BANGY CO. LTD. v. E. WAH REALTY LIMITED AND OTHERS

IN THE COURT OF APPEAL

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JUDGMENT

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Sir Alan Huggins, V.-P.:

1. This is an appeal against the refusal of leave to amend, application having been made after the beginning of the trial. The judge considered the matter very fully and he decided that the balance of justice required that leave be refused.

2. It should be said at the outset that it is not suggested that the Defendant was in any way at fault in making application at such a late hour. The application was the result of specific discovery made only last Friday. What is said in effect is that the judge did not successfully weigh the justice of the matter between the parties.

3. The case is of great complexity but it is not necessary to go into details. The difficulty arises from the interconnection between the various companies and the various individuals who are involved in the transactions. The pleadings, as they stand, raise an issue which can be stated thus: whether an alleged agreement said to have been made on 13th January 1983 was in fact made, so that the Defendants are not liable at all upon a guarantee. The issue which it is sought to raise now is whether a sale of the land was collusive, so that the Defendants (the guarantors) have been prejudiced by a sale at an under value. The proposed amendment is a lengthy one. I propose to read only two paragraphs. Para. 27 is in this form:

"Further or in the alternative the Defendants will say that if contrary to their contentions aforesaid, they are held liable to the Plaintiff under the guarantee any such indebtedness is extinguished or reduced by way of the matters hereinafter set out. "

And then in para. 35 the Defendants repeat the matters aforesaid and counterclaim - and there are various alternative prayers in the counterclaim.

4. It has not been argued that the first issue cannot be concluded alone, on the ground that the second which is now sought to be pleaded in para. 27 is a set-off: the argument ramains one as to the balance of convenience and justice. Nevertheless it was submitted that the court cannot reach a proper determination of the amount, if any, for which judgment should be entered under the guarantee without hearing both issues. It is said that the overriding consideration should be that the court should have before it all the material necessary to reach a proper conclusion on that. If we could say that the matter now raised was clearly not one of set-off at all, but only one of counterclaim, I would not feel it possible to say that the judge came to a wrong conclusion, although it may well be that had I been sitting as the trial judge I might have come to a different conclusion but I do think that the proposed amendment is in such a form that it ought to have been allowed even though, as is now conceded, an adjournment will be inevitable. As it seems to me there is something more than a common question of credibility which requires that both issues should be heard together.

5. I would therefore allow this appeal.

Cons, J.A.:

6. I agree with all that my Lord has said and I too would allow the appeal: `

Fuad, J.A.:

7. I agree with my Lord that the appeal should be allowed and have a few comments of my own. I think that the ordinary principle should be applied that an amendment should be permitted if the other party suffers no prejudice that cannot be compensated for by an appropriate order to costs. Here there is no suggestion that the application for leave was made male fide and ample explanation has been given why the application came so late in the day. It seems to me that ordinarily the court should encourage the determination of all the issues that can conveniently be tried together between the parties, by the same tribunal and at the same time, if only because a multiplicity of proceedings is thereby avoided and the danger of conflicting decisions on facts depending in part on the credibility of witnesses is obviated.

8. While it is true that the two issues could be separately tried, and the second would not arise unless the first is determined against the Defendants, in my judgment they are closely linked in that ultimately it may well be necessary for the court to determine what is the amount that the Defendant should pay over to the Plaintiffs and we are told that the principal witnesses for both issues will be the same.

9. I would like to say something about costs. It was suggested that the Defendants might not be good for any order for costs that might be made against them. With respect, I do not think this is consideration which should influence our decision and I would comment that in the somewhat unusual circumstances of this case, without in any way trying to influence any decision the judge might reach on the proper order, it would not necessarily follow that the usual order as to costs on granting leave to amend would be made: that the Defendants would be ordered to pay not only the cost of the amendment but also all the costs thrown away. It may be that the appropriate order would be that costs should be in the cause or it may be that the judge will feel it right to reserve the question of costs until the end of the trial. But I do not think, as I have said, that the matter of cost is relevant at this stage.

Sir Alan Huggins, V. -P.:

10. There will be leave to file and serve the re-amended defence and counterclaim.

13th December 1984