XCHRX CHAN KUI v. LEE FAI t/a FAI KEE TIMBER

1995, No. PI 126

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

PERSONAL INJURIES LIST

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REASONS FOR JUDGMENT

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1. On 16 March 1992, an accident occurred at the defendant's factory whilst the plaintiff was engaged in the loading of wooden planks onto trucks in the course of his employment with the defendant. As a result of the accident, the plaintiff sustained substantial injuries with residuary permanent disability. Legal aid was obtained by the plaintiff in January 1994. In the following month, the notice to insurers for Employees Compensation was issued. After further medical reports on the condition of the plaintiff were finalised, the plaintiff's assigned solicitors entered into correspondence with the defendant's solicitors regarding service of process in October 1994. On 14 February 1995, about a month before the cause of action would be time-barred, the writ herein was issued together with the Notice to Insurers. About six weeks after that, the plaintiff's solicitors further wrote to the defendant's solicitors regarding service of the writ. In April 1995, defendant's solicitors confirmed their instruction to accept service. In May 1994, counsel was assigned by Legal Aid to the plaintiff. In August 1995, payment into court in the Employees Compensation claim was accepted by the plaintiff. In early February 1996, solicitor in charge of the plaintiff's case handed the file to the litigation section for service of process.

2. Unfortunately, in the event the writ was not served before the 12 month validity period had expired. However, on 6 March 1996, about three weeks after the validity of the writ had expired, a Notice to Act was filed by the defendant's solicitors on behalf of the defendant. It was most unusual for a party to file such a notice before he was served with any process at all. In its usual form, the said notice gave the address of the defendant's solicitors as the service address for the defendant. I was informed by defendant's counsel that the purpose for filing the said notice was to give notice to the plaintiff that the defendant was aware of the expiry of validity of the writ and that any application for renewal would be opposed. Allegedly, it was filed with an intent to protect the defendant's interest in that they would be permitted to oppose any ex parte application for renewal intended by the plaintiff. I am unable to see how it could have been reasonably assumed that the unqualified Notice to Act filed in its usual format could accomplish the alleged purpose. I was given to understand that there were negotiations and communications exchanged in the meantime, though not made known to the court on the materials presented.

3. On 11 March 1996, the plaintiff took out an application to renew the validity of the writ. Strangely, the application was by way of an inter partes summons instead of the usual ex parte summons. I would not speculate if that was due to any mutual understanding between the parties. It was correct for counsel for the defendant to submit that there is no express provision in the rules to prohibit such an application to be by way of inter partes hearing. However, it only stands to reason to conclude that as a norm such application would necessarily be ex parte. There would be no other party apart from the applicant before the court at that early stage when the originating process was yet to be served on anyone. For that simple reason, it would be most unusual for such application to be inter partes. The locus of the respondent to the application must be doubtful. No issue was ever raised in this respect by parties to the application nor by the master who dealt with the same. By way of consent applications, parties obtained directions for filing affidavits for the hearing. At the adjourned hearing of the application, an order for renewal of the writ was granted. The hearing might, on one view, be considered as amounting to an ex parte application on notice to the defendant, notwithstanding it was an inter partes hearing with evidence and submissions from both sides. It is, however, not necessary to determine the true nature of that hearing as no one had taken issue in that respect to challenge the validity of the order made.

4. The application was eventually heard on 9 July 1996 when the order for renewal of the writ was made. Being dissatisfied with the order for renewal, the defendant lodged an appeal against the order to a judge on 13 July 1996. Subsequent to the service of the writ, the plaintiff moved expeditiously in serving the statement of claim and statement of special damages. Upon expiration of time for filing notice of intention to defend, the plaintiff promptly obtained interlocutory judgment for default of notice of intention to defend on 23 July 1996. On 14 August 1996, the appeal (which was scheduled to be heard on 22 August 1996) was adjourned at the request of the plaintiff and without any objection from the defendant. In the meantime, whilst pending hearing of the defendant's appeal, the plaintiff wasted no time in proceeding to assessment of damages. At the direction hearing on 20 September, directions for the assessment of damages were obtained. The Notice of Appointment for Assessment of Damages was issued five days later setting down the assessment to be heard on 28 January 1997. It is important to note that since the adjournment of the appeal on 14 August 1996, the defendant had made no attempt to obtain new hearing dates for the appeal until 13 December 1996 when his solicitors gave notice to the plaintiff to attend listing clerk for new hearing dates for the appeal. On 20 December 1996, new hearing date on 18 April 1997 was obtained for the appeal. In the premises, the appeal would not be heard until 10 weeks after the hearing of the assessment of damages. On 31 December 1996, presumably with a view to eliminate the appeal as an obstacle to the assessment of damages, the plaintiff took out a summons returnable on 17 January 1997, i.e. 11 days before the hearing of the assessment of damages, to dismiss the defendant's appeal.

5. One day before the hearing of the plaintiff's summons to dismiss the defendant's appeal, the defendant took out a summons on 16 January 1997 returnable on 18 April 1997 to set aside "the regular judgment" and for leave to defend the action by filing an acknowledgment of service out of time. On 17 January 1997, representations were made on behalf of the defendant for an adjournment of the plaintiff's summons to 18 April 1997. In other words, the defendant would like the two summonses and the appeal to be heard at the same time on 18 April 1997. It was, of course, immensely sensible to have all matters dealt with at one hearing. However, it would be absurd to have the hearing 10 weeks after the assessment of damages. In the event, as both parties intended to file further affidavits, the hearing was adjourned to the afternoon of 22 January with very stringent directions regarding the filing of affidavits.

6. On 22 January 1997, the defendant took out another summons returnable on the same day to adjourn the assessment of damages. Hearing of the plaintiff's application to strike out the defendant's appeal could not be completed that afternoon and was thus part-heard adjourned. An order was also made to re-fix all other outstanding applications, including the defendant's appeal, to be heard at the same time as the adjourned hearing. Defendant's application to adjourn the assessment of damages was refused in view of the failure of the defendant to prosecute his appeal diligently after the August adjournment. Notwithstanding the defendant's indications to the masters that the appeal will be proceeded with without delay and new hearing dates would be immediately obtained, no steps were ever taken by him to carry out such promise until many months later. It was alleged that time was spent obtaining instructions on the merits of the defence as it was the intention to take out an application to set aside the judgment and have the same heard together with the appeal. It must have been clear to the defendant and his solicitors that the plaintiff intended to proceed with the assessment expeditiously. The summons for setting aside judgment was only issued on 16 January 1997. I was not satisfied the defendant's delay in prosecuting the appeal could be excused. But for such a failure, the appeal could have been disposed of before the assessment of damages. Another attempt to have the assessment of damages adjourned was made by the defendant on 27 January 1997, which was dismissed with costs.

7. On 28 January 1997, hearing for the assessment of damages duly took place. The defendant took active part in defending the claims of the plaintiff at the assessment, albeit it was done expressly "under protest" and "without prejudice" to his objection to the validity of the renewal of the writ. Damages were assessed in the sum of $773,203.06 with interest. Final judgment was entered on 5 March 1997. On 22 February 1997, an ex parte application for interim stay of execution was refused by the master on ground that the application ought not be made ex parte. Notwithstanding such ruling, the defendant made another ex parte application for interim stay of execution on 19 March 1997, which was again refused for the same reason.

8. Hearing of the plaintiff's application to dismiss the appeal continued on 22 April 1997. In the event, an order was made dismissing the defendant's appeal. The defendant's application to set aside the "regular judgment" was also dismissed. I now hand down reserved reasons for the said orders.

9. The plaintiff's grounds for dismissing the defendant's appeal were that : (1) the appeal was incompetent, being bad in law; and (2) in any event, the defendant had submitted to the jurisdiction of the court thus waiving all irregularities regarding the validity of the writ.

Competence of the Appeal

10. It was submitted by the plaintiff that O.12, r.8 provided a single code for challenging the propriety of an extension of the validity of a writ for service. In the premises, there can be no challenge, outside O.12, r.8, by a defendant against an order extending the validity of a writ, whether by way of an appeal against such order or otherwise. The only available remedy for the defendant is to apply under O.12, r.8(1)(d) for a discharge of that order. As a pre-requisite to such an application, the defendant must first give notice of intention to defend the proceedings. The application must be taken out within the time limited for service of a defence. However, the defendant submitted that he was entitled to appeal against an order of a master extending the validity of a writ under the general provisions of Order 58. In the premises, it was submitted by the defendant that the appeal was competent.

11. There was no doubt that the defendant's appeal did not fall within any of the exceptions set out in O.58, r.1. In the premises, there would appear prima facie to be a general right to lodge the said appeal. But, was such general right restricted by the specific provisions of O.12, r.8? O.12, r.8 provided as follows :

"(1) A defendant who wishes to dispute the jurisdiction of the court in the proceedings by reason of any such irregularity as is mentioned in rule 7 or on any other ground shall give notice of intention to defend the proceedings and shall, within the time limited for service of a defence, apply to the Court for...........

(d) the discharge of any order extending the validity of the writ for the purpose of service........."

12. Rule 8(3) provided that such application must be by way of summons or motion. Rule 8(4) required supportive affidavit verifying the facts on which the application was based. Rule 8(5) empowered the court to try the matter as a preliminary issue. Rule 7 and r.8(6) made it clear that the acknowledgment of service would not operate as a waiver of any alleged irregularity or be taken as a submission to the jurisdiction of the court. If no order was made on the defendant's application, or if such application was dismissed, the notice of intention to defend would cease to have effect. If the defendant then files another notice of intention to defend, he would be taken to have submitted to the jurisdiction of the court.

13. It is apparent from the detail provisions of O.12 that a distinct and separate mechanism was intended for any challenge to the irregularities listed therein. These provisions provided a self-contained procedure, setting them apart from other general provisions in the rules. It was observed by Hunter J.A., in the Court of Appeal, in Wo Fung Paper Making Factory Ltd. v. Sappi Kraft (Pty) Ltd. [1988] 2 HKLR 346 at 355H, that ".....Order 12, rule 8 constitutes a single code and covers all applications however based for any of the orders enumerated in rule 8(1)".

14. Usually, the application for renewal of validity of a writ for service would be made ex parte, there being no other party properly before the court at that stage for an inter partes hearing. However, that would not preclude the propriety of an inter partes application. Though most rare, and not to be encouraged, it is possible for the plaintiff to invite the yet-to-be-served defendant to attend the application, be it ex parte on notice or under an inter partes summons. Such practice is not to be encouraged because the locus of the defendant must be, as aforesaid, a matter of doubt in the circumstances. Would he be appearing as a respondent to the application merely, or as defendant in the action in every true sense of that title? Can he be considered a proper party before the court before he submits to the jurisdiction of the court, whether generally, or for a limited purpose? If for a limited purpose, what would be the purpose? It must be remembered the validity of the writ would have expired then and could not be served without an order extending its validity. The writ became incompetent upon expiration of the 12 months. In the premises, before the making of the intended order, the defendant has no interest requiring protection. Upon the extension of the validity of the writ and its service upon the defendant, the defendant would acquire an interest to protect and a locus to challenge the order. But then, the defendant would face a logical dilemma in his position. He would be maintaining the position that due to the invalidity of the writ or that service being a nullity, he was never subjected to the jurisdiction of the court. However, to establish such a claim, he would have to invoke the jurisdiction of the very court he says has no jurisdiction over him. To solve this impasse, express provisions were made in the rules to prevent the defendant's challenge of the jurisdiction of the court from becoming an act of submission to the jurisdiction of the court. However, to take advantage of such solution to the logical dilemma, the defendant must strictly abide by the prescribed procedure. He must first "submit to jurisdiction" on a "without prejudice" basis in the manner permitted by the rules for the limited purpose of challenging jurisdiction. That must be the reason for the Court of Appeal's observation that the procedure provided a "single code" for all applications challenging such alleged irregularities and invalidities.

15. The validity and effectiveness of the order made would not be affected by the inter partes nature of the application or the presence of the defendant at the hearing. However, such nature of the hearing would not take the matter outside the operation of the specific provisions of O.12, r.8. Order 12, r.8 is in wide enough terms to cover all orders made for extension of the validity of a writ for service, be it an ex parte or inter partes order. Any such order can only be challenged in the manner prescribed in the Order. Appeal from such an order, be it ex parte or inter partes, or an application to set aside pursuant to rights conferred by other general provisions, are not permissible modes to challenge such an order. The only competent mode of challenge is prescribed by O.12, r.8. I therefore rule that the general right of an appeal under O.58 is excluded by the specific provisions of O.12, r.8 in respect of the orders set out therein. The only permissible mode to challenge such orders is the procedure set out therein which must be strictly complied. For the above reasons, I had ruled that the appeal against the master's inter partes order, dated 9 July 1996, extending the validity of the writ for service was incompetent and ought to be dismissed as being bad in law. However, an appeal would lie under O.58 from an order made by the master in the application for discharge taken out under O.12, r.8 in the same manner as any other order of a master.

Submission to Jurisdiction

16. The law applicable was not controversial. It was accepted to be the law that the test to be applied should be an objective one. The issue was whether judged objectively the defendant had conducted himself in such a way that he had submitted himself to the jurisdiction of the court notwithstanding his express declaration of non-acceptance of the jurisdiction of the court? It was accepted, very properly in my view, that mere express declaration of non-acceptance of the court's jurisdiction and/or an express disclaimer of "without prejudice" or "under protest" would not per se render all conducts thereunder incapable of objectively amounting to a submission to the court's jurisdiction. Had it been otherwise, they would have become unrestricted permits to the defendant to defend the action on the merits whilst refusing to submit to the court's jurisdiction. Such an absurd right cannot exist in law. No one can be allowed to blow hot and cold at the same time. No defendant can be allowed to invoke the court's jurisdiction to defend the action on merits whilst denying the court's jurisdiction over him.

17. The defendant's express intent to deny the court's jurisdiction was beyond doubt. Not only had he constantly made this known to the masters whenever he appeared before them, he had expressly declared that his participation in the assessment of damages to be "under protest" and "without prejudice". Mr Chan for the defendant said such proclamation must be taken into account in judging the defendant's conduct objectively. I was of the view that such subjective proclamation of self-interest, though should be taken into account, would pale into insignificance when judged objectively against the defendant's conduct. His conduct in actively defending the assessment on merits was wholly inconsistent with any denial of the court's jurisdiction when judged objectively. He had behaved in a manner wholly and diametrically opposed to his proclamation. That was an obvious attempt to have the best of both worlds. He cannot, in law, be permitted such privileged position. Once a defendant acted wholly contrary to his proclaimed intent, he must be taken to have changed his intent. He cannot be permitted to hold diametrically opposed intents at the same time. The mind and the conduct must be consistent rather than different. To hold otherwise would bring absurdity and illogical conclusions to the law. I am satisfied that it was impossible in law for the defendant to be entitled to defend the assessment of damages on merits "under protest" or "without prejudice" to his denial of the court's jurisdiction. The defendant must make a choice between maintaining his stance on the denial of the court's jurisdiction, or to defend the proceedings on merits. He cannot have both. If he maintains his denial of court's jurisdiction, he must refrain from taking any step that could be considered as defending the proceedings on merits. He would have to accept the risk of a decision against his interest. He would have to waive his right to argue against the plaintiff's submissions and evidence on merits, and take his chances with the decision. There could be no harshness or unfairness as suggested by Mr Chan in such situation. To the contrary, to hold otherwise would be unduly unfair.

18. Mr Chan also complained that the defendant was "forced" to defend the assessment of damages because adjournment of the hearing was refused. I had given reasons for refusing the adjournment. There would be injustice if the assessment was to be adjourned. The defendant had brought the predicament upon himself by the dilatory manner he pursued the appeal. He had only himself to blame for facing such predicament. I could see no unfairness in allowing the assessment of damages to proceed and to require the defendant to make the aforesaid election at that hearing.

19. Having actively defended the assessment of damages, the defendant had clearly submitted to the court's jurisdiction by conduct. His proclamation did not, and could not, prevent such conduct from being a submission to jurisdiction on an objective view. I had, therefore, concluded that even if the appeal was competent in law, it should also be dismissed for the reason that the defendant had already submitted himself to the jurisdiction of the court and could no longer further maintain any denial of the court's jurisdiction.

Setting Aside Judgment

20. It is noteworthy that in his summons, the defendant was applying to set aside a "regular judgment", and was seeking liberty to file an acknowledgment of service to defend the action. Such a step would have, per se, amounted to a submission to the jurisdiction of the court.

21. Having accepted the default judgment was regular, it was encumbered upon the defendant to explain why he had allowed judgment to go by default and that he had a real prospect of success in defending the claim on merits.

22. It was the case of the defendant that the plaintiff had himself to blame for the accident or that he had contributed substantially to the occurrence of the accident. Such claims were based on the allegation that the operator of the crane that struck the plaintiff was operating the crane faithfully at the oral instructions of the plaintiff. However, a careful consideration of the factual allegations contained in the affirmation of Wong Siu Bor, the crane operator, would reveal the fallacy of the defendant's defence. It was affirmed to by Wong that he operated the crane at the oral instructions of the plaintiff, and that he operated the crane faithfully as instructed by the plaintiff. However, he said at the material time he had completed carrying out the oral instructions of the plaintiff, and was awaiting further instruction from the plaintiff when the accident occurred. In other words, according to his version of facts, when the accident occurred, the crane ought to be motionless as he had stopped any operation of the crane. He was then awaiting further oral instruction from the plaintiff. In the premises, the previous oral instructions given by the plaintiff had ceased to be relevant to the occurrence of the accident. According to Wong, it was unknown how the accident could have happened at a time when the crane was not being actively operated upon by him at all. The accident happened when the crane ought not to be in motion at all if Wong's story was to be accepted. According to the plaintiff, the accident occurred when the crane suddenly moved sideways towards him. The plaintiff believed it was due to negligent control of the crane by Wong. The crane's motion must have been the result of either Wong's control or mechanical failure. There is no suggestion of an act of god e.g. a sudden strong side-wind. If it was due to mechanical failure, the issue of proper maintenance would arise for which the defendant had not offer any defence. If it were due to Wong's control, the court would have to reject Wong's evidence of how the accident occurred, as his evidence was wholly inconsistent with a finding that the crane was put into motion by his control. Then there would not be any credible evidence to explain the sudden sideways movement of the crane. The doctrine of res ipsa loquitur would be against the defendant.

23. I was unable to find any merits in the allegation of contributory negligence on the part of the plaintiff. The particulars pleaded by the defendant in the draft defence were allegations suggestive of a failure to provide a safe system of work. The particulars complained of the dangerous manner the plaintiff discharged his duty in directing the operation of the crane. There was no allegation that the plaintiff possessed any skill in the performance of this kind of work, nor was he given any proper training or instruction on how he could perform his work properly and safely. The plaintiff was a general manual labourer without any special skill and had little education. It would be encumbered upon the defendant to train the plaintiff or to give him proper instructions on the safe manner to perform the work.

24. I could not be satisfied that there was any real prospect of success in defending the plaintiff's claims on the defence proposed by the defendant in his draft defence and on the strength of the evidence he sought to rely. In the premises, the defendant failed to convince the court that the default judgment ought to be set aside and that he be permitted to defend the claim on merits. In the premises, his application to set aside the default judgment was dismissed with costs.