LAM YUN WAH DOMINIC AND ANOTHER v. CHAN KAN HEI AND ANOTHER

CACV 283/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO.283 OF 2000

(ON APPEAL FROM HCA 7545 OF 1998)

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J U D G M E N T

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Hon Woo JA:

The appeal

1. This is an appeal by the plaintiffs against the orders made by Stone J, namely,

(1) on 26 May 2000, that there be leave to the defendants to appeal against the decision of Registrar Chu, made on 15 April 1999 out of time and that the said order be set aside;

(2) on 28 June 2000, that there be leave to the defendants to amend the defence and counterclaim with leave to the plaintiffs to make consequential amendments to the reply and the defence to counterclaim, and directions as to the further conduct of the action; and

(3) also on 28 June 2000, orders for costs.

The facts giving rise to the appeal

2. The action arose from a transaction of sale and purchase of a property which fell through. The defendants are the owners of a flat at Cameo Court, Tai Po. They wished to sell the property. They entered into a sale and purchase agreement dated 28 October 1997 ("the agreement") with the plaintiffs for a sum of $2,500,000. The property was standing on three lots of land in the New Territories and in particular there were two lots of land, Lots Nos. 1593 RP and 1570 PR which gave rise to problems because the plaintiffs alleged that the defendants were unable to provide to the satisfaction of the plaintiffs' solicitors anything other than purely secondary evidence to prove good title.

3. Due to the dispute between the parties' solicitors over the proof of title, completion as prescribed in the agreement to be on or before 10 January 1998 did not take place. By a letter dated 12 January 1998, the defendants purported to rescind the agreement and to forfeit the deposits paid by the plaintiffs.

4. By a writ issued out of the High Court on 12 May 1998, the plaintiffs claimed for rescission of the agreement, repayment of the deposits totalling $250,000, repayment of agency fee in the sum of $25,000 and repayment of the stamp duty paid by the plaintiffs in the sum of $37,500. The defendants put in a defence and counterclaim, denying liability and counterclaiming forfeiture of the deposits and damages for breach of the agreement. They also took out third party proceedings against two solicitors ("the third party") who were acting for them in April 1991 in the purchase of the property. The basis of the third party claim is that if the plaintiffs' claim is correct in that the defendants failed to prove good title, the third party had failed properly and/or diligently to perform their duties towards to the defendants in approving and investigating the title of the property back in 1991, being in breach of an implied term of the client/solicitor retainer and in breach of a duty of care owed by the third party to the defendants.

5. On the application of the plaintiffs against the defendants pursuant to Order 14A and/or Order 86A of the Rules of High Court, Registrar Chu, as she then was, made on 15 April 1999 the following orders, inter alia, that there be a declaration that the agreement had been duly rescinded by the plaintiffs, final judgment for the plaintiffs in the sum of $250,000 by way of repayment of deposits, final judgment for the plaintiffs in the sum of $250,000 being the reimbursement of the agent's commission paid by the plaintiffs, and final judgement for the plaintiffs in the sum of $37,500 being reimbursement of stamp duty paid by the plaintiffs. The basis of the Registrar's decision was that secondary evidence of lost title deeds was not permissible in proving title under s. 13 of the Conveyancing and Property Ordinance, Cap.219. By virtue of the Registrar's order, the disputes between the plaintiffs and the defendants in the action had been fully determined. However, the third party proceedings have remained afoot.

6. In the third party proceedings, there was an exchange of witnesses' statements. Both of the witness statements filed by the third party on 23 February 2000 stated in identical terms the following:

"It was the standard practice and the standard of care of the profession at the material time when the Defendants purchased the Property to accept title upon the production of the secondary evidence of the grant of the Crown Lease and of the terms thereof in the absence of any certified copy of the complete Government Lease and in the absence of the subsequent court decisions strictly requiring the production of a certified copy of the complete Crown Lease. EWN [ie, the firm of solicitors acting for the defendants in the purchase] had handled the Defendants' purchase with due diligence and they had fully discharged their duty of care towards the Defendants. Such comments were and indeed what EWN had done, have since been vindicated by the Court of Appeal's decision in Wu Wing Kuen v. Leung Kwai Lin; Ip Foo Keung Michael and Anor. v. Chan Pak Kai [1999] 4 HKC 565, ruling that secondary evidence is admissible for proving the contents and due execution of lost title deeds and documents. In the Judgment of Godfrey J.A., he expressly stated that 'these six cases in so far as they decided secondary evidence of a document of title was, because of section 13(1) [of the Conveyancing and Property Ordinance], not admissible, were all wrongly decided and, in my judgment, we should now overrule them. They all proceeded on the unspoken assumption that s. 13(1) was calculated to make life harder for vendors, not easier. The opposite is the case.'"

7. On 19 May 2000, by way of a summons and a notice of appeal, the defendants sought almost identical relief in both documents, namely, that there be leave to the defendants to file the notice of appeal out of time, and there be leave to set aside the order of the Registrar made on 15 April 1999. When the matter came before Stone J on 26 May 2000, he enlarged the time for the defendants to appeal against the Registrar's order and set aside the Registrar's order. Now the plaintiffs appeal against the order of Stone J and the subsequent orders made by him on the 28 June 2000 giving directions to the parties before us for the further conduct of the action and costs.

The law

8. The principles involved are well established. It is not enough to show that there has been a development of the law which has rendered wrong the basis of the decision from which appeal out of time is sought; the intended appellant has to show "very special circumstances" or that it is just for the court to grant leave.

9. In Craig v Phillips (1877)7 Ch D 249, CA, the judgment intended to be appealed was mainly based on the interpretation of a particular statute. Fourteen months afterwards a judgment was pronounced by the Court of Appeal in another case in which a different construction was put upon the statute. Six months afterwards, being a year and eight months after the judgment intended to be appealed, the plaintiff sought leave to appeal despite the time limited for appeal was one year after judgment. While the Court of Appeal (before which leave was sought) was of the view that the later pronouncement of the Court might not have overruled the judgment, it refused leave. Jessel MR said:

"... more than a year after the decision in Craig v. Phillips the Court of Appeal had come to a different decision on a vexed point of law. In my opinion that is not sufficient ground, in the absence of very special circumstances, to deprive a man of a judgment which has been given in his favour. ... it does not appear to me that the rights of the Defendant ought to depend on the accident that this vexed point of law was differently decided after the expiration of the year allowed for appealing.

This is sufficient to dispose of this application. But I think it ought also to fail on the ground of the applicant's delay in making it. ... I do not think that the Plaintiff has shewn due diligence in coming to Court on the 15th of December, on account of a decision delivered on the 2nd of June; and of course any person who comes to ask the Court to relax the provisions of the rules in his favour, must shew great diligence, and not unnecessary delay, in doing so. I prefer, however, to rest my decision on the larger ground. The application must be refused with costs."

10. Baggallay LJ at 252 laid more stress on the delay. He said:

"...even if there had been such special circumstances in the present case, there has been so much delay in making the application that it ought not to have been granted."

Thesiger LJ agreed that the court ought not lightly to interfere with the time fixed for bringing appeals, and ought to require very special circumstances to be shown before exercising its judicial discretion to enlarge the time. He also concurred that even if the later decision of the Court of Appeal had overruled the basis of the judgment sought to be appealed, he did not think that it would have been a special circumstance sufficient to justify the grant of enlargement of time.

11. In Esdaile v. Payne (1888) 40 Ch D 520, the plaintiff sued various occupiers of houses in a London parish for an account and payment of sums payable in lieu of tithes. Two defendants pleaded the Tithe Prescription Act. Other defendants pleaded both that statute and the Statute of Limitation. On 16 July 1885, Kay J decided that the Statute of Limitation was no defence and gave judgment for the plaintiffs. Some of the defendants, but not the two defendants, appealed to the Court of Appeal which dismissed their appeal. They then appealed to the House of Lords which allowed the appeal on 10 August 1888, holding that there was a good defence under the Statute of Limitations. In December 1888, the two defendants applied for leave to appeal from Kay J's judgment of 16 July 1885. At first the Court of Appeal granted them leave. A third defendant who had not appealed to the House of Lords also sought leave to appeal later. It was then shown to the Court of Appeal that after the time for appealing had expired the tithes payable in respect of the two defendants' property had been sold and paid for, and a compromise as to the tithes of the parish had been carried out by Act of Parliament, which must be taken to have gone on the footing that the third defendant was liable to pay tithes. Cotton LJ at p 533 said :

"When the case was before the Court on the former occasion we did not know that the property had been dealt with after the judgment. It now appears that the Metropolitan Railway Company bought the tithes payable in respect of [the two defendants'] property after their time for appealing had expired; at a time, therefore, when the company had a right to conclude that there would be no appeal, and after [the two defendants] had stated their intention not to appeal. I think that after this dealing with the property it would be wrong to give these Defendants an extension of time for appealing. I do not think it necessary to decide whether, if [the two defendants] were allowed to appeal, and to establish that their property, the tithes on which the company bought, was free from tithe, the company would have a good case against the Plaintiffs. It is enough to say that the probability of a claim being made against them is a good reason for not granting [the two defendants] an indulgence by allowing them to appeal. An appeal by them, which, if they are allowed to bring it, must be successful, might give rise to future litigation between the Plaintiffs and the company, and leave to appeal ought not to be granted. If we had known the facts when the case was before us on the former occasion, I think that we should then have refused leave."

At p 534, Lindley LJ stated :

"In my opinion it is for the interest of the public that litigants should know as soon as possible when certainty has been reached, and that if people have deliberately elected to let time for appealing go by, the Court should not give them leave to appeal without special circumstances. ... The Plaintiffs may have covenanted for title, and, at all events, if [the two defendants] were successfully to appeal, the Plaintiffs might be involved in further litigation. Leave to appeal ought, therefore, not to be given."

Lopes LJ agreed. He said at 535:

"I am of the same opinion. I am ready to rest my conclusion on the same grounds as my learned Brothers, viz., that what has taken place since the decree would make it unjust to give leave to appeal. But I must add that, apart from these circumstances, the case appears to me not distinguishable from Craig v. Phillips, with the decision in which I entirely agree. Though a strict adherence to rules as to time may sometimes produce hardship, I think that a loyal adherence to them is best for the public and for litigants."

12. Again, in In re Wigfull & Sons' Trade Marks [1919] Ch 52 CA, Eve J said at p 60 that it seemed to him:

"...to be the well-settled rule, that the mere fact that a subsequent opinion of this Court shows that a judgment of an inferior Court was wrong gives no ground for enlarging time."

13. In In re Berkeley [1945] Ch 1 CA, at 4 Lord Green MR in the Court of Appeal had this to say :

"I find no difficulty in reconciling the statement that the different decision is not necessarily a ground for enlarging the time with the statement that the court can enlarge the time if it is just in the circumstances to do so. It seems to me that the principle to be extracted is that it is not sufficient for a party to come to the court and say that a subsequent decision of a superior court has determined that the principle of law on which his case was decided was wrong. The court will say to him: 'That bald statement is not enough. What are the facts? What is the nature of the judgment? Who are the parties affected? What, if anything, has been done under it?' and so forth. In other words, the whole of the circumstances must be looked at. If the court, in the light of those circumstances, considers it just to extend the time, then it will do so."

14. In Property and Reversionary Investment Corp Ltd v Templar [1977] 1 WLR 1223 is a case where special circumstances were shown. The landlords' action in the High Court for an increase of rent under the terms of a rent review clause in a 21-year lease was dismissed on 1 November 1974. On 23 March 1997, decisions of the House of Lords on the construction of rent review clauses threw doubt on whether the dismissal of the action was correct. The Court of Appeal followed In re Berkeley and held that it was not sufficient merely to show that a later decision of a superior court showed that the present case might have been wrongly decided. In granting leave to appeal out of time, Roskill LJ at 1225D-E said :

"The real point here, ... is whether it is right that these parties should have these continuing contractual relationship governed by a lease the terms of which have assumedly been erroneously construed in the court below.

... there are special circumstances which justify leave to appeal out of time."

Cumming-Bruce LJ agreed and added, at 1225H-1226A:

"Now that the House of Lords has decided that the proper construction of the contract is other than that decided by the judge, I agree that there are special circumstances here because it does not seem just that future obligations between the parties to the lease should depend upon the construction now shown to be wrong."

15. In Norwich & Peterborough Building Society v Steed [1991] 1 WLR 449, 450, McCowan LJ stated, with which the other members of the court, Lord Donaldson of Lymington MR and Legatt LJ, agreed :

"The matters which this court takes into account in deciding whether to grant an extension of time are first, the length of the delay; secondly, the reasons for the delay; thirdly, the chances of the appeal succeeding if the application is granted; and, fourthly the degree of prejudice to the respondent if the application is granted."

16. All the above authorities were considered in the Hong Kong Court of Appeal in Birkenhead Properties & Investments Ltd v Leung Yiu & Ors [1998] 1 HKLRD 527, which adopted the factors mentioned in Steed and re-iterated the decision in Templar that a change in the law could not be justification for delay. After stating that extensions of time would invariably defeat the finality of litigation and should not be granted in the absence of special circumstances, Le Pichon J, as she then was, said at 539A-B :

"To permit the validity of a judgment to be revisited because of judicial developments that occur long after the date for lodging an appeal has passed will only serve to perpetuate a continuing state of uncertainty and promote a lack of finality in litigation that cannot be in the public interest.

... Moreover, lack of prejudice is not a reason for granting an extension. See The Adhinguna Meranti [1988] 1 HKLR 410 at 411H applied in Chiu Sin Chung v Yu Yan Yan Angela [1993] 1 HKLR 225 at 228 where it was noted (at 229, line 25) that the additional period of uncertainty is prejudice in itself."

17. In his judgment, Stone J adopted the four factors referred to in Steed and Birkenhead Properties and went on to state that he had considered all the four factors.

Interference with a judge's discretion

18. Before I proceed to apply the law on enlargement cited above to the present case, I am reminded by Mr Keane SC on behalf the defendants of the principle that this Court does not reverse discretionary decisions of a judge save in restricted circumstances.

19. In Hadmor Productions Ltd v Hamilton [1983] 1 AC 191, at p 220B-F, Lord Diplock stated the rule as follows :

"... it is I think appropriate to remind your Lordships of the limited function of an appellate court in an appeal of this kind. An interlocutory injunction is a discretionary relief and the discretion whether or not to grant it is vested in the High Court judge by whom the application for it is heard. Upon the appeal from the judge's grant or refusal of an interlocutory injunction the function of an appellate court, whether it be the Court of Appeal or your Lordships' House, is not to exercise an independent discretion of its own. It must defer to the judge's exercise of his discretion and must not interfere with it merely upon the ground that the members of the appellate court would have exercised the discretion differently. The function of the appellate court is initially one of review only. It may set aside the judge's exercise of his discretion on the ground that it was based upon a misunderstanding of the law or of the evidence before him or upon an inference that particular facts existed or did not exist, which, although it was one that might legitimately have been drawn upon the evidence that was before the judge, can be demonstrated to be wrong by further evidence that has become available by the time of the appeal; or upon the ground that there has been a change of circumstances after the judge made his order that would have justified his acceding to an application to vary it. Since reasons given by judges for granting or refusing interlocutory injunctions may sometimes be sketchy, there may also be occasional cases where even though no erroneous assumption of law or fact can be identified the judge's decision to grant or refuse the injunction is so aberrant that it must be set aside upon the ground that no reasonable judge regardful of his duty to act judicially could have reached it. It is only if and after the appellate court has reached the conclusion that the judge's exercise of his discretion must be set aside for one or other of these reasons, that it becomes entitled to exercise an original discretion of its own."

20. In Lau Lap Che Richard v Wong Sut Fan Villette [1996] 1 HKC 165, at 167G-I Nazareth VP put the point succinctly as follows :

"In seeking to vary the exercise of the judge's discretion, for that is what the husband seeks to do, the husband has to cross a very high threshold. This was explained by Lord Diplock in Hadmor Productions v Hamilton [1991] 1 AC 220. A Court of Appeal does not interfere with a judge's discretion merely it might have taken a different way. It will interfere only if the judge's exercise of discretion is based upon a misunderstanding of the law or of the evidence before the court or if the judge's decision is plainly wrong."

21. In the revered case of Evans v Bartlam [1937] AC 473, at 487 Lord Wright stated the rule as follows :

"A judge's order fixing the date of trial or refusing to grant an adjournment is a typical exercise of purely discretionary powers, and would be interfered with by the Court of Appeal only in exceptional cases, yet it may be reviewed by the Court of Appeal. Thus in Maxwell v. Keun [1928] 1 K.B. 645, the Court of Appeal reversed the trial judge's order refusing to the plaintiff an adjournment. That was a pure matter of discretion on the facts. Atkin L.J. said, at p 653: 'I quite agree the Court of Appeal ought to be very slow indeed to interfere with the discretion of the learned judge on such a question as an adjournment of a trial, and it very seldom does so; but, on the other hand, if it appears that the result of the order made below is to defeat the rights of the parties altogether, and to do that which the Court of Appeal is satisfied would be an injustice to one or other of the parties, then the Court has power to review such an order, and it is, to my mind, its duty to do so.'"

22. With this limit of the powers of this Court over a judge's exercise of his discretion in mind, I will now examine the four factors in order to discern whether Stone J was mistaken in law or on fact in the exercise of his discretion to grant leave to the defendants to appeal out of time.

The chances of success of the defendants' appeal

23. I deal with this matter first as it can be disposed of quickly. Before Stone J and before us, Mr Ho has very fairly conceded that if Stone J's decision to enlarge time for the defendants' appeal is correct, the defendants would have an arguable case that the documents they offered as "secondary evidence" may be admissible to show that they had good title to the property, and hence they are entitled to defend unconditionally, and the Registrar's order would have been set aside properly. Indeed Stone J proceeded to allow the defendants' appeal on 26 May 2000 after granting them leave to appeal. He set aside the Registrar's order of 15 April 1999. Notwithstanding, Mr Ho submits that Stone J had wrongly exercised his discretion in favour of enlarging time.

The Judge's reasons for enlarging time

24. After stating that he had considered the four factors above referred to, the Judge concluded at p 7H-M of his judgment as follows:

"This is a most unusual case. I have been particularly concerned about the public policy aspect, and the well-known desire of the courts in administer (sic) justice in order to achieve finality between litigants. However, in the very particular circumstances of this case, after putting all the facts into the discretionary 'mix' and after taking into account the excellent submissions on each side, I have decided to accede to the application, and to permit this appeal against the judgment of Registrar Chu to proceed out of time."

25. It is not very clear what the Judge meant to be the "very particular circumstances" of the case that he later described in his judgment (p 7Q) as "very unusual circumstances". From the judgment, only the following matters were mentioned and they therefore appeared to at least play a significant part in his considering the case being very unusual :

(a) pp 5R-6A: Though the Registrar's decision "appeared to be in line with established authority, it was now clear that there was considerable hope or, at its lowest, some reasonable degree of hope, not only in terms of the substantive action against the plaintiffs, given the decision of the Court of Appeal" in Wu Wing Kuen, "but also, on the basis of this appellate judgment, it was evident that the Registrar's decision, through no fault of her own, plainly had been rendered incorrect." The Judge also relied on Mr Ho's concession that "if the defendants are let back in, Registrar Chu's judgment cannot stand and the matter must go to trial" (p 7B-D).

(b) p 5I-O: The situation created by the order of the Registrar in this action and the decision in Wu Wing Kuen "placed the defendants in a considerable dilemma. In colloquial terms, the defendants found themselves between a rock and a hard place. They had lost the head action against the plaintiffs in a summary fashion on the basis of established case law, which was now at a fell swoop overruled by the Court of Appeal. So that if this was correct, they had lost the head action on one basis, and now stood to lose the third party proceedings on quite the contrary basis, namely, the overruling of the cases which had been the foundation of the plaintiffs' success in the head action."

26. As I said before, based on all the above authorities: Craig, Esdaile, Wigfull, Berkeley and Templar, a change of law, even one overruling the decision sought to be appealed, is not sufficient by itself for enlargement of time to appeal to be granted. The rationale of this principle is so well demonstrated by the question posed by the Vice-President during the hearing before us. Would the losing parties in all the six cases overruled by Wu Wing Kuen be allowed to have time enlarged to bring appeals?

27. Stone J obviously considered the on-going third party proceedings as constituting "very unusual circumstances" for his exercise of discretion. On the other hand, however, he did not seem to have considered the prejudice suffered by the plaintiffs, as none of the circumstances relating to the plaintiffs was mentioned in the judgment. As the enlargement was granted and the Registrar's order giving judgment to the plaintiffs was set aside, the plaintiffs have been having to fight the action all over again and be subjected to the defendants' counterclaim seeking to forfeit the deposits that they (the plaintiffs) had paid as well as damages for breach of the agreement. The property that has been retained by the defendants has gone down in price, from $2,500,000 (the purchase price under the agreement) to $1,900,000 at the time of the Registrar's order, and to $1,660,000 in May 2000 when the Judge heard the defendants' application for enlargement of time. Moreover, the plaintiffs had bought an alternative flat in about February 1998 as their residence since the agreement in this action fell through. All these may be said to be the risks of litigation that the plaintiffs took when the agreement was terminated, and may not have featured very much in the consideration of the Judge who was very mindful of the disadvantage to which he described the defendants were being subjected by reason of the Wu Wing Kuen decision, as between them and the plaintiffs on the one hand and as between them and the third party on the other.

While the Judge may be correct in stating that the defendants would be faced with the dilemma, in all fairness to the plaintiffs he should have but had not taken into consideration that the plaintiffs might be compelled to take action against their solicitors who handled the agreement for them and who rejected the defendants' proof of title to the property. The defendants and the plaintiffs alike as laymen would have to, and plainly did, rely on their respective solicitors in relation to the vexed questions concerning the title to the property. The plaintiffs' situation if enlargement of time is allowed would at least be the same as what the defendants faced if enlargement was refused: they would have to sue their solicitors to cover the damages that they had suffered and those they might be adjudged to pay to the defendants. Indeed, I consider that the plaintiffs' predicament would be worse than the defendants' if and when they sue their solicitors, because obvious from the six cases that disallowed secondary evidence to prove title, which were all overruled by Wu Wing Kuen, the plaintiffs' solicitors would raise the defence that they were performing their duties towards the plaintiffs in accordance with the law as established by the six cases existing at the time of the proof of title, namely, in late 1997 and early 1998, when Wu Wing Kuen had not yet come into being. On the other hand, the third party, the defendants' solicitors handling the defendants' purchase in April 1981, would have to prove their alleged standard professional practice that secondary evidence was allowed in April 1991 in the face of at least the first in time of those cases, Chan Kam Sing & Anr v Lam Ping Ping Grace [1990] 1 HKC 373 that had already been decided on 8 March 1990. I therefore consider that the Judge was wrong in the exercise of his discretion in enlarging time because he failed to take into account this very important aspect of the prejudice to the plaintiffs, who were not at fault, as compared with the disadvantage suffered by the defendants.

Delay and reason for the delay

28. The Registrar's order was made on 15 April 1999. According to Order 58, rule 1(3), the defendants had to appeal within 5 days thereafter, although the time limit has been amended from 5 to 14 days with effect from 2 May 2000 by LN 129 of 2000. The deadline to appeal was therefore 20 April 1999. Wu Wing Kuen was decided on 23 November 1999, seven months after the deadline. During these seven months, it cannot be disputed that there was no action or step taken by the defendants to seek to appeal the Registrar's order. That might well have been because there was no reason to do so, in view of the authorities that were well established before Wu Wing Kuen intervened. However, there was no step taken even shortly after that decision. Indeed, even after Wu Wing Kuen was made known to the defendants by the third party in their witness statements on 23 February 2000, there had been inaction on the part of the defendants up till the issue of the summons and Notice of Appeal both on 19 May 2000, a lapse of about three months out of the total delay since the deadline of 13 months.

29. The Judge's comment on this aspect is at p 6D-G of his judgment, as follows :

"Now I do not know how long this matter was brooded on, but I am prepared to accept at face value that these matters had not come to the attention of the defendants until they had sight of the relevant witness statement of 23 February 2000. Thereafter there appears to have been a three-month hiatus until the formal application to enlarge time for appealing against the judgment of Registrar Chu was filed on 19 May."

30. However, due to the dilemma that he described the defendants would be facing, on which he apparently placed great reliance, the Judge did not expressly evaluate this significant aspect of the case. There was no evidence before the Judge to explain the delay. Counsel for the defendants before us have not been able to tender any explanation either. I think I am right to assume that there was indeed no acceptable explanation or reasonable excuse at all. The defendants were seeking an indulgence from the court and it is trite that delay, save perhaps very minimal delay, will have to be explained away, or else the court will not allow its rules to be disregarded (see the judgment in Craig cited above, Ratnam v Cumarasamy [1965] 1 WLR 8 and Rivici v Prentice Hall Inc [1969] 1 WLR 157, 160C-D, per Lord Denning MR).

Conclusion

31. I am of the view therefore that the Judge had erred in the exercise of his discretion to enlarge time. He failed to take into account two very relevant matters in his consideration, namely, the prejudice that an enlargement would cause the plaintiffs and the absence of any explanation for the defendants' delay in bringing appeal proceedings, even after they had knowledge of the decision in Wu Wing Kuen. In all the circumstances of this case, I do not think that it is just to allow the defendants to appeal so long after the Registrar had made her order. It was far too late that for 13 months since the deadline for appeal and three months since they had known the decision in Wu Wing Kuen, they had allowed the plaintiffs to enjoy the fruits of the judgment. It would not be just to the plaintiffs or in the public interest to allow the defendants to disturb that finality and certainty when they were clearly guilty of inexcusable dilatoriness. I would accordingly allow the appeal, set aside the orders of the Judge made on respectively 26 May and 28 June 2000 and restore the order of the Registrar.

32. Costs

Costs should follow the event. I would make an order nisi pursuant to Order 42, rule 5B(6) of the RHC that the costs of this appeal and the costs below before Stone J on those two days be costs to the plaintiffs, to be taxed if not agreed.

Hon Mayo VP:

33. This appeal has caused me some concern. Needless to say the court is loathe to set aside any judgment where a judge has exercised a judicial discretion. This is for the reasons referred to by Woo JA in his judgment.

34. However, after giving this matter the most careful consideration, I consider that this is a case where it is necessary to make such an order.

35. It is clear that there must be "very special circumstances" to justify "the validity of a judgment to be revisited on account of judicial developments which occur long after the date for lodging an appeal has passed" : Le Pichon J (as she then was) in the Hong Kong Court of Appeal case of Birkenhead Properties & Investments Ltd v. Leung Yiu & Others [1998] 1 HKLRD 527 at p.539.

36. On the material which was before Stone J can it be said that such circumstances existed? I do not think so. The type of dilemma he refers to in his judgment is typical of the sort of situation which arises when there is a change in the law.

37. The amount of time which had elapsed from the date when summary judgment was entered to the hearing before Stone J was of the order of 13 months. While I accept that no blame can attach to the defendants for a large part of the delay it is nonetheless true to state that it is highly unsatisfactory that a litigant can lose the benefit of a judgment after such a lapse of time. Why is this case different from the six cases referred to by Godfrey JA (as he then was) in his judgment in Wu King-kuen v. Leung Kwai-lin Cindy; Ip Foo-keung Michael & Anor. v. Chan Pak-kai [1999] 4 HKC 565? In other words, where is the line to be drawn?

38. With respect the third party proceedings are something of a red herring. The involvement of the solicitors is a collateral issue. The real issue between the parties is who should suffer through no fault of their own in this situation.

39. As has been outlined by Woo JA in his judgment it would appear that Stone J only considered the prejudice suffered by the defendants and did not sufficiently weigh and consider the plaintiffs' difficulties which may indeed exceed those of the defendants.

40. There is also the question of the delay which occurred after the defendants became aware of the change in the law brought about by the Court of Appeal in Wu King-kuen.

41. It appears that no explanation was provided for this although the delay was approximately three months. As I see it in the absence of any explanation there was nothing for the judge's discretion to be based upon in this connection.

42. For these reasons, I would respectfully agree with Woo JA that this appeal should be allowed and I so order that it is. I also agree with the costs order proposed by him.