TSANG YU v. TAI SANG CONTAINER COLD STORAGE AND WHARF LTD.

CACV 276/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 276 OF 1999

(ON APPEAL FROM HCPI 1048/1997)

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J U D G M E N T

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Hon Rogers JA :

Introduction

1. This is an appeal from a decision of Suffiad J given on 27 August last year whereby he refused the defendant's application to strike out the plaintiff's claim under Order 18 rule 19 that the claim was frivolous, vexatious and an abuse of the process of the court and on the basis of the court's inherent jurisdiction. The attack on the plaintiff's case in the court below was that the plaintiff's claim was statute-barred and in the alternative, that the plaintiff was attempting to re-litigate matters which had been litigated previously.

The history

2. This claim arises out of an accident which occurred in September of 1988 when the plaintiff was a security guard in a godown which was situated in a building called Tai Sang Container and Godown Centre.

3. Some three years later in September 1991, the plaintiff commenced an action naming three defendants. The first defendant was the driver of the forklift truck which had caused the plaintiff's injury. The second named defendant was Tai Sang Container and Godown Centre and the third defendant was Texxan Warehouse Co. Ltd which was the employer of the first defendant. Default judgment was obtained against the first and third defendants.

4. In respect of the second named defendant, it is quite clear that the plaintiff had difficulty in serving the proceedings upon any party who was prepared to take responsibility. The name given to the second defendant was the name of the building but it is clear from the documents before the court that at the time, the plaintiff and its advisers including the Legal Aid Department were unaware of who the owner of that building was. The writ was sent to Tai Sang Estate Agency Ltd. It was subsequently found that Tai Sang Land Development Ltd was the parent company of Tai Sang Estate Agency Ltd. None of these parties took responsibility. Eventually, in 1994, by dint of visits not only to the building but to other buildings as well, it was found that the owner of the building was Tai Sang Container Cold Storage and Wharf Ltd.

5. Despite discovering the name of the owner of the building in 1994, nothing happened until March 1997 when a summons was taken out on the plaintiff's behalf with a marginal note indicating that it was under Order 20 rule 5. The relief sought was that leave be given to the plaintiff to re-amend the writ as underlined in green on the copy which was annexed. We have not seen the copy annexed nor have we seen copies which have been marked in green but we are told that the first part of the draft amendment was the addition of the words "or Tai Sang Container Cold Storage and Wharf Ltd" added after the name "Tai Sang Container and Godown Centre". Again, we are told that the words "or Tai Sang Container Cold Storage and Wharf Ltd whose registered office is situated at 26-28/F, Tai Sang Commercial Building, 23-34 Hennessy Road, HK" after the address of the Tai Sang Container and Godown Centre of No. 2 Cheung Fai Road, New Territories, was the other amendment.

6. Before proceeding, I should mention that there was nothing in the body of the summons which indicated that the application was intended to be an application to join Tai Sang Container Cold Storage and Wharf Ltd as a new party to the action as opposed to amending the name. When analysed, however, the application could, in my view, only be comprehended on the basis that Tai Sang Container and Godown Centre was the same entity as Tai Sang Container Cold Storage and Wharf Ltd. If there were any suggestion that the names referred to two separate entities, the proposed application would have been a nonsense. As it is, it was simply confusing.

7. That application came before the master and it was refused. As would be normal, there was no written decision by the master and hence, the basis upon which the application was refused is not known. An appeal was subsequently launched by the plaintiff but there was apparently a consent order of 22 July permitting withdrawal of the appeal.

8. On 14 October 1997, the plaintiff commenced this action naming Tai Sang Container Cold Storage and Wharf Ltd as the sole defendant. The action has proceeded at a somewhat leisurely pace, a defence was filed on behalf of the defendant in January 1999. Amongst other defences, it is alleged the action is time-barred under the provisions of the Limitation Ordinance and also that the defendant is estopped from instituting these proceedings by reason of the dismissal of its application in the previous action.

The judgment below

9. The judge dealt with the defendant's application as two discrete points. In the first place, he held that the limitation point would clearly be open to the defendant but that it was a point which should be taken at trial. The judge then considered the attack which had been made as to whether the plaintiff was seeking to re-litigate a point which had been decided against it. The judge determined the point against the defendant, in the first place, no issue of fact had been determined between the plaintiff and the present defendant in the earlier proceedings : what the master had decided was that he refused to allow the plaintiff to amend the second defendant's name and that should not debar the plaintiff from commencing a new action if so advised.

This appeal

10. On this appeal, Mr Miu has argued two points. His first point was that even if the plaintiff's application in front of the master in the previous action should be considered as having been an application to amend the name of a party, pure and simple, the plaintiff should, on that occasion, have also applied, in the alternative, to join Tai Sang Container Cold Storage and Wharf Ltd as an additional defendant. Mr Miu relies upon a form of res judicata which was expounded in the cases of Henderson v. Henderson (1843) 3 Hare 100 and Yat Tung Investment Co Ltd v. Dao Heng Bank Ltd [1975] AC 581. He says that the proposition as to res judicata applies because parties to a litigation should raise all the points which, exercising reasonable diligence, they might bring forward at the time of that litigation and that they should not be permitted to re-open litigation on the basis of new points which could have been raised earlier.

11. After the break, Mr Miu raised a different point and that was based primarily upon the wording of Order 20 rule 5(1) which reads :-

"Subject to Order 15, rules 6, 7 and 8 and the following provisions of this rule, this Court may at any stage of the proceedings allow the plaintiff to amend his writ, or any party to amend his pleadings, on such terms as to costs or otherwise as may be just and in such manner (if any) as it may direct."

12. Based on that, Mr Miu argued that the application before the master in the previous action, although stated to be an amendment to the writ, was in effect also an application to join Tai Sang Container Cold Storage and Wharf Ltd as a party.

13. Turning to the last point first, in my view, Mr Miu's argument is incorrect on the facts. As pointed out above, the wording of the draft writ and thus the application itself, is only comprehensible if it was an application to correct the name of a party which had been incorrectly named. It is impossible, in my view, to name as a defendant two alternative people (corporate or otherwise). In those circumstances, the application before the master was clearly not an application which comprehended joining a new party, it was simply an application to correct the name of a party which had been incorrectly named.

14. In my view, that application before the master was indeed correctly refused. It is quite clear on the documents which are before the court that at one stage, the plaintiff contemplated that it was suing not the present defendant but one or other of two other existing limited companies. In those circumstances, it would have been quite wrong to have allowed an amendment on the basis that the wrong name had been given to a party. The true fact is probably that the plaintiff, and his advisers, had no clear notion of who they were suing and insofar as they did have any notion, that notion was that they were suing some other party. Indeed, insofar as the present defendant is concerned, it appears that it also considered that it was not a party to the proceedings. We have been shown an affirmation of Yue King Tat filed in the previous proceedings on behalf of the present defendant in which it is alleged that the application to amend was, in effect, an attempt to join the present defendant as a defendant in those proceedings after the expiration of the limitation period.

15. Turning to the question as to whether the plaintiff should have made an alternative application in the previous action to join the present defendant as a defendant in those proceedings, it is true that he might have done. I do not consider, however, that it is clear that he should have done nor do I consider that in the absence of his doing so, he should be debarred from issuing the present proceedings on the basis that it is an abuse of process for him to seek to sue the present defendant. Had the plaintiff in 1997 sought to join the defendant as a new defendant in the earlier proceedings, the court would have been faced with the problem of the limitation period. The note in the White Book appearing on page 222 under the heading "Adding or substituting parties after expiry of limitation period", marginal note 15/6/4 reads :-

"Where a plaintiff seeks to claim against a new party at a time when the limitation period relevant to such claim has plainly expired and the new claim does not come within the conditions prescribed by s.35(5)(b) of the Limitation Act 1980, the proper course is to issue fresh proceedings against the new party rather than to attempt to amend subsisting proceedings against another party to add or substitute the new party as a defendant. Any application by the new party to strike out the fresh action as an abuse of process on the grounds that it is statute barred, or by the plaintiff, if appropriate, for an order under s.33 of the 1980 Act that the action may be allowed to proceed, may then be made by summons and adjudicated upon in the course of the fresh proceedings. In this way, the new party has the opportunity to put before the Court his objections to the launch of proceedings against him, whereas, if he is added or substituted as a defendant to subsisting proceedings, he will have been given no opportunity, and the order giving leave to add or substitute him may subsequently be set aside on his application in order to prevent the limitation point being concluded against him by virtue of s.35(1) of the 1980 Act. If the fresh action is allowed to proceed it may, if appropriate, be ordered to be consolidated or listed for hearing with the original action."

16. In my view, the plaintiff has adopted the correct course. Having failed to satisfy the master that it was an appropriate case to allow the name of the party to be amended, instead of applying to join the new party to the writ which is, in some respects, an undesirable process, he recognised the difficulties, and commenced new proceedings. This permitted the defendant to take the limitation point at an appropriate stage.

17. In any event, I consider that this is a procedural matter. There has been no clear adjudication by a court on the merits of the plaintiff's case. This is not a case in which the plaintiff has failed to bring forward his whole case necessary to bring within the decision every point which properly belonged to the previous litigation. Nor do I consider that this is a case where it could be said that the course adopted by the plaintiff to start new proceedings was an abuse of the process of the court. That is the crux of the basis of the Yat Tung case as explained in the advice of the Privy Council at p.580.

18. In my view, this appeal should be dismissed with an order nisi as to costs in favour of the plaintiff.

Hon Godfrey VP :

19. I agree.

20. What the respondent should have done in 1997 (or earlier) is what he has done now, and it is not an abuse of the process of the court for him to have done so. His failure to appreciate then what he has appreciated now (with the consequence that what I consider to be the misconceived application he made in 1997 was dismissed) does not warrant the action he has now instituted being treated as an attempt to re-litigate an issue which has already been decided against him, or as an attempt to bring forward now a case against the appellant which he should have advanced in 1997. The correct analysis of what happened is that he tried in 1997 to advance that case but went about it in the wrong way, with the result that his attempt to do so failed. Why that should bar him from advancing his case in the right way, I fail to understand. The appellant's rights under the Limitation Ordinance, Cap. 347 are in no way affected.

21. We will, therefore, dismiss the appeal, with costs here and below.