufficient security for his appearance to answer any judgment that may be given against him. But, whereas r.1 of the Indian 0.38 provides that the Court may issue a warrant to arrest the defendant and bring him before the Court, O.44A r.1 merely prescribes the circumstances in which a plaintiff may make an application and the nature of the relief sought. 27. Upon the making of such an application, O.44A r.2 appears to require the Court itself to make some sort of investigation, after which it is open to the Court to form the opinion that there is probable cause for believing that what the plaintiff alleges is true and that, consequently, the execution of any judgment is likely to be obstructed or delayed. If the Court should form that opinion, it then has jurisdiction to issue a warrant to the bailiff to bring the defendant before it to show cause why he should not give security for his appearance to answer any judgment that may be given against him in the action. 28. Upon the bailiff executing the warrant, if the defendant shows cause, the warrant is discharged. [r.3(1)]. If he fails to show cause, the Court is required to order him to give sufficient bail for his appearance at any time when called upon until the execution of any judgment against him. [r.3(2)]. If the defendant does not comply with that order, he may be committed to prison until the execution of any judgment against him. [r.4(2)]. 29. Order 44A rr.7-9 deal with interim attachment of the property of a defendant. As in the case of r.1, r.7 simply prescribes the circumstances in which a plaintiff may make an application and the nature of the relief sought. Whereas the Indian r.5 enables the Court to direct the defendant to furnish security, and to direct conditional attachment of his property, O.44A r.7 does not give the Hong Kong Court power to make any order. Upon the making of an application in proper form under r.7, r.8 contemplates that the Court itself will then make some sort of investigation, after which it may form the opinion that there is probable cause for believing that what the plaintiff alleges is true. 30. If the Court should form that opinion, the next step is the issuance of a warrant to the bailiff commanding him to call upon the defendant either to furnish security, etc. or, alternatively, to show cause why he should not furnish such security. 31. The Court may also in the warrant direct the attachment, until further order, of the property of the defendant within the Colony. [r.8(2)]. 32. If the defendant shows such cause or furnishes the required security, and there has been an interim attachment under r.8(2), the Court then withdraws the attachment. [r.9(1)]. 33. If the defendant fails to show cause or to furnish the required security, the Court may then direct that the property, if not already attached, shall be attached until further order. [r.9(2)]. 34. Rules 7-9 must be read together. The application under r.7 is "to the Court to call upon the defendant to furnish security" etc. The only mode of calling upon the defendant appears to be that provided by r.8, that is to say the Court issues a warrant to the bailiff "commanding him to call upon the defendant ..........." A defendant whose last known address was within the jurisdiction could not defeat an interim attachment under r.8(2) by going into hiding and thereby preventing the execution of a warrant issued pursuant to r.8(1). If the Court were satisfied that he was obstructing the execution of the warrant, no doubt it would allow the interim attachment under r.8(2) to stand until the conclusion of the proceedings. 35. If, however, the defendant is resident out of the jurisdiction, a warrant to the bailiff could not be executed; and as r.8 does not prescribe any other method of calling upon a defendant to furnish security or to show cause, is it open to the court to call upon him in any other way - such as by personal service of the application under r.7 and any interim order under r.8, or by despatch to him of a registered letter addressed to him at his last known address out of the jurisdiction? If not it might well be argued that O.44A rr.7-9 may not be invoked in the case of a defendant who is resident out of the jurisdiction. 36. This question was not argued on the hearing of this appeal; and we think that it should be left open for decision on some future occasion after full argument by counsel. 37. But even assuming that O.44A does apply to a defendant resident out of the jurisdiction and that the court may call upon such a defendant to furnish security or show cause by some method other than by a warrant issued to the bailiff, the orders made by the Commissioner in this case were for the attachment absolutely of the appellant's property and that upon an ex parte application without notice of any kind to the appellant. The order of attachment which was made by the Commissioner on 22nd October 1969 certainly appears to be an interim order. It was to stand "until further order". But no reference was made to r.8 in the summons; and there is no reference to this rule in the record of the proceedings or in the order as formally drawn up. In particular, the order, as drawn up, does not recite the fact that the Court, "after such investigation as it considered necessary", had formed the opinion that there was probable cause for believing that the defendant was about to dispose of, or remove, the whole or any part of his property with intent to obstruct or delay the execution of any judgment that might be given against him. Clearly, the order of 22nd October was not made under r.8(2). It appears to have been made under r.7 - which, in my view, does not give the Court power to make any order. 38. As regards the order made on 31st October 1969, it does not appear to be an interim order. Despite the fact that the application was ex parte, the order was that the investment account be "attached forthwith". Whether the intention was that this should be read together with the order of 22nd October so as to give the Court power to withdraw the attachment upon the appellant putting up the necessary security or showing cause why he should not be required to do so, seems doubtful. 39. At any rate, it appears that the order was made under r.7 and not under r.8(2) or r.9(2). Therefore, I would, myself, have been prepared to allow the appeal also on that ground.
Representation: Mr. Martin Lee (Messrs. Johnson, Stokes & Master) for Appellant. Mr. A.J. Sanguinetti (Messrs. Deacons) for Respondent. ORAL JUDGMENT REDUCED INTO WRITING (1) (1800) 8 Term Rep. p.629; 101 E.R. p.1585/6. (2) Sun Ming Shan v. Moran (1910) 5 H.K.L.R. at p.218. IN THE SUPREME COURT OF HONG KONG APPELLATE JUHISDICTION CIVIL APPEAL NO. 38 OF 1970 (On appeal from O.J.M.P. No. 199 of 1969) -----------------
----------------- Coram: Full Court (Blair-Kerr, Mills-Owens and Pickering JJ.) in Court. Date of Judgment: 30 April 1971 ----------------- JUDGMENT ----------------- Mills-Owens J.: I entirely agreed that the appeal must be allowed. Rules 7 and 8 of Order 44A require the defendant to be called upon to give security and in default thereof, or on failure to show cause, to suffer attachment. Calling upon him to give security, or to appear and show cause, necessarily involves serving him with process. In the present case it is apparent that the plaintiff proceeded by way of exparte summons, knowing moreover perfectly well that the defendant had left for the United States months earlier. What the plaintiff asked for, and obtained, without any form of notice to the defendant, was an absolute attachment. The defendant is entitled, ex debito justitiae, to have that attachment set aside not only as an absoute order made without notice to him or opportunity to be heard, but also as an order made without the fundamental basis of evidence that he, the defendant, had an intention to obstruct or delay enforcement of any judgment debt against him which might result from the proceedings. The plaintiff's supporting affidavit was obviously deficient in failing to show such an intention on to part of the defendant. Moreover, the plaintiff knew on the 21st July 1969 that the defendant intended to leave Hong Kong and there was a signed agreement between him and the defendant of that date which prima facie suggests a settled account between them. But the fundamental point arising in the appeal, in my view, is that no absolute order of attachment can be made under Order 44A unless the defendant is first called upon to furnish security or show cause why his property should not be attached. That is a condition precedent. Calling upon the defendant must mean serving him, and that means - according to the procedure laid down by rule 8 - sending the bailiff with a warrant to bring him before the Court. It is true that the court somethings modifies the rigours of this method of proceeding by issuing a summons instead in the first instance, or by ordering that the bailiff do not execute the warrant unless the defendant is unwilling to appear. But whichever way it is done, the defendant is given the opportunity to furnish security or show Cause. Here that was not done. The orders complained of were made simply on ex parte applications and therefore are clearly wrong. I am not condemning the provision for interim attachment under rule 8(2); I presume that means attachment in the interim pending the furnishing of security or appearance of the debtor to show cause. If he is abroad it is difficult to see how the Order can be made to operate on his property in Hong Kong - how can he be brought before the Court by the procedure laid down, a warrant? However, I have no need to decide whether in such a case the plaintiff may proceed by summons to be served abroad. The orders in the present case were clearly of no effect in my view. Briggs J., on the proceedings before him under O.2 r.2, made some remarks concerning service abroad. Those remarks must be regarded as made per incuriam; service of writ in the United States, rather than notice of the writ, would clearly be wrong. He also considered that the writ should bear the same proceedings number as the preliminary application for leave to issue and serve the writ out of the jurisdiction, but I would nave thought this to be a matter for the Registry and of concern only with administrative convenience.
Pickering J.: I concur in the judgments delivered and have nothing to add. Representation: Mr. Martin Lee (Messrs. Johnson, Stokes & Master) for Appellant Mr. A.J. Sanguinetti (Messrs. Deacons) for Respondent. |