LEIGHTON PHILLIP JOHANNESEN AND ANOTHER v. CIBEAN DEVELOPMENT CO LTD

Civil Appeal No. 215 of 1997

Headnote

Re-instatement or commencement of fresh action where action struck out under rule 31 of the District Court Civil Procedure (General) Rules.

Paper applications for appeals to be allowed by consent - suggestions and observations.

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

1997, No. 215
(Civil)

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J U D G M E N T

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Nazareth, V.-P.:

1. This is an appeal against the decision of His Honour Judge Muttrie in the District Court on 22 October 1997. By that decision he struck out the plaintiffs' second action. The plaintiffs now appeal to this Court against the order His Honour Judge Muttrie made.

2. The facts are as follows. On 7 April 1997 the plaintiffs took out their writ in District Court Action No. A7519 of 1997. By their writ they sought a refund of their deposit paid to their landlord for the lease of a flat. In due course a defence and counterclaim was filed by the landlord/defendant and later a reply by the defendant on 2 May 1997. The action was then struck out by the Registrar when the plaintiffs failed to apply for the fixing of a date for the hearing as required by rule 24 of the District Court Civil Procedure (General) Rules ("the Rules"). He did that in pursuance of rule 31(2) of those Rules. This and the succeeding paragraphs of rule 31 are as follows:

"(2) Where no application to fix a date for the hearing of an action is made under rule 24 within 3 months from the date on which the defence or counterclaim was filed or within such extended period as may have been ordered by the Court under paragraph (3), the Registrar shall strike out the action from the Register of Civil Actions, and upon the application of any party a judge may award such costs as he thinks fit.

(3) the Court may, on such terms as it thinks just, by order-

(a) extend the period provided in paragraph (1) during which an application for entry of judgment may be made under rule 22;

(b) extend the period provided in paragraph (2) during which an application to fix a date for the hearing of an action may be made under rule 24.

(4) The Court may extend the periods referred to in paragraph 3(a) and (b) although the application for extension is not made until after the action has been struck out from the Register of Civil Actions."

3. The plaintiffs then by summons issued on 4 September 1997 applied to the District Court to set aside the order striking out the action and to extend time under paragraph (4) of rule 31.

4. The summons came before Deputy Judge To on 12 September. Both parties were represented before him. He considered the matter and came to the conclusion that there was no reason for the delay. He accordingly dismissed the application with costs.

5. The plaintiffs then commenced a new action, District Court Action No. 16790, on 22 September. The defendant on 29 September 1997 took out a summons to strike out the new action for abuse of process. This summons came before His Honour Judge Muttrie on 8 October and he struck it out. His reasons for striking out the action are contained in his notes and are to the following effect:

"Procedure under Rule 31 DCCPGR is peculiar to the District Court. It provides for the automatic striking out of an action for want of prosecution. The dilatory plaintiff may then apply to a judge for extension of time which is in effect, if granted, a reinstatement of the action. The principles originally enunciated in Allen v Sir Alfred McAlpine and Sons Ltd [1968] 1 All ER 543 that the power of the court to strike out actions for want of prosecution should be exercised only where the court is satisfied that there has been an intentional and contumelious default would no doubt have to be considered by a judge hearing such an application.

The point is that here a judge has considered and dismissed such an application. No doubt that dismissal is open to appeal. It seems to me that if I were to allow this application I would be reversing in effect another judge's order and usurping the functions of the Court of Appeal. Though I myself might have taken a different course from Judge To I do not think it proper for me in effect to reverse his order. To the extent that his order is appealable I think this second action must be regarded as abuse of process."

6. Before us today, Mr Tommy Chung who appears for the appellants, submits that it is trite law that where an action is struck out in such circumstances, it may be commenced anew. He relies upon Birkett v James [1978] AC 297; 318F; [1977]2 All ER 801 in particular the following passages in the judgment of Lord Diplock at 318F:

"The power should be exercised only where the court is satisfied either (1) that the default has been intentional and contumelious e.g. disobedience to a peremptory order of the court or conduct amounting to an abuse of the process of the court; or (2) (a) that there has been inordinate and inexcusable delay on the part of the plaintiff or his lawyers, and (b) that such delay will give rise to a substantial risk that it is not possible to have a fair trial of the issues in the action or is such as is likely to cause or to have caused serious prejudice to the defendants either as between themselves and the plaintiff or between each other or between them and a third party.";

and added at p.321A:

"But such exceptional cases apart, where all that the plaintiff has done has been to let the previous action go to sleep, the court in my opinion would have no power to prevent him starting a fresh action within the limitation period and proceeding with it with all proper diligence notwithstanding that his previous action had been dismissed for want of prosecution."

Lord Edmund-Davies at p.334A said this:

"Putting aside cases where the plaintiff has so misled the defendant that it might be wrong to allow him to sue afresh, I hold that a plaintiff is free to issue within the limitation period a further writ claiming the same relief and based on the same grounds as an earlier writ dismissed for want of prosecution, and it is irrelevant to the competency of the second action that by the time it comes on the defendant may well be even more prejudiced than he would have been had the first action been permitted to proceed to trial."

7. It can be seen from what has already been said that Deputy Judge To did not find that there was anything in the nature of intentional and contumelious conduct or inordinate and inexcusable delay which has given rise to a substantial risk that it is not possible to have a fair trial. Likewise, there is no suggestion that this was found by Judge Muttrie in the second action. Indeed, it is plain that the basis upon which Judge Muttrie proceeded was that if he were to allow the application, he would be in effect reversing another judge's order and usurping the functions of the Court of Appeal.

8. That, however, can be seen in the light of Birkett v James not to have been the question. Here, it seems to me, that the situation in principle is no different from the ordinary position of a court dismissing an action or allowing it to go to sleep notwithstanding that rule 31of the Rules requires the action to be dismissed. However, rule 31 in paragraphs (3) and (4) also provides for reinstatement of the action. It might be suggested that the provision for reinstatement is intended to be comprehensive and in that way to exclude the principles endorsed as accurate in Birkett v James, but I cannot see that that suggestion has any force in it. In my view, rule 31 paragraph (2) does not take the matter outside the normal scope of striking out dealt with in Birkett v James.

9. Upon that basis, Judge Muttrie should have dismissed the defendant's application before him and allowed the proceedings to proceed. For my part, therefore, I would allow the appeal, set aside his order and make the following orders. That is to say, that I would in addition dismiss the summons taken by the respondent on 29 September 1997. I would give the following directions: That the defendant shall file a defence and/or counterclaim in the District Court action within 14 days after the service on the defendant of a sealed copy of the order made by this Court. I would give the costs of the hearing before Judge Muttrie in the District Court on 8 October to the appellants to be taxed if not agreed; likewise the costs of the appeal to this Court.

10. It remains to say that this matter originally came before me as a paper application upon a consent summons in the same way as consent summonses for the dismissal of appeals regularly come before this Court. However, this was one of those very rare instances when a consent summons is received for the appeal to be allowed. The consent summons came simply of itself without any explanation supporting affidavit or other information that would have revealed the matters that I have already canvassed. In his helpful written skeleton and supporting authorities, Mr Chung has provided to this Court extracts from the Law and Practice of Compromise by David Foskett. It is said in paragraph 28-06 at p.417 that

"... it was the practice of the Court of Appeal [in England] to require [applications by consent] to be listed for mention in order to be satisfied that a proper course was being adopted. This had the effect of increasing (usually unnecessarily) the parties' costs and a rather more flexible procedure had come to be adopted in more recent years. This practice was set in place formally by the then Master of Rolls, Sir Thomas Bingham, in Hadfield v Knowles and another when he indicated that in future the following procedure would be adopted:

(1) Where parties who were sui juris were asking for an appeal to be allowed by consent, a copy of the proposed consent order stating that the parties were sui juris and signed by the parties' solicitors was to be sent to the Registrar of Civil Appeals.

The court would then consider whether it was appropriate to allow the appeal by consent. If so, it would generally make the order on paper.

(2) Where a consent order needed approval because one of the parties was an infant a copy of the proposed order signed by the parties' solicitors was to be sent to the Registrar together with an opinion from an advocate acting on behalf of the infant.

If on consideration of the documents the court considered that the consent order should be approved the matter would be listed, but without any party being represented, and the order would be made in open court.

(3) Where the party was a patient and the case was not covered by Order 59, rule 23, the same procedure would he adapted, but the documents lodged were also to include any relevant reports prepared for the Court of Protection and a document evidencing formal approval by that court where required.

(4) The same procedure was to be followed in the case of a structured settlement negotiated in a case under appeal. The documents were to include those which would be required in the case of a structured settlement, dealt with at first instance.

If in any of those categories of case the court required further documents before deciding whether to approve the order or settlement, the Registrar or a member of his staff would notify the solicitors of what was required.

In future the court would only list any such case for mention at a hearing to be attended by the parties' advocates if it considered that there were problems about a proposed order or settlement which could not be satisfactorily resolved in any other way, or that for some other special reason such a hearing was necessary or desirable."

It may be that some such procedure should be considered in this jurisdiction. For myself, I am not prepared to make an order setting aside the considered judgment of a judge below without being satisfied that it is wrong. The bare consent summons placed before me does not provide me with a sufficient basis to do so. I do not advocate a procedure which unnecessarily puts the parties to additional costs. Had the summons been backed up with an affidavit explaining the position I would have been disposed to make that order. It seems to me therefore that if parties wish to have an order that was made below set aside in similar circumstances, they may well be able to save costs if they provide the judge who comes to hear the application on paper any necessary information in a supporting affidavit or affirmation in case he is disposed to make such an order.

11. It remains to say that Mr Chung drew our attention also to Tse Tsun-man v Kowloon Motor Bus Co. (1971) DCLR 39 in which Addison DJ, as he then was, exhaustively examined the position as it then was. However, it is little to the point now since the position has been dramatically changed, it may be at least partly because of his exposition.

Liu, J.A.:

12. I agree. I merely wish to address briefly two points. A defendant in any action may, for good cause, apply for the action to be struck out even if it is instituted within the limitation period, but none of the usual grounds for so striking out this action, albeit by a fresh writ after a previously terminated action, was advanced to the District Judge who was not otherwise inhibited from, in effect, reversing the Order made by Deputy Judge To under Rule 31 of the District Court Civil Procedure (General) Rules. I, too, would allow the appeal and make the orders proposed by the Vice-President.

13. The remaining matter is: Hong Kong would be better served by a similar Practice Direction for allowing appeals by consent as that issued by the English Court of Appeal in Hadfield v. Knowles & Another, [1996] 1WLR 1003. But in the absence of such a Practice Direction, the power of a single judge of the Court of Appeal would seem to be limited. See O 59 r 10(9) and "Incidental Applications" marginal references 59/10/28 & 59/14/1 at pp.1008 & 1018 respectively of 1997 White Book Vol. 1.

Leong, J.A. :

14. I agree that the appeal should be allowed. If I may add this: Rule 31 is a statutory rule on procedure peculiar to the District Court of Hong Kong. Under it, it is mandatory for the Registrar of the District Court to strike out an action which has remained stagnant on the Register of Civil Actions for over three months after the issue of the writ. It operates without an order from a judge. The purpose of this rule is, as it was well put by the case of TSE TSUN MAN v KMB [1971] DCLR 39, to ensure "actions are heard without there being a clog in the administration". Striking out an action under Rule 31 would involve no consideration on the merits. In the present case, the action taken by the plaintiff in April 1997 was deleted, so to speak, from the Register of Civil Actions as a matter of course. The first action was only thus struck out. Nothing under the rule nor by any authority was the plaintiff deferred from taking out a fresh action within the limitation period on the same cause.

Nazareth, V.-P.:

15. The appeal is accordingly allowed.

16. [After hearing counsel]

17. Costs before His Honour Judge Muttrie and the costs of the appeal be to the appellants.