Chow Ching Man And Others v Sun Wah Ornament Manufactory Ltd And Others

Judgment Date10 July 1996
Judgement NumberCACV207/1995
Citation[1996] 2 HKLRD 338
CourtCourt of Appeal (Hong Kong)
Subject MatterCivil Appeal
CACV000207/1995 CHOW CHING MAN AND OTHERS v. SUN WAH ORNAMENT MANUFACTORY LTD AND OTHERS
1995, Nos 207 & 212
(Civil)

HEADNOTE

Where the failure to serve a writ within its normal validity period is the result of a choice, then it is necessary to decide whether the choice was made for a good reason, meaning one which supports a deliberate failure to comply with the time limit involved. And no discretion to extend the writ would arise unless the choice was made for a reason which is at least capable of amounting to a good reason.

IN THE COURT OF APPEAL 1995, Nos 207 & 212
(Civil)

BETWEEN
CHOW CHING MAN and seven others Appellants
(Plaintiffs)
and
SUN WAH ORNAMENT MANUFACTORY LIMITED and eighteen others Respondents
(Defendants)

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Coram: Nazareth VP and Bokhary & Liu JJA

Date of Hearing: 28 May & 25 - 27 June 1996

Date of Handing down Judgment: 10 July 1996

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JUDGMENT

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Bokhary JA:

Introduction

1. These consolidated appeals concern the proper approach for the court to adopt when a plaintiff chooses not to serve his writ within its normal validity period even though he could do so but chooses instead to seek an extension of the validity of the writ. I emphasise the word "chooses". This is not a case of intervening mishap or even of mere inadvertence.

2. If the appeals succeed, the appellant plaintiffs will be able to pursue their claims against the respondent defendants on the merits. The failure of the appeals may mean that the plaintiffs will be left to pursue such remedy as fresh legal advisers may advise them to pursue against their present legal advisers. So the case is an unfortunate one all round.

And if the appeals were to be decided on sympathy alone, I would unhesitatingly decide them in the plaintiffs' favour. But they cannot be decided on sympathy alone. It is necessary to look at the law. And I will do so. But first a word has to be said on the facts.

The accident

3. On November 26, 1990, a large portion of a massive concrete canopy projecting from the side of a factory building in To Kwa Wan collapsed on to the pavement below. Several persons were badly injured. Tragically, five persons lost their lives.

4. This case arises out of that accident.

The parties and the claims

5. The first three plaintiffs are persons who were badly injured. And the remaining plaintiffs are the legal personal representatives of the five persons who lost their lives.

6. Turning to the defendants, this is the position. The 1st to 6th, 8th to 10th and 12th to 13th defendants are sued as co-owners of the common parts of the building. The 7th defendant is sued as a co-owner of the common parts of the building, the previous manager of the building and a person who gave instructions to 18th defendant. The 11th defendant is sued as the manager of the building and a person who gave instructions to the 18th defendant. The 15th defendant, which is in liquidation, is sued as the 1st defendant's agent who instructed the 18th defendant and who caused the canopy to be extended. The 16th and 17th defendants are sued as constituting the alter ego of the 15th defendant, which was the agent through which the 1st defendant had instructed the 18th defendant and extended the canopy. The 18th defendant is sued as a structural engineer who had advised that the canopy was structurally safe. The 19th defendant is sued as the Building Authority's representative.

7. Public nuisance and negligence are the causes of action relied upon.

The writ and the applications below to extend it

8. The writ was issued on October 22, 1993. That was just three days before the period of limitation expired on the 25th.

9. On October 19, 1994-when the writ was due to expire two days later at midnight on the 21st but still had not been served - the plaintiffs launched an ex parte application under Order 6, rule 8(2) for a one-year extension of the validity of the writ. That application came before Master Britton on the 22nd and was granted.

10. The writ thus extended was amended on the same day.

11. Over the next few days, the writ, the Statement of Claim and the Statement of Special Damages were served.

12. That was followed by applications by all the defendants except the 4th, 9th and 12th to 15th for the discharge of the Order extending the writ and for the setting-aside of the service of the writ.

13. The 4th and 9th defendants have filed defences. Default judgments have been entered against the 12th to 14th defendants. And the 15th defendant is in liquidation.

The Order appealed against

14. Those discharge and setting-aside applications were heard before Findlay J on September 19 - 22 last year. On the 26th of that month, he acceded to them. He discharged the Master's Order extending the writ and set aside the service of the writ on the applicant defendants.

15. The appeals now before us are the plaintiffs' appeals against Findlay J's Order. They seek the setting-aside of his Order and the restoration of the Master's Order. The respondents are the defendants who obtained Findlay J's Order.

16. Mr Sarony and Mr Ozorio appear for the plaintiffs. Mr Scott appears for the 1st to 3rd, 7th, 11th and 16th to 19th defendants. Mr Franklin appears for the 5th and 6th defendants. Miss Leong appears for the 10th defendant. We thank them all for their assistance.

"Good reason" needed

17. It is clear from the decisions of the House of Lords in Kleinwort Benson Ltd v. Barbrak Ltd [1987] AC 597, Waddon v. Whitecroft Scovell Ltd [1988] 1 WLR 309 and Baly v. Barrett [1988] NI 368 that (i) Order 6, rule 8(2) is to be construed so that the discretion to extend the validity of a writ does not arise unless the plaintiff first establishes matters amounting to good reason for extension or at least capable of so amounting; and that (ii) matters such as the balance of hardship only fall to be considered if the discretion to extend arises in the first place.

18. Subject to that, just because a factor would be relevant to which way the discretion ought properly to be exercised if it arose does not mean that such factor is necessarily irrelevant to whether or not the discretion arises in the first place. At no stage is justice irrelevant. After all, whether or not a reason is a good one is a question which falls to be determined by a court of law administering justice: justice according to law rather than palm tree justice of course but justice nevertheless.

19. As Waite LJ pointed in Lewis v. Harewood, "Times", March 11, 1996, there can be a degree of overlap between the two stages. And, as I see it, such overlap does not undermine the two-stage approach. It merely shows that the two stages are not watertight compartments for all purposes.

The judge's view of the case

20. Findlay J indicated that he would have exercised his discretion in the plaintiffs' favour if a discretion to extend arose. But he was of the view that no such discretion arose because the plaintiffs had failed to show any good reason for an extension. That is the basis on which they lost before him.

Further evidence

21. In his judgment, Findlay J set out a number of specific questions on the facts which he considered were important to the ultimate question of whether there was any good reason for an extension but had been left unanswered by the evidence filed on behalf of the plaintiffs.

22. Mr Sarony submitted that the judge ought in all fairness to have raised those questions with the plaintiffs' counsel in the course of the hearing. And there is a dispute as to whether or not the judge had in fact done so.

23. All things considered, we took the view that justice would be best served by allowing further evidence on the facts bearing upon the question of whether there is any good reason for an extension. Accordingly, we granted an adjournment, with costs against the plaintiffs on a common fund basis for them to prepare such further evidence, giving the opposite parties leave to prepare evidence in answer if they saw fit.

24. At the resumed hearing, the plaintiffs proferred such further evidence. None of the opposite parties proferred any evidence in answer. Instead, they all opposed the plaintiffs' application to file their further evidence.

25. As we shall see in a moment, all of the questions raised by the judge in his judgment go to matters within the actual knowledge of the plaintiffs' legal advisers. Had the judge raised those questions with Mr Sarony in the course of the hearing, Mr Sarony would have been able to provide the answers from his own knowledge, that of his junior and that of their instructing solicitor.

26. It was not suggested by any of the defendants that they would wish to file any evidence in answer if the plaintiffs were given leave to file their further evidence.

27. All things considered, we took the view that in these interlocutory appeals the just course was to give the plaintiffs such leave. So we did so, albeit with the costs of the argument on leave to the opposite parties on a common fund basis.

28. The judge's questions and the answers to be found in the plaintiffs' further evidence are as follows:

(1) Q. When was it decided that the writ would not be served immediately?
A. That was finally decided on October 10, 1994.
(2) Q. When did [the plaintiffs' solicitor] complete his investigations so that he could decided against which defendants to proceed?
A. October 10, 1994.
(3) Q. When was it decided to proceed against the defendants before [the judge]?
A. October 10, 1994.
(4) Q. When was counsel instructed to draft a statement of claim?
A. Junior counsel was first so instructed on or about May 19,
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