C.E.C. FINANCE LTD v. LEE SAI HO

Head Note

                An order whereby the Plaintiff's action for damages in breach of a hire purchase agreement was struck out under rule 31(2) of the District Court Civil Procedure (General) Rules by Assistant Registrar, Victoria District Court for its Deputy Registrar on the ground that no application was made to set down the action for trial "within 3 months from the date on which the defence or counter-claim was filed" was set aside where the Plaintiff had filed a summons for striking out the defence and counter-claim and for entering judgment for the Plaintiff two days before the expiration of the 3 months' period.

                Pending the hearing of interlocutory proceedings, rule 31(2) has no application.

IN THE DISTRICT COURT OF HONG KONG

HOLDEN AT VICTORIA

CIVIL JURISDICTION

CASE NO. 3086 OF 1984

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BETWEEN

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REASONS FOR RULINGS EX TEMPORE

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1. These are consolidated applications to set aside an Order made by Assistant Registrar, Victoria District Court for its Deputy Registrar made on the 4th of July, 1984 whereby the Plaintiff's action was struck out under rule 31(2) of the District Court Civil Procedure (General) Rules on the ground that the Plaintiff had failed to set the case down for trial within 3 months from 2nd of April, 1984 the date on which Defence and counterclaim was filed.

2. For ease of reference I set out rule 31(2), Cap. 336:-

"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 the Registrar shall strike out the action from the Registrar of Civil Actions, and upon the application of any party a judge may award such costs as he thinks fit. "

3. On 13th of June, 1984, that is 4 days before the action was struck out, the Plaintiff took out a Sunmons for striking out the defence and its accompanying counterclaim and for entering judgment for the Plaintiff. That was done two or three days before the expiration of the three months period under rule 31(2).

4. The crux of the matter turns on the interpretation of rule 31(2). It is not difficult to perceive that the object was to avoid undue or inordinate delay in the conduct of civil proceedings before the District Court and to avoid undue and unnecessary long backlog of pending case. It is inconceivable that the Rules Committee would have intended it to apply literally to a situation in which interrogatory matters particularly interrogatory hearings are still pending for such hearings might sometimes project beyond the 3 months period e.g. the battle over Particulars, Reply or striking out and summary judgment etc.

5. In Federal Steam Navigation Co., Ltd. v. Department of Trado and Industry, [1974] 2 All E.R. 97, at p. 100 Lord Reid gave the very helpful guideline:-

"Cases where it has properly been held that a word can be struck out of a deed or statute and another substituted can as far as I am aware be grouped under three heads: where without such substitution the provision is unintelligible or absurd or totally unreasonable; where it is unworkable; and where it is totally irreconcilable with the plain intention shown by the rest of the deed or statute. "

6. In my opinion, it is plain that to construct rule 31(2) strictly literally would be totally unreasonable for causing injustice which could not have been within the contempation of the Rules Committee.

7. In Arteniou v. Procoplou, 1966 1 Q.B. 878 Act 888 Lord Danckwerts neatly stated:-

"A intention to produce an unreasonable result is not to be imputed to a statute if there is some other construction available. "

8. Where possible, a construction should be adopted which will facilitate the smooth working of the scheme of legislation established by the legislature (by the Rules Committee in this instance), which will avoid producing or prolonging artificiality in the law, and which will not produce anomalous results (see Maxwell on Interpretation of Statue 12 Edition p. 201 and cases cited thereunder).

9. I feel confident that the Rules Committee did not intend rule 31(2) to apply to a case where interrogatory proceedings are still pending, and in order to do justice to it, I read into it to that effect.

10. For the above reasons the order of striking out made by the Registry on 4th of July, 1984 is hereby set aside.

11. Now on the second application, due notice had been served on the defendant who had failed to appear this morning and these hearings are heard ex parte him. I have read all the papers in the file and had valuable assistance from Mr. Yeung, Solicitor for the Plaintiff. I am satisfied that there is no merit in the defence that no notice was served on the defendant before repossession of the vehicle took place as it was provided under course VI 8B paragraph 1 of the Higher Purchase Agreement exhibited that no notice would be required when repossession was enforced upon default by the hire purchaser, the defendant. This is a legally valid clause.

12. However I cannot say there are no triable issues at all on the counterclaim that in repossessing the vehicle the Plaintiffs had appropriated property and cash allegedly to the total amount of $5,119 weak as the allegations may be, nonetheless prima facie issues there are.

13. Judgment is therefore entered for the Plaintiff.

14. I am also satisfied that the rebate is more generous than allowable under Rule 78 and that the sale of the car was to the highest trading bidder with the incidental costs reasonably incurred. Damages are therefore assessed at $16,628.90 with interest at the rate of 8% per annum from the date of writ to the date of judgment today's date and at the rate of 13½% per annum thereafter until payment.

15. Costs to the Plaintiff on the Upper Scale for today's application for summary judgment and assessment of damages. No order as to costs for the application to strike out the order, made by the Assistant Registrar.

16. The counterclaim has not been struck out. However in view of its apparently rather weak nature, the Defendant shall be allowed to proceed with the counterclaim only if he will pay into Court or to Solicitors within two weeks, the sum of $11,509.19 being the balance between the judgment debt and the amount under counterclaim failing which the counterclaim shall be taken to have been struck out.