Hadsphaltic Intl Ltd v Tower Corporation Ltd

JurisdictionCayman Islands
Judge(Zacca, P., Georges and Rowe, JJ. A.)
Judgment Date06 April 1988
CourtCourt of Appeal (Cayman Islands)
Date06 April 1988
Court of Appeal

(Zacca, P., Georges and Rowe, JJ. A.)


J. Croxford and D. Jones for the appellant;

M. Harvey, Q.C. and A Foster for Maples & Calder.

The respondent did not appear and was not represented.

Cases cited:

(1) Armour v. Bate, [1891] 2 Q.B. 233; (1891), 60 L.J.Q.B. 433; 65 L.T. 137, considered.

(2) Edwards” Will Trusts, In re, [1982] Ch. 30; [1981] 2 All E.R. 941.

(3) Enoch v. National Coal Bd.(1978), 122 Sol. Jo. 401, distinguished.

(4) Jennings v. London Gen. Omnibus Co. (No. 2)UNK(1874), 30 L.T. 640, considered.

(5) Jordan v. JonesUNK(1880), 44 J.P. 800, considered.

(6) McEnearney (Charles) & Co. Ltd. v. SwiftUNK(1970), 16 W.I.R. 387; on appeal (1971), 16 W.I.R. 391, considered.

(7) Maunsell v. Olins, [1975] A.C. 373; [1975] 1 All E.R. 16, dicta of Lord Simon applied.

Legislation construed:

Judicature Law (Revised) (Law 11 of 1975, revised 1976), s.58: The relevant terms or this section are set out at page 102, lines 21–27.

s.59: The relevant terms of this section are set out at page 113, line 36 – page 114, line 3.

Rules of the Supreme Court (England) O.5, r.6(2): The relevant terms of this rule are set out at page 102, lines 36–38.

O.35, r.1: The relevant terms of this rule are set out at page 106, lines 12–18.

Civil Procedure-consolidation of actions-cross-participation of parties-intervention-express agreement between parties that defendant in second suit consolidated with first may participate fully in first suit, e.g. because liability dependent on decision in first suit, that defendant may intervene in interlocutory proceedings seeking striking out of first suit

Companies-legal proceedings-appearance by company-by English Rules of Supreme Court, O.5, r.6(2) company may only ‘appear’ through attorney qualified to practise in jurisdiction

Civil Procedure-appearance-striking out for non-appearance-automatic striking out under Judicature Law, s.58 and English Rules of Supreme Court, O.35, r.1 applicable only to non-appearance on opening day of trial-discretion to strike out if non-appearance when hearing already beyond first day but no striking out if unfair because submissions and evidence considerably advanced

The defendant-appellant applied to the Grand Court for an order to strike out the plaintiff-respondent”s case against it on the basis of the non-appearance of counsel for the plaintiff.

The respondent engaged the appellant to build an office block on its land and charged the land in favour of the appellant for an advance to cover the construction costs. The respondent defaulted in repayment of the advance and the property was sold by the appellant at auction.

The respondent commenced the present proceedings alleging that this sale had been at an undervalue. The appellant denied liability but, against the possibility of its being found liable, it in turn brought proceedings against Maples & Calder, its attorneys, alleging negligence on their part in advice given to it on the conduct of the auction.

By consent the two actions were ordered to be tried together. A second consent order was made permitting, inter alia, each of the parties to serve on the others copies of all their pleadings and particulars, and lists of all relevant documents. The three parties were to be allowed to exchange their experts” reports and at the trial would be at liberty to cross-examine each other”s witnesses. The evidence given at the concurrent trial of the two actions was to be treated as pertaining to both and Maples & Calder agreed to be bound by the result of the leading action between the respondent and the appellant.

The hearing of the two actions commenced and continued until the 98th day, when counsel for the respondent were granted leave to withdraw from the case and the respondent ceased to be represented at the trial, although an officer of the company remained in attendance throughout. At this stage of the proceedings the respondent had already presented and closed its case. The appellant”s defence to the respondent”s claim and its claim against Maples & Calder had also been completed but for the hearing of one witness, and Maples & Calder had opened their defence. As a consequence, the appellant applied for an order to strike out the respondent”s case by reason of its counsel”s failure to appear during the remainder of the proceedings.

The Grand Court (Summerfield, C.J.), after permitting Maples & Calder to intervene, dismissed the application.

On appeal, the appellant submitted that (a) Maples & Calder had no locus standi to challenge its application since the two actions were separate and they should not even have been allowed to make an application as a third party against the appellant in the appellant”s case against the respondent; (b) it was an essential element of the adversary system that a plaintiff must appear to prosecute his case from the first day of trial to the last day of judgment and, under the Judicature Law, s.58 or, alternatively, the English Rules of the Supreme Court, O.35, r.1, the court was required to strike out the case of a plaintiff who did not so ‘appear’; and the withdrawal of the respondent”s counsel before the termination of the proceedings amounted to non-appearance which entitled the appellant to have the case against it struck out.

Maples & Calder, contesting the appeal in their own right, submitted in reply that (a) an essential condition of the consent order combining the two actions was that they be allowed to participate as active litigants in all aspects of both and they had consistently done so in the hearing of all of the several interlocutory applications which had so far been made in the suit between the appellant and respondent without any objection from the appellant; (b) s.58 of the Judicature Law and O.35, r.1of the English Rules of the Supreme Court were intended to apply to the circumstances in which a plaintiff did not appear on the first day his case was called and had no application to any subsequent day of a trial; (c) it was thereafter a matter for the court”s discretion whether to strike out a case due to a plaintiff”s non-appearance and there was no reasonable justification for doing so in the present case; and (d) in any event, an officer of the respondent company had continued to attend the hearing in a representative capacity and this could be regarded as an ‘appearance’ within the meaning of s.58.

Held, dismissing the appeal:

(1) Maples & Calder had the unreserved right to participate in all aspects of the trial and could also be heard on appeal since they were not merely third parties to the action between the appellant (defendant) and the respondent (plaintiff) but were themselves proper defendants in a second suit being heard together with that action. Their own liability to the appellant was entirely dependent upon the result of the first action;

they had agreed to be bound by the result of that action and, moreover, the appellant had expressly agreed to their participation at all levels of the proceedings between itself and the respondent (page 102, lines 6–19; page 108, line 21 – page 109, line 22; page 118, line 35 – page 119, line 22).

(2) The Judicature Law, s.58 and the English Rules of the Supreme Court, O.35, r.1 required the court to strike out a plaintiff”s case if he failed to ‘appear.’ Since there was no local provision prescribing the manner in which a limited liability company could ‘appear’ in court, O.5, r.6(2) of the English Rules of the Supreme Court became applicable by virtue of the proviso to the Grand Court (Civil Procedure) Rules, r.62(2). It followed that upon the application of this provision to the Cayman Islands a company could only ‘appear’ through counsel or an attorney-at-law qualified to practise in the Islands and the attendance in court of an officer of the plaintiff company throughout the trial could therefore not of itself constitute appearance (page 102, line 28 – page 103, line 5; page 117, lines 4–34).

(3) However, both s.58 and O.35, r.1 only required the striking out of a plaintiffs case if he failed to ‘appear’ on the opening day of the trial. The wording of s.58 had been adopted from earlier legislation intended for a summary court accustomed to disposing of a case on its opening day and though this circumstance had changed, the purpose of the section-to give the court the power to dispose of a case if the plaintiff did not appear when it was called on its opening day-was still the same. Moreover (per Georges, J.A. at page 114, lines 4–10) since it was stated in s.59 that ‘upon any such day’ (i.e. on which the action was set down for hearing) if the defendant failed to appear, the trial judge was to ‘proceed to the hearing,’ it could be implied that both ss. 58 and 59 were intended to apply exclusively to a stage before the actual hearing had begun. This construction was further reinforced by the fact that if s.58 were to be taken to apply to the second or subsequent day of a hearing, it would be likely to produce in future even greater injustice in principle, as a meritorious case would have to be struck out simply because a plaintiff was unavoidably prevented from attending court, or it might allow the abuse of the process of the court by a plaintiff”s deliberately absenting himself from court so as to ensure the striking out of his case without prejudice to the institution of further proceedings. Additionally, in the particular circumstances of the present case, it would cause grave injustice to the two other litigants who had already spent considerable time and money in preparing and presenting their own cases and, on the part of Maples & Calder (who had been made a party only for the purpose of indemnifying the defendant in the first suit), would have destroyed the benefit of hearing the two cases together. There was therefore neither authority nor...

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