Cordial Manufacturing Co Ltd and Another v. Hong Kong -america Air Transport Ltd and Another

HCA002629A/1972

IN THE SUPREME COURT OF HONG KONG

(ORIGINAL JURISDICTION)

ACTION NO. 2629 OF 1972

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Coram: Trainor J. in Chambers

Date of Judgment: 23rd June, 1973.

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JUDGMENT

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1. The plaintiffs in this case have appealed from a decision of the learned Assistant Registrar whereby he granted, on an application before him under Order 14 of the Rules of the Supreme Court, leave to the defendant to defend unconditionally, other than that he fixed a time limit within which a defence should be delivered.

2. Mr. Ching who appeared for the appellants pointed out that since the application was heard before the learned Assistant Registrar and at which a draft defence, which was exhibited to the affidavit of a Mr. Owen, the then solicitor for the defendant, was considered, a further affidavit had recently been filed by a Mr. Thornhill, member of the firm of solicitors now acting for the defendant, exhibiting a new draft defence. He said that in this affidavit nowhere is there a deposition as to the truth of the facts alleged in it or to a belief in the source of such matters contained in the affidavit as might be hearsay. He pointed out that there has been a considerable change in the defence as now exhibited from that which was before the learned Assistant Registrar, the principal difference being that there had been a new plea added to the effect that the defendants were agents of both the plaintiff and the Third Party. He said that these new matters pleaded were things which were not in fact specially deposed to by the maker of the latest affidavit, Mr. Thornhill.

3. Mr. Ching further argued that in an application such as was before the learned Assistant Registrar the onus was on the defendant to establish that there was a triable issue. He said that such evidence as there is available as to agency is to be derived from an airway bill exhibited, and a circular letter from the defendant company and they clearly establish that the defendants had considered themselves at all times principals and not agents. That in fact there is no defence.

4. Mr. Eddis in reply would stress that the primary, in fact the only concern, of the court in this matter is whether or not there is a triable issue between the plaintiff and the defendant. He referred to the airway bill and to the letters which had earlier been referred to by Mr. Ching. He said, to put it at the lowest, they clearly disclosed that it was possible to interpret from them that the defendant was acting as agent of the plaintiff not as principal.

5. As to the first point raised by Mr. Ching, I think it suffices to say that the affidavit of the then solicitor for the defendant which was before the learned Assistant Registrar contained all the requisite depositions as to the truth of the contents; and where the matter deposed to was hearsay the source of the information and a belief in its veracity was stated. That a fresh affidavit has been filed exhibiting an amended defence is in my opinion irrelevant and I am only concerned with whether or not the learned Assistant Registrar was correct in granting unconditional leave to defend. Indeed, I can see no reason why a draft defence was in fact exhibited before the Assistant Registrar other than as a convenient way of disclosing the defence that existed. All that is required from a defendant is an affidavit disclosing a bona fide defence. Even then a defendant is not rigidly tied to the defence as outlined in the affidavit. In applications under Order 14 the principal consideration is whether or not there is a triable issue. It is clearly open to the Registrar to consider such material as is available to ascertain if a bona fide defence exists. If he is satisfied that there is a bona fide defence he ought to give leave unconditionally to defend. If he personally is of the opinion that it is unlikely to succeed he has a discretion to permit a defence subject to such conditions as he considers ought be imposed. Where, however, it is established that there is a triable issue which will present difficulty in its resolution the learned Assistant Registrar must grant unfettered permission to defend.

6. In this instant case I consider that there are indeed issues of considerable importance to be decided. It is not at all certain or foreseeable what the decision of a trial court will be on them.

7. In the circumstances I dismiss the appeal. I order costs to the defendant in any event and certify for counsel. I direct that the defence herein be filed within 7 days from this date and that the times fixed by the learned Assistant Registrar for the subsequent steps in the procedure be continued.

Representation:

Mr. Charles Ching (D.W. Ling & Co.) for Appellants.

Mr. Eddis (J.S.M.) for Respondent.