United Asia Trading Co (A Firm) v. Timur Jaya Co Ltd

Case No.HCA 2993/1980[1980] HKLR 768

Court

High Court CFI

Date—

Judge—

Case Document

100%Judiciary

HCA002993/1980

IN THE SUPREME COURT OF HONG KONG

HIGH COURT CIVIL ACTION NO. 2993 OF 1980

BETWEEN
	United Asia Trading Co. (a firm)	Plaintiffs
	and
	Timur Jaya Co. Ltd	Defendant

Coram: Mr. Commissioner Hooper in Chambers

Date of Judgment: 8th October 1980

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JUDGMENT

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1. This is an appeal from the order of the Registrar ordering that judgment be entered for the plaintiff against the defendant with damages to be assessed and costs. The defendant/applicant now applies that that order of the Registrar be set aside and that the plaintiff's application for judgment be dismissed and that the defendant may be given leave to defend this action.

2. The writ of summons was filed on the 9th June this year and served on the defendant company at 3 p.m. on the 10th June. The Statement of Claim is in the following terms:

"	1. By a contract in writing dated the 1st March 1980 and made between the Plaintiff and the Defendant agreed to sell and the Plaintiff agreed to purchase 500 metric tons of semi-refined paraffin wax melting point56^o - 58^oC (hereinafter called 'the said goods') at the price of US$760.00 per metric tons C.I.F. Hong Kong to be delivered by the Defendant on or before the 30th April 1980 and the Plaintiff will refer at the trial to the said contract for its full terms and effect.
	2. At the time of the said contract the Defendant knew the said goods were required by the Plaintiff for resale purpose.
	3. The Defendant has delivered 100 metric tons of the said goods and failed to deliver to the Plaintiff the remaining 400 metric tons of the said goods.
	4. Item 3 of the contract provides inter alia that if the Defendant cannot deliver the goods in the mentioned time, the Defendant must compensate 10% of total amount of the contract to the Plaintiff.

PARTICULARS

	Contract amount
	US$760.00 x 400 metric tons = US$304,000.00	10%	US$30,400.00

	5. By reason of the Defendant's breach, the Plaintiff has suffered a loss of profit.
	And the Plaintiff claims:-

	(1)	The said sum of US$30,400.00 mentioned in paragraph 4,
	(2)	Or damages to be assessed,
	(3)	Costs of this action."

3. The defendant entered appearance on the 14th June this year and filed a Defence and Counterclaim on the 19th July this year having obtained the consent of the solicitors for the plaintiff on the 12th July 1980 for the Defence to be filed out of time.

4. The Defence and Counterclaim is in the following terms:

"	DEFENCE
	1. Subject to paragraph 4 hereof, the Defendant admits the contract referred to in paragraph 1 of the Statement of Claim.
	2. The said contract contains, inter alia, the following terms:-

	(a)	Payment for the said goods should be by irrevocable letter of credit to be furnished to the Defendant not later than the 20th day of March, 1980 and not otherwise;
	(b)	Partial shipments are allowed.

	3. In breach of the term pleaded in paragraph 2(a) hereof, the plaintiff wrongfully failed to furnish to the defendant an irrevocable letter of credit conforming in all respects to the term pleaded in paragraph 2(b) hereof on or before the 20th day of March, 1980 and had thereby wrongfully repudiated the said contract. In the premises the defendant was not liable to deliver the said goods or any part of them to the plaintiff.
	4. Further or in the alternative, if, (which is denied), the defendant was liable to deliver the goods comprised in the said contract to the plaintiff, the defendant says that by an oral agreement made on or about the 26th day of April, 1980 between the defendant and the plaintiff (through one LEE Chun-cheong, its servant or agent), it was agreed that the said contract should be varied in the following respect, namely, that the time for delivery by the defendant of part of the goods comprised in the said contract, namely, 300 metric tons thereof, should be extended until 31st May, 1980.
	5. In breach of the said contract as varied aforesaid, by letter dated the 15th day of May, 1980 from Messrs. K. Y. Woo & Co., solicitors acting for and on behalf of the plaintiff and addressed to the defendant, the plaintiff wrongfully and unlawfully repudiated the said contract as varied aforesaid, which repudiation the plaintiff hereby accepts by issue of the Counterclaim herein.
	6. Save that it is admitted that at the time of the said contract the defendant knew that the said goods were required by the plaintiff for re-export purpose, paragraph of the Statement of Claim is denied.
	7. Save that it is admitted that the defendant delivered 100 metric tons of semi-refined white paraffin wax to the plaintiff, paragraph of the Statement of Claim is denied.
	8. The sum of US$30,400 claimed is irrecoverable as being penalty in law. Save as aforesaid paragraph 4 of the Statement of Claim is admitted.
	9. No admission is made as to paragraph 5 of the Statement of Claim.
	10. Save as hereinbefore expressly admitted, each and every allegation contained in the Statement of Claim are denied as though the same were set out herein and traversed separately.
	COUNTERCLAIM
	11. The defendant repeats paragraph 1 to 5 inclusive of the Defence.
	12. By reason of the matters pleaded in paragraph 5 of the Defence, the defendant has suffered loss and damage.
	And the defendant counterclaim:-

	(a)	Damages;
	(b)	Costs. "

5. Mr. LAU for the appellant/defendant bases his application on two grounds (1) that the summons for summary judgment under Order 14 had not been brought within the proper time, and (2) alternatively, the Registrar erred in the principles which he applied when he ordered that summary judgment ought be given to the plaintiff.

6. Mr. LAU has drawn the court's attention to the time at which the application for interlocutory judgment was made. In fact his submission in this respect is one-day out because he took it that the specially endorsed writ was served by the plaintiff on the defendant on the 9th June this year whereas in fact the endorsement on the writ shows that it was served on the 10th June as I have said above. This means that the time limit for entering appearance was the 18th June and that the time for filing a Defence was 14 days after that namely the 2nd July this year. As can be seen above the Defence was not in fact filed until the 19th July, but this was done with the consent of the plaintiff. Despite all this, it was not until the 13th August this year that the plaintiff took out an order 14 application for summary judgment.

7. Mr. LAU submits that this application is brought too late and that nowhere in the affidavit in support of the application was there any explanation for the delay in bringing the application. He relies on the case of McLardy v. Slateum 24 Q.B.D. 504.

8. Mr. HO for the respondent/plaintiff also relies on this case to support his proposition that an application of this sort may be made after the defence has been filed by even as long as one month.

9. Order 14 (1) of the Rules of Supreme Court is in the following terms :-

"Where in an action to which this rule applies a Statement of Claim has been served on a defendant and that defendant has entered an appearance in the action, the plaintiff may, on the ground that the defendant has no defence to a claim included in the writ, or to a particular part of such claim, or has no defence to such a claim or part except as to the amount of any damages claimed, apply to the court for judgment against that defendant."

10. It will be appreciated that the application cannot be made before the defendant has been served and has entered an appearance in the action, but there is nothing in the rule itself which states a time limit within which the application must be made. The only authoritative statement on the question of time appears be that of Baron Pollock in the case of McLardy and Slateum referred to above. He gave a short judgment in that action and it is set out below.

"	This is an appeal from an order of Field, J., at chambers, setting aside an order of a master, who, upon an application under Order XIV., had given the defendant leave to defend upon paying the amount of the claim into court.
	The order of Field, J., proceeded upon his view of the proper construction of Order XIV., r.1, namely, that the plaintiff was bound to make his application for summary judgment before the defendant had put in any statement of defence.
	We took time to consider our judgment, principally because we were desirous of ascertaining what was the practice followed by other judges, and by the masters, in consequence of being informed by counsel that Field, J., had long ago decided, in an unreported case, that the application must be refused if made after delivery of a statement of defence. We have made those inquiries, and learn that the view of Field, J., still is that the intention of Order XIV. was that the plaintiff must make his application before delivery of a statement of defence; but that in peculiar circumstances it may be made after, as where the defendant has delivered his defence before the expiration of the usual time, for the very purpose of defeating such an application. The view taken by other judges, and by the masters, is that the intention of Order XIV., r.1, was that the plaintiff should apply within a reasonable time after the appearance of the defendant, but that it very often happens that a defence, which has been delivered, itself discloses facts which make an application under Order XIV. right and proper. We think that this is the proper construction of the rule.
	Although the primary intention of the rule may be that an application should be made before a defence has been delivered in the ordinary course, yet we think that it is not in all cases compulsory. Therefore our judgment upon this point of law and practice is that a plaintiff is not necessarily too late in making his application under Order XIV., r.1 because a defence has been delivered. The master was right in considering the facts and making an order, and this appeal must be allowed.
	If a plaintiff makes his application after the ordinary time, the onus is on him to show that the delay is justifiable under the special circumstances of the case."

11. It clearly stated in that judgment that the view taken by the judges and masters at that time was that the intention of order 14 rule 1 was that the plaintiff should apply within a reasonable time after the appearance of the defendant. If however the plaintiff makes his application after "the ordinary time" the onus was on him to show that the delay is justifiable under the special circumstances of the case. It was not disputed by Pollock B. in his judgment that the primary intention of the rule may be that in the ordinary course of things an application should be made before a defence had been delivered. I think in considering a matter of this sort one should take into consideration that an order 14 application should only be made where the plaintiff or someone on his behalf can swear an affidavit that he verily believes that there is no defence to the claim. This he should be able to do, in the ordinary course of things, before any defence has been filed.

12. It does seem to me to be an abuse of this particular process, if a plaintiff delays without making an application under order 14 in the ordinary course of time, and where not only having failed to make such an application, he has consented to an extension of time for filing the defence, and in these circumstances he then applies some 25 days after the defence was filed for judgment under order 14. In my view Mr. LAU is quite right that this application has been brought after the ordinary time, and the onus is on the plaintiff to show that the delay is justifiable under the special circumstances of this case. There is nothing in the affidavits to show that the delay is justifiable in the present case. On this ground alone I allow the appeal and set aside the order of the Registrar.

13. So far as the merits are concerned I do not propose to say anything at this stage, except that it would appear from the arguments that the pleadings do not reflect with absolute accuracy the contentions of the parties. If the plaintiff maintains that the defendant's pleading is vexatious or an abuse of process of the court then it is open to them to file an application under order 18 rule 19 and of course it may be at that stage that the court may feel inclined to order that the pleadings be amended.

14. I therefore allow this appeal and set aside the orders of the Registrar and award costs of this application and of the hearing before the Registrar to the defendant in any event.

	(N. B. Hooper)
	Commissioner of the High Court

Representation:

Mr. Lau (Deacons) for Appellant/Defendant

Mr. Ho (K.Y. Woo & Co.) for Respondent/Plaintiffs

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