532 Hong Kong Cases [2003] 1 HKC

TANG KAM WAH & ORS v TANG MING YAT & ANOR A

COURT OF APPEAL
CIVIL APPEAL NO 522 OF 2000
MAYO VP AND STOCK JA
22 NOVEMBER, 22 DECEMBER 2000
B
Civil Procedure – Amendment of pleadings – Defence – Amendment at trial
– Application to re-amend defence after plaintiffs closed their case –
Amendment material to determine main issue between parties – No bad
faith alleged against defendants – General principles for leave to amend
C
Civil Procedure – Abuse – Trial judge refused leave to amend pleadings mid-
way through trial – Adjournment refused pending appeal – Solicitors given
leave to withdraw – Adjournment granted – Solicitors continued to act and
filed appeal – Whether conduct amounted to abuse of process by defendant

: rÿ äö f – Œ ³ §¥ – hţ – M Ĺ ñ Ą§ ¥Œ ³ – M « D
cdQî/{µ@™ác=Ľ
cdQî c=Ľ¦Č§¥hţ §¥hţ – §¥ĩ
§¥ĩlO
M ˆś $ Ą ( £‹ ŠŖ  ¦ £ – mR ĩ ác î / ¹ ě
šÔ – =Ľ§¥ã
§¥ã2
À«•

: rÿ äö f – Ő ; – (Ĺ Š €† ùû M Ĺ Â ç§ ¥Œ ³  E
ã 2 – M ÿ— l ñĄ †ù ‚ ñß Â – ˜¯ ő īK [ž , ˜ ¯
 ã2 – i ¨‚ ñ ß – ˜ ¯ şŢ /° qî ? ÿ – á c  W
žœa đˆŐ;öf
žœa đ

The plaintiffs were managers of two Tsos, the first of whom held land and the F
second held property. The first defendant was a member of the first Tso. The
plaintiffs alleged that the first defendant broke into the land and unlawfully took
possession without permission of all the Tso managers and that the second
defendant used the properties erected on the land to store vehicles. In the
amended defence, the defendants asserted that the managers had on behalf of the
G
Tsos, entered an agreement to let the properties to the first defendant for five
years and two months. It was pleaded that it was a customary rule that a manager
of both Tsos had authority to act for and on behalf of the Tso to lease out land.
On the fourth day of the trial in September 2000, after the plaintiff had closed its
case the defendants applied to re-amend the defence. The proposed re-
amendment sought to assert that it was a customary rule that a manager of these H
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
defendants conceded that their failure to plead the case accurately was an
oversight by those representing them, however, without the re-amendment their
defence might collapse.
Earlier in November 1998 the plaintiff sought summary judgment on the basis I
that there was no arguable defence. The affirmation by the first defendant referred
to the matter that the defendants now wanted to plead by the proposed re-
 [2003] 1 HKC Tang Kam Wah v Tang Ming Yat 533

A amendment. In 1999, when witness statements were served, the point about
custom was raised again. At trial, cross-examination was mainly directed at what
constituted a valid resolution of members and what amounted to a duly convened
meeting of the members of the Tso. There was no suggestion of bad faith
involved in the application to re-amend. It was said the failure to plead the case
accurately was an oversight by the defendants’ lawyers. The trial judge agreed
B with the plaintiff’s submission that the proposed re-amendment would
necessitate new evidence and possibly expert evidence. The fundamental concern
was the question of prejudice to the plaintiffs and whether the prejudice could be
overcome. She concluded that leave to amend should be refused in the interest of
and fair administration of justice. The defendants obtained an adjournment after
C an application to adjourn pending appeal was refused. This was obtained after
leave was granted for the defendants’ solicitors to withdraw as counsel said the
clients had lost confidence in them. The defendants did change solicitors but the
previous solicitors filed this appeal and the same counsel still appeared for them.
The plaintiff argued that the defendants secured the adjournment by abuse, by
causing counsel to say it was no longer feasible for the lawyers to act and then
D allowing them to act nonetheless, the defendants had manipulated the court
below to permit them to launch an appeal before judgment. This conduct had
already been decided by the judge earlier as unacceptable.

Held, allowing the appeal and setting aside the order refusing leave to re-
E amend the defence:
(1) Generally speaking, courts would allow amendments to pleadings if the
amendments sought to be introduced was for the purpose of determining the real
question in controversy between the parties or of correcting any defect or error in
any proceedings. The principle was that it was the object of the court to decide
F the rights of the parties and not to punish them for mistakes they made in the
conduct of their cases by deciding otherwise than in accordance with their rights.
However there was a clear difference between allowing amendments to clarify
the issues in dispute and those that permitted a distinct defence to be raised for
the first time. Whether an amendment should be granted was a matter for the
discretion of the trial judge and he should be guided in the exercise of the
G discretion by his assessment of where justice lay. Further, amendments should
not be refused however late the application was made provided that they were not
designed to over-reach and provided that no prejudice was caused to the other
side which could not be cured by costs and an adjournment if necessary (cf
Supreme Court of Practice (UK) 1999 para 20/8/6). Chau Mei Lee Fragrance v
Ng Yee Tim [1996] 4 HKC 46 followed (at 541E-542H).
H
(2) The suggestion raised by the proposed re-amendment was not a recent
invention. It had been present since the 1998 affirmations. The re-amendment
was required for the purpose of determining the real question in controversy
between the parties. The omission in the pleading, or the failure to plead the
matter in accordance with the case as it appeared in the affirmations, statements
I and cross-examination was not an omission born of any dishonourable motive.
Further, there was no prejudice to the plaintiffs, even though there would be a
new pleaded case to be met, it was not a problem that could not be addressed, or
534 Hong Kong Cases [2003] 1 HKC

a disadvantage that could not adequately be met by an order as to costs (at 543A- A
E).
(3) The trial judge fell into error of a kind that entitled this court to intervene.
She had taken 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. Without the
amendment the defendants had no case. The denial of the amendment was B
tantamount to depriving the defendants of adjudication upon the real issues in
dispute between the parties. The amendment should have been permitted. Mok
Pak Keung v Wong Ip Ming (CACV 78/2000, 8 September 2000, unreported)
applied. Ketteman v Hansel Properties Ltd [1987] 1 AC 189 and Wellfit
Investments Ltd v Poly Commerce Ltd [1995] 3 HKC 56 distinguished (at 543I- C
545C).

Obiter
(4) If the court were satisfied that the defendants had used a deliberate ploy to
get an adjournment pending appeal, it would be unlikely to permit the defendants
to allow the situation they had created by such a device to found or support a D
ground of appeal. It was not necessary to consider whether the ploy would bar the
appeal altogether even though it had not created a ground of appeal as the court
was not convinced on the facts that it was a deliberate ploy. The fact was that the
ruling put an end to the defendants’ case and was a result of an omission in the
pleadings, so it was awkward for the solicitors to continue. The court was
disturbed by the fact that despite the apparent rift between legal advisers and E
clients and despite the order that the solicitors cease to act, the solicitors
continued to act. They should not have acted for one moment after the order was
made. While the court had considerable misgivings about the defendants’
conduct, a deliberate manipulation was not established (at 546D-547E).
F
Cases referred to
Chau Mei Lee Fragrance v Ng Yee Tim [1996] 4 HKC 46 (CA)
Hipgrave v Case (1885) 28 Ch D 356, 54 LJ Ch 399, 52 LT 242 (CA)
Ketteman v Hansel Properties Ltd [1987] 1 AC 189, [1988] 1 All ER 38,
[1987] 2 WLR 312 (HL)
Mok Pak Keung v Wong Ip Ming (CACV 78/2000, 8 September 2000, G
unreported) (CA)
Wellfit Investments Ltd v Poly Commerce Ltd [1995] 3 HKC 56 (CA)

Legislation referred to
New Territories Ordinance (Cap 97) s 15 H
Rules of the High Court (Cap 4A) O 14

Other source referred to

Supreme Court Practice 1999 [UK] para 20/8/6

[Editorial note: as to general principles for leave to amend a party’s pleadings, I

see Halsbury’s Laws of Hong Kong Vol 5(1) (2000 Reissue), Civil Procedure
[90.0444].]
 [2003] 1 HKC Tang Kam Wah v Tang Ming Yat (Stock JA) 535

A Appeal
This was an appeal by the defendants from a refusal by Deputy Judge Chu to
allow the defendants leave to re-amend the defence after the plaintiff had closed
its case at trial. The facts appear sufficiently in the following judgment.

B Audrey Eu SC and Richard Leung (George YC Mok & Co) for the plaintiffs.
Benjamin Chain (Jal N Karbhari & Co) for the defendants.

Stock JA: The claim

1. The statement of claim was issued in June 1998. It was amended in
C
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
D constitute the Tso; three who look after the interests of the other fong.
These managers are the first plaintiffs. The first defendant is a member of
this Tso. So, it is said that through the Tso, the first defendant and the first
plaintiffs own Property 1.
2. The second Tso is called Tang Tsz Hau Tso. There are five
E 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 second plaintiffs. Property 2 is
held from the Government in the name of this Tso; and the first defendant
is a member of this Tso also.
F 3. The first and second plaintiffs are managers appointed and registered
under s 15 of the New Territories Ordinance (Cap 97), 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.
G 4. The allegation in the statement of claim is that on 1 December 1997,
the first 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 second defendant and that that
H 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 first defendant is an estate agent, and that the
second defendant carries on a business of hiring and renting car-parking
I spaces.
6. The plaintiffs claim against the second defendant an injunction to
restrain it from trespassing on the land, and an order that it remove its
536 Hong Kong Cases [2003] 1 HKC

vehicles; and an order as against both the defendants for possession of the A
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 B
upon an agreement dated 1 December 1997 to let the properties to the first
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 C
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 first 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 D
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 E
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 first defendant entered upon the premises
lawfully under this lease. He goes on to say that he then sublet the
premises to the second defendant for a term of two years from 1 March F
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 G
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 second
defendant is a lawful sub-tenant; and damages are claimed in lieu of H
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 I
first defendant made a proposal to some members of the two Tsos that the
land be let, but repeats the contention that the first defendant entered into
 [2003] 1 HKC Tang Kam Wah v Tang Ming Yat (Stock JA) 537

A occupation of the land without first obtaining the consent of all the Tso
managers or of the Secretary for Home Affairs through the District
Officer.

The application to re-amend

B 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.
C 13. The proposed re-amendment is to para 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
D 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 para 8(g) of the defence is
E 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
F 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.

G 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
H the land had been assumed without consent of all the managers.
16. The affirmation by the first 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 first
defendant, ‘always the custom and practice of both plaintiffs that all
I 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
538 Hong Kong Cases [2003] 1 HKC

is also an affirmation by an elder of the Tsos, a Mr Tang Fat, who also A

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 B
summons to withdraw the O 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 C
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 first defendant relied, he misled the D
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 first 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 E
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 F
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 G
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
H
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, I
or rather that part which we have, it becomes clear enough that a
significant portion of cross-examination of the plaintiffs’ main witness at
 [2003] 1 HKC Tang Kam Wah v Tang Ming Yat (Stock JA) 539

A 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 first defendant asserted that ‘We have put forward quite a
simple case that … as a result of [the] meeting the agreement came into
B 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
C
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:
D
… 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
E 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.
20. And again, a while later:
F
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.
G
21. 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.
H
The reason for the omission
22. Counsel for the defendants accepts that the defendants’ case was
inadequately pleaded, or rather that the case as pleaded was put quite
I 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
540 Hong Kong Cases [2003] 1 HKC

defendants. The amended defence was filed and served before A

affirmations were made for the O 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 B
convened meeting would be binding.

The judgment
23. In her judgment, the learned judge has referred to the plaintiffs’
opposition to the proposed re-amendment as pleading a completely new C
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.
24. The judge stated that the fundamental concern was the question of
prejudice to the plaintiffs ‘and whether such prejudice can be overcome’. D
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 E
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 F
other than those initially scheduled may have to be considered.
25. 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 G
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.
26. 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 H
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.
27. The judge expressly recognized that the defendants had in the O 14
proceedings, and in the witness statements, made reference to the custom I
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
 [2003] 1 HKC Tang Kam Wah v Tang Ming Yat (Stock JA) 541

A 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
B 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
C
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.
D 28. She rejected the application to re-amend.

The principles
29. The principles are well established. The first principle is conveniently
summarized in the Supreme Court Practice (The White Book) (UK) 1999
E 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
F 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
G
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
H 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).
I 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,
542 Hong Kong Cases [2003] 1 HKC

he had done some injury to his opponent which could not be compensated for A
by costs or otherwise.’
30. 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 B
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 C
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 D
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
E
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. F
(per Lord Griffiths in Ketteman v. Hansel Properties [1987] 1 AC 189, 220)
31. 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 G
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 H
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
I
32. Against the backdrop of those principles, we have the following
comments:
 [2003] 1 HKC Tang Kam Wah v Tang Ming Yat (Stock JA) 543

A 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
B 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
C 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
D 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
E 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
F 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
G 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
H 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
I Griffiths in Ketteman v Hansel Properties Ltd [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 UK. Indeed,
544 Hong Kong Cases [2003] 1 HKC

the same point has expressly been made in Hong Kong (see Wellfit A
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 B
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 C
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 D
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 E
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 F
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 G
venture to suggest, the type of case which Lord Griffiths had in mind
when he highlighted this consideration in Ketteman (at p 220).

33. 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 H
limited and prescribed circumstances. Those circumstances have been
stated thus in Mok Pak Keung v Wong Ip Ming (CACV 78/2000,
8 September 2000, unreported), 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 I
wholly erroneous way to some matters or failed to take into account some
other matters or indeed if the judgment was plainly wrong.
 [2003] 1 HKC Tang Kam Wah v Tang Ming Yat (Stock JA) 545

A 34. 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,
B 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
C
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
D 35. 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
E 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
F
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
G 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
H withdraw. The judge acceded to the application, so the solicitors
withdrew, and there was an adjournment.
36. 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
I 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
546 Hong Kong Cases [2003] 1 HKC

forced the judge’s hand, and she emphasizes that, despite the fact that A
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 B
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 C
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.
37. But this still leaves the abuse point. In so far as the plaintiffs’ D
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 E
on a scale higher than normal.
38. 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 F
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 G
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 H
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.
39. We think, without deciding, that were this court satisfied that there
was such a deliberate ploy, the court would be unlikely to permit the I
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,
 [2003] 1 HKC Tang Kam Wah v Tang Ming Yat (Stock JA) 547

A 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
B 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
C
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
D 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
E 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.
F
Conclusion
40. 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
G defendants be granted leave to re-amend the defence in the terms of the
application made to the judge.
41. 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,
H 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
I 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
548 Hong Kong Cases [2003] 1 HKC

reason of the re-amendment. There will be costs orders nisi to those A

effects.

Reported by Lindy Course