Eng Wah Film Co (A Firm) v. Chung Wai Lau t/a Ngai Yip Film Co

HCA000025/1969

IN THE SUPREME COURT OF HONG KONG

ORIGINAL JURISDICTION

ACTION NO. 25 OF 1969

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Coram: Rigby, S.P.J.

Date of Judgment: 8 November 1969

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JUDGMENT

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1. This summons now comes before me at the instance of the applicant for an order that the plaintiffs be at liberty to amend the Writ of Summons by striking out the name of "Eng Wah Film Co. (a firm)" as plaintiffs and substituting therefor the name of "Goh Eng Wah". The application is opposed by the defendant.

2. The Statement of Claim endorsed on the Writ of Summons is founded upon an agreement in writing made between the plaintiffs and the defendant whereby, in consideration of the plaintiffs, inter alia, advancing certain sums of money to the defendant and preparing for certain stage appearances for the defendant and her troupe in the then Federation of Malaysia, including Singapore, the defendant appointed the plaintiffs' firm as her sole agents for the distribution in the said Federation of Malaysia of two films to be produced in the Chiu Chow dialect.

3. Clause 2 of the agreement specifically provided, inter alia, that the plaintiffs would advance certain sums of money to the defendant for the purpose of the making of the two said films.

4. Clause 8 further provided that the defendant would be ultimately responsible for the advertisement charges of the two films and all expenses incidental to the distribution of the films and the stage appearances, although the plaintiffs should, in the first instance, be responsible for the payment of the said charges and expenses on the defendant's behalf.

5. In pursuance of Clauses 2 and 8, the plaintiffs, at the defendant's requests, advanced to the defendant, in respect of the said charges and expenses, a specified sum of money, only part of which has been repaid, and the plaintiff sues for the balance thereof.

6. The Writ of Summons was filed on the 7th January and personally served on the defendant on the 9th January. An appearance to the action was entered by the defendant on the 16th January but no Statement of Claim has yet been filed.

7. On the 16th June, the applicant took out the summons now before me. The summons is supported by an affidavit, dated the 2nd June, and made by one Goh Eng Wah. In that affidavit Mr. Goh states that he is ordinarily resident in Singapore. On the 1st January 1966 he appointed a Mr. Lee Long Koan to be his agent in Hong Kong and to establish for him in Hong Kong the Eng Wah Film Company. The affidavit recites that Mr. Lee Long Koan, after having established the said Eng Wah Film Company, entered into an agreement in writing and in the Chinese language with the defendant, such agreement being the subject matter of the present action. The deponent then states that due to an oversight he instructed his solicitors, Messrs. Lau, Chan & Ko to institute proceedings in the name of the said Eng Wah Film Co.; that he has now been advised by his legal representatives that as an undisclosed principal he is entitled to sue the defendant himself, and he therefore asks to have his name substituted as the plaintiff in the action in place of the said Eng Wah Film Co. On the face of it the application certainly seems to me to be a perfectly reasonable request and one which, subject to any appropriate order as to costs in favour of the defendant, ought to have been acceded to.

8. It is clear from O.81 rr.(1) and (9) of the Rules of the Supreme Court that although a single individual (as distinct from two or more partners) carrying on business in a firm name can be sued in that firm name, he cannot himself sue in that name. O. 20 r. 5 deals with the procedure enabling an amendment to be made, with leave, of a writ or pleading. The rule provides:

"Amendment of writ or pleading with leave (O.20, r.5).

9. Mr. Zimmern, who appears for the defendant, does not take the point that the writ was a nullity on the ground that the plaintiff firm as described was not a legal entity entitled to sue and therefore the writ should be struck out in limine, nor does he invite me to consider any such proposition. His objection to the application to amend the writ is based upon the proposition that, in terms of O. 20 rr. 5(2) & (3), before the court will give leave to amend it must be satisfied of three things:-

10. In furtherance of his argument Mr. Zimmern refers to the contract itself and he seeks to place emphasis upon the fact that this was, as be contends, a contract made between the parties themselves and that it was a contract which involved personal services - stage performances - to be rendered by the defendant and her troupe in favour of the plaintiff company, Eng Wah Film Co., as represented by Lee Kin In. It was therefore, so Mr. Zimmern contended, a contract peculiar and personal to the parties involved and which only the parties involved could enforce, the one against the other. In support of his argument Mr. Zimmern gave the vivid illustration that if A, a distinguished stage actor, had entered into a contract wit B, a wholly reputable company of producers, to appear in a stage performance entirely sponsored by that company, and it was subsequently found that the company was acting as the undisclosed agent for an undisclosed principal, to wit, C company, a company of dubious reputation, it would not be open to C company to seek to enforce the contract as against A; nor would an application by C, under Order 20 r.5, to amend into its own name as plaintiff any writ taken out by B company as against A, be granted. In support of his argument Mr. Zimmern referred to the case of Greer v. Downs Supply Co.⁽²⁾ It is, I fear, necessary to refer as briefly as possible to the facts of that case. A man named Godwin, a travelling salesman fox X firm, purchased on his own account from one Chandon, trading under the name of Downs Supply Co., a quantity of timber. Subsequently Godwin left the employment of X firm and became employed by the plaintiff Greer, who carried on business as a timber merchant, as an agent selling timber for Greer on commission, Godwin later saw Chandon, told him that he had left X firm and further told him, which was untrue, that he had set up business on his own account, and be offered to sell Chandon some timber. Chandon agreed, stipulating at the time that in regard to the purchase price of that timber he would set off against that price the money Godwin still owed him, paying only to Godwin the difference between the two prices. The agreement was concluded upon that basis and in due course the timber was delivered to Chandon's firm, Downs Supply Co., together with invoices and letters bearing the name, address, and description of the plaintiff Greer - which Godwin had previously told Chandon was in fact the name, address and description on which he was trading on his own account. In due course the plaintiff Greer brought an action against Downs Supply Co. to recover the value of the timber sold by Godwin, as his agent, to the defendant. The defendant, by his pleading, denied that there was any contract between him and the plaintiff and, if any such contract existed, he counter-claimed for the price of the timber which he had himself earlier sold to Godwin. The case was tried in the Mayors and City of London Court. The judge of that court, whilst being satisfied that the defendant honestly believed what Godwin had told him and honestly believed that he was dealing with Godwin as a principal, held that the defendant should have been put on inquiry by the invoices and letters he had received at the same time as the timber was delivered to him, and which invoices and letters bore the plaintiff's name and address. He further held that having been put on inquiry he should have made further investigation and that if he had done so he would have found that Godwin was not a principal but only an agent. Accordingly, he gave judgment for the plaintiff for the full amount claimed - which, of course, involved the dismissal of the defendant's counter-claim. On appeal the Divisional Court reversed that decision. On further appeal, taken by the plaintiff, the Court of Appeal upheld the decision of the Divisional Court, reversing the judgment of the trial court, holding:-

11. Mr. Zimmern particularly relies upon a passage contained in the judgment of Bankes L.J. quoting with approval from the judgment of Bramwell B. in the case of Boulton v. Jones.⁽³⁾ Bramwell B. said this:-

"When a contract is made, in which the personality of the contracting party is or may be of importance, as a contract with a man to write a book, or the like, or where there might be a set-off, no other person can interpose and adopt the contract."

The facts in Greer's case and the ratio decidendi adopted and followed by the appellate court appear to me to be capable of being very readily distinguished from the facts and circumstances in the present case. As Mr. Martin Lee, who appears for the applicant, has cogently pointed out, the position could well have been very different if this had been an action for specific performance - an action under the contract to compel the personal services - the stage performance the defendant and her troupe had undertaken to perform. But it is nothing of the kind; it is a simple action to recover moneys advanced to the defendant under the agreement. If one accepts the applicant's affidavit, and it stands uncontradicted before me, the applicant was at all times the undisclosed principal. No statement of defence has yet been filed, but it is not suggested in any affidavit filed by or on behalf of the defendant that the substitution of the applicant's name as plaintiff would in any way react to the detriment or prejudice of the defendant; it is not suggested, for example - nor indeed could it be suggested - that such an amendment as is now sought would deprive the defendant of any right of setoff or counter-claim she might have against the Eng Wah Film Co., the present plaintiffs. There is no suggestion here, to use the words of Bramwell B. that any person has interposed and adopted the contract. The plaintiff, upon the uncontradicted affidavit now before me, is the sole proprietor of the firm in the name in which the action was originally brought; any defence to the action as brought in the name of the film company can equally well be raised against the applicant, as the sole proprietor of that company.

12. Turning, therefore, again to the three conditions prescribed under Order 20 r.5 (2) and (3), I am satisfied first, that the mistake which it is now sought to correct was a genuine mistake and, thirdly that it is just to give leave to make the amendment sought. The second condition prescribed under Order 20 r.5(3), namely, that the mistake was not misleading or such as to cause any reasonable doubt as to the identify of the person intending to sue is, admittedly, more difficult of solution. Certainly, I am satisfied that in bringing the action in the name of the Eng Wah Film Co. there was no dishonest intent on the part of the applicant to mislead the defendant as to the identity of the real plaintiff. Nor do I consider that, bearing in mind the realities of the situation and the nature of the contract between the parties, it is of any material consequence whether the principal claimant is Mr. Goh Eng Wah, Mr. Lee Long Koan or even Mr. Lee Kia In. The defendant knew that she was entering into a contract with the Eng Wah Film Co.; that under that contract she was to receive certain financial benefits and advancement of moneys in consideration for her appointing that Film Co. as her sole agents for distribution of her films and for certain stage performances to be produced by her and her trouble. The contract was with the Eng Wah Film Co.; it seems to me of little consequence, bearing always in mind that the claim is for the return of moneys advanced and not for specific performance of the contract, what was in fact the name of the proprietor of that company. In my view the paramount consideration is that contained in O. 20 r.5(2), namely, that the court may grant leave to make the amendment "if it thinks it just to do so". I am fully satisfied that it is just to allow the amendment to be made. Since the application has been unsuccessfully resisted on behalf of the defendant, the defendant must pay the costs of, and incidental to, the application including, of course, the costs of appearance, both of the original hearing before me on the 4th October and today. The applicant must pay the costs, if any, thrown away by the defendant prior to the making of the application to amend and consequent upon such amendment.

13. Certified fit for counsel.

Representation:

Martin Lee (Lau, Chan & Ko) for Applicants/Plaintiffs.

A. Zimmern (Remedios & Yanne) for Defendant/Respondent.

(1) (1966) 2 All E.R. 349 at 365

(2) (1927) 2 K.B. 28.

(3) 2 H. & N. 564, 566.