WFM MOTORS PTY LTD. v. MALCOLM MAYDWELL

-----------------

-----------------

JUDGMENT

-----------------

Ching, J.A. (giving the judgment of the Court) :

1. On 7th December, 1995, we handed down a reserved judgment restoring the registration of a judgment obtained by the Plaintiff against the Defendant in Australia. That judgment left for resolution questions relating to a bankruptcy notice which the Plaintiff had served on the Defendant upon the basis of the original registration.

2. On 12th April, 1995, Master Betts acceded to the Defendant's application to set aside the bankruptcy notice. The Defendant has said that that was on the grounds that the Defendant had a counterclaim, set-off or other cross claim equal to or exceeding the amount of the judgment but which could not have been set up in the proceedings in which the judgment had been obtained. The Plaintiff appealed that decision to Findlay, J., in Chambers. Findlay, J., dismissed that appeal and the Plaintiff appealed against that dismissal to this Court. Meanwhile on 4th July, 1995, the Plaintiff had also applied to Liu, J.A., for an extension of time within which to appeal the judgment of Master Betts to this Court. Liu, J.A., refused that application and the Plaintiff also appealed that refusal to us.

3. One of the Defendant's objections to the Plaintiffs appeal to Findlay, J., was a procedural one but is none the worse for that. It is based upon section 98(2) of the Bankruptcy Ordinance, Cap.6, which reads in part,

"Every order of ..... the Registrar shall be subject to appeal to the Court of Appeal ....."

The argument is that Findlay, J., had no jurisdiction to hear the appeal and that therefore the appeal and the decision thereon were nullities. The section clearly provides that any order in question shall be subject to an appeal to the Court of Appeal and is in that respect indistinguishable from section 79(1) of the Trade Marks Ordinance, Cap.43, which was the subject of the decision in Mita Kogyo Kabushiki Kaisha v. Mitac, Inc. (1993) 1 HKC 207. There the question was whether the section supervened over the more generous provisions as to time for appeal contained in Order 59 rule 4(1)(c) of the Rules of the Supreme Court. It was held that the section being more specific must prevail. Section 99(1) of the Bankruptcy Ordinance provides that the Rules of the Supreme Court shall apply as far as applicable and so far as not inconsistent with that Ordinance. Having regard to that decision and to the wording of section 98(2) there is clearly no concurrent jurisdiction in a Judge of the High Court to hear an appeal such as that against the decision made by Master Betts. The appeal from the decision of Findlay, J., in that respect is therefore dismissed.

4. Section 98(2) also provides that the appeal to the Court of Appeal,

"..... shall be commenced within 21 days from the time when the decision appealed against is pronounced or made."

5. The Plaintiff's application to Liu, J.A., was made well out of time. The appeal to us is by way of rehearing, see Adhiguna Meranti (1988) 1 HKLR 410. We must therefore look afresh at the circumstances and exercise our own discretion untrammelled by the principles applying to appeals against the exercise of discretion in the Court below. We bear in mind the fact that the serving of a bankruptcy notice is a serious matter so that the party serving it must comply strictly with the rules.

6. The reasons advanced by the Plaintiff for being out of time are that the Plaintiff's solicitors considered and still consider that the Judge had jurisdiction but that, if not, they simply made a mistake for which the Plaintiff should not be refused relief and that it was felt that as a matter of convenience the appeal should be heard by Findlay, J., together with the Defendant's appeal against the order of Master Betts refusing to set aside the registration of the judgment. No doubt the latter reason had much to commend it if, but only if, it were permissible. However, the provisions of section 98(2) are clear and the mistake ought not to have been made. The Plaintiff was alerted to the argument on or about 31st May, 1995, before Findlay, J., but did nothing until 4th July, 1995, when they applied to Liu, J. A., a delay which Mr. Tong for the Defendant points out has not been explained. We must look not only to justice for the Plaintiff but to justice for the Defendant and the rules are there to be obeyed.

7. It is argued that the merits of the appeal are overwhelmingly in favour of the Plaintiff. That is not a question we feel we should entertain because on the facts of this case it would involve a preliminary appeal on the very matters that would be in issue on the substantive appeal. It would mean going into questions, inter alia, of whether the Defendant should have raised or did raise his cross claim in the Australian proceedings, if not then whether he could have done so and in any event whether he should be permitted to do so now as well as the merits of the claim on each side. Mr. Tong has pointed out that there may well be a challenge to the bankruptcy notice on the grounds of a dispute as to the amount. It is then said that the Defendant would suffer no prejudice if the Plaintiff were given further time. It is however not so much a question of prejudice to the Defendant as it is a question of excusing a breach of the rules, see Ratnam v. Cumarasamy (1965) 1 WLR 8 and Revici v. Prentice Hall Inc. (1969) 1 WLR 157. In the circumstances we are unable to accede to the appeal against the order of Liu, J.A., and that appeal is also dismissed.