KWOK PAT MUI and Others v. FOK CHI WAH and Others

IN THE COURT OF APPEAL

1996, No. 148
(Civil)

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J U D G M E N T

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Litton V-P:

Introduction

1. This is an interlocutory appeal.

2. It concerns an application by the plaintiffs filed on 11 June 1996 to add two parties to the action as the 2nd and 3rd Defendants, and to amend the statement of claim by adding claims against those two parties. The two parties are Eastern Worldwide Co. Ltd. (2nd Defendant) and Cheng Sau Mui (3rd Defendant). The application was heard by Cheung J who allowed the plaintiffs' application. Hence the appeal by Eastern Worldwide Co. Ltd., the 2nd Defendant. The 3rd Defendant Cheng Sau Mui has not appealed. She cannot be apparently be traced.

The Action

3. The plaintiffs are the personal representatives of the estate of Leung Yin deceased. By writ dated 22 November 1990 they brought claims for damages under the Fatal Accidents Ordinance Cap 22 and the Law Amendment and Reform (Consolidation) Ordinance Cap 23 against the deceased's employers, the owners of a dumb barge "Shui Nam No. 1". The deceased was employed as a sailor on the barge. Back in November 1987 the barge, whilst under tow on a voyage from Hong Kong to Macau, sank with the loss of all hands, including the deceased. The plaintiffs, by their claim, alleged that the loss was caused by the negligence and/or breach of contract on the part of the barge owners, their servants or agents.

4. On 4 February 1991, the barge owners filed their Defence, denying negligence. At the same time they took out a Third Party Notice alleging that the loss was caused by the negligence of (i) the 2nd Defendant the charterer of the barge and/or (ii) the 3rd Defendant, the owner of the tug Cheng Sau Mui, their servants or agents for whose acts they were in law responsible. In paragraph 2 of the barge owners' Defence they alleged among other matters that the loss was due to the negligence of the charterer of the barge and the tug owner as particularised in the Third Party statement of claim.

Who should be defendants in the action?

5. It appears from the affidavit evidence that in March 1991 the Legal Aid Department sought counsel's advice as to whether the Third Parties should be added as Defendants in the action. The advice seems to have been partly to this effect: Since expert reports were then not available, the positions of the Third Parties could not be assessed. I have some difficulty in understanding the basis of such advice: There were from beginning to end only two issues to be tried: (i) whether the death of the deceased was caused by actionable fault and (ii) whose fault. As regards the question whether the Third Parties should be joined as defendants in the action - in other words, whose fault caused the loss - it is difficult to see where expert evidence might come in.

6. Be that as it may, the decision seems to have taken in 1991 that the Third Parties should not be joined.

7. Belatedly, and not until last year, the Legal Aid Department changed its mind: apparently as a result of expert advice then received. In Ms Miller's affidavit (she is the Legal Aid Officer in charge of the litigation for the plaintiffs) she says that, on the basis of the expert evidence, she had come to the view that the Third Parties might have been in charge of the barge, rather than the barge owners; the 2nd and 3rd Defendants might therefore have incurred civil liability for the loss rather than the party sued.

8. Hence the application to join the Third Parties which went before the judge.

Jurisdiction to override time limits

9. The deceased died when the barge and its tow sank with all hands on its voyage to Macau on 27 November 1987. Action against the 2nd and 3rd Defendants was prima facie time-barred on 27 November 1990 under sections 27 and 28 of the Limitation Ordinance Cap 347.

10. Section 30 however gives the court power to override the time limits in sections 27 and 28. Section 30(1) states:

"(1) If it appears to the court that it would be equitable to allow an action to proceed having regard to the degree to which -

(a) the provisions of section 27 or 28 prejudice the plaintiff or any person whom he represents; and

(b) any decision of the court under this subsection would prejudice the defendant or any person whom he represents,

the court may direct that those provisions shall not apply to the action, or shall not apply to any specified cause of action to which the action relates."

11. Section 30(3) then goes on to particularize six factors which the court must take into account apart from all the other circumstances of the case.

Prejudice to the plaintiffs"

12. As can be seen, what the court must consider, in terms of s30(1)(a), is whether it would be equitable to allow the action to proceed against the Third Parties, having regard to the degree to which the limitations in sections 27 and 28 prejudice the plaintiffs: in other words, what prejudice the plaintiffs would suffer if the limitation on proceedings against the Third Parties were not over-ridden.

13. An example of how subsection (1)(a) might bite to exclude the exercise of discretion against the plaintiff is the case of Liff v. Peasley [1980]1 WLR 781 where the plaintiff had a cast-iron case for damages for injuries sustained by the negligent driving of the 1st Defendant. The 1st Defendant was convicted of careless driving. Further, two independent witnesses placed responsibility for the accident on the 1st Defendant. In those circumstances the English Court of Appeal held, reversing the judge, that the plaintiff had not shown he would be prejudiced if he was not able to pursue his claim against the 2nd Defendant.

14. Here the position is wholly different. Nothing suggests that when the plaintiffs brought proceedings in November 1990 they, or the Legal Aid Department representing them, realized that the barge had been chartered to the 2nd Defendant. It was natural for the deceased's employers, the barge-owners, to be sued. Although, as this court knows, from the appeal we dealt with yesterday, the barge-owners in fact had started proceedings against the charterer in 1988 (in High Court Action No. CL-7/1988) to recover the value of the barge from the charterer, there is no reason to think that the plaintiffs were aware of that action when the present proceedings were instituted in November 1990.

15. The Third Party statement of claim, lodged by the barge-owners in these proceedings on 25 June 1991, placed the responsibility for the loss on the shoulders of the 2nd Defendant: it was averred for example that it was for the 2nd Defendant (i) to procure a sufficiently powerful tug, fitted with proper radio and navigational equipment to undertake the voyage to Macau and (ii) to exercise judgment in deciding whether to commence or permit the continuation of the voyage so as to avoid taking unnecessary weather risks.

16. Such arrangements for the voyage (if they be such) would not have been within the knowledge of the plaintiffs. They are not in a position, as far as we can see, to evaluate the strength or weakness of those averments. In the light of those averments, the plaintiffs would have been taking a risk in the litigation - perhaps a considerable risk - if they did not bring the 2nd and 3rd Defendants in as parties to the action.

17. These matters would have been obvious to the judge - so obvious that he probably did not consider it necessary to mention them in his judgment.

18. Mr Sussex's submission is that the judge had failed to take subsection (1)(a) into account and therefore his exercise of discretion in allowing the time limits in sections 27 and 28 to be overridden is fundamentally flawed. It is true that the judgment says nothing about subsection (1)(a) nor how the judge viewed the question of prejudice to the plaintiffs. There might have been some substance in the submission were this not such an extreme case. Here the fact of the charter of the barge to the 2nd Defendant seems beyond doubt - a fact unknown to the plaintiffs when the writ was issued - and the only question is: To what extent did the barge-owners nevertheless retain control of the barge and its operation, so that they owed liability to the deceased when he met his death? The answer is by no means self-evident. It would obviously be disastrous for the plaintiffs in the litigation if, at the trial, it was found that the 2nd Defendant, or the 2nd and the 3rd defendants jointly, were in control, and not the 1st Defendant - and the 2nd and 3rd Defendants were not made defendants in the Action. It is inconceivable that this was not at the forefront of the judge's mind.

The other factors

19. Mr Sussex, rightly, says that there has been no satisfactory explanation for the delay of some four years when the Action, most regrettably, went to sleep. This however, was something which the judge clearly took into account. The judge also took note of the explanation offered by Ms Miller to the effect that, in the intervening period, there were negotiations for settlement: Mr sussex rightly submits that this affords no explanation at all for the delay. He goes, however, too far in his submission when he says that this impeached the foundation of the exercise of discretion by the judge. I do not understand the judge to have placed reliance upon it beyond noting it, factually, as an explanation offered by Ms Miller.

20. The overriding point, at the end of the day, is the question of prejudice to the defendants: prejudice, that is to say, beyond the obvious prejudice to a party brought into legal proceedings against his will, by the compulsive process of law.

21. The fact of the matter is that the issues now sought to be litigated by the plaintiffs have already been issues in the same Action as between the 1st Defendant and the 2nd and 3rd Defendants in the Third Party proceedings ever since June 1991. So the judge is quite right in his conclusion that there can be no real prejudice to the defendants.

Conclusion

22. Despite Mr Sussex's attractive advocacy, I am not persuaded that the judge has erred in evaluating the relevant considerations when he decided that the time limits in sections 27 and 28 should be over-ridden. Whether, in the circumstances of the case, it is equitable or inequitable to allow a claim which is barred by the statute to go ahead is peculiarly a matter for the judge to decide. The judge having exercised his discretion properly, this appeal must be dismissed. I would so order.

Godfrey JA:

23. I agree.

24. Section 30(1) of the Limitation Ordinance, Cap. 347 assumes, as Mr. Sussex for the appellants correctly submitted, (1) that there will be prejudice to the plaintiff if the action is not allowed to proceed; and (2) that there will be prejudice to the defendant if the action is allowed to proceed.

25. But the degree of prejudice, to the plaintiff and defendant respectively, with which section 30(1) is particularly concerned, will vary from case to case. In the case of the plaintiff, the degree to which the prejudice will have been caused by the time-limit provisions of sections 27 or 28 of the Ordinance (as distinct from any other cause) will also vary from case to case.

26. Like my Lord, Litton, V.P., I see no reason to infer, from the judge's analysis of the matter, that he failed to bear these considerations in mind when balancing the parties' competing interests. The fact that he did not spell out his process of reasoning in relation to the requirements of section 30(1) does not seem to me to matter. The judge decided, for reasons which appear entirely satisfactory, that it would indeed be equitable to allow the respondents' claim against the appellants to proceed.

27. I would dismiss this appeal accordingly.

Liu JA:

28. A given event in the particular setting of a case may be weighty enough to persuade a court to disapply the Limitation Ordinance and exercise its residual discretion in favour of an applicant for a joinder.

29. As against a relatively uninvolved background, the fact that Eastern Worldwide Company Limited was made a third party in February 1991 was apparently taken by the judge, in conjunction with the few circumstances he was able to refer to, as such an event. I cannot say that it was not open to the judge to give weight to that fact for reaching what he regarded as an equitable decision. It was largely a matter of discretion, and the Judge's discretion was unfettered. He was doing the best he could with the material placed before him. If he had found it impossible to reach a decision, he could have easily voiced his predicament to the parties. I might have been tempted to come to a different conclusion but that cannot be relevant. We should not interfere.

30. I, too, would dismiss this appeal.