SIT YIU WAH v. KIN HING HONG CO. LTD.

IN THE COURT OF APPEAL

1993, No 116
(Civil)

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J U D G M E N T

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Mortimer, J.A.:

1. This is an appeal against the order of His Honour Judge Cheung in the District Court when he ordered that unless the 1st defendant paid into court within 14 days the sum of $20,647, the plaintiff should be at liberty to enter judgment and ordered that the costs of the application be costs in the cause.

2. This action is a simple claim for goods sold and delivered, following which there was an application by the plaintiff to strike out the Defence. The application was expressed in this way:

"that the defendant's Defence be struck out on the ground that it discloses no reasonable defence and that judgment be entered for the plaintiff against the defendant as claimed."

3. In spite of it being an application to strike out, it was expressed to be made under rr.27 and 28 of the District Court Civil Procedure (General) Rules.

4. It is clear from the submissions of counsel that the judge made his order purportedly under r.27(1)(b) which reads:

"Where -

(a) ...

(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 ...

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."

5. Having made the application the plaintiff filed an affidavit on the merits. It appears that the defendant's Defence was one which, although signed by himself, must have been the result of some advice. The application to strike-out came on for hearing in front of the judge on 6th April 1993.

6. I turn for a moment to the nature of the application. The application was for a strike-out of the Defence. As is clear from the terms of r.27(1)(b), it is not an appropriate rule for striking out pleadings. The appropriate rule in the District Court is r.38A. That rule provides, so far as it is relevant to this case:

"(1) Whenever it appears to the Court that the particulars of -

...

(b) any defence ...

(ii) do not disclose an adequate defence; ...

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 ..."

7. When the application came before the judge, the question must have arisen as to under what powers he was to act. The plaintiff had filed an affidavit on the merits. There was no affidavit from the defendant. It appears from what we have been told from the Bar that the defendant had instructed a solicitor to attend very shortly before the hearing and was present. The judge read the plaintiff's affidavit and made the order which I have set out.

8. That order must have been made on the basis that the defendant had not disclosed any reasonable ground of defence under r.27 - and indeed this has been submitted by counsel. He must, therefore, have looked at the inter partes summons; have come to the conclusion that although it was an application to strike out under r.38A, he had power under r.41 which enabled him to deal with the matter as if it had been made under O.27.

9. Having come to the conclusion that the defendant had not disclosed any reasonable ground of defence he made an order which by its terms accepted that there was a ground of defence to be advanced.

10. His order is clearly one which only would be appropriate in High Court O.14 proceedings. (Note his order for costs) But, O.14 proceedings are not part of a plaintiff's armoury in the District Court (See The Kwangtung Provincial Bank v Tang Chik-leung Civil Appeal No. 2 of 1985 (unreported)). The basis upon which he purported to exercise his jurisdiction under r.27(1)(b) then fell to the ground for it is clear from his order he was of the view there was a reasonable ground of defence disclosed. Having done that it is also clear to me that he had no jurisdiction on his finding to make the order he did. His jurisdiction under r.27(1)(b) to pronounce judgment is only if he comes to the conclusion that there is no reasonable ground of defence. If he comes to that conclusion the appropriate order may be to pronounce judgment. For my part, I would take the view that the other provisions in r.27(1) for the imposition of terms as to costs and payment in and the giving of security, and so forth, would be more appropriate to circumstances arising under subrules (a), (c) and (d) of r.27.

11. The judge exercised powers here which were not his to exercise under the Ordinance. He was clearly exercising the powers which he would have had under O.14. For my part, it is sufficient to dispose of this appeal.

12. I would add this. If a judge acts under his wide powers in the District Court, such as he is given under r.41 and rr.27 and 28 so as to dispose of a case summarily, it is incumbent upon him to act fairly and to ensure that by a shift of ground one party does not take the other by surprise. It is essential to ensure that if a party shifts its ground and an application is determined without evidence that injustice is not done. Here, we are told, there was an application for an adjournment for the defendant to file evidence. That was refused. It seems to me from the way in which this matter was proceeded, an adjournment would have been appropriate. There is now before the Court an affidavit from the defendant which would have shown that there is at least an issue or issues to be tried.

13. So far as the pleadings are concerned, there is only one view that any court could have taken of the defence, and that is, that it did disclose a reasonable and adequate defence on the face of it. So, in any event a striking-out application was bound to fail.

14. On those grounds, I would allow this appeal.

Sears, J.:

15. I agree.

Kaplan, J.:

16. I also agree.