The Ka Wah Bank Ltd V.Product Scouting International Ltd and Another
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CACV000171/1984
BETWEEN
__________ Coram: Silke, J.A., Bewley & Macdougall, JJ. Date of Hearing: 18 December 1984 Date Judgment Handed Down: 3 January 1985 __________ JUDGMENT __________ Silke, J.A.: 1. We dismissed this appeal with casts and stated that we would give our reasons later. This we now do. 2. Product Scouting International Limited - "the Company" - entered into a General Agreement for banking facilities an the 8th April 1981 with Ka Wah Bank - "the Bank". 3. On the 30th June 1981 the Company mortgaged with the Bank a premises owned by it to secure general banking facilities in the sum of $2 million. This mortgage was registered on the 1st August 1981. On 28th October 1981 the Company created a further charge in favour of the Bank in the sum of $500,000 to bring the total sum under the mortgage to $2.5 million. This further charge was registered on the 17th November 1981. 4. The Company got into financial difficulties and on the 11th July 1984 the Bank issued a writ No. 4645 - "the Writ" - basing its claim for monies due upon the General Agreement of the 8th April 1981 and citing a Letter of Guarantee signed by D.W.J. Oosterveld guaranteeing payment of advances made to the Company. The total of the claim was $3,024,556.81 as at the 16th May 1984. 5. The parties to the Writ were the Bank as plaintiffs, the Company as 1st defendant and Mr. Oosterveld as 2nd defendant. 6. On the 23rd July 1984 the Bank issued an Originating Summons No. 2032 - "the Summons" - under Order 88 naming the Company as defendant and claiming possession of the property mortgaged to them because of the non-payment of monies due. 7. An application was made to the Master by Mr. Oosterveld, acting in person, to (a) consolidate the Originating Summons and the Writ; and (b) to permit the Company to appear in person at the hearing in both of the processes. 8. That application having been dismissed on the 7th November 1984, Mr. Oosterveld appealed to a Judge against the dismissal. On the 15th November 1984 the Judge dismissed Mr. Oosterveld's appeal. This is the appeal by Mr. Oosterveld against that dismissal. 9. Mr. Ribeiro, who appears here for the Bank, has dealt with the matter first as to the appearance by the Company and then as to the refusal of the consolidation. We are content to deal with them in the same sequence. 10. So that the Company may appear in person, and the reality is that that appearance would be by Mr. Oosterveld, it is necessary for the Company to seek to avoid the consequences of 0.12, r.1 (2) of the Rules of the Supreme Court. That reads:
11. It is Mr. Oosterveld's basic contention that, because of the definition of "person" contained in section 2 of the Interpretation and General Clauses Ordinance, Cap. 1 which reads:
he is entitled by reason of that "enactment" to appear for and on behalf of the Company. That it supersedes and overrides the Rules of the Supreme Court. We do not agree. 12. The Rule is a strict one. 13. It is suggested by the Editors of the White Book (1985) - 0.5 r.6 - that even where an authorized officer may acknowledge service of a writ in which a limited liability company is the defendant they cannot go as far, in the new form of acknowledgement of service, as to ask for a stay of execution. 14. With respect to Mr. Oosterveld, both the Master and the Judge were perfectly right to hold that there is a bar upon a limited liability company from taking, other than the acknowledgement of service, any further step in an action without a solicitor. Further Mr. Oosterveld is not personally a party to the Originating Summons. 15. As to consolidation Mr. Oosterveld has sought to argue that there is a common question of law and of fact arising in both the Originating Summons and the Writ. Further that the right to relief claimed in both arises out of the same transaction or series of transactions and that, generally, it would be desirable to consolidate the two actions. 16. We are prepared to accept that the end result of either or both of the processes would be, in effect, an order for the payment of monies due whether that be by the seizure of the properties under the mortgage or a decree in the sum claimed in the Writ. 17. We are not prepared to accept, as Mr. Oosterveld has argued, that they are in reality one and the same action. It could be that, were Order 14 proceedings taken, one or other of these actions might be stayed upon the application of the limited company. But that is not our concern. 18. Mr. Ribeiro takes three main points: the first that there having been no concurrent summons for consolidation taken out by Mr. Oosterveld in the Originating Summons, the Court has no jurisdiction to order a consolidation; second that, if he fails on his first technical point, then the exercise by the Master and by the Judge of their discretion was manifestly correct and, thirdly, and as a fall back alternative, the Judge having exercised his discretion which has not been shown to be entirely wrong, this Court should not interfere with that exercise. 19. When the jurisdiction point was raised in the course of argument, and Mr. Ribeiro was perfectly entitled to take it, Mr. Oosterveld suggested that the present Appeal be adjourned to allow him to rectify the situation. But the difficulty arises that he is not a party to the Originating Summons and it being clear that the limited company must appear by a solicitor who has not as yet been appointed to represent it there is no one to make any such application for a summons for that would be a step in the action. Further at this stage in the proceedings it is, in our judgment, too late to take the suggested course. 20. In support of his jurisdiction point Mr. Ribeiro has drawn our attention to Daws v. Daily Sketch and Daily Graphic Ltd.(1) and cites this as an authority for his proposition. It was there held that the failure to take out concurrent summonses was a fatal objection, as Willmer L.J. said "however unmeritorious it may be". 21. Mr. Ribeiro has submitted that these proceedings are taken basically by way of delay. He cites in support of that submission the multiplicity of applications, adjournments, and appeals which have taken place in these proceedings by the ingenuity of Mr. Oosterveld. 22. Since the dismissal by the Judge of the appeal against the decision of the Master there have been two applications - one for the committal of the Bank's solicitors for contempt and the second an application to another Judge for an injunction to restrain proceedings before the Judge dealing with the Originating Summons. Both have been dismissed with costs. 23. Mr. Oosterveld has contended that he and, through him, the Company have a good defence both to the Originating Summons and to the Writ and he alleges that that defence is based upon a subsequent agreement for variation. Again the merits of such a matter are not for this Court. There is certainly nothing to prevent Mr. Oosterveld raising such a defence in the Writ to which he is a party, nor anything, were it to be properly represented, to prevent the Company raising it in both the Originating Summons and the Writ. 24. In the event we accept the technical point raised by Mr. Ribeiro to have validity. We share, with respect, Lord Justice Willmer's distaste expressed in Daws(l) for deciding an issue of this nature on mere technical grounds. But we, too, are fortified in the decision we have come to in that we are unable to say that the Judge here erred in any way in the exercise of his undoubted discretion in such a way as to entitle this Court to interfere. We would add that we do not think in the circumstances here the Judge, in refusing an order to consolidate, under the provisions of 0.4 r.10, was in any way acting outside the ambit of that discretion nor did he err in its application. 25. As I said at the conclusion of the hearing we were indebted to Mr. Oosterveld for the succinctness of his submissions and to Mr. Ribeiro for the assistance he has been. (1) [1960] 1 W.L.R. 126 Representation: R. Ribeiro, Esq. instructed by Messrs. Woo, Kwan, Lee & Lo for Plaintiff/Respondent. 2nd Defendant in person. |