UNITED MUSLIM ASSOCIATION OF HONG KONG AND OTHERS v. YUSUF YU AND OTHERS

CACV 139/2015

[2018] HKCA 451

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 139 OF 2015

(ON APPEAL FROM HCA 640/2012)

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JUDGMENT

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Hon Lam VP (giving the Judgment of the Court):

1.  This is an appeal against the judgment of Recorder T Cheng SC [“the Judge”] of 14 May 2015. It has taken an unduly long time for the Plaintiffs to apply for this appeal to be heard.

2.  At the outset, we must say that the 1^st Plaintiff is not properly joined as an appellant in the appeal.  The effect of the judgment below is that the 2^nd to 7^th Plaintiffs had no authority to represent the 1^st Plaintiff.  Thus, they had no authority to give instructions to solicitors to prepare the Notice of Appeal of 15 June 2015 which named the 1^st Plaintiff as an appellant. 

3.  Further, as the 1^st Plaintiff UMAH is a corporate body, it cannot litigate without acting through solicitors unless leave to do so is granted under Order 5 Rule 6(2), Rules of the High Court. The 2^nd to 7^th Plaintiffs had not applied for such leave. 

4.  The firm which lodged the notice of appeal on 15 June 2015 had gone off the record on 29 September 2016 after obtaining an order permitting it to cease to act from a master. 

5.  For a long period of time, the Plaintiffs were not represented by lawyers.  The hearing of the appeal was fixed in September 2017.  Notices of hearing were given to the parties on 18 September 2017. Attention was drawn by the Registrar to the parties on the requirement to lodge and serve skeleton submissions in accordance with Practice Direction 4.1. 

6.  Given that the hearing of the appeal was scheduled to take place on 17 July 2018, according to para 57, the appellants should have lodged and served their skeleton submission at least 28 days before hearing, viz 19 June 2018.

7.  On 15 June 2018, another solicitors firm, Messrs MCA Lai Solicitors LLP [“MCA Lai”] filed a Notice to Act as solicitors for all the Plaintiffs, including UMAH.

8.  A set of skeleton submissions prepared by counsel (dated 19 June 2018) was lodged with the Court on 20 June 2018.  However, that document was not served on the Defendants, who were then acting in person.

9.  On 5 July 2018, a firm of solicitors GPS Legal LLP [“GPS Legal”] came on record to act for the Defendants.

10.  Prior to that, on 3 July 2018, GPS Legal lodged a set of skeleton submissions of the Defendants prepared by counsel.  In those submissions, counsel for the Defendants said the Defendants did not receive the skeleton submissions of the Plaintiffs.

11.  On 10 July 2018, the 2^nd Plaintiff purportedly issued a Notice to Act in Person for all the Plaintiffs.

12.  On 11 July 2018, the 2^nd Plaintiff further lodged a set of skeleton submissions signed by himself.  He purported to do so for all the Plaintiffs.

13.  The second set of skeleton submissions of the Plaintiffs was sent to solicitors for the Defendants on 11 July 2018. 

14.  The Court regarded the Notice to Act in Person of 10 July 2018 as irregular since it was only signed by the 2^nd Plaintiff.  The Court intimated to the parties its concern and required MCA Lai to arrange for counsel to represent the plaintiffs other than the 2^nd Plaintiff at the appeal.

15.  Subsequently, MCA Lai arranged for Notice to Act in Person to be given by the 1^st to 6^th Plaintiffs but they could not locate the 7^th Plaintiff.

16.  The purported Notice to Act in Person of 16 July 2018 regarding UMAH as the 1^st Plaintiff is ineffective.  It was signed by the 2^nd Plaintiff, who has no authority (and was restrained by the order below from holding himself out as a council member for UMAH) to act for UMAH.  Further, it failed to take account of Order 5 Rule 6(2). 

17.  Hence, MCA Lai remained as solicitors for the 1^st Plaintiff on the record.

18.  At the hearing, MCA Lai could not explain the basis on which they regarded themselves as having the authority to act for the 1^st Plaintiff in light of the judgment below and the injunction granted by the judge.  They should have known that the other Plaintiffs had no authority to represent the 1^st Plaintiff.

19.  An appeal does not operate as a stay of the judgment.  Application for stay of execution has been dismissed by this Court on 13 November 2017. 

20.  In the circumstances, it is obvious that MCA Lai did not have proper authority to act for UMAH.  Mr Lau also agreed with this analysis at the hearing.

21.  We therefore struck out the name of UMAH as the 1^st Plaintiff at the hearing of the appeal.  The appeal was processed as an appeal by the 2^nd to 7^th Plaintiffs. There being no effective appeal by UMAH, it is bound by the judgment below.

22.  MCA Lai issued a Notice of Motion on 16 July 2018, applying for an order to cease to act for the 7^th Plaintiff.

23.  In the affidavit in support of the motion, the solicitor said the 7^th Plaintiff is “non-traceable”.  The solicitor did not explain since when did the 7^th Plaintiff has become untraceable. 

24.  Mr Lau, a solicitor of MCA Lai who attended the hearing, could not give the Court much assistance as regards the position of the 7^th Plaintiff.  Initially, he was reticent as to the person who gave instructions to the firm in this case.  Eventually, he told the Court that the instructions came from the 2^nd Plaintiff.

25.  There is no evidence of service of the Notice of Motion on the 7^th Plaintiff.  The requirement of Order 67 Rule 6(2) is not satisfied.  This Court saw no basis to exempt MCA Lai from the requirement.

26.  The 7^th Plaintiff did not attend the hearing of the appeal.  The Court had no information as to his intention regarding the appeal.  If we were to grant the cease to act order, the appeal may have to be adjourned (at least as far as the 7^th Plaintiff was concerned).  We did not find such course to be in the interest of justice, given that this appeal has taken so much time to come to be heard.  It is unfair to the Defendants that they have to be subject to any further delay in the resolution of the appeal.  MCA Lai did not explain why they did not make the application much earlier.

27.  In any event, a cease to act order would not be effective until the service of the same on all the parties, including the 7^th Plaintiff, see Order 67 Rule 6(1)(a). 

28.  For the above reasons, we declined to make any order under Order 67 Rule 6 and MCA Lai remained as solicitors for the 7^th Plaintiff in the appeal. After the hearing, on 19 July 2018, the 7^th Plaintiff lodged a Notice to act in person. That document does not have retrospective effect and could not affect the position at the hearing.

29.  As regards the other Plaintiffs, the 2^nd Plaintiff not being a lawyer cannot represent the other plaintiffs.  They appeared in person at the hearing and adopted the submissions of the 2^nd Plaintiff.  Mr Lau told the Court that the 7^th Plaintiff had no submission to make.

30.  The skeleton submissions of 11 July 2018 only advanced arguments on Ground (4) in the Notice of Appeal.  No argument was advanced in respect of the other grounds.  In the supplemental skeleton argument of 13 July 2018, the 2^nd Plaintiff said they would pursue all the grounds in the Notice of Appeal but did not put forward any substantive submissions regarding those other grounds.  The 2^nd Plaintiff only produced another document at the hearing dealing with the other grounds.  The other plaintiffs (apart from the 1^st Plaintiff which has been struck out by us as a party to this appeal and the 7^th Plaintiff represented by Mr Lau) adopted the submissions of the 2^nd Plaintiff.

31.  This is not an acceptable way to conduct an appeal.  Litigants acting in person, as are those represented by lawyers, are required to lodge skeleton submissions in accordance with the timetable set out in Section G of Practice Direction 4.1.  Before a date is fixed for the hearing of the appeal, the Registrar of Civil Appeals gave directions to all the parties on 25 August 2017 reminding them to comply with this obligation specifically.  In the Notice of Hearing of 18 September 2017, the parties were again reminded to comply with the directions of the Registrar.

32.  Since the promulgation of the new Practice Direction 4.1, the Court has taken a firm stance against non-compliance with direction to lodge skeleton submissions.  Failure to comply with such directions are regarded as waiver to the right to oral hearing and hearing dates may be vacated, see Re Mudannayakalage Chaminda Pushpa Kumara [2018] HKCA 400; Re Manjit Kaur [2018] HKCA 247; Re Miha Md Limon [2018] HKCA 278; Re Ali Arshad [2018] HKCA 304; Re SK Sarf Araj [2018] HKCA 307.     

33.  The Plaintiffs were clearly aware of the requirement to lodge skeleton submissions as they instructed counsel to prepare the same.  On their instructions, the skeleton submissions so prepared (and lodged on 20 June 2018) did not address the grounds in the Notice of Appeal other than Ground (4).  Subsequently, the skeleton submissions signed by the 2^nd Plaintiff personally (lodged on 11 July 2018) suffered from the same shortcoming.

34.  In the circumstances, Mr Marwah was fully justified in his supplemental submissions of 11 July 2018 in noting that the Plaintiffs appeared to have abandoned all the grounds in the Notice of Appeal except Ground (4).

35.  As mentioned, the 2^nd Plaintiff handed up to the Court the 4-page submissions on those other grounds for the first time at the hearing of the appeal.  Those submissions had not been given to Mr Marwah in advance.  In the circumstances, it would not be fair to expect Mr Marwah to deal with the same there and then.  We therefore directed that the Defendants shall lodge submissions in reply to the 4-page document within 14 days.  We also indicated that in light of the financial positions of the parties (we were told that both the Plaintiffs and the Defendants are not wealthy and could have difficulty to pay for costs of another hearing), we would resolve matters arising from those submissions without further hearing. On 23 July 2018, a Further Written Submissions by Mr Marwah was lodged on behalf of the Defendants and we took those into account.  

36.  Though we gave the indulgence to the 2^nd Plaintiff to use the 4-page document in this appeal, it should not be regarded as a precedent for permitting arguments not canvassed in skeleton submissions to be run at the oral hearing.  In general, the starting point is that litigants and lawyers would be barred from raising arguments not foreshadowed in the skeleton submissions. This Court will maintain a strict discipline in case management to prevent appeals being conducted with manoeuvres or tactics which sprung surprises to the Court and the other parties.  

37.  We reiterate that due compliance with Section G of the Practice Direction is essential for good case management and this Court does not lightly condone any attempt to circumvent the Practice Direction which would inevitably impair the proper preparation for the hearing of the appeal by the Court and the opposite parties.  This is the approach of the Court irrespective of whether a party is acting in person or legally represented.

38.  Before we address the merit of the appeal, we shall first reiterate some general principles applicable to the appellate process in Hong Kong.  As recently stated in the judgment of another division of this Court in Tsang Tak Wai v Building Authority [2018] 1 HKLRD 137 at [7] to [8]:

“ 7. First, an appeal is not a second trial of the case.  What the appellate court has to consider is mainly the evidence at trial, and whether the decision of the trial judge is right or wrong: see paragraph 12 in the judgment of Cheuk Shu Yin v. Lo Yeuk Kan (CACV 17/2013, 28 July 2016).

8. Second, only in exceptional circumstances can parties to legal proceedings adduce evidence which was not produced during trial.  If a party wishes to submit new evidence at the appeal, he will have to comply with the 3 conditions established in Ladd v Marshall [1954] 1 WLR 1489: (1) that even with reasonable diligence, the new evidence intended to be produced could not have been obtained for use at trial; (2) the new evidence intended to be produced will have material effect on the decision of the case; and (3) the new evidence intended to be produced appears credible.”

39.  Further, in reviewing the findings of fact by a trial judge, the Court of Appeal’s role is limited.  This Court will only intervene when an appellant can demonstrate that the trial judge palpably erred in making a finding not supported by any evidence, misunderstanding the evidence, failing to take account of relevant evidence or taking irrelevant matters into account, or that the finding is plainly wrong.  The Court of Appeal will not conduct a re-assessment of the evidence simply because the appellant submitted that more weight should be given to one piece of evidence as opposed to another.  See China Gold Finance Limited v CIL Holdings Limited CACV 11/2015, 27 November 2015; Hoptai Sharkfins Co Ltd v Productos Pesqueros Gallegos SL CACV 240/2014, 7 December 2015; ZJW v SY CACV 10/2017, 1 December 2017.

40.  The Court of Appeal would also be circumscribed in entertaining fresh points which had not been raised at the trial.  The principles were explained by Bokhary PJ in Flywin Co Ltd v Strong Associates Ltd (2002) 5 HKCFAR 356 at [38]:

“ … What is involved is a general principle. Where a point is taken at the trial, the facts pertaining to it are open to full investigation at the evidence-taking stage of the litigation. That is as it should be. Therefore where a party has omitted to take a point at the trial and then seeks to raise that point on appeal, the position is as follows. He will be barred from doing so unless there is no reasonable possibility that the state of the evidence relevant to the point would have been materially more favourable to the other side if the point had been taken at the trial.”

41.  In Lehmanbrown Ltd v Union Trade Holdings Inc HCMP 977/2015, 17 June 2015, at [10], the concept of fairness in assessing whether a new point should be permitted to be taken was further explained:

“ Whilst the Court of Appeal obviously has power to entertain new points in an appeal, it is also clearly and firmly established that new points which are fact sensitive or otherwise affect the course of evidence or conduct of the case at the hearing below should not be allowed. Though this principle is usually applied in situations where the new points necessitated further evidence to be adduced, it is not confined to such scenarios. Very often, the raising of new point by one party may lead to the other party raising counter argument and the consideration of such counter argument may involve factual assessment in a different light from that undertaken by the court below. Sometimes, it may involve a different weighing of factors in the exercise of discretion. Alternatively, the other party may embark on a different course of forensic conduct if the new point were taken earlier. The appellate court, in considering whether the new point would be entertained, is entitled to take these into account in order to avoid unfairness to the other party.”

42.  Moreover, by reason of Order 59 Rule 3(1) of the Rules of the High Court, an appellant cannot rely on any grounds of appeal not specified in the notice of appeal without the leave of the Court. 

43.  This rule is there both for case management reason as well as fair conduct of an appeal.  In terms of case management, the notice of appeal sets out the basis on which an appeal is brought.  Hence, it is by reference to the grounds set out in the notice of appeal that the Court as well as the opposite parties would prepare and give directions to foster proper preparation of an appeal (including but not limiting to the consideration as to what documents should be included in the appeal bundles: see Gotland Enterprises Ltd v Kwok Chi Yau CACV 260/2014, 19 January 2016).  Whilst the notice of appeal should set out the grounds in a concise manner, they should be developed in skeleton submissions with the necessary cross-references to the relevant parts of the judgment and the relevant evidence. The skeleton submission should also present the legal and forensic arguments in support of the application of legal principles to the facts and evidence in the court below. 

44.  In addition, the length of an appeal can also be affected.  As the raising of a new ground may lead to more time being required for proper preparation or proper argument at the hearing of the appeal, the appeal may have to be adjourned and new dates to be fixed.  It would delay the final resolution of the matter.

45.  In terms of fair conduct of an appeal, it is also important for the grounds of appeal to be adequately set out so that the other party can properly assess the merits of the appeal.  A respondent may consider to what extent it is necessary for a respondent’s notice to be filed to canvass additional grounds to support the judgment.  He may also consider if other steps should be taken to protect his position in the appeal, e.g. applying for security for costs, making payment into court or other sanctioned offer or Calderbank offer.  The legal costs to be incurred in an appeal can also be an important factor for a respondent.  All these would have to be considered in light of the grounds set out in the notice of appeal.  Thus, allowing a new ground to be raised at a late stage could upset these assessments which may lead to injustice. 

46.  Thus, the Court will not lightly grant leave under Order 59 Rule 3(3) for a substantial new point to be raised if it has not been included in the notice of appeal.

47.  In the skeleton submissions of the 2^nd Plaintiff, the following new points were raised:

(a)     Challenging the finding by the Judge that the 2^nd Plaintiff was not a member of UMAH, see para 15 of his submissions of 10 July 2018;

(b)     Challenging the finding by the Judge that the 2012 Notice was invalid and the 2012 AGM not properly convened, see paras 16 to 24 of his submissions of 10 July 2018.

48.  Argument (a) relates to the conclusion of the Judge at [122] of the judgment.  That was a conclusion based on the findings that the membership of the plaintiffs (other than 4^th and 5^th Plaintiffs) had not been validly approved, see [12], [32] to [38], and the findings that there was no valid quorum for the 2010 AGM and the election of the Council at that meeting was invalid, [54] to [65].  The 2^nd Plaintiff only referred to an application form purportedly dated 23 July 1999 (at appeal bundle C436) and submitted that he had been a member.  We noted that there were two application forms for the 2^nd Plaintiff in the appeal bundle, one dated and one undated (the latter is at C437).  We also noted that the one dated 23 July 1999 manifestly bears a different signature from that of the undated form. 

49.  In any event, the 2^nd Plaintiff did not tell us how the form he now relied upon had been deployed at the trial and he did not show us the relevant parts of the transcript concerning the document to make good his case.  At the trial, counsel for the Plaintiffs did not refer to this document at all in his opening and closing submissions.  If this ground has validity, it should have been an obvious one.  Yet, surprisingly, the notice of appeal drafted by counsel did not advance any ground of appeal based on this document.  

50.  In the judgment, at [25] the Judge found the 2^nd Plaintiff to be a very unconvincing witness and he had denied access to relevant documents concerning membership, see [27].  The judge gave further reasons at [99] for disbelieving him.

51.  In the circumstances, we are not satisfied that all the relevant materials presented at the trial on the assessment of the application form at C436 are before us.  Neither can we be satisfied that the 2^nd Plaintiff has a valid ground of appeal against the factual findings of the Judge at [12] and [122].  We would not grant leave for this new ground to be relied upon.   

52.  We have cross-checked against the pleadings and the opening and closing submissions in the court below.  The argument under (b) based on the resignation of Mr Cassim Hussain and section 569 of the Companies Ordinance was not the case pleaded by the Plaintiffs nor the case run by their counsel at the trial.  In the closing submissions of Mr Koo for the Plaintiffs at the trial, counsel only contended that the notice was valid as the 2012 AGM was convened by the then council members of UMAH.  The new argument is problematic as the current Companies Ordinance did not come into operation until 2014.  Under the old Companies Ordinance (as the previous Cap 36), there was no such provision.  Section 113 of the old Companies Ordinance only provided for requisition by 10% shareholders with voting rights to the directors to convene a meeting.  There is no evidence of requisition for meeting.  In accordance with the established approach as discussed above, we refuse to grant leave for this argument to be run.

53.  Once that argument is out of the way, the remaining arguments on uncertainty of the notice (paragraphs 21 to 24 of the submissions of 10 July 2018) are of no avail to the Plaintiffs.  Even assuming (without deciding) that there is no uncertainty in the 2012 Notice, that document could not be effective because, as found by the Judge, it was not issued by someone who had the authority to convene a valid meeting. 

54.  Hence, we would not grant leave for (b) to be relied upon.     

55.  We turn to address Ground (4) in the Notice of Appeal (the remaining ground discussed in the submissions of 10 July 2018) which challenged the Judge’s finding that the 3^rd Plaintiff had ceased to be a member of UMAH when he left his employment in the late 1990s. His attempt to rejoin by the application form of 10 January 2010 was held by the Judge to be invalid because of the absence of approval by the Council. 

56.  The 2^nd Plaintiff referred to the evidence of the 3^rd Plaintiff in his witness statement that when he left his employment he did not cease his membership.  The application form of 10 January 2010 was merely submitted for change of address. 

57.  In this connection, the 2^nd Plaintiff referred to the case of 4^th Plaintiff which was similar to the situation of the 3^rd Plaintiff in that another application form had been submitted for change of address purpose. 

58.  We do not find these arguments valid.  As pointed out by Mr Marwah, the judge made this assessment at [61] of the judgment:

“ He admitted that he left his employment and UMAH in the late 1990s. This is consistent with the evidence off Rashida. To re-join as member he filed in an application form dated 10 January 2010…”

59.  This was a finding made after hearing oral evidence, including cross-examination of the witnesses.  Very often, evidence in a witness statement would change when oral evidence was given under cross-examination. There is no suggestion by the 2^nd Plaintiff that the Judge made any mistake in the assessment at [61] and he did not produce the relevant transcript to support his appeal. 

60.  We are not satisfied that the plaintiffs were able to pinpoint any palpable error on the part of the Judge to support the intervention of the findings of fact on the 3^rd Plaintiff’s membership.

61.  Coming to the other grounds of appeal which were only canvassed by the 2^nd Plaintiff in his written document submitted at the hearing of the appeal, we must first reiterate that those submissions should have been included in the skeleton submissions lodged in accordance with PD 4.1.  We do not see any good reason why the Plaintiffs should leave those submissions out when the skeleton submissions were prepared.  Further, as we have seen, the first version of the skeleton submissions was prepared by counsel who should have the notice of appeal in mind.  The omission to refer to some of the grounds in the skeleton submissions can reasonably be regarded as the abandonment of those grounds by the Plaintiffs.

62.  In any event, having considered the document put forward at the oral hearing, we find those grounds to be without merit.  We shall comment on them briefly.

63.  Like Ground (4), Grounds (1) to (3) are challenges to the findings of fact by the Judge.  In his submissions handed up at the hearing, the 2^nd Plaintiff did not elaborate on Ground (3).

64.  On Ground (1), he simply regurgitated his own case which the Judge did not find convincing after his oral testimony.  He also challenged the Judge’s acceptance of the evidence of another witness Imam Zahid.  He also said the Judge was mistaken in the references to box files.

65.  These are not valid grounds for disturbing the Judge’s findings of fact.  Assessment of credibility is primarily a matter for the trial judge.  None of the matters pinpointed by the 2^nd Plaintiff amount to palpable error on the part of the Judge.  The Judge referred to boxes of files being removed when the lock was changed.  This was referred to by Mr Zahid at para 34 of his witness statement of 14 July 2013.  There is no suggestion by the 2^nd Plaintiff that this witness had retracted from such evidence and transcript of his evidence was not placed before us.

66.  On Ground (2), the 2^nd Plaintiff only repeated his point on Section 569 of the Companies Ordinance which we have addressed above.  We further note that this is not the argument in Ground (2) in the notice of appeal. 

67.  We see no basis for this Court’s intervention on the findings referred to in Grounds (1) to (3). 

68.  Ground (5) relates to the Judge’s remark at [97] that the 2^nd Plaintiff’s chairmanship of the parent-teacher association of another school could not assist him in the present case.  The Judge said:

“ It was readily pointed out and he agreed that that was in fact not the primary school of UMAH. It was also put to the 2^nd plaintiff and he accepted that the public work he alluded to in his witness statement and his oral evidence were not related to UMAH.”

69.  With respect, we cannot see how that remark can give rise to Ground (5) which is in the following terms:

“ The Learned Recorder erred in logic to draw wrong inference on the information of parents teacher association that the 2^nd Plaintiff has no engagement in the 1^st Plaintiff.”

70.  Quite plainly, the Judge did not draw the inference as alleged.  Nothing said by the 2^nd Plaintiff in his document produced on appeal could take this point further.

71.  Ground (6) is equally unmeritorious.  It reads:

“ The Learned Recorder erred in logic and principle that the 2010 AGM had not been validly convened and any election of any member of the Council of Management at that meeting is improper and invalid without considering cautiously that what her lordship (sic) had is only a limited source of evidence by which the membership of UMAH is to be determined.”

72.  The Judge was quite aware of the paucity of evidence before her, see [20] of the judgment.  However, as the Judge said in that paragraph, her duty was to determine the contested issue on the limited evidence before the court.  In our system, it is up to the parties to put forward evidence at the trial.  It is not for the court to investigate or collect evidence on its own motion.  Ground (6) is obviously bad. 

73.  For Grounds (7) and (8), in our view the Judge gave adequate reasons for her findings that the 2^nd Plaintiff was never properly elected as council member.  In his submissions, the 2^nd Plaintiff alluded to material which he said he had given to his lawyers but which they failed to put forward at the trial.  This is a matter of complaint by him to the Law Society.  However, the Plaintiffs are bound by whatever omission their lawyers made at the trial and they did not obtain leave to adduce fresh evidence in this appeal. In the circumstances, this cannot constitute a ground of appeal.

74.  Ground (9) challenged the Judge’s finding that the Council continued to be valid up to date.  The 2^nd Plaintiff elaborated on it in his submissions by running an argument which had not been canvassed at all at the court below.  He referred to the requirement under the Companies Ordinance for registration of change of auditors.  He also advanced new allegation of forgeries which he claimed to have discovered since the trial. 

75.  For reasons we have explained at [40] and [41] above, we are not minded to entertain these facts-and-evidence sensitive fresh allegations on appeal.

76.  None of the grounds canvassed by the Plaintiffs before us has any merit.  We dismiss the appeal accordingly.  We also make a costs order nisi that the Plaintiffs (other than the 1^st Plaintiff which we have struck out as a party to this appeal) shall pay the Defendants’ costs of this appeal, such costs are to be taxed on indemnity basis if not agreed.