Mak Chun-po v. John David Ip

CACC000064/1979

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Coram: Roberts, C.J., Leonard & Li, JJ.

Date of Judgment: 30 October 1979

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JUDGMENT

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Leonard, J. :

1. The papers before us appear to me to disclose a sorry state of affairs. The writ of summons in this action was issued on the 30th of August 1978. By it the plaintiff claimed possession of the premises (to which I will refer to as "the premises") on the basis that the same had been transferred for good consideration by the defendant to the plaintiff at an earlier date and that some two months after the transfer the defendant had gone back into possession of them. The relief sought was possession and an injunction to prevent the defendant continuing in the premises.

2. The defence and the counterclaim was not filed or served until the 28th of November 1978, just three months later. It is a most complex document, in which the defendant puts forward an explanation as to his re-occupation of the premises into which it is unnecessary to go save to remark that it indicated that the premises were transferred as a result of an agreement between the plaintiff and the defendant entered into because of misrepresentations which were stated to be fraudulent or alternatively innocent misrepresentations. Furthermore it alleged that the assignment was invalid by reason of the fact that an unconscionable bargain had been struck. By a counterclaim in which the plaintiff in the original summons, another director of Asia Stock Exchange Ltd. that company itself and a Mr. John Yip a solicitor were named as defendants, the original defendant sought relief on the basis that he had at about the date of the transfer of the premises wished to join a stock exchange which would carry on business in Hong Kong and it was suggested to him by the plaintiff and the second defendant to the counterclaim that they could arrange this for $180,000. As a result of these suggestions he made the transfer of the premises then valued at $150,000 and paid over a sum of $30,000.

3. The defendant, Mr. Yip, was joined, not because it was alleged that he was a party to the impugned transaction, but because it was alleged that he while acting for both parties had been negligent in dealing with the defendant's affairs. There was in due course a reply and defence to the counterclaim served on the 9th February, 1977 - another two months had passed. Meanwhile the defendant had applied to the District Judge to transfer the case to the High Court. This application was dismissed on the 15th January 1979. That order was not appealed.

4. On the 5th of March 1979 the order appealed against was made. The sole applicant in the summons leading to that order was Mr. Yip, (the third defendant to the counterclaim) and the sole respondent was the defendant. The application was for an order that the name of the third defendant be struck out as a party to this action and that the counterclaim against the third defendant be "excluded" on three given grounds. The first was that it was inconvenient to bring and join the counterclaim against the third defendant with the claim of the plaintiff against the third defendant with the claim of the plaintiff against the defendant in the action; the second that it would cause embarrassment, delay and prejudice to the third defendant by joining and trying the counterclaim against all the defendants including the third defendant therein together with the plaintiff's claim in this action and the third that the issues raised by the plaintiff in the counterclaim against the third defendant were entirely different from the issues between the plaintiff and the defendant in this action as between the plaintiff and the first, second and fourth defendants in the counterclaim.

5. The application was supported by the affidavit of Mr. Yip and the matters raised in that affidavit were substantially in further argument of the grounds I have already quoted. The principal contention of Mr. Yip was that the matters alleged by the defendant constituted breaches of professional duties owed by him towards his clients in connection with the transfer and other documents made and signed by the defendant and that there were no allegations against him in relation to or in connection with the misrepresentations which may have led to the transfer.

6. Leave to appeal from this order was granted on the 29th of March 1979. An application was made to extend the time for the service on the Registrar and other parties to be served with the notice of appeal but this application was not made until late August and was not considered until the 28th August 1979, a delay of five months. The excuse for delay which was given was that the solicitors for the defendants to the counterclaim were confused as to which counsel was to be involved. I personally would consider that a delay of perhaps two days might properly be attributed to such a confusion but I cannot see any justification for a delay as long as five months.

7. Be that as it may the District Judge made an order extending the time. In our view he had not power to make that order. The application for the extension should have been made to this court. However, at the hearing before him no objection to the application was made on the ground that he had not power to make it. A belated application was made to us to extend the time under Order 3 rule 5 and we have granted it.

8. One of our difficulties in this case arises from the extreme brevity of the judge's notes. He does not record any argument advanced to him nor does he give any reasons for the decision at which he arrived. At one time this might have been regarded as fatal to the appellant's appeal because the decision was a discretionary one but that time has long since passed. As is clear from the case of Evans v. Bartlam⁽¹⁾, the view which a court of appeal may now take as to interference with the discretion of the single judge in interlocutory matters is much more liberal than it was in the 19th century. In that case it was said :

"It is clear that the Court of Appeal will not interfere with the discretion of a judge acting within his jurisdiction unless the Court is clearly satisfied that he was wrong but the court is not entitled simply to say that if the judge had jurisdiction and had all the facts before him, the Court of Appeal cannot review his order unless he is shown to have applied a wrong principle. The court must, if necessary, examine anew the relevant facts and circumstances in order to exercise a discretion by way of review which may reverse or vary the order. Otherwise in interlocutory matters the judge might be regarded as independent of supervision."

Similarly in In re O (Infants)⁽²⁾ Davies L.J. said at page 754

"the climate of opinion with regard to this matter has changed drastically"

and at page 755

"In my considered opinion the law now is that if an appellate court is satisfied that the decision of the court below is wrong it is its duty to say so and to act accordingly."

We therefore consider that we are entitled to look at all the relevant facts and circumstances and this we have done through a careful examination of the record particularly the defence and counterclaim.

9. We consider that not only does the case against the third appellant arise out of the same series of transactions as does that against the other defendants to the counterclaim but that the two are quite inextricable from one another. They are as closely interwoven on the facts alleged as any different causes of action might be. If separation was ordered the conduct of the action against the first, second and fourth defendants to the counterclaim would require the evidence of the third defendant as an absolute necessity if justice were to be done. Our duty is to interfere if we consider that our "discretion by way of review" can properly be exercised only by doing so and we have come to the conclusion that the danger of serious injustice if the case were split into two parts would be so great as to overweigh all other considerations. It is unwise, as I see it, to deal further with the facts and the likelihood of their truth at this stage. The less said about those questions the better.

10. We consider that the appeal should be allowed and the decision and order of the judge made on the 5th of March 1979 should be reversed.

11. Some difficulties arise as to costs and for my part I should like to hear counsel on the question of costs. (after discussion as to costs)

12. We consider that the applicant should have the costs of the hearing of the 5th of March before Judge Collier and the costs of the hearing of the 29th of March before Judge Liu. The respondent should have the costs of the hearing of the 28th August before Judge Gruden and the applicant to have three-quarters of the taxed costs of today.

Representation:

Mr. Y.C. Mok (Wilkinson & Grist) for appellant.

Mr. A.R. Suffiad (Sousae & Hoosen) for respondent.

(1) (1937) A.C. 473.

(2) (1971) Ch. D. 748