Chan Pak Wai v. Thomas Young

CACV000018/1982

Whether application to strike out should itself be struck out as abuse of process. Res judicata. Confusion in the profession following enactment of the Landlord and Tenant Consolidation)(Amendment) Ordinance (No.2) 1981 or that a second summons raises squarely matters which should have been raised in the first cannot amount to a 'special circumstance' within the meaning of the phrase as used in Yat Tung Investment Co. v. Dao Heng Bank.

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Coram: Hon. Leonard V-P, Cons J.A. & Liu J.

Date: 30 July 1982

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JUDGMENT

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Leonard, V-P:

1. This is an appeal from a refusal by His Honour Judge Cruden to dismiss the respondent's summons of the 21st January 1982 as itself being an abuse of the process of the Court coupled with an appeal from the Order of the judge striking out the appellant's amended particulars of Claim as being such an abuse.

2. The history of the matter is as follows: by a writ, issued in the District Court on the 9th of December 1981, the appellant claimed possession of premises at No. 77, Bisney Road, on the basis that they had been let for a period of three years which term had expired and that the premises had been sub-let without the consent in writing or knowledge of the plaintiff. The respondent, appearing in person, applied on the 21st December 1981 for two orders; firstly under O.18 r.19 that what he incorrectly referred to as the amended claim of the plaintiffs (the document was in fact an unamended claim of the single plaintiff) be struck out on the ground that it was frivolous and vexatious; secondly he sought a ruling "on the meaning of section 53(2)(e) and section 74A(aa) during the contractual term of a tenancy and a summary judgment made in favour of the defendants". That application was supported by an affidavit in which the respondent alleged that the tenancy agreement did not prohibit sub-letting and suggested that "section 53(2)(e) of the landlord and Tenant Ordinance does not apply during a contractual tenancy as stipulated by section 74A(aa)". That affidavit was sworn on the 18th December 1981. As the affidavit recognised, the landlord and Tenant (Consolidation) (Amendment) (No.2) Ordinance No. 76 of 1981 was to come into force, as it did come into force, on the 19th December 1981 two days before the summons itself was issued.

3. The hearing of that summons took place on the 14th January 1982 before His Honour District judge Cruden who treated it "as a simple summons to strike out." we have been supplied with a note of that hearing certified by the Judge. In his judgment as recorded in that note, the judge said that he was satisfied that "the law which applied was the law as recently amended and therefore section 74A(aa) does not apply"; that the new legislation made it clear that "there is no cause of action by plaintiff if sub-letting is existing during the contractual tenancy". He noted "(The) difficulty is where initial contractual term expired and (there is) nothing prohibiting sub-letting in (the) tenancy agreement. The plaintiff prima facie has good cause of action. There is provision for renewal in clause 4(i) of the Tenancy Agreement. (There is) no statement in lst defendant's affirmation that continued possession is pursuant to exercise of option though it may be so. 1st defendant says that is the position but the proper procedure is to include it in his affirmation. If not contested, then it can be proved and 1st defendant has unanswerable case; Counsel does not concede and states that if there is a dispute of facts, there can be no striking out. I accept counsel's argument on (the) first point. Application must be dismissed." Later he said: "If question of option is only point, it can be disposed of as a preliminary point at the hearing. As it is, the action should go to trial".

4. I read this as an indication that the judge considered that the plaintiff prima facie has a good cause of action where sub-letting has taken place after the expiry of the initial contractual term even though there is nothing prohibiting sub-letting in the tenancy agreement. He may have overlooked the amendment to section 53(2)(e) which since the 19th December 1981 reads:

"The tenant -

Be that as it may, he dismissed that summons and from that dismissal there was no appeal. Instead of appealing, the respondent on the 21st January 1982 took out a further summons.

5. By this summons he also sought two orders. The first was for "a ruling on the relevant versions of section 53(2)(e) in force at time of hearing and its application along with section 74A(aa) in regard to the plaintiffs' claim on the grounds it is the preliminary and sole issue of the plaintiffs' claim". The second order sought was again an order under 0.18 r.19 on the basis that the Particulars of Claim were frivolous and vexatious. In the result the trial judge struck out the amended Particulars of Claim which had in the meantime been amended to put in issue the question as to the renewal of the contractual tenancy.

6. When this summons was taken out, the present appellant objected to it on the basis that it itself was an abuse of the process. His argument was that at the first summons to strike out the respondent had an opportunity of arguing all the matters that could be argued on the second application. Although the respondent appeared to have been in some confusion when he drafted his summons of the 21st January 1982 as to the law applicable, there is no doubt that the trial judge on both the occasion of the hearing of the first summons and the occasion of the hearing of the second knew that Ordinance No. 76 of 1981 had come into force and was the law applicable. At that stage, that is to say, the hearing of the first summons all arguments as to the law applicable and its effect could have been advanced by the respondent. The respondent in his affidavit in support of the second summons put his argument simply: "Section 53(2)(e) (when it applies) required that there must be a sub-letting in breach of the contractual tenancy. Therefore even if the contractual tenancy has already expired there is still no breach of the contractual tenancy in the present action". On the occasion of the first summons the respondent here could equally well have raised this argument. All arguments were open to him on the 21st December. Indeed so far as I can determine, no arguments were advanced on the hearing of the second summons that were not advanced on the hearing of the first summons for he is recorded in the approved note to which I have referred as having argued in precisely the same way. The trial judge in the course of his judgment says:-

"As to whether the present summons is an abuse of process was referred by the plaintiff to the opinion of the Privy Council on appeal from our own Full Court in Yat Tung Investment Co. Ltd. v. Dao Heng Bank Ltd.⁽¹⁾ which is analogous to the present proceedings although here I am not concerned with competing statements of claim or counterclaims in different actions but with successive summons in the one action. Having considered the principles of that decision I consider that the question now raised on this second summons is sufficiently different to the prior summons that the Privy Council's opinion is of far less relevance than it would otherwise have been. If the two summons were the same and the 1st defendant was now merely seeking to cure an evidential defect or to argue the same point of law again I would have no hesitation in holding that the second summons was an abuse of process. I am also of the view that even if the two summonses were not substantially different 'special circumstances' would exist in terms of Henderson v. Henderson⁽²⁾ which would allow the present summons to proceed."

7. The question as to when the doctrine of res judicata is to be applied is dealt with in the judgment of their Lordships in Yat Tung Investment Co. Ltd. v. Dao Heng Bank at page 590:-

"But there is a wider sense in which the doctrine may be applied to, so that it becomes an abuse of process to raise in subsequent proceedings matters which could and therefore should have been litigated in earlier proceedings. The locus classicus of that aspect of res judicata is the judgment of Wigram V.C. in Henderson v. Henderson⁽²⁾ where the judge says:-

'when a given matter becomes a subject of litigation in and of adjudication by a court of competent jurisdiction, the court requires the parties to that litigation to bring forward their whole case and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest but which was not brought forward only because they have from negligence inadvertence or even accident omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the court was actually required by the parties to form an opinion and pronounce judgment but to every point which properly belonged to the subject of litigation and which the parties exercising reasonable diligence might have brought at the time.'

The shutting out of a 'subject of litigation' - a power which no court should exercise but after scrupulous examination of all the circumstances - is limited to cases where reasonable diligence would have caused a matter to be earlier raised; moreover although negligence, inadvertence or even accidence will not suffice to excuse, nevertheless 'special circumstances' are reserved, in case justice should be found to require the non-application of the rule".

8. The special circumstances which the trial judge regards as special in this case, he says:-

"Include the confusion that has arisen, even among members of the legal profession experienced in landlord and tenant matters, following the enactment of the tortuous provisions of the Landlord and Tenant (Consolidation)(Amendment) Ordinance (No.2) 1981 which came into force on the 19th day of December 1981."

9. I cannot, for myself, see that confusion resulting from an enactment of the legislature could in any case be said to be a special circumstance within the meaning of the phrase as it is interpreted in Yat Tung Investment Co. Ltd. The second special circumstance which the trial judge put forward is a suggestion that "this second summons in its wider form squarely raises the effect of a major amendment included in the recent amending Ordinance which was neither raised nor argued on the prior summons." In my view whether it was raised or argued on the prior summons (a matter on which there may be some doubt) is immaterial, what is material is whether it could have been so argued. I can see no reason why it could not have been or should not have been. Under these circumstances I consider that whether or not the trial judge was right in dismissing the first summons, he was not entitled to hear the second summons, and for that reason I would allow this appeal and order that the case be remitted for hearing to the District Court.

(1) (1975) A.C. at 581

(2) (1843) 3 Hare 100, 115

Cons, J.A.:

10. The reasons which the judge below gave for his decision on the first summons have been recorded in a note taken by the solicitor for the plaintiff and which the judge has certified as being correct. As I read that note an essential step in the reasons which led him to his conclusion was that the legislation introduced by the amending Ordinance No. 76 of 1981 applied not only to actions commenced thereafter but also to actions in which the writs had already been issued. That is the very same proposition which was raised in the second summons. The judge should therefore have refused to deal with it as being res judicata. He took the view that there were sufficient differences in the second summons, but for myself I am unable to discern what those differences are. Nor do I think that the needs of justice required him to impose upon the plaintiff the burden of resolving the difficulties which the legal profession, quite understandably, find in this particular legislation. I therefore, too, would allow the appeal and set aside his order.

Liu, J.:

11. I agree with the conclusions of my Lord, the Vice-President and my brother Mr. Justice Cons and their given reasons. I would also allow the appeal. I have little to add save that in both summons the amended section 53(2)(e) was a live issue before the court and that the decision of the learned judge on the first summons could not have stood except on the premise that this amended section 53(2)(o) of the Ordinance was not, in the known circumstances, fatal to the plaintiffs' cause of action; hence there was no justification for re-opening the very same issue, decided by necessary implication, at the hearing of the second summons.

Representation:

Mr. Kenneth Kwok (Wilkinson & Grist) for appellant

Respondent in person