Kan Kee Teak Floor Factory Ltd v. Nam Sang Building Construction Co Ltd

DCCJ000086/1984

HEADNOTE

"No objection" nature of a consent order relating to an interlocutory matter distinguished from definite contractual nature. While the consent of the parties is required for the latter, such consent is not essential to vary or set aside the order.

Order striking out defence and counterclaim and entering judgment for the Plaintiff for failing to comply with an "unless" order by consent to furnish further and better particulars set aside on review on term of payment in of part of the amount under claim.

Chandless-Chandless v. Nicholson (1942) 2 K.B. 321 and Siebe Gorman Ltd. v. Pneupac Ltd. (C.A.) 1982 1 W.L.R. 185 applied.

Purcell v. F.C. Trigell Ltd. (1971) 1 Q.B. 358 and Tigner-Roche & Co. Ltd. v. Spiro and Another (1982) Vol. 126, Solicitors' Journal 525 distinguished.

Samuels v. Linzi Ltd. (C.A.) [1980] 2 W.L.R. 836 at 845 - 846 applied re principle on payment in.

IN THE DISTRICT COURT OF HONG KONG

HOLDEN AT VICTORIA

CIVIL JURISDICTION

ACTION NO. 86 OF 1984

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BETWEEN

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Coram: H.H. Judge Eric Li in Chambers

Date: 26 May 1984

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EX TEMPORE RULING

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1. This is an application to set aside my order made on the 25th of April, 1984 whereby the defence and the counterclaim were struck out and judgment was entered for the plaintiff by reason of the defendant's failing to comply with an unless order made by consent dated 27th March 1984 to furnish further and better particulars as requested.

2. At the outset, I shall make it abundantly clear that the order of the 27th was for all intent and purposes an unless order. It was applied for as such by summons and the consent must have been given on such under-standing and the order was made on unless basis.

3. The defendant was thus ordered to furnish the particulars within 7 days. It failed to do so and it asked by summons for further extension of time on April 9th, 3 days after the plaintiff had filed a summons for judgment for non-compliance with the said order. The ground for the application for extension of time was that Counsel had advised that damages under ounterclaim be apportioned between the plaintiff and a third party and for this purpose time was needed for a quantity surveyor's report to be had. At the last hearing it was quite rightly pointed out by Mr. Wong for the plaintiff that the item referred to to support the application for extension of time relates only to one of the more than 10 items under request and relates only to the counterclaim. No reason and no valid explanation was given as to why the many other further and better particulars were not given as ordered by consent.

4. Furthermore, no application was made to ask for further extension of time until time had run out and until the plaintiff had taken stops to enter judgment. Let me say it at once that the facts of the case deserve the defendant little sympathy and the defendant is now crying out for mercy before the Court.

5. Nonetheless, the question now is whether the said order was correctly made at the last hearing. It was certainly made in a great hurry in one of those 9.30 Chambers with no more than half an hour reserved for and in ignorance of the recent case of Siebe Gorman Ltd. v. Pneupac Ltd. to which I shall allude. While it is true that generally a consent judgment or consent order can only be varied by consent of the parties but not otherwise, "an order of this kind merits somewhat different consideration". The legal principle applicable here may best be summarised by Lord Denning in Siebe Gorman Ltd. v. Pneupac Ltd. (C.A.) 1982 1 W.L.R. 185 at 189:-

"        We have had a discussion about 'consent orders'. It should be clearly understood by the profession that, when an order is expressed to be made 'by consent', it is ambiguous. There are two meanings to the words 'by consent'. That was observed by Lord Greene M.R. in Chandless-Chandless v. Nicholson [1942] 2 K.B. 321, 324. One meaning is this: the words 'by consent' may evidence a real contract between the parties. In such a case the Court will only interfere with such an order on the same grounds as it would with any other contract. The other meaning is this: the words 'by consent' may mean 'the parties hereto not objecting'. In such a case there is no real contract between the parties. The order can be altered or varied by the Court in the same circumstances as any other order that is made by the court without the consent of the parties. In every case it is necessary to discover which meaning is used. Does the order evidence a real contract between the parties? Or does it only evidence an order made without objection?"

6. The facts in Siebe Gorman Ltd. are not identical to this instant case but I think the sameprinciple applies in so far as the factual similarities are concerned. The consent order was made after a brief discussion along the corridor before solicitors came into my Chambers no doubt in circumstances notdissimilar to Siebe German. There Lord Denning went on to say at 190:-

"        I cannot put any such interpretation on the order which was drawn up in this case. It often happens in the Bear Garden that one solicitor or legal executive says to the other, 'Give me 10 days'. The other agrees. They go in before the master. They say 'We have agreed the order.' The master initials it. It is said to be 'by consent'. But there is no real contract. All that happens is that the master makes an order without any objection being made to it. It seems to me that that is exactly what happened here. The solicitors for the plaintiffs were saying, 'We do not object to the order. Give us the extra 10 days from the time of inspection, and that is good enough.' It seems to me quite impossible in this case to infer any contract from the fact that the order was drawn up as 'by consent'.

I may say that from my experience - which goes back a long time - very rarely is a peremptory order, or an order of this kind, made on first application. Time is always given before a default order is made. This default order was made on the very first application for specific discovery. "

7. Eveleigh L.J. distinguishes Siebe Gorman from Purcell as follows at p. 191G:-

"        In my opinion, to consent to an order of this nature is to say that the party is agreeable to have the punitive clause put in the order and from thenceforth to be at the mercy of the Court. Purcell v. F.C. Trigell Ltd. [1971] 1 Q.B. 358 was relied upon by the defendants; but that case was concerned with the question whether or not there was a contract and whether the court had power to set aside the order itself. It does not seem to me to have been concerned with the question of the power of the court under the very order that was made. The question there also before the court was whether there was a difference between an interlocutory order and a final order; and the court came to the conclusion that there was not, and that in each case the agreement between the parties would only be set aside on the principles upon which a contract can be set aside. But in this case the plaintiffs do not ask for the order to be set aside; they ask for the court to exercise its discretion under it. That being so, I do not see that this present case is governed by any binding authority which prevents the court exercising its discretion to extend the time. "

8. There is jurisdiction to extend time for the compliance of an unless order of this nature under Ord. 3 r.5. (See Lord Eveleigh's judgment in Siebe Gorman at 191 Letter D and Lord Denning's at 190 Letter G and H. )

9. In Purcell, the defendants were given time to comply with an earlier order which they failed to comply with. It was upon the second occasion when they failed to deliver the answers requested i.e. not complying court orders twice that judgment was entered and the delay there was considerable with the defendant adopting highly irresponsible attitude. It was no surprise at all that that case was distinguished from Siebe Gorman.

10. Then there is a recent case of Tigner-Roche & Co. Ltd. v. Spiro and Another [1982] Vol. 126, Solicitors' Jonrnal 525. In that case Purcell was followed and Siebe Gorman was distinguished, but that case was concerned with failure to comply with an order of injunction made by consent. The facts of that case indicated the contractual nature of the undertakings which are clearly distinguishable from this instant case which is concerned with non-compliance of an interlocutory matter, namely furnishing further and better particulars made the subject matter of a court order for the first time.

11. Attractive as they may be, Mr. Wong's arguments that the speedy nature and the approach of the District Court Rules are not the same as their counterparts in the High Court, but the principles behind all civil pleadings really made little difference in that they are there to provide for fair and just trial to come and to ensure that the proceedings can be as speedy as possible. Like in the District Court, a master or a judge in the High Court has similar power to enforce an unless order especially in striking out defence and entering judgment. Order 24, Rule 16 Rules of Supreme Court refers. Likewise, the discretion bestowed on a District Judge in civil matters, with some peculiar exceptions of which this case is not one, are not dissimilar to that of a High Court Judge and vice versa. In the absence of any specific provisions in the District Court Rules, it is provided that the Rules of Supreme Court are to be adopted. Therefore, in the matter of this nature the principles are really the same.

12. Mr. Wong further submitted with great force that in view of Rule 38(a)(iii) of the District Court Rules which enables a party to request for particulars by giving 5 days notice, the order by consent was the second time when the defendant was required by law to give particulars. With greatest respect, I think that the facts here were not dissimilar to Siebe Gorman in that there was only one court order made to command the defendant to give the particulars.

13. It was also submitted by Mr. Wong with considerable ingenuity that there was time gap of some one year in Siebe Gorman whereas there was urgency in this case in that hearings were due within one month at all the material times. This is true, but surely what I must bear in mind is: Had I granted time at the last hearing to the defendant, would it have made any significant difference in the time factor? I do not think it would. Surely the case would proceed on trial in May then but for my vacating those hearing dates.

14. I have come to the conclusion that I ought to have granted time to the defendant on his last application before me and I would have certainly done so had full arguments were had then.

15. I should also mention that on the face of it there are triable issues before the Court.

16. For the above reasons, my order dated 25th of April 1984 striking out the defence and counterclaim and entering judgment for the plaintiff is hereby set aside on term that the defendant shall pay into court the sum of $42,589.33 within 7 days from today, failing which the said order will not in effect be set aside.

17. Whether I should impose the term as I did gave me considerable concern. The obvious grounds for imposing a term of payment into court in the case of this nature is to ensure, to force if one likes, the non-complying party to give the particulars. Another good reason is to cover the possibility of empty judgment if there be such indication. Obviously, these two elements are absent in the case. I am told that in fact the particulars asked for had been supplied to Mr. Wong the day before the last hearing and there is no evidence at all of empty judgment. However, Samuels v. Linzi Ltd. (C.A.) [1980] 2 W.L.R. 836 at 845 and 846, makes sufficiently, clear, in my opinion, that the Court does have jurisdiction to impose the stringent term of payment into court to make it a point that rules of pleadings are there to be complied with - Lord Justice Roskill at 845:-

"        To say that there is jurisdiction to extend the time where an 'unless' order has been made and not complied with is not to suggest - let this be absolutely plain - that relief should be automatically granted to parties who have failed to comply with the orders of the court or otherwise than upon stringent terms either as to payment of costs or as to bringing money into court or the like. Orders as to time, and in particular as to the time for delivery of pleadings and particulars are made not to be ignored but to be complied with ....."

18. In this instant case, as I have said earlier on, the conduct of the defendant and circumstances of delay deserved him little sympathy and I think it is a matter of principle that I should impose this term.

19. As to costs, the costs awarded to the plaintiff at the last hearing will stand. In all the circumstances of the case including that no full legal arguments were heard at the last hearing and the defendant was not entirely to be blamed for the delay between then and now, I make no order as to costs for today's hearing.

20. This case will be restored upon payment in and the Deputy Registrar is to fix new hearing dates.

21. I am just told by Counsel and Solicitors that three days will be required.

22. Upon further hearing Counsel and Solicitors and on reflection, I vary my order of payment in to the sum of $20,000,00 only. The reason for this is: that the conduct of the defendant is not so appalling on reflection as to warrant full payment in especially in the light of an existing counterclaim which, as I have said, gives rise to triable issues.