Joint United Industrial Co v. South Union Chemical Engineers Ltd

CACV000012A/1970

IN THE SUPREME COURT OF HONG KONG

APPELLATE JURISDICTION

CIVIL APPEAL NO. 12 OF 1970

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Coram: Blair-Kerr, Briggs and McMullin, JJ.

Date of Judgment: 2 February 1971

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DECISION

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Blair-Kerr, J.:

This is an application for leave to appeal to the Privy Council against a judgment of this Court dated 27th October 1970. The history of the case is recorded in that judgment; and it is unnecessary to repeat it in detail here.

2. The plaintiff company's claim for possession of certain factory premises was based upon a Chinese agreement dated 30th September 1966 which, it would appear, had been drawn up by the parties themselves. From this document, it is clear that both parties were aware that there was no Crown lease of the land upon which the factory had been built and that a gentleman named Wong Wing was a Crown "permittee" in regard to the land. Through out these proceedings the plaintiffs' submission has been that the agreement was never intended by either party to be anything more than a licence for the use of the factory for 12 months determinable after six months at the option of the plaintiffs. The defendants' case, as pleaded, was that the parties intended to create, as between themselves, the relationship of landlord and tenant; that the Supreme Court had no jurisdiction to adjudicate upon the plaintiffs' claim until a decision had been made as to whether the Landlord and Tenant Ordinance applies, and that, in the alternative, if the Landlord and Tenant Ordinance does not apply, the defendants are entitled to 6 months notice under the Tenancy (Notice of Termination) Ordinance Cap.335.

3. There has been no trial of the action; and it was not open to this Court on the appeal to decide whether the relationship of the parties was that of licencor and licencee or that of landlord and tenant although we felt bound to say that looking at the 1966 agreement in isolation and in the absence of any other admissible evidence which might be adduced at a trial in regard to the intention of the parties when they signed the agreement, we found it very difficult to see how any court could reasonably construe. the document otherwise than as a licence. Having looked at the papers before us on the hearing of this application, we see no reason to alter our view; but, for the purpose of deciding whether to grant leave to appeal, we have to assume that the parties may have intended to create the relationship of landlord and tenant, or at any rate, that it might be held, on the authorities, that a tenancy by estoppel had been created.

4. Before Mr. Justice Huggins (and later before this Court) the defendants' main submission was that the Supreme Court had no jurisdiction to adjudicate on the question of possession because the plaintiffs had not alleged in their pleadings that the premises were excluded from the operation of the Landlord and Tenant Ordinance. A good deal of time was spent, in one way or another, by various courts listening to the defendants' submissions on this point. However, there is now before us uncontroverted affidavit evidence that the factory was built by the plaintiffs in 1962. It would appear, therefore, that the premises are not subject to the Landlord and Tenant Ordinance. Presumably, the defendants were perfectly well aware of this from the commencement of these proceedings. In seeking leave to appeal to the Privy Council, Mr. Ching for the applicants (defendants) very properly did not attempt to argue that the Supreme Court might not have jurisdiction to adjudicate on the plaintiffs' claim. His submission was that because the alleged tenancy was for less than 3 years, the defendants were entitled to 6 months notice under the Tenancy (Notice of Termination) Ordinance. As I understood his submission, if the plaintiffs had given the defendants 6 months notice on, say, the 1st April 1967, the defendants would have vacated the premises on 30th September 1967 as agreed.

5. The plaintiffs, of course, maintain that Cap. 335 has no application to this case because, they say, the defendants were mere licencees and the licence was revoked long ago. Be that as it may, it seems abundantly clear that when the September 1966 agreement was signed, the parties contemplated that their contractual relationship would terminate on 30th September 1967 at the latest. It is now January 1971. If this Court were to grant leave to appeal to the Privy Council, in all probability the appeal would not be disposed of for at least 2 years; and the defendants would therefore be able to remain in possession until 1973.

6. Looking back over the last 11 years during which I have sat on this Bench, I feel that, in cases of this kind, this Court has been too ready to grant leave to appeal to the Privy Council. The Judicial Committee is not a revising court of appeal. Litigants do not have an unqualified right of appeal from the decisions of this Court; and it is important that the provisions of rule 2 of the Order-in-Council which imposes certain restrictions on the right to appeal to the Judicial Committee should be carefully considered before leave is granted.

7. As Mr. Jackson-Lipkin said, it frequently happens in Hongkong that the last thing a tenant or licencee considers is the terms of the agreement under which he has obtained possession of premises; and that having obtained possession, he then proceeds to avail himself of every device permitted by law so that he may remain in possession for as long as it suits his purpose to do so. Having regard to the fact that by appealing to the Privy Council tenants know that they may well be allowed to remain in possession for a further two years at least, it is not surprising that some of them have no scruples about applying for leave, irrespective of their chances of success before the Judicial Committee.

8. In the present case, Mr. Ching informed us that if leave to appeal were granted, the grounds of appeal would be the same grounds as were argued before this Court. But in view of the fact that the defendants have made no attempt to deny the plaintiffs' allegation that they (the plaintiffs) built the factory in 1962, the submission that the Landlord and Tenant Ordinance might apply to the premises will not, presumably, be further pursued; and the only other ground argued before this Court was what might be described briefly as the "defunct company" point. As regards that ground of appeal the defendants would, presumably, argue that Tyman's Ltd. v. Graven⁽¹⁰⁾, and other cases, were wrongly decided.

9. Mr. Ching also hinted that, if leave were granted, an attempt might also be made to argue that, because the Tenancy (Notice of Termination) Ordinance applies and no notice has been given under that Ordinance, no valid judgment by default could have been entered. This is the first indication that we have had of that ground of appeal; and it is, to say the least of it, highly unlikely that the Privy Council would allow such a point to be argued since it was not taken either before Mr. Justice Mills-Owens, or Mr. Justice Huggins or before this Court.

10. Under rule 2(a), an appeal lies to the Privy Council, as of right, from any final judgment of the Court,

11. In my view, the claim for possession might be said to fall within the ambit of both limbs of this rule. What, then, is the "matter in dispute on the appeal" or "the claim or question"? The defendants say that they are tenants and that the plaintiffs should have given them 6 months notice of determination of tenancy. They maintain that they have a right to hold over as tenants till they receive 6 months notice under s.3 of Cap.335. In other words, the matter in dispute is: Are the defendants tenants who are entitled to a further six months use and occupation of the premises? Admittedly, they have not received any notice under s.3 of Cap.335; and it would appear that the plaintiffs are not going to give them any notice.

12. The "rent" reserved in the agreement was $600 per month; and, computing the claim for possession on that basis, it appears that the value of the matter in dispute is $3,600. However, the defendants say:

"$600 per month, (which is the figure we agreed to pay for the period October 1966 to September 1967) is not the present economic rent of the premises; the economic rent of such premises today is at least $2,000 per month; therefore the value of the matter in dispute on the appeal (so far as the claim for possession is concerned) is at least $12,000."

13. I suppose they would argue that if the economic rent of the premises were to rise to $3,000 per month by 1973, the matter in dispute should be valued at $18,000.

14. I do not agree with this submission. In 1966, the parties agreed that the "rent" would be $600 per month for the period October 1966 to September 1967. The defendants claim that they are entitled to a further six months use and enjoyment of the premises by reason of s.3 of Cap. 335. The matter in dispute is clearly the money value of this alleged right to 6 months use and enjoyment at the figure fixed by the parties themselves, viz. $3,600. This figure was agreed to by the defendants in September 1966; and I see no reason why, at this stage, they should be allowed to value the right on some other basis.

15. The plaintiffs' second claim, as endorsed on the writ, is for possession of the chattels belonging to them which were in the factory when the agreement was signed in September 1966. On 14th May 1968, they were given leave to enter final judgment "for the claims as endorsed on the writ" in the event of any breach of condition on the part of the defendants. In an affidavit filed on 1st December 1970, the sole proprietor of the defendant firm stated:

"In September 1966, when the defendants signed the tenancy agreement of the said factory premises with the plaintiffs there was also let the following ...........................(hereinafter referred to as 'the plaintiffs' property')................................However. the plaintiffs' to the expansion of the defendants' business and operation, new ..............................(hereinafter referred to as 'the defendants' property') were installed by the defendants................................."

Clearly, according to the defendants, chattels do not enter into this question at all either as to value or as to use. Not only do the defendants not claim the plaintiffs' chattels; they assert on affirmation that the use of those chattels does not form part of the claim. Therefore, I do not see how this Court should be asked to put any value on this item when deciding whether the defendants have a right of further appeal.

16. The plaintiffs also claimed "mesne profits" at the rate of $600 per month and the defendants say that this should be taken into account in estimating the value of the claim or matter in dispute. I do not follow this argument. Whether the defendants are tenants or licencees, and whether they would be successful or unsuccessful in any appeal to the Privy Council, they would still have to pay $600 per month so long as they remain in possession. They do not dispute that. There is no issue between the parties so far as that is concerned. That was the figure to which they agreed in September 1966; and they obtained conditional leave to defend on the footing that they would continue to pay $600 per month till the date of trial. They have defaulted on at least two occasions; but they are not in arrears at the moment. Mesne profits should not be taken into consideration in deciding whether the defendants have a right of appeal.

17. In my view the defendants have no right of appeal to the Judicial Committee under rule 2(a); and Mr. Ching did not submit that this was a case for discretionary leave under rule 2(b). With that submission we are in full agreement. I would, myself, refuse leave to appeal.

18. There is also before us an application for a stay of execution of the judgment pending the decision of the Judicial Committee. Of course, the question of a stay in these terms does not now arise. But I might add here (speaking for myself) that even if I had come to the conclusion that the defendants did have a right of further appeal under rule 2(a), I would not have been disposed to grant any stay of execution. There are no exceptional circumstances in this case. Since the writ was issued on 26th February 1968 (if not before), the defendants have been perfectly well aware that the plaintiffs wished to have possession of their property. Although the defendants' allegation is that they were and are entitled to an additional 6 months use and enjoyment of the premises, they have in fact had an additional 3 years use and enjoyment; and they now have the effrontery to suggest that they should have a further few years use and enjoyment. Indeed they have filed an affidavit from which it is evident that in 1967, towards the end of the 12 months term of the agreement, they proceeded to establish what, according to them, is now a very flourishing factory business. Clearly, the agreement of September 1966 is past history so far as they are concerned.

19. Furthermore, it now appears from the plaintiffs' affidavit filed on 18th January, 1971 that Wong Wing's permit to occupy the land expired on 31st December, 1970. It has not yet been renewed by the Hong Kong Government; and it is said that the Government are waiting to see whether the plaintiffs recover possession before considering such renewal - the suggestion being that if there is any further delay in recovering possession the permit will not be renewed. The Government of course are quite entitle to re-enter upon the land at any moment.

Representation:

Mr. C. Ching (John Ip & Co.) for the Defendants (Appellants)

Mr. M.H. Jackson-Lipkin (Gunston & Chow) for Plaintiffs (Respondents)

Briggs, J.:

I concur.

McMullin, J.:

I concur.

Representation:

Mr. C. Ching (John Ip & Co.) for the Defendants (Appellants)

Mr. M.H. Jackson-Lipkin (Gunston & Chow) for Plaintiffs (Respondents)

(10) (1952) 2 Q.B. p.100

IN THE SUPREME COURT OF HONG KONG

APPELLATE JURISDICTION

CIVIL APPEAL NO. 12 OF 1970

(On appeal from O.J. 306 of 1968)

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Coram: Blair-Kerr, Briggs & McMullin, JJ.

Date of Judgment: 27 October 1970

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JUDGMENT

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Blair-Kerr, J. :

The Plaintiff company's claim as endorsed on the writ of summons (so far as relevant to this appeal) reads:-

The plaintiff therefore claims:-

2. There is exhibited to an affidavit by the managing director of the plaintiff company a copy of a Crown permit in favour of Mr. Wong Wing for the month of December 1962. It is not known whether, and if so how many, further permits were issued to Mr. Wong; but it appears to be common ground that this gentleman is a Crown permittee in regard to the land upon which the factory referred to in the agreement of 30th September, 1966 is built. The 1962 permit is in the standard form and it reads:-

"Permission is hereby given to the permittee whose name appears below to occupy Crown land hereinafter called the permit area' for a temporary period and for the purpose hereinafter set forth subject to the general and special conditions hereunder............"

The structures permitted on the permit area are stated to be two storerooms, a grinding mill, a workshop, and machine room; and the permit further states:

"In accepting this permit, I the undersigned permittee, fully understand ............. and agree that

General Condition number 2 reads:-

"This permit is not transferable."

3. A certified translation of the agreement of 30th September 1966, so far as relevant to this case, reads as follows:-

"Agreement for renting of a factory between (the plaintiff) hereinafter referred to as Party A and (the defendant) hereinafter referred to as Party B ................................................................................ Party A hereby agrees to rent to Party B the factory ...................... for his use with the terms as follows:-

4. By summons dated 22nd April 1968, the plaintiff company gave notice of their intention to apply for summary judgment under O.14 r.1 for possession of the premises and mesne profits in respect of the period 1st October 1967 until delivery of possession; and the defendants, by summons dated 24th April 1968, gave notice of their intention to apply, under O.32 r.1 and O.18 r. 19, for an order that the statement of claim be struck out as disclosing no reasonable cause of action. In support of the latter application, the defendants filed an affidavit dated 25th April 1968, paragraph 2 of which reads:-

5. Both summonses came before Mr. Justice Mills-Owens on 14th May 1968. The parties were legally represented. As regards the defendants' summons to strike out the plaintiff company's statement of claim, the learned judge's order, as endorsed on the summons, reads:-

"By consent, summons withdrawn with costs to plaintiff in any event." As regards the plaintiff company's summons for summary judgment, the judge's order, as endorsed on the summons, reads:-

"By consent:-

The formal order as drawn up and filed did not follow the judge's endorsement.

The material part of it reads:-

"...... unless the defendant pays into court ........... the plaintiff may enter final judgment against him ........"

That is to say the plaintiff company was to be at liberty to "enter" final judgment without the necessity of having to "apply" to a judge for final judgment.

6. In their defence (filed on 1st June 1968), the defendants pleaded:-

7. Between 5th May 1969 and 5th October 1969 the defendants did not make any payments into court as required by the order of 14th May 1968 giving them conditional leave to defend the action; and on 22nd September 1969 the plaintiff company, through their solicitors, signed final judgment for possession, and for mesne profits at the rate of $600/- per month as from 5th May 1969.

8. The order of 22nd September 1969 was not served upon the defendants till 23rd February 1970. It is not known whether in late September or early October they otherwise learned that the plaintiff company had signed final judgment against them. At any rate, the evidence is that on 6th October 1969, they paid into court the $3,600/- arrears of mesne profits then due and they continued to make periodic monthly payments into court until they received a summons dated 24th February 1970 which indicated that on 28th February 1970 the plaintiff company would apply for payment out of all sums which had been paid into court. The defendants immediately took out a summons (also returnable on 28th February), which gave notice of their intention to apply for an order (a) setting aside the judgment of 22nd September 1969 and (b) extending the time for making payment into court of the various sums of $600/- due on 5th May and on the 5th day of each calendar month thereafter up to and including the 5th October 1969. They also filed an affidavit on 27th February 1970 in which they gave reasons for their being in default between 5th May 1969 and 5th October 1969; and paragraph 10 thereof reads: -

"..........I refer to the .......... defence which raises questions of jurisdiction. I respectfully submit that in the absence of any allegation in the entire statement of claim and of any evidence that the premises ........... let to the defendants are excluded from the provisions of the Landlord and Tenant Ordinance, on which matter the defendants expressly raised issue, this court ought not to allow the said judgment dated 22nd September 1969 to stand but ought to inquire the matters in question ......"

9. The plaintiff company's summons for payment out and the defendants' summons to set aside the judgment of 22nd September 1969 came before Mr. Justice Huggins on 28th February 1970; and they were both adjourned to 7th March 1970.

10. On 4th March 1970, the defendants took out another summons (also returnable on 7th March) which gave notice of their intention to apply for an order setting aside the judgment of 22nd September 1969 on the ground of irregularity in that the plaintiff company was struck off the register of companies on 30th August 1968 and was no longer a legal entity when their solicitors purported to sign final judgment on 22nd September 1969.

11. It is common ground that the plaintiff company was struck off the register of companies on 30th August 1968 under s. 291(5) of the Companies Ordinance because the Registrar of Companies had reasonable cause to believe that the company was not carrying on business. However, this belief was founded entirely upon the company's failure to comply with various provisions of the Companies Ordinance relating to the filing of annual returns and such-like documents. At no time did the plaintiff company in fact cease to carry on business; and on 20th December 1969 an application was made to the court under s. 291(6) for an order restoring it to the register. The court acceded to this application and ordered that, upon the company filing the various documents required by the Ordinance to be filed, it would be restored to the register; and that upon an office copy of the order being delivered to the Registrar of Companies the company would be "deemed to have continued in existence as if its name had never been struck off".

12. The order of 20th December 1969 was served upon the Registrar of Companies on 6th March 1970; and when the three summonses came before Huggins J. on 7th March, the learned judge made an order in favour of the plaintiff company for payment out of all monies paid into court by the defendants, and he dismissed the defendants' application that the judgment of 22nd September 1969 be set aside.

13. The defendants now appeal to this court against the learned judge's orders of 7th March 1970 and they ask for an order setting aside the judgment of 22nd September 1969.

14. Although it was not made a ground of appeal, Mr. Mills-Owens (for the appellants) appeared to suggest that the order of 14th May 1968, as formally drawn up and filed, should not prevail over the order endorsed upon the respondent company's summons which had been initialled by the judge personally. It is, of course, perfectly clear that the judge's intention was that, upon any default on the part of the appellants, the respondent company should be at liberty to "apply" for judgment. But that is not what the order, as formally drawn up by the parties and filed, says. The appellants made no application to correct it under the slip rule; and it would be too late to consider any such application at this stage. Therefore the respondent company was under no obligation to apply to a judge for judgment by default. The order, as formally drawn up and filed, is the order with which this court is now concerned.

15. There can be no doubt at all that Wong Wing, vis-a-vis the Crown, is nothing more than a licensee (or permittee, as he is described in the Crown permit). The Crown could revoke his permit at any time; and, in any proceeding for possession to which the Crown was a party, it would not avail the respondent company and the appellants to plead that, as between themselves, the relationship may be that of landlord and tenant. However, in this appeal we are not concerned with what the position would be in an action for ejectment at the instance of the Crown. It is the relationship of the parties to this action with respect to the subject-matter of the action with which we are concerned.

16. Mr. Mills-Owens submitted that it was not open to this court to rule on the question of whether in 1966 the parties intended to create, as between themselves, the relationship of landlord and tenant. With that proposition I am in full agreement. There has been no trial of the action; and it is impossible for this court to say with certainty how a trial judge might have been disposed to construe the 1966 agreement in the light of all the evidence presented to him, including any evidence which might possibly have been admissible to explain a number of terms used by the parties.

17. On the other hand, speaking for myself and looking at the 1966 agreement in isolation, I find it very difficult to see how any court could reasonably have come to any conclusion other than that the appellants obtained a licence from the respondent company to "manage" a factory for a year the respondent company reserving to itself the right to revoke the licence at the end of six months and recover possession of "the said factory" for its own "management". Admittedly the parties say that the document is an "agreement for renting" and they speak of a "term of tenancy". But the "renting" was in respect of the factory. No mention was made of the land upon which the factory was built. To their knowledge, Wong Wing had no interest in the land. They describe him in the agreement as "the licensee". Clearly they both knew of the existence of the Crown permit when they entered into the 1966 agreement. Clause 5 deals With the "equipment" of the factory; and the expression "dealings with outsiders" in clause 7 clearly refers to business transaction with customers in respect of goods produced in the factory. It is very difficult to see how any court could reasonably have construed this document as a tenancy agreement. But, as I have said, we are not called upon to decide that issue; and, for the purpose of this appeal, we have to assume the possibility that, as between themselves, the parties intended to create the relationship of landlord and tenant or, at any rate, that the plaintiff company is nowestopped from denying that the defendants are its tenants.

18. Mr. Mills-Owens referred to a practice direction which was issued by the Registrar by the direction of the Chief Justice on 30th April, 1963.

It reads:-

19. Counsel's main submission may be summarised thus:-

"The fact that Wong Wing is admittedly a Crown permittee is irrelevant to these proceedings; while the absence of any title or interest in the alleged landlord at the time of the transfer of possession is a relevant consideration in determining whether the possession was transferred with the intention of creating the relationship of landlord and tenant, such absence cannot prevent the creation of a tenancy between the parties when they have clearly manifested the necessary intention at the time of transferring possession. In the latter event, both parties are estopped from denying the creation of the relationship of landlord and tenant between them and the existence at the time of any title to support that relationship in the party giving the possession (citing Edward H. Lewis and Son. Ltd. v. Morelli⁽¹⁾; and Charles Lee v. Wong Fong⁽²⁾; a trial judge might well have decided that the 1966 agreement did create the relationship of landlord and tenant as between the parties to this action; the Landlord and Tenant Ordinance prohibits the making of an order in ejectment or for recovery of possession of protected premises by any judicial body other than the tenancy tribunal (Lam Mau Tak v. Ng Wang Yip ⁽³⁾; Yeung Wai v. Cheng Hang Mee⁽⁴⁾; Lee Yeuk-bing v. Yuon Man-biu⁽⁵⁾; prima facie the Ordinance applies to all tenancies except these specifically exempted; it was therefore incumbent upon the respondent company to plead in their statement of claim that the premises were exempted from the operation of the Ordinance, and, in the affidavit verifying the cause of action for the purpose of the application for summary judgment, the facts upon which exemption was being claimed should have been stated because the Ordinance prima facie applies to all tenancies until the court is satisfied that it does not apply; in the absence of any such pleading and statement of facts the judge himself should have caused an inquiry to be made as to whether the premises were exempted from the operation of the Ordinance in order to satisfy himself that the Supreme Court had jurisdiction to deal with the case at all; until the issue of jurisdiction had been decided, it was irregular to give leave to defend conditional upon the making of periodic payments into court and irregular for the respondent company to sign final judgment; the judgment entered on 22nd September 1969 should be set aside because there has been no adjudication upon the issue of jurisdiction."

20. Difficult questions of law arise upon Mr. Mills-Owens' submissions. The authorities seem to be somewhat in disarray. As regards the first question (as to how far it is possible for a tenancy to be "carved cut of a licence) in Torbett v. Faulkner⁽⁶⁾, Lord Denning said:-

"...... the company had no estate or interest in the land at all. It had nothing out of which it could carve a tenancy...... It could only grant a licence and not a tenancy."

In Cobb v. Lane ⁽⁷⁾, Romer L.J. said:-

"The one thing which she (the alleged landlady) had not at that time was an estate in the land herself. She was not a tenant at will, and, unless she was, she could not create the tenancy on which the defendant relies. In the absence of a sufficient title or interest in her to carve out or to create a similar tenancy in the defendant, his claim ...... fails in limine."

However, as Judge Mills-Owens (as he then was) said in Lai Yiu v. Tam Fai ⁽⁸⁾, in neither of those cases was reference made to the doctrine of estoppel as between landlord and tenant. The Lewis v. Morelli ⁽¹⁾ case (which was relied upon by Judge Charles in Charles Lee v. Wong Fong⁽²⁾ is strong persuasive authority in favour of holding that estoppel tenancies are protected by the Landlord & Tenant Ordinance. True, in Stratford v. Syrett ⁽⁹⁾, Evershed M. R. said:-

"........ you cannot give to a Court a statutory jurisdiction by estoppel; either the statutory jurisdiction is there or it is not there, or whether it is there depends upon the parliamentary language".

But, later in his judgment, the Master of the Rolls appears to lend explicit support to the view of Charles D.J. in the Lee⁽²⁾ case and of the English Court of Appeal in the Lewis⁽¹⁾ case where he says (p.112):-

"I cannot, as at present advised, see any reason why the ordinary incidents, so far as they may be relevant in a particular case, of the old established relationship between lessor and lessee should not apply in Rent Act cases, including matters of estoppel, save to the extent that the statute expressly modifies or varies them."

No doubt it is true that where a statute plainly says that a Court is not to have jurisdiction in a certain matter no estoppel can be invoked to defeat the clear intention of the statute. But, in this case, the appellant's submission is that the estoppel ousts the general jurisdiction of the Supreme Court to deal with a tenancy arising from it by invoking the protection of an Ordinance which, prima facie, applies to all tenancies, however created, and which may have to be construed as expressly excluding the Court's jurisdiction to make any orders under it. In the one case the estoppel conflicts with the statute; in the other it is not in conflict with any statute but is merely seeking the protection of a statute designed to protect tenancies; and there is nothing in the Landlord and Tenant Ordinance which can be said to exclude a tenancy by estoppel.

21. I do not think that an appeal against an order for summary judgment is an appropriate occasion on which to decide the questions of law which have been raised by Mr. Mills-Owens in his very able submission; and, in my view, it is unnecessary, for the purposes of this appeal, to do so. As Mr. Jackson-Lipkin (for the respondent company) said, from the beginning the appellants have really done nothing but attempt to manufacture a substantive defence out of an omission in the respondent company's pleadings. Admittedly, the respondent company did not comply with the 1963 practice direction. One possible reason for their failure to do so may have been that in 1966 they intended to create the relationship of licensor and licensee, and not that of landlord and tenant. If their intention was to create a landlord and tenant relationship, it is difficult to see what purpose they had in mind in referring specifically to the Crown "licensee" in clause 1 of the agreement and in paragraph 2 of the statement of claim.

22. But, assuming for the purpose of this appeal that the practice direction should have been followed, it has to be remembered that it is only a practice direction. I would not wish anything I say now to be construed as implying that a plaintiff may disregard the 1963 practice direction. It is most desirable that it should be followed in all cases coming before the Court under Orders 13 and 14 - more especially under Order 13. But, as a strict matter of pleading, apart from exceptional circumstances (e.g. certain matters must be pleaded in a petition for divorce to satisfy the Court that it has jurisdiction) nowadays it is not normally necessary for a plaintiff who institutes an action in a court of unlimited civil jurisdiction, to plead that his cause of action is within the jurisdiction of the court and to prove to the court that it has jurisdiction to try the issue then before it. As Spencer-Bower says in his text-book on Res Judicata (2nd Edition) at p.94:-

"nothing shall be intended to be out of the jurisdiction of a superior court but that which specially appears to be so."

23. In my view, when the two summonses came before Mr. Justice Mills-Owens on 14th May 1968, it was the duty of the appellants to ask the learned judge to consider the issue of jurisdiction. Not only did they not do so, they withdrew the summons which raised that very issue on which they now lay such stress. By withdrawing their summons to strike out the statement of claim and by agreeing to the terms imposed under the respondent company's summons, the appellants certainly divested themselves of any right which they may have had to relief in so far as this rested on an alleged weakness in the respondent company's pleadings as they then stood. Of course, it cannot be said that they thereby abandoned the question of jurisdiction altogether; but they could no longer rely on any alleged defeat in the respondent company's pleadings. From then onwards, it was the appellants' duty to show, by some positive pleading on their own, that there was genuine merit in the jurisdiction point.

24. However, in their defence which was filed on 1st June 1968, the appellants once again adopted a purely negative approach. They did nothing more than allege a defect in the respondent company's statement of claim. Apart from pleading that they would 'rely' on the Landlord & Tenant Ordinance, nothing whatsoever moved from their side to assist the court in resolving a doubt which they alone had raised; and paragraph 10 of their affidavit of 27th February, 1970 merely harps back to the plaintiff company's failure to comply with the practice direction ("I refer to the ... defence .... in the absence of any allegation in the entire statement of claim and of any evidence that the premises ... are excluded .......... this court ought not to allow the said judgment ...... to stand").

25. I do not know what submissions were made to Mr. Justice Huggins because his note has not been made available to this court; and in refusing to set aside the default judgment, he gave no written judgment. It may be that the learned judge took the view (as I do) that the 1966 agreement could not reasonably be construed as a tenancy agreement. At any rate, it seems highly probable that the learned judge took the view that even if it could be said that there was a tenancy by estoppel, in the Order 14 proceedings before Mr. Justice Mills-Owens the appellants had made no attempt to "condescend upon particulars" for the purpose of showing cause under O.14 r. 4(1); that by withdrawing their summons to strike out, the appellants had abandoned any argument which they might have advanced on the ground of some alleged defect in the respondent company's pleadings; and that even in their defence as filed and in their application before him, they had failed to put forward any positive facts in support of the alleged lack of jurisdiction which they alone had raised. It cannot be said that they had not raised the jurisdiction issue; but clearly the manner in which they did so left both Mr. Justice Mills-Owens and Mr. Justice Huggins in serious doubt as to their bona fides; and looking at the papers as a whole as filed in this appeal, I see nothing irregular in the course adopted by either judge. The appellants were given conditional leave to defend. They did not observe the very reasonable conditions imposed; and judgment was entered against them.

26. As regards the submission that the statement of claim made no reference to the Tenancy (Notice of Termination) Ordinance Cap. 335, there is nothing in that Ordinance which requires a plaintiff to plead in a particular way in order to found the jurisdiction of the Supreme Court; and the appellants' submissions on this aspect of the appeal call for no further comment.

27. The second ground of appeal, as argued by Mr. Mills-Owens may be stated briefly thus:-

28. It is common ground that the solicitors who entered judgment on behalf of the plaintiff company on 22nd September 1969 were not the company's solicitors when it was struck off the register on 30th August 1968; and Mr. Mills-Owens' submission was this a company can only act through agents the second firm of solicitors could not have received any instructions from the plaintiff company because it had been dissolved when it was struck off the register; therefore the solicitors had no authority to enter judgment on behalf of a defunct company on 22nd September 1969 or to make an application for restoration of the name of the company to the register on 20th December 1969; consequently the court, in acceding to the application for restoration ought to have been asked to make some order under the latter part of s.291(7) to validate the appointment and the acts of the solicitors; and that, in the absence of any such validating order, the judgment which was entered on 22nd September 1969 was irregularly obtained.

29. Section 291(7), so far as relevant, reads:-

"............... upon an office copy of the order being delivered to the Registrar for registration the company shall be deemed to have continued in existence as if its name had not been struck off; and the court may by the order give such directions and make such provisions as seem just for placing the company and all other persons in the same position as nearly as may be as if the name of the company had not been struck off".

30. The effect of the English equivalent of s.291(7) of the Hongkong Ordinance has been considered in a number of cases; but reference need only be made to two cases viz. Tyman's Ltd v. Craven⁽¹⁰⁾ and In re Lindsay Bowman Ltd. (Ch D)⁽¹¹⁾.

31. In Tyman's case, the company (as in the present case) had been struck off for failing to perform its statutory duties though continuing to carry on business. During the period of its dissolution it applied to court for the grant of a new lease under s.12 of the Leasehold Property (Temporary Provisions) Act 1951, and the application was adjourned to a later date. Between the date when the application was first made and the adjourned hearing, two things occurred: (1) the statutory time limit for making the application for the lease expired and (2) the court ordered that the name of the company be restored to the register.

32. At the adjourned hearing, the respondent lessor objected that as the company had not been in existence when the application was first made, the application was a nullity and could not be entertained. In his judgment Evershed M.R. said (p.106):-

"...... the subsection continues' ...... and the court may ........ give such directions ......' The argument of the respondent is that the addition of this further and (as it is said) expository sentence substantially qualifies the effect of the phrase that precedes it, so that the latter does no more than preserve the continuance of the company's corporate existence without validating ex post facto any acts done in the company's name during the period of its temporary dissolution."

This argument was not accepted by the majority of the Court of Appeal.

Evershed M.R. said (p.111):-

"If on the power contained in the final words of the subsection in question to insert special directions in the order of resuscitation depended the validation of all the multifarious engagements into which the dissolved company might have entered during the period of its statutory suspense .......... price facie, all the third parties concerned would have to be given an opportunity of making representations to the court, a proceeding which I find well-nigh impossible to contemplate. .................... In my judgment, the final words of the subsection can properly and usefully be regarded as intended to give to the court, where justice requires and the general words would or might not themselves suffice, the power to put both company and third parties in the same position as they would have occupied in such cases if the dissolution of the company had not intervened. More generally, the final words of the subsection seem to me designed, not by way of exposition, to qualify the generality of that which precedes them, but rather as a complement to the general words so as to enable the court (consistently with justice) to achieve to the fullest extent the 'as-you-were' position, which, according to the ordinary sense of those general words, is prima facie their consequence".

And at p.126 Hodson L.J. says:-

".......... I think the words of (the subsection) are clearly designed to produce an 'as you were' position, and think that the latter part of the subsection is complementary and intended to provide for cases where provision is necessary in order to clarify an obscure position or give back to the company an opportunity which it might otherwise have lost. An example of this would be a case where a company had lost an opportunity of obtaining a concession or renewing a lease during the interval between its dissolution and an order under the subsection".

33. Megarry J. (in In re Lindsay Bowman Ltd⁽¹¹⁾), discusses the effect of the final limb of the English equivalent of subsection (7) of section 291 thus (p.1446):-

"One example of the use of this limb is in inserting in the order a provision that in the case of creditors who were not statute-barred at the date of dissolution, the period between the date of dissolution and the date of restoration to the register is not to be counted for the purposes of any Statutes of Limitation: see, for example In to Donald Kenyon Ltd. (1956) 1 W.L.R. 1397. Such a direction seems to me to effectuate the general purpose of the concluding limb of the subsection. If a creditor had six years to sue the company, and his time ran out after the company had been defunct for five years, he would have had only one year in which he could effectually have sued the company. He may justly say that he ought not to have been deprived of five years".

34. Despite the well-reasoned dissenting judgment of Jenkins L.J. (on which Mr. Mills-Owen relied) I am in full agreement with the views expressed by the majority of the Court of Appeal in Tyman's ⁽¹⁰⁾ case; viz. that an order under s.291(6) of the Ordinance declaring that "the company shall be deemed to have continued in existence as if its name had not been struck off" is effective to validate retrospectively all acts done in the name or on behalf of the company during the period between its dissolution and the restoration of its name to the register.

35. For the above reasons, I would myself dismiss this appeal.

Representation:

Mr. R. Mills-Owens (John Ip & Co.) for Appellant

Mr. M. H. Jackson-Lipkin (Gunston & Chow & Co.) for Respondent.

(1) (1949) 65 T.L.R. p.56

(2) (1953) DCLR p.140 at p.143

(3) (1958) DCLR at p.5

(4) (1963) HKLR at pp.241/2

(5) (1966) HKLR at p.49.

(6) (1952) 2 T.L.R. 659

(7) (1952) 1 AER 1199

(8) (1957) DCLR at p.41

(2) (1953) DCLR at p.143

(9) (1958) I.Q.B. at p.112

(10) (1952) 2 Q.B. p.100.

(11) (1969) 1 W.L.R. p.1443.