Mary L. Lynn v. Consolidated Sales Ltd

IN THE SUPREME COURT OF HONG KONG

(APPELLATE JURISDICTION)

CIVIL APPEAL NO. 7 OF 1970

(On appeal from O.J. Action No. 710 of 1969)

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Coram: Full Court (Scholes, Ag. C.J., Mills-Owens & Pickering, JJ.)

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JUDGMENT

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1. This appeal is against the decision in chambers of Blair-Kerr J. dated the 19th February 1970 on an application under 0.81 r.5(4) of the Rules of the Supreme Court 1967, whereby he found that the appellant had, at all material times, held herself out as a partner in a firm called Wintergreen's Rattancraft "the defendant firm". Whether the corollary of that finding is that were the finding to remain undisturbed the appellant would automatically be liable to the respondent company for the satisfaction of a judgment obtained by that company in an action against one "Turner C. Lynn (a male) trading as Wintergreen's Rattancraft (a firm)", may be open to some doubt but that question need not here concern us.

2. The original Notice of Motion of Appeal dated the 5th March 1970 contained three grounds and was supplemented on the 17th June 1970 by a Notice of two additional grounds of appeal. At the hearing Mr. Litton for the appellant sought leave to introduce these two additional grounds together with yet a third and further additional ground of appeal. Having intimated that we would allow Mr. Litton to argue both the original and the additional grounds of appeal subject to the right of the court to disallow the introduction of the additional grounds after hearing the argument, we then invited Mr. Litton to address us first on the first limb of his third proposed additional ground of appeal since this went to jurisdiction. The complete third proposed additional ground of appeal was as follows:-

"6. That the Court had no jurisdiction under Order 81 rule 5(4) to declare that the Appellant held herself out as a partner on the ground (i) that the Order 81 rule 5(4) did not apply and/or (ii) that the said issue was never raised on the pleadings at the trial of the issue as to whether the Appellant was or was not a partner of the Defendant Turner C. Lynn (a male)."

3. Before dealing with the arguments advanced on this issue by Mr. Litton for the appellant and Mr. Mills-Owens for the respondent we must relate those facts relating to O.J. Action 701 of 1969 which are material to this question of jurisdiction.

4. In that action the respondent in the present proceedings was the plaintiff. The defendant was "Turner C. Lynn (a male) trading as Wintergreen's Rattancraft (a firm)".

5. The action was for the return of a deposit and for damages for breach of contract. On the 3rd of October 1969 summary judgment was entered for the respondent company for $8,000, the amount of the deposit claimed, and for damages to be assessed in respect of the breach of contract. These damages were later certified by the Registrar at $168,234.75. Subsequently, the respondent company took out a Summons under O.81 r.5(4) of the Rules of the Supreme Court addressed to the appellant calling upon her "being a partner of the defendant's firm herein" to show cause why the respondent company should not proceed to execution against her personally for the judgment obtained by that company against the defendant. On the 27th of December 1969 it was ordered that the issue be tried whether the present appellant was liable as a partner or as having held herself out as a partner in Wintergreen's Rattancraft, and the learned judge who tried that issue found, as we have already recited, that the appellant did, at all material times, hold herself out as a partner of Wintergreen's Rattancraft "the defendant firm".

6. It will be convenient here to interpose the history of some of the intermediate steps in the action. The Writ was served on 13th June 1969 and the Indorsement as to Service reads:

"This writ was served by me on the Defendant at 100-C Argyle Street, 9th Floor, Kowloon in the Colony of Hong Kong, by delivering a true copy thereof to him personally who identified himself to me that he was the Defendant herein and by producing and showing to him the original writ of summons on Friday, the 13th day of June, 1969. Indorsed the 13th day of June, 1969."

7. Appearance was entered on the 18th June 1969 in the following form:

"Please enter an Appearance for Turner C. Lynn. (initialled) in this Action

Dated the 18th day of June, 1969."

This document was signed "Turner C. Lynn" and contained the deletion which we have reproduced above.

8. On the 6th of September 1969 a Notice to Act was filed by Messrs. M.K. Lam & Company and is reproduced below:

IN THE SUPREME COURT OF HONG KONG

ORIGINAL JURISDICTION

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9. Five days later a Notice to Act in person was filed and took the form set out hereunder:

IN THE SUPREME COURT OF HONG KONG

ORIGINAL JURISDICTION

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10. For the appellant Mr. Litton contended that the firm Wintergreen's Rattancraft had not been sued and was never a party to the original proceedings. The writ was addressed to Turner C. Lynn (a male) and that description of gender in itself militated against the possibility that the plaintiff company had sought to sue a firm; the Indorsement as to Service referred to service on "him" personally and contained no suggestion that service had been effected upon Mr. Lynn as a partner or a person having the management or control of any firm; appearance had been entered in the name of Turner C. Lynn and the mere addition of the words "trading as" to that gentleman's name upon the writ did not operate to attract the provisions of O.81 r.1 of the Rules of the Supreme Court relating to partners. Mr. Litton referred to the meaning of a 'firm' and a 'firm-name' contained in Section 6 of the Partnership Ordinance, Cap. 38 and to the cases of Ching Mei-bo v. Lai Yuen-wah & others⁽¹⁾, Tak Wo (a firm) v. Lai Ming Tak Kee & C. & Anor.⁽²⁾, and to the observations of Lord Lindley in Western National Bank of City of New York v. Perez, Triana & Co.⁽³⁾ where the Lord Justice said:

".... When a firm's name is used, it is only a convenient method for denoting those persons who compose the firm at the time when that name is used, and a plaintiff who sues partners in the name of their firm in truth sues them individually, just as much as if he had set out all their names."

11. The converse, Mr. Litton argued, was also true and when an individual was sued, neither Section 6 of the Partnership Ordinance nor O.81 of the Rules of the Supreme Court had any application. Moreover, the mere addition to the title "Wintergreen's Rattancraft" of the words "(a firm)" did not render that organization a firm. Mr. Litton referred to Vol. 1 of the Supreme Court Practice 1970 at p.1155 dealing with O.81 where, in the note under "Scope of this Order" it is stated:-

"This Order only applies to firms and single individuals suing or being sued in their firm or trading name, and not to cases where the partners or a single individual are or is sued in their or his individual names or name. For instance, it applies to actions by or against "Jones & Smith", or "John Jones & Co.", or "The Dairy Supply Co.", or whatever other name has been adopted as the firm or trading name, but not to actions by or against John Jones and Thomas Smith sued as individuals, even though the description "trading as Jones & Smith", or whatever the firm-name may be, is added."

12. For the respondent, Mr. Mills-Owens urged that O.81 r.9 of the Rules of the Supreme Court operated to apply r.1 of that Order to an individual carrying on business in a name other than his own and consequently the respondent company had been entitled to proceed under O.81 r.5(4) to claim that the appellant was liable as a partner to satisfy the judgment obtained by the respondent company.

13. Ingenious as this argument is, we are wholly unpersuaded by it. In our view O.81 r.9 applies to cases where an individual trades under a name other than his own and is a procedural rule designed to prevent such a person from escaping liability by reason of his creditor's unawareness of the true name of the person operating the business with which the creditor has been dealing. In such a case r.(9) applies rules (2) to (8) of O.81 so far as applicable but that cannot result in an individual trading in a name other than his own being treated as a firm (which ex hypothesis he is not) for the purposes of execution against alleged partners. In the present case Turner C. Lynn was sued as an individual in his own name, served with the writ as an individual and entered appearance as such. The firm 'Wintergreen's Rattancraft's was never before the court.

14. Since we find the appellant's arguments on this first limb of his third additional ground of appeal convincing, it follows that we grant leave to raise this additional ground of appeal out of time.

15. The appellant must succeed on this issue of jurisdiction. The issue was unfortunately never raised before the learned Judge in chambers but in fact Wintergreen's Rattancraft never had been before the court. It was not open to the Judge to purport to render any alleged partner in that firm liable on the judgment by virtue of such a partnership. It follows that we need not consider the remaining grounds of appeal.

16. The appeal is allowed. The finding of the judge in chambers is set aside and the summons dismissed. On the question of costs we have reached the conclusion that the appellant is to have the costs of the appeal, and that otherwise all costs of and incidental to the issue concerning the liability of the appellant on the judgment are to be born by the parties themselves, i.e., each party bearing their own costs.

Representation:

K. Litton (Philip K.H. ...(illegible) & Co.) for appellant.

Mills-Owens (Deacons) for respondent.

Judgment read by Hon. Mr. Justice Pickering in Court.

(1) 1959 D.C.L.R. p.186.

(2) 1962 D.C.L.R. p.87.

(3) 1891 1 Q.B. p.314.