Gohind Mohan and Another v. Brian Shane Mcelney and Others

CACV000051/1983

Headnote

Order 20 rule 5(5) is ultra vires the powers of the Rules Committee under Sec. 54 of the Supreme Court Ordinance.

Date of Hearing : 26th July, 1983.

Date of Handing Down of Judgment : 3rd August, 1983.

BETWEEN

Coram: Hon. Leonard, V.-P., Cons & Fuad, JJ.A.

Date: 3rd August, 1983.

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JUDGMENT

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Cons, J. A. :

1. We allowed this appeal at the conclusion of the hearing for reasons which we felt might usefully be reduced to writing. Our decision turned purely upon a question of law so that it is necessary to go into the facts no further than to say that the plaintiffs' claim is based upon matters that occurred no later, at least, than the Summer of 1973.  Their action then had to be brought before the summer of 1979 : Sec. 4, Limitation Ordinance Cap. 347. The plaintiffs made that date with only a few months to spare,' issuing their writ, together with a Statement of Claim, on the 20th December, 1978.

2. The next date of importance is the 12th January this year when the plaintiffs issued a summons seeking leave to amend their Statement of Claim. Other things had taken place meanwhile but they are not relevant to these proceedings.  Although the proposed amendments appeared substantial, the plaintiff .contended that they fell within the compass of the original claim, alternatively the plaintiffs relied upon the provisions of Order 20 rule 5-

3. Certain of the amendments were stoutly resisted by the defendants' directly concerned. Nevertheless the judge below gave leave. He concluded that although the particular amendments did introduce new causes of action, the new causes arose out of the same or substantially the same facts as those already pleaded and that in all the circumstances it was proper to exercise his discretion in favour of the plaintiffs.

4. Notices of Appeal to this court were served challenging both those conclusions.   There was also a Respondent's Notice suggesting that the judge was wrong as to the new causes of action.  In the event we have not found it necessary to decide any of these matters. At the opening of the hearing before us counsel for the plaintiffs conceded that the disputed amendments did in fact introduce new causes of action.  At the same time we gave leave to add a third ground to the Notices of Appeal which, in our view, was by itself decisive. It is fair to add that this ground was brought to the attention of counsel for the plaintiffs only at the last minute and that having considered the merits he did not seek to argue against it.  We should also say that the argument on which it is based was not presented to the judge below. We allowed it to be taken before us as being a matter of pure law and touching jurisdiction.

5. The ground may conveniently be set out in full :

6. Authority to make rules of court is derived from Sec. 54 of the Supreme Court Ordinance Cap. 4 :

7. Subsection(2) "without prejudice to the generality of subsection (1)" provides for specific situations, none of which appears to have any connection with the limitation of actions by the passage of time.

8. Section 54 is taken directly from Section 99(1)(a) of the Supreme Court of Judicature (Consolidation) Act 1925 and Order 25 rule 5 is identical with that of the Rules of the Supreme Court of England. There, the validity of the rule has been unsuccessfully challenged on' two occasions. The first was Rodriguez v.  R. J. Parker⁽¹⁾ an action for personal injuries. The writ was issued within the three-year period but subsequently it was discovered that a mistake as to the name of the defendant had been made.  The writ was directed to one R. J. Parker who was in fact the father of the intended defendant, one R. S. Parker. On appeal from the order of the Master allowing the amendment under Order 25 rule 5 it was argued that the rule was ultra vires.  That argument was rejected, the judge taking the view that the Limitation Acts did no more than bar a plaintiff's remedy in court, they did not extinguish his rights. Thus they conferred no substantial benefit upon a defendant, giving him merely the right to plead in a certain way if he so chose. As such it was a matter of procedure and practice which could properly be dealt with by rules of court.

9. The facts in Mitchell v. Harris Engineering Company Ltd. ⁽²⁾ were similar, the plaintiff issuing his writ against Harris Engineering Company (Leeds) Limited when it should have been against Harris Engineering Company Ltd. Simpliciter.  The case eventually reached the Court of Appeal. There, all three members of the court agreed that the amendment should be allowed.  At page 718 Lord Denning M.R. said this : -

Lord Russell at page 720 put it this way :-

"It is quite clear that a rule of court cannot in terms alter the period of time laid down by a statute within which an action must. be brought.  But it seems to me to be equally clear that the circumstances in which a litigant may amend his existing proceedings, for example, by addition or substitution of defendants, are essentially a matter of practice or procedure. Nor does it appear to me that the order made conflicts with the law contained in the Statute of Limitations, notwithstanding that if the amendment had been refused, there would have been a defence available to the Irish company under that statute in a different action. ................................................................................................................ It was argued that before the amendment, the Irish company had a sure shield under the statute and the amendment removed that shield. But its sure shield under the statute was one which was available tot in another action should one be brought out of time. Its shield in the present proceedings was not the statute, but the fact that it was not yet a defendant in them.  That shield could be taken away by the procedural power of permitting amendment of these proceedings."

10. It is important to note as we consider these two cases that both were concerned with the identity of the defendant, i.e. it was a question of sub-rule (3).  In the present instance we are concerned with new causes of action, i.e. a question of sub-rule (5).

11. That has been the end of the matter in England, but it arose recently in Malaysia, although in a somewhat different setting, and then came before their Lordships of the Privy Council in Yew Bon Tew aliasYong Boon Tiew, v. Kenderaan Bas Mara⁽³⁾.   In April 1972 the plaintiffs were injured in a collision with a bus operated by the defendants, who were a public authority. At that date the Public Authorities Protection Ordinance 1948 provided that any action against a public authority in respect of neglect or default in the execution of its public duties had to be brought within 12 months. The plaintiffs failed to do that.  However by an amending Act in June 1974 the period of 12 months was extended to three years.  Seeking to take advantage of that amendment the plaintiffs issued their writ in March 1975. The defendants pleaded that by virtue of the 1948 Act the action had already become time barred in 1973 thereby giving them an accrued right preserved against any change in legislation by the express provisions of the interpretation Act 1967 (which is similar to Section 23 of our corresponding ordinance).   It was apparently argued against the defendants that statutes which deal only with procedure apply retrospectively and that the amending Act fell within that category. The judge at firs instance accepted that submission. The Federal Court took a different view : it depended not so much upon the nature of the Act itself but more upon the effect that it would have. The court accepted the reasoning of Williams J. in the Australian case of Maxwell v. Murphy⁽⁴⁾ -

"Statutes of limitation are often classed as procedural statutes. But it would be unwise to attribute a prima facie retrospective effect to all statutes of limitation. Two classes of case can be considered. An existing statute of limitation may be altered by enlarging or abridging the time within which proceedings may be instituted. If the time is enlarged whilst a person is still within time under the existing law to institute a cause of action the statute might well be classed as procedural. Similarly if the time is abridged whilst such person is still left with time within which to institute a cause of action, the abridgement might again be classed as procedural. But if the time is enlarged when a person is out of time to institute a cause of action so as to enable the action to be brought within the new time or is abridged so as to deprive him of time within which to institute it whilst he still has time to do so, very different considerations could arise.  A cause of action which can be enforced is a very different thing to a cause of action the remedy for which is barred by lapse of time.  Statutes which enable a person to enforce a cause of action which was then barred or provide a bar to an existing cause of action by abridging the time for its institution could hardly be described as merely procedural. They would affect substantive rights."

The court then concluded :

"On the failure of the [plaintiffs] to commence action within the specified period the [defendants] had acquired an 'accrued right' which was designed to give them immunity for acts done in the discharge of their public duties. That right was well preserved by the Interpretation Act 1967 ... It therefore seems to us that in the circumstances of this case, the time for the claim was not enlarged by [the Act of 19747].  The Act is not retroactive in operation and has no application to a cause of action which was barred before the Act came into operation."

12. Their Lordships of the Privy Council entirely agreed with that conclusion saying that they wished to add only a few observations. One of the observations was to this effect :-

"In their Lordships' view, an accrued right to plead a time bar, which is acquired after the lapse of the statutory period, is in every sense a right, even though it arises under an act which is procedural."

13. Later their Lordships turned to the case of Mitchell v. Harris Engineering Company Ltd. After setting out the facts they observed :-

"It was submitted on behalf of the employer that the rule was ultra vires because it enabled the court to divest a defendant of an accrued right. The argument failed, rightly in their Lordships' view."

14. Their Lordships then referred briefly to the reasoning of Lord Denning M.R. and Russell L.J. which we have set out earlier and continued:-

"Their Lordships consider that there is an alternative, and perhaps preferable, approach to the Mitchell type of case. Not only did the two companies have a common English address, but they also had common directors and a common secretary. It was obvious to all who were concerned on behalf of the two companies that the plaintiff intended to sue his employer and that those advising the plaintiff believed that the name of his employer was correctly written as Harris Engineering Company (Leeds) Ltd. It was fortuitous that a company bearing the latter name actually existed. Had there been no such company in existence, the plaintiff's right to correct the name of the defendant would have been beyond argument. No one was misled by the use of the mistaken name in the proceedings, and the case resolves itself into one of mere misnomer which was clearly within the court's corrective power under Ord. 20, r. 5: see Whittam v. W. J. Daniel & Co. Ltd. ⁽⁵⁾ So analysed the result of the Mitchell case is in no way inconsistent with the view which their Lordships take in the present case. The only other comment which their Lordships would make on the decision in the Mitchell case is that they do not accept the generality of the proposition stated at p.718 that: 'The Statute of Limitations [1623. (21 Jac. l c. 16)] does not confer any right on the defendant. It only imposes a time limit on the plaintiff.'  In the opinion of their Lordships an accrued entitlement on the part of a person to plead the lapse of a limitation period as an answer to the future institution of proceedings is just as much a 'right' as any other statutory or contractual protection, against a future suit."

15. In our view it follows inexorably from those comments that insofar as Order 20 rule 5 relates to new causes of action it is ultra vires. If the discretion apparently granted thereby were exercised to allow the introduction of an action that had already become barred by the passage of time the effect would be to deprive the defendant of something that is, in the words of their Lordships, "in every sense a right".  That right is of course derived from the Limitation Ordinance. Once that is established sub-rule (5) must inevitably fall, and for two reasons. Firstly, there is no authority to support it, Sec. 54 of the Supreme Court Ordinance being confined to procedure and practice.  Secondly, it would be inconsistent with the provisions of the Limitation Ordinance and Sec. 28(b) of the Interpretation and General Clauses Ordinance Cap. 1 provides that "no subsidiary legislation", which by definition includes rules of court, "shall be inconsistent with the provisions of any ordinance".

16. We need only add that the same question could no longer arise in England.  The Limitation Amendment Act 1980 expressly provided for rules of court to be made to cover the situation we have been discussing. No fresh rules have in fact been made but it is accepted that Order 20 rule 5(5) now derives its authority from that act rather than from the act of 1925: see the Supreme Court Practice 20/5 - 8/7A. No corresponding amendment has yet been introduced in this jurisdiction.

(1)    [1967] 1 Q. B. 116

(2)    [1967]2 Q.B. 706

(3)    [1982] 3 W.L.R. 1026

(4)    [1957] C.L.R. 261

(5)    [1962] 1 Q.B. 271

Representation:

Ian Payne, & C. Smith (Robertson, Double & Boase) for 1st and 2nd Plaintiffs.

Peter Scott, Q.C. & Andrew Li (Messrs. Lo & Lo) for 1st and 2nd Defendants.

Ronny Wong (Messrs. Deacons) for 5th Defendant.