Silktex Trading Co v. Kong Sung Sin t/a Darwin Fashion Garment Factory and Another

HCA006303/1985

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Coram: The Honourable Mr Justice Jackson-Lipkin in Chambers

Date of Hearing: 25 November 1985 at 10:00 a.m.

Date of Decision: 25 November 1985 at 12:10 p.m.

Date of Delivery of Reasons: 25 November 1985

Appearances:
Yam for the Plaintiff.
(Raymond C.K.) Ho for the 1st Defendant.
The 2nd Defendant was not represented and did not appear.

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REASONS FOR DECISION

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1. This is an appeal under Order 58 against two orders made by Master Betts on 22nd and 23rd November, 1985 in respect of execution by a writ of fi. fa. on a judgment granted in default on 8th November, 1985.

2. It behoves me to recite the chronology, in order to explain what has happened.

3. The acknowledgement of service, under paragraph 3, indicated that the defendant intended to apply for stay of execution. This being a claim for a liquidated debt, the provisions of Order 13 rule 8 immediately came into force, and there was an "automatic" stay of execution for 14 days from 6th November - the date of the acknowledgement of service.

4. For reasons which are still beyond me, time is governed by provisions found in three different places: In section 71 of the Interpretation and General Clauses Ordinance, in section 31 of the Supreme Court Ordinance and in Order 3 of the Rules of the Supreme Court: Why they have not been consolidated into a single section or a single rule is a matter not for me, but for the Law Reform Commission or the Supreme Court Rules Revision Committee. Be that as it may, 14 days from the acknowledgement of service expired on 20th November - see Order 3 rule 2(3), R.S.C.. The 1st defendant issued the summons to which I have referred above, at 3:20 p.m. on 20th November, 1985, (although, according to Messrs. Tony Kan & Ho, such summons was "filed" at that time and on that day). The summons, however, was not served on the 1st defendant until 5 p.m. on 21st November, and, by reason of Order 65 rule 7, it took effect on the next following day, that is to say 22nd November. The immediate consequence of that was that the automatic stay imposed by Order 13 rule 8 expired by effluxion of time. Mr Ho, in the course of an admirably presented submission, sought to persuade me that the mere issue of the summons within the 14 days period was sufficient to continue the stay, and, in so doing, he relied upon the last sentence of note 13/8/1 on p.126 of The Supreme Court Practice 1985. But no footnote, however eminent the writer thereof, can override clear express wording in a rule itself. Rule 8 says, "if within that time the defendant issues and serves ..... a summons for such stay .....". "Issues and serves", in my judgment, means issues and serves. "If within that time", in my judgment, governs both the issue and the service of the summons, and, if either falls without the 14 days, the automatic stay does not continue, and a separate application for a further stay will, in such circumstances, be required.

5. But there was argued before me a point of greater importance, and it was the one that weighed most heavily with Master Betts. The point is this: Rule 8 says, "where judgment ..... is entered ..... against the defendant who has returned ..... an acknowledgement of service containing a statement to the effect that, although he does not intend to contest the proceedings, he intends to apply for stay of execution of the judgment by writ of fieri facias, execution of the judgment of such writ shall be stayed for a period of 14 days from the acknowledgement of service .....". In this case, the plaintiff caused the writ of fi. fa. to be issued within the 14 days, but did not attempt to levy execution by the use of that writ until after the expiry of the 14 days, and the non-renewal thereof by a timeous issuance and service of a summons such as I have described above. Master Betts, it seems, took the view that no writ of fi. fa. could be issued during those 14 days, and that is ratio of his decision of 23rd November.

6. I have come to a contrary view and, therefore, it behoves me to give my reasons in detail.

7. First and foremost I rely on the wording of the rule itself: What rule 8 says is this, "execution of the judgment by such a writ shall be stayed for a period of 14 days ....."."Such a writ" in the rule means a writ of fi. fa.. What the rule does not say is, "no such writ shall be issued for a period of 14 days ......".

8. Order 45 rule 11 provides for the enforcement of a judgment "by one or more of the following means", one of which is a writ of fi. fa.. Another is the appointment of a receiver. In In re Shephard: Atkins v. Shephard (1889) 43 Ch. D. 131, Cotton, L.J. said, at p.135, when dealing with execution and equitable execution:-

"It has often been used by judges, and occurs in some orders, as a short expression indicating that the person who obtains the order gets the same benefit as he would have got from legal execution. But what he gets by the appointment of a receiver is not execution, but equitable relief, .....";

Bowen, L.J., at p.137, said:-

"It is urged that this can be done, because the appointment of a receiver is only equitable execution, that at common law execution could be issued without notice to any one, and that therefore equitable execution may be so issued. ..... But even supposing that legal execution could be issued ex parte, it does not follow that what is called equitable execution can be so issued. Equitable execution is not like legal execution; it is equitable relief, which the Court gives because execution at law cannot be had. It is not execution, but a substitute for execution.";

Fry, L.J., at p.138, said: -

"The idea that a receivership order is a form of execution is in my opinion erroneous. ..... It has often been spoken of by judges as "equitable execution", but I am afraid that this concise expression has led to the erroneous idea that the appointment of a receiver is a form of execution .....".

Kekewich, J., in Blackman v. Fysh [1892] 3 Ch. D. 209 sought, at pp. 217/8, to distinguish those observations of the Court of Appeal, but that was in a wholly different context, as appears from the decision of the Court of Appeal upholding his decision, which appears at pp. 223/5: I find that case of no assistance to me in the present one. In John Carlbom & Co., Ltd v. Zafril (Owners): The Zafril [1960] P.1, Hewson, J., when dealing with the question of whether or not the arrest of a ship could be regarded as execution, read and accepted the definition of "execution" in Halsbury's Laws of England: What Hewson, J., said, at p.40, was "I accept that definition .....". The same definition now appears in Halsbury's Laws of England; 4th Ed.; vol. 17; p.232; at para. 401; thus:-

"The word "execution" in its widest sense signifies the enforcement of or giving effect to the judgments or orders of courts of justice In a narrower sense, it means the enforcement. of those judgments or orders by a public officer under the writ of fieri facias, possession, delivery, sequestration, fieri facias de bonis ecclesiasticus, etc. .....".

In In re Overseas Aviation Engineering (G.B.) Ltd [1963] Ch. D. 24, Lord Denning, M.R., at p.29, said:-

Lord Denning went on to refer to the judgment in Blackman v. Fysh to which I have already referred, and continued,

"In cases when execution was had by means of a common law writ, such as fieri facias or elegit,it was legal execution: when it was had by means of an equitable remedy, such as the appointment of a receiver, then it was equitable execution. But in either case it was "execution" because it was the process for enforcing or giving effect to the judgment of the court.

Applying this meaning of the word "execution" I should have thought it plain that when a judgment creditor gets a charge on the debtor's property, it is a form of "execution": for it is a means of enforcing the judgment.".

In summary, therefore, in my judgment, a judgment creditor is at liberty to issue a writ of fi. fa. during the period of automatic stay under Order 13 rule 8, provided that the writ is not passed to the bailiff, and that no enforcement of the terms of the writ is attempted during that period. That is also a matter of convenience, in that it would enable, and, I hope, does enable, a judgment creditor to levy execution at the moment the period of the stay expires.

9. For all those reasons, I allow this appeal: By consent the time for service of the Notice of Appeal is abridged to to-day; the orders of Master Betts are set aside; the plaintiff is at liberty to levy execution forthwith against the 1st defendant and the plaintiff will have the costs of this application and of the hearing before Master Betts on 23rd November.

10. There having been no order for costs on 22nd November, the remainder of prayer 5 of the present Notice of Appeal is refused.

11. When I first read prayer 3 of the Notice of Appeal, I was somewhat confused, for it did not appear to reflect the order appealed from: That was a semantic error, and, by consent, I permitted that prayer to be amended by the insertion of the words "inter alia" between "that" and "there" in the 2nd line.

12. There being no objection, I order that there be a Certificate for Counsel in respect of the appearances before Master Betts on 23rd November.

Representation: