CHOW CHIU CHEUNG v. HANS JOACHIM BERNICK AND ANOTHER

IN THE SUPREME COURT OF HONG KONG

ORIGINAL JURISDICTION

ACTION NO. 371 OF 1969

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BETWEEN

CHOW Chiu-cheung and Hans Joachim Bernick Heidemarie Klempin

Plaintiff 1st Defendant 2nd Defendant

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Coram : Leonard J.

Date : 6 January 1972

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J U D G M E N T

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1. This is an appeal against a decision of Mr. Assistant Registrar B.L. Jones given on the 4th of November 1971 ordering that the judgment therein against the 1st defendant dated the 16th July 1969 and the assessment of damages of the 18th January 1971 be set aside, and granting leave to the American Home Assurance Company by their agent the American International Underwriters Ltd. (“the company”) to enter an appearance in the name of the 1st defendant or in their own name and to defend the action. At the outset the solicitors for the plaintiff applied for leave to adduce fresh evidence at the hearing of the appeal. The application for leave to adduce fresh evidence was resisted. As an appeal from the Registrar to a Judge in Chambers is dealt with as an actual rehearing of the application which led to the order on appeal and as it is common practice for the Judge in Chambers (subject, of course, to the question of costs) to admit further or additional evidence by affidavit to that which was before the Registrar, I allowed the application and read the new affidavits.

2. The history of this matter is shortly as follows: the plaintiff, a spinster aged 23, was on the 5th May 1968 knocked down by a motor vehicle driven by the 2nd defendant and owned by the 1st defendant while crossing Wong Chuk Hang Road, Aberdeen and she suffered personal injuries. She was in hospital for one month and suffered ill effects for a period there­after. On recovery she sought to enforce a claim in negligence against the driver of the car the 2nd defendant and was referred by the 2nd defendant to the company. The writ was issued on the 28th March, 1969 and on the same day a notice of proceedings was given to the company pursuant to section 10 of the Motor Vehicle Insurance (Third Party Risks) Ordinance No. 39 of 1951. Efforts to serve the writ proved unavailing. The plaintiff’s solicitors then wrote to the company asking for the address of the defendants and the company replied:

“For your information private motor car No. HK 254 is no longer insuredwith theAmerican Home Assurance Company and it is regretted therefore that we are unable to advise you of the present address of either of the defendants in the said action.”

Thereupon the plaintiff sought an order for substituted service and an order for substituted service on the 1st defendant was duly made. Inter­locutory judgment in default of appearance was entered against the 1st defendant on the 16th July 1969. On the 20th of September 1969 an order was made to serve a concurrent summons on the 2nd defendant in Germany. This service proved impossible to effect. The solicitors for the plaintiff then sought to have damages assessed against the 1st defendant. Substituted service of the notice of assessment of damages was duly effected and on the 25th January 1971 the company was informed that damages had been assessed at the figure of $14,810 comprising $7,310 as special damages and $7,500 as general damages with interest at 8% per annum from the 5th of May 1968 to the 18th January 1971. The attitude of the plaintiff solicitors in entering judgment and having damages assessed without reference to the company was almost certainly prompted by the fact that as early as the 11th April 1969 the company had indicated to the plaintiffsolicitors that they would look into the matter only when the writ has been served on their insured. They were, to say the least, un­helpful to the solicitors for the plaintiff when the latter sought to effect service.

3. In the letter of 21st January 1971 to the company the solicitors for the plaintiff inquired whether the company was prepared to satisfy the judgment which had been obtained, failing which, they stated, their client would have no alternative but to commence separate legal proceedings on the judgment against the company. They received no reply to this letter and sent a reminder on the 9th of February 1971. On the 10th March 1971 the solicitors for the insurance company wrote to the solicitors for the plaintiff in the following terms;

“We thank you for your letter dated the 1st March 1971 and now have instructions to reply thereto. You will admit that matters of such farreaching importance should not be the subject of a hasty decision. For that, we are awaiting counsel’s opinion upon this matter.

We should be grateful if you will kindly let the demand stand over another two weeks within which our client’s position in this matter can be verified.”

The solicitors for the insurance company did not write to the solicitorsfor the plaintiff as impliedly promised and the matter rested. In May 1971the plaintiff left the colony to further her studies in the United Statesof America where she now is. She intends to remain there for a period ofthree years. On the 16th September 1971 without any prior notification the solicitors for the plaintiff were served with an application in the name of the defendants inter alia for the interlocutory judgment dated the 16th July 1969 and the assessment made on the 18th January 1971 to be set aside. This application was heard on the 18th of October 1971 and on the 4th November 1971 the Assistant Registrar gave the decision the subjectof this appeal.

4. The plaintiff is a legally aided person and is now in the United States and is not in aposition to bear the expenses or inconvenience of returning to Hong Kong to contest the action at a new hearing nor can she bear the expense of arranging to have her evidence taken before a special examiner in the United States of America. Indeed she is fully dependent on her parents. It will also be noted that the company took no step to set aside the judgment for a period of over seven months namelyfrom the 25th January 1971 to the 16th September 1971.

5. There is no doubt that the company has a direct interest in setting aside the judgment and before the Registrar reliance was placed by counsel for the insurance company on Windsor v. Chalcraft ([1939] 1 K.B. 279). Thefacts there were similar to those in this case. However a comparison ofthe dates on which steps were taken is illuminating. In Windsor v. Chalcraft (supra) the accident occurred on the 5th December 1936. The writ was issued on the 22nd October 1937. Notice was given to the insurance onthe 26th October 1937. The writ was served on the 23rd November 1937. Judgment in default of appearance was entered on the 8th December 1937.Damages were certified on the 12th January 1938 and notice to the insurers was given on the 1st February 1938. The insurers brought their application to set aside the judgment on the 3rd March 1938. In the instant case the accident occurred on the 5th May 1968. The writ was issued on the 28th March 1969. Notice was given to the insurers on the same day. Judgmentin default was entered on the 16th July 1969 but damages were not assessed immediately because the solicitors for the plaintiff wished to serve the2nd defendant but found it impossible to do so. The Underwriters were notifiedon the 25th January 1971, the Registrar having given his decision as to damages on the 18th January 1971 but not having issued his certificate until the 24th February 1971. It will be noted that the plaintiff was still in this jurisdiction up to the 25th May 1971 that is a period of4 months after the insurance company had received notice of the assessment. The learned Registrar may have been misled by the headnote to Windsor v. Chalcraft (supra) which reads in part:

“In as much as the underwriters although not partiesto the action, were liable under the provisions ofthe Road Traffic Acts, 1930 and 1934, to pay theamount of the judgment to the plaintiff and underthe policy to pay it to the defendant, they werepersons aggrieved by the judgment and as such willentitle to an order setting aside the judgment andgiving them leave to enter an appearance in theaction in the name of the defendant or in theirown name, and to deliver a defence.”

Lord Justice McKinnon states at page 293:

“It is by reason of the fact that the nominal defendant has no pecuniary interest in the action and that the strangers to it really have the whole interest in it but they had a right to set aside the judgment.”

The rule itself is permissive only. Order 13 rule 9 reads:

“The Court may on such terms as it thinks just set asideor vary any judgment entered in pursuance of this order.”

The same expression revealed in Order 15 rule 6(2) which empowers the courts to order persons to be joined as parties “whose presence beforethe court is necessary to ensure that all matters in dispute in the cause or matter may be effectually and completely determined and judicated upon.” Having regard to the use of these words I have no hesitation in deciding that I have a discretion and that Windsor v. Chalcraft is notintended to decide otherwise. My attention was also drawn to Gurtner v. Circuit ([1968]  2 Q.B. 587) a case in which the Motor Insurance Bureau immediatelyon receipt of the statutory notice of the commencement of proceedings successfully applied to be joined as a party.       That course was opento the company in this case. They failed to follow it. They alsofailed for a period of 7 months after receiving notice of final judgment to apply to set aside or to be joined. In view of the delay of thecompany in bringing this application and in view of the manifest prejudice …(illegible)  which will be suffered by the plaintiff which would not have been presenthad the company acted in good time I have no doubt that I should …(illegible)  that discretion in favour of the plaintiff. Admittedly the …(illegible)  prejudiced by my action but to a large extent it is the author …(illegible)  own prejudice. It could have taken steps to have itself joined …(illegible)  party as soon as it obtained information that a writ has been issued, as the motor insurance bureau did in the case of Gurtner v. Circuit (supra). Alternatively it could have taken steps to have the judgment set aside and to have itself joined as a party immediately it was informed of the assessment of damages. It failed to do so for a period ofeight months. Diring that eight months the plaintiff, a legally aided person, went abroad relying on the fact that she had her judgment andthat no steps had been taken to set it aside so that it could be executed on or further proceedings taken against the insurance company to enforce it. In these circumstances I consider it would be a manifest injusticeto deprive the plaintiff of her judgment,

6. The plaintiff failed to indicate to the Registrar the nature of the prejudice which she would suffer if the judgment was satisfied. Heradvisers also failed to bring to the Registrar’s attention the fact that she had left the jurisdiction and could only return at very considerable expense and inconvenience. Having regard to this and to the fact that I permitted fresh evidence to be given before me I consider that the plaintiff  although successful should not be allowed the costs of the appeal. Accordingly I order that the plaintiff be given the costs before the Registrar but that each party should pay their own costs of the appeal.

7. As the plaintiff was legally aided I further order that the plaintiff’s costs of the proceedings will be taxed for the purposes of the appeal on such taxation.

(P.F.X. Leonard) Puisne Judge.

S. V. Gittins, Q.C. & P. Lee (Woo & Kwan) for the plaintiff.

…(illegible)  (H. H. Lau & W. S. Lo) for the defendants.

…(illegible)  reduced into writing.

HCA000371A/1969

  

IN THE SUPREME COURT OF HONG KONG

ORIGINAL JURISDICTION

  

ACTION NO. 371 OF 1969

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BETWEEN
	CHOW CHIU CHEUNG	Plaintiff
	and
	HANS JOACHIM BERNICK	1st Defendant
	and
	HEIDEMARIE KLEMPIN	2nd Defendant

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Coram: Mr. B.L. Jones, Assistant Registrar, in Chambers.

Date of Judgment: 4th day of November, 1971.

  

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DECISION

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1. This is an application by the American Home Assurance Company through its local agents, American International Underwriters Ltd. For an order that the judgment entered against the 1st defendant in default of appearance on the 16th July 1969 and the assessment of damages on the 18th January 1971 be set aside and that the Assurance Company be joined as a party to the action.

2. The application was made under Order 13 rule 9 and Order 15 rule 6(2) of the Rules of the Supreme Court.

3. Order 13 rule 9 provides that 'The Court may, on such terms as it thinks just, set aside or vary any judgment entered in pursuance of this Order'.

4. Order 15 rule 6(2) provides that:-

'

At any stage of the proceedings in any cause or matter the Court may on such terms as it thinks just and either of its own motion or on application -

(b)

order any person who ought to have been joined as a party or whose presence before the Court is necessary to ensure that all matters in dispute in the case or matter may be effectually and completely determined and adjudicated upon be added as a party;'

5. The writ of summons was issued on the 28th March 1969 claiming damages for personal injuries and loss suffered by the plaintiff as a result of a road traffic accident that occurred on the 5th May, 1968. A Statement of Claim was filed on the 12th September 1969 for the purpose of the assessment of damages but was not served. It is alleged that the 1st defendant was the owner of the motor car that knocked down the plaintiff on the date of the accident and was driven by the 2nd defendant as the 1st defendant's agent.

6. An Order for substituted service of the writ of summons upon the 1st defendant was made on the 11th June, 1969. No appearance was entered by the 1st defendant and interlocutory judgment was entered against the 1st defendant for damages to be assessed and costs to be taxed on the 16th July, 1969. The writ of summons was not served upon the 2nd defendant and at the hearing of the assessment of damages on the 27th May 1970 the plaintiff through her counsel undertook not to proceed against the 2nd defendant having regard to the provisions of Order 37 rule 3 of the Rules of the Supreme Court. Damages were assessed on the 18th January 1971 at the sum of $14,810.

7. The 1st defendant was insured under a policy with the American Home Assurance Company and on the 7th May 1968 the 2nd defendant sent a report to them dealing with the facts of the accident. On the 20th November 1968 the company received a copy of a letter from the plaintiff's solicitors addressed to the 1st defendant giving notice of a claim arising from the accident. On the 17th December 1968 the company wrote to the plaintiff's solicitors denying liability. The company was served with a copy of the writ and a notice of commencement of proceedings pursuant to section 10 of the Motor Vehicles Insurance (Third Party Risks) Ordinance Cap. 272 on the 28th March 1969 and on the 11th April 1969 the Assurance Company wrote to the plaintiff's solicitors informing them that they would look into the matter once the writ had been served on their insured. On the 16th April, 1969 the Assurance Company received a letter from the plaintiff's solicitors requesting information as to the 1st defendant's address. On the 24th April, 1969 a letter was written by the Company to the plaintiff's solicitors stating that the vehicle was no longer insured with their Principals and they were not in a position to give them the 1st defendant's address. Subsequent to this letter the Assurance Company received no further communication nor were they informed whether the writ had been served. On the 25th January 1971 the Assurance Company received a letter from the plaintiff's solicitors informing them of the judgment and enquiring whether they were prepared to satisfy the damages assessed.

8. It was contended for the Assurance Company that the plaintiff could have issued her writ immediately after liability had been denied on the 17th December 1968 when personal service of the writ could have been effected. The Assurance Company said that they were prepared to act in the defence of the defendants but only if the writ was served and they were authorised to appoint solicitors to act for them. The Assurance Company considered that it was incumbent upon the plaintiff to inform them when the writ was served and when the order for substituted service had been made.

9. Mr. Ching for the Assurance Company said that there was a judgment against the owner but no judgment against the driver and there was no evidence to show that the 2nd defendant was a servant or agent of the 1st defendant.

10. The position with regard to an application by a third party is set out on page 117 of the Supreme Court Practice 1970 Volume 1 which states as follows:-

'A third party who desires to apply to set aside a judgment must show that he had a direct interest in so doing and must either do so in the name of the defendant with his leave, or he must make both the plaintiff and the defendant parties to the application and ask for leave to intervene. But such an order does not make them parties to the proceedings so as to enable them (e.g.) to apply to set aside an order for substituted service (Murfin v. Ashridge and Martin, [1941] 1 All E.R. 231).'

11. Mr. Ching cited Windsor v. Chalcraft 1939 1 K.B. page 279 where the facts are similar to those in this case. The headnote reads as follows:-

'A policy of insurance effected in September, 1936, provided that the underwriters should indemnify the defendant in respect of death of death or bodily injury to third parties caused by or in connection with the use of his motor-car. The policy contained conditions that the insured should, immediately any occurrence which might give rise to a claim under the policy came to his knowledge, notify the underwriters thereof; and that "The underwriters shall be entitled to take absolute control of all proceedings and negotiations and have full discretion to settle prosecute or defend any claim in the name of the insured."

On December 15, 1936, the defendant while using the motor-car was involved in an accident, as the result of which a third party was killed. On October 22, 1937, the administrator of the third party brought an action against the defendant for damages suffered by the relatives and estate of the deceased owing to his death by the alleged negligence of the defendant; and on October 26, 1937, the plaintiff gave notice of the action to the underwriters. On November 23, 1937, the writ in the action was served upon the defendant. On December 8, 1937, judgment in the action was signed against the defendant in default of appearance. In March, 1938, on the application of the underwriters, the Master made an order that the judgment in default of appearance and all subsequent proceedings in the action be set aside, and that the underwriters be at liberty to enter appearance in the action in the name of the defendant and to deliver a defence. On appeal by the plaintiff, the judge at Chambers made an order setting aside the order of the Master. On appeal by the underwriters:-

12. Held, by the Court of Appeal (Greer and MacKinnon L.JJ., Slesser L.J. dissenting), rescinding the order of the judge and restoring that of the Master, that inasmuch as the underwriters, although not parties to the action, were liable under the provisions of the Road Traffic Acts, 1930 and 1934, to pay the amount of the judgment to the plaintiff, and under the policy to pay it to the defendant, they were persons aggrieved by the judgment, and as such were entitled to an order setting aside the judgment and giving them leave to enter an appearance in the action in the name of the defendant or in their own name, and to deliver a defence.

13. In a more recent case cited by Mr. Ching that concerned the Motor Insurers' Bureau, Gurtner v. Circuit and Another 1968 2QB Page 587, it was held by the Court of Appeal 'that, where the determination of an action between two parties would directly affect a third person's legal rights or his pecuniary interest, the courts had a discretion, under R.S.C. Ord. 15, r.6(2), to order the third person to be added as a party to the action on such terms as the court considered desirable so that all matters in dispute could be "effectually and completely determined and adjudicated upon"; that, as the bureau had an obligation to the Minister of Transport to satisfy all unpaid damages awarded to a plaintiff in an action against an insured motorist, which obligation the Minister could enforce by an action for specific performance, the bureau had a legal and pecuniary interest in ensuring that all proper defences were raised in the plaintiff's action. Accordingly, justice required that the bureau be added as defendants to the plaintiff's action and the court would exercise its discretion, under R.S.C. Ord. 15, r.6(2), and add the bureau as defendants to the action on their undertaking to pay all damages awarded to the plaintiff.

14. Mr. Ching said that the application was in no way an attempt by the Assurance Company to avoid the risk covered by the policy but nevertheless it should be proved how the 1st defendant is made liable.

15. Miss Lee for the plaintiff said that there was no law that the Assurance Company should be served with a notice of any of the proceedings other than under section 10 of Cap. 272.

16. It is abundantly clear that the Assurance Company is a directly interested and directly affected third party having a legal and pecuniary interest in ensuring that all proper defences are raised in the action. The Assurance Company has a locus standi and upon the authorities I am satisfied that they should be added as a defendant under Order 15 rule 6(2) of the Rules of the Supreme Court. Accordingly I shall make an order setting aside the judgment against the 1st defendant dated the 16th July 1969 and the assessment of damages on the 18th January 1971 but on the condition that the Assurance Company will undertake to pay any damages awarded to the plaintiff. Leave is therefore granted for the Assurance Company to enter an appearance in the name of the 1st defendant or in their own name and to deliver a defence.

17. Costs will be reserved.

18. Certificate for Counsel for each party.

19. Dated this the 4th day of November, 1971.

  

  

	(B.L. Jones)
	Assistant Registrar

  

Representation:

HCA000371/1969

  

IN THE SUPREME COURT OF HONG KONG

ORIGINAL JURISDICTION

  

ACTION NO. 371 OF 1969

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BETWEEN
	CHOW CHIU CHEUNG	Plaintiff
	and
	HANS JOACHIM BERNICK	1st Defendant
	and
	HEIDEMARIE KLEMPIN	2nd Defendant

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Coram: B.L. Jones, Assistant Registrar in Chambers.

Date of Judgment: 18th January, 1971.

  

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DECISION

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1. This is an assessment of damages under Order 37 of the Rules of the Supreme Court 1967 pursuant to the interlocutory judgment obtained by the Plaintiff against the 1st defendant in default of appearance on the 16th July 1969. The assessment originally came before me on the 27th May 1970 when the Plaintiff's counsel undertook not to proceed against the 2nd defendant having regard to the provisions of Order 37 rule 1(3) of the Rules of the Supreme Court.

2. Service of the writ of summons upon the 1st defendant had been effected by way of substituted service and no appearance had been entered to the proceedings.

3. There was no appearance by the 1st defendant at the hearing of the assessment on the 27th May, 1970.

4. Evidence was called on behalf of the Plaintiff on the 27th May but at the conclusion of the evidence I adjourned the hearing sine die in order to enable the Plaintiff to obtain an up-to-date medical report.

5. The hearing was resumed on the 24th August 1970 when I drew the attention of the Plaintiff's counsel to the provisions of Order 37 rule 1(2) of the Rules of the Supreme Court with regard to the fact that notice of the original appointment for the hearing of the assessment had not been served on the 1st defendant. Ultimately the directions of a Judge were obtained with regard to service of the notice of appointment and pursuant to the directions obtained, notice was eventually served by posting a copy of the notice on the notice board of the supreme Court on the 2nd, 3rd and 4th December, 1970 and was advertised in the South China Morning Post on the 5th December, 1970.

6. The assessment came before me again on the 11th January 1971, when there was no appearance by the 1st defendant.

7. The Plaintiff, a female, aged 23 received personal injuries as a result of a road traffic accident that occurred on the 5th May, 1968 when she was knocked down by a motor vehicle driven by the second defendant whilst crossing Wong Chuk Hang Road, Aberdeen from the bus-stop near to the entrance leading to Grantham Hospital. The motor vehicle was owned by the first defendant. The Plaintiff was unconscious for a period of three days after admission to hospital and she remained in hospital until her discharge on the 3rd June, 1968. The Plaintiff suffered a right extradural haematoma in mid. cranial fossa. A burr bole was performed on the 8th May 1968 with evacuation of the haematoma.

8. The Plaintiff regained consciousness slowly after the operation but her rental state at the time was said to have been confused. She developed a urinary tract infection during her convalescence which was however controlled. The Plaintiff also suffered a forked laceration of the right pavital scalp 1" in length and laceration 1" x 1/2" which was 1" below the right iliac crest. There were also minor abrasions on the right side of the calf, front of the knees and hands.

9. The Plaintiff still has two scars on her right hip and a large scar over her head. The Plaintiff complains that she still suffers ...(illegible) in the left upper and lower limbs whilst she is unable to lower her head as she becomes dizzy. Accordingly she walks with her head raised.

10. A report of a medical board dated the 24th July. 1970 that was convened at the Queen Mary Hospital states that there is no evidence that the Plaintiff has any permanent disability as a result of the head injuries received in the accident.

11. After her discharge from the hospital the Plaintiff attended as an out-patient at the Jockey Club Clinic in Western District until June 1969. Whilst convalescing the Plaintiff rented a room at North Point for the purpose of peace and quiet and remained for a period of eight months. The Plaintiff paid a rental of $105 per month for the room.

12. The Plaintiff who is an English teacher was unable to work from the date of the accident until the 1st February 1969. At the date of the accident the Plaintiff's earnings amounted to $410 per month. From February 1969 until May 1969 the Plaintiff gave private tuition earning $80 per month. The Plaintiff did not work from May 1969 - September 1969. In September 1969 the Plaintiff resumed employment as a full time teacher at a salary of $450 per month and continued to do so until May 1970. The Plaintiff commenced work in a garment factory in May 1970 and worked there as an indoor saleswoman until the middle of July 1970 earning $660 per month. The Plaintiff returned to work as a full time teacher in September 1970 earning $550 per month and has continued to do so since that time.

13. The Plaintiff's loss of earnings from June 1968 to August 1968 at $410 per month amounts to $1,230.

14. The Plaintiff received an increase in salary of $40 per month in September 1970 and the Plaintiff's loss of earnings from September 1968 to August 1969 at $450 per month amounts to $5,400 making a total loss of earnings of $6,630. To be deducted from this figure is the sum of $320 in respect of four months private tuition at $80 per month leaving a sum of $6,310 in respect of loss of salary.

15. The other special damages claimed amount to $2,890 made up as follows:-

	Flat rental eight months June 1968 to January 1969 at $105 per month		$840
	Damaged clothing		$100
	Taxi fares		$50
	Hospital expenses		$100
	Nourishing food		$1,800
		Total	$2,890

16. Added to the loss of earnings the total special damages claimed by the Plaintiff amount to $9,200.

17. I do not consider in the absence of medical evidence that the Plaintiff was justified in incurring the expense of renting a room nor was any medical evidence produced to justify the claim in respect of nourishing food. I shall therefore disallow the sum of $840 claimed in respect of the rentals paid. For the nourishing food I will allow the sum of $750 which I consider to be a reasonable figure in the absence of strict proof. The special damages will therefore be assessed at $7,310.

18. In view of the medical evidence before me I shall award the sum of $7,500 in respect of general damages which when added to the special damages will make a total award of $14,810.

19. By virtue of section 30A of the Supreme Court Ordinance Cap. 4 interest may be awarded at such rate on the whole or any part of the damages for the whole or any part of the period between the date when the cause of action arose and the date of the judgment. I shall award interest at the rate of 8% as from the date the cause of action accrued viz. the 5th May 1968 until today, the date of final judgment.

20. Costs of and incidental to this application will be paid by the first defendant and there will be a certificate for counsel. As the Plaintiff is legally aided there will be taxation of the Plaintiff's costs in accordance with the provisions of the Legal Aid (Scale of fees) Regulations Cap. 91.

21. Dated the 18th day of January, 1971.

 

 

	(B.L. Jones)
	Assistant Registrar.

  

Representation: