TANG KAM WAH AND OTHERS v. TANG MING YAT AND ANOTHER

CACV522/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO.522 OF 2000

(On Appeal from HCA No.10141 of 1998)

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J U D G M E N T

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Stock JA (giving the judgment of the Court) :

The Claim

1. The Statement of Claim was issued in June 1998. It was amended in September that year. As amended, the case pleaded is as follows. The plaintiffs are managers of two 'tsos', the first 'tso', Tang Mung Lau Tso, holds land under lease from the Government. This land has been referred to as "Property 1". There are six managers of the Tso; three who look after the interests of one of the two fongs of descendants or members who constitute the Tso; three who look after the interests of the other fong. These managers are the 1st plaintiffs. The 1st defendant is a member of this Tso. So, it is said that through the Tso, the 1st defendant and the 1st plaintiffs own Property 1.

2. The second tso is called Tang Tsz Hau Tso. There are five managers, two who look after the interests of the members of one of the constituent fongs; and three who look after the interests of the members of the other fong. These managers are the 2nd Plaintiffs. Property 2 is held from the Government in the name of this Tso; and the 1st defendant is a member of this Tso also.

3. The 1st and 2nd plaintiffs are managers appointed and registered under section 15 of the New Territories Ordinance, by virtue of which section the managers have, in circumstances there prescribed, one of which is the consent of the Secretary for Home Affairs, power to dispose of the properties as if sole owners.

4. The allegation in the Statement of Claim is that on 1 December 1997, the 1st defendant, without the consent of all of the managers, broke the padlock to the land constituted by the properties, and unlawfully took possession of the land, and that on about 1 March 1998, he entered into a Chinese tenancy agreement with the 2nd defendant and that that company took possession of the properties and has used them to store vehicles, and has done that without the permission of the Planning Department.

5. It is said that the 1st defendant is an estate agent, and that the 2nd defendant carries on a business of hiring and renting car-parking spaces.

6. The plaintiffs claim against the 2nd defendant an injunction to restrain it from trespassing on the land, and an order that it remove its vehicles; and an order as against both the defendants for possession of the land, and mesne profits, alternatively, damages.

The Defence

7. There is before us an Amended Defence dated 20 September 1998. In short, it asserts that the managers have, on behalf of the Tsos, entered upon an agreement dated 1 December 1997 to let the properties to the 1st defendant for five years and two months from 1 January 1998. It is pleaded that in accordance with the customary rules of the Tsos, notice was given to all members of the Tsos to attend a meeting, to be held on 30 November 1997, to discuss the proposed lease of the properties; and that on that day there was such a meeting attended by Mr Tang Ka Hi, Mr Tang Siu Cheung and Mr Tang Yuet Nam (all named plaintiffs), as well as the 1st defendant, and also about 20 other members of the Tsos, all of whom signed the agreement. Mr Tang Ka Hi is said to have signed on behalf of the two Tsos, and Mr Tang Siu Cheung on behalf of the Tang Tsz Hau Tso.

8. Paragraph 8(g) of the Amended Defence is important for the purpose of the present appeal. It reads as follows :

"It is the customary rule that a manager of Tang Mung Lau Tso has the authority to act for and on behalf of it to lease out its land property; and that a manager of Tang Tsz Hau Tso has the authority to act for and on behalf of it to lease out its land property."

9. So, the defence is that the 1st defendant entered upon the premises lawfully under this lease. He goes on to say that he then sublet the premises to the 2nd defendant for a term of two years from 1 March 1998.

10. There is a Counterclaim. By the Defence, it is asserted that the consent of the District Officer (presumably as representative of the Secretary for Home Affairs) was not required for the managers to lease the properties, but the Counterclaim says that if such consent was required, then it was an implied term of the lease that the managers of the Tsos would procure that consent, and specific performance of that term is claimed; as well as specific performance of the lease itself; and the defendants claim declarations that the lease is valid, and that the 2nd defendant is a lawful sub-tenant; and damages are claimed in lieu of specific performance.

The Reply

11. The Reply and Defence to the Defence and Counterclaim is dated 9 October 1998. There is an admission that in or about October 1997, the 1st defendant made a proposal to some members of the two Tsos that the land be let, but repeats the contention that the 1st defendant entered into occupation of the land without first obtaining the consent of all the Tso managers or of the Secretary of Home Affairs through the District Officer.

The Application to Re-amend

12. The trial of this action commenced before Deputy High Court Judge Chu (as she then was) on 14 September 2000. On the fourth day of the hearing, and after the plaintiffs had closed their case, there was an application for a re-amendment of the Defence. It is that application and the judge's refusal to permit it that is the subject of this appeal.

13. The proposed re-amendment is to paragraph 8(g) of the Defence which paragraph, if re-amended, would read as follows :

"(g) It is the customary rule that a manager of the Tang Mung Lau Tso authorized or directed by a resolution of members passed at a duly convened meeting of members of the Tso has the authority to act for and on behalf of it to lease out its land property, and that a manager of Tang Tsz Hau Tso authorized or directed by a resolution of members passed at a duly convened meeting of members of the Tso has the authority to act for and on behalf of it to lease out its land property." (Emphasis added).

14. The difference between the two versions of paragraph 8(g) of the Defence is immediately apparent. The Statement of Claim asserted that entry upon the land was effected without the approval or consent or prior knowledge of "all of the said managers". The Defence as it stands asserts that the land was leased at a meeting at which some of the managers were present, and that that suffices because there is a custom by which a manager has authority to act on behalf of the Tso. The proposed pleading asserts, however, that if some of the managers are authorized at and by a duly convened meeting of which notice has been given to all the members of a Tso, then they have that authority to act.

The practice canvassed before trial

15. In November 1998, the plaintiff issued a summons seeking summary judgment on the basis that the Defence, as then framed, did not disclose any defence and did not raise a triable issue. The affirmation in support referred, as did the Statement of Claim, to the fact that the occupation of the land had been assumed without consent of all the managers.

16. The affirmation by the 1st defendant in response to that summons is relevant, because it makes reference to the matter which the defendants now wish to plead by this proposed re-amendment. "It was", said the 1st defendant, "always the custom and practice of both plaintiffs that all matters discussed and agreed at a duly convened meeting will be binding on the plaintiffs." Such a meeting, it is said, was convened by notice and the letting thus agreed. This affirmation is dated 8 December 1998. There is also an affirmation by an elder of the Tsos, a Mr Tang Fat, who also speaks of the notice of the meeting, and says that he was present at that meeting; and he affirms the same practice, that "all matters discussed and agreed at a duly convened meeting will be binding on the plaintiffs." The plaintiffs' affirmation in reply expressly denies the existence of such a practice; and in a further affirmation in January 1999, in support of a summons to withdraw the Order 14 application, the plaintiffs say that "if there is any practice in the granting of leases by the plaintiffs of the Tsos' land property, the practice is that the majority of the managers must sign the lease whereas no one else from the Tsos objected to the lease."

17. Again, when witness statements were served in 1999, the point about practice was raised again. In a statement filed on behalf of the plaintiff, it was said that "in the past, tenancies of properties of [these Tsos] were granted to tenants when all or at least a majority of their managers signed the tenancies to signify their consent and none of the managers objected to such grant." It was also asserted that at the November meeting upon which the 1st defendant relied, he misled the managers who did sign the agreement into believing that he would also secure the signatures of all other managers of the two Tsos. The witness statements from the 1st defendant and Mr Tang Fat, to whom we have made earlier reference, repeated the point made in their O.14 affirmations, namely, that the custom and practice of the two Tsos was that all matters discussed and agreed at a duly convened meeting would be binding on the Tsos.

18. We think, perhaps with the benefit of hindsight, that it is clear enough that there was, on the face of these contending affirmations, an issue, already at the date of the O.14 proceedings, as to the relevant custom, and that that issue was important. Whether it was obvious from the way in which the defendants put their case at that stage, and at the stage of their witness statements, that they were suggesting a custom by which matters agreed at a meeting were binding even if managers or the majority of managers did not agree, is open to argument; and we proceed on the premise that the plaintiffs did not in fact appreciate the essence of the point being made by the defendants. But in the light of this history, one cannot assume that the suggestion raised by the proposed re-amendment is one which is a recent invention. It has always been there, although perhaps its expression even in the affirmations and the statements was lacking in particularity or emphasis. It is also beyond dispute that it was not thus pleaded in the Amended Defence.

At trial

19. If one looks at the transcript of the proceedings before the trial judge, or rather that part which we have, it becomes clear enough that a significant portion of cross-examination of the plaintiffs' main witness at trial was directed at this very issue of the power of the managers and the power of the members at a general meeting convened by notice to discuss a lease. In submissions to the judge in the midst of examination-in-chief, counsel for the 1st defendant asserted that "We have put forward quite a simple case that .... as a result of [the] meeting the agreement came into being, signed by all those attending." Both counsel appeared to have agreed that the meeting of 30 November was crucial, though whether they may have been at cross-purposes, we cannot say. What we can say is that a significant number of questions were put by Mr Chain to one of the plaintiffs' witnesses, testing the assertion that decisions of the type at issue in this case, the letting of land, was a matter for the managers regardless of the wishes of the members. The whole tenor of the cross-examination was to show that due notice had been given of the meeting of 30 November; that such a notice was taken as notice to all members of the Tong; and that it was, as far as concerned the decision to be taken, the majority of attendees that mattered. Counsel put it in terms :

"... The power of decision of the Tso/Tong in fact lies with the whole of all descendants... I put it to you, that Tso/Tong's rule/custom is that if there is an important matter involving the rights and benefits of all the descendants the power of final decision will lie with the whole of the members ... the power of final decision lies with the descendants' general meeting, not with a few managers as what you said this morning.... The managers cannot refuse to accept a resolution passed by the majority of the descendants. Do you agree or not?

A : Not agree."

And again, a while later :

"I finally want to put it to you, Mr Tang, ... that ... on the Tso/Tong's matters the members' general meeting has the power of final decision, and it is not that the managers have a say on everything, do you agree or not?

A : I do not agree."

20. This line of questioning clearly ties in with the point sought to be made in the proposed re-amendment, namely, that a manager of these two Tsos had the authority to act on behalf of the Tsos to lease land if authorized to do so by a resolution of members passed at a duly convened meeting.

The reason for the omission

21. Counsel for the defendants accepts that the defendants' case was inadequately pleaded, or rather that the case as pleaded was put quite differently from the way it was put in the witness statements, the affirmations, and cross-examination. The failure to plead the case accurately was, it is said, an oversight by those representing the defendants. The Amended Defence was filed and served before affirmations were made for the Order 14 proceedings. Had it been the other way round, it may well be, he suggests, that the error or shortcoming in the Amended Defence would never have appeared. The Amended Defence would then have properly reflected that which was in the affirmations, namely, that there was a custom that all matters agreed at a properly convened meeting would be binding.

The judgment

22. In her judgment, the learned judge has referred to the plaintiffs' opposition to the proposed re-amendment as pleading a completely new defence that would necessitate new evidence, and, possibly, expert evidence on the alleged customary rule. The judge accepted that no suggestion of bad faith was involved in the application.

23. The judge stated that the fundamental concern was the question of prejudice to the plaintiffs "and whether such prejudice can be overcome". She said :

"There is plainly prejudice over and above the usual prejudice expected of a late amendment. An analysis of the proposed amendment will show that it raises a number of new evidential matters ranging from what constitutes a valid resolution of members to what amounts to a duly convened meeting of the members of the Tso. These are matters which the plaintiffs do not have to deal with either on their own case or on the defendants' case as it stands. With the proposed amendment, not only will the plaintiffs have to consider adducing evidence on these new matters but the plaintiffs would also have to tackle these aspects when the defence witnesses come to give evidence. It is also not a remote possibility that some form of expert evidence or witnesses other than those initially scheduled may have to be considered."

24. The judge went on to say that the application to amend came only when the plaintiffs had closed their case. She added :

"It is true that the plaintiffs could have re-opened their case and sought an adjournment to deal with these new matters. However, the prejudice outlined above may or may not be overcome in that it remains uncertain as to the prospect and outcome of obtaining the necessary fresh evidence."

25. We pause to comment that the need for such further evidence was obviously a matter to which the judge had proper regard; though by their nature, the classes of evidence itemized do not appear to present some insuperable difficulty. It was not suggested that such evidence, if needed, was not available.

26. The judge expressly recognized that the defendants had in the O.14 proceedings, and in the witness statements, made reference to the custom which they now wished to plead; and also that the primary concern "is to adjudicate on the merits of the case". But, she added : "It must not be forgotten that procedural justice is as important as substantive justice. It has an important role to play to ensure that the parties have a fair trial and the results are just." She noted that the pleadings were drawn by counsel, stated that the plaintiffs could not be expected to assume that the defendants' case was not as pleaded and was rather as stated in the witness statements and affirmations; and she asserted that these affirmations and witness statements contained only cursory references to the custom and practice as to the effect of a duly convened meeting. We would say, in response to this last point, that the references were brief, rather than cursory, and that the particular point on which the defendants wish to rely, no matter how briefly stated, was nevertheless stated clearly. The judge concluded as follows :

"In all the circumstances of the case, I do not regard that the interest of justice and the fair administration of justice demands that leave to amend which is discretionary in nature ought to be given."

She rejected the application to re-amend.

The principles

27. The principles are well established. The first principle is conveniently summarized in the Supreme Court Practice (The White Book) (U.K.) 1999 para.20/8/6, with reference to particular dicta :

" - It is a guiding principle of cardinal importance on the question of amendment that, generally speaking, all such amendments ought to be made 'for the purpose of determining the real question in controversy between the parties to any proceedings or of correcting any defect or error in any proceedings' (see, per Jenkins L.J. in G.L. Baker Ltd v. Medway Building & Supplies Ltd [1958] 1 W.L.R. 1216 at 1231; [1958] 3 All E.R. 540 at 546).

'It is a well established principle that the object of the Court is to decide the rights of the parties, and not to punish them for mistakes they make in the conduct of their cases by deciding otherwise than in accordance with their rights ... I know of no kind of error or mistake which, if not fraudulent or intended to overreach, the Court ought not to correct, if it can be done without injustice to the other party. Courts do not exist for the sake of discipline, but for the sake of deciding matters in controversy, and I do not regard such amendment as a matter of favour or grace ... It seems to me that as soon as it appears that the way in which a party has framed his case will not lead to a decision of the real matter in controversy, it is as much a matter of right on his part to have it corrected if it can be done without injustice, as anything else in the case is a matter of right' (per Bowen L.J. in Cropper v. Smith (1883) 26 Ch.D. 700 at 710-711, with which observations A.L. Smith L.J., expressed 'emphatic agreement' in Shoe Machinery Co. v. Cultam [1896] 1 Ch. 108 at 112).

In Tildesley v. Harper (1878) 10 Ch.D. 393 at 396 and 397, Bramwell L.J. said : 'My practice has always been to give leave to amend unless I have been satisfied that the party applying was acting mala fide, or that, by his blunder, he had done some injury to his opponent which could not be compensated for by costs or otherwise.'"

As against all that, it is to be recalled that :

".... There is a clear difference between allowing amendments to clarify the issues in dispute and those that permit a distinct defence to be raised for the first time.

Whether an amendment should be granted is a matter for the discretion of the trial judge and he should be guided in the exercise of the discretion by his assessment of where justice lies. Many and diverse factors will bear upon the exercise of this discretion. I do not think it possible to enumerate them all or wise to attempt to do so. But justice cannot always be measured in terms of money and in my view a judge is entitled to weigh in the balance the strain the litigation imposes on litigants, particularly if they are personal litigants rather than business corporations, the anxieties occasioned by facing new issues, the raising of false hopes, and the legitimate expectation that the trial will determine the issues one way or the other. Furthermore to allow an amendment before a trial begins is quite different from allowing it at the end of the trial to give an apparently unsuccessful defendant an opportunity to renew the fight on an entirely different defence.

Another factor that a judge must weigh in the balance is the pressure on the courts caused by the great increase in litigation and the consequent necessity that, in the interests of the whole community, legal business should be conducted efficiently. We can no longer afford to show the same indulgence towards the negligent conduct of litigation as was perhaps possible in a more leisured age. There will be cases in which justice will be better served by allowing the consequences of the negligence of the lawyers to fall upon their own heads rather than by allowing an amendment at a very late stage of the proceedings."

(per Lord Griffiths in Ketteman v. Hansel Properties [1987] 1 AC 189, 220)

28. We note, too, authority to the effect that the courts will not readily grant amendments once the trial has begun where the need for the amendment was abundantly apparent long ago, but not sought (see Hipgrave v. Case (1885) 28 Ch D 356, 361). That said, all will in such cases depend on the circumstances, and our attention has also been drawn to a passage in the judgment of Ching JA (as he then was) in Chau Mei Lee Fragrance v. Ng Yee Tim [1996] 4 HKC 46, 52 :

"... Amendments should not be refused however late the application is made provided that they are not designed to over-reach and provided that no prejudice is caused to the other side which cannot be cured by costs and an adjournment if necessary."

Analysis

29. Against the backdrop of those principles, we have the following comments :

1. We are satisfied that the re-amendment is required for the purpose of determining the real question - or one of the real questions (for we recognize that there is another question to do with the consent of the District Officer) - in controversy between the parties.

2. We are satisfied, and it has never been suggested otherwise, that the omission in the pleading, or the failure to plead the matter in accordance with the case as it has appeared in the affirmations, the statements and cross-examination, is not an omission born of any dishonourable motive.

3. As for prejudice, we have, with respect to the learned judge's reference to prejudice, considerable difficulty in understanding the nature of the concrete prejudice, such as could not be compensated by an appropriate award in costs, which it is said would in fact be suffered by the plaintiffs were the re-amendment permitted and an adjournment required. It was not, so far as we can see, suggested that this new evidence could not be obtained. It did not depend on the availability of persons who were present at the beginning of proceedings, but were no longer available. Ms Eu, SC, on behalf of the plaintiffs, asserts that the prejudice suffered is that the plaintiffs now have to meet a new case. Yet, granted that the plaintiffs did not read the various affirmations and statements as requiring them to answer the case which the defendants now wish to plead, and that there is indeed a new pleaded case to be met, it is not, in our judgment, a problem which cannot be addressed, or a disadvantage that cannot adequately be met, by an order as to costs. Ms Eu goes on to contend that she is placed at a tactical disadvantage since witnesses have already answered questions in chief and in cross-examination in a context quite different from that which would now obtain, were the re-amendment allowed. We do not see this as a real disadvantage, given that the trial would, if the re-amendment were now allowed, continue before a professional judge, well aware of the circumstances in which the evidence was formerly adduced, and the issues to which the plaintiffs may have felt it was directed. We note, too, that in argument before the judge on the question of an adjournment after the ruling on the amendment was delivered, Ms Eu argued that there was prejudice in an adjournment in that the plaintiffs have not been collecting rent. In her ruling, the judge does not refer to this as an element of prejudice; it was not a point argued before the judge on the application to re-amend; nor is it a point taken on this appeal.

4. We accept that the fact of an adjournment mid-trial, occasioned by an amendment, is an important consideration. The warning by Lord Griffiths in Ketteman & Ors v. Hansel Properties Ltd & Ors [1987] 1 AC 189 about indulgence towards the negligent conduct of litigation and its adverse impact on the courts is as applicable here as it is in the U.K. Indeed, the same point has expressly been made in Hong Kong (see Wellfit Investments Ltd v. Poly Commerce Ltd [1995] 3 HKC 56). Yet it is but one factor, albeit an important one; and we notice that in the case of Wellfit it was said that the adjournment which the amendment would have compelled, would have resulted not only in loss of judicial time, but also prejudicial delay, by which we assume was meant prejudice to the other party in the proceedings. In our judgment, in so far as this consideration of disruption of orderly conduct of trials, and of the impact on the lists, influenced the trial judge in this case, it is a consideration that assumed, in the particular circumstances of this case, a significance disproportionate to the importance of the amendment to the defendants' case, and that there was accorded insufficient attention to the fact that the case which the defendants wished expressly to plead had already been canvassed in affirmations and in statements and in evidence; insufficient regard to the fact that the prejudice to the plaintiffs was one that could be compensated by costs; and insufficient account of the impact upon the defendants of the refusal to permit the amendment. The fact of the matter is - and it is significant that this fact is not expressly recognized in the ruling - that without this amendment, the defendants had no case. The meetings of 30 November, and the custom upon which they relied, was the be-all and end-all of their case. Without it, the question of the District Officer's consent mattered not. The denial of this amendment effectively defeated the defendants' case. This application to re-amend the Defence went to something which was obviously, and genuinely, a material issue between the parties, and the denial of the amendment was tantamount to depriving the defendants of an adjudication upon the real issues in dispute between the parties.

5. Cognizant though one must be that justice cannot always be measured in money terms, this is not one of those cases in which it can be said with any true force that the continuation of the litigation imposed some personal strain of a particular kind on the plaintiffs. It is not, we venture to suggest, the type of case which Lord Griffiths had in mind when he highlighted this consideration in Ketteman (at p.220).

30. It is trite that the power to grant or refuse leave to amend is a matter of discretion for the trial judge, and that an appellate court will interfere in limited and prescribed circumstances. Those circumstances have been stated thus in Mok Pak Keung v. Wong Ip Ming (unreported) CACV 78/2000, cited by Ms Eu on behalf of the plaintiffs :

"The Court of Appeal will not interfere with the exercise of a discretion unless it is satisfied that the judge had applied wrong principles of law or had given a wholly erroneous way to some matters or failed to take into account some other matters or indeed if the judgment was plainly wrong."

31. Whilst we have sympathy with such irritation as the judge must have felt at the lateness of the application, and the fact that granting it would almost certainly have required an adjournment after several days of hearing, this is nonetheless a case in which we think that the judge fell into error of a kind which entitles this court to intervene. In our judgment, the judge clearly over-emphasized the question of prejudice to the plaintiffs; failed sufficiently to take into account the dramatic impact upon the defendants' case which the refusal to allow the amendment would have; and given the history we have outlined, placed too great an emphasis on the aspect which she referred to as procedural justice. We think that the circumstances and that history were such that the amendment should clearly have been permitted, and accordingly, subject to the issue of abuse, to which we now turn, we would allow the appeal.

Abuse

32. There is brought to our attention by Ms Eu a point that has caused us some considerable concern. It relates to the circumstances in which the defendants obtained an adjournment after the application to re-amend had been rejected by the judge. The point arises in this way. After the judge had refused the application for leave to re-amend, the defendants sought an adjournment to enable them to appeal the ruling on the question of the amendment. The judge refused the application. So the trial should then have proceeded. The judge has given reasons for that refusal, into which it is not necessary to go for the purpose of this appeal, save to say that, in the course of that ruling, she referred to the fact that Mr Chain had drawn to the court's attention the possibility that the solicitors for the defendants might have to withdraw from the case "due to conflict of interest, following the refusal of leave to amend". He did not specify what that conflict was, but one thing is clear, and it is that Mr Chain made it apparent in the course of his submissions that the result of the ruling on the re-amendment meant that there was really no case that the defendants had left to present. In any event, the court refused the adjournment. What then happened was that Mr Chain pointed out the difficulty in which the defendants and their solicitors then found themselves. He referred to scepticism on the part of the defendants about such advice as was tendered by the solicitors, and he sought the court's leave for them to withdraw. The judge acceded to the application, so the solicitors withdrew, and there was an adjournment.

33. The point has arisen on this appeal for a number of reasons. The first is that Mr Chain suggested in his skeleton argument that the fact that there has, in the event, been an adjournment is one that this court can now take into account in deciding whether there should be an amendment. Ms Eu, on behalf of her clients, takes umbrage at the suggestion, given the fact, she says, that the behaviour of the defendants and their advisers forced the judge's hand, and she emphasizes that, despite the fact that they represented to the court that they could no longer continue to act, and despite the fact that an order was made by the judge that upon compliance with the rules the solicitors cease to act, they nonetheless filed this appeal; and that although the defendants have changed solicitors, Mr Chain still appears for them on this appeal. Indeed, he drafted the Notice of Appeal on the very day that the adjournment was granted, and it was signed by the solicitors. It would, in the circumstances, she suggests, be wrong to allow the defendants to rely in this appeal on the circumstances which have changed since the ruling on the re-amendment, namely, the fact that the case was adjourned. That particular point is easily resolved, for our view of the merits of the appeal do not take into account this changed circumstance at all. We simply take the view that the decision not to allow the re-amendment was, at the time that the decision was taken, plainly wrong.

34. But this still leaves the abuse point. In so far as the plaintiffs' skeleton argument was concerned, abuse was mentioned only in the context of the argument with which we have already dealt, namely, that it was not open to the defendants to utilize the changed position in support of their argument on the appeal. With that we agree. Then it was mentioned in the context of costs, it being suggested that if the appeal should go in favour of the plaintiffs, the costs awarded should be awarded on a scale higher than normal.

35. But the suggestion advanced orally before us is that this court should not entertain the appeal at all, or should dismiss it, because of the suggested abuse. The suggested abuse is the conduct of the defendants in securing the adjournment by causing their counsel to say that it was no longer feasible for the lawyers to act, and then allowing them to act nonetheless, showing, it is said, that they had manipulated the court below in order to secure an adjournment; a manipulation executed to permit them to launch an appeal before judgment, the very course which the judge had already decided was not acceptable. The attack which Ms Eu mounted was at first one which was directed at the solicitors and, indeed, at counsel; but now concentrates itself on the defendants themselves. She says that there is exhibited "confidence schizophrenia" by the clients by which, at one moment, they apparently had no confidence in their representatives yet, at the next, sufficient confidence to permit them to continue to act; all classic hallmarks of a ploy. It is a ploy, she says, which should not be allowed to succeed, for were we to allow it to succeed, it would encourage other litigants to employ the same device.

36. We think, without deciding, that were this court satisfied that there was such a deliberate ploy, the court would be unlikely to permit the defendants to allow the situation which they have created by such a device to found or support a ground of appeal. Whether this court should, in such circumstances, bar the appeal altogether, where the device has not created a ground of appeal, and is not permitted to be relied on as a ground of appeal, is a much broader proposition, for which no authority was cited. It is not, in the event, necessary to delve further into the proposition, since we are not convinced on the facts that there was such a deliberate ploy. The quandary in which the solicitors were placed by the amendment ruling does not appear to us to be a manufactured quandary. The fact is that the ruling did put an end to the defendants' case, and was a result of an omission in pleadings, so that for the solicitors to continue was awkward. Similarly for counsel; and the fact is that counsel had warned the court in the course of submissions that this might be the outcome. Counsel for the defendants is of course somewhat inhibited in revealing to us what transpired between clients and legal advisers after the judge's ruling but, reading between the lines, it seems that counsel was bound to advise the defendants that there was nothing further to argue, there was no case left, and that the clients were then reluctant to accept that advice. The despair of the clients must have been real. We are disturbed by the fact that, despite the apparent rift between legal advisers and clients, and despite the order that the solicitors cease to act, the solicitors continued to act. We think that they should not have acted for one moment after that order was made, but whilst the courts will be astute to act against an abuse and must never countenance a deliberate act of misleading a court, and whilst we entertain considerable misgivings about the conduct of the defendants themselves in effecting the adjournment, a deliberate manipulation is, in the peculiar circumstances of this case not, in our view, established.

Conclusion

37. In the circumstances which we have described, we allow the appeal, and order that the order of the learned judge by which she refused the application for leave to re-amend the Defence be set aside; and that the defendants be granted leave to re-amend the Defence in the terms of the application made to the judge.

38. There now comes the question of costs. The costs of this appeal should be to the defendants. As for costs below, the re-amendment does indeed put a case wholly different from that pleaded and which, apparently, the plaintiffs thought they had to meet. It is likely that the plaintiffs will require further particulars of the custom alleged; and that they will need to call not only additional evidence, but recall witnesses who have already given evidence. In the circumstances we have described, the order for costs ought to reflect the mess that has been left by the defendants. The order should be that the defendants will pay all costs incurred by the plaintiffs up to the date of the adjournment of the hearing below; and any other costs as may have been thrown away by reason of the re-amendment. There will be costs orders nisi to those effects.