JONPAUL ASSOCIATES LIMITED v. SOUTH CHINA TRADING CORPORATION AND ANOTHER

IN THE COURT OF APPEAL

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JUDGMENT

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Sir Alan Huggins, V.-P.:

1. This is an appeal from the judgment of Jackson-Lipkin, J. dismissing the claim of the Defendant against the Third Party. The Third Party has not appeared.

2. The case arose in this way. The Plaintiff in the action ordered goods from the Defendant. The Defendant says that in order to fulfil that order it bought goods from the Third Party and the Third Party's goods were delivered to the Plaintiff. The Plaintiff alleged that the goods were defective and has obtained judgment against the Defendant. The Third Party filed a Defence to the Defendant's claim - denying in effect all material allegations. The matter came on for directions before the Master and we are told that the usual direction was given for the third party proceedings to be heard immediately after the trial of the action. In fact the Master's order as perfected included the following:

Paragraph 4 reads somewhat strangely and one is left wondering whether a "not" has been omitted before "tried", but in the light of the order as drawn up we cannot say that the Judge was wrong to deal with the liability of the Third Party at the trial of the action. The witnesses were called and there camera stage when counsel for the Defendant had to decide whether to call any further witnesses. He then told the judge that he had had a conversation with the Third Party (who was unrepresented in the trial before the High Court), and what counsel said was this:

"I don't think I really need to call the defendant. I understand from the third party that she is not actually saying that the goods supplied to the plaintiff were not those supplied by the defendant to the plaintiff because the air forwarding agent actually came to the factory and took the goods direct and had them sent to the plaintiff. "

I hope that the counsel involved - he is not now before this court - will excuse my pointing out that he is a counsel of no great experience and that what he said was not as clearly put as it might have been. Obviously what he was seeking to say was that the goods supplied by the Third Party (i.e. by the defendant in the third party proceedings) to the Defendant (i.e. the plaintiff in the third party proceedings) were agreed to be those supplied by the Defendant to the Plaintiff, and this must have been obvious to anybody who was listening. The Third Party remained silent. Later, counsel made it quite clear to the judge what his understanding of what he had said was, for we find that he said this:

"...... I said earlier, the position accepted by the Third Party is sufficiently extensive to cover that point, namely, that the goods now being complained of by the Plaintiff under the relevant contract between the Plaintiff and the Defendant, these goods were supplied by the Third Party to the Defendant. "

That was his understanding of it, but he was not the only person who so understood it, because counsel for the Plaintiff whose assistance had been sought by the judge said:

"... to the best of my recollection, although I couldn't take my oath on it, Mr. Wong did say to you that, as he understood it, the Third Party was not disputing that her goods were supplied to the Plaintiff, and as far as one knows that was translated and Mrs. Lam did not say anything. "

To that the judge himself said: "Yes". The position taken by the judge however was that the Defendant had adduced no evidence that there was a contract between the Defendant and the Third Party or that the goods supplied to the Plaintiff by the Defendant were those supplied by the Third Party to the Defendant under that contract. He went out of his way to persuade the Third Party not to call any witness so that she would be able to take this totally unmeritorious point. In my view he went far beyond the performance of a judge's duty to protect the interests of an unrepresented party and in fact entered into the arena. The result in my view has been to produce a serious injustice. The judge having at length persuaded the Third Party to call no evidence, application was then made by the Defendant to call further evidence after the close of the Third Party's case. The judge still maintained his original position and refused the application. His attitude was that it was hard on the Defendant but that such things do sometimes happen. With the greatest respect to him it seems to me that this is a case where this court must interfere, because justice has manifestly not been done.

3. I would allow the appeal and order a re-trial of the third party proceedings.         

Cons, J.A.:

4. I agree with my Lord that the appeal must be allowed as doing the best we can to remedy an obvious injustice, although we may not in practical terms achieve a great deal. The reason is this. Judgment was given on the 15th March this year. We do not know what was the financial position of the Third Party at that time but presumably the Defendant thought she was at least worth powder and shot. Since then, on the 16th July to be precise, the Third Party has been adjudicated bankrupt. The Defendant is therefore now in the unfortunate position of having either to abandon his claim altogether, or to risk throwing good money after bad, for in order to recover anything at all he must incur further costs in proceeding with the retrial, yet perhaps may recover only a small proportion of what he has all told put out.

Fuad, J.A.:

5. I agree with both the judgments just delivered and with the order proposed.

17th October 1984