Ngao To-ki v. Attorney General

CACV000067/1980

Plaintiff's action struck out for want of prosecution - claim time - barred at the date of striking out - two firms of solicitors and Director of Legal Aid sued for negligence - claim against Director and one of the firms dismissed - claim allowed as to the other firm on basis of admitted negligence and small award of damages made - failure of appellant to put up security for appeal against that decision resulting in dismissal of appeal against both firms of solicitors - appeal against Director continuing - Held : Director's primary duty is to administer legal aid scheme competently with due regard to the public purse - he was no duty to supervise the performance of the assigned lawyers - onus of proof as to quantum of damages in negligence - principle of Armory v. Delamirie inapplicable - principle in Kitchen v. Royal Airforce Association rightly applied by trial judge.

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Coram: McMullin, V.-P., Li, J.A. & Silke, J.

Date of Judgment: 25th March, 1981

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JUDGMENT

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McMullin, V.-P. :

1. In 1964 the appellant was trading under the style of Cheong Lee Construction Company. On 29th of September 1964 he entered into a written agreement with a company called Yau Wing Ltd. to carry out certain of the road construction works detailed under contract No. 181/64 between Yau Wing and the Public Works Department of the Hong Kong Government relating to the Sha Tin Tunnel approach road. This sub-contract, which was in Chinese, stipulated that the work should be completed by the 24th January 1966. The appellant put his men and machines on the site and the work commenced forthwith but later it ran into difficulties.

2. Early in 1966, the job under the sub-contract being only part completed, Yau Wing Ltd., alleging that the appellant had ceased work, purported to terminate the contract by a letter from its solicitors dated 4th March 1966. On the 20th April 1966 the appellant through his solicitors commenced action against Yau Wing by writ of that date the action being numbered 775/66. The writ was amended by order of the court on 4th of June 1966 and statement of claim was filed on the 7th of June. This was in turn amended on 11th February 1967 and when the case came on for trial before Mills-Owens, J. on 26th of February 1968 the appellant's claims consisted of the following :

Of these (a), (c) and (d) remained basically his claims throughout the entire length of this ill-starred litigation up to 1974. However, when the hearing commenced in February 1968 the sum of "about $200,000" claimed under (a) had increased to $354,104.18; the $79,467.25 claimed under (b) had grown to $80,368.49; and the additional costs under (c) had increased from $67,972 to $102,042. These changes had come about through the instructions of the appellant who at that time was represented by Mr. Peter Chan of counsel instructed by Messrs. K.C. Yung.

3. Meanwhile Yau Wing Ltd. had entered a defence denying these various claims and counterclaiming for moneys which were said to have been overpaid under the contract. The defendant company was represented at the trial by Mr. Patrick Yu.

4. These alterations in the amounts claimed in the statement of claim, reflecting earlier amendments of the writ of summons, were made in the course of the proceedings before Mills-Owens, J. between the 26th February and 4th of March. In addition a new pleading was introduced alleging that the completion date in the sub-contract had been misstated and alleging an oral agreement whereby the defendant had admitted that this was so and had consented to the plaintiff continuing the work within the terms of the contract until 29th of January 1967. Liberty was given to amend the writ, the defence and the reply but on the 4th of March Mr. Chan informed the court that his instructions had been withdrawn and he was given leave to withdraw. The case was then adjourned.

5. Thereafter the appellant ceased to be privately represented and 19 months later on the 29th of September he applied for legal aid. This was granted under a certificate dated the 18th of February 1970 and Messrs. Johnson Stokes and Master were assigned as solicitors on the 27th of the same month. The Director of Legal Aid had in the meantime obtained from counsel who had signed the original writ and statement of claim, Mr. John Swaine, an opinion to the effect that the appellant had a good cause of action. This was affirmed in a later opinion given by Mr. Swaine to the Director on 29th of January 1970 after consulting the amended pleadings. He regarded the claim for damages for breach of contract as of secondary importance but thought that there was a prima facie case.

6. Although by this date almost four years had passed since the letter terminating the sub-contract it is not alleged that anyone other than the appellant himself was to blame for the delay. It might have been expected that now, supported out of public funds and supplied with eminent counsel and an experienced solicitor from a leading firm, his cause would go swiftly forward to trial. Instead, some 19 months later and following many consultations with his advisers his relations with them had fallen into such a degree of disharmony that Messrs. Johnson Stokes and Master asked to be relieved of the assignment. It will be necessary to inspect the vicissitudes of that period a little more closely later on. For the moment it need only be noted that the appellant does not accept any responsibility for the delay or for the final rupture of relations.

7. Messrs. Johnson Stokes and Master were relieved from the assignment on the 1st of October 1971. During the next five months the Director of Legal Aid sent the papers in turn to four other firms of solicitors. Each, after considering the papers, declined the assignment.

8. On the 23rd of February 1972 Messrs. Gordon Hampton and Winter agreed to represent the appellant. On that date a period of six years, all but for some ten days, had already elapsed from the date (4th of March 1966) upon which Yau Wing Ltd.

had purported to terminate the sub-contract. Although the action was still alive it had came to the border of the limitation period of 6 years which would operate to prevent its re-instatement should the defendant succeed in having the claim struck out for want of diligent pursuit. And that is precisely what happened 2 years and 7 months after the latest solicitors in the series had accepted their mandate. At the instance of the defendant the action was struck out for want of prosecution by order of Pickering, J. on the 5th April 1975. It was then 10 years since the sub-contract had been signed; 8½ years since the purported termination by Yau Wing and 6½ years since the adjournment before Mills-Owens, J. The application to strike out was apparently precipitated by the filing of a notice of intention to proceed by the solicitors for the appellant on the 2nd April 1974 followed by the filing of an application to further amend the statement of claim in August of that year. Mr. Swaine had by then prepared draft amendments based on his latest instructions which included reference to P.W.D. documents relevant to the sub-contract. In the draft amendments the claim for retention money had been dropped and new claims for conversion of chattels and machinery on the site had been introduced. There was also a claim for rectification. The introduction of these amendments was forestalled by the defendant's successful application to strike out.

9. Thereafter the appellant sought recourse against those whom he held to be accountable for his failure to achieve an adjudication of his claim upon its merits. By a writ dated 14th of February 1976 he commenced the action with which we are presently concerned. He claims damages amounting to $1,050,804.17. This is the sum which it is said he stood to recover in the original action and which he would have recovered but for the negligence of his legal advisers. Messrs. Johnson Stokes and Master are sued as 2nd defendant; Messrs. Gordon Hampton & Winter as 3rd defendant and the Attorney General appears as 1st defendant to answer for the alleged negligence of the Director of Legal Aid. For convenience, following the example of Zimmern, J. I shall refer to these firms hereafter as J.S.M. and G.H.W. respectively.

10. The amended statement of claim which was filed on 28th of May 1977 having detailed in narrative form the facts which are alleged to disclose a negligent failure on the part of all three defendants to carry out the duties implied by the legal representation accorded to the plaintiff goes on to summarize these complaints as follows :

11. All three defendants denied negligence but in the course of the hearing of the action, which commenced before Zimmern, J. on the 22nd of February 1979, counsel for the 3rd defendants conceded that there had been a failure on the part of his clients to discharge their duties to the appellant with due care and diligence and in their regard the only contested question was the question of damages. It will be necessary to take a look at the more salient features in this terminal phase of the melancholy history of Action 775 inasmuch as the Director of Legal Aid is said to have been responsible for it. Insofar as the third defendants are concerned I can do no better than repeat the verdict of the trial judge who said (p. 16 of his judgment) :

"From the documentary evidence before me the only conclusion I can come to is that G.H.W. from the date of assignment to the date of Mr. Swaine's letter never came to grips with the case at all. It was a year and a half of procrastination."

It is an apt and accurate summary of the third defendant's contribution to the appellant's cause. Zimmern, J. however absolved the 1st and 2nd defendants of all culpability and he went on to estimate the damages. He found the appellant's evidence greatly unsatisfactory on this as on all other matters. Following the line taken by the House of Lords in Kitchen v. The Royal Air Force Association⁽¹⁾ he addressed himself to the task of estimating the chances of success of the several heads of claim as they stood in the draft amended pleadings of the appellant in the light of the evidence before him he found that the claims for breach of contract and conversion were to the appellant's knowledge false and that his prospects of recovering anything in respect of them were therefore without any value whatsoever.

12. He adverted to the several alterations in the sum claimed in respect of underpayment and the attempt of the appellant to show, principally by reference to P.W.D. documents relating to the amount of work done on the site during the working days of the contract period, that he had done more, applying the agreed contract rates, than the sums admittedly paid to him by Yau Wing would cover. This attempted demonstration failed to convince the judge that anything at all was owing under this head and he awarded nothing in respect of it.

13. That left only the claim for $141,063 for extra work allegedly done at the defendant's request. The judge felt that there was, on the evidence of the documents, some prospect of success in this claim which however be regarded with some suspicion because of the steady inflation of the amount claimed through three successive amendments of the claim. Under this head he awarded a sum of $40,000 against the 3rd defendant. And that was all. The remainder of the claim was dismissed as against all three defendants. In particular the judge found that the Director of Legal Aid had no such duty of care in the conduct and continuation of the proceedings as was alleged by the appellant. He also found that J.S.M. had not in fact been negligent in the discharge of their duties during the period of their assignment between the 27th of February 1970 and the 1st of October 1971.

14. From this decision, which was delivered on the 7th of May 1980, the appellant sought to appeal against all three defendants. Notice of appeal was filed on 12th of June 1980 challenging the findings in law. Thereafter, however, he was once again unrepresented and in a somewhat diffuse and extremely lengthy memorandum dated 11th of October 1980 he contested the findings of the judge on the facts both as to liability and quantum of damage. We are not presently concerned with that memorandum which relates to all three defendants because of two further developments following upon the lodging of the notice of appeal.

15. On the 16th of September 1980 and the 14th of October respectively the 2nd and 3rd defendants applied to the court for security for costs in respect of the proposed appeal. Security was ordered to be given within stipulated periods, the appeal in each case to stand dismissed upon default. The appellant did not comply with these orders and the appeal insofar as it relates to those defendants has therefore been defeated through want of compliance with the court's order. Secondly, on the appeal coming on for hearing on the 3rd of November 1980 the court ordered that legal aid should be extended to the appellant for the conduct of the appeal. The case was thereupon adjourned and Mr. Bernacchi, who had appeared in the court below, was once more assigned to represent the appellant and a supplemental notice of appeal was filed on the 24th of December 1980. The latest certificate issued by the Director of Legal Aid, pursuant to the order of the Chief Justice, confines the issues on the appeal within limits described as follows :

"Legal aid has been granted for the purpose of continuing Civil Appeal No. 67 of 1980 limited to argument by Counsel on two points:

With the primary targets of the appellant's dissatisfaction thus removed from the arena the Director now finds himself in an unusual situation as provider of the sinews of war for a campaign of which he is the sole remaining object.

16. Some 16 grounds are set out in the notice of appeal. As argued before this court they may, I think, be fairly said to reduce to the following propositions (1) that the trial judge was wrong to find that there was not, in the circumstances of the case, a special duty of care owed by the Director to the appellant to see that the action was properly and expeditiously handled by the assigned lawyers; (2) that the judge was wrong in holding that the Director had properly discharged his duties under the Legal Aid Ordinance; (3) that assuming negligence to be proved the judge erred in law as to where the burden of proof of damage lay and as to the nature and degree of that burden.

17. Mr. Bernacchi has not sought to maintain that the duty of the Director towards the legally aided person is identical with that obtaining between solicitor and client or that between counsel and client. He claims, however, that an analogous relationship is implied (a) from the terms of the litigation itself and (b) from the acts of the Director in this particular case whereby a general duty of supervision arose which had the effect of implicating the Director in what counsel regards as the culpable procrastination of the lawyers assigned by him to serve the appellant's cause. In addition he claims that in one respect at least the Director was himself the primary cause of the part of the delay attributed to the lawyers by failing promptly to make up his mind whether or not to extend legal aid to cover all or some only of the claims which the appellant wished to advance.

18. Since the negligence attributed to the Director closely shadows that which the appellant still alleges against all of his legal advisers, notwithstanding the absolution of the 1st defendants by the trial judge, it will be helpful at this point to look at the sequence of events consequent upon the application for legal aid on the 29th of September 1969. This may conveniently be divided, in accordance with the helpful schedule provided to the court by Mr. Kaplan at the hearing, into six stages.

History of progress in Action 775 from 1969 onwards -

Stage One

19. On the 23rd of October the Director wrote to Mr. Swaine, then a leading junior, who had signed the original writ and statement of claim, asking his opinion of the merits of the application and the plaintiff's chance of success in the action. The letter was accompanied by a number of documents mainly supplied by the appellant including original pleadings in the claim. The claim already included a claim for damages for breach of contract.

20. On the 27th of October Mr. Swaine replied affirming his view that there was a good claim but venturing no opinion as to the prospects of success. On the 10th of December a further opinion was sought from Mr. Swaine prompted by perusal by the Director of a large number of additional documents presented by the appellant. Amendments of certain of the individual claims having thus come to light the Director was exercised about the credibility of the appellant and the prospects of his action.

21. On the 20th of January 1970 Mr. Swaine gave a second opinion saying inter alia that he considered that there was a prima facie case on the claim for damages. The legal aid certificate was issued about three weeks later, on the 19th of February. It was not limited to any specific issue or issues among those thus pleaded. Little is said of this first stage except insofar as it is an introduction to the next and because, it is suggested, it was generally less imbued with a sense of urgency than the lengthening history of the dispute might have warranted.

Stage Two

22. This extends from the 18th of February 1970 - the date of issue of the certificate - to the 1st of October 1971 and comprises the 19 months during which J.S.M. had seisin of the case. The principal complaint against J.S.M. is that they took almost seventeen months to instruct Mr. Swaine. Apart from the overall responsibility which the appellant ascribed to the Director for delay through the whole six stages, the Director is said to have directly contributed to this part of the delay by failing to advise J.S.M., who on the 29th of October 1970 had asked for a complete set of all the court papers "up-to-date" that they should consult Mr. John Swaine for that purpose since all papers in the Director's possession had been sent to him a year previously. It is said that this caused a delay of three months between 29th of October and the 21st of January 1971 when the Director authorized the Registrar of the High Court to let the solicitors have a full copy of the pleadings free of charge.

23. I mention this subsidiary complaint only to dispose of it and because it affords a fair example both of the minute attention which has been devoted to scrutinizing the performance of the Director and of the confusions which have attended that scrutiny. Whatever the solicitors may have intended by the phrase "all the court papers" when they wrote to the Director in October it caused considerable dismay in the Supreme Court Registry when on the 18th of December they made a request for such papers, the Director, be it noted, having promptly authorized them to do so on the 13th of November. The Registrar seems to have assumed that the solicitors were asking for all the exhibited documents as well as notes of proceedings in Action 775. It was only on the 29th of December by a letter to the Director that J.S.M. made it clear that they wanted a complete set of the pleadings.

24. There followed some consultation between the Director and the Registrar as a result of which the solicitors were told that they could have copies of the pleadings without cost. As Li, J.A. pointed out in the course of the hearing the "three months" delay reduces to some 19 days as may be seen from a minute on the Director's file dated 19th January 1971 (p. 100 of Bundle A) in which the Director inquires sharply why there has been delay in bringing the letter of the 29th of December to his attention. This was followed by the authorization given to solicitors on the 21st by the Director. Since at the outset the solicitors had not made clear what papers they were seeking and since "court papers" given to Mr. Swaine would not have included the judge's notes then it is difficult to see why the Director should as counsel suggested have advised the solicitors to consult Mr. Swaine rather than the Registrar.

25. Some six months after Mr. Swaine was instructed by J.S.M. the solicitors applied to the Director to be relieved from this commitment to the appellant and they were relieved on 1st of October 1971.

26. Since delay is the theme of this action it is appropriate at this point to note a factor which must be given its due weight in assessing responsibility for the eventual outcome. From the outset the appellant had shown himself to be a difficult client. In dismissing the former action for want of prosecution on the 8th of April 1975 Pickering, J. noted that the initial adjournment (which had been followed by 19 months without further activity on the part of the appellant) had been caused by his "shooting down his own counsel in mid-flight".

27. In dealing with him on the resumption of the proceedings the assigned lawyers, both counsel and solicitors, and beyond them the Director of Legal Aid himself, encountered headwinds generated in part by the appellant's suspicion of anyone connected with his case who did not share to the fullest extent his own opinion of the soundness of his several claims, and in part by a vigorous campaign sustained in parallel with his legal action whereby he sought to enlist the assistance of the administrative authorities at the highest level in holding his publicly funded advisers to the due observance of their responsibilities. However genuine his belief that this was necessary, it was not likely to promote mutual confidence between client and adviser. And indeed misunderstandings arose which had the effect of prolonging the preparation of the case, in particular the amendments of the statement of claim which counsel deemed to be necessary. In this connection it is of interest to note that on being offered J.S.M. as solicitors and Mr. Swaine as counsel the appellant asked for three days in which to consider the matter. [See Minute 78 at p. 29 of Bundle A.]

28. During the 14 months between the issue of the legal aid certificate and the sending of instructions to counsel the following steps were taken. On 20th of April 1970 J.S.M. wrote to the Public Works Department asking for a statment of the total work done by the appellant under the sub-contract. On the 30th of April J.S.M. called the appellant to an interview with Mr. Chang a solicitor of the firm. In the ensuing year there were numerous such interviews between the appellant and a Mr. Ho of J.S.M. (about ten according to the appellant [See p. 196 in Bundle A] in which the particulars of the various claims were discussed.)

29. The trial judge adverted to the years delay between the grant of legal aid and the instructing of Mr. Swaine but he ascribed that to the fact that the particulars involved the consideration of a mass of figures and calculations supplied by the appellant and he noted how the claim for underpayment had swelled from about $200,000 in 1967 to something over $600,000 in 1971. He found that the appellant had failed to prove that his solicitors had proscrastinated after being themselves properly instructed and before they instructed counsel. The instructions eventually delivered were, as Mr. Bernacchi concedes, extremely elaborate and thorough.

30. Mr. Kaplan was prepared to say that, notwithstanding the difficulties encountered with the client and the variable nature of the data supplied by him, the time occupied was somewhat longer than might have been expected. For my part, that is as far as I think the matter can be put. The difficulties of exploring Mr. Ngao's figures is apparent from the quality of his evidence extending over some 380 pages of typescript. Moreover, even after instructions were sent to counsel conferences took place with Mr. Swaine in the course of which the instructions to counsel had to be further altered (See letter of 15th of September 1971 from the Director to the appellant p. 237 of Buddle A).

31. The appellant had conferences with counsel and solicitor on the 7th and 11th of May and the 1st of June 1971. A misunderstanding arose. Mr. Swaine believed that his client, being so advised by counsel, was content to drop claims for conversion of goods and breach of contract as detailed in the instructions and that he was content to proceed only with the claim for underpayment. Counsel drafted issues on the basis of this assumed understanding which he communicated to J.S.M. by a letter of 1st of June 1971 enclosing the draft issues. He advised the solicitors that he would be absent from Hong Kong from mid-June to mid-September.

32. A further interview between solicitor and client revealed that the latter was not prepared to give up his claims for conversion and breach of contract and counsel was informed of this by letter of 1st of June. It was agreed that the matter should be held in abeyance until his return.

33. In a long letter to the Director of the same date the appellant complains of counsel's attitude and advice and affirms his determination not to give up any of his claims. The Director in common with the assigned solicitors took the view that the appellant had been given sound advice and there was a stormy interview at which he informed the appellant that if he did not follow it the certificate might be discharged. This was, however, not done. The appellant, who had originally turned to the Colonial Secretary in connection with his application for legal aid now resorted to him once more and, on the 16th of August, having in the meantime again complained to the Director about his legal advisers, he wrote to the Colonial Secretary complaining of his treatment by the Department of Legal Aid. The Colonial Secretary inquired from the Director who on the 24th of August replied pointing out that the appellant had services of the best advisers available in Hong Kong and supporting Mr. Swaine's view that the appellant's chances of success would be enhanced and the matter brought to a more speedy conclusion if he were to accept this advice as to his claims. The Colonial Secretary, who was perhaps somewhat disconcerted by finding himself in the role of ombudsman in a matter sub-judice, made no further question of this and informed the appellant that he was not prepared to intervene.

34. It is not surprising that the Director should at this point find himself nonplussed by the appellant's attitude. The appellant had been given considered advice by eminent counsel which he simply refused to accept. The Director agreed with that advice. He could simply have discharged the certificate and left the appellant to his own devices. As we will see his decision not to do so is advanced as a reason for holding him negligent in the performance of his duty.

35. It is of course true that Mr. Swaine's original opinion, while guarded, had indicated that he thought the claim for damages for breach of contract was at least viable. His later advice to the appellant after conferences in which the question of the proposed amendments were discussed was in large measure due to his misgivings over the instructions from the appellant relating to the alteration of the date of completion under the sub-contract and the very late introduction of a wholly new claim for conversion of chattels. The statement of claim had been several times amended already and any further considerable amendments, after the lapse of so many years, was understandably a subject for question although the appellant seemed unwilling or incapable of appreciating the difficulties which his lawyers faced. Nevertheless none of the assigned lawyers had as yet firmly said that any one of the claims was wholly unsustainable.

36. The Director no less than the assigned lawyers had a difficult client in his hands. There was also the fact that the appellant's unpaid workers who were clearly interested in the results of the litigation had taken to agitating the advancement of the action both by writing to the Director and by visiting the department. Mr. von Pokorny in giving evidence for the 1st defendant said that the Director, apart from any positive duty which the legislation might be said to impose on him, assumed an obligation of a moral kind based on social concern to see that an aided person was given the full value of the public funds allocated to him. In this impasse therefore, caught between irritation at what he regarded as the appellant's unreasonable and perhaps ungrateful stance and social concern that a possibly viable claim should not be left unfunded the Director, deemed it politic to seek the opinion of leading counsel on the claim at large before deciding whether or not to call on the appellant to show cause why the certificate should not be discharged. This decision was made on the 26th August, the same day on which a reply had been made to the enquiry of the Colonial Secretary. By a letter of the same date the appellant was informed that leading counsel would be assigned to him in addition to Mr. Swaine and the appellant was warned that if he continued to reject the advice of counsel the discharge of the certificate would be considered.

37. On the 6th of September the appellant wrote to the Director purporting to represent the dissatisfaction of his unpaid workers with the Department's failure to assign leading counsel of their preference and their belief that the Department was purposely delaying the case. It seems likely that such was also the tone of the exchanges with J.S.M. who on the 1st of September had informed the appellant of the Director's decision to assign leading counsel. Relations were by now rapidly approaching rupture.

38. On the 13th of September J.S.M. wrote a sharply worded letter to the appellant emphasizing the importance of his giving them full and final instructions to enable counsel to advise and to draft the necessary amendments. This drew a lengthy and distinctly heated reply on the 27th of September in which once again an allegation of intentional proscrastination is put in the months of his workers together with a denial of his solicitors' statement that their representative had properly explained to him the contents of their instructions to counsel.

39. On the 30th of September Mr. Chang of J.S.M. went to the department with the appellant and sought release from the assignment on the ground that the client had shown a want of confidence in his assigned advisers. They were released forthwith and the appellant was admonished once more and warned of the possibility of having legal aid withdrawn should he prove equally unco-operative with his next advisers.

40. I have detailed the events of this stage with some elaboration because they are, I think, necessary to show not only the attitudes of the protagonists but also the degree to which the Director had become involved in the fortunes of the suit.

41. It is one of Mr. Bernacchi's contentions that whether or not in the usual case the Director has a duty to supervise the conduct of the proceedings in this particular case he assumed such a duty. I will return to the point in coming to the question of the Director's duties.

42. Finally, with regard to this stage it should be noted that, apart from the various instructions which have been described, the Director on four occasions between the 22nd of October 1970 and 20th of April 1971 sent formal queries to the solicitors asking to be informed of the progress of the case.

The third stage (1/10/71 - 23/2/72)

43. This occupied the five months which it needed to secure the services of solicitors willing to take the case. G.H.W. were assigned on the 23rd of February 1972. Meanwhile, and prior to the withdrawal of J.S.M., Mr. S.V. Gittins, Q.C. had been assigned as leading counsel to advise on the claim. The full certificate remained in force.

The fourth stage (23/2/72 - 29/1/73)

44. The risk of unredeemable loss of action through dismissal for want of prosecution, hitherto a growing threat, became acute with the passing of the six year period of limitation on the 3rd of March 1972. It is conceded that in this as in the subsequent two stages there was much unexplained delay on the part of the solicitors. The client was not interviewed at all until the 19th of September 1972. There was some confusion as to what Mr. Gittins was to advise upon. This was cleared up by the 21st of August (although the solicitors had been authorized to get his opinion on the chances of success in the case in March) and Mr. Gittins was instructed on the 29th of August. His opinion was given on 12th December. It was to the effect that while he thought the appellant had a genuine cause of action for all of his then existing claims (the claim for conversion is not mentioned) he gave the claim for damages a less than 50% prospect of success. Like Mr. Swaine he advised that it should be dropped. Invited by Mr. Gittins to comment, Mr. Swaine on the 28th of December 1972 confirmed his original view. Meanwhile no further step in the action was taken.

45. During this stage the Director had written on some six occasions either notifying the solicitors of complaints of delay by the client or simply making a formal request for information as to the progress made.

46. On the 29th of January 1973 Mr. Bowran for the Director wrote to G.H.W. saying that in view of the recommendations of counsel the plaintiff should limit his claim by dropping the claim for damages. He asked them to regard his letter as a confirmation of the Department's decision on the matter.

47. A controversy has arisen as to whether, assuming this decision was to be given effect, the Director was purporting to act under Regulation 6 or Regulation 8 of the Legal Aid Regulations. If under the latter regulation which deals with the revocation of legal aid as distinct from its being limited in some way (Regulation 6), then it would have been incumbent upon the Director to issue notice to show cause to the aided person a procedure which would have drawn in its train the possibility of an appeal to the Registrar and, possibly, thereafter to a judge of the High Court. Mr. Bernacchi says that this was the only course open to the Director. He denies that Regulation 6 has any relevance to the situation and he faults the Director for letting matters drag on without duly implementing the decision which counsel regards as more in the nature of a declaration of intent than a final and effective decision.

48. Mr. Kaplan argues that a decision was actually taken under Regulation 6 to limit the purpose of aid and that there was therefore no duty upon the Director to inform the aided person, this being the duty of his solicitors. The point is one of some significance in view of the nature of the allegations against the Director. For even if Mr. Bernacchi is wrong to ascribe to the Director a contributory responsibility by way of overall supervision for any delay which may be said to be culpable in the legal advisers during the period of aid - and to that I must return - a more limited but direct contribution to delay might be urged in respect of any juncture at which the failure to act promptly in accordance with some routine obligation might be said to have deprived the aided person of the opportunity of deciding whether to co-operate or resist in his own interests. For the moment it is sufficient to note that whichever of these views be the correct one no action was taken to inform the appellant of the Director's decision and this may very largely have been due to what next transpired in the fifth stage of this unfortunate history.

The fifth stage (8/2/73 - 11/11/73)

49. It is not necessary to examine the events in any great detail. Some time in the early part of the year Mr. Winter of G.H.W. interviewed his client and it was discovered that the "contract, sub-contract and relative papers" were not among those sent to the solicitors by the Director upon assignment. From this arose a comedy of errors to which the Director is said to have contributed. Mr. Winter wrote on the 8th of February saying that the appellant had informed him that these documents (as described above) had been deposited with the Director. This episode concludes with a letter dated 7th of November from the Director to the appellant informing him that all the papers in his case have been presented to him and that there appear to be no missing documents. The intervening nine months however was taken up with a fruitless inquiry involving requests by the Director directed to the four firms which had handled the papers between the departure of J.S.M. and the entrance of G.H.W., all of which received negative replies.

50. However this hare was started, it was undoubtedly started in the office of G.H.W. and the complication which it caused was rendered more acute by the intervention of another solicitor then employed by the firm who, some time in August, informed the appellant that all the documents in his case were missing and that the Legal Aid Department was being pressed to produce them. This extraordinary misunderstanding of the situation was confirmed by letters dated 21st of August 1973 to the appellant and to Mr. Gittins. In fact the sub-contract had been among the documents given to J.S.M. and was included in those sent with instructions to Mr. Swaine on the 23rd of April 1971. The head contract was largely irrelevant to the matter in issue and the nature of the "relative papers" which were said to be missing was never explained.

51. It is scarcely surprising that the appellant was alarmed and dismayed by the treatment his case was receiving during this period. He assumed that the information he was given by his solicitors relating to the documentation of his case was accurate and this, following upon the delay in calling him for interview in the first place, prompted personal appeals by him to the Director and the Colonial Secretary to do something about the delay. In these letters, which betray a very understandable note of desperation - he was at this time being increasingly pressed by his unpaid workers for further action - he is clearly under the impression that the missing documents are the cause of the delay and that this is to be laid at the door of the Legal Aid Department. This was clearly not the case and the fault lay with the dilatory and careless behaviour of the solicitors. It is said however that the Director contributed to the confusion and delay by his failure either to inquire what the "relative papers" were or by referring G.H.W. to Mr. Swaine to whom the necessary documents, including the sub-contract, had been sent long before by J.S.M.

52. To this Mr. Kaplan replies that that was solely the duty of G.H.W. the assigned solicitors and that the Director is not in this or indeed in any other particular of the day to day conduct of the case to be fixed with an obligation which would imply his usurping or at least duplicating the function of the solicitors. I will come later to these contentions in dealing with the legal submissions as to nature of the Director's duties.

The sixth stage (13/11/73 - 8/4/75)

53. G.H.W. had written to Mr. Swaine on the 21st of August 1973 informing him that "all relevant documentation" was missing and asking him whether, bearing that in mind, he was "prepared to proceed forthwith to finalize the action". Counsel was naturally somewhat mystified by this and he replied on the 3rd of September in the following terms :

A copy of this letter was sent to the Director by G.H.W. on the 13th of November 1973 and on the 20th of the month the Director informed them that he proposed to arrange a conference between himself, counsel and solicitors to decide on the future progress of the case. On the 21st of December G.H.W. requested that such conference should not be held until an early date after the 12th of January 1974 because of the absence of their representative who was then dealing with the case. The conference took place in fact on the 8th of January and on the 9th the Director confirmed its results to G.H.W. in the following terms :

54. Thus one year after the Director's decision not to support the claim for damages the appellant had by obstinate resistance to professional advice won full backing for all his claims. Meanwhile however time had run on and it was now almost two years since the date on which the claim would, but for the proceedings commenced on the 20th of April 1966, have been time-barred. It was, that is to say, long past the "point of no return" for his expectations, should the proceedings miscarry.

55. On the 16th of January the appellant was informed of this decision. Despite a further reminder from the Director on the 19th of February nothing further seems to have happened until on the 2nd of April when notice of intention to proceed within one month was served on the defendant. A further reminder by the Director on the 4th of May produced the information that counsel was going through the pleadings. Between then and July further information was furnished by the appellant in accordance with which further amendments were drafted to put the already much amended claim in final form for an application to amend. The proposed amendments included a substantial increase in the quantum of the underpayment claim, the alteration of the completion date (the third alteration) to 29th of November 1966 and a plea for rectification of the contract. This draft was submitted to G.H.W. on the 5th of July 1974 and an application to amend was filed in that month which does not seem to have been dealt with until September of that year. (See copy of minute in Director's file at page 214 of Bundle B). At the hearing of that application counsel for the defendant intimated that a motion to strike out for want of prosecution was in contemplation. The application to amend was adjourned and in the same month the solicitors for the defendant filed their application to strike out.

56. On the 8th of April 1975 both applications were taken before Pickering, J. and the appellant's case was struck out for want of prosecution. He applied for legal aid to enable him to appeal against that decision but this was refused on counsel's advice that the prospects of success were negligible and no appeal was taken. The present action was commenced on the 14th of February 1976 the appellant being privately represented.

The nature of the alleged duty and the general breach alleged

57. The duty is pleaded in general terms as follows :

The trial judge had, rightly in my view, rejected the suggestion of a duty in contract arising from the payment by the appellant of the $60 fixed as his contribution under the scheme. Mr. Bernacchi does not seek to raise that point again although he touched, rather lightly I think, upon the possibility of a quasi-contractual relationship between the Director and the aided person. This he thought might co-exist with the tortious liability which is the true substance of his client's case. It was a doubtful embellishment of his argument, insofar as I have understood it, and as it did not, with respect, seem to me to strengthen his case against the Director, I shall say no more of it.

58. The purely tortious liability attributed to the Director was at various points in the argument somewhat variously stated. The argument was, if I may put it so, a conflation of several distinct contentions within the single accusation that the Director had by his acts and directions caused or contributed to the stultification of the appellant's action.

59. The broadest of those contentions rested on very general principles of liability deriving from certain of the modern leading cases. Mr. Bernacchi cited Donoghue v. Stevenson⁽²⁾ and Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd.⁽³⁾ to support him in fixing the Director as a professional man with an obligation to avoid, by the use of reasonable care in the discharge of his professional duties, acts or omissions which would be likely to cause injury to the rights of anyone so directly affected by such acts or omissions that the possibility of such detriment must reasonably have been within his contemplation. Mr. Kaplan does not demur to this as a statement of general principle but he, of course, denies that there was anything in the discharge of his duties by the Director which could fall foul of it.

60. Narrowing the breadth of this contention I come next to Mr. Bernacchi's greatly more contentious endeavour to persuade the court that the Ordinance imposes upon the Director obligations in relation to the aided person of a kind comparable with those existing between solicitor and client. Section 24 of the Ordinance was enlisted, as it had been in the court below, in support of this assertion.

61. Section 24(1) is as follows :

"24. (1) The like privileges and rights as those which arise from the relationship of client, counsel and solicitor acting in their professional employment shall arise from the following relationships, that is to say -

At one point in the argument I thought, as evidently did the judge in the court below, that counsel was arguing for a strict equivalence of duty between the Director and the assigned solicitor vis-a-vis the aided person in respect of the day to day maintenance of the proceedings. In common with Zimmern J. I have no doubt that that cannot be so, if only for the reason that the Director is entitled under the Ordinance (section 13) to act directly for the aided person as an alternative to assigning counsel or solicitor. Whether s.24(1) is confined to preserving the applicant's or the aided person's right to confidentiality in communications with the Director relating to the litigation as the judge thought or whether it may have a wider significance is something I do not feel called upon to decide. Mr. Kaplan concedes that the section read in its entirety is not without difficulty if it be sought so narrowly to confine it. Subsection (3) of section 24 appears to bear little relation to the preceding subsections.

62. What is clear is that s.24 does not make the Director vicariously liable for acts or defaults of the assigned lawyers as distinct from any acts or omission of his own of which complaint might be made either because it is said to be a culpable interference with the personal or proprietary rights of the aided person in some very general sense within the principles of Donoghue v. Stevenson etc. or else because it is said to be a failure to perform or a negligent performance of some positive duty under the Ordinance.

63. When one reads the provisions of the Ordinance and the Regulations as a whole it is, I think, apparent that the purpose of the regulation being the grant, within defined limits, of legal aid to persons who are not financially competent to get it for themselves, the principal duty cast upon the Director is to see that the scheme is competently managed so that public funds are not wasted. Thus the various provisions which empower the Director to intervene either to make inquiries or to give directions (for example under Regulation 12) after solicitors or counsel have been assigned are not, to my mind, intended to give him a supervisory control of legally aided proceedings or, as the judge put it, to intermeddle with the conduct of the case by the assigned lawyers in the interests of the aided person. His supervisory power, as I see it, in any case where lawyers are assigned is concerned with the grant and continuance, suspension, limitation or revocation of aid and does not extend to invigilating the performance of the assigned lawyers.

64. Mr. von Pokorny did indeed say that his department was interested as a matter of "social concern", to see that solicitors do not delay and although Mr. Bernacchi many times reminded us of the use of that phrase it is clear, from the immediate context of the evidence wherein it occurs, that the Director was dealing primarily with his department's concern that public funds should not be wasted although he did add that such concern would extend to a compassionate interest in the fortunes of the litigant. Such a concession, however, is a very long way from accepting a duty to act, in effect, as puppet-master in every case in which legal aid is given and even although the interests of the aided person may in fact be served by the intervention of the Director seeking to protect the public purse.

65. Although Mr. Bernacchi undoubtedly argued for some analogous duty in the Director which would make him responsible for the dereliction of the lawyers, he came in the end, as I understood him, to point to section 24 as a signpost to the fact that there was nothing in the legislation exempting the Director from responsibility for any miscarriage to which he had materially contributed. That is a very much milder proposition and it is here I think that we came to the real substance of counsel's argument. Commenting on Zimmern, J.'s reference to "intermeddling" and the Director's want of right to do so Mr. Bernacchi said that the point was that the Director had intermeddled in this case. This argument to which I will return is quite distinct from the more general proposition that the Director, a professional man, having granted legal aid assumed a special relationship with the appellant - the term fiduciary was rightly rejected by the judge and has not been pressed here - as a result of which he ought to have realized that the appellant was looking to him to maintain the momentum of the proceedings and that he therefore had a duty to do so. He failed in that duty, counsel says, by failing to recognize the danger to the appellant's cause which would result from any delay after legal aid was granted and by his consequent failure to do more to expedite the proceedings than he did by sending occasional reminders to the various solicitors. This is the duty which counsel discerns at its broadest and he finds it reinforced by reference to the narrower and more specific obligations both expressed in and implied by the Legal Aid Ordinance.

66. I am not sure that Mr. Bernacchi went quite so far as to say that this duty, cross-bred from an admixture of duties under Statute and common law, applied in the case of anyone to whom aid had been extended. I understood him rather to confine it to the special circumstances of this case which include, he would say, the factor of urgency intrinsic to the case even at the date of granting of the certificate in 1970, an urgency sharpening to crisis as the years went past. Again, there was the fact that the grant of aid involved an undertaking by the appellant to apportion $160,000 of any damages recovered to paying his workers. Finally, there was the degree to which the Director had, willy-nilly, been drawn into direct contact with the appellant by the latter's many direct appeals to him and his responses thereto.

67. It is thus that the Director is said to have become responsible for all delay between 1970 and 1974 which may in any way be attributed as blameworthy to any of the lawyers who were assigned. In this version the Director appears as a watchdog who simply failed to bark frequently enough or sharply enough to keep the proceedings rolling. Mr. Bernacchi suggested that it was incumbent upon the Director, certainly in the latest phases, to fix deadlines for the taking of certain necessary steps towards re-activating the case.

68. I have said enough I think to indicate that I can find no warrant, either in the cases cited or in the Ordinance, for imposing any such duty on the Director whether in the generality of cases or in the special circumstances of this case. Certainly, he has a duty to provide competent advisers and not to delay unnecessarily in doing so. But once assigned, solicitor and counsel are in control of the case and the Director can interfere only for such purposes and to such extent as the legislation permits. He is entitled to call for progress reports (Reg. 12(9)) and no doubt he may advise or admonish if he sees fit and in extreme cases re-assign but he has no right to take the proceedings over by issuing directions.

69. I return therefore to what I have called the substance of Mr. Bernacchi's case. When he outlined at the start his specific complaints concerning the Director counsel said the negligence of which he complained consisted in (a) his allowing the various solicitors inexcusably to delay the progress of the action; (b) his contributing to the delay caused by the missing documents episode; and (c) not making up his mind to support the claim for damages for breach of contract until the 8th of January 1974.

70. The first of these complaints I have rejected for the reasons just now given. The second and third constitute a wholly different and limited approach to the question of negligence. Since it is conceded that at least in the time of G.H.W. there was inexcusable delay did the Director cause or contribute thereto in any way?

The specific acts and omissions alleged to be negligent

(1) The missing documents

71. As to the missing documents, it is conceded that primary responsibility for that entire episode rests with G.H.W. It is said however that the Director should have referred the solicitors at once to Mr. Swaine since the documents sent to him included the sub-contract which was one of the items specified in the letter from G.H.W. which initiated the wild goose chase. I cannot find much merit in this suggestion. For one thing the Director was entitled to assume that the solicitor, who knew or ought to have known of counsel's previous involvement with the case, had already checked upon that source of information before communicating with him. For another, the letter of G.H.W. referred to unspecified but related papers. The Director was only too well aware of the voluminous character of the documentation which had gone the rounds of four solicitors offices before reaching G.H.W. He would necessarily assume that much more than the two documents specified were in question and would realise that G.H.W. themselves might be in some doubt as to their exact identity. In writing promptly to other solicitors as he did he was doing what was most reasonable in the circumstances. He was certainly in no way responsible for the deepening confusion which prompted the solicitor then dealing personally with the appellant to conclude that all the massive documentation had all been mislaid.

(2) The alleged delay in decision to support claim for damages

72. In view of Mr. Swaine's advice that this claim should be abandoned and of the appellant's adamant adherence to it the Director had deemed it proper to enlist the aid of Queen's Counsel for a second opinion. This was done on the 26th of August 1971 shortly after the interview with the appellant. Counsel then approached was unable to accept the task and Mr. Gittins was assigned on the 29th of September. On the next day, the 30th of September, J.S.M. were released and there followed five months during which the Director could find no firm willing to take the appellant's case on. G.H.W. were assigned on the 23rd of February 1972. As we have seen between that date and the 18th of December 1972 when G.H.W. informed the Director of Mr. Gittins' opinion virtually nothing had been done to advance the proceedings. Of this period Mr. Bernacchi says that since it was the Director who wanted the second opinion it was for him to see that it was expedited. This part of the delay in the proceedings therefore, he maintains, must be laid at the Director's door because the Director's lack of initiative had the effect of inhibiting the assigned lawyers from getting on with the necessary amendments. It is here that counsel finds the start of that "intermeddling" of which he complains and from which he concludes that the Director had, in effect, taken control of the proceedings.

73. What next followed, he says, discloses further negligence causing further delay. Fortified by the opinions of counsel comes the letter from the Director on the 29th of January 1973 announcing his decision to restrict the grant of aid. What is said of this is that it was an interim decision - perhaps a mere statement of intention - which, never acted upon, further restrained activity until a year later when a final decision was made to support all the appellant's claims. Throughout this final period the looming danger of an application to strike out should, says counsel, have become steadily more apparent to everyone connected with the case and from this perspective the Director must as a professional man, intervening in this way, bear a responsibility for delay which is either primary or at least coterminous with that of the solicitors. What the Director should have done, according to Mr. Bernacchi, after communicating his decision to the solicitors, was to call upon the appellant to show cause why the certificates should not be discharged thus giving him an immediate opportunity of either accepting the decision or else appealing to the Registrar against it. But the appellant was never informed of this decision and thus time went by with the Director not finally decided and the lawyers in a state of irresolution.

74. In answer to all of this Mr. Kaplan does not contend that the Director is protected from the consequences of all negligence in the discharge of his duties under the Ordinance. He could, for example, be liable in tort for such things as careless loss of papers occasioning delay or miscarriage of litigation, or for delay, causing loss, in the consideration of an application for aid or perhaps in the negligent performance of any specific duty case upon him by the Ordinance. But once lawyers have been assigned he has no duty and counsel would say, no right, to intervene and direct the course of the proceedings. His concern, in any case in which he has not assumed the direct responsibility for the maintenance of the litigation, is with the due administration of public funds and not with the cause of the aided person save in the secondary sense that any mismanagement of that cause may require inspection to detect, and if necessary to curtail, undue expenditure.

75. Thus far, it seems to me, counsel is clearly right. This is the proper answer to the contention that the Director, in such cases, has a supervisory duty running in some manner parallel to that of the assigned lawyers. That cannot be so. His general supervisory duty relates only to the control of public expenditure. Nor can it be said that some judicial duty is to be presumed from the fact - if it be so - that the appellant was relying on the Director to expedite his case and that this must have been apparent to the Director because of the frequent complaints and entreaties addressed to him by the appellant. The Director's position might be seriously imperilled and the due administration of the legal aid scheme greatly embarrassed if it were possible for an indigent litigant to extend the ambit of the Director's duties to the extent here suggested simply by being importunate.

76. Further, where, as here, there has been considerable delay already before the grant of aid I find no good ground for the contention that this imposes on the Director, as distinct from the assigned solicitor, a special duty to ensure that the aided person is not prejudiced by further delay on the part of the latter.

77. But what of the argument as to intermeddling? To this Mr. Kaplan as I understand him makes two main points in reply. Firstly, he says, that the argument is wrong because the position is misconceived. Any delay which resulted, (a), from the failure to get Mr. Gittins' opinion promptly and, (b), from the failure to implement his decision thereafter is the sole responsibility of G.H.W. Adopting the phraseology of Zimmern, J., he says that the solicitors, who had, as the judge said, failed to get to grips with the case, had equally failed to get the grips with the Director. It is a forceful way of putting what I think is a valid and very important point viz. : that although both the Director and the solicitors have obligations to the aided person arising from the relationships between them, and although those obligations import into these relations a duty of care in the discharge thereof the obligations and duties of the solicitors and those of the Director, although connected by a common thread of interest in the manner in which proceedings are conducted, are not the same duties and obligations and may at times even be in conflict. The solicitor's primary duty is to his client; that of the Director to the public purse.

78. Where, therefore the Director makes a decision to protect the purse either by revoking a certificate under Regulation 8 or limiting the proceedings in some way under Regulation 6, this is subject to appeal and it will be for the assigned lawyers to consider whether such an appeal is advisable. They do not have to accept the Director's decision when it conflicts with what they deem to be the client's legitimate interests.

79. Mr. Kaplan regards the letter signed by Mr. Bowran of the 29th of January 1973 as a decision - not a tentative or interim decision - to limit the issues receiving legal aid and I think that he is right. It is true that it was the Director who, for reasons of politics, assigned leading counsel. True also that there was some initial doubt on the part of solicitor and counsel as to the purpose of the assignment. (See letter of 18th May 1972 from Mr. Swaine to G.H.W. : Bundle B page 8). It should not have been difficult to understand. A cursory perusal of the papers would have made plain the cause of the Director's anxiety and the nature of his intention. In the event, Mr. Gittins' opinion of the prospects of success was sought by formal instructions issued to him on the 28th August 1972.

80. What is important is that the affair had been placed in the hands of G.H.W. in early February 1972. They were aware that leading counsel had been assigned. Sometime in March there had been a conference with the Director and by then there could be no doubt of the reason and purpose of the assignment. It was for the solicitors to maintain the momentum and that they failed to do despite numerous inquiries and reminders by the Director between then and January 1973.

81. It has been suggested that in writing as he did on the 29th of January the Director was merely notifying the solicitors of the possibility that aid would be withdrawn and that thereafter his proper course was to inform the appellant that he proposed to do so in accordance with the provisions of Regulation 8 and thus give him an opportunity of showing cause under that regulation and, if the decision went against him, of appealing that decision under s.26 of the Ordinance.

82. For my own part I am satisfied that in writing as he did the Director was not contemplating the discharge or revocation of the certificate but only the limitation of the issues. Although he does not specify the provisions under which he is proposing to act I think his decision was covered by the powers provided in Regulation 6. There has been some question whether that regulation, insofar as it deals with disentitling aid for any purpose, ought to be interpreted as only enabling the Director to disallow the grant of funds for steps in the proceedings which he deems unnecessary rather than empowering him to limit the issues in this way. The power to amend the certificate so that it "shall not extend to certain of the proceedings in respect of which it was issued" (Reg. 6(b)) seems to me to be wide enough to include the limitation of aid so as to exclude the issues in the proceedings as well as steps in the proceedings. If that be the correct view then I do not see any necessity for the Director to deal directly with the aided person as he must do under the elaborate measures provided by Regulation 8 where total revocation or discharge is dealt with. It is then for the solicitor - no doubt after consultation with his client - to abide by that decision or to protest it under section 26 or possibly, as the trial judge suggested, by way of judicial review under 0.53.

83. It was over seven months after assignment before G.H.W. interviewed the client and then by a letter dated 10th of October 1972 (page 36 in Bundle B) the Director was informed that the client was prepared "if necessary" to drop the breach of contract claim. There followed the missing documents episode for which the Director was in no way responsible and thereafter the conference at which the Director reversed his decision. This conference was requested by the Director very shortly after the fact had been established that there were no missing documents but at the solicitor's request, it was not held until the 8th of January, 1974.

84. In all of this I can find nothing within the "good neighbour" and "foreseeability of harm" principles stemming from Donoghue v. Stevenson and broadening through Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd. to include financial damage and through Ross v. Caunters⁽⁴⁾ to involve solicitors in liability for tortious as distinct from contractual negligence, which would oblige me to say that the Director must bear responsibility for the negligence of the legal advisers. Within the ambit of the duties imposed upon him by the Ordinance, as I perceive them to be, he did nothing that he was not entitled to do and nothing which I can regard as placing any impediment in the way of the solicitors on which they could legitimately rely in exoneration or even in extenuation of their failure to carry out their duties to their client expeditiously.

85. Mr. Kaplan has argued, in the alternative, that in any event if the Director be held to be responsible for any of the delay his contribution was non-causative in the sense that, as counsel puts it, the appellant's action was beyond repair by March 1972 since, very shortly after G.H.W. took over, the time limit for action had passed and by then the principal ground on which the action was eventually struck out by Pickering, J. in 1975, viz. the disappearance of the defendant's star witness, MA Wing, already existed. Indeed. Ma had been untraceable since late 1971. His evidence was vital to the defendant's case. Moreover, six out of eight defence witnesses, including MA Wing, had left the company's employment when its roads and drainage department closed down in 1972 and were untraceable in 1974 when the appellant's solicitor gave notice of intention to proceed. Two of these, apart from MA Wing, were said to have left Hong Kong one in 1971 and one in 1972. (See affidavits of Norman NAI Pang-lung at pages 468 and 478 of Bundle D and affidavit of Peter CHAN Hoi-chung at page 203).

86. In these circumstances counsel says striking out was inevitable as early as 1972 and it became so because of the appellant's own delay before he was legally aided and his obstinate and unco-operative behaviour thereafter.

87. While I think that there is much force in that argument I prefer to rest my opinion that no blame attaches to the Director on the failure, as I see it, of counsel to demonstrate any negligent breach of duty on the Director's part either through failure to carry out any specific duty under the Ordinance or by breach of any general duty of care owed to the appellant as a legally aided person.

88. This finding as to liability disposes of the appeal, but in deference to the argument of counsel, and in case the matter should go further, I will deal as briefly as I can with the appeal against the judge's finding as to quantum insofar as the judge is said to have erred in principle in making his award against G.H.W.

89. The judge awarded $40,000 by way of damages to the appellant against the third defendant. This related solely to one of the appellant's four claims as they appeared in the final draft pleading proposed by Mr. Swaine. Under this head he had claimed $141,063.87 for extra work done at the defendant's request. This was one of the claims which had became inflated over the years in successive amendments and it had originally stood at $69,972.

90. Although the judge found that the documentary records on which the appellant relied were wholly unsatisfactory and his figures insecure, he found that some such work had been done.

Referring to the sum originally claimed he said

"He was unable to prove even this sum but a chance he did have of proving something and I accordingly award the sum of $40,000."

91. The other three claims were as follows :

The claim for conversion appeared only in the latest (draft) amendments; the claim for damages for breach of contract, although figuring in the earliest pleading, had undergone over the years considerable modification and amplification. This included three different versions of the completion date of the sub-contract (the final version being 29th of November 1966) coupled with a plea for rectification of the date - 29th of January 1966 - appearing on the contract itself. It had also involved an allegation at one stage (statement of claim of 7th of June 1966) that the completion date (29th January 1966) had been altered by an oral agreement with MA Wing to continue work for an unspecified period. A 1968 amendment alleged an oral agreement that the appellant should continue to work after the 29th of January 1966 on the basis that the true completion date was the 29th of January 1967.

92. In relation to the conversion and damages claims the judge said :

"          Having heard the plaintiff cross-examined at length on this I have come to the conclusion and I doubt if any other court would conclude otherwise than that the claims for breach of contract and damages for conversion were false and known to be false by the Plaintiff."

93. He then considered the remaining claim for underpayment. He noted the swelling of that claim from about $200,000 in 1966 to about $600,000 in 1974. He stressed the fact that the appellant had no records of his own and was relying on the quantities and measurements recorded by Yau Wing when the present action first came on for hearing, and on unproven Public Works Department records when it resumed a year later. He noted also that these latter records had only been produced after a further adjournment, despite the long interval and counsel's undertaking to see that documentation would be produced to explain the several considerable alterations in the appellant's particulars of claim. The judge found this documentary evidence inadequate to prove the claim. The only viva voce evidence on quantities and measurement was that of an officer of the Public Works Department who had done certain of the measurements referred to in the P.W.D. documents. There were, however, many figures prepared by other hands to which he could not speak. Moreover, it would appear from the affidavits to which I have referred earlier that MA Wing was the person with whom the appellant dealt directly for all practical purposes, including the vital measurements of work done. The judge concluded upon this claim in the following words :

"I am not convinced on probabilities that he had a chance of succeeding on these claims."

He therefore awarded nothing in respect thereof.

94. Legal aid has been extended to the appellant on this appeal only to cover two issues viz. : (a) Can the Director be liable in law in the circumstances of the present case and (b) if he can be so liable then whether in fact and in law he is liable as alleged in this case. The question of quantum has not been expressly argued before us and we have not asked to enter into it should we find the Director to be liable. What was argued - and what was by common assent within the issues thus stated - was whether the judge had erred in his approach to the onus of proof on damages and the nature or degree of that onus.

95. As to onus, Mr. Bernacchi sought before us, as he did before Zimmern, J., to establish a very startling principle by a bold deployment of the obiter dictum of Diplock, L.J. (as he then was) in Allen v. McAlpine⁽⁵⁾ which is quoted in full in the judgment of the court below. I do not propose to delay upon this. I simply cannot see how the Armory v. Delamirie⁽⁶⁾ principle to which Diplock L.J. there refers can be extended in the way counsel suggests. What Mr. Bernacchi says is that the plaintiff's claim in its several parts, stultified by the negligence of solicitors and of the Director, must, once negligence has been shown, be accepted at its full value unless disproved by the defendant. This is because that negligence has made it impossible for him to adduce now the necessary evidence to prove his claim. It is, therefore, counsel says, for those who stultified it to show that it was worth nothing or at any rate something less than is stated in the claim.

96. If that proposition were to succeed then, since the judge found that the available evidence was, save to the limited extent reflected in the award for extra work, useless for the purposes of either side, it would mean that the defendants had failed to prove that the plaintiff's claim of over one million dollars was to any extent incorrect and it must therefore succeed. The valuation of his chose in action is equated with the valuation of the jewel converted by the tortfeasor in Armory v. Delamirie. Even taken as a colourable analogy, the analogy breaks down at once because in Armory the court did, apparently, have satisfactory evidence of an expert character of the maximum value of a jewel which would fit the setting in the plaintiff's ring. Here there is only the assertion in the statement of claim supported by evidence which the judge found wholly unsatisfactory.

97. But apart from that, and forgetting for the moment that the observation of Diplock L.J. is wholly obiter, I do not understand him to be saying that once the defendant is shown to have been negligent the plaintiff's claim must be accepted at its full value as pleaded simply because the evidence to rebut it is, through that negligence, no longer available. Rather he is saying that the solicitor can only avoid liability altogether by showing that the claim was incapable of succeeding to any extent even if it had been prosecuted with diligence. No doubt it would be unlikely that a solicitor who was either conceding or not denying negligence, or who anticipated that negligence would be established even though denied, would venture upon such an unappealing answer to the claim. A court might well be unimpressed by a denial of liability which involved maintaining that a claim which the solicitor had been prepared to advance for his client had, in his belief, been from the outset worthless. Diplock L.J. goes on immediately to say that for the honour of the profession he would hope that such a claim would be settled. A solicitor who in such circumstances sought to deny liability on the basis that there had been no damage would not be likely to receive a very sympathetic hearing. It is in that sense that I understand the comment upon Armory v. Delamirie. The observation, is I would think directed to the question of liability rather than to the onus of proof as to quantum.

98. That, I apprehend, is what was in the trial judgw's mind where, in citing J.R. Munday Ltd. v. London County Council⁽⁷⁾, he remarks, somewhat cryptically, that Armory is irrelevant because negligence is not actionable without proof of damage. However, that may be, and I confess I may not have fully understood this observation of Diplock, L.J. I am satisfied that it can not have been intended to imply that a plaintiff so wronged need only quantify his claim in pleading and leave it to the defence to disprove it.

99. Williams v. Williams⁽⁸⁾; Gray v. Haig⁽⁹⁾ ; Dean v. Thwaite⁽¹⁰⁾ on which Mr. Bernacchi relies on are all cases of tortfeasors in which the principle of Armory v. Delamirie was invoked in assigning to a defendant the onus of proving that the plaintiff's claim should not be taken at its strongest against the defendant because of a deliberate act of the defendant in doing away with the evidence, or (as in Thwaite) failing to keep records essential to enable him to rebut the plaintiff's case by bringing the effects of his wrong doing within a period of limitation set by the court. In Coldman v. Hill⁽¹¹⁾ a bailee of cattle who had without negligence let them escape and be lost was held blameless in detinue but negligent in that he had failed to inform the owner of the loss as soon as possible, a duty which the court found to arise out of the contract of agistment (See Bankes L.J. at page 449).

100. Not only are all of these cases remote from the circumstances of the present case but in none of the cases to which we have been referred and which involve negligence on the part of solicitors (other than the case of Allen v. McAlpine where the dictum of Diplock L.J. appears) is Armory v. Delamirie even mentioned. It is perhaps not without significance that the case is not even cited in the latest edition of Charlesworth on Negligence.

101. I am satisfied that the principles which do apply derive in the main from the decision of the Court of Appeal, relied on by the trial judge, in Kitchen v. Royal Airforce Association. I need do no more than refer without quoting it in full to the passage from the judgment of Evershed L.J. which is cited by the trial judge. The passage concludes as follows (page 575 of the report) :

"In my judgment, what the court has to do (assuming that the plaintiff has established negligence) in such a case as the present, is to determine what the plaintiff has by that negligence lost. The question is, has the plaintiff lost some right of value, some chose in action of reality and substance? In such a case, it may be that its value is not easy to determine, but it is the duty of the court to determine that value as best it can."

Where liability has been established the court does what it can on the materials before it to assign a money value to the lost prospect of success.

102. The judge in the present case regarded two of the four claims as bogus and therefore worthless. He did so upon an estimate of the appellant as a witness and his poor performance when confronted with the confusing and suspicious history of these claims. I do not see that we are entitled to say that he was wrong. Certainly the record shows the appellant in a light which would seem to justify the judge's criticisms of him.

103. The claim for underpayment was also regarded as valueless because it rested on a strict showing of quantities and measurements for which, as the judge found, there was no adequate proof. He went further and said that, as to the Public Works Department documents on which, in the end, the appellant principally relied, the cross-examination of the appellant by Mr. Patrick Yu had resulted in testimony which tended rather to support the defendant's case that there had been overpayment for work done.

104. Mr. Bernacchi's main criticism of the judge's application of Kitchen's case to the facts before him was that the judge had mistakenly refused to assign any value to the claim for underpayment on the basis that he had not been convinced on the balance of probability that the claim could succeed. This, counsel says, is wrong. He proposes that the proper test is whether there was some possibility of success great or small including the possibility that the parties might have come to settlement before trial.

105. Leaving aside the question of a possible settlement - to which the judge clearly did not advert - I am satisfied that he did apply the proper test. In Kitchen itself Sellers, L.J. at page 580 upholding the trial judge's assessment of the value the prospect of a compromise does so on the basis that a compromise was probable. Moreover, in Davies v. Taylor ⁽¹²⁾ on which Mr. Kaplan relies the question was whether, in a claim by a woman under the Fatal Accidents Act 1846 in respect of the death of her husband from whom she had separated and who had instituted divorce proceedings shortly before his death, the widow had some prospect of future support, based on a possible reconciliation, the loss of which could be assigned a money value. At page 212 Lord Reid deals with the matter in this way :

"The peculiarity in the present case is that the appellant had left her husband some five weeks before his death and there was no immediate prospect of her returning to him. He wanted her to come back but she was unwilling to come. But she says that there was a prospect or chance or probability that she might have returned to him later and it is only in that event that she would have benefited from his survival. To my mind the issue and the sole issue is whether that chance or probability was substantial. If it was it must be evaluated. If it was a mere possibility it must be ignored. Many different words could be and have been used to indicate the dividing line. I can think of none better than 'substantial' on the one hand, or 'speculative' on the other. It must be left to the good sense of the tribunal to decide on broad lines, without regard to legal niceties, but on a consideration of all the facts in proper perspective."

Finally it is to be noted that even in Yeoman's Executrix v. Ferries⁽¹³⁾ which was perhaps Mr. Bernacchi's most favourable authority on the point, inasmuch as the Lord Ordinary was of the opinion that he himself would not have found for the pursuer on liability, the learned judge yet held that had the action been timeously tried before a jury they might have found otherwise and he assessed the lost prospect of success at one-third of the amount of damages claimed in the original action. Yet even in that case the test applied (see page 337 of the report) was the test of probability. That of course related to the question of liability and there was an agreed figure of what the pursuer would have recovered by way of damages had the original action succeeded. The award took into account both contributory negligence and the likelihood that a settlement would have been offered. I see no reason to apply a different statement in relation to question of damages.

106. On the claim as to underpayment in the present action I think we are equally obliged to consider whether as a matter of probability the appellant would have recovered anything at all. A speculative possibility will not do. In all the circumstances of the case I cannot say that Zimmern, J. was wrong to find as he did. It is possible that if the case had been tried in 1970 or 1971 there might have been available as witnesses all those who had a part in preparing the P.W.D. documents and it is possible that if they had been called they might have lent some support to the appellant's case in quantities. Zimmern, J. himself referred to this as a theoretical possibility. He found it too speculative a prospect to merit a monetary quantification.

107. I must respectfully agree. I would dismiss the appeal.

Li, J.A.:-

108. I have the benefit of reading the judgment of my lord the Vice-President. Having regard to the meticulous care with which the appellant's case is considered I do not feel that I could have put it in a more succint manner. A lengthy judgment by me would serve only to create more paper work. Reference to one or two points, in emphasis, would be sufficient reasons for my concurrence.

109. I can find no provision in the Legal Aid Ordinance and the Regulations imposing on the Director of Legal Aid a duty to supervise the daily conduct of the proceedings once counsel and solicitor have been assigned to the aided person. Nor is there a duty or right for the Director to dictate what step is to be taken by the assigned solicitor at a certain time. In this connection I have in mind also the invidious position in which the Director found himself in this case. From the records, the appellant had shown himself to be a difficult client. The Director had great difficulty in finding a solicitor who would be willing to take up the case after the first assigned solicitor asked to be discharged. Any untactful gesture on the part of the Director would have provoked the subsequently assigned solicitor to apply similarly for a discharge as in the case of the previously assigned solicitor. In my opinion, the Director was not negligent for not setting a time-table to regulate the acts of the assigned solicitor as counsel for the appellant says he should.

110. Much has been said of the Director's letter dated 29th January, 1973 to G.H.W. in which he purported to limit the legal aid certificate so that it would not cover the applicant's claim for breach of contract. Without going into the merit of the argument whether the Director should inform the appellant of this decision under Reg. 8 I must observe that a matter of far greater importance intervened. Within 10 days of his letter (i.e. on 8th February, 1973) the Director was informed by G.H.W. that relevant papers were missing. What the Director did in search of the papers was perfectly reasonable and proper. In the event the whole confusion was not clarified until 13th November, 1973 when G.H.W. forwarded a copy of assigned counsel's letter to the Director. When the Director attempted to call for a conference, G.H.W. requested that the conference should not be held until early January, 1974. Thus the delay between January, 1973 and June, 1974 was caused not by the Director's letter of the 29th January, 1973, but by the myth of the missing papers and G.H.W. 's inability to have an early conference with the Director.

111. In the course of his argument counsel for the appellant cites an obiter dictum of Diploch L.J., as he then was, in the case of Allen v. Sir Alfred McAlpine and Sons Ltd., - 1968 2 Q.B. 229. Though he concedes that it is relevant to the question of quantum he maintains that the learned L.J. did use the phrase "to establish liability". For the sake of clarity I wish to emphasize that the learned Lord Justice must have in mind the question of quantum of damages only. In that case his Lordship was disposing of an appeal against a judge's decision to dismiss an action for want of prosecution. In a passing reference to the possibility of the appellant having recourse against his own solicitor he said at p.256:-

"It is true that if the action for professional negligence were fought, the court which tried it would have to assess what those chances were. But on this issue the plaintiff would be in a much more advantageous position than if he had sought, despite the inordinate delay, to establish liability against the defendant in the action which had been dismissed. Not only would there be available to him any advice or material which had been given or obtained by his solicitor in support of his case in the dismissed action, but the principle of Armory v. Delamirie (1722) 1 Stra. 505 would apply and would impose upon the solicitor the onus of satisfying the court that the plaintiff's claim in the dismissed action would not have succeeded had it been prosecuted with diligence. This would be a heavy onus to sustain after so great a lapse of time."

112. It is apparent from this dictum that the negligence of the solicitor concerned had been established. The only question to be considered was quantum of damages. Hence the case of Armory v. Delamirie was said to be applicable. Negligence of conversion in the latter case was clearly established as were subsequent cases flowing from the same principle in which tortious liability had been proved. Any attempt to rely on that dictum or the principle in Armory's case to establish liability in an action in tort is a confusion in thought by mixing up the question of liability with that of quantum. However, as I am in agreement with the trial judge in his assessment as to the present appellant's chance of success in the original action the McAlpine's case is of little assistance.

113. It remains for me to express my agreement that the appeal should be dismissed.

Representation:

Mr. B. Bernacchi, Q.C. & Wally Yeung (Bernard Wong & Co.,) for appellant

Mr. N. Kaplan & Mr. W. Leung (Legal Department) for respondent

(1) (1958) 1 W.L.R. 563.

(2) (1932) A.C. 562.

(3) (1964) A.C. 465.

(4) (1979) 3 W.L.R. 605.

(5) (1968) 2 Q.B. 228 at p. 256-7.

(6) (1722) 1 Stra. 505.

(7) (1916) 2 K.B. 331.

(8) (1863) 3 Beavon 306.

(9) (1855) 20 Beavon 219.

(10) (1855) 21 Beavon 621.

(11) (1919) 1 K.B. 443.

(12) (1974) A.C. 207.

(13) (1967) Scots Law Times 332.

IN THE SUPREME COURT OF HONG KONG

COURT OF APPEAL

CIVIL APPEAL NO. 67 OF 1980

(On Appeal from High Court Action No. 313 of 1976)

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Coram : Court of Appeal (McMullin V-P, Li, J.A. & Silke J.) in Court

Date of Judgment: 25th March, 1981.

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JUDGMENT

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Silke, J. :

114. I also have had the benefit of reading in draft the Judgment of my Lord Vice-President and, with deference, agree with its conclusion.

115. I have only this to add. Mr. Kaplan has argued that Regulation 6 is capable of covering an amendment as to the cause or causes of action covered by the certificate. For myself I do not think a certificate can be amended in this way under this regulation.

116. Paragraph (b) of Regulation 6 reads -

(The Director may amend a certificate)

"When, in his opinion, it has become desirable either for the certificate to extend to other proceedings, being part of the same action, cause or matter to which the certificate relates, or proceeding for the enforcement of any such order or agreement as is referred to in Regulation 14(2) or for the certificate not to extend to certain of the proceeding in respect of which it was issued; or ....."

117. I also note the wording of paragraphs (a) and (c) of the Regulation and that which is provided for in Regulation 14(2) - the recovery or preservation of property for the benefit of the aided person or an order or agreement for the payment of costs to the aided person. I would think Regulation 6 to govern other proceedings in the same action which become necessary as the action progresses, such as interlocutory appeals or interim orders which can be enforced by application to the court.

118. To alter the action itself - as here to withdraw, to use a neutral word, legal aid in respect of the damages claim falls four square within Regulation 8 and in particular paragraph (d) of that Regulation.

119. The existing certificate should be discharged and a fresh one issued. This allows legally aided person to query the withdrawal of legal aid in respect of a head of claim with which he wishes to proceed and involves the right of the aided person to appeal as against such discharge. And further Regulation 8 provides that the aided person has an opportunity to show cause to the Director why such discharge should not take place prior to any such appeal.

120. Revocation is a much more drastic remedy available to the Director with which I am not directly concerned.

121. I therefore with respect, find myself in the unfortunate position of disagreeing from my Lord Vice-President and my Lord Mr. Justice Li's conclusions as to Regulation 6 and its effect.

122. But as I have said that does not alter the result of this appeal. In any event the "Bowran letter" was never communicated - the "missing documents" matter intervening - to Mr. Ngao and though he was not in a position either to show cause or to appeal the effect, in my view, is minimal for the decision was never implemented nor was it the direct cause of any delay.

123. In respect of the method of the assessment of quantum, I am with respect in entire agreement on the approach adopted by my Lord Vice-President.

124. Armoury v. Delamirie⁽¹⁾ a case which over the years gives all the appearance of flourishing like the green bay tree, has not in my view grown into the area of damages for professional negligence.

125. Smiths Leading Cases 13th Edition Vol. 1 at p.393 sets out in full the very brief report of that case and goes on to say, at p.394,

"This is the case usually referred to for the purpose of illustrating that leading principle of law, that bare possession constitutes a sufficient title to enable the party enjoying it to obtain legal remedy against a mere wrong doer."

126. It relates to such matters as trover and conversion, to a bailee in possession of a chattle suing a wrong doer in respect of damage to the chattle even though he is not answerable over to the bailor and it is basically concerned with possession. It can extend to master and servant and the tortious act of the latter and the ratification by the former and further, if you fail to hand over something you possess, then the strongest presumption will go against you.

127. But however widespread the branches of the case may be it does not extend to this aspect of the law of negligence and I doubt if the obiter of Lord Justice Diplock (as he then was) in Allen v. McAlpine⁽²⁾ upon which Mr. Bernacchi places so much reliance, was intended to so extend it.

128. Lord Diplock, whose opinions, even obiter, demand the fullest consideration and respect, appears to be considering the position of a blameless plaintiff suffering though the default of his agent, the solicitor. He refers to him being in a much more advantageous position in respect of damages in an action for professional negligence when his original action had been dismissed for want of prosecution that he would be in prosecuting that original action itself after a long period of delay. His reference to "liability" in this passage clearly refers, in my judgment, to the liability of the defendant in the dismissed action and not to liability of the solicitor in the action for professional negligence.

129. He does not go on to state which particular principle of Armoury v. Delamirie⁽¹⁾ would apply to an action for negligence by a blameless plaintiff when the original action had been dismissed for want of prosecution nor how it would impose that which he describes as a "heavy onus" upon the solicitor in the disproving of quantum.

130. For myself I think him to have been contemplating the situation where a man, (a solicitor), by his own tortious act (his negligence leading to the dismissal of the action) withheld, in effect, the evidence which could have assisted the plaintiff to prove his case in the original action and that every presumption to his disadvantage would be adopted : treating the situation as analogous to that of a man withholding an agreement under which he is chargeable and the presumption which would then arise that it was properly stamped. He goes back, in effect, to the goldsmith whose apprentice handed back to the chimney sweepers boy the socket without the stone and, holding onto that stone, was presumed to have held onto a stone of the finest water which befitted the returned socket. And the master was responsible for the wrongful act of his apprentice.

131. But in saying that which he did Lord Diplock is quite clearly, in the context of his judgment, considering possibilities at large in respect of quantum rather than making any definitive statement of the law as he thought it to be.

132. I also am satisfied that Kitchen v. Royal Airforce Association⁽³⁾ contains the general principles to be applied and for the reason given by my Lord Vice-President.

133. I too would dismiss the appeal.

Representation:

(1) (1722) 1 Sha 505

(2) [1968] 2 Q.B. 228 at 256-7

(3) [1958] 1 W.L.R. 563