XCHRX QUE JOCELYN CO t/a SCENTED DELIGHTS v. BROADAIR EXPRESS LTD.

HCA No.3477/1996

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 3477 OF 1996

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DECISION

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1. This is an appeal from a decision of Master Cannon made on 21 April 1999. The reason given by the Master for her decision was that she had no jurisdiction to deal with the matter, and on that basis, she dismissed the Summons filed on 8 January 1999 on behalf of the Plaintiff ("QJC").

2. The Summons arises in this way. QJC had arranged for certain goods to be shipped to Hong Kong. She says that the goods arrived in a damaged condition. She instructed Finley & Co, Solicitors ("F&Co") with a view to getting compensation from the carrier ("Broadair").

Unless Order

3. The writ (for a sum of $34,600 odd) was issued in March 1996. No Statement of Claim had been filed and served by September 1996, so Broadair issued a summons for an order dismissing the action for QJC's failure to file and serve a Statement of Claim.

4. On 7 October 1996, Registrar Betts made an order that unless by 4:15 pm on Tuesday 22 October 1996 QJC serve and file her Statement of Claim on Broadair, QJC's action against Broadair be dismissed with costs to Broadair ("the Unless Order").

Service of Statement of Claim

5. The Statement of Claim was filed in Court before 4:15 pm, but it was not served on Broadair's solicitors Dibb Lupton Alsop ("DLA") until after 4:15 pm. (This was subsequently found as a fact by Master Cannon after hearing oral evidence from various individuals from DLA and from F&Co respectively).

6. Meanwhile Broadair, on the basis that the Statement of Claim had not been served in time in compliance with the Unless Order, treated the action as dismissed and issued a summons in November 1996 for judgment for its costs. This was disputed on behalf of QJC on the ground that the Statement of Claim had been served in time.

Decision of Master Cannon - April 1997

7. This issue was heard by Master Cannon over 2 days in March 1997, with counsel being instructed on behalf of Broadair. The master gave her decision on 29 April 1997. She found that the Statement of Claim had not been served by F&Co in time, but she gave an order extending time so that the service could be in compliance with the Unless Order.

8. She further made an order that the costs be to Broadair on an indemnity basis, to be paid forthwith, to be taxed if not agreed.

9. In making that order for costs, she took into account the rejection on behalf of QJC of Broadair's earlier suggestion that to save time and costs, QJC should issue a time summons for service of the Statement of Claim out of time, which Broadair had indicated it would not oppose.

Costs

10. Broadair's Bill of Costs dated 5 December 1997 was delivered to F&Co as solicitors for QJC on 9 December 1997.

11. On 2 March 1998, F&Co issued a summons for an order that it may cease to act for QJC. On 11 March 1998, the order was given. On 16 March 1998, F&Co rendered its own bill to QJC in the sum of slightly over $56,000.

12. On the same day, 16 March 1998, there was the call-over for taxation of Broadair's costs. The bill was taxed by Master Chu on 22 June 1998. On 10 August 1998, an allocatur was issued allowing costs of slightly over $254,000 to Broadair. QJC has not paid this amount and is facing bankruptcy proceedings.

Application under O.62 r.8

13. On 8 January 1999, QJC issued a summons under O.62 rr.7 and 8 RHC for an order that F&Co be ordered to pay to Broadair its costs, and to refund to QJC the costs she had paid F&Co on the grounds appearing in the Summons and which I shall not repeat here. A number of Affirmations/Affidavit have been filed by QJC and by Mr Finley respectively.

Decision of Master Cannon - April 1999

14. Master Cannon dismissed the Summons on the ground that she had no jurisdiction. This order is the subject-matter of the appeal before me today.

Jurisdiction of Judge on appeal / Res Judicata

15. As a preliminary point, Mr Finley submitted that I had no jurisdiction to hear the matter. This jurisdiction argument also elided into a submission that the matter was res judicata. I gave an oral decision on these arguments which can be briefly summarised as follows.

(1) In respect of the submission that O.62 r.8 could only be invoked on the Court's own motion, and could not be invoked by an aggrieved client, I held that even if that be the case, an aggrieved client could apprise the Court of relevant matters by any means, whether by letter or affirmation. The form whereby the Court is apprised of matters relevant to the invoking of O.62 r.8 is immaterial. (In the present case, it was by means of a summons with supporting evidence).

(2) In respect of the submission that once a client misses the opportunity to make his solicitor liable for costs at taxation by virtue of O.62 r.7, the client can no longer do so, I held that there was no such express provision, and such a Draconian prohibition should not be inferred.

(3) In respect of the submission that Master Cannon was the best person to deal with the issue of F&C's liability for costs, having been the trial tribunal, I agreed. However, the matter having been set down before Master Cannon, and the master having dismissed the application on the ground that she had no jurisdiction, I saw no reason why a judge in chambers could not hear an appeal from that order.

(4) There was a further argument based on alternative remedies of QJC, such as an appeal from Master Cannon's April 1997 order and/or proceedings for negligence, but I did not see how these were relevant to the issue whether I had jurisdiction to hear this appeal.

In conclusion, I considered that I did have jurisdiction to hear the appeal and I proceeded to do so.

Master Cannon had jurisdiction to hear the application

16. With respect to the learned master, I have to hold that she has fallen into error in deciding that she had no jurisdiction to hear the application. Mr Finley did not refer to any arguments on jurisdiction other than those submitted as to why this court did not have jurisdiction to hear the appeal, and I have dealt with those.

17. My view is fortified by the fact that O.62 r.8 is a summary process which arises out of the inherent jurisdiction of the Court. As such, a very clear case would have to be made out before a court would find that the rules have taken away any power that the Court has in its inherent jurisdiction (cf Clark v Clark [1991] 1 FLR 179, 193H). In my view, no such case has been made out.

18. Further, it is clear from Myers v Elman [1939] 4 All ER 484, 508 that the Court can be invited to invoke its jurisdiction by an application made by a client "either by motion in the Chancery Court or by a motion or application for a rule in the courts of common law. ... no stereotyped forms were followed. ... All that is necessary is that the judge should see that the solicitor has full and sufficient notice of the nature of the complaint made against him, and full and sufficient opportunity of answering it. ... The summary jurisdiction thus involves a discretion both as to procedure and as to substantive relief, though there was, and is an appeal."

19. It has not been argued that there is any distinction between a judge and a master in this respect.

20. I hold therefore that Master Cannon ought to have heard the application, first because she did have jurisdiction, and also because she was the tribunal who had the carriage of the matter which brought about the costs order. It is clear from Myers v Elman 508 and In re Freudiana Holdings Ltd (1995) Times 4 December 1995, 635, 636 that the trial judge (or in this case, the master who had heard the summons in April 1997 and made the costs order) should be the tribunal to adjudicate upon the matter. The reasoning is obvious and it is common ground between the parties that Master Cannon should be the "first port of call".

21. In the premises, since the master has only adjudicated upon the jurisdiction point, I shall have to remit this matter back to the master for a decision on the merits.

22. In so doing, I have taken into account Mr Finley's submission that quite some time has elapsed between the events of 1996 and now. However it has not been shown to me that any prejudice has been suffered as a result of that lapse of time, such as to lead me to order otherwise.

Order

23. I would therefore set aside Master Cannon's order of 21 April 1999 and order that the matter be remitted to her for an early hearing. I would also make an order nisi that the costs of the appeal from Master Cannon's order of 21 April 1999 follow the event, i.e. that they be paid by F&Co to QJC.