LEUNG CHING FAI JACKY AND ANOTHER v. TANG KA FAI

HCA2313/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.2313 OF 2004

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J U D G M E N T

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1. This is an appeal against the order of Master de Souza dismissing the plaintiffs’ application to join a firm of solicitors, Messrs Li, Wong & Lam (“LWL”) as 2^nd defendant.

2. The plaintiffs entered into an agreement, as purchaser, with the defendant, as vendor, for the sub-sale and purchase of a flat.  In brief, their case is that they tendered completion at the due time, but the defendant wrongfully refused to accept it, and accordingly they claim specific performance, or alternatively return of their deposits and damages.  The defendant’s case is that completion was not tendered in time, and he was therefore entitled to determine the contract and forfeit the deposits.

3. LWL acted for the plaintiffs.  Messrs Wong & Poon (“W&P”) acted for the defendant.  The parties agreed that completion was to take place on 28 September 2004, at W&P’s office, within “office hours” which were defined as between 9:00 and 11:30 a.m. on weekdays.  Time was of the essence.  The issue between the plaintiffs and the defendant is whether LWL’s messenger, Ms Ho Wai Chu Helina, arrived at W&P’s office with the settlement documents and cheques before 11:30 a.m.  The plaintiff says that she arrived at 11:28, and the defendant that she arrived at 11:34.

4. The plaintiffs now seek to add LWL as 2^nd defendant, and to claim against them for damages for professional negligence and breach of retainer.  They say that LWL owed them a duty to arrive in good time for completion, but that LWL breached that duty because Ms Ho arrived late.

5. LWL took a statement from Ms Ho, in which she says that she left Hong Kong by bus at 10:15, arrived at Yuen Long at 11:20, and entered W&P’s office at 11.28.  The defendant pleads that Ms Ho arrived at 11:34.  There is a blank sheet of paper chopped with a time chop showing that time.  Ms Ho will say that she asked W&P’s staff to acknowledge receipt of the documents as soon as she arrived but that they refused to do so, and only chopped the blank sheet at 11:34. 

6. There is therefore one factual issue which is common to the plaintiffs’ case against the defendant and its case against LWL, namely, when did Ms Ho arrive at W&P’s office?

7. I have no doubt that a solicitor owes a duty to his client not to miss conveyancing deadlines.  If this deadline was missed through the fault of LWL’s staff, the firm will be liable.  No particular reason is given why Ms Ho was late, if indeed she was late.  So I will take it for the purposes of this appeal that, if it can be shown that Ms Ho arrived at 11:28, the plaintiffs will succeed against the defendant, but will have no case against LWL; but if it be shown that she arrived at 11:34, the plaintiffs will succeed against LWL, if LWL is joined, but will not succeed against the defendant.

8. This means, of course, that the plaintiffs are relying on two different and inconsistent factual situations at the same time.  Against the defendant it needs to prove that Ms Ho arrived on time; and against LWL it needs to prove that she was late. 

9. The application is made under Order 15 rule 6(2)(b) of the Rules of the High Court which provides that the court may order the addition as a party of :

“any person between whom and any party to the cause or matter there may exist a question or issue arising out of or relating to or connected with any relief or remedy claimed in the cause or matter which in the opinion of the Court it would be just and convenient to determine as between him and that party as well as between the parties to the cause or matter.”

10. The power is discretionary.  Since this appeal is by way of a re-hearing, I do not need to consider whether or not the Master exercised his discretion properly.  I have to decide whether it would be just and convenient to determine the single issue of Ms Ho’s time of arrival as between the plaintiffs and the defendant, and the plaintiffs and LWL, in the same proceedings. 

11. Ms Hung, solicitor for LWL refers to the power of the court under Order 15 rule 5 to order separate trials, or make such order as may be expedient, where joinder may embarrass or delay the trial or is otherwise inconvenient.  She says that the proper course is for the plaintiffs to bring a separate action against LWL, and that the Master accepted this in making the order which he made.  The two actions could be tried together, or one after the other, by the same judge. 

12. This approach is attractive because the plaintiffs would not then, in the same action, be seeking to prove two contrary facts.  This could embarrass the trial.  The plaintiffs themselves have no idea whether Ms Ho arrived on time or not.  All they can say is what their instructions to their solicitors were.  In their claim against the defendant, they will have to rely on the evidence of Ms Ho.  In their claim against LWL they will have to rely on the evidence of W&P’s staff.   

13. Mr Lam, solicitor for the plaintiffs, has cited various cases, in particular Bullock v. London General Omnibus Co. & Ors, 1904-7 All E.R. Rep. 44 (the source of the “Bullock order”), Payne v. British Time Recorder Co. Ltd [1921] All E.R. 388 and Child v. Stenning (1876) 5 Ch. D. 695.  Insofar as this is a matter of discretion, the decided cases are always of limited value because each case falls to be dealt with on its own facts, but I think Payne’s case is of assistance.

14. In Payne, the plaintiff sued the 1^st defendant for payment for goods sold and delivered, namely clock cards.  The 1^st defendant denied liability, claiming that the cards did not conform to specimens it supplied to the plaintiff, who then sued the 2^nd defendant, from which it had got the cards, on the same basis.  The issue common to both claims was whether the cards conformed to the specimens.  The Court of Appeal, upholding the master and the judge below, held that this common question of fact gave the court the discretion to allow both causes of action and both defendants to be joined in the action, and the question was so important that they should be joined.

15. At page 388 H, Scrutton LJ stated the principle thus :

“It is impossible to lay down any rule as to how the discretion of the Court ought to be exercised.  Broadly speaking, where claims by or against different parties involve or may involve a common question of law or fact bearing sufficient importance in proportion to the rest of the action to render it desirable that the whole of the matters should be disposed of at the same time the Court will allow the joinder of plaintiffs or defendants, subject to its discretion as to how the action should be tried.”

16. I think the difference between Payne’s case and the instant case is this.  Payne had to prove as against the 1^st defendant that he had sold and delivered the goods.  Once he did so, it was for the 1^st defendant to show that they did not conform to the specimens.  Payne, in his claim against the 2^nd defendant, had to prove that non-conformity; but he was not, in the same action, faced with proving both conformity and non-conformity.  Here, the plaintiffs, if allowed to join LWL, will have to prove both that Ms Ho was on time, and that she was late.  I do not see how they can do both.

17. In Payne, Lord Sterndale, MR, had some reservations as to whether the statement of claim might be embarrassing.  He also considered what would happen if one defendant were struck out.  At page 391A he said this :

“But there is, as I say, one main question which is common, and the learned judge who tries the case will be able under Order XVI r.5, to avoid any injustice being occasioned to one of the defendants by reason of the fact that some of the questions do not concern them.  That rule provides: ‘It shall not be necessary that every defendant shall be interested as to all the relief prayed for, or as to every cause of action included in any proceeding against him; but the Court or a judge may make such order as may appear just to prevent any defendant from being embarrassed or put to expense by being required to attend any proceedings in which he may have no interest.’  That rule seems to me quite sufficient to prevent any injustice being done to a defendant who is not interested in subsidiary questions which concern only another defendant.

I had some doubt at first whether the statement of claim in this case was not embarrassing, but I have come to the conclusion that on the whole it is not so embarrassing that the Court ought to strike out one of the defendants.

Even if the Court were to strike out one of these defendants the only result would be that another action would be brought by the plaintiff against them and the two actions would be tried by the same judge.”

18. It seems to me that, one way or another, there has to be a trial of the issue of whether Ms Ho arrived on time or late.  The question is how best to achieve that.  It can either be done by joinder, or by way of two separate actions tried together, or one after the other.  Either way, I think there will have to be a trial on liability first; because neither defendant should be put to the expense of defending on quantum, until it is established which one is liable.

19. Some assistance on the mode of trial, if joinder is allowed, is to be found in the report of the trial in Child v. Stenning, reported at 7 Ch D 413; this came after the decision of the Court of Appeal referred to above, to allow the joinder of defendants against whom the plaintiff had inconsistent claims.  Fry J said this :

“The question I have to determine is new, and is as to the proper mode of trial where the Plaintiff seeks relief in the alternative against two sets of Defendants.

The case against the Stennings, two of the Defendants, is, that they have no right on the land at all, and are trespassers, and the Plaintiff claims against these Defendants an injunction and damages.  The case against the other Defendant, Mr. Wagner, is, that if the Stennings have a right of way over this land, then Mr. Wagner, under his covenant for quiet enjoyment, is liable to indemnify the Plaintiff.  On the first question, therefore, both the Plaintiff and Mr. Wagner are interested in showing that the Stennings have no right of way.

The case of the Plaintiff has been very fully opened, and now Mr. Kekewich, for Mr. Wagner, says that the Plaintiff must elect which Defendants to go on against, and cannot beyond this stage of the proceedings retain both sets of Defendants.  In my opinion that is not the full extent of the right given to a Plaintiff by the Rules of Court, especially when I bear in mind the decision on the demurrer in this case; and I think that the Plaintiff is entitled to retain both sets of Defendants.  I think that Mr. Wagner's counsel should now be allowed to address the Court in support of the Plaintiff's case, and to cross-examine the Plaintiff's witnesses.  Whether they will be allowed to address the Court again, and in support of their own case against the Plaintiff, will be matter for consideration hereafter.”

20. Here, the plaintiff and LWL are both interested in showing that Ms Ho arrived on time.  Presumably procedure similar to that ordered by Fry J could be ordered.  That will be a matter for the trial judge, who has a general power under rule 5 to make an expedient order to avoid any embarrassment, delay or other inconvenience caused by the joinder.

21. As I have said, one way or the other there will have to be a trial of the issue of whether Ms Ho arrived on time or late.  I think that can be achieved in one action, so long as the trial is on liability only in the first instance.  It is therefore just and convenient to join LWL in these proceedings, and allow the amendments sought.

22. I therefore allow the appeal and make an order in terms of that which, by their Notice of Appeal, the plaintiffs seek in substitution of the Master’s order.  For the reasons given above I also order that there be a split trial on liability and quantum.

23. Since this judgment is to be handed down the costs orders are nisi.