The Owners of Cargo Lately Laden on Board the Ship "Artemis" v. Artemis Transportation Corporation and Another

HCAJ000328/1981

BETWEEN :-

_____________

Coram: The Honourable Mr. Justice Jackson-Lipkin in Court.

Date: 28 May 1982 at 3.30 p.m.

___________

JUDGMENT

___________

1. In this action, the Plaintiffs issued a Writ on 2nd December 1981 against a Liberian Corporation and a Hong Kong Company. The face of the Writ bears, as is required by the Rules, the addresses of the proposed Defendants, and, in relation to the first Defendant, it reads as follows:- "Artemis Transportation care of Barber Ship Management Limited of 301A Melbourne Plaza, 33 Queen's Road Central, Hong Kong.".

2. On 9th December 1981, Mr. Registrar Blackwell as he then was, upon reading an affidavit of the Plaintiffs' Solicitor, Mr. Anthony Rooth, sworn on 9th December, ordered that the Plaintiffs have leave to issue a concurrent Writ and to service Notice of that Writ on the first Defendant in Liberia by post or such other means at the Plaintiffs' disposal, and he extended the time for acknowledgement of service by the first Defendant to 22 days after service of the Notice of Writ. On 15th December 1981, Solicitors on behalf of both Defendants, in accordance with the provisions of O. 12 r. 8(1) acknowledged service, which, under O. 12 r. 7, does not constitute a waiver of their rights to challenge the jurisdiction, the Notice of the Writ being served without the jurisdiction or any other irregularity. They did not, however, issue a Summons within the period of 14 days, as is required by O. 12 r 3(1), which is a slavish copy of the English Rule, (notwithstanding that 14 days appears (to me) to be wholly inappropriate in this particular jurisdiction of Hong Kong).

3. There followed conversations between the Solicitors, to which there is reference in the affirmation of Mr. NG Kwok-ying affirmed on 18th January 1982. Paragraph 3 of that affirmation recites an agreement between Mr. Paul Kenyon of Ince & Co. and Mr. Rooth of Clyde & Co. to whom I referred. It is accepted by Mr. Rooth through Counsel appearing before me that there was such a conversation and that there was such an agreement. In consequence of that agreement, the Defendants' Solicitors issued a Summons on 11th January 1982 claiming, among other things, an Order that the Writ be set aside, that it had not been properly served alleging certain improprieties in the Order of Mr. Registrar Blackwell in that it does not fall within O. 11 r. 1, that the Plaintiffs had no reasonable cause of action and that they failed to make out a proper case for substituted service. So far as the second Defendant is concerned, it asked for the Writ to be struck out as against it on the basis that the Plaintiffs have no reasonable cause of action against it, and that the claim is vexatious or otherwise an abuse of the process of the Court. O. 8 r. 1 prescribes a period of 14 days for the issue of a Summons for the seven purposes set out in that rule, and I am concerned with the first three and the seventh of those sub-rules. If it were permissible to regard the Summons as a pleading, there is no doubt that the Summons would have been in time by reason of the Christmas Vacation: Unfortunately for the Defendants, the definition rule in O. 1 specifically excludes a Summons from the term "pleading" and, consequently, neither O. 3 nor section 72 of the Interpretation and General Clauses Ordinance avails the Defendant. Mr. Chan properly concedes that he cannot rely upon section 72 in the light of the wording of section 2(1) of the Interpretation and General Clauses Ordinance, having regard to the specific wording of O. 12 r. 8(2), to which I will refer later in this judgment. O. 12 r. 8(2) is very new in Hong Kong, having been brought into force only last year, and apparently brought into force by the Rules Committee without any regard to the powerful plea of Mr. Justice Robert Goff in Carmel Exporters (Sales) Ltd. v. Sea-Land Services Inc. reported at [1981] 1 W.L.R. 1068. In his judgment, Mr. Justice Robert Goff said at p. 1079, between B and F,

"The exceptional rigidity of this requirement contrasts forcibly with the flexibility which is now generally characteristic of the Rules of the Supreme Court, and which enables the court to ensure that justice is done. No doubt short time limites are sometimes desirable; a recent example of this is the period of 21 days now required under Ord. 73, r. 5, for the commencement and service of proceedings to challenge arbitration awards. But the imposition of the quillotine in Ord. 12, r. 8(2), appears to be contrary to the trend in our rules, which is to ensure so far as possible that parties do not fall into the procedural traps, and to give the court power to deal with the situation if they do so. The widening some years ago of the court's powers under Ord. 2, r. 1, to deal with failures to comply with the rules provides a vivid illustration of this trend. It is not difficult to see how, due to error, oversight or even illness in a busy solicitors' office, the 14 days period in rule 8(1) might be allowed to pass without an application being made under Ord. 3, r. 5, for an extension of time. I must confess that it seems strange that the court should be deprived of any power to remedy the situation, especially where the plaintiff has suffered no prejudice, as for example where the point at issue has already been developed in correspondence. I therefore wish respectively to suggest to the Rules Committee that reconsideration may be given to the inflexible fetter imposed by Ord. 12, r. 8(2), upon the courts' discretion under Ord. 3, r. 5, bearing in mind that the exercise of any discretion which the court has to extend time will always take into account the purpose of the time limit and the need for finality in any particular case.".

It is hard to imagine a more forceful plea to a Rules Committee. The Rules Committee in England is not as accessible as the Rules Committee here, and does not meet as frequently as does the Rules Committee here. Nor is it as easy to alter Rules in England as it is in Hong Kong, and it is rather worse than a pity that the Hong Kong Rules Committee should have seen fit to ignore that plea by a judge of such eminence, particularly when one considers that the proportion of cases heard in The Strand where Plaintiffs and Defendants are foreign companies is a very much lower than in Hong Kong. Be that as it may, I am faced with the rule in its present form and it is worded in singularly strong terms: It reads as follows:-

"O. 3, r. 5, shall apply in relation to the period of 14 days [and that, parenthetically, I should mention, is the period prescribed in O. 12 r. 8(1)] mentioned in paragraph (1) with the modification that the said period may be extended by the Court only on an application made before the expiration of the period.", (the underlining of "only" on is my own).

Before I continue, I think this is an appropriate point in the judgment to add that the application before me was conducted with the utmost good faith by both sides and with a refreshing candour coupled with brevity by Mr. Chan. Mr. Dicks has obviously been personally embarrassed, as has his instructing solicitor, and that has been openly admitted to me. However, those solicitors would be failing in their duty to their clients if they did not take every course available to them to advance their clients' case, whatever their personal feelings. Mr. Chan, having very properly abandoned his plea of the rule being ultra vires, relies on the consent of the solicitors and the inherent jurisdiction of the Court. In relation to consent, Mr. Dicks puts the matter thus:-

"My solicitors accept that they have waived whatever can be waived. However, their ability to waive the provisions of O. 12 r. 8(2) is a question of law, and, as a matter of law,"

says Mr. Dicks,

"they cannot waive the point of time.".

The point on consent is simply this. The Court has a discretion under O. 3 r. 5 to extend time, which discretion is not fettered but blocked by the provisions of O. 5 r. 8(2), and nothing in O. 2 can get round that particular point and it, in my judgment, is, unhappily, unassailable. Mr. Chan falls back, therefore, on the inherent jurisdiction of the Court, and, in this respect, he invites my attention to the speeches of Lord Halsbury L.C. and Lord Watson in Reichel v. Magrath reported at (1889) 14 App. Cas. 665, Keymer v. Reddy reported at [1912] 1 K.B. 215 K. Master & Co. Ltd. v. Eagle Star Insurance Co. Ltd. reported at [1968] H.K.L.R. 215, The Queen v. Bloomsbury & Marylebone County Court ex parte Villerwest Ltd. reported at [1976] 1 W.L.R. 362, & Samuels v. Linzi Dresses Ltd. reported at [1981] Q.B. 115, and invites me to hold that I have a jurisdiction, arising from the foundation of these Reports and from section 16 of the Supreme Court Ordinance, to go around or behind O. 12 r. 8. Every instinct that I have, and I add that it is shared by Counsel and solicitors here on both sides, urges me to hold that I can so avoid the provisions of that unhappy sub-rule. However, an examination of the authorities does not support that proposition. In Reichel v. Magrath (supra) the House was dealing with the jurisdiction of the Court to prevent an abuse of the process: That does not arise here. In Keymer v. Reddy the Court was not dealing with a rule in the sense of that which I have to deal with here: It was dealing with the old O. LXIV r. 7, which is referred to by Lord Justice Farwell at page 221 of that Report. But, as it does not appear in the Report, I will read it from the 1908 White Book, (I assume is the same rule as pertained in 1911). The rule there read:-

"A Court or a judge shall have power to enlarge or abridge the time appointed by these rules, or fixed by any order enlarging time, for doing any act or taking any proceeding, upon such terms (if any) as the justice of the case may require, and any such enlargement may be ordered although the application for the same is not made available until after the expiration of the time appointed or allowed.".

What Lord Justice Farwell said was:-

"The argument is that the Court cannot enlarge the time because the rule as to enlarging time applies only to a case where the time is fixed under the rules of the Court. That seem to me a fatal argument. It is inconceivable that the Court should allow itself to be hampered in that way.".

That is very far removed from this inhibitory rule, and, when I say inhibitory rule, I bear in mind the definition clause in section 3 of the Interpretation and General Clauses Ordinance, where "Ordinance" is defined and, in sub-paragraph (c), includes "any subsidiary legislation made under any such ordinance or proclamation". I am dealing, therefore, with what amounts in law to a statutory provision. In the K. Master & Co. case, Mr. Justice Blair-Kerr was dealing with a point of discovery, which has no bearing on this particular point: It related to two matters, one the extent of discovery and the second the time for discovery. I cannot, alas, obtain any assistance from that. The Bloomsbury case dealt with the inherent power of the County Court and, obiter, the High Court to enlarge the time prescribed by a judge in an earlier order: That alas does not help me in this case. The Samuels v. Linzi case deals with enlarging the time that an "unless" order prescribed. That, again, is of no assistance to me here. I had hoped to be able to rely upon an analogy with the Limitation Ordinance, which contains certain prohibitory sections, for example section 4(1) and section 7, because it is trite that it is open to Defendants to waive the period of limitation. But that is because they are waiving a defensive right conferred on them - they are not thereby conferring jurisdiction on the Court. In this case, to accept the agreement between the solicitors would be tantamount to conferring on me a jurisdiction which is expressly taken away from me by the Legislature. Mr. Chan invited my attention most particularly to O. 18 r. 19(2) and said "look at that rule: It's quite clear that it lays down a code of practice which prohibits the giving of evidence, and yet, under the inherent jurisdiction, evidence may be admitted.". If one looks at the rule itself, it says no evidence should be admissible on an application under paragraph 1(a), and yet, under the inherent jurisdiction, a procedural matter, such as inadmissibility, can clearly be overcome by an invocation of that inherent jurisdiction; and the Notes under 18/19/10 at page 355, and in Volume 2 of the White Book in paragraphs 3346 onwards, make that quite clear: It is basically an invocation of the inherent jurisdiction of the Court to prevent an abuse of its process. Alas, I find those of no assistance. Here I am not dealing with an abuse of the process. Nothing has been abused; everything has been done, as I said, with propriety: I am dealing with blocked jurisdiction. With dismay verging on disoust, I find myself obliged to uphold the objection taken by Mr. Dicks. I most earnestly hope that this matter will be taken to appeal, and I most earnestly hope that I will be held by the Court of Appeal to be wrong. If I am upheld by the Court of Appeal, contrary to my wish, then I invite the Rules Committee, in the strongest terms, to reconsider, in the Hong Kong context, both O. 12 r. 8(1) as to the period of 14 days, and the prohibitory terms of O. 12 r. 8(2).

4. It follows from what I have said that I cannot entertain Mr. Chan's Summons at page 7 of the bundle put before me. That is to say the first relief sought in that Summons (that is to say, in respect of the first Defendant) and in consequence and, with the greatest reluctance, I must dismiss that part of the Summons.

5. Having given this extempore judgment in open Court, I will now return to Chambers and hear Counsel on the question of costs.

Representation: