ORDER 14A Disposal of Case on Point of Law

Contentspara.

14A/0/1

1.Determination of questions of law or construction (O.14A, r.1) 14A/1

2.Manner in which application under rule 1 may be made (O.14A, r.2) 14A/2

Editorial Introduction

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This Order was introduced in 1992. RHC, O.14A is closely based on the RSC,
O.14A. Rule 1 provides that the court may determine any question of law or
construction of any document arising "without a full trial of the action"
where it appears to the court that such determination will finally determine
the proceedings or an issue therein. The procedure is stated in r.2. The Order
should be read with O.14 (summary judgment), as well as with O.18, r.19
(striking out pleadings and indorsements) and O.33, r.3 (time, etc., of trial
of questions or issues) and O.33, r.7 (dismissal of action after decision
of preliminary issues).

Related Sources

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•RHC, O.14 (Summary judgment)

•RHC, O.18, r.19 (Striking out pleadings and indorsements)

•RHC, O.86 (Actions for specific performance, etc.; summary judgment)

Determination of questions of law or construction (O.14A, r.1)

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1.--(1) The Court may upon the application of a party or of its own motion determine
any question of law or construction of any document arising in any cause or matter
at any stage of the proceedings where it appears to the Court that--

(a)such question is suitable for determination without a full trial of the action;
and

(b)such determination will finally determine (subject only to any possible appeal)
the entire cause or matter or any claim or issue therein.

(2) Upon such determination the Court may dismiss the cause or matter or make such
order or judgment as it thinks just.

(3) The Court shall not determine any question under this Order unless the parties
have either--

(a)had an opportunity of being heard on the question; or

(b)consented to an order or judgment on such determination.

(4) The jurisdiction of the Court under this Order may be exercised by a master.

(5) Nothing in this Order shall limit the powers of the Court under Order 18, rule
19 or any other provision of these rules.

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Manner in which application under rule 1 may be made (O.14A, r.2)

2. An application under rule 1 may be made by summons or motion or (notwithstanding

Order 32, rule 1) may be made orally in the course of any interlocutory application
to the Court.

(L.N. 165 of 1992)

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Effect of rule

An application for determination of a question of law or construction may

be made by a party or the court may make such determination on its own motion.
The court may proceed to make such determination at any stage of the
proceedings. In Hong Kong Kam Lan Koon Ltd v. Realray Investments Ltd [2005]
1 H.K.C. 565, the court agreed to entertain an O.14A summons in the course
of a trial after it had been adjourned part heard and after the Court of Appeal
had issued a judgment in another case which would have an obvious impact on
the viability of the plaintiff's claim. A determination may be made on an
application for an interlocutory injunction. "If the only question at issue
between the parties is one of law, it may be possible to decide this at the
stage of a contested application for an interim injunction" (per Lord Jauncey
in R. v. Secretary of State for Transport, ex p. Factortame Ltd (No. 2) [1991]
A.C. 603; sub nom. Factortame Ltd v. Secretary of State for Transport (No.
2) [1991] 1 All E.R. 70. 123G (opinion delivered before this Order was
introduced)).

Further, this Order empowers the court to make a final determination of a

question of law without the need for a prior order of the court under O.33,
rr.3 and 4(2) for the determination of a preliminary question of law whether
raised on the pleadings under O.18, r.11 or otherwise.

This Order provides an alternative procedure to that provided by O.5, r.4

by way of originating summons for the construction of a document or some other
question of law.

It would seem that this Order may, in an appropriate case, be applied in

respect of claims for a declaration.

This Order does not apply to any proceedings by or against the Government
(O.77, r.7(1)), nor does it limit the powers of the court under O.18, r.19
or any other provision of the RHC (para. 1(5)).

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 Requirements of O.14A

The requirements for employing the procedure under this Order are the
following:

1.the defendant must have given notice of intention to defend;

2.the question of law or construction is suitable for determination without

a full trial of the action (para. 1(i)(a));

3.such determination will be final as to the entire cause or matter or any

claim or issue therein (para. 1(i)(b)); and

4.the parties had an opportunity of being heard on the question of law or

have consented to an order or judgment being made on such determination (para.
1(3)).

See B. & B. Construction Ltd v. Sun Alliance & London Insurance Plc [2001]
1 H.K.L.R.D. 1.

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Notice of intention to defend

The wording of para. 1(3) makes it clear that the determination of any
question of law or construction under this Order can only be made if the
defendant has given notice of intention to defend. It precludes the court
from determining any such question unless the parties, i.e. both the
plaintiff and the defendant, have had an opportunity of being heard on the
question or have consented to an order or judgment being made on such
determination. This requirement underscores the importance of the procedure
under this Order in ensuring that both parties have participated or have had
the opportunity to participate in the final disposal of the case on a point
of law or construction. If the defendant fails to give notice of intention
to defend, the plaintiff will be entitled to proceed to judgment in default
under O.13.

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Suitable question of law or construction

The ambit of O.14A was considered by the English Court of Appeal in Korso
Finance Establishment Anstalt v. John Wedge, unreported, February 15, 1994,
CA Transcript 94/387. The following principles are laid down thereby:

1.An issue is "a disputed point of fact or law relied on by way of claim or
defence".

2.A question of construction is well capable of constituting an issue.

3.If a question of construction will finally determine whether an important

issue is suitable for determination under O.14A and where it is a dominant
feature of the case a court ought to proceed to so determine such issue.

4.Respondents to an application under O.14A are not entitled to contend they

should be allowed to hunt around for evidence or something that might turn
up on discovery which could be relied upon to explain or modify the meaning
of the relevant document. If there were material circumstances of which the
court should take account in construing the document, they must be taken to
have been known, and could only be such as were known, to the parties when
the agreement was made. In the absence of such evidence, the court should
not refrain from dealing with the application.

It is submitted that the above accords with the law as to construction as

expressed in Prenn v. Simmonds [1971] 1 W.L.R. 1381; [1971] 3 All E.R. 257,
HL. It is to be observed that the earlier dicta of the Court of Appeal on
O.14A in The Coral [1993] 1 Lloyd's Rep. 1 were critically re-examined in
Korso and should not be relied on without reference to the later case. The
Korso decision was considered in Cable & Wireless HKT International Ltd v.
New World Telephone Ltd, unreported, HCCL No. 229 of 1999, April 5, 2000,
[2000] H.K.E.C. 368, Stone J. See also Shell Hong Kong Ltd v. Yeung Wai Man
Kiu Yip Co. Ltd & Another (2003) 6 H.K.C.F.A.R. 222, where the Court of Final
Appeal cited Korso for the point that the O.14A procedure can be invoked not
only in respect of questions which finally determine the entire cause or
matter, but also questions which finally determine any claim or issue,
although the process did not contemplate that trivial matters would be
submitted for determination under O.14A.

Sir Thomas Bingham M.R., considering the interrelation of striking out and
O.14A, expressed unease at "... deciding questions of legal principle without
knowing the full facts". However, he continued: "But applications of this
kind are fought on ground of a plaintiff's choosing, since he may be generally
assumed to plead his best case ... [If] the legal viability of a cause of
action is unclear (perhaps because the law is in a transition), or in any
way sensitive to the facts, an order to strike out should not be made. But
if, after argument, the court can be properly persuaded that no matter what
(within the reasonable bounds of the pleading) the actual facts [are] the
claim is bound to fail for want of a cause of action, I can see no reason
why the parties should be required to prolong the proceedings before that
decision is reached" (E (A Minor) v. Dorset C.C. [1995] 2 A.C. 633; [1994]
4 All E.R. 640). These words were approved on appeal to the House of Lords
by Lord Browne-Wilkinson (the other members of the Appellate Committee
concurring) reported sub nom.X (Minors) v. Bedfordshire C. C. (another appeal
heard at the same time) at [1995] 2 A.C. 633; [1995] 3 All E.R. 353, HL. It
was said that where the law is not settled but is in a state of development,
it is normally inappropriate to decide novel questions on hypothetical facts;
however, where construction of statutes is conclusive this is not so. Thus
a defendant, in cases arguably falling within O.14A, should also rely thereon
when seeking to strike out; the question for the court on O.14A applications,
namely resolving the point of law, will be more easily decided in a
defendant's favour. He must otherwise bear the heavier onus. It is preferable
to refer to O.14A in the summons as otherwise a more difficult test will be
sprung upon a plaintiff at the hearing. It is unlikely that a court would
then, in the exercise of its discretion, invoke the rule under its powers
in O.14A, r.1(3) without prior notice unless satisfied that no adjournment
could possibly help the plaintiff.

The question of law or construction to be determined by the court under the

Order should be stated or formulated in clear, careful and precise terms,
so that there should be no difficulty or obscurity, still less any ambiguity,
about what is the question that has to be determined (see Allen v. Gulf Oil
Refining Ltd [1980] Q.B. 156; [1979] 3 All E.R. 1008, CA, reversed on another
point [1981] A.C. 101; [1981] 1 All E.R. 353), and this is all the more
important since the determination will be final (see para. 1(i)(b)). This
passage was approved by Godfrey J.A. in Dragages et Travaux Publics (HK) Ltd
v. American Home Assurance Co., unreported, CACV No. 295 of 1999, December
10, 1999, [1999] H.K.E.C. 800; reversing No. CT5, April 21, 1999.

Moreover, it should be remembered that among the facts which are to be treated
as proved or admitted, there must be no hypothetical or future facts (see
Sumner v. William Henderson & Sons [1963] 1 W.L.R. 823; [1963] 2 All E.R.
712, CA and Hondon Development Ltd v. Powerise Investments Ltd, unreported,
HCA No. 1208 of 1998) and still less any fictitious facts, even though they
may be admitted in the pleadings (see Royster v. Cavey [1947] K.B. 204; [1946]
2 All E.R. 642, CA). Where the issues of fact are interwoven with the legal
issues raised, it will be undesirable for the court to split the legal and
factual determination, for to do so would in effect be to give legal rulings
in vacuo or on a hypothetical ruling, which the court will not do (see per
Taylor L.J. in State Bank of India v. Murjani Marketing, unreported, March
1, 1991, CA Transcript 91/0304 (CA)). See per Rogers V.-P. in Netwell
Properties Ltd v. JCG Finance Co. Ltd [2004] 2 H.K.L.R.D. 138 at 141 approving
this paragraph, and see also Weltime Hong Kong Ltd v. Cosmic Insurance Corp.
Ltd [2004] 2 H.K.C. 155 at 168-169.

Where there are conflicting allegations of fact, or issues of fact interwoven

with the legal issues to be determined, the O.14A procedure is not appropriate:
Shell Hong Kong Ltd v. Yeung Wai Man Kiu Yip Co. Ltd & Another (2003) 6
H.K.C.F.A.R. 222. See also Townearn Industrial Ltd v. Golden Globe Holdings
Ltd [2003] 1 H.K.C. 186.

In Rockwin Enterprises Ltd v. Shui Yee Ltd & Others, unreported, HCA No. 19629
of 1999, August 29, 2001, [2001] H.K.E.C. 1102, Recorder Ma S.C. (as he then
was) referred to Korso and held that the court had a residual discretion
whether or not to embark on a determination of a question under O.14A even
where (1) the question of law or construction was one that was suitable for
determination without a trial and (2) its determination would finally
determine (subject to a possible appeal) the entire cause or matter or any
issue or claim therein. He held that, where the court was not seized of all
relevant facts, it would be an extremely rare case (if ever) in which the
procedure under O.14A would be adopted (following Cable & Wireless HKT
International Ltd (above)), and noted that this approach was consistent with
the passages contained in this note. Even if the court accedes to an
application for a determination under O.14A, if in the course of hearing the
application it transpires that the O.14A procedure is not appropriate, the
court can and should refuse to make a determination: Shell Hong Kong Ltd v.
Yeung Wai Man Kiu Yip Co. Ltd & Another (above), para. 33, per Chan P.J. In
deciding whether to accede to the application, the court is able to take an
overall view of the matter to discern the context in which the question arises,
and where the issue for determination is not merely one of a variety of issues
for decision but lies at the very core of the plaintiff's case, the court
may exercise its discretion to determine the question posed in the
application: per Stone J. in China United Holdings Ltd v. Johnson Stokes &
Master (a firm) [2004] 2 H.K.L.R.D. 222 at 278-279.
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Hearing or consent of parties

Rule 1(3) expressly requires that one of two conditions should be fulfilled
before the court determines any question of law or construction under this
Order, namely either:

1.that the parties have had an opportunity of being heard on this question
(r.1(3)(a)); or

2.that the parties had consented to an order or judgment on such determination

(r.1(3)(b)).

The first condition is somewhat unusual, since the practice and procedure
relating to proceedings in chambers are already dealt with under O.32, rr.1-
6. Nevertheless, the principle underlying this provision would seem to be
that, since the procedure under O.14A for the determination of a question
of law or construction without a full trial virtually replaces the trial
process for such determination, the occasion on which it is employed should
be treated as an important and special occasion. Accordingly, great care
should be employed in the service of a summons or motion under this Order,
and unless the opposite party consents or there is a clear acknowledgment
of the service of the summons or motion, it would be desirable to attend the
hearing with an affidavit of service to avoid the adjournment of the hearing
in order to satisfy the court that the opposite party had had the opportunity
of being heard.

The alternative condition, that the parties had consented to an order or

judgment on the determination of the question of law or construction, is still
more unusual since it must be very rare for the exercise of its powers by
the court to be dependent on the consent of the parties. It should, however,
be stressed that even if the parties do consent, the court must still be
satisfied about the suitability and finality of determining the question of
law or construction without a full trial.

In W. G. Clark (Properties) Ltd v. Dupre Properties Ltd [1992] Ch. 297; [1992]
1 All E.R. 596, during the course of the hearing of an appeal by the judge
in chambers to strike out the statement of claim as disclosing no reasonable
cause of action under O.18, r.19, the parties consented that the court should
exercise its power under O.14A to determine the question of law arising,
namely whether the landlord can maintain an action for possession against
the tenant on the ground that the tenant, in earlier proceedings, had denied
the title of the landlord to part of the demised premises, while at the same
time he had asserted the title of the landlord to the other substantial part
of the premises, the two parts not being severable and were incapable of
separate lettings.

Whichever condition has been fulfilled, it should be recorded in the order

made or judgment given following the determination by the court of the
question of law or construction raised before it.

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Mode of application
 Great flexibility has been introduced as to the manner in which an application
under r.1 may be made, namely by summons or motion and notwithstanding O.33,
r.1, it may be made orally in the course of any interlocutory application
to the court (r.2).

The application should ordinarily be made by summons to the master who is

invested with the jurisdiction of the court under this Order (r.1(4)).

It should be made by motion or the summons may be made returnable before a

judge only if the judgment or order sought on the determination of the
question of law or construction can only be granted by a judge, e.g. an
injunction (O.32, rr.11, 13; Shell Mex & B.P. Ltd v. Manchester Garages Ltd
[1971] 1 W.L.R. 613; [1971] 3 All E.R. 841, CA).

The application may be made at any time after the defendant has given notice
of intention to defend and before the full trial of the action has begun;
see, in this context, Man Wing Fun Stephens v. Ho Ching Yee Susanna,
unreported, HCA No. 3724 of 1997, February 25, 1999, Mr Recorder Edward Chan
S.C.

The summons should state in clear and precise terms what is the question of
law or construction which the court is required to determine. If there is
more than one such question, each should be stated in the same terms, and
it should be made clear whether the several questions are cumulative or in
the alternative.

The summons should also specify, with particularity if necessary, what

judgment or order is being claimed upon the determination of the question
of law or construction.

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Supporting evidence

The summons should be supported by affidavit evidence deposing to all the

material facts relating to the questions of law or construction to be
determined by the court. For the purposes of O.41, r.5(2), proceedings under
O.14A are not interlocutory proceedings, since by its nature, the application
will decide the rights of the parties and will terminate the action or
otherwise finally dispose of it (see para. 41/5/2 and Rossage v. Rossage [1960]
1 W.L.R. 249; [1960] 1 All E.R. 600, CA; Re J (an infant) [1960] 1 W.L.R.
253; [1960] 1 All E.R. 603), and therefore, the affidavits for use in
proceedings under O.14A may depose only to such facts as the deponent is able
of his own knowledge to prove (O.41, r.5(1)).

The defendant may of course file affidavit evidence in answer but such an
affidavit must also be confined to matters within the personal knowledge of
the deponent. The object of the defendant's affidavit evidence should be to
confirm or adopt or supplement the material facts deposed to, by and on behalf
of the plaintiff, but not to traverse or challenge or contradict such facts
since on an application under O.14A there is no room for any dispute between
the parties as to the necessary material facts.

In addition to the material facts proved by the evidence of the parties, the
 court will take into account all those facts which have been duly admitted,
whether by the pleadings or otherwise (see O.27, r.3).

The application under r.1 may be included in a summons for summary judgment
under O.14, or it may be made by a separate summons to come on and be heard
together with a summons under O.14 (see Crockfords Club Ltd v. Mehta [1992]
1 W.L.R. 355; [1992] 2 All E.R. 748), and likewise it may be included in a
summons for striking out any pleadings under O.18, r.19 or under the inherent
jurisdiction of the court. However, the important distinction should be
observed between the contents of the affidavits for the purposes of O.14 (see
O.14, r.2(2) and r.4(2)) or for the purposes of O.18, r.19 (see O.41, r.5(1))
which may contain statements of information and belief with the sources and
grounds thereof, and the affidavits for the purposes of r.1, which may contain
only such facts as are within the personal knowledge of the deponent (O.41,
r.5(1)).

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Oral application

A helpful innovation has been made which enables a party to make an

application under r.1 orally in the course of any interlocutory application
to the court (r.2). Experience has shown that occasionally a question of law
emerges during the hearing of an interlocutory application, e.g. relating
to pleadings or discovery or evidence, the determination of which would
finally dispose of the whole action or at any rate a claim or issue in it.
In such event, instead of adjourning the proceedings to enable an application
under r.1 to be made at a later date, the court is enabled on the application
of a party, and after having heard or after hearing the parties on that
question, to proceed directly there and then to determine that question and
finally to dispose of the whole action or the particular claim or issue in
it. Indeed, in such event, the court may act of its own motion, after hearing
the parties, to determine the question of law and dispose of the action (see
r.1(1)).

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Final judgment or order

Upon making its determination of the question of law or construction, the

court may dismiss the action or make such order or judgment as it thinks just
(r.1(2): cf. O.33, r.7). In this way, the action will be finally disposed
of without a full trial and the judgment or order will have the same force
and effect as the judgment or order after a full trial of the action.

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Appeal

An appeal against the order or judgment made or given by the master under
r.1(2) lies in the ordinary way to the judge in chambers (O.58, r.1).

Whether a judgment under O.14A is interlocutory or final for the purposes

of appeal is determined by the "applications" test. Formerly it was thought
that an O.14A judgment was always final under this test. However, the effect
of the Court of Final Appeal judgment in Shell Hong Kong Ltd v. Yeung Wai
Man Kiu Yip Co. Ltd & Another (2003) 6 H.K.C.F.A.R. 222 is that this may not
always be the case. Chan P.J. held at para. 33 that a judgment which is not
finally determinative of the entire cause or matter but is finally
determinative of a crucial or substantial issue in the cause or matter should
be regarded as a final judgment. Notwithstanding what was said in Shell, in
Huaxin (Hong Kong) Co. Ltd v. Cheerful Corp. and Ors, unreported, CACV No.
343 of 2003, Rogers V.-P., Le Pichon J.A. and Waung J., [2005] H.K.E.C. 278,
CA, Waung J. at para. 33 held that by definition, a determination under O.14A
had to be final in nature.