Ng Lam Shing v. Hing Fat Plastic Factory

IN THE SUPREME COURT OF HONG KONG

(APPEALLATE JURISDICTION)

CIVIL APPEAL NO. 36 OF 1971

(On appeal from K.C.J. No. 4622/70)

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BETWEEN

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Coram: Blair-Kerr, S.P.J. & Huggins, J.

Date: 14 January 1972

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JUDGMENT

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Huggins, J.:

1.  This is an appeal against an order dated 8^th September, 1970 dismissing an application by the Defendants to set aside a judgment of a District Court entered on 6^th July, 1970. The ground of the application was that the judgment “was obtained ex parte by the Plaintiff by fraud”.

2.  This is a most unfortunate case and it is necessary to trace the history of the matter. The action was for the alleged wrongful dismissal of the Plaintiff from the Defendants’ employment and the claim was for arrears of wages and one month’s wages in lieu of notice. Judgment was entered under r.24 of the District Court Civil Procedure (General) Rules 1963 (which have since been amended), the Defendants having failed to appear at the date and time appointed by the writ. On 29^th July, 1970 a writ of execution was issued and on 6^th August the Defendants’ goods were seized in execution. Thereupon the Defendnats paid the amount of the judgment and costs under protest. On 18^th August they took out the application to set aside the judgment.

3.  The Defendants filed affidavits in support of that application. They alleged that the matter had been settled through the good offices of a mediator and that the Plaintiff had not only agreed to withdraw the action but had told the mediator that the Defendants need not appear on the return date. No affidavit was filed in reply. At the hearing of the summons, however, the judge did not consider the merits of the application. His note reads:

“Case already dealt with.
Court functus officio.
Application dismissed”.

4.  It may not be without significance that, as we are told, before the date of the hearing the money paid into court had been paid out to the Plaintiff.

5.  According to the notes of proceedings included in the record of appeal nothing then happened until 1^st September, 1971, when application for leave to file the present appeal was sought and obtained in the District Court. The notes of the judge who heard that application, however, referred to some proceedings on 5^th August, 1971 and as a result of questions put by the court the whole sorry story came out.

6.  It now appears that after the dismissal of the summons under O.13 r.9 the solicitors then acting for the Defendants advised them to obtain legal aid. We are told that application was made to the Director in September, 1970 and that a legal aid certificate was issued in October, 1970. As we understand it, that certificate was for the purpose not of appealing against the dismissal of the summons under O.13 r.9 but for the bringing of a fresh action in the District Court to set aside the judgment on the ground of fraud. Eventually the action came on for trial and the learned trial judge, having been informed that a previous application to set aside the judgment had been made and dismissed, thought that the action was misconceived in that it dealt with issues already determined and he dismissed the action. We are told that at the same time he indicated that he would be disposed to give leave to appeal against the dismissal of the summons under O.13 r.9, but no application being made to him for such leave he did no more. Application was made subsequently to another judge.

7.  What appeared to us, on the papers before us, to be a quite inexcusable delay of very nearly twelve months in the bringing of this appeal is therefore explained and we are not surprised that the Appellants are aggrieved. Whether or not their story is true they were obviously entitled to be heard and they cannot be expected to care about the niceties of the procedure appropriate for them to achieve their end.

8.  We are at a loss to understand why the judge who made the order now appealed from thought that he was functus officio: where there is power to set aside a judgment an application for that purpose is a new proceeding and there must of necessity be power to make an order where the circumstances justify that course.

9.  What we have to ask, however, is whether there was power to set aside the judgment upon the summons which was before the learned judge. The matter is by no means as straight forward as might appear at first glance. The marginal note on the summons indicated that the application was brought under “O.13 r.9 of the Rules of the Supreme Court 1967”. The Rules of the Supreme Court 1967 came into force on 1^st September, 1967 and by virtue of s.25 of the Interpretation and General Clauses Ordinance the Code of Civil Procedure, which, although it had long ago been reduced to the status of subsidiary legislation, previously governed the practice and procedure of the Supreme Court, remained in force until that date, despite the wording of General Notice No. 1342 of 1967. The Code was then revoked. In the District Court the procedure was governed by the District Court Civil Procedure (General) Rules 1963. Rule 9(1) provided:

“Subject to the provisions of the Ordinance and of these rules, the Code as for the time being enacted and save as it therein may otherwise be provided shall apply to proceedings in the court as it applies to proceedings in the Supreme Court with such modifications as are necessary for that purpose”.

10.  Rule 26 expressly provided that O.13 r.7 of the Code, which allowed the court to set aside a judgment where the plaintiff obtained leave to proceed ex parte for want of appearance to the writ of summons, should apply in the District Court. However, the revocation of the Code in 1967 deprived r.9(1) of the District Court Civil Procedure (General) Rules 1963 of any effect until it was amended, with effect from 1^st February, 1971, by the District Court Civil Procedure (Amendment) (No.2) Rules 1970. In the mean time reliance had to be placed on r.10, which provided:

“Subject to the provisions of the Ordinance, in all cases with respect to which no provision is made in these rules or in the Code in its application to the court, the practice and procedure for the time being in force in the Supreme Court in England shall be deemed to be in force in the court subject to the applicability thereof and with such modifications as the circumstances may require”.

11.  In the absence of express provision in the District Court Rules and in view of the revocation of the Code this left only the English practice and procedure as the guide.

12.  It might be arguable that by virtue of r.26 of the District Court Rules the revocation of the Code did not affect the application of O.13 r.7 of the Code in so far as the District Court was concerned. In that event the application should have been made under O.13 r.7 of the Code and not under O.13 r.9 of the Rules of the Supreme Court 1967. If the revocation of the code destroyed the efficacy of r.26 of the district Court Rules, the reference in the summons to O.13 r.9 of the Rules of the Supreme Court 1967” was still wrong: the reference should have been to “O.13 r.9 of the Rules of the Supreme Court 1965 of England”. We will assume that that rule could be applicable “with such modifications as the circumstances may require”.

13.  It follows that in our view unless this summons was amended the learned judge was right to dismiss the application under O.13 r.9, although he dismissed it for the wrong reason. It also follow that we think the solicitor who subsequently advised a fresh action to set aside the judgment may have been justified, in view of the reason given by the judge for dismissing the application under O.13 r.9, in proceeding by way of a fresh action instead of making a further application in the same action. The application under O.13 r.9 of the Rules of the Supreme Court 1967 having been misconceived it would have been proper either to make a fresh application under the correct rule or to bring a fresh action to set aside. There could be no question of there having been a decision of the first application upon the merits so as to constitute a bar to the claim in a fresh action. It was the dismissal of the fresh action against which the Appellant should now have appealed.

14.  This matter has already dragged on in a way which is no credit to the administration of justice and we think that in order that there may be an early determination of the real issue between the parties we ought to invite the Appellants here and now to move the court for leave to appeal against the dismissal of their fresh action. It will, of course, be necessary for us to hear the Respondent upon any such application but we think that sooner or later the issue of fact which has been raised by the Appellants will have to be decided – and the sooner the better. Whether or not the facts will be found to be as alleged by them in their affidavits in support of the application under O.13 r.9 we do not presume to forecast, but they are entitled to adduce their evidence and to have a decision on the facts.

Appellant by Chung Muk –kai (sole proprietor)

Respondent in person.