WU YIN KWAN AND ANOTHER v. MODERN TERMINALS LTD AND OTHERS

Headnote

The new section 35 of the Limitation Ordinance (Cap. 347) which was introduced by section 2 of the Limitation (Amendment) Ordinance 1984 (No. 58 of 1984) and validates Order 20 rule 5(2), (4) and (5) with effect from the 27th July 1984 is not to be construed as empowering the court to allow the amendment of a statement of claim in a pending action so as to permit the making of a new claim which was already time barred before the 27th July 1984: Yew Bon Tew v Kenderaan Bas Mara [1983] AC 553 (P.C.) applied.

1981 No. 7110

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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BETWEEN:

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JUDGMENT

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1. This application by the Plaintiff to amend her Writ and Statement of Claim in this action raises the question whether rules of court which were hitherto held to be ultra vires by the courts have been validated with retrospective effect, and if so, with what degree of retroactivity, by section 35 of the Limitation Ordinance (Cap. 347). That provision was introduced in its present form by the Limitation (Amendment) Ordinance 1984 which came into operation on the 27th of July 1984.

2. At the conclusion of the hearing of the Plaintiff's application on the 29th October 1984 I reserved judgment because this is a test case for the Director of Legal Aid and for the Defendants and Third Parties who presumably have insurers behind them.

3. The Plaintiff is the widow of the late Mr. Cheung Kwok Keung who died intestate. He was killed in an accident on the 6th November 1978 when working at Kwai Chung Container Terminal. Before obtaining any grant of representation the Plaintiff began her action by a specially indorsed writ issued on the 13th October 1981 against the three Defendants. The 1st and 3rd Defendants were subsequently made Third Parties by the 2nd Defendant. In her Statement of Claim the Plaintiff alleges neligence and breach of statutory duty against all the Defendants and purports to claim damages against them under both the Fatal Accidents Ordinance (Cap. 22) and the Law Amendment Reform (Consolidation) Ordinance (Cap. 23) ("LARCO").

4. As a matter of pleading the Statement of Claim leaves much to be desired. It is deficient inter alia in relation to the claim under LARCO because the Plaintiff pleads that she is the widow of the deceased but does not plead that she is his duly constituted personal representative or that she is suing on behalf of his estate for the purposes of section 20 of LARCO. On the contrary she pleads that the LARCO claim is made "on behalf of the Dependants" of the deceased.

5. On the 19th February 1982 the Plaintiff obtained a grant of letters of administration of the deceased's estate. On the 31st March 1983 a purported amendment to Order 20 rule 5 was made by L.N.126/83 introducing a new paragraph (4) so as to follow the like amendment to the same English rule which had been introduced on the 1st May 1981 by S.I. 1981 No. 562 under the powers conferred by section 35 of the Limitation Act 1980 which came into operation on the same day under S.I. 1981 No. 588.

6. This is the amendment which is intended to remove the technical anomaly the courts were compelled to accept in the well known line of cases beginning with Ingall v. Moran [1944] K.B. 160 (C.A.) preventing a plaintiff who sued to establish a LARCO claim on behalf of an intestate deceased's estate without first obtaining a grant of letters of administration from subsequently amending his claim after the expiration of the relevant limitation period to plead the Plaintiff's representative capacity subsequant to obtaining the necessary grant. The doctrine of relation bank did not apply to the grant and the original writ was a nullity and could not be amended.

7. On the 3rd August 1983, in Mohan v. McElney [1983] HKLR 308, the Court of Appeal, applying the principles laid dorm by the Judicial Committee of the Privy Council in Yew Bon Tew v. Kenderaan Bas Mara [1983] AC553 (P.C.), held that, in purporting to confer a discretion on the court to allow the introduction of an action that had already become time barred rule 5(5) was ineffective because it was ultra vires the powers of the Rules Committee under section 54 of the Supreme Court Ordinance (Cap. 4) and inconsistent with the provisions of the Limitation Ordinance.

8. On 11th November 1983 the Director of Legal Aid, acting for the Plaintiff, issued the summons to amend which is now before me supported by the affidavit of counsel acknowledging the deficiency in the claim under LARCO due to the lack of capacity of the Plaintiff when the writ was issued, invoking the new rule 5(4) of order 20 and explaining that the amendment was sought to rectify the initial deficiency in the claim and to "regularise" the Plaintiff's claim now that letters of administration had been granted.

9. The Plaintiff's summons was adjourned to a judge in chambers by the master and was due to be heard by me on the 15th February 1984. On the morning of the same day, in Kwok Cheung v. Kowloon Bus Co. (1933) (H.C.A. No. 2057 of 1980) Mayo J., held inter alia, applying the Mohan case, that rule 5(4) of Order 20 was also ultra vires. On the Plaintiff's application I granted an adjournment of the hearing of the application for not more than twenty eight days to enable the Director of Legal Aid to obtain the advice of leading counsel on the implications of Mayo J.'s decision. On 29th February the Director of Legal Aid lodged notice of appeal against Mayo J.'s decision. On the 29th of March I again adjourned the hearing of the Plaintiff's summons to the 24th of May with liberty to the parties to apply in the light of the developments in the pending appeal in the Mohan case; and on the 26th May the summons was by consent adjourned sine die with liberty to restore.

10. The appeal in the Kwok Cheung case was evidently not pursued. I respectfully agree with the decision of Mayo J. in that case that at the material time Order 20 rule 5(4) was ultra vires.

11. On the 27th July 1984 the Limitation (Amendment) Ordinance 1984 came in to operation, introducing into the Limitation Ordinance the new section 35 which is in substance a reproduction of section 35 of the Limitation Act 1980. Although the substantive provisions of the English and Hong Kong sections are almost the same the Act, very sensibly, deals expressly with the question of retroactivity by a transitional provision contained in Schedule 2 to the Act but the Hong Kong Ordinance contains no similar provision.

12. Paragraph 9(1) of Schedule 2 to the Act provides that nothing in any provision in the Act shall enable any action to be brought which was barred by the Act or by the Limitation Act 1939 before the "relevant date". The "relevant date" is defined in paragraph 9(2) in relation to section 35 in terms which in the event mean the 1st May 1981 because (as indicated in the notes to section 41(3) of the Limitation Act 1980 in Halsbury's Statutes of England, Vol. 50(1) p. 1297) section 8 of the Limitation Amendment Act 1980 (which introduced the same provisions as those contained in section 35 of the Limitation Act 1980 as a new section 28 in the Limitation Act 1939) never took effect.

13. The Hong Kong draftsman has not followed the English Act on this point and has simply inserted the following subsection at the end of section 35:-

14. On the 7th September 1984 the Plaintiff restored her summons for hearing and I heard the application to amend on the 29th of October. Mr. Mitchell, counsel for the Plaintiff, did not invoke section 30 of the Limitation Ordinance, nor did he invoke Order 15 rule 6. He relied on the new section 35 of the Limitation Ordinance and on Order 20 rule 5.

15. He opened the application on a broader basis than had been indicated in the affidavit supporting the application. He acknowledged that the purported claim under LARCO in the Statement of Claim contained no claim by the Plaintiff to be the Administratrix of the deceased's estate and no claim in terms on behalf of the estate. He put his case on the footing that the Plaintiff was seeking to introduce a new claim in a now capacity.

16. No question arose on the terms of the proposed amendment to the Statement of Claim which would clearly repair its deficiency by pleading the capacity of the Plaintiff as Administratrix of the deceased and by pleading that the LARCO claim was made by her in that capacitor on behalf of the deceased's estate. If and so far as the Plaintiff was seeking to introduce a new claim after the expiration of the relevant limitation period current when the writ was issued in a capacity she did not have when the writ was issued, the proposed amendment was within the terms of the new section 35(8) of the Limitation Ordinance and of Order 20 rule 5(5) which is now given full effect by section 35 of the Ordinance, overruling the Mohan case.

17. To the extent that a new capacity only was sought to be relied upon by the Plaintiff after the expiration of the relevant limitation period current when the writ was issued in respect of the LARCO claim, the proposed amendment was within the terms of section 35(9) of the Ordinance and Order 20 rule 5(4) which is likewise given full effect by section 35 of the Ordinance, overruling the Kwok Cheung case.

18. In the absence of any application under section 30 of the Limitation Ordinance to enlarge the limitation period in respect of the Plaintiff's LARCO claim the three year limitation period applicable under section 27(5) of the Ordinance must have expired before the 11th November 1983 when the Plaintiff's summons to amend was issued. It follows that unless Order 20 rule 5(2), (4) and (5) could be invoked the Plaintiff's application would be defeated by the general rule of practice that amendments to the Statement of Claim should not be permitted if at the date of such amendments the Defendants had an accrued limitation defence : Weldon v. Neal (1887) 19 QBD 394 (C.A. ).

19. Accordingly there were two issues arising at the hearing of the application. The first issue was whether the validation of Order 20 rule 5(2), (4) and (5) by the new section 35 of the Limitation Ordinance introduced by section 2 of the 1984 Ordinance had effect to give the court power to permit the amendment sought by the Plaintiff in this case where the Defendants' limitation defence had accrued under section 27(5) of the Ordinance long before the 27th July 1984 when the new section 35 came into operation. If the first issue were determined in favour of the Plaintiff then the second issue was whether the court should exercise the power to give the Plaintiff leave to amend in the circumstances of this case.

20. On the first issue Mr. Pirie, counsel for the Defendants, drew my attention to a ruling given by Hunter J. in Mohan v. McElney (H.C.A. No. 4611 of 1978) on the 21st September 1984 to the effect that the new section 35 of the Limitation Ordinance did not affect pending litigation. However I have ascertained from Hunter J. that his ruling was based on a concession and was not given after argument. Accordingly the ruling in question does not assist me now.

21. Mr. Pirie relied on section 23(c) of the Interpretation and General Clauses Ordinance (Cap. 1) and contended that since the 1984 Ordinance effected a partial repeal of the Limitation Ordinance any accrued limitation defence of the Defendants in this action was unaffected by the provisions of the 1984 Ordinance.

22. Mr. Mitchell pointed out that, whilst section 2 of the 1984 Ordinance was expressed to repeal section 35 of the Limitation Ordinance and to replace that section by a new section 35, the provisions of the new section 35(1) and (2) reproduce the provisions of the replaced section 35. However the remaining provisions of the new section 35 are, in my judgment, inconsistent with other provisions of the Limitation Ordinance. Thus in the present case the combined effect of section 27(3) and (5) of the Limitation Ordinance is that the Plaintiff's claim under LARCO is time barred but nevertheless section 35(3) and (5) of the new section introduced by the 1984 Ordinance expressly authorise rules of court to be made to empower the court to allow such a time barred claim to be made in specific conditions and section 35(12) validates the rules previously made to this end.

23. In my judgment the 1984 Ordinance, being subsequent in time to the Limitation Ordinance, has therefore impliedly partially repealed the provisions of section 27(3) and (5) of the Limitation Ordinance: See Craies on Statute Law, 7th ed. at page 366. Therefore the combined effect of section 2(1) and 23(c) of the Interpretation and General Clauses Ordinance is that, unless a contrary intention appears from the 1984 Ordinance that Ordinance is not to be construed as affecting any rights which have accrued to the Defendants under the Limitation Ordinance before the 1984 Ordinance came into operation.

24. Furthermore, as Lord Brightman observed in Yew Bon Tew v. Kenderaan Bas Mara [1983] AC 553 (P.C.) at p. 558 F.

"Apart from the provisions of the interpretation statutes, there is at common law a prima facie rule of construction that a statute should not be interpreted retrospectively so as to impair an existing right or obligation unless that result is unavoidable on the language used."

25. In relation to pending actions the same principle was enunciated by Viscount Dilhorne in the following passage of the judgment of the Judicial Committee in Zainal Bin Hashim v. Government of Malaysia [1980] AC 734 (P.C.) at p. 742 C:-

".... for pending actions to be affected by retrospective legislation, the language of the enactment must be such that no other conclusion is possible than that that was the intention of the legislature."

26. When considering whether or not the 1984 Ordinance is to be construed in a retrospective sense, and, if so, to what degree, the court has to ascertain the intention of the legislature having regard to the normal canons of construction and to the relevant provisions of the Interpretation and General Clauses Ordinance, including section 19 which provides as follows: -

"An Ordinance shall be deemed to be remedial and shall receive such fair, large and liberal construction and interpretation as will best ensure the attainment of the object of the Ordinance according to its true intent, meaning and spirit. "

27. The question whether or not the Defendants in this case had acquired accrued rights under the Limitation Ordinance as distinct from merely procedural rights when the Plaintiff's claim under LARCO became time barred under section 27(5) of the Limitation Ordinance is answered by the opinion of the Judicial Committee in their judgment in the Yew Bon Tew case expressed by Lord Brightman in the following passage at p. 563 D:-

"In their Lordships' view, an accrued right to plead time bar, which is acquired after the lapse of the statutory period, is in every sense a right, even though it arises under an act which is procedural. It is a right which is not to be taken away by conferring on the statute a retrospective operation, unless such a construction is unavoidable."

28. The purpose of the new section 35 of the Limitation Ordinance is clearly to authorise rules of court to empower the court to allow a new claim to be made in a pending action after the expiration of any time bar imposed by the Limitation Ordinance if specified conditions are satisfied and to validate rules of court purportedly made to achieve that purpose before the 1984 Ordinance came into operation. There can therefore be no doubt that, from the very nature of section 35 and of Order 20, rule 5(2), (4) and (5), these provisions are intended to apply at least to some pending actions and therefore to permit defendants in those actions to be deprived of what would otherwise be accrued limitation defences.

29. However the crucial question for decision is whether it is unavoidable to construe the 1984 Ordinance as having the effect of empowering the court in specified circumstances to allow an amendment permitting the litigation of a new claim which has become time barred not only after the Ordinance came into operation but also before that event. Adopting the language of Lord Brightman in the Yew Bon Tew case at p. 563 E-F, the question seems to me to be - is the purpose of the 1984 Ordinance to deprive a defendant in a pending action of an accrued limitation defence which he "already possessed" when the Ordinance came into operation?

30. In this connection I have borne in mind the following dictum of Lord Brightman in the Yew Bon Tew case at P. 563:-

"When a period of limitation has expired, a potential defendant should be able to assume that he is no longer at risk from a stale claim. He should be able to part with his papers if they exist and discard any proofs of witnesses which have been taken; discharge his solicitor if he has been retained; and order his affairs on the basis that his potential liability has gone. That is the whole purpose of the limitation defence. "

31. Mr. Pirie contended that the 1984 Ordinance and the validated rules applied only to cases where there were no accrued rights to rely on a limitation defence when the Ordinance came into operation. Mr. Mitchell relied on the use of the expression "any action" in the new section 35(1), (3) and (8) introduced by section 2 of the 1984 Ordinance. He argued that a pending action is a class of actions within the generic term "action" and that "any action" includes a pending action.

32. Mr. Mitchell's argument seems to me to beg the crucial question which I have stated above because clearly section 35 is intended to apply to pending actions. It does no violence to section 18(3) of the Interpretation and General Clauses Ordinance to emphasise that the application of section 35 to pending actions is recognised by the marginal note to that section. It now has to be decided whether the 1984 Ordinance is intended to affect all pending actions including any action which was pending immediately before the 27 the July 1984 in which a party had already acquired an accrued limitation defence in respect of a cause of action which had not yet been pleaded against him or had been pleaded against him by another party purporting to claim in a capacity not yet acquired by that other party.

33. In my judgment the answer to this question is in the negative. Section 35(12), cited above, is expressed in terms validating rules of court made before the commencement of the 1984 Ordinance "... which would have been validly made" had section 35 been in operation when the rules were made. That section validates such rules ".... as from the commencement of the limitation (Amendment) Ordinance 1984 as if made by virtue of this section. "

34. For the purposes of this application the effect of section 35(12) is, in my judgment, no more than to give validity to rules 5(2), (4) and (5) of Order 20 from the 27th July 1984 as if those rules had been made on that date by virtue of the powers conferred by section 35. I can see no manifestation by section 35(12) of any intention that a party having an accrued limitation defence immediately before 27th July 1984 is to be liable to be deprived of it on or after that date under the rules given validity by section 35(12).

35. There are in my view three possible situations that might be affected by section 35 and the rules it validates, namely:-

36. Situations (1) and (2) above do not involve the taking away or the risk of the taking away of a right to a limitation defence already accrued by the 27th July 1984 whereas situation (3) does so. Applying the approach of the Judicial Committee in the Yew Bon Tew case, there is in my judgment nothing in the context or the purpose of the 1984 Ordinance which makes it unavoidable to construe that Ordinance as being intended to take away or impair an accrued limitation defence from a defendant in situation (3). The Ordinance can be construed in accordance with the normal canons of construction and the relevant provisions of the Interpretation and General Clauses Ordinance to have efficacy in relation to situations (1) and (2). The latter situation is, in my judgment, covered by the decision in Rex v. Chandra [1905] 2KB 335 cited in the Yew Bon Tew case.

37. If the legislature had intended that the 1984 Ordinance should take away or impair a limitation defence which had accrued before the Ordinance took effect it would have either employed language in the Ordinance expressing such an intention or language from which such an intention was necessarily to be inferred. In my judgment it has not done so. I therefore conclude that the court has no power to allow the amendments sought in the present case. It follows from that conlusion that it ceases to be necessary to deal with the second issue mentioned above.

38. Accordingly I dismiss the Plaintiff's application. I award the cost of the application to the Defendants in any event but the order as to costs will be an order nisi for the purposes of Order 42 rule 5B(6) and will become absolute fourteen days after the date when this judgment is handed down unless the Plaintiff applies within that period to vary this order as to costs.