1999

TIAN SHENG NO.8

Files (2)

7827-EN-2000-01-26

TIAN SHENG NO.8

HTML content

CACV000103A/1999

CACV 103/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 103 OF 1999

(ON APPEAL FROM HCAJ 370/1996)

____________

Admiralty Action in rem against: the ship or vessel "TIAN SHENG NO.8" now named "RESOURCE 1", and the ship or vessel "TIAN SHENG NO.1"

BETWEEN
	THE OWNERS OF CARGO LATELY ON BOARD THE SHIP OR VESSEL "TIAN SHENG NO. 8"	Plaintiffs

	AND

	THE OWNERS AND/OR DEMISE CHARTERERS OF THE SHIP OR VESSEL "TIAN SHENG NO.8" NOW NAMED "RESOURCE 1" AND THE OWNERS OF THE SHIP OR VESSEL "TIAN SHENG NO.1"	Defendants

____________

Coram: Hon Nazareth VP, Mayo JA and Ribeiro J in Court

Date of Hearing: 19 January 2000

Date of Handing Down Decision: 26 January 2000

_______________

D E C I S I O N

_______________

Hon Ribeiro J: (giving the decision of the Court)

1. This is an application by the defendant shipowners for leave to appeal to the Court of Final Appeal from the decision of this Court handed down on 12 November 1999 whereby it dismissed the defendants' appeal from the judgment of Waung J handed down on 15 February 1999.

2. Mr Charles Sussex, who appeared for the defendants, sought leave on the basis that the defendants have an appeal as of right under section 22(1)(a) of the Hong Kong Court of Final Appeal Ordinance. Alternatively, he submitted that the questions to be raised are ones which, by reason of their great general or public importance, ought to be submitted to the Court of Final Appeal for decision under section 22(1)(b). He also submitted that if the case does not strictly satisfy the abovementioned test of importance, this Court should nonetheless exercise its residual discretion in favour of granting leave to appeal.

3. The facts relevant to the present application may be summarised as follows. The defendants' vessel, now named "Resource 1", was arrested in Hong Kong on 9 February 1997 by the Plaintiff cargo owners. The plaintiffs allege that their cargo of 30,000 metric tons of bagged cement was shipped on board the vessel, then named "Tian Sheng No. 8", in October 1996 at Rizhao, China for shipment to Bangladesh, but that there was a deviation with the cargo being wrongfully discharged and sold at Haikou. The in rem action pursuant to which the vessel was arrested is brought on the basis that the plaintiffs have good causes of action in contract, tort and bailment. The loss and damage allegedly suffered by the plaintiffs, as particularised in the Points of Claim, is said to exceed US$2 million in value.

4. After the vessel's arrest, service of the in rem Writ was acknowledged on 24 February 1997 by Messrs Sinclair, Roche & Temperley on behalf of the vessel's present owners, namely, International Resources Investment Inc. Such defendants allege that they had purchased the vessel from her previous owners, on 6 December 1996, an entity whose identity was subject to some controversy, but need not detain us at present.

5. The defendants accordingly say that the matters complained of by the plaintiffs took place prior to their acquisition of the vessel. However, it is not in dispute that, by virtue of the provisions of Part III of the High Court Ordinance, potential liability in rem is preserved against a vessel notwithstanding a change in its ownership having taken place between the time that the causes of action accrued and the time of her arrest, such provisions sometimes being said to give the plaintiffs a "statutory lien" over the vessel. As Mr Sussex pointed out, such potential liability on the part of the new owners is generally catered for by their obtaining a suitable indemnity from the previous owners as a condition of the purchase. If they choose to acknowledge service, the new owners are entitled to deploy any defences open to the previous owners and, in the present case, they have done so, having filed a defence joining issue on the merits of the plaintiffs' claim.

6. When the plaintiffs obtained an order for sale pendente lite on 18 March 1997, the defendants put up a bail bond in the sum of US$1.01 million and so secured the release of the vessel. However, the defendants did not then, or at any other time, seek to challenge the Court's in rem jurisdiction under Order 12 rule 8 of the High Court Rules. Instead, some time after the arrest, the defendants applied for a stay of the proceedings on the basis of an exclusive jurisdiction clause and on the ground of forum non conveniens. That application was subsequently abandoned on 6 January 1999.

7. In the meantime, on 25 April 1998, the defendants issued a summons before Waung J to set aside the Warrant of Arrest and consequentially, for cancellation of the bail bond on the ground that the case did not come within the Court's admiralty in rem jurisdiction as constituted by section 12B of the High Court Ordinance.

8. Waung J dismissed the summons inter alia on the basis that, not having challenged the Court's jurisdiction under the provisions of Order 12 rule 8, it was not open to the defendants to make such a challenge on some other basis. He so held applying the Court of Appeal's decision in Wo Fung Paper Making Factory Ltd v Sappi Kraft [1988] HKLR 346 that every application which, if successful, would result in the defendant avoiding the jurisdiction of the Hong Kong courts has to be made under Order 12 rule 8. This Court (differently constituted, with Suffiad J then forming part of its membership) upheld Waung J's decision.

Whether as of right

9. The defendants contend that they are entitled to appeal that decision to the Court of Final Appeal as of right under section 22(1)(a). For that contention to succeed, the Court's decision must involve a final judgment. As laid down in First Pacific Bank Ltd v Robert H P Fung [1990] HKLR 527, this means that the defendants must show that, whatever its result, the appeal would finally dispose of the controversy between the parties.

10. In our judgment, applying that test, the Court in the present case is not concerned with a final judgment. The appeal would settle the question whether the defendants are entitled to challenge the Court's in rem jurisdiction. If the defendants fail, it will remain for the plaintiffs to establish substantive liability in contract, tort or bailment. If the defendants succeed and if in rem jurisdiction is held to be lacking, the arrest would be set aside and the bail bond which now represents the res would be cancelled. However, in personam jurisdiction having been founded against the defendants by their submission to the jurisdiction, there would still remain for determination all questions of substantive liability in respect of which issue has been joined on the merits. The appeal would therefore not finally dispose of the controversy between the parties.

11. We accept, of course, that commercially, it may (but by no means necessarily will) be that, without an arrested vessel or substituted security for their claim, the plaintiffs will decline to pursue the in personam proceedings against the defendants. The test, however, is whether the judgment is a final judgment as a matter of law and not whether, commercially, a particular result of the appeal is likely to lead to abandonment of the claim.

12. Accordingly, in our view, the application for leave to appeal as of right fails because the judgment sought to be appealed against is not a final judgment within the meaning of section 22(1)(a).

Great general or public importance

13. The questions said to qualify under section 22(1)(b) as questions which, by reason of their great general or public importance, ought to be submitted to the Court of Final Appeal for decision were formulated by Mr Sussex as follows:-

(1) Whether RHC Order 12 rule 8 is a comprehensive and exclusive code for dealing with all questions relating to the jurisdiction of the High Court, so that where a defendant contends that the Court lacks substantive jurisdiction, and does not challenge his own amenability to be brought before the Court, that defendant must nevertheless apply under RHC Order 12 rule 8 and comply with the time limit thereby prescribed.
(1A) If a challenge to jurisdiction, such as that made in Wilkinson v Barking Corporation [1948] 1 KB 721, does not have to be made under RHC Order 12 rule 8, should the admiralty jurisdiction in rem be characterised in the same way as the jurisdiction issue under consideration in Wilkinson v Barking Corporation?
(2) Whether The "Evpo Agnic" [1988] 1 WLR 1090 is good law insofar as it decides (at p 1096D) that "owner" in section 12B(4)(b) of the High Court Ordinance (Cap 4) means "registered owner", and, if so, whether it is permissible for the Court to conclude that someone other than the party whose name appears on the relevant register is in fact the owner.

Questions (1) and (1A)

14. Question (1A) was not in the Notice of Motion but was allowed to be included in this application by leave of the Court. It is put forward as a refinement of Question (1). The two questions can, in our view, be dealt with together.

15. As we understand them, these two questions in combination are designed to raise on appeal an argument which was advanced by Mr Sussex both before Waung J and this Court and which may be summarised in the following propositions :-

(1) It is necessary to recognize that the court may be concerned with its "jurisdiction" in at least two different senses:-
(a) a court may have to decide if it has jurisdiction to deal with the merits of a particular class of dispute (sometimes called "merits jurisdiction");
(b) a court may also be concerned to decide the prior question of whether it has jurisdiction to determine whether it has some particular merits jurisdiction (sometimes being called "jurisdiction jurisdiction").
(2) If a court is deprived by statute of a merits jurisdiction (as in Wilkinson v Barking Corporation [1948] 1 KB 721; or Rothmans of Pall Mall (Overseas) Ltd v Saudi Arabian Airlines Corporation [1981] 1 QB 368), the parties cannot confer jurisdiction on the Court, whether by a voluntary submission, by a purported waiver of the statutory restriction on the court's jurisdiction or otherwise.
(3) It follows that Order 12 rule 8 time limits and procedural requirements cannot operate to preclude the defendant from objecting to the lack of such merits jurisdiction.
(4) Here, the defendants have undoubtedly submitted to the Court's in personam jurisdiction by acknowledging service and not seeking to challenge its jurisdiction under Order 12 rule 8 within time. However, such submission is merely to the court's "jurisdiction jurisdiction".
(5) The question of whether the admiralty in rem jurisdiction was validly invoked by the plaintiffs in the present case is a merits jurisdiction question. The defendants are entitled to challenge such jurisdiction at any time, irrespective of their previous submission to the Court's jurisdiction jurisdiction and irrespective of the requirements of Order 12 rule 8.
(6) The Wo Fung Paper decision does not extend to challenges against unfounded invocations of the admiralty in rem jurisdiction, so that it is not authority requiring such challenges to be mounted solely within the four corners of Order 12 rule 8.

16. These arguments raise novel and possibly difficult points of law. However, in our view, as appears from the judgment of Mayo JA, with whom the other Judges agreed (at pp 5 and 6), this Court held that the question of whether the present case falls within the admiralty in rem jurisdiction (as laid down by section 12B) is plainly an entirely different question from the jurisdiction question posed in Wilkinson v Barking.

17.Wilkinson v Barking was a case in which the challenge was to the court's merits jurisdiction, namely, as to whether the power to determine certain rights of local authority employees had been taken away from the court and vested exclusively by statute in some other tribunal. In the present case, the challenge is as to the amenability of the vessel to the Court's in rem jurisdiction, being a "jurisdiction jurisdiction" challenge which, like the challenge in Wo Fung Paper, must be brought within the four corners of Order 12 rule 8.

18. In the Rothmans case (supra, at pp 375-6), Mustill J (whose decision was upheld by the English Court of Appeal) considered the circumstances in which possible objections to a court exercising jurisdiction can be waived and gave as an example where waiver was possible, the Court's exercise of jurisdiction under Order 11, as follows:-

"The next issue is whether a party can, by waiver, concede to the court the jurisdiction to entertain actions which by virtue of article 28 [of Schedule 1 to the Carriage by Air Act 1961] ought properly to have been instituted elsewhere. For this purpose, two situations must be distinguished.
The first exists where an action is brought in respect of a matter which in the ordinary way the court would have no jurisdiction to entertain, but where it is not precluded from doing so if no objection is taken. Thus, for example, if a plaintiff obtains leave under R.S.C., Ord. 11, in a case where it should not have been granted, the action can properly proceed unless an application is made to set aside the writ and service. The objection is one which can be waived, and the entry of an unconditional appearance is an example of such a waiver.
The second situation exists where the objection is not simply that the matter lies outside the jurisdiction of the court, as conferred by the common law or by statute, but is one in respect of which jurisdiction has been actively withdrawn from the court and conferred on another tribunal."

19. This Court has in effect decided that objections to the admiralty in rem jurisdiction are to be treated on the same basis as objections to jurisdiction asserted under Order 11, as discussed by Mustill J, with the consequences prescribed by Wo Fung Paper v Sappi Kraft.

20. The plaintiffs invoked the admiralty in rem jurisdiction by serving and arresting the vessel in Hong Kong on the grounds set out in the affidavit leading arrest. If no objection was taken to the court exercising such jurisdiction, the court is entitled to proceed on the assumption that jurisdiction has been properly invoked. If in fact there was a potential objection on the ground that the subject-matter of the dispute "lies outside the jurisdiction of the court, as conferred by ....... statute", such objection can be waived and is deemed to have been waived unless an application to set aside the Writ, service and/or the arrest is made in accordance with Order 12 rule 8.

21. The Court's conclusion is also strongly supported by the wording of the rule. Order 12 rule 8(3) expressly provides for challenges to the admiralty in rem jurisdiction to be made under Order 12 rule 8(1). This requires and presupposes an acknowledgment of service and notice of intention to defend by the vessel's owners if they wish to mount a challenge. The submission to the court's jurisdiction prescribed by Order 12 rule 8(7) if a challenge is not made pursuant to sub-rule 1 within the time limited gives a clear indication that it was intended to make Order 12 rule 8 a compulsory code for challenges to jurisdiction, including challenges to the admiralty in rem jurisdiction.

22. This Court has accordingly decided that the applicability of Order 12 rule 8 to such challenges is plainly settled. In our view, in such circumstances, it is appropriate to refuse the defendants' application, leaving them to seek leave from the Court of Final Appeal, if so advised.

23. There is an additional ground for refusing leave under section 22(1)(b) which is of at least equal weight. As Mr Michael Bunting, who appeared for the plaintiffs, pointed out, the defendants find themselves advancing the intricate argument summarised above purely or very largely because they have chosen not to avail themselves of simple procedures made available by Order 12 rule 8 for challenging any invocation of jurisdiction. Not only did they choose to make no challenge under that rule in the time limited by Order 12 rule 8(1), at no stage have they sought an extension of time for the bringing of such a challenge.

24. In our view, the availability, in appropriate cases, of extensions of time for Order 12 rule 8 applications lends force to a construction of the rule which attributes to it the intention and ability to provide an all-embracing code for challenging amenability to jurisdiction. The claim that the questions formulated by the defendants as set out above are of great general or public importance is severely undermined or destroyed if such questions need to be canvassed only as a result of the defendants' failure to avail themselves of readily accessible procedures designed to enable the jurisdictional questions to be tested.

Question (2)

25. In the light of the conclusion that leave should not be granted under section 22(1)(b) in respect of Questions (1) and (1A), Question (2) is not engaged. It is concerned with an argument only arising if the challenge to the in rem jurisdiction is to be entertained. No justification exists for giving leave to appeal on that question alone. Accordingly, in our judgment, leave must also be refused in respect of Question (2).

26. We are also unable to see any ground for the grant of leave pursuant to the residual discretion given to the Court by section 22.

27. Accordingly, in our view, the application must be dismissed. We make an order nisi that the costs of this application be to the plaintiffs in any event.

(G P Nazareth)	(Simon Mayo)	(R A V Ribeiro)
Vice President	Justice of Appeal	Judge of the Court of First Instance

Representation:

Mr Michael Bunting, instructed by Messrs Richards Butler, for the Plaintiffs

Mr Charles Sussex, instructed by Messrs Ng & Partners, for the Defendants

7828-EN-1999-11-12

THE TIAN SHENG NO. 8

HTML content

CACV000103/1999

CACV 103/99

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 103 OF 1999

(ON APPEAL FROM HCAJ 370 OF 1996)

BETWEEN
	THE OWNERS OF CARGO LATELY LADEN ON BOARD THE SHIP OR VESSEL "TIAN SHENG NO. 8"	Plaintiffs

	AND

	THE OWNERS AND/OR DEMISE CHARTERERS OF THE SHIP OR VESSEL "TIAN SHENG NO. 8", NOW NAMED "RESOURCE 1" AND THE OWNERS OF THE SHIP OR VESSEL "TIAN SHENG NO. 1"	Defendants

--------------------------------------------------------------------

Coram: Hon. Nazareth, V.-P., Mayo, J.A. and Suffiad, J. in Court

Date of hearing: 29 & 30 July & 21 October 1999

Date of handing down judgment: 12 November 1999

----------------------

J U D G M E N T

----------------------

Mayo, J.A.:

1. This is an appeal from a judgment of Waung, J. who heard a summons taken out by the Defendants to strike out the Plaintiffs' statement of claim. It was based on the ground that the Court had no Admiralty jurisdiction in Rem to hear the case.

2. For the reasons he gave the Judge dismissed the application. As a matter of convenience the Judge divided his judgment into two parts. The first dealt with what he described as being the time issue and the second was the jurisdiction issue.

3. The Plaintiffs' claim is made in connection with a cargo of 30,000 metric tons of bagged cement. The cargo was shipped in the vessel "Tian Sheng No. 8" in October 1996 from Rizhao, China to Bangladesh. The vessel deviated from its course and the cargo was discharged and sold in Haikou, China.

4. The Plaintiffs issued their writ on 23rd November 1996. The vessel arrived in Hong Kong on 9th February 1997 and was arrested. A Bail Bond was posted on 2nd April 1997 and the vessel was released from arrest.

5. The main point which arises on the time issue is whether Order 12 rule 8 of the Rules of the High Court is all embracing on an application of this nature or whether, as contended for by Mr. Sussex for the Defendants, it is open to him to make his application pursuant to Order 75 rule 13 of the Rules.

6. Order 12 rule 8 of the Rules of the High Court, Cap. 4 sub. Leg. A reads:

"8. Dispute as to jurisdiction (O. 12, r. 8)
(1) A defendant who wishes to dispute the jurisdiction of the court in the proceedings by reason of any such irregularity as is mentioned in rule 7 or on any other ground shall give notice of intention to defend the proceedings and shall, within the time limited for service of a defence, apply to the Court for -
(a) an order setting aside the writ or service of the writ on him, or
(b) an order declaring that the writ has not been duly served on him, or
(c) the discharge of any order giving leave to serve the writ on him out of the jurisdiction, or

(d) the discharge of any order extending the validity of the writ for the purpose of service, or
(e) the protection or release of any property of the defendant seized or threatened with seizure in the proceedings, or
(f) the discharge of any order made to prevent any dealing with any property of the defendant, or

(g) a declaration that in the circumstances of the case the court has no jurisdiction over the defendant in respect of the subject-matter of the claim or the relief or remedy sought in the action, or
(h) such other relief as may be appropriate.

(3) An application under paragraph (1) must be made -

(a) in an Admiralty action in rem, by motion;
(c) in any other action, by summons or motion,

and the notice of motion or summons must state the grounds of the application.
(4) An application under paragraph (1) must be supported by an affidavit verifying the facts on which the application is based and a copy of the affidavit must be served with the notice of motion or summons by which the application is made.
(5) Upon hearing an application under paragraph (1), the Court, if it does not dispose of the matter in dispute, may give such directions for its disposal as may be appropriate, including directions for the trial thereof as a preliminary issue.

(6) A defendant who makes an application under paragraph (1) shall not be treated as having submitted to the jurisdiction of the court by reason of his having given notice of intention to defend the action; and if the Court makes no order on the application or dismisses it, the notice shall cease to have effect, but the defendant may, subject to rule 6(1), lodge a further acknowledgement of service and in that case paragraph (7) shall apply as if the defendant had not made any such application.
(7) Except where the defendant makes an application in accordance with paragraph (1), the acknowledgement by a defendant of service of a writ shall, unless the acknowledgement is withdrawn by leave of the Court under Order 21, rule 1, be treated as a submission by the defendant to the jurisdiction of the Court in the proceedings."

7. What has to be said immediately is that the Defendants did not comply with the time limit in the Order and have made no application to the Court for the time to be extended. Mr. Sussex submits that it is not necessary for his clients to make any such application as the application is not made under the Rule. He argued that it was necessary to differentiate between two different kinds of application in relation to jurisdiction.

8. The first was jurisdiction to entertain substantive proceedings which he referred to as "merits jurisdiction". The second was jurisdiction to decide the existence and limits of its own jurisdiction. He referred to this as being "jurisdiction jurisdiction". He claimed that his application was a "merits jurisdiction" application. This was clearly the case as the High Court Admiralty jurisdiction in Rem was a limited jurisdiction.

9. S.12B(4) of the High Court Ordinance, Cap. 4 provides:

"(4) In the case of any such claim as is mentioned in section 12A(2)(e) to (q), where -

(a) the claim arises in connection with a ship; and
(b) the person who would be liable on the claim in an action in personam ('the relevant person') was, when the cause of action arose, the owner or charterer of, or in possession or in control of, the ship,

an action in rem may (whether or not the claim gives rise to a maritime lien on that ship) be brought in the Court of First Instance against -

(i) that ship, if at the time when the action is brought the relevant person is either the beneficial owner of that ship as respects all the shares in it or the charterer of it under a charter by demise; or
(ii) any other ship of which, at the time when the action is brought, the relevant person is the beneficial owner as respects all the shares in it."

10. The case of Wilkinson v. Barking Corporation [1948] 1 K.B. 721 was a good illustration of how the Court dealt with a situation concerning a "merits jurisdiction" situation. Asquith, L.J. had this to say at p. 725:

"Before this court the principle laid down in this passage was not seriously challenged. What was said for the plaintiff was that even though s. 35 of the Act of 1937 deprives the ordinary law courts of jurisdiction in the case of claims or questions covered by the section, yet the defendants, by entering an unconditional appearance to the writ, had submitted to the jurisdiction of those courts and could not be heard to challenge it. One corollary of this argument, if it were sound, would be that the House of Lords decided Pasmore v. Oswald-twistle wrongly, since there is no suggestion that an unconditional appearance was not entered in that case, or that any steps were taken to set aside the writ, yet the House had no hesitation in saying to the plaintiff-appellants, 'you' have no remedy in the courts of law: your only remedy is 'to make a complaint to the Local Government Board.' The real answer to the plaintiff's contention under this head can be put in several ways: No act of the parties can create in the courts a jurisdiction which Parliament has said shall vest, not in the courts, but exclusively in some other body. Nor again can a party submit to, so as to make effective, a jurisdiction which does not exist: which is perhaps another way of saying the same thing. The argument we are here rejecting seems to be based on a confusion between two distinct kinds of jurisdiction: The Supreme Court may, by statute, lack jurisdiction to deal with a particular matter - in this case matters including superannuation claims under s. 8 - but it has jurisdiction to decide whether or not it has jurisdiction to deal with such matters. By entering an unconditional appearance, a litigant submits to the second of these jurisdictions (which exists), but not to the first (which does not). We are not here concerned with irregularity in the service or issue of the writ which raises other considerations which are here quite out of place. I think the argument for the plaintiff under this head quite impossible to sustain, and leading counsel for the plaintiff, when fairly confronted with the difficulties in his way, did not press it."

11. What is clear from this passage is that the situation which was being considered was entirely different to the application which was heard by Waung, J. Asquith, L.J. was considering the simple question whether it was open to a litigant to essentially contract out of a statutory provision. What Waung, J. was being asked to consider was whether on the facts before him the Plaintiffs had satisfied him that the requirements of s.12B(4) had been complied with.

12. Mr. Sussex also placed reliance upon a passage at p. 375 from the judgment of Mustill, J. (as he then was) in Rothmans Ltd. v. Saudi Airlines (C.A.) [1981] 1 Q.B. 368:

"The next issue is whether a party can, by waiver, concede to the court the jurisdiction to entertain actions which by virtue of article 28 ought properly to have been instituted elsewhere. For this purpose, two situations must be distinguished. The first exists where an action is brought in respect of a matter which in the ordinary way the court would have no jurisdiction to entertain, but where it is not precluded from doing so if no objection is taken. Thus, for example, if a plaintiff obtains leave under R.S.C., Ord. 11, in a case where it should not have been granted, the action can properly proceed unless an application is made to set aside the writ and service. The objection is one which can be waived, and the entry of an unconditional appearance is an example of such a waiver.

The second situation exists where the objection is not simply that the matter lies outside the jurisdiction of the court, as conferred by the common law or by statute, but is one in respect of which jurisdiction has been actively withdrawn from the court and conferred on another tribunal. The position in such a case is stated by Asquith L.J. in Wilkinson v. Barking Corporation [1948] 1 K.B. 721, 724:

'It is undoubtedly good law that where a statute creates a right and, in plain language, gives a specific remedy or appoints a specific tribunal for its enforcement, a party seeking to enforce the right must resort to that remedy or tribunal, and not to others.'

Where the statute is of this kind, it is immaterial whether the parties wish the court to try the action. It must disclaim jurisdiction, since to continue with the action would be contrary to law. Still less can one party by unilateral act confer on the court a jurisdiction which Parliament has said it should not have. Entry of an unconditional appearance does not preclude the defendant from raising the objection at a later stage, since it is the duty of the court not to entertain the dispute."

13. He submitted that this passage supported his contention that where an application was a merits application it could be made otherwise than in accordance with Order 12 rule 8.

14. As was pointed out by Mr. Bunting for the Plaintiffs if this passage is read as a whole and in context the opposite conclusion can be reached. I agree.

15. When Mustill, J. is referring to the two situations which can arise he is making a similar comparison to the one made by Mr. Sussex referred to earlier in this judgment. What is clear however is that where the first situation referred to by Mustill, J. arises then Order 12 rule 8 is the route which has to be taken.

16. I have no doubt that the situation which arises in the present case is to adopt the nomenclature of Mr. Sussex a "jurisdiction jurisdiction" application.

17. S.12B(4) of the High Court Ordinance, Cap. 4 does confer the necessary jurisdiction on the Court. What was necessary for the Court to determine was whether on the evidence which was before it the requirements of the section had been complied with. This is exactly the type of situation which Order 12 rule 8 is designed to meet.

18. Mr. Bunting placed considerable reliance upon Wo Fung Paper Making Factory Ltd. v. Sappi Kraft (Pty.) Ltd. [1988] 2 HKLR 346 and in particular a passage from the judgment of Fuad, V.-P. at p. 352:

"It seems to me clear that unless a defendant has made an application under Order 12, rule 8(1) within the time limited, he cannot dispute the jurisdiction of the court on the ground (a) that the plaintiff's case does not fall within one or other of the provisions of Order 11, rule (1) or (b) that the plaintiff had not established, for the purpose of Order 11, rule 4, that his case was a proper one for service outside the jurisdiction.

What then is the result? By virtue of Order 12, rule 8(7) Sappi's acknowledgement of service must be treated as a submission by them to the jurisdiction of the court in the present proceedings.
In the circumstances, Sappi were not entitled to submit that Wo Fung had not shown that they had a 'good arguable case' before leave was granted under Order 11 or that they had not discharged the burden of satisfying the Court that Hong Kong was the forum conveniens, both issues which were decided in favour of Sappi.
Was Sappi permitted, outside the time allowed by Order 12, rule 8(1), which could not be extended in view of the provisions of rule 8(2), to apply to have the master's ex parte Order of 13th March 1987 set aside under Order 32, rule 6 or the inherent jurisdiction? Mr. Litton submits that such an application is not caught by Order 12, rule 8(1). In my judgment, on a fair reading of Order 12, rule 8 and on a proper understanding of the new scheme it introduced, Sappi were not permitted to do so. Although relying on material non-disclosure, they were asking, in effect, for an order under Order 12, rule 8(1)(c) to discharge the order giving leave to serve the writ out of the jurisdiction. The words with which rule 8(1) begins, make reference to reliance on irregularities mentioned in Order 12, rule 7 but immediately afterwards the rule says: 'or on any other ground'.

Once service has been effected, even where non-disclosure of material facts is relied upon, it is essentially the jurisdiction of the court that is being challenged. It cannot, I think, be right to allow Sappi to maintain: 'We are not in terms disputing the jurisdiction. We are invoking quite another power in the court, to set aside the ex parte Order giving leave to serve on the ground of material non-disclosure, so we are not caught by Order 12, rule 8(1) and (2).' In my judgment, this would be unreal. It seems clear that the rule-making authority intended every application which, if successful, would result in the defendant avoiding the jurisdiction of the Hong Kong courts to be made under Order 12, rule 8 and within the time allowed, by the same simple procedure. Unless Order 12, rule 8(1) is complied with, the order giving leave to serve outside the jurisdiction must be treated as valid and every irregularity waived. This is the effect of Order 12, rule 8(7). Sappi was properly before the court for all purposes and they must be left to dispute the action on the merits."

19. Waung, J. accepted the validity of the conclusions of the Court of Appeal in Wo Fung Paper Making Factory Ltd. In my view he was entirely correct in doing so.

20. It was incumbent upon the Defendants to invoke the provisions of Order 12 rule 8. They did not do so. The Judge was right to hold that the jurisdiction of the Court could not be challenged in any other way.

21. This should be decisive of this appeal. However as Waung, J. also dealt with the jurisdiction issue and as Counsel made submissions to us I consider it to be appropriate to make short observation on this aspect of the matter.

22. Unfortunately as the appeal took longer to be heard than was anticipated it was necessary for there to be a fairly lengthy adjournment of the hearing. During this period the Defendants lodged an application for further evidence to be adduced. We indicated that we would reserve making an adjudication and proceed on a de bene esse basis.

23. The additional evidence sought to be adduced were three certificates dated respectively 8th February 1996, 17th May 1996 and 19th August 1996 issued by the Consul General of Panama in Hong Kong.

24. These certificates took the Form of Patentes which enable an owner prior to formal registration of a Bill of Sale to comply with various requirements. The purpose of adducing these certificates as evidence was to endeavour to establish that Hainan Tiansheng Ocean Shipping Co. Ltd. ("Ocean") was not the owner of the vessel in October 1996 when the cause of action arose.

25. In my view this application should be refused for two reasons. The first is that it has by no means been satisfactorily demonstrated that the evidence could not have been readily available before Waung, J.

26. During his submission to us Mr. Sussex informed us that the reason why a decision had been made to obtain this evidence was that Mr. Bunting had submitted during the early part of the appeal that the Patentes only covered the period up to February 1996. Mr. Sussex wanted to correct this. It cannot be satisfactory to permit litigation to proceed on the basis of the parties adding to their cases as the case goes forward unless exceptional circumstances obtain. They do not in the present case. In addition to this the reasons given for not obtaining the evidence at an earlier date by the instructing solicitor Mary Thomson are of a very general and unspecified nature.

27. The second reason for refusing the application is that the second condition in Ladd v. Marshall has not been met. It cannot be said that if the evidence was adduced and believed its effect would be conclusive or have an important influence on the result. A Patente is by no means conclusive evidence of the ownership of a vessel. For these reasons in my view the leave sought should not be granted.

28. So far as the jurisdiction issue is concerned it is immediately evident from a perusal of Waung, J's judgment that he has dealt with the issue in a meticulous manner.

29. He was mindful of the fact that in accordance with the wishes of the parties the application was proceeded with on the basis of affidavit evidence.

30. He proceeded correctly to consider the entries in Lloyd's Register of Ships and Lloyds Confidential Index. He was also impressed by the fact that the Defendants' case to a large extent was dependant upon internal documents.

31. The reasons given by the Judge for concluding that Ocean was the owner of the vessel were impeccable. Indeed Mr. Sussex has not advanced any constructive criticisms of the Judge's reasoning and I can see no reason to interfere with his findings of fact.

32. For all these reasons I am of the view that this appeal should be dismissed and that we should make an order nisi that the Plaintiffs should have their costs.

Suffiad, J.:

33. I have had the benefit of reading the judgments of both Mayo, J.A. and Nazareth V.-P. and am in total agreement with both their judgments.

34. For the reasons given by them, I too would dismiss the appeal with costs of the Plaintiffs to be paid by the Defendants.

Nazareth, V.-P.:

35. I also agree.

36. On the "time" issue, the court below had jurisdiction under s.12B of the High Court Ordinance; Order 12 rule 8 does not affect that. To dispute jurisdiction the Defendants had to comply with O12r8. They have chosen not to do so. For the reasons given by Mayo JA, and, indeed, the judge below, their appeal on the time issue fails.

37. Likewise on the jurisdictional question, I am satisfied for the reason given by Mayo JA and the judge, that the latter was on the facts correct in finding that the Defendants were the owners of the vessel through Ocean.

38. Accordingly the appeal is dismissed with costs of the Plaintiffs to be paid by the Defendants.

(G.P. Nazareth)	(Simon Mayo)	(A. R. Suffiad)
Vice-President	Justice of Appeal	Judge of the Court of First Instance

Representation:

Mr. Michael Bunting instructed by M/S Richards Butler for Plaintiffs

Mr. Charles Sussex instructed by M/S Ng & Partners for Defendants

Remarks:
On appeal by the Defendant to the Court of Final Appeal: Appeal allowed. Please refer to FACV000006/2000.

(I) On appeal by the Defendant to the Court of Final Appeal: Appeal allowed. Please refer to FACV6/2000 dated 12 July 2000 (II) Defendant's application for leave to appeal to Court of Final Appeal dismissed by Court of Appeal. Please refer to CACV103/1999 dated 26 January 2000

(1)	Whether RHC Order 12 rule 8 is a comprehensive and exclusive code for dealing with all questions relating to the jurisdiction of the High Court, so that where a defendant contends that the Court lacks substantive jurisdiction, and does not challenge his own amenability to be brought before the Court, that defendant must nevertheless apply under RHC Order 12 rule 8 and comply with the time limit thereby prescribed.

(1A)	If a challenge to jurisdiction, such as that made in Wilkinson v Barking Corporation [1948] 1 KB 721, does not have to be made under RHC Order 12 rule 8, should the admiralty jurisdiction in rem be characterised in the same way as the jurisdiction issue under consideration in Wilkinson v Barking Corporation?

(2)	Whether The "Evpo Agnic" [1988] 1 WLR 1090 is good law insofar as it decides (at p 1096D) that "owner" in section 12B(4)(b) of the High Court Ordinance (Cap 4) means "registered owner", and, if so, whether it is permissible for the Court to conclude that someone other than the party whose name appears on the relevant register is in fact the owner.

(1)	It is necessary to recognize that the court may be concerned with its "jurisdiction" in at least two different senses:-
	(a)	a court may have to decide if it has jurisdiction to deal with the merits of a particular class of dispute (sometimes called "merits jurisdiction");
	(b)	a court may also be concerned to decide the prior question of whether it has jurisdiction to determine whether it has some particular merits jurisdiction (sometimes being called "jurisdiction jurisdiction").

(2)	If a court is deprived by statute of a merits jurisdiction (as in Wilkinson v Barking Corporation [1948] 1 KB 721; or Rothmans of Pall Mall (Overseas) Ltd v Saudi Arabian Airlines Corporation [1981] 1 QB 368), the parties cannot confer jurisdiction on the Court, whether by a voluntary submission, by a purported waiver of the statutory restriction on the court's jurisdiction or otherwise.

(3)	It follows that Order 12 rule 8 time limits and procedural requirements cannot operate to preclude the defendant from objecting to the lack of such merits jurisdiction.

(4)	Here, the defendants have undoubtedly submitted to the Court's in personam jurisdiction by acknowledging service and not seeking to challenge its jurisdiction under Order 12 rule 8 within time. However, such submission is merely to the court's "jurisdiction jurisdiction".

(5)	The question of whether the admiralty in rem jurisdiction was validly invoked by the plaintiffs in the present case is a merits jurisdiction question. The defendants are entitled to challenge such jurisdiction at any time, irrespective of their previous submission to the Court's jurisdiction jurisdiction and irrespective of the requirements of Order 12 rule 8.

(6)	The Wo Fung Paper decision does not extend to challenges against unfounded invocations of the admiralty in rem jurisdiction, so that it is not authority requiring such challenges to be mounted solely within the four corners of Order 12 rule 8.