Massmutual Asia Ltd v. Chan Man Lai

CACV 181/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 181 OF 2005

(ON APPEAL FROM DCCJ 2700 OF 2002)

BETWEEN

Before : Hon Cheung JA, Hon Yeung JA and Hon Yam J in Court

Date of Hearing : 7 December 2006

Date of Decision : 7 December 2006

Date of Reasons for Decision : 13 December 2006

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REASONS FOR DECISION

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Hon Cheung JA :

1.The defendant applied for leave to appeal to the Court of Final Appeal against our judgment dated 22 September 2006.  We refused the application and these are my reasons.

Notice of Motion

2.Despite the clear words of section 22(1) of the Hong Kong Court of Final Appeal Ordinance the defendant did not specify in the Notice of Motion (‘Motion’) under which limb of section 22(1) the application was based upon.  The case in dispute clearly did not come within the $1 million threshold.  Neither did the Motion specify what, if any, were the matters of great general or public importance.  Nor did it say that the application comes within the ‘or otherwise’ ground.

3.Instead the Motion first set out the three grounds upon which the defendant claimed that this Court had erred, then it identified three matters which it said to be ‘questions of law to be certified for appeal to the Court of Final Appeal’.  The questions had been modified in a draft Amended Motion and they were :

‘1. whether there can be joinder of issue, expressed or implied, on a counterclaim;

2. whether the Court should make a finding of fact which is not the parties’ pleaded cases or suggestions, when such fact is inconsistent with the unchallenged and uncontradicted evidence of the witnesses of a party against whom the fact was found, and when the fact is within the knowledge of the other party but that party failed to give the necessary evidence;

3. whether, when the Defendant was taken by surprise at the trial with the Plaintiff’s evidence, it is necessary for the Defendant to do everything that he may, including

(1) making an application for adjournment for the purpose of seeking rebuttal evidence when the Defendant did not even know what evidence to look for at that stage; and/or

(2) during the adjournment for submissions, obtain the necessary rebuttal evidence which he may or may not be able to obtain,

in order that he might be seen as having discharged his due diligence referred to in the first condition in the Ladd v Marshall test.’

4.The Motion or its amended form clearly did not fulfil the requirements of section 22(1).  Despite Mr. Simon Lui, counsel for the plaintiff, drawing specifically in his written submission to the need by the defendant to identify matters of great general or public importance, none was provided by the defendant prior to the hearing of the application.  While a litigant in person may not be aware of the statutory requirement, the defendant was legally represented and this omission was clearly not acceptable.

The three grounds

5.Instead Mr. Leung, counsel for the defendant, only stated at the hearing that he was relying on the great general and public importance ground and he relied on the three ‘questions of law’ as the basis of his application.

6.The second and third questions clearly are not matters of great general or public importance. 

Order 18 Rule 14(3)

7.On the face of it, the first question appears to be covered by this limb, but the actual pleading does not bear out this ground. 

8.This question concerns the operation of Order 18 Rule 14(3) of the Rules of the District Court which provides that there can be no joinder of issue, implied or expressed, on a statement of claim or counterclaim.  Mr. Leung had not argued on this rule at the appeal. 

9.The starting point, as stated at paragraph 7 of the judgment, is that the defendant complained that the plaintiff had not expressly denied his case on the repudiation of the agreement and hence was deemed to have admitted his case.  The defendant filed a Re-Amended Defence and Counterclaim.  Paragraph 4 of the Defence pleaded ‘Wrongful termination’ by the plaintiff of the agreement.  Then under paragraph 10 of the Counterclaim the defendant repeated, among other things, paragraph 4 of the Defence and further pleaded that ‘By filing and serving this 2^nd Amended Defence and Counterclaim, the Defendant accepted the repudiation of the Plaintiff’.

10.There could not be any deemed admission of the plea of repudiation in the Defence because an express joinder was pleaded in paragraph 1 of the Amended Reply.  By this, the allegation of repudiation contained in paragraph 4 of the Defence was denied.  At paragraph 4 of the Amended Reply, the plaintiff in response to paragraph 4 of the Amended Defence, further pleaded that it was entitled to terminate the agreement.  Nor could there be any ‘deemed’ admission of the allegations contained in the Counterclaim because paragraphs 7 and 8 of the Amended Defence to Counterclaim pleaded that :

‘ 7. The Plaintiff repeats the Amended Reply hereinabove.

8. Paragraph 10 of the 2^nd Amended Counterclaim is denied ......’

11.No question of ‘a joinder of issue, expressed or implied, on a counterclaim’ has ever arisen in this case.  The plaintiff did not plead in the Amended Defence to Counterclaim a joinder of issue on the counterclaim.  I have not said that it had or that it was entitled to do so.  The Amended Defence to Counterclaim first repeated the Amended Reply which of course contained the earlier express joinder of issue of the Defence but that joinder was only in respect of allegations contained in the Defence.  This included specifically the denial of the allegation of repudiation or ‘wrongful termination’.  But that was different from pleading a joinder of issue to the Counterclaim.  All that the plaintiff had done was relying in a condensed manner on what was already pleaded by way of denial in the Amended Reply together with other denials as its defence to the Counterclaim.  In this situation I fail to see how the pleading would engage the operation of Order 18 Rule 14(3) at all.

Application dismissed

12.This being the case no question of great general or public importance is involved with the first question.  Accordingly the application was dismissed with costs to the plaintiff.

Hon Yeung JA :

13.I agree.

Hon Yam J :  

14.I also agree.

Mr. Simon K. M. Lui, instructed by Messrs Lau, Chan & Ko, for the Plaintiff

Mr. Kelvin Y. C. Leung, instructed by Messrs Poon & Cheung, for the Defendant