Case Document

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CACV000012/1970

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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BETWEEN
	Joint United Industrial Co.	Appellant (Defendant)
	AND
	South Union Chemical Engineers Ltd.	Respondent (Defendant)

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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. :

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

	"1.	By an agreement in Chinese ...... dated 30th September 1966 and made between the plaintiff ...... and the defendant......., the plaintiff let unto the defendant the factory premises ............. at the monthly rental of $600 for a term of one year from the 1st day of October, 1966.
	2.	The said factory premises is the subject matter of a permit held by the plaintiff's predecessor in title, one Mr. Wong, directly from the Crown.
	3.	On 1st September, 1967 the plaintiff through his solicitors gave notice to the defendant requiring it to vacate the said factory premises ................ on 30th September, 1967.
	4.	The defendant failed to deliver up possession .........................
		The plaintiff therefore claims :-

	(1)	Possession ..........
	(2)	Mesne profits .......
	(3)	Costs ...................."

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 a machine room; and the permit further states:

"

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

(1)

neither this document nor any occupation of the permit area nor the payment of any fees in respect thereof shall oe construed as creating the relationship of landlord and tenant............................................".

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:-

	1.	The rent for each calendar month is $600 of which $300 is for Party A and the other $300 for the licensee Wong Wing.
	2.	The tenancy is for a term of one year commencing from 1st October 1966 ending on 30th September 1967.
	3.	Party B shall deposit with Party A a sum of $4,500 and the monthly rent $300 payable to Party A shall be deducted from the said deposit each month.
	4.	Party A has obtained the consent of Party B to the right of his recovering possession of the said factory for his own management after 6 months from the date of signing this agreement .................................................................. However Party A shall refund the deposit of $4,500 to Party B .................................. as compensation.................................................... .
	5.	During the said term of tenancy, Party B shall keep all the equipment of the factory in good repair and shall not alter them at his own will ...............................
	6.	.....................................
	7.	Any dealings with outsiders by Party A prior to the said term of tenancy shall be no concern of Party B. On the other hand any dealings with outsiders by Party B and any profit or loss (of Party B) during the said term of tenancy shall be no concern of Party A. Any dealings with outsiders by Party B after expiry of the said term of tenancy shall be dealt with by Party B."

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 :-

"2.

.............. the statement of claim does not disclose a reasonable cause of action on the following grounds :-

	(1)	There is no allegation as to whether the said premises are excluded from the provisions of the Landlord and Tenant Ordinance........
	(2)	...... and also no statement of facts in support of such allegation.
	(3)	Without such allegation ... this .... court cannot properly adjudicate upon the matters raised in the statement of claim.
	(4)	In the event the premises are so excluded as aforesaid (which is denied) the said premises and the tenancy thereof as now pleaded in paragraph 1 of the statement of claim, will be subject to the provisions of the Tenancy (Notice of Termination) Ordinance Cap. 335 unless it is pleaded that this Ordinance will not apply ..........
	(5)	It is immaterial and irrelevant whether the said premises are the subject matter of a Crown permit or otherwise ......"

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:-

	1.	Leave to defend on condition that a sum of $1,200 be paid into court by the defendant on or before 5-6-1968; and on condition that $600 be paid into court by the defendant on or before the 5th day of each month commencing 5-7-1968 (until the trial of the action);
	2.	Liberty to the plaintiff to apply for judgment in default of such payments;
	3.	Statement of defence within 21 days;
	4.	...............
	5.	..............."

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:-

	"8(a)	In the absence of the said allegations of fact in the statement of claim the defendants will rely on the provisions of the Landlord & Tenant Ordinance .......... affording to tenants protection against eviction from tenancies of premises subject thereto. If this ...... court holds this to be so, the defendants will dispute that the rent of $600 is in excess of the permitted rent ......
	(b)	Alternatively, in the absence of the said allegations of fact .......... the defendants will rely on the .......... Tenancy (Notice of Termination) Ordinance ...... affording to tenants security of tenure for tenancies of premises subject thereto, for a fixed term of less than 3 years duration. If this .......... court holds this to be so, the defendants will say that they are entitled to 6 months notice of termination ......"

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 into 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 proceedings 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 know 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 transactions 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:-

"	It is considered that upon Application for Judgment in Default of Appearance (O.2 r.17), and upon Summons for Judgment (O.2 r.18) in actions for recovery of possession of immovable property, there should be at least prima facie proof that the premises are exempt from the provisions of the Landlord and Tenant Ordinance (Cap. 255), that is to say apart from a mere assertion in the Statement of Claim that the premises are, for example, exempt as being an entirely new building etc.
	Accordingly, Applications for Judgment (O.2 r.17) should be supported by an Affidavit stating the facts upon which exemption is claimed; similarly in the case of a Summons for Judgment (O.2 r.18) an Affidavit verifying the cause of action should state the facts giving rise to exemption. It should be noted that it will not be sufficient for the Affidavit to assert exemption as a matter of law, as, for example, by stating that 'the premises are an entirely new building within the meaning of the Landlord and Tenant Ordinance'; the facts whereon the exemption is founded should be clearly stated, and where necessary, relevant documents, such as the Occupation Permit, or an office copy thereof, exhibited."

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. Yuen Man-biu(5)); prima facie the Ordinance applies to all tenancies except those 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 out 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."

Want of jurisdiction is normally a matter for a defendant to raise if he intends to rely upon it.

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 defect in the respondent company's pleadings. From then onwards, it was the appellants' duty to show, by some positive pleading of 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:-

that it was not sufficient for the purpose of "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", for the court to order simply that, upon the delivery to the Registrar of companies of a copy of the order restoring the company to the register, the company would be "deemed to have continued in existence as if its name had never been struck off".

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 .......... prima 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 re 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.