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					A                                                                                          A
B                         IN THE DISTRICT COURT OF THE                                     B
C                           CIVIL ACTION NO. 4819/2004                                     C

D                                                                                          D

E                                                                                          E
                       UTi (HK) LIMITED                        Plaintiff
F                                                                                          F
G                                                                                          G

          SOUTH CHINA GARMENTS COMPANY LIMITED                 Defendant
H                                                                                          H

                                       ______                                              I

J   Coram: Deputy District Judge Frederick HF Chan (Open Court)                            J

    Date of hearing: 29th September 2008
K                                                                                          K
    Date of order: 29th September 2008
L   Date of handing down the ruling: 2nd October 2008                                      L

M                                                                                          M

N                                    RULING                                                N

O                                                                                          O

P   1. The present case was set down before me for trial on 29                  and 30th   P
       September 2008. In the Plaintiff’s detailed written opening dated 25
Q                                                                                          Q
       September 2008 (“the Written Opening”), Ms. Rachel Lam (counsel for
R      the Plaintiff) described the Plaintiff’s case as “a simple claim                    R
       concerning a contract” between the Plaintiff and the Defendant.
S                                                                                          S

T   2. In outline, the Plaintiff is claiming for the contractual price of the air-         T

U                                                                                          U
V                                                                                          V
A                                                                                    A
       freight services it provided to the Defendant in respect of the carriage of
B      some ladies woven pants (“the Ladies Pants”) from Los Angeles,                B

       United States of America, back to Hong Kong. The Plaintiff says a sum
C                                                                                    C
       of HK$233,664.16 was due with interest and the Defendant had failed to
D      settle the said sum.                                                          D

E                                                                                    E

F                                                            th                      F
    3. The Defendant, by its Re-Amended Defence dated 9 May 2008, sought

       to defend the claim by running, among others, the following defences:
G                                                                                    G

H      (a) there was no agreement between the Plaintiff and the Defendant in         H

          respect of the return journey by air for the Ladies Pants;
I                                                                                    I

J      (b) the agreement for the consignment of the Ladies Pants from Los            J

          Angeles to Hong Kong was entered into by the Plaintiff and a Hot           K
          Kiss Inc. (who was the Defendant’s American buyer vis-à-vis the
L                                                                                    L
          Ladies Pants);

M                                                                                    M
       (c) the Plaintiff is suing the wrong party.
N                                                                                    N

    4. At the heart of the present dispute was a Ms. Michelle Chong who, at
O                                                                                    O
       the material time, was a merchandiser in the employ of the Defendant.
P                                                                                    P
       The Plaintiff contends that she made the contract of carriage on the

       Defendant’s behalf with the Plaintiff. The Defendant retorted by saying       Q
       that Ms. Michelle Chong did not have the Defendant’s instructions to
R                                                                                    R
       enter into the alleged agreement to carry the Ladies Pants from Los

S      Angeles back to Hong Kong.                                                    S

T                                                                                    T
    The Plaintiff’s pleadings?

U                                                                                    U
V                                                                                    V
A                                                                                                             A

B   5. With respect, the Plaintiff’s pleadings were woefully sparse on the                                    B

        material facts regarding the purported authority of Ms. Michelle Chong
C                                                                                                             C
        to conclude the carriage contract on the Defendant’s behalf. The
D       Plaintiff’s Statement of Claim dated 13th September 2004 merely                                       D

        contained this bland paragraph:
E                                                                                                             E
        “3.    At the Defendant’s request, the Plaintiff arranged for the consignment of 468
F              cartons of [the Ladies Pants] from Los Angeles … to Hong Kong on the                           F
               Defendant’s behalf”.
G                                                                                                             G
    6. On 17           December 2004, the Plaintiff filed the Answer to the
H                                                                                                             H
        Defendant’s Request for Further and Better Particulars of the Reply
I       dated 24th November 2004 and said:                                                                    I

        “… State who on behalf of the Defendant made the agreement with the Plaintiff
J                                                                                                             J

K       Michelle Chong, a merchandiser of the Defendant”.                                                     K

L   7. Obviously, the Plaintiff’s pleaded case made no express mention of Ms.                                 L

        Michelle Chong’s purported authority from the Defendant to enter into
M                                                                                                             M
        the carriage contract, whether actual, ostensible or apparent. It was
N       tolerably clear that the Plaintiff’s primary case against the Defendant                               N

        was that Ms. Michelle Chong was given the actual and express authority
O                                                                                                             O
        to make a contract on the Defendant’s behalf with the Plaintiff. Ms.
P       Lam argued that the Court may draw inferences from the facts of the                                   P

        present case and then determine the issue of actual authority in the
Q                                                                                                             Q
        Plaintiff’s favor1.
R                                                                                                             R

      In the English Court of Appeal decision of AHJ Wood & Co. Ltd. v. George Glossop & Co. Ltd. & Another
S                   th
    (unreported, 7 February 1987, Lexis Transcript) where Sir John Donaldson MR and Brown-Wilkinson LJ.       S
    (as both of them then were) endorsed the view that whether a Mr. Beverley (a manager of the
    defendant’s retails shop) had the actual authority of the defendant to place orders for goods would be
T   either a matter of direct evidence or inferences to be drawn from the facts of that case.                 T

U                                                                                                             U
V                                                                                                             V
A                                                                                                                A

B   The Plaintiff’s opening?                                                                                     B

C                                                                                                                C
    8. In the Written Opening, the Plaintiff chose to rely heavily on the well-
D       known English Court of Appeal decision of Freeman & Lockyer v.                                           D

        Buckhurst Park Properties (Mongal) Ltd. [1964] 2 QB 481 (“the
E                                                                                                                E
        Freeman’s Case”) where Diplock LJ. set out the locus classicus
F       statements on the common law of actual, ostensible and apparent                                          F

        authority 2 of a company’s officer to enter into contracts with a third
G                                                                                                                G
        party on behalf of the limited company. Ms. Lam ventured to argue that:
H       “A company may be bound by the acts of its agent where such person is held out to                        H

        be his agent, even if such a person did not have the actual authority to so bind it …
I                                                                                                                I
        Pursuant to the above legal principles: -

J       … Michelle Chong, as employee and therefore agent of D, had the apparent                                 J
        authority to conclude the said contract on D’s behalf. In such circumstances, D is
K       bound” (my emphasis).                                                                                    K

L                                                                                                                L
    9. By doing so, it seemed to me beyond doubt that the Plaintiff was, so to
M       speak, trying to move the goalposts by alleging that either Ms. Michelle                                 M

        Chong had the actual authority or alternatively she had the apparent or
N                                                                                                                N
        apparent authority from the Defendant to conclude the carriage contract.
O                                                                                                                O

P     In Freeman’s case, Lord Justice Diplock (as he was then) famously said at pp. 505-506 that:                P
    “… four conditions which must be fulfilled to entitle a contractor to enforce against a company a contract
    entered into on behalf of the company by an agent who had no actual authority to do so. It must be
Q   shown:                                                                                                       Q
    (1) that a representation that the agent had authority to enter on behalf of the company into a contract
          of the kind sought to be enforced was made to the contractor;
R   (2) that such a representation was made by a person or persons who had “actual” authority to manage          R
          the business of the company either generally or in respect of those matters to which the contract
S   (3) that he (the contractor) was induced by such representation to enter into the contract, that is, that    S
          he in fact relied upon it; and
    (4) that under its memorandum or articles of association the company was not deprived of the capacity
T         either to enter into a contract of the kind sought to be enforced or to delegate authority to enter    T
          into a contract of that kind to the agent”.

U                                                                                                                U
V                                                                                                                V
A                                                                                           A
    The pleading point?
B                                                                                           B

    10. As I perceived it, the Written Opening immediately gave rise to a
C                                                                                           C
       crucial pleading issue:
D      “Whether the Plaintiff was entitled to raise this new allegation without amending    D

       the pleadings?”
E                                                                                           E

F   11. Plainly, the answer should be a resounding no. When the hearing began               F

       before me, I expressed my deep concerns on the parsimoniousness of
G                                                                                           G
       the Plaintiff’s pleadings on the issue of apparent authority which was
H      looming large. Ms. Lam drew my attention to the witness statement of                 H

       Mr. Ken Lau (of the Plaintiff) dated 5th November 2007 where he said:
I                                                                                           I
       “25.       I wish to make clear that Michelle has been the person liaising with me
J      and giving instructions on behalf of Defendant. There was no notice that Michelle    J

       did not have authority to do so”.
K                                                                                           K

L   12. On the strength of that paragraph, Ms. Lam forcefully submitted that the            L

       Plaintiff had thereby alerted the Defendant that at the trial of the present
M                                                                                           M
       case, the legal issues of apparent or ostensible authority by the holding
N      out of Ms. Michelle Chong by the Defendant would be ventilated fully                 N

       and the Court could determine those legal issues and the factual matrix
O                                                                                           O
       after considering the oral testimonies and the documentary evidence.
P                                                                                           P

    13. I respectfully disagreed. The short answer was that the pleadings of the
Q                                                                                           Q
       Plaintiff did not refer to any acts of holding out by the Defendant. In this
R      civil trial, it was indispensable to bear in mind the trite principle that           R

       pleadings should be the horses and the evidential matrix should be the
S                                                                                           S
       carts. Only the horses could lead and drive the carts, not the other way
T      round. Generally speaking, a witness statement prepared by a witness                 T

U                                                                                           U
V                                                                                           V
A                                                                                               A
       should not be a valid substitute of a proper pleading of the party calling
B      that witness.                                                                            B

C                                                                                               C
    14. If the Plaintiff were to proceed to trial on the basis of the existing
D      pleadings, then if called upon to do so, I would have ruled that absent an               D

       application by the Plaintiff for leave to amend the Statement of Claim so
E                                                                                               E
       as to insert a proper plea on apparent or ostensible authority, the
F      Plaintiff was simply not entitled to advance a case of “apparent                         F

       authority” against the Defendant, whether by way of viva voce
G                                                                                               G
       testimonies, documentary evidence or submissions.
H                                                                                               H

    15. I would seek to fortify that conclusion by relying on the following
I                                                                                               I
       important authorities:
J                                                                                               J

       (a) In Wing Hang Bank Ltd. v. Crystal Jet International Ltd. &
K                                                                                               K
          Others [2005] 2 HKLRD 795, Mr. Justice Ma (the Chief Judge of
L                                                                                               L
          the High Court) pithily summarized the functions of a pleading as

          follows at pp. 799-800:                                                               M
          “(1)   The purpose of pleading is fairly and precisely to inform the other side of
N         the stance of the pleading party so that proper preparation is made possible, and     N

          time and effort are not expended unnecessarily on other issues …
O                                                                                               O
          (2)    In a trial, particularly where evidence is given by witnesses, it becomes

          extremely important that each side knows exactly what are the live issues.            P
          Where issues are sought to be introduced that have not been adequately or
Q         properly pleaded, amendments must be sought unless the consent of the other           Q
          party or parties has been obtained. It will simply not do for unpleaded issues to
R         be “slipped-in” when evidence is being given in the hope that the other side is       R

          not sufficiently alert to object. Much testimony given in the course of a trial may
S                                                                                               S
          in truth relate to a number of possible aspects or may simply be background

T         information. Obviously, counsel must be astute to object when necessary but the       T

U                                                                                               U
V                                                                                               V
A                                                                                                  A
      primary responsibility of ensuring that any issue is properly before the Court is
B     on the party seeking to advance that issue. He must do so clearly and not                    B
      ambiguously, and the usual way of doing so is through the pleadings. Care must
C     be taken to plead issues clearly, and not draft pleadings either vaguely or                  C

      ambiguously perhaps in the hope that the other side might not readily understand
D                                                                                                  D
      a party’s real case …
      8.     Ultimately, a court is to be guided by what is fair and just in the
E                                                                                                  E
      circumstances, not just the party seeking to rely on the unpleaded case but to all
F     parties before it. The Court ought also to bear in mind the following passages at            F
      p. 297 para. 18/12/1 of Hong Kong Civil Procedure 2004, Vol. 1:
G          The purpose of pleadings is not to play a game at the expense of the litigants but to   G

           enable the opposing party to know the case against him.
H                                                                                                  H
      What is set out above as representing acceptable practice will be all the more
      emphasized when the civil justice reforms in Hong Kong take shape. The object
I                                                                                                  I
      is not to invite prolixity in pleadings but to achieve what has always been the

J     position: to fairly inform the other side and the Court of a party’s case,                   J
      identifying the issues and the true extent of the dispute between the parties”;
K                                                                                                  K

L   (b) In Rolled Steel Products (Holdings) Ltd. v. British Steel                                  L
      Corporation [1986] 1 Ch 246 (“the Rolled Steel’s Case”), the
M                                                                                                  M
      directors of the plaintiff company borrowed money from the

N     defendant in the plaintiff’s corporate name and signed guarantees.                           N
      Repayments were made by the plaintiff to the defendant. The
O                                                                                                  O
      plaintiff company later sued the defendant and sought to recover the

P     sums paid to the defendant. The case was tried before Vinelott J.                            P
      who allowed the defendant to make an amendment to the defence to
Q                                                                                                  Q
      include pleas that certain directors of the plaintiff company had the
R     ostensible authority of the company to borrow money from the                                 R
      defendant. On those new pleas, Vinelott J. held the defendant was
S                                                                                                  S
      not liable;
T                                                                                                  T

U                                                                                                  U
V                                                                                                  V
A                                                                                             A
    (c) The plaintiff took the case to the English Court of Appeal and argued,
B      among others, that Vinelott J. erred when he granted leave to the                      B

       defendant to insert a new plea on ostensible authority when evidence
C                                                                                             C
       was finished and the parties were making their respective final
D      speeches; the plaintiff’s argument succeeded and the English Court                     D

       of Appeal set aside the judgment;
E                                                                                             E

F   (d) On the pleading point, Lord Justice Slade specifically said at p.                     F

G                                                                                             G
       “… in my opinion, the judge was right in holding that the rule in Turquand’s
H      case … is not a mere plea of law, which does not have to be pleaded. The plea          H

       asserting “entitlement to rely etc.” is a plea of mixed fact and law … it is at very
I                                                                                             I
       least incumbent on the defendants, if they wished to take the point, to plead in
       the alternative that, even if (which they denied) the resolution of 22 January1969
J                                                                                             J
       had not been duly passed, they did not know of this irregularity and were
K      entitled to rely on it as one which had been duly passed. This would have been a       K
       conventional plea by way of confession and avoidance, which would have put
L      the plaintiff’s legal advisers on notice that they had to adduce evidence, if they     L

       could, to show actual or constructive knowledge of the relevant facts on the part
M                                                                                             M
       of Colvilles and British Steel Corporation or their legal advisers and to explore
       these matters, as far as possible, in cross-examination of the defendant’s
N                                                                                             N
O                                                                                             O

    (e) In a short yet trenchant judgment, Lord Justice Lawton concurred
P                                                                                             P
       and aptly observed at p. 309F-310C:
Q      “From the way they were raised by counsel and dealt with by the trial judge I          Q

       was left with the impression that neither the judge nor defending counsel
R                                                                                             R
       appreciated as fully as they should have done the need for precision and

S      expedition when dealing with pleading points. My recent experience in this court       S
       shows that some counsel and judges are not giving pleadings the attention which
T      they should. Pleadings are formal documents which have to be prepared at the           T

U                                                                                             U
V                                                                                             V
A                                                                                           A
      beginning of the litigation. They are essential for the fair trial of an action and
B     the saving of time at trial. The saving of time keeps down the costs of litigation.   B
      A plaintiff is entitled to know what defence he has to meet and a defendant what
C     claims are being made against him. If the parties do not know, unnecessary            C

      evidence may be got together and led or even worse, necessary evidence may
D                                                                                           D
      not be led. Pleadings regulate what questions may be asked of witnesses in
      cross-examination. When counsel raises an objection to a question or a line of
E                                                                                           E
      questioning … the trial judge should rule at once. He should not regard the
F     objection as a critical commentary on what the other side is doing. If the judge      F
      does not rule, counsel should ask him to do so. If a line of questioning is stopped
G     because it does not relate to an issue on the pleadings, counsel should at once       G

      consider whether his pleadings should be amended. If he decides that they
H                                                                                           H
      should, he should forthwith apply for an amendment and should specify

      precisely what he wants and the judge should at once give a ruling on the             I
      application … Judicial insistence on precision in pleading should not take the
J     courts back to the days when the successful taking of pleadings sometimes             J
      resulted in a denial of justice. The judge’s powers of adjourning and ordering the
K                                                                                           K
      payment of costs thrown away should stop this happening”;

L                                                                                           L
    (f) In Yip Lai Fong v. Sin Tung Hng [2004] 3 HKC 153, our Court of
M                                                                                           M
      Appeal applied the principles governing proper pleadings on

N     ostensible authority laid down in the Rolled Steel’s Case and in                      N
      giving the unanimous judgment of the Court of Appeal, Mr. Justice
O                                                                                           O
      Lam said pertinently at p. 159:

P     “… It is for the respondents to raise the plea and then the petitioners could, if     P
      necessary, respond thereto by way of evidence in reply. To raise the plea, the
Q     respondents should also set out the factual matrix relied upon by them to argue       Q

      how the second respondent had held out to the fourth respondent that the first
R                                                                                           R
      respondent had apparent authority to enter into the sale on its behalf. After all,
      the rationale of the Turquand rule is apparent or ostensible authority, see
S                                                                                           S
      Freeman & Lockyer v. Buckhurst Park Properties (Mongal) Ltd. [1964] 2 QB
T     481 at 505-506. It therefore behoves a party relying on the rule to identify the      T

U                                                                                           U
V                                                                                           V
A                                                                                                A
       material facts in respect of the holding out. For this reason, it is not sufficient for
B      Mr. Leong to refer to his skeleton submissions on 20th March as notice of the             B
       fourth respondent’s case [on the Turquand rule]”;
C                                                                                                C

D   (g) In Freeman’s Case which was cited by Ms. Lam, the plaintiff (a firm                      D
       of surveyors) sued the defendant for £291 6s. as its professional fees
E                                                                                                E
       in respect of work done and alleged that a Mr. Kapoor (who was a
F      director of the defendant) had agreed to engage the plaintiff on the                      F

       defendant’s behalf; the plaintiff’s claim was tried in the Westminster
G                                                                                                G
       County Court and allowed by Judge Herbert; the defendant appealed;
H      in dismissing the appeal, Lord Justice Willmer said at p. 489:                            H

       “The real question to be determined is whether the judge was right in finding
I                                                                                                I
       that Kapoor had ostensible authority to engage the plaintiffs. This is partly a

       question of fact and partly of law”;                                                      J

K                                                                                                K
    (h) In Armagas Ltd. v. Mundogas SA [1986] AC 717 (“the Armagas’

L      Case”), the plaintiff purchased the ship “Ocean Frost” from the                           L
       defendant and agreed to lease the ship back to the defendant for a 3-
M                                                                                                M
       year charter; the defendant reneged on the charter and the plaintiff

N      sued the defendant; the defendant argued that the alleged person who                      N
       entered into the 3-year charter (a Mr. Magelssen) did not have the
O                                                                                                O
       actual or apparent authority to do so; the case was tried by Staughton

P      J. (as he was then) who held however that the defendant was liable                        P
       on a basis which was not pleaded by the plaintiff;
Q                                                                                                Q

R   (i) the defendant’s appeal was allowed by the English Court of Appeal;                       R
       the plaintiff’s appeal to the House of Lords also failed; on appeal, Mr.
S                                                                                                S
       Justice Staughton came under heavy criticisms on the pleading point,
T      Lord Justice Robert Goff (as he then was) said at p. 730C:                                T

U                                                                                                U
V                                                                                                V
A                                                                                             A
          “There was no reliance upon any ostensible authority of Mr. Magelssen to notify
B         approval by top management of a transaction which was known to be outside his       B

          actual authority. That approach appears to have had its origin in certain remarks
C                                                                                             C
          which fell from the judge himself, in the course of counsel’s final speeches
          before him …”;
D                                                                                             D

E      (j) In the House of Lords, Lord Keith said at p. 777F-G:                               E

          “[Staughton J.] took the view that by appointing to be vice-president
F                                                                                             F
          (transportation) and chartering manager Mundogas represented that he had
          authority to convey such approval. This conclusion appears to have originated in
G                                                                                             G
          an idea which the judge himself had in the course of the trial. Armagas had not
H         pleaded any such representation …”;                                                 H

I                                                                                             I
       (k) The loud and clear message from the Armagas’ Case was that when
J         dealing with the difficult issues of apparent or ostensible authority of            J

          a company’s officer, the Court should be astute to make findings and
K                                                                                             K
          rulings which fully accord with the pleadings advanced by the
L         respective parties;                                                                 L

M                                                                                             M
       (l) The above case law all spoke in one voice on the crucial importance
N         of pleadings when it comes to the issue of apparent or ostensible                   N

          authority of an agent of a company.
O                                                                                             O

P   16. Mutatis mutandis, it was abundantly clear that the Plaintiff’s pleadings              P

       as they stood were defective and could not possibly be interpreted to
Q                                                                                             Q
       embrace an allegation of ostensible or apparent authority on the part of
R      Ms. Michelle Chong to enter into the agreement of carriage of goods by                 R

       air on the Defendant’s behalf. Any argument to the contrary was
S                                                                                             S
       without substance.
T                                                                                             T

U                                                                                             U
V                                                                                             V
A                                                                                   A
    17. Indeed, following the Armagas’s Case, the Court would not be able to
B      give a judgment on that issue if the case of ostensible or apparent          B

       authority together with the supporting material facts were not properly
C                                                                                   C
       pleaded by the Plaintiff.
D                                                                                   D

    18. Mr. Chang for the Defendant argued that the Plaintiff’s pleadings did
E                                                                                   E
       require amendment to include the pleas of apparent or ostensible
F      authority. He emphatically burnished the point that the Plaintiff bears      F

       the burden of proof to prove that Ms. Michelle Chong had the authority
G                                                                                   G
       (actual, ostensible or apparent) to give the alleged instructions to the
H      Plaintiff for the return journey of the Ladies Pants to Hong Kong. He        H

       submitted that such a plea would be one of mixed fact and law and must
I                                                                                   I
       be pleaded.
J                                                                                   J

    19. At the hearing before me on 29        September 2008, I invited Ms. Lam
K                                                                                   K
       (counsel for the Plaintiff) to reflect upon the above legal principles and
L                                                                                   L
       indicated to her in no uncertain terms that the Plaintiff’s pleadings as

       constituted did not permit an alternative plea of apparent or ostensible     M
       authority vis-à-vis Ms. Michelle Chong. Upon Ms. Lam’s request, the
N                                                                                   N
       Court adjourned for a short duration to enable her to take instructions

       from the Plaintiff on how to proceed with the case.                          O

P                                                                                   P
    The amendment application?

Q                                                                                   Q
    20. Subsequently, the Plaintiff back-pedaled and formally applied for leave
R                                                                                   R
       from the Court to amend the Statement of Claim. Ms. Lam helpfully

S      submitted a written draft Amended Statement of Claim (“the                   S
       Amendment Application”). In essence, the Plaintiff sought the Court’s
T                                                                                   T
       leave to amend its case to include a plea that when concluding the

U                                                                                   U
V                                                                                   V
A                                                                                               A
       carriage contract for the transportation of the Ladies Pants back to Hong
B      Kong, Ms. Michelle Chong had the apparent or ostensible authority of                     B

       the Defendant to enter into that particular contract on about 13 th
C                                                                                               C
       September 2003.
D                                                                                               D

    21. The Defendant objected to the Amendment Application. In opposing the
E                                                                                               E
       application to amend the Statement of Claim, Mr. Chang argued that the
F      Plaintiff should have provided more particulars on the new allegations                   F

       of ostensible or apparent authority. Advisedly, he accepted that if
G                                                                                               G
       necessary, the Defendant could make requests for further and better
H      particulars of the new pleas from the Plaintiff. Mr. Chang also accepted                 H

       that provided the material facts supporting the new plea of ostensible or
I                                                                                               I
       apparent authority were pleaded, leave to amend should then be granted
J      by the Court.                                                                            J

K                                                                                               K
    22. Regarding the well-established principles governing the Amendment
L                                                                                               L
       Application, I needed to go no further than to the succinct summary

       provided by the learned editors of Hong Kong Civil Procedure 2008,                       M
       Volume 1:
N                                                                                               N
       “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
O                                                                                               O
       determining the real question in controversy between the parties to any proceedings
P      or of correcting any defect or error in any proceedings” (paragraph 20/8/6, p.           P
       378) …
Q      As a general rule, however late the amendment is sought to be made, it should be         Q

       allowed if it will not do the opponent some injury or prejudice him in some way that
R                                                                                               R
       cannot be compensated for by costs or otherwise (paragraph 20/8/10, p. 382) …
       Where leave to amend a pleading is granted close to the date of trial, the court may
S                                                                                               S
       in its discretion adjourn the date of the trial, so as to enable the opposite party to
T      meet the new case or to allow for further particulars, discovery of documents and so     T

U                                                                                               U
V                                                                                               V
A                                                                                              A
       on arising from the amendment (paragraph 20/8/10, p. 382) ...
B      Where the amendment asked for is a substantial one, such that the plaintiff could not   B
       succeed without it, he will in a proper case be only allowed to amend at the trial on
C      payment of all costs incurred up to that date, and any costs thrown away by reason      C

       of the amendment (paragraph 20/8/12, p. 383)”.
D                                                                                              D

E   23. In the circumstances of the present case, I considered that it was both                E

       fair and just to allow the Amendment Application. As I have indicated
F                                                                                              F
       to both counsel at the hearing, the new plea on ostensible or apparent
G      authority must be pleaded in the Plaintiff’s Statement of Claim and to                  G

       deny the Amendment Application would be to deprive the Plaintiff the
H                                                                                              H
       right to advance its case against the Defendant, namely, as far as the
I      Plaintiff was concerned, the Defendant had clothed Ms. Michelle Chong                   I

       with the necessary instructions and authority to conclude the carriage of
J                                                                                              J
       goods contract to transport the Ladies Pants back to Hong Kong. This
K      plea on ostensible or apparent authority would undoubtedly form the                     K

       cornerstone of the Plaintiff’s case against the Defendant at trial.
L                                                                                              L

M   24. I was also of the firm view that the Amendment Application, if allowed,                M

       would not prejudice the Defendant’s case and a costs order in respect of
N                                                                                              N
       the Amendment Application and the costs thrown away in respect the
O      present 2-day trial in the Defendant’s favor would sufficiently                         O

       compensate the Defendant.
P                                                                                              P

Q   25. Both parties further agreed that the new plea on ostensible or apparent                Q

       authority would throw a completely different complexion to the factual
R                                                                                              R
       matrix of the instant case, they were not ready to proceed with the
S      present 2-day trial and they jointly applied for an adjournment of the                  S

       trial for new dates to be fixed.                                                        T

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V                                                                                              V
A                                                                                    A

B   Costs?                                                                           B

C                                                                                    C
    26. On costs, Ms. Lam conceded the costs of and incidental to the
D      Amendment Application to the Defendant but said such costs should             D

       only be taxed and paid in any event. On the costs thrown away by the
E                                                                                    E
       inevitable adjournment of the present trial, Ms. Lam submitted that the
F      appropriate costs order should either be costs in the cause or no order as    F

       to costs. She articulated that the Defendant had not, on its own volition,
G                                                                                    G
       taken issue with the pleadings of the Plaintiff and instead the Defendant
H      had earlier indicated that the trial could have proceeded. Rather, the        H

       pleading point was ventilated at the instigation of the Court.
I                                                                                    I

J   27. Mr. Chang asked for the costs of and incidental to the Amendment             J

       Application and costs thrown away should be paid by the Plaintiff             K
       forthwith, to be taxed if not agreed and with a certificate for counsel. He
L                                                                                    L
       also provided a list of suggested directions for the Court to consider

       should the Court adjourn the present case for trial on another day. He        M
       emphasized that the Plaintiff could have proceeded to trial on the plea of
N                                                                                    N
       actual authority alone and when the Plaintiff asked for the Court’s

       indulgence to tidy up its house, the Plaintiff should pay for the costs of    O
       and incidental to the Amendment Application and the costs thrown
P                                                                                    P
       away to the Defendant. What, he rhetorically asked, did the Defendant

       do wrong to warrant the Court depriving its entitlement to costs              Q
R                                                                                    R

S   28. Whilst Mr. Chang agreed that the pleading issue was not unearthed by         S
       the Defendant, he maintained that the Plaintiff should shoulder the
T                                                                                    T
       blame when the 2-day trial hearing was derailed because of the

U                                                                                    U
V                                                                                    V
A                                                                                    A
       Amendment Application. The Defendant’s submissions on costs were
B      all valid and I accepted them.                                                B

C                                                                                    C
    29. In my view, costs issues are always in the discretion of the Court and
D      should be exercised after considering the particular circumstances of a       D

       case. Under the Amendment Application, the Plaintiff had obtained
E                                                                                    E
       indulgences from the Court to put its house in order which resulted in
F      the inevitable adjournment of the present 2-day trial.                        F

G                                                                                    G
    30. There was no denying that the Plaintiff could have proceeded to trial on
H      the strength of actual authority alone. But should the Plaintiff opted for    H

       that course of action, the risks that, on the basis of the materials placed
I                                                                                    I
       before the Court on 29 September 2008, the Court might conclude that
J      Ms. Michelle Chong had no actual authority to enter into the carriage         J

       contract could not be under-estimated. The Plaintiff did need to pick up      K
       the new plea of the ostensible or apparent authority as the second string
L                                                                                    L
       to its bow.

M                                                                                    M
    31. After taking all the circumstances into account and looking at the
N                                                                                    N
       matters most carefully in the round, I would hold that (a) the costs of

       and incidental to the Amendment Application and (b) the costs thrown          O
       away by the adjournment of the trial should be paid by the Plaintiff to
P                                                                                    P
       the Defendant forthwith, to be taxed if not agreed, with certificate for

       counsel.                                                                      Q

R                                                                                    R

S                                                                                    S
    32. Therefore, on 29 September 2008, I ordered that:
T                                                                                    T

U                                                                                    U
V                                                                                    V
A                                                                                      A
          (a) The Plaintiff be granted leave to amend the Statement of Claim as
B             per the draft Amended Statement of Claim dated 29th September            B

              20083 within the next 7 days;
C                                                                                      C

D         (b) Within 14 days of (a), the Defendant shall file and serve a Re-Re-       D

              Amended Defence;
E                                                                                      E

F         (c) Within 7 days of (b), if necessary and so advised, the Plaintiff shall   F

              file and serve an Amended Reply;
G                                                                                      G

H         (d) Within 7 days after (c), there shall be mutual discovery of any new      H

              documents and inspection of the said documents within 7 days there-
I                                                                                      I
J                                                                                      J

          (e) Upon the conclusion of the filing and service of the new pleadings as    K
              provided above and within 28 days of (d), the Plaintiff and the
L                                                                                      L
              Defendant shall (if so advised and when necessary) file, serve and

              exchange any additional witness statement(s);                            M

N                                                                                      N
          (f) no further witness statement from either the Plaintiff or the

              Defendant shall be allowed to be filed, served or exchanged without      O
              the Court’s leave;
P                                                                                      P

          (g) The trial of the action herein be adjourned sine dine with liberty to    Q
              restore so as to fix new dates for a trial in the Fixture List of the
R                                                                                      R
              District Court before a bilingual judge with 4 days be reserved and

S             that such trial dates be fixed in consultation with counsel’s diaries;   S

T                                                                                      T
        with some minor amendments which were agreed to by the parties.

U                                                                                      U
V                                                                                      V
A                                                                                        A
       (h) Costs of and incidental to the leave to amend the Statement of Claim
B          and the costs thrown away by the adjournment of the 2-day trial on            B

           29th and 30th September 2008, be paid by the Plaintiff to the
C                                                                                        C
           Defendant forthwith, to be taxed if not agreed, with a certificate for
D          counsel.                                                                      D

E                                                                                        E
    33. I believe that the above dealt with all the matters for the time being and
F      I would express my gratitude to both Ms. Lam and Mr. Chang for their              F

       respective submissions.
G                                                                                        G

H                                                                                        H

I                                                                                        I

J                                                                                        J

K                                                                                        K
                                                   Frederick HF Chan
L                                                                                        L
                                                  Deputy District Judge

M                                                                                        M
N                                                                                        N
    Ms. Rachel Y. K. Lam, instructed by Messrs. DLA Piper Hong Kong for the Plaintiff;
O                                                                                        O

    Mr. Jonathan T. Y. Chang, instructed by Messrs. Hampton, Winter & Glynn for the
P                                                                                        P

Q                                                                                        Q

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