THE NEW ORDER 14A (SUMMARY DISPOSAL OF POINTS OF LAW OR CONSTRUCTION) — MORE THAN A CODIFICATION OF EXISTING PRACTICE

• Date: 01 December 1994
• Citation: (1994) 6 SAcLJ 304
• Published date: 01 December 1994
• Author: JEFFREY PINSLER

THE POSITION PRIOR TO THE INTRODUCTION OF ORDER 14A

It was recognised early on that that where the issues in summary judgment proceedings concerned points of law or documentary construction the court was at liberty, in the appropriate circumstances, to give judgment or leave to defend, depending on the nature of the issue. Thus, Order 14, rule 3 is framed to encompass any ‘issue or question in dispute which ought to be tried’ — whether factual, legal or a matter of construction. However, it is submitted that the cases have not always been clear as to the precise approach to be employed in determining the viability of summary relief. It will be argued that Order 14A largely resolves the uncertainties which arose under the previous state of the law, but nevertheless leaves open certain fundamental questions about the scope and effect of the new procedure.

We may start in the 19th century with Electric and General Contract Corp v The Thomson-Houston Electric Co,1 in which the Queen’s Bench Division made it clear that the courts could hear points of law in Order 14 proceedings subject to the qualification that they had to be fit for summary disposal. The case involved a dispute over whether a payment was a part payment or a deposit. Wills J thought the point of law to be too difficult for summary disposal and that it would have taken considerable time for argument. The learned judge stated that it was ‘impossible’ for the matter to be ‘satisfactorily dealt with at chambers’.2‘It was never intended to throw on the judge in chambers such a burden’.3 His Lordship added: ‘to decide such cases satisfactorily at chambers was not possible, and it only tended to put the judge at chambers in a false position.’4

This case, as do subsequent cases, leaves open the question of the degree of difficulty required before leave is given to defend. It is only 50 years later that a clearer indication is given by the courts. In Cow v Casey,5 the

English Court of Appeal was concerned with a point raised as to the effect of the Rent Restriction Acts. The master and the judge had granted summary judgment for possession. The Court of Appeal dismissed the defendant’s appeal.

Lord Greene stated the approach of the court concerning issues of law:

The only point is that, as everybody knows, the Rent Restriction Acts are complicated Acts. They contain a number of difficult matters and there are a number authorities decided upon them. But it is not sufficient under an Order 14 case to flourish the title of the Increase of Rent Restriction Acts in the face of the court and say that is enough to give leave to defend. If a point taken under the Rent Restriction Acts is quite obviously an unarguable point, the court has precisely the same duty under Order 14 as it has in any other case. It may take a little longer to understand the point and to be quite sure that one has seen all round it in a case under the Rent Restriction Acts than in other cases, but when the point is understood and the court is satisfied that it is really unarguable, the court has the duty to apply the rule, and, in my opinion, the master was perfectly right, the judge was perfectly right, and the appeal should be dismissed.6

Lord Greene pointed out that the mere fact that the Acts were complex in nature was not a basis on which to grant leave to defend. The court would still look at the issues and determine whether it was appropriate for adjudication in summary proceedings. In this case, one sees the emergence of the principle that the court may investigate the issues in order to determine whether the case is fit for summary disposal. Implied in this approach is the possibility that the court may take its time in making the determination as to whether the matter should be summarily disposed of. Cow v Casey was applied by the Malaysian Federal Court in very similar circumstances in Fadzil bin Mohamed Noor v Universiti Teknologi Malaysia.7 The appellant claimed that he had been improperly dismissed by the university and sought a declaration that the dismissal was ultra vires. The Federal Court held that he was entitled to summary judgment because, on the construction of the constitution of the university, the university had an ‘absolutely hopeless case’.8 The Federal Court did not think that a case involving statutory construction should be treated differently from any other Order 14 proceeding. Raja Azlan Shah CJ pointed

out that the court would always be cautious: ‘…it is a very stringent procedure because it shuts the door of the court to the defendant’.9 His Lordship added:

The only point is that everybody knows the pertinent legislation is long and complicated. But it is not sufficient under an Order 14 case to flourish the title of the University and University Colleges Act, etc., in the face of the court and say that is enough to give leave to defend. If a point taken under the Acts is quite obviously an unarguable point, and the court is satisfied that it is really unarguable, the court has precisely the same duty under Order 14 as it has in any other case’.10

His Lordship applied the same principles to an earlier case involving construction of documents. In Esso Standard Malaya Bhd v Southern Cross Airways (Malaysia) Bhd,11 His Lordship said:

It is, I think, right that an order under Order 14 should be made only if the court thinks it is a plain case and ought not to go to trial. If one simply has a short matter of construction with a few documents, the court, on summary application, should decide what in its judgment is the true construction. There should be no reason to formally go to trial where no further facts could emerge which would throw any light upon the letters that have to be construed.12

The approach was echoed by Mohamed Azmi SCJ in Bank Negara Malaysia v Mohd Ismail,13 where his Lordship said:

Where the issue raised is solely a question of law without reference to any facts or where the facts are clear and undisputed, the court should exercise its duty under Order 14. If the legal point is understood and the court is satisfied that it is unarguable, the court is not prevented from granting summary judgment merely because ‘the question of law is at first blush of some complexity and therefore takes a little longer to understand’.

After Cow v Casey, one sees a spate of decisions in the 1980’s and 1990’s. In Verrall v Great Yarmouth Borough Council, Roskill L.J. emphasised the importance of practical considerations:14

We have often said in this court in recent years that where there is a clear-cut issue raised in Order 14 proceedings, there is no reason why the judge in chambers — or for that matter, this court — should not deal with the whole matter at once. Merely to order a trial so that the matters can be re-argued in open court is to encourage the law’s delays which in this court we are always trying to prevent.15

The Court of Appeal considered the defendant’s technical arguments on the law and made an order for specific performance on the plaintiff’s Order 14 summons. In Jaya Kumar v Subramaniam Mohana Krishnan & Anor,16 Thean J (as his Honour then was), adopted Roskill LJ’s position and held that the construction of a statutory provision was sufficiently clear-cut to justify summary judgment. Jaya Kumar was followed in Cascade Shipping v Eka Jaya.17 On appeal, Chao Hick Tin J held that the points of law involved were straightforward and proceeded to hear full arguments. His Honour dismissed the plaintiff’s claim. The decision may be compared to that reached by Chan Sek Keong J in Lim & Tan Securities Pte Ltd v Sunbird Pte Ltd,18 where his Honour declared that the the novelty of legal issues involved did not justify summary relief.

The above cases indicate that the essential criterion in determining whether there should be summary relief is the degree of difficulty involved. If the matter is not clear-cut, it is not suitable for such proceedings. However, the matter can not be left at that, for there are English decisions which indicate a variety of approaches. In Home & Overseas Insurance Co Ltd v Mentor Insurance Co Ltd,19 which involved the construction of a re-insurance contract, Hirst J. adopted a balancing approach which was accepted by the Court of Appeal:20

…where a point of construction is at issue and decisive of its outcome, the court should determine it on Order 14 even if at first blush it is of some complexity…

If on the other hand the point is of outstanding difficulty and importance, (or if, as is not immediately relevant here, the issues of fact and law are interlocked), so that the court is unable to form a definitive view there and then in Order 14 proceedings, the court should grant leave to defend.21

In the Court of Appeal, Parker LJ laid down a test which is akin to the principle governing an injunction order:

If the point of law relied upon by the defendant raises a serious question to be tried which calls for detailed argument and mature consideration the point is not suitable for determination in Order 14 proceedings.22

In British & Commonwealth Holdings v Quadrex Holdings,23 Sir Nicholas Brown Wilkinson V-C preferred to lay emphasis on the volume of documentation and the prolongation of argument.24 Yet, in Carter (R. G.) Ltd v Clarke,25 one sees for the first time a much more flexible approach on the part of the Court of Appeal. Lord Donaldson of Lymington MR said:

If a judge is satisfied that there are no issues of fact between the parties, it would be pointless for him to give leave to defend on the basis that there was a triable issue of law. The only result would be that another judge would have to consider the same arguments and decide that issue one way or the another. Even if the issue of law is complex and highly arguable, it is far better he then and there decides it himself, entering judgment for the plaintiff or the defendant as the case may be, on the...