THE KWANGTUNG PROVINCIAL BANK v. TANG CHIK LEUNG

Courts, practice and procedure - District Court

Civil Procedure (General) Rules, rules 27 and 38A

                The Defence filed in this action on a dishonoured cheque effectively traversed the allegations of fact appearing in Particulars of Claim and was not therefore liable to be struck out.

                In the District Court an application to strike out a pleading should be made under rule 38A of the "District Court Rules" and not under rule 27.

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JUDGMENT

__________

Fuad, J.A.:

1. This is an appeal by Plaintiff in this action from an Order, made by a District Judge dated the 27th November 1984 dismissing an application for summary judgment. The matter arose in this way. The Plaintiff issued a writ in the District Court on the 21st September 1984, endorsed with the following Particulars of Claim:

"	1.        The Plaintiff's claim against the Defendant is for the sum of $26,000.00 being the amount of a bearer cheque No.057597 dated the 13th April 1982 Sawn by the Defendant on Bank of China, Hong Kong (Yuen Long Branch) of which the Plaintiff became the holder in due course. The said cheque was dishonoured upon presentment to the said bank for payment, notice where of has been given to the Defendant.
	2.        The Plaintiff therefore claims against the Defendant: -
	(a)	The said sum of $26,000.00;
	(b)	Interest thereon at the rate of 13.5% per annum from the 13th April 1982 up to the date of payment; and
	(c)	Costs of this action."

2. On the 1st November 1984, the Defendant filed a Defence in these terms:

 

"	1.          Save that the Defendant had drawn on Bark of China, Hong Kong (Yuen Long Branch) a bearer cheque No. 057597 dated the 13th day of April, 1982 in the sum of HK$26,000.00, paragraph 1 of the Particulars of Claim is denied and the Plaintiff is put to strict proof thereof.
	2.          Save as hereinbefore expressly admitted or pleaded to each and every allegation of fact contained in the Particulars of Claim is denied as if the same were set forth herein and traversed seriatim."

3. The Plaintiff then took out a summons on the 14th November 1984, purporting to rely on rule 27(1)(b) of the District Court Civil Procedure (General) Rules ("the District Court Rules"):

 

"......for an order that the Defence of the Defendant be struck out on the ground that it discloses no reasonable ground of defence and that the Plaintiff be at liberty to enter judgment against the Defendant for the sum of $26,000.00 together with interest thereon at the rate of 13.5% per annum from the 13th April 1982 up to date of payment being the amount claimed in this action and costs, including. the costs of this application, to be taxed."

4. At the hearing of the summons on the 27th November, the Solicitor for the Plaintiff, the Judge's rotes show, relied on R.S.C.O.18, r.13(3) and submitted that the general denial in the Defence was not a sufficient traverse - under the rule, all allegations must be traversed specificially. The Defendant's Solicitor contended that R.S.C.O.18 was not applicable for the summons had been taken out under rule 27 of the District Court Rules. The Defence was clear - it was a denial. The Solicitor representing the Plaintiff then replied that the application had been made under the latter rule because the Defendant had failed to disclose any ground of defence. The learned Judge dismissed the application with costs.

5. The matter came before the Judge again on the 18th December 1984 when he entertained an application for a review of his Order. Counsel then appearing for the Plaintiff expanded on the arguments urged upon the Judge at the earlier hearing but made substantively the same points. As had happened before, he relied on R.S.C.O.18, r.13(3). The Defendant's Solicitor contended that the Plaintiff had to prove that he was a holder in due course of the cheque and notice of dishonour. There was, he submitted, a triable issue that should go for hearing; the Defence was not merely a general denial or traverse. He further argued that the fact of receiving notice of dishonour was clearly challenged by the pleading. The Judge refused the application for review with costs.

6. Neither on the first nor the second occasion did he record reasons for his decisions, but we have before us his later "Reasons for Decision", which were undated. The learned Judge took the view that the Statement of Claim lacked particulars and it was not therefore surprising that there was a blanket defence. It was thus very difficult to determine if there was a triable issue despite the fact that the holder was alleged to be the holder in due course of a bearer cheque. He said that if the blanket defence included a claim for liquidated damages that would in law be a good defence; if, however, it was a claim or set off for unliquidated damages it might in certain circumstances be upheld although the authorities were generally against it. The matter was one of discretion and there was no rule of law that said it was not a defence. In his opinion it was unnecessary to go into all the decided cases and the text books to decide the application. He saw his function as being to determine whether or not there was a triable issue. He could envisage a situation where a triable issue was not made out in a case such as this if there had been a full disclosure by the Plaintiff. He added that the Defendant and his legal advisers who drew up the Defence "must be satisfied that there was a triable issue." Because it was not apparent what particular form that Defence would take was not a ground for striking out the Defence.

7. The Judge went on to say that it appeared to him that what the Defendant was alleging by his blanket defence was a total failure of consideration for the cheque. To strike out a Defence in these circumstances would be unjust.  Since the Plaintiff's pleadings were lacking in particulars the Defendant had done all that was expected of him under R.S.C.O.18, r.13.

8. The Judge stated that to succeed the Plaintiff would have to show (on the pleadings or by way of affidavit) the facts upon which his claim was based, as required by R.S.C.O.14, r.2 but that Order did not apply here in view of the presence of rule 27(l)(b) of the District Court Rules. That paragraph merely stated how the application was to be made; it did not state what information should or should not be made available to the Court. He considered the information on the writ inadequate to determine the issue,

9. The learned Judge turned to consider the definition of "holder in due course" in BYLES ON BILLS OF EXCHANGE and ruled that the Statement of Claim must aver performance of the conditions necessary to entitle the Plaintiff to payment; or they could be included in an affidavit. Since rule 27 of the District Court Rules, unlike R.S.C. O.14, did not make an affidavit mandatory, it followed that they must appear on the writ.

10. The Judge continued by draping attention to the fact that the cheque had not been produced to him as an exhibit. This, he felt, would have been of considerable assistance in determining the Plaintiff's application. It could or should contain a lot of information about the transaction. Without inspection it was not possible to determine if the cheque was complete and regular. He said that there may be something on the cheque or an omission "which should put the transferee on his inquiry. There would be no compliance with the conditions of the section if the transferee failed to act. The cheque would have to be inspected to determine if. this cheque were posy dated."

11. The learned Judge concluded his "Reasons" by expressing the opinion that rule 27(l)(b) of the District Court Rules was not there to assist an applicant who was not prepared to make a full disclosure of the facts upon which he relied. Without full disclosure, as was required under R.S.C O.14, r.2 which should have been made available here, an injustice could be done to the Defendant.

12. The Plaintiff being dissatisfied with this decision now appeals to this Court. The grounds of appeal are that the Judge erred in law (a) in failing to give effect to R.S.C.O.18, r.13, (b) by failing to hold that the Defence did not contain a sufficient, or any, traverse of the Plaintiff's claim and (c) by not holding that the Defence disclosed no reasonable ground of defence so that it should be struck out.

13. As will have been seen, the learned Judge was of the view that the Statement of Claim lacked particulars and, inter alia, that the facts showing that the Plaintiff was a holder in due course of the cheque should have appeared on the writ. In my view the Statement of Claim generally followed the usual form. It can certainly be criticised in that it did not aver the date when, and the manner in which, notice of dishonour was given (or to form the basis of one submission made during the review proceedings - that no notice of dishonour was necessary in the circumstances - a statement of the facts relied upon for dispensing with such notice) but it was not so defective as to excuse non-compliance by the Defendant with the rules of pleading, if this occurred. The defect could easily have been rectified, or dealt with by a request for further and better particulars. Certainly there is no authority for suggesting that a holder in due course has to plead the facts upon which his claim to be such is founded.

14. I am bound to say that I do not understand how the Judge reached the conclusion that the real burden of the defence was an allegation that there was a total failure of consideration for the cheque. This would have to be specifically pleaded. Nor do I understand what he meant the passage in which he made reference to a possible defence based on a claim for liquidated or, unliquidated damages.

15. I will say no more than that, with the utmost respect, I would not find it possible to uphold the learned Judge's decision on the reasons that he gave.

16. In the forefront of the arguments addressed to us by Miss Kwan (who did not appear at any stage in the lower Court) on behalf of the Appellant, was the contention that the Defence did not comply with R.S.C. O.18, r.13(3). She relied on Arab Bank Ltd. v. Ross⁽¹⁾ which is given in all the books as an authority for the proposition that in an action on a bill of exchange, promissory note or cheque, a defence in denial must deny some matter of fact, e.g. the drawing, indorsing, accepting, presenting, notice of dishonour of the bill or note. However, Miss Kwan readily acknowledged that in the Arab Bank^(l) case, where Somervell, L.J. dealt with the matter, he referred to R.S.C. O.21, r.2 then, but no longer, in force, which contained an express stipulation to that effect, and on this point the decision cannot be regarded as now having the same force.

17. In this context, I think it is useful to set out  what Lord Denning had to say in Warner v. Sampson⁽²⁾ at pages 310-311:

 

"Since so much effect has been given to this general denial, I would say a word about it. It is used in nearly every defence which goes out from the Temple. It comes at the end. The pleader has earlier gone through many of the allegations in the statement of claim and dealt with them. Some he has admitted. Others he has denied. Whenever he knows there is a serious contest he takes the allegation separately and denies it specifically. But when he has no instructions on a particular allegation, he covers it by a general denial of this kind, so that he can, if need be, put the plaintiff to proof of it at the trial.

At one time the use of this general denial was said to be embarrassing: see British and Colonial Lard Association Ltd. v. Foster and Robins, but since 1８93 it has been recognised as convenient and permissible: see Adkins v. North Metropolitan Tramway Co. Sometimes the pleader 'denies', sometimes he 'does not admit' each and every allegation; but whatever phrase is used it all comes back to the same thing. The allegation is to be regarded 'as if it were specifically set out and traversed seriatim.'  In short, it is a traverse, no more and no less. Now the effect of a traverse has been known to generations of pleaders. It 'casts upon the plaintiff the burden of proving the allegations denied': see Bullen and Leake on Precedents, (3rd ed., p.436). So this general denial does no more than put the plaintiff to proof."

18. When one bears in mind the whole purpose of pleadings, I find the Defence unsatisfactory. I have no doubt that the better practice in cases of this kind, where the Statement of Claim is so short, and the issues that could arise so simple, is for the Defence to be more specific. This is implicit in the passage I have just read from the judgment of Lord Denning in Warner v. Sampson ⁽²⁾, and I would respectfully adopt what the learned authors of the White Book have to say in para.18/13/5:

 

"In dealing with a long and complicated statement of claim or counterclaim, and especially with allegations which are more or less immaterial, this practice [a general traverse] is of ten convenient. It should not, however, generally be adopted in dealing with the essential allegations."

19. However that may be, I was persuaded by Mr. McLanachan's arguments (he has represented the Defendant only on this appeal) that the Defence was not so defective as to entitle a Court to strike it out. When the action comes on for hearing, if the Judge considers that the Defence in its present form has involved the Plaintiff in unnecessary expense, this can, no doubt, be dealt with by an appropriate order for costs.

20. This would be sufficient to dispose of the appeal, but I feel it is necessary to review some aspects of the practice and procedure for which provision is made in the District Court Rules. I will first refer to rule 13 which is in these terms:

 

"13.         No writ specially endorsed with a statement of the claim made by the plaintiff, or of the remedy or relief to which he claims to be entitled, for the purpose of obtaining summary judgment thereon, shall issue in the Court, and no provision of the Rules of the Supreme Court relating to specially endorsed writs shall apply to the Court except in so far as any such provision is specially enacted in these rules."

It will be seen at once that the rule has not kept up with changes in procedure in the R.S.C. There is no longer any provision for "specially indorsed" writs, which were necessary to found an application for summary judgment under O.14 However, what is perfectly clear is that the O.14 procedure has no place in the armoury of options open to a Plaintiff in the District Court.

21. The following rule applies certain provisions of the R.S.C. to proceedings in the District Court:

 

"9	(1) Subject to the provisions of the Ordinance and of these rules, the Rules of the Supreme Court as for the time being enacted and save as it therein may otherwise be provided shall apply to proceedings in the Court as they apply to proceedings in the High Court with such modifications as are necessary for that purpose.
	(2) Those parts of the Rules of the Supreme Court which are listed in the Schedule shall not apply to the Court or to any proceedings in the Court."

I would mention here that O.18, r.19 does not appear in the Schedule to which reference is made in rule 9(2).

22. A Defendant who disputes liability is required to file a Defence under rule 21. There is provision in rule 22 for judgment in default of defence, and upon admission. Under rules 25 and 26 the Court may frame and record issues, and for this purpose may order the appearance before the Court of a party (rule 26(1)(c)), and call upon a party to produce documents upon which he intends to rely (rule 26(1)(d)). But the Court is not bound to frame issues (rule 25(3)).

23. As regards pleadings in general, rule 37 is as follows:

 

"37.    Save as the Court may otherwise allow, the provisions of the Rules of the Supreme Court relating to the form and contents of pleadings shall apply to proceedings in the Court."

24. I now turn to rule 27 under which the application which failed before the Judge was sought. The rule is in these words:

 

"27.	(1)    Where -
	(a)	any party appearing or present in court, upon being required so. to do by the Court for the purpose of framing issues, refuses without reasonable excuse to be orally examined by the judge or to produce any document then and there in his possession; or
	(b)	the defendant, in the opinion of the Court, fails, by himself or by his counsel, solicitor or other representative to disclose any reasonable ground of defence; or
	(c)	any party being bound by an order made under rule 26(1)(e) or (d) fails without reasonable excuse to obey the same,
	the Court may pronounce such judgment against him and in such terms as it shall think fit or make such order and impose such terms as to costs, payment of money into court, giving security or otherwise as it thinks fit.
	(2) Whenever, in the opinion of the Court, the issues are sufficiently established for the immediate determination of the cause, the Court may pronounce judgment forthwith in such terms as it shall think fit."

And rule 44A is also relevant:

"44A.	(1) For the purposes of exercising any of the powers granted by rules 25, 26, 27 and 28, the Court may, upon giving not less than 3 days' notice, require any party to an action to attend before the Court.
	(2) Any party to an action may, at any stage before the trial of the action and upon giving not less than 3 days' notice to all other parties, apply to the Court for directions.
	(3) Upon an application under. paragraph (2), the Court shall give such directions upon such terms as it thinks fit."

25. The impression I first gained when reading rule 27(1)(3) is that the wording employed (although the expression "...... fails ..... to disclose any reasonable ground of defence ...." is used) is hot apt to embrace defects in pleading alone. No doubt a defective or hopeless defence as pleaded might put the Judge upon enquiry so that he decides to invoke his jurisdiction under that rule but, it seems to me that para. (b) of rule 27(l) envisages some pre-trial investigation by the Judge of the actual merits of the Defendant's case, and he can enter summary judgment only when he is satisfied after hearing the Defendant or his representative that no reasonable grounds of defence remain.

26. It may be, too, that when rule 44A is taken into account,  the rule-making authority intended the initiative to be with the Judge (compare paras. (2) And (3) of rule 44A, with para. (1) ). However, it may well be that there is nothing to prevent a party inviting the Court to exercise jurisdiction under rule 27(1)(b) in appropriate cases. Certainly this seems to have been done in Kao, Lee & Yip v. Euro Treasure Ltd.⁽³⁾ (unreported) where another Division of this Court upheld an appeal against a refusal by a District Judge to enter summary judgment under rule 27(1)(b), on the merits of the respective cases.

27. The impression I had formed when reading rule 27(l)(b) of its true intention is strengthened when rule 38A is taken into account. Unfortunately, although Counsel appearing before us an the appeal took us through most of the relevant procedural provisions, we were not referred to that rule. It reads:

 

"38A	(1)    Whenever it appears to the Court that the particulars of-
	(a)		any claim or counterclaim -
		(i)		do not comply with these rules;
		(ii)		do not adequately disclose a cause of action;
		(iii)		fail to cover facts which, if proved, would establish the jurisdiction of the Court; or
		(iv)		are otherwise insufficient; or
	(b)			any defence or defence to counterclaim -
		(i)		do not comply with these rules;
		(ii)		do not disclose an adequate defence;
		(iii)		are otherwise insufficient,

	the Court may, either upon the application of a party or of its own motion and on such terms as it thinks fit, order that the particulars. be struck out or amended in such manner as it shall direct or that further and better particulars be filed within a limited period.
	(2)    The provisions of rule 35(l) and (2) shall apply to the filing, of further and better particulars ordered to be filed under paragraph(1).
	(3)    If a party requires further or better particulars of any other party's case he may, at any time before the Court has fixed a date for the trial, give notice to the opponent specifying what further or better particulars he requires, and the other party shall, within 5 days of the service of the notice, file such further or better particulars as may properly be required and within the same time deliver a copy thereof to the party requiring the particulars.
	(4)    If a notice under paragraph (3) is not complied with, the Court, either before or at the trial, if it is satisfied that the party requiring the particulars is thereby prejudiced, may -

		(a)	order the further or better particulars to be filed and delivered; and
		(b)	stay all proceedings until such order has been obeyed; or
		(c)	direct that the action be struck out or that the defendant be debarred from defending, as the case may be, unless such order is obeyed within such further time as the Court may allow, and the Court may make such order as to costs as it thinks fit.
	(5)    Paragraphs (3) and (4) shall apply, with such modifications as are necessary, to a counterclaim and to third party proceedings in the same manner as it applies to an action."

28. There can be no doubt that while paras. (3) to (5) of rule 38A deal with applications and orders for further and better particulars as ordinarily understood, para. (1) of that rule goes much further. It enables a party, inter alia, to apply for the particulars of a defence to be struck out (or for an order that they be amended) if they do not disclose an adequate defence. The effect of this provision, when rule 9 is borne in mind, is to negative the application of R.S.C. O.18, r.19(1)(a) - which allows an order to be made for a defence to be struck out or amended, on the ground that it discloses no reasonable defence. However, since they are not listed in the Schedule to the District Court Rules and no provision to like effect occurs  in the body of those rules, paras. (b), (c) and (d) of O.19, r.18(1) would be applicable to District Court proceedings.

29. There is thus no great difference between the substance of rule 38A(1)(b)(ii) and R.S.C.O.19, r.18(1)(a) but there is one difference which may or may not have been intended. Under O.19, r.18, in the circumstances there set out, the Court has power to order the action to be stayed, or dismissed or to enter judgment against the defaulting party. This can be done under rule 38A(4)(c) but, it seems, only when a notice under para. (3) has not been complied with and the Court is satisfied that the party requiring particulars has been thereby prejudiced. This may not matter greatly because, no doubt, once the Judge has struck out particulars of a defence, and there is nothing left, he will be able to invoke his powers under rule 27 and if, after inquiry, he is satisfied that no reasonable ground of defence is shown, give summary judgment for the Plaintiff.

30. In my judgment the application was technically misconceived, but I would dismiss the appeal (reaching my conclusions by a different route from that taken by the learned Judge) on the ground that it had not been established that the Defence was so irregular that it should have been struck out, and judgment entered for the Plaintiff, on whatever procedural rules the application was based.

(1)    [1952] 2 Q.B. 216

(2)    [1959] 1 Q.B. 297

(3) Civil Appeal No. 189 of 1984

Sir Alan Huggins, V.-P.:

31. The application was one to strike out the Defence on the ground that it disclosed no reasonable ground of defence and to enter judgment for the Plaintiff. It was made under r.27(1)(b) of the District Court Civil Procedure (General) Rules ("The District Court Rules").

32. The contention of the Plaintiff at both hearings before the District Judge appears to have been that the alleged denial of the material allegations in the Particulars of Claim was insufficient, with the result that those allegations should be taken to be admitted, and that the Plaintiff was therefore entitled to judgment upon admissions. That is not, however, how the judge saw the matter, for he said:

"My function is to determine whether or not there is a triable issue"

and he based his decision upon the fact that he considered

"the information on the writ inadequate to determine the issue".

I am not clear to what issue he was referring in that second passage nor what information he had in mind. Although in reality consisting of only one paragraph, the Particulars of Claim contained all the material allegations necessary to found an action on a dishonoured cheque and were in a form hallowed by time: see Bullen & Leake (12th Edn.) 326 Form 134. The only criticism which might fairly be levelled against the Particulars of Claim is that better particulars should have been given of the notice of dishonour. Indeed, the court was not initially concerned with any deficiency in the Particulars of Claim: that would only have become material if the Defence had been struck out.

33. The District Judge went on to say:

 

"It would appear to me that what the defendant is alleging by a blanket defence is a total failure of consideration for the cheque To strike out a defence under these circumstances would in my opinion be unjust."

With respect to him failure of consideration was one defence which the Defendant was not seeking to raise: that would have required an express allegation in the Defence: see r.30. In truth what the pleader was seeking to say was:

They were, of course, alternative defences.

34. The real issue was whether the Defence filed was in a form which put those five matters in issue. If any allegation in the Particulars of Claim was not traversed, it was deemed to be admitted: O.18 r.13(1) of the Rules of Supreme Court, which was applicable by virtue of r.9 of the District Court Rules. Miss Kwan's argument was that the Defence here contained only a "general traverse" and that such "general traverse" was inadequate. She submitted that, in the absence of a separate denial of each of the five allegations not expressly admitted, the Plaintiff could not know what were the issues on which it had to adduce evidence. The foundation of the argument appears to be that what used to be called the "omnibus traverse", which formed para.2 of the Defence in the present case, is not sufficient to prevent the operation. of O.18 r.13(1) where the principal allegations in the Particulars of Claim have not been individually denied.

35. Mr. McLanachan replies in the first place that he does not need to rely upon the omnibus traverse at all: there was in para.1 of the Defence an express denial of para.1 of the Particulars of Claim save as to the drawing of the cheque, which was expressly admitted. There could be no question of that's being an evasive denial, to which legitimate exception could have been taken, and the omnibus traverse in para. 2 was nothing more than a long-stop inserted ex majore cautela. In other words, he says that what can properly be alleged in one paragraph of the Particulars of Claim can properly be denied in ore paragraph of the Defence, and it was not necessary for the Defendant to separate the allegations which the Plaintiff had chosen to string together.

36. It would doubtless have been better had the Defence denied each allegation individually, if for no other reason than that would have indicated that the pleader had applied his mind to each in turn and was not, through an oversight, traversing something which he ought to have admitted. Thus one may wonder whether the pleader here really had instructions to deny all five of the allegations listed above. However, in my view, deny them he did by para.1 of the Defence,. The denial was "specific" in the sense that it was not a "traverse of the claim": it was directed to the specific allegations made by the Plaintiff though it was in general terms. Accordingly, I think, (although for different reasons) that the judge was right to decline to strike out the Defence. A fortiori there was, in my judgment, no ground for entering judgment.

37. It follows that I agree with Mr. McLanachan that there was no need for him to rely upon the "omnibus traverse" in para.2 of the Defence. As Lord Denying, L.J. pointed out in Warner v. Sampson 1959 1 Q.B.297, 310, it is a plea which is used in nearly every defence which goes out from the Temple. The justification for such an extensive use of it is open to question, and in a simple case the plea should not be necessary. In a complicated. case it is possible that the pleader may fail to traverse individually (and thus be held to have admitted) an allegation the existence and force of which he has not appreciated, and it is to prevent such an eventuality that the plea may legitimately be inserted. I would endorse what is said in 1 Supreme Court Practice (1985) 296 (18/13/5) to the effect that "so far as concerns the allegations which are the gist of the action the denial should be as precise as possible". A pleader who relies upon the omnibus plea as a traverse of an important allegation which ought to be individually traversed is likely to lead his client into incurring unnecessary costs.

38. Fuad, J.A. has dealt with the question whether r.27(1)(b) was the appropriate rule under which to make the present application. I have had the advantage of reading his judgment in draft and am in entire agreement with the conclusion he has reached. At first sight the wording of that paragraph is so similar to that of O.18 r.19(1)(a) of the Rules of the Supreme Court that one might assume that the draftsman intended a similar meaning. The Supreme Court rule is clearly concerned with the propriety of the pleading and not with the merits of any defence, and upon applications under it no evidence is admissible: see r.2. One must remember that, although formerly a defendant in the District Court was not obliged to file a defence unless specifically ordered to do so, r.21(1) now makes the filing of a defence mandatory. Nevertheless a "reasonable" defence is not the same thing as an "adequate" defence (compare r.38A(1)(b)(ii)): "adequacy" would appear to suggest an inquiry into the merits of the defence. (I confess that I have difficulty in understanding why the draftsman has differentiated between disclosure of and "adequate defence" in that sub-paragraph and "adequate disclosure" in sub-paragraph (a)(ii) of the same rule.) Yet r.38A, like O.18 r.19, is clearly concerned only with pleadings, and the latter rule is applicable in the District Court subject to the former: see r.9. Having regard to the existence of r.38A one is driven to the conclusion that r.27(1)(b) does, after all, require some investigation of the merits of any defence pleaded. That view is strengthened by the fact that r.27(1)(c) deals (inter alia) with a case where a defendant has disobeyed an order to produce documents in support of his case.

39. It would appear that this is the first time this court has been called upon to consider the construction of the new District Court Rules, and it seems to me that they need urgent and comprehensive revision. It does not surprise me if the parties and the judge in the present case were misled as to the nature of the application before the court.

Kempster, J.A.:

40. His Honour Judge Rattigan first became seized of this matter when, on 27th November 1984, he heard an application, ostensibly brought pursuant to rule 27(1)(b) of the District Court Civil Procedure (General) Rules, to strike out the Defence as disclosing no reasonable ground of defence. I am satisfied that such rule afforded him no jurisdiction to strike out a pleading. The whole of the rule, apt to give effect to the provisions of rules 25 and 26, is subject to the words "Where - (a) any party appearing or present in Court, upon being required so to do by the court for the purpose of framing issues-" and the parties had not come before the learned judge pursuant to notice given under rule 44A(1) or otherwise for such purpose. Further, the rule gives the court power only to pronounce judgment together with necessary consequential orders. In the District Court an application to strike out a pleading which, by rule 37, will normally be required to follow the Rules of the Supreme Court as to form and content, should be made under rule 38A which, by rule 9, prevails over, for example, R.S.C. Order 18 rule 19(l)(a). Having regard, however, to the terms of rule 41 the Court had power to treat the application as having been made under the appropriate rule and I am prepared to assume that this is what happened.

41. The matter was argued before the learned judge on the footing that the Defence comprised a general traverse, contrary to the terms of R.S.C. Order 8 rule 19(3), which should be construed as an admission; thereby leaving the material allegations in the Particulars of Claim unchallenged so as to allow judgment to be entered in the plaintiffs' favour. In the event the application was dismissed with costs.

42. By Notice dated 5th December 1984 the plaintiffs sought a review of the decision of 27th November and the contentions of the parties were again rehearsed before the learned judge on 18th December. He declined this further application but granted the plaintiffs leave to appeal to this Court on a point of law pursuant to section 63 of the District Court Ordinance (Cap.336). In due course pursuant to section 60 he furnished his "Reasons" for the decision of 27th November 1984. In this somewhat diffuse document the learned judge criticised the Particulars of Claim as less than explicit; entered into some degree of speculation as to the substance of the defendant's case and concerned himself with the concept of "a triable issue" which would have been appropriate had he been hearing an application for summary judgment pursuant to R.S.C. Order 14 in the High Court. Such a procedure is expressly eschewed by rule 13 of the District Court Civil Procedure (General) Rules which was not drawn to the attention of the division of this court which decided Kao, Lee & Yip v. Euro-Treasure Ltd. ⁽¹⁾. Be that as may the outcome of this appeal must turn on our decision. as to the effect of the Defence impugned.

43. In the appendix to the third edition of Bullen and Leake are to be found the "General Rules as to Pleading, of Trinity Term, 1853". Rule 7 reads:

 

"In all actions upon bills of exchange and promissory notes, the plea of 'non assumpsit,' and 'never indebted' shall be inadmissible. In such actions, therefore, a plea in denial must traverse some matter of fact; exempli gratia, the drawing, or making, or indorsing, or accepting, or presenting, or notice of dishonour of the bill or note. "

After reciting this rule of pleading in Arab Bark v. Ross⁽²⁾ at p.224 Somervell, went on to say:

 

"On a claim on a bill of exchange or promissory note the defendant cannot simply put the plaintiff to the proof."

By that he meant, if I understand him correctly, that the defendant must do more than plead the general issue or, in other words, merely deny his liability on the bill. He must deny such matters of fact as "the drawing, making, endorsing, accepting or presenting or giving notice of dishonour of the bill." The material issue here may thus further be refined to the question "Has the defendant effectively traversed such allegations of fact appearing in the Particulars of Claim as are not expressly admitted?"

44. In Grocott v. Lovatt & Anor.⁽³⁾ the Court of Appeal in England, having been referred by counsel to the equivalent provisions of R.S.C. Order 18 rule 13(3), held that a paragraph in a Defence to a claim for damages for libel which read:

 

"The defendants deny the facts alleged in par.3 of the statement of claim."

albeit a loose and irregular pleading did effectively traverse the critical allegation of publication. Further, in Warner v. Sampson⁽⁴⁾ at pp.310- 311, Lord Denning considered an equivalent plea to that raised in the instant case:

 

"Save and except for the admission herein contained this defendant denies each and every allegation in the statement of claim as if the same were specifically set out and traversed seriatim."

He explained:

 

"It is used in nearly every defence which goes out from the Temple. It comes at the end. The pleader has earlier gone through many of the allegations in the statement of claim and dealt with them. Some he has admitted. Others he has denied. Whenever he knows there is a serious contest he takes the allegation separately and denies it specifically. But when he has no instructions on a particular allegation, he covers it by a general denial of this kind, so that he can, it need be, put the plaintiff to proof of it at the trial. At one time the use of this general denial was said to be embarrassing - but since 1893 it has been recognized as convenient and permissible."

Lord Denning went on to contrast such a denial, which casts the burden of proof on to the plaintiff, with a denial pregnant with an affirmative allegation; which would require specifically to be pleaded. Hodson, L.J. (as he then was) gave judgment to like effect at p.319 as did Ormerod, L.J. at p.324.

45. Lord Denning had referred to the case of Adkins v. The North Metropolitan Tramway Company⁽⁵⁾ in which, at p.174, Hawkins, J. said:

 

"The pleading may not be in strict literal compliance with the rules, though it is admitted that each denial might be made separately and specifically, and it really amounts to the same thing to say that the defendant 'denies each and every allegation in the plaintiff's claim'; and so the Master thought and refused to order the pleading to be altered. Yet the plaintiff, not content with the Master's decision, went before the Judge at Chambers, and he agreed with the Master, and now the plaintiff appealed to the Court.

I cannot conceive anything more useless than this appeal, which could come to nothing except costs. I agree with the Master and the Judge that the pleading ought not to be struck out, and that the application ought to be dismissed, but the defendants may if they please alter their pleading without costs." Lawrance, J. concurred.

Clearly the Court in that case was considering not only literal compliance with the rules but inherent discretion. I would adopt the same attitude albeit this Court has, in Jim Mai-gi v. Choy Kwun-ping⁽⁶⁾ exercised its discretion in relation to different pleadings to contrary effect on the basis that "only the inconsequential matters may be safely left to the general traverse." per Cons, J.A. at P.678. Zimmern, J.A. at p.682 based himself on the principle that "when a party relies on confession and avoidance he cannot just confess without specifically pleading the matters relied on for the avoidance." Leonard, V.-P. agreed with the approach of Cons, J.A.

46. I too agree that this appeal should be dismissed.

(1)    Civil Appeal No. 189 of 1984 (unreported)

(2)    [1952] 2 Q.B. 216

(3)    [1916] W.N. 317

(4)    [1959] 1 Q.B. 297

(5)    (1893) 10 T.L.R. 173

(6)    [1981] H.K.L.R. 674