ELIZABETH BARKER GUBERSKY v. HARRIS BOOK CO LTD

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JUDGMENT

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Fuad, J. A.:

1. The case from which this appeal arises has met with a number of vicissitudes. On 8 September 1983 the Appellant filed her claim in the Labour Tribunal for three months' wages in lieu of notice and for leave pay. On 8 November the Tribunal declined jurisdiction under section 10 of the Labour Tribunal Ordinance and transferred the claim to the High Court.

2. It appears from the papers before us that the parties were informed about the transfer on 16 February 1984. If this was the first intimation of the decision of the Labour Tribunal to decline jurisdiction, such a delay was quite unwarranted. On 10 July 1984 the Appellant filed her Statement of Claim in the High Court. On 26 July 1984 she obtained judgment in default of defence, for the full amount of her claim for some $50,000. Later on, the default judgment was set aside and, on an unknown date, as a result of the increase in the monetary jurisdiction of the District Court, the action was transferred for trial to that Court.

3. On 8 July 1985 the hearing began in the District Court before His Honour Judge Eric Li. Evidence was heard on 8 and 9 July and the Plaintiff's case was concluded on 10 July. On 12 July Mr. Warren Chan, who appeared for the Defendant company, submitted that the Defendant had no case to answer and said that if the Defendant were to be put to election, he would call no evidence. The Judge did not formally insist upon election but I take it that for all practical purposes the Defendant company did elect to call no evidence. After two further days' hearing, the Judge upheld the submission made by Mr. Chan and refused Mr. Mitchell's application for leave to amend the Statement of Claim, with amendments which were properly formulated and ready.

4. The grounds upon which Mr. Chan submitted there was no case to answer were, briefly, that the Plaintiff was relying on a contract made before the incorporation of the Defendant company, and which therefore could not be sued upon, and also that the consideration for a later agreement that was pleaded had not been spelt out in the pleadings.

5. The learned Judge ordered (and I use his words) "The Plaintiff's action herein be discontinued.". In what the Judge called his "ex tempore rulings", he noted that the action would be "discontinued albeit not dismissed on the merits, without prejudice to the Plaintiff's rights to institute fresh proceedings.". Adding: "I use the word 'discontinued' instead of 'dismissed' as an analogy to 'non-suit' which is no longer used in these modern days.".

6. Here the Judge clearly erred. If he had decided that the Defendant had no case to answer he should have entered judgment for the Defendant unless he allowed the amendments sought. It is, of course, only a Plaintiff (or Defendant in respect of his counterclaim) who can be given leave to discontinue an action in appropriate circumstances. The order he made was wholly misconceived.

7. The learned Judge, for some reason, considered that his hands were tied and that he had no option but to make the order that he did. He directed himself on the considerations a Court should bear in mind when an application for leave to amend pleadings is made, but felt that the Defendant would be prejudiced if leave were granted, because he would have to face "an entirely new case" and would have "to go through the ordeal of an unnecessarily prolonged hearing incurring time and costs for further interlocutory matters, consequential amendments to pleadings an adjournment be it short or long, reopening of the Plaintiff's case for further cross-examination let alone the defence case which I anticipate will take at least another week if not more for actual hearing and thus depriving the benefit of the end of the day". He also thought that the evidence from which the Court would have to draw inferences was far from clear cut.

8. It must be accepted as a matter of well-established law that a Plaintiff cannot rely on a contract which was entered into before the company he is suing was incorporated. Sufficient foundation must be laid in the pleadings to raise the inference that the company, when it became incorporated, made a new contract in similar terms. The principal amend-ments proposed by the Plaintiff sought to rectify this defect.

9. The other matter was that it was pleaded originally that on 17 May 1983 there had been an oral agreement, made between the Plaintiff and a lady on behalf of the Defendant company, that the Plaintiff would leave their employment on 21 May, and would be paid the sum of $58,250 which was the amount she claimed. I am not at all sure that in these circumstances it was necessary to plead consideration in such terms, but an attempt was made to meet this alleged defect in an amendment proposed by the Plaintiff.

10. It has been held, for a very long time now, that the object of Court is to decide the rights of the parties, and not to punish them for any mistakes they may have made in the conduct of their cases. The guiding principle, it has been held often enough, of cardinal importance is, generally speaking, that all amendments ought to be allowed for the purpose of determining the real question in controversy between the parties to any proceedings, provided leave can be given without injustice to the other side. With the utmost respect to the Judge, I cannot understand how he concluded that the Defendant would be prejudiced in this case, prejudice that could not be met by an appropriate order for costs.

11. The alleged defects in the pleadings were highly technical, and I very much doubt if an adjournment (other that a very short one) would have been necessary if the amendments had been allowed. The case of the Plaintiff was perfectly plain, whether she could prove it or not. She had been working for the Harris Book Company. Later the Harris Book Company Limited was incorporated and the terms of her service under the Harris Book Company were exactly the same as the terms of her service with the Harris Book Company Limited and the real issue was what her entitlements were at the tune she stopped working.

12. This Court will be slow to interfere with the discretion of a Judge who refuses leave to amend pleadings, but will not hesitate to do so when it is satisfied that the Judge was wrong; and I say, without the slightest hesitation, that he erred in this particular instance. I think the Judge should have allowed the case to be heard out on its merits.

13. Mr. Mitchell has drafted further amendments which are annexed to his grounds of appeal, and he suggested that if we allow this appeal, we should permit these amendments to go forward to save more particulars being sought, and further interlocutory applications. I do not think that this would be right, and I prefer that the matter be dealt with in this way: I propose that the appeal should be allowed and the case be remitted to the District Court for re-trial there before another District Judge, on the amended Statement of Claim which should have been allowed in at the conclusion of the Plaintiff's case. The Defendant, of course, should be given leave, and time, to file an amended defence. If any particulars are legitimately needed of averments in the amended Statement of Claim, these will have to be given if sought.

14. The Plaintiff would be forgiven if she thought that there was something rather strange about our legal procedure, when it took so long to bring her claim before the Court, followed by her claim being temporarily dismissed (if I may put it that way ) after 7 full days' hearing; without the matter being. determined on its merits.

Sir Alan Huggins, V.-P.

15. I agree with the order which Fuad, J. A. has proposed. I also agree that it is unfortunate that the case has taken the course which it has. It is to me horrifying that what is a comparatively simple case should have taken all this time and involved so much expense. The only real difficulty arises from the facts that the Harris Book Shop, in which the Plaintiff has worked since 1974, has changed hands on at least two occasions and that the present owner is part of a group of companies several of which have been involved in the negotiations. Therefore there has been a muddle as to who was in fact the employer of the Plaintiff. She has alleged, and Counsel for the Plaintiff still maintains, that Harris Book Company Limited is the employer. It was the Harris Book Company Limited which was made Defendant in the proceedings in the Labour Tribunal and yet we find that another company purports to put in a defence to that claim. There has been muddle time and time again. I think in the end it will be quite a simple matter to sort out who was in fact the employer. As I say, the Plaintiff has directed her fire against the Harris Book Company Limited. She may or may not be right as to that, but I think it was wrong that the Judge should make an order discontinuing the proceedings and did so largely because he took a different view as to who probably was the employer.

16. The only point upon which I have some reservation in the judgment which has been delivered is as to the course which the proceedings took before the Judge when there was a submission of no case to answer. I see no evidence whatsoever that the Defendant did make an election or was called upon to make an election: counsel merely stated what he would do if he were called upon to make an election. Therefore it is clear to me that there can have been no findings and that it was not open to the Judge to make any finding of any kind on the evidence which had been led before him, evidence which was not yet complete.

17. I agree that this was a case where there was no new cause of action indicated in the amended pleading submitted to the Judge. The first issue had always been whether there had been a breach of a contract of employment between the Plaintiff and the Defendant. When that contract was made and how it was made were, no doubt, relevant matters, but the amendments which were suggested did not alter the cause of action. Similarly, I am satisfied that there had been a pleading of the consideration for the promise to pay a sum of $58,250 in paragraph 9 of the original Statement of Claim.

18. For these reasons I agree that the appeal should be allowed.

Cons, J. A.:

19. I agree generally with what has been said by my Lords and with the orders that have been proposed. I would only add that in my view the Judge was extremely unwise to allow Counsel to proceed with his application that there was no case to answer without first putting him to elect whether or not he was going to call evidence.