A.G.W. HOLDINGS LIHITED v. FENIX (PART II) LTD.

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J U D G M E N T

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Fuad, V.-P.:

1. This is an interlocutory appeal by the defendant against the order of Liu, J. dated 17th October 1991 allowing the plaintiff's statement of claim to be re-re-amended during, the closing speeches of the trial of the action.

2. The history of the litigation before the amendment of which complaint is made is as follows. The plaintiff, A.G.W. Holdings Ltd. ("the estate agents") issued a writ against the defendant, Fenix (Part 11) Ltd. ("Fenix") on 9th November 1989. By the statement of. claim with which the writ was indorsed, the estate agents pleaded that in or about October 1988 (the month was amended to June by leave on 23rd March 1990) they had been retained and employed by Fenix for the purpose of "introducing" suitable industrial premises to them. They had "introduced" certain property (8 factories on the 10th floor, and 2 car parking spaces in the basement, of the Elite Industrial Centre) in Cheung Sha Wan Road, Kowloon "for the purchase price of $14,752,250". They averred that it was an express term of the agreement (alternatively, a term implied by a course of dealing between the parties, particulars of which were given) that Fenix would pay them a commission of 1 per cent on the total purchase price of any property so introduced, upon Fenix signing the sale and purchase agreement involving such a property.

3. The statement of claim goes on to state that after introducing the property to Fenix, the estate agents had negotiated with the vendor of the property on behalf of Fenix as to the terms of purchase but that on a date unknown, Fenix had approached the vendor and had executed a sale and purchase agreement relating to the property for $14,752,250. They therefore claimed 1 per cent of the purchase price (i.e. $147,522.50) or damages in the alternative.

4. On 28th December 1989 Fenix filed a defence resisting the claim, and a counterclaim. The reply and defence to the counterclaim was filed on 21st January 1990. Further and better particulars of the statement of claim, and of the reply and defence to the counterclaim, were served respectively on 25th January and 6th April 1990.

5. The trial of the action, expected to last 2 days, began on 10th October 1991. Before evidence was called, the estate agents were given leave to re-amend their statement of claim to plead that the June 1988 agreement sued upon was an oral one and to add a new paragraph 7A averring a breach of that agreement by failing to pay the commission due, a plea which had up to them been inadvertently omitted.

6. Fenix then abandoned their counterclaim and the estate agents' only witness began to give evidence. On the following day they closed their case and the first witness for Fenix started her evidence. She continued on the next day (12th October) and Fenix's second and final witness was called. The hearing of evidence concludes on the following day, 14th October. There was then an adjournment to 17th October for counsel's submissions.

7. On that day when the hearing resumed, written submissions were handed in and there followed a discussion (it seems prompted by an observation made by the judge) about the possibility of an application by the estate agents for leave to amend the statement of claim once again. The matter was adjourned until the afternoon when counsel for the estate agents presented the proposed amendments. Counsel for Fenix Objected strongly, pointing out that he had run his case on the basis that the estate agents were relying on a June 1988 agreement - now a totally different case was being out forward based on a September 1989 agreement. He cited and relied upon Ketteman v. Hansel Properties Ltd. [1987] AC 189 (H.L.)

8. The learned judge decided to allow the statement of claim to be re-re-amended and the careful record which he kept includes the following notes:

''Court: An attempt seemed to have been made to advance a case on the alleged September 1989 Agreement. That seemed to have been the only alleged relevant agreement put forward at the trial

This is a somewhat extraordinary case saddled with oversight, imprecision and a wholly different pleaded case. I do not propose to set out in any great detail the reasons why my discretion is exercised in the way I do.

In all the circumstances, justice dictates that the seemingly sole dispute on fact must be resolved, particularly after all these efforts. The plaintiff, if succeeded on the re-re-amendments alone, would have to pay costs up-to-date.

I would only allow these amendments on those terns."

The hearing was then adjourned.

9. Pursuant to the leave granted by the judge, by the new paragraphs 5A and 5B the estate agents pleaded, further and in the alternative, that the parties had entered into an oral agreement "in or about early September 1989" whereby Fenix had agreed to engage them as their agents for the negotiation of the terms of purchase of the property (details regarding the introduction to Fenix and negotiations with the vendor of the property were given in paragraph 5C). They averred (as they had clone in relation to the June 1988 agreement) that it was an express term, or a term implied by the previous dealing between the parties, that Fenix would pay commission of 1 per cent "on the total purchase price of the property upon the successful purchase of the property". A new plea "in the further alternative" was that they were entitled to a reasonable commission for the successful negotiation for the Purchase price of the property ... which ... is 1 per cent of the purchase price". A new paragraph 7C pleaded in the alternative a breach of the September 1989 agreement.

10. Fenix filed their appeal on 7th November 1991. They complain that the judge wrongly exercised his discretion in granting leave to amend the statement of claim during the final submissions to plead an entirely new case. They say that the prejudice they would suffer could not be compensated by costs. They add that the judge should not have made a decision without given their counsel time to take instructions, thus depriving them of the opportunity to make full submissions as to how they would be prejudiced by the proposed amendments.

11. By their Respondent's Notice, Fenix said that the judge had exercised his discretion wrongly in imposing the following terms when granting leave to amend: "should the plaintiff succeed on re-re-amendments alone, costs up to the date hereof be costs to the defendant in any event."

12. Each case will depend on all the surrounding circumstances, but there can be no doubt that it is unusual, although not unknown, for leave to amend a pleading, to be given when all the evidence is in and counsel are addressing the court. But the judge certainly had a discretion even at that extremely late stage, which he had to exercise judicially, to allow the amendments if he thought that no injustice or prejudice would be occasioned to Fenix. The judge's discretion to grant leave cannot be examined without bearing in mind that the judge granted an adjournment of not less than 10 days so that Fenix could decide how to conduct their case in the light of the amended statement of claim.

13. Speaking for myself, I am not prepared to interfere with the judge's discretion. Having considered Mr. "Wong's helpful submissions and the affirmation of Hr. Lee Yuk Lun, Fenix's Managing Director, which we permitted to be read in evidence, I am not persuaded that Fenix will suffer any prejudice which could not be compensated for by the adjournment and an appropriate order for costs. on reading the evidence so meticulously recorded by the judge, the pleadings supplemented by further and better particulars, and the documents before us, although the estate agents were allowed, by the late amendment, to plead, in the alternative, reliance on a specific oral agreement in September 1989, whereas until the amendment, a General oral retainer given in June 1988 was relied upon, this alternative plea did not in my view introduce a complete change in the nature of the claim or alter the essential character of the action.

14. As regards the Respondent's Notice, as Miss Sze Kin (who did not appear in the court below) fairly conceded, the estate agents could not be allowed to complain about the terms as to costs imposed by the learned judge as a condition for granting leave to amend, because the record shows that the indulgence offered by the judge (to be permitted to amend the statement of claim at that stage of the trial) was accepted on those terms by counsel then representing them (see the Supreme Court Practice Vol. 1 p.369, paragraph 20/5-8/12).

15. Miss Sze Kin has rightly abandoned the Respondent's Notice, however I permit myself to observe that in my opinion, unless a judge feels justified, in an appropriate case, in allowing an amendment only on terms that the applicant pays all costs up to date, it is better to reserve the question of such an order for costs until the end of the trial so that difficulties do not arise in reflecting an order of the kind made here in the light of the further conduct of the trial.and the conclusions reached in the judgment. Instead of the contingent order made by the judge, with great respect to him, I think he should have ordered the estate agents to pay, not only any costs of the amendment, but also the costs thrown away by reason of the adjournment.

16. I would therefore dismiss the appeal.

Penlington, J.A.:

17. I also would dismiss the appeal. One has only to look at the size of this file and the tire that has already been taken in court, to regret that in view of the amount claimed it was necessary at this stage to have the statement of claim once again amended and the matter sent back. I am satisfied that the trial judge was within his discretion in making the order he did and that we should not interfere with it.

Nazareth, J.A.:

18. I agree that the appeal should be dismissed.