Irmco International Ltd v. Tom Flynn

DCCJ002695/1973

IN THE DISTRICT COURT OF HONG KONG

HOLDEN AT VICTORIA

CIVIL JURISDICTION

ACTTON NO. 2695 OF 1973

-----------------

-----------------

Coram: Liu, D.J. in Chambers.

Date of Judgment: 31st December, 1973

-----------------

JUDGMENT

-----------------

1. In this case, the Plaintiff sues on a Promissory Note, and by his Defence and Counterclaim the Defendant pleads a bare denial but counterclaims for an unspecified sum and damages for breach of contract. Mr. Fairbairn for the Plaintiff criticises, and quite rightly so, the Defence and Counterclaim as pleaded, but he is prepared to allow it to stand unchallenged so as to unable all the disputes between the parties to this action to be once and for all adjudicated. The Defendant applies for judgment on his Counterclaim in default of a defence thereto, and the Plaintiff applies for leave to file out of time his "Defence to the Counterclaim and Counterclaim to Counterclaim". No date has been fixed for hearing of this action, and obviously no injury caused to the Defendant by the Plaintiff's admitted delay cannot be adequately compensated for by costs. I would therefore grant leave to file the "Defence to the Counterclaim" within 7 days from to-day. With this "Defence to the Counterclaim" there is now no fault of pleading to the Defendant's Counterclaim, and the Defendant's summons to enter judgment is thus blocked by the indulgence so granted to the Plaintiff and cannot succeed.

2. The remaining matter is the Plaintiff's proposed "Counterclaim to Counterclaim" which is in substance a counterclaim for up to 10,000.00. Mr. Fairbairn relies on the passage against the Side Note 15/2/5 of Volume 1 of the 1973 White Book which reads as follows:-

"Para. (2), supra. adopts and probably extends the previous law, and enables the plaintiff to raise a counterclaim to the counterclaim raised by the Defendant against him, even though the Plaintiff's counterclaim may be no more than a mere protection against the Defendant's counterclaim, ........."

Whilst this passage puts the matter in the negative and does not explicitly exclude the setting up of a cross action by a "Counterclaim to a Countercliam", the authorities cited in that very passage say otherwise. See Toke v. Andrews (1882) 8 Q.B.D. 428, Renton Gibbs & Co. Ltd. v. Neville & Co. (1900) 2 Q.B. 181, C.A. , and Lewis Falks Ltd. v. Jacobwitz (1944), 171 L.T. 36. Romer L.J. in Renton's case at p. 187 put it neatly thus:-

"If a plaintiff when he sees a counterclaim finds that he has omitted to riase a claim in addition to that already raised in the statement of claim, he ought, as a rule, so raise that claim by amendment of his statement of claim. That is the regular course, and that is what was directed to be done in the case of James v. Page before Manisty and Stephen J.J. To this rule there are exceptions. If on looking at the nature of the additional claim which the plaintiff wants to set up it appears to be one that cannot be added to the original statement of claim without inflicting hardship and injustice on the plaintiff, and further that it would be an injustice not to allow him to set it up, the Court has jurisdiction to allow him to set it up in his reply ...................................................................... In this case, it is impossible to require the plaintiffs to amend their statement of claim and begin all over again, and it would be an injustice not to allow them to set up the claim as an answer to the counterclaim."

Collins L.J. at p. 186 in the same case observed:-

"..... it would be unjust to the plaintiffs to make them set up as a claim that which they only want as a defence and a shield to the counterclaim."

3. The position is summed up by a footnote to the sentence that "He (A plaintiff) may even in rare cases counterclaim to it (a defendant's counterclaim)" at p. 234 of Odgers on Pleading and Practice 20th Ed.:-

"e.g. , if any cross-claim has accrued to him either before or after the issue of the writ, which arose at the same time and out of the same transaction as the counterclaim and is not strictly pleadable as a set off, provided that the plaintiff desires to use such cross-claim merely as a shield against the defendant's counterclaim; otherwise he must amend his statement of claim or issue a fresh writ."

4. P. 696 of Bullen & Leake's Precedents of Pleadings 11th Ed. also carries a passage to similar effect.

5. In the circumstances, I would not allow the filing out of time or at all of the Plaintiff's proposed "Counterclaim to Counterclaim" which is a sword rather than a shield. I will now entertain submissions on the question of costs.

Representation:

Mr. Fairbairn of Fairbairn & Kwok for Plaintiff

Miss Smith of Gordon Hampton & Winter for Defendant