XCHRX TANG KIN WAH v. CHENG CHOY KAM CHEE CONNIE AND ANOTHER

HCPI 771/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO.771 OF 2000

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J U D G M E N T

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1. This is an appeal from the order of Master H.C. Wong whereby the learned master dismissed the defendants' application by summons to strike out the plaintiff's ("Tang") Statement of Claim on the grounds that it disclosed no reasonable cause of action, was frivolous, vexatious and an abuse of court's process. Although the summons taken out by the defendants was framed as widely as it was, at the hearing before me, counsel for the defendants made it abundantly clear that the defendants' application was really based on the abuse of court's process alone.

Background

2. The background facts giving rise to this application are not disputed by the parties and are as follows. At about 8.00 am on 16 June 1998, a collision occurred at Tai Po Road between a private car driven by the 2nd defendant and owned by the 1st defendant, and a motorcycle driven by Tang and on which his wife, Lo Mei Yee ("Lo"), was a pillion passenger. As a result of that collision, both Tang and Lo sustained personal injuries.

3. On 5 May 1999, Lo commenced an action in the High Court (HCPI 468 of 1999) against the driver and owner of the private car in respect of that collision, claiming damages for the injuries which she sustained in the collision. On the same day that the Defence was filed by the defendants in HCPI 468, third party proceedings was commenced by both defendants in HCPI 468 against Tang. Lo then withdrew her claim against the owner of the private car but continued the proceedings against the driver. As a result, the owner of the private car also withdrew her third party claim against Tang. The Statement of Claim in the third party proceedings in HCPI 468 claims for an indemnity or contribution from Tang in respect of the damages which Lo may recover against the car driver. To that claim in the third party proceedings in HCPI 468, Tang filed a Defence effectively denying negligence and denying liability to either a contribution or indemnity but without any counterclaim. Neither did Tang take out any fourth party proceedings in HCPI 468.

4. Ultimately, a settlement was reached between Lo and the car driver in HCPI 468. Similarly, a settlement was also reached between the car driver and Tang in the third party proceedings, and that was embodied in a Consent Order which states :

"The third party do pay the 1st defendant the sum of HK$55,771.22 within 14 days from the date of this order in full and final settlement of the 1st defendant's claims against the third party herein."

5. On 22 June 2000, Tang commenced the present action against the owner and driver of the private car involved in the collision, claiming damages in respect of the injuries suffered by him in the collision. On 25 July 2000, the defendants applied for striking out under Order 18, rule 19 and the inherent jurisdiction of the court. The matter was heard by the learned master on 28 November 2000 who dismissed the defendants' application. The defendants now appeal against the master's order.

The defendants' application to strike out

6. As already indicated, the defendants' application is founded squarely on the abuse of court's process. That, in turn, is based on the wider sense of res judicata as per the judgment of the Privy Council in the case of Yat Tung Investment Co. Ltd v. Dao Heng Bank Ltd [1975] AC 581 in the words of Lord Kilbrandon at 590 :

"But there is a wider sense in which the doctrine may be appealed 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."

7. The defendants submitted that Tang could and therefore should have counterclaimed in the third party proceedings in HCPI 468 for the damages he now claims in the present action, alternatively, by bringing fourth party proceedings for same. That his failure to do so tantamounts to an abuse of process by bringing the present proceedings now. On this basis, it is submitted that the matter is res judicata in the wider sense as understood in the decision in Yat Tung.

8. Secondly, it is submitted by the defendants that on the authority of the decision of the Court of Appeal in Bahadur v. Secretary for Security [2000] 2 HKC 486, where it was decided that decisions of the Privy Council delivered before the resumption of sovereignty over Hong Kong by the People's Republic of China continued to be binding since the resumption of sovereignty on all courts in Hong Kong save for the Court of Final Appeal, the decision of the Privy Council in Yat Tung is therefore binding on all the courts in Hong Kong, and if there is a divergence in the law as laid down in that case with other decisions by courts in England or in Australia, notably the case of Bradford & Bingley Building Society v. Seddon Hancock & Others [1999] 1 WLR 1482, a decision of the Court of Appeal in England, and also the case of Port of Melbourne Authority v. Anshun Pty. Ltd (1981) 147 CLR 589, a decision of the High Court of Australia, then the law, as it is laid down in the Yat Tung case, should apply in Hong Kong.

9. It was decided in Bradford & Bingley Building Society that mere "re"-litigation, in circumstances not giving rise to cause of action or issue estoppel, does not necessarily give rise to abuse of process. Further, that the maintenance of a second claim which could have been part of an earlier one, or which conflicts with an earlier one, should not, per se, be regarded as an abuse of process, but that some additional element is required, such as a collateral attack on a previous decision, some dishonesty or successive actions amounting to unjust harassment. It was also decided in that case that in a case of "re"-litigation falling short of res judicata, the onus should be on the person alleging abuse of process to establish it, that is, what makes the further litigation an abuse.

10. In the case of Anshun, the High Court of Australia decided that there will be no estoppel unless it appears that the matter relied upon as a defence in the second action was so relevant to the subject matter of the first action that it would have been unreasonable not to rely on it, and that there are a variety of circumstances why a party may justifiably refrain from litigating an issue in one proceeding yet wish to litigate the issue in other proceedings, e.g. expense, importance of the particular issue, motives extraneous to the actual litigation.

11. Thirdly, it was submitted by the defendants that even if the test enunciated in the Anshun case was applicable to the present case, then the defendants say that the issues in the present action by Tang was so relevant to the subject matter of HCPI 468 that it would have been unreasonable that it was not raised in the earlier action. In this respect, the defendants submit that there are common issues of negligence and/or contributory negligence on the part of the car driver and Tang based upon the same facts as in HCPI 468. In this respect, reliance is placed by the defendants on the decision in Wall v. Radford [1991] 2 All ER 741. In that case, Popplewell J at First Instance decided that where two vehicles collided resulting in an injury to a passenger in one of the vehicles, then, even though each driver owed a separate duty to the other driver from that owed to the passenger, the duty itself was not in any way different, since the facts giving rise to a breach of that duty were identical and liability for it was identical, and although owed to a different person it was the same duty, namely a duty to take reasonable care. Therefore, a decision on the respective driver's liability in an action brought by the passenger was conclusive of the driver's liability inter se, with the result that they were estopped from re-litigating their liability inter se in a second action.

Decision

12. The starting point is of course the Privy Council decision in Yat Tung. Moreover, there can be no question that that decision is binding on all Hong Kong courts except the Court of Final Appeal. From there, the next question to ask is whether there is a divergence in the law? Put in a different way, was the decision by the Court of Appeal in Bradford & Bingley Building Society and also the decision by the Australian High Court in Anshun's case different from what was decided by the Privy Council in Yat Tung? I think not, for the following reasons. After citing the words of Wigram V-C in Henderson v. Henderson (1843) 3 Hare 100, Lord Kilbrandon in the case of Yat Tung went on to point out at page 590 that the phrase used by the Vice-Chancellor : "every point which properly belonged to the subject of litigation" was expended in Greenhalgh v. Mallard [1947] 2 All ER 255, at 257, by Somervell LJ in these words :

".... res judicata for this purpose is not confined to the issues which the court is actually asked to decide, but .... it covers issues or facts which are so clearly part of the subject matter of the litigation and so clearly could have been raised that it would be an abuse of the process of the court to allow a new proceeding to be started in respect of them."

13. Immediately thereafter, Lord Kilbrandon in the Yat Tung case at page 590 also referred to a phrase used by Lord Shaw of Dunfermline in delivering the opinion of the Board in Hoystead v. Commissioner of Taxation [1926] AC 155, at 171 :

"The present point was one which, have taken, went to the root of the matter on the prior occasion."

which phrase Lord Kilbrandon conceded to be precisely apposite to the failure, in answer to the counterclaim in the earlier proceedings, to raise the matters founded on in the later proceedings which, if then substantiated, would have been then decisive.

14. Indeed, if the facts of the Yat Tung case are looked into, it could be seen that the abuse of process was not simply the failure to raise in the earlier proceedings the matter which Yat Tung wished to raise in the later proceedings, but that that matter was one which went to the root of the counterclaim in the earlier proceedings.

15. The facts of Yat Tung were as follows. When a borrower defaulted to the bank on a loan which was charged upon a property, the bank, exercising its rights under the charge, sold and assigned the property to Yat Tung. Yat Tung then borrowed from the bank on the security of a mortgage of the property. When Yat Tung defaulted on payment of interest under the mortgage, the bank exercised its right of sale under the mortgage and sold the property to one Choi Kee. Yat Tung brought a first action against the bank, claiming that the sale of the property to it was a shame, that the property had been conveyed to it as trustee for the bank and the mortgage was accordingly a nullity. The bank denied that claim and counterclaimed for the loss suffered on the resale of the property to Choi Kee. The court dismissed Yat Tung's claim and upheld the bank's counterclaim. One month after that judgment, Yat Tung brought a second action against the bank and also against Choi Kee, claiming that the sale of the property by the bank to Choi Kee was void or voidable as fraudulent because the bank and Choi Kee were acting in concert with a common design calculated to obtain the property at a low price and to extinguish Yat Tung's interest therein. It was held by both the Court of Appeal in Hong Kong as well as the Privy Council that this second claim by Yat Tung went to the very root of the bank's counterclaim in the earlier proceedings and should have been pleaded as a counterclaim to the counterclaim in the earlier proceedings and there lies the abuse of process.

16. Coming back to the present case, the cause of action in HCPI 468 (i.e. the earlier proceedings) was the claim for damages by Lo for the injuries sustained by her in the collision. That is a separate and distinct cause of action than the present claim by Tang for damages resulting from the injuries sustained by him in the collision. Accepting that both causes of action of Lo and Tang arose out of the same collision on the same facts, nevertheless, they remain separate and distinct causes of action.

17. The defendants sought to rely on the decision of Popplewell J in the case of Wall v. Radford for the proposition that the present claim brought by Tang goes to the very root of the matter of HCPI 468 and should have been litigated there in the earlier proceedings. However, the decision in Wall v. Radford was a decision on issue estoppel. It was not a decision on abuse of process in the wider sense of res judicata. What was decided in Wall v. Radford was that the apportionment of blameworthiness between the two drivers in the earlier proceedings was such that that issue should not be re-litigated in the later proceedings but that the apportionment in the earlier proceedings would apply to the later proceedings. As such, it does not support the proposition put forward by the defendants for which reliance is sought on the decision of Wall v. Radford.

18. Lastly, I do agree that the present claim by Tang could have been litigated in HCPI 468 either by way of a counterclaim in the third party proceedings or even by way of fourth party proceedings. However, failure to do so in the earlier proceedings and/or the bringing of the present proceedings do not, in my view, amount to an abuse of process in the way that it is understood in the Yat Tung case. That much is made clear in the case of Bradford & Bingley Building Society and also the Anshun case. Accordingly, the defendants' appeal from the order of Master H.C. Wong is dismissed.

Costs

19. There will be a costs order nisi that the costs of this appeal from the master's order be to the plaintiff in any event.