Ada Ltd v. Sing Tao Holdings Ltd and Others

CACV000131/1990

BETWEEN

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Coram: Hon. Sir Derek Cons, V-P, Clough, J.A. and Hooper, J.

Dates of hearing: 30 October 1990 and 12 February 1991

Date judgment handed down: 5 March 1991

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JUDGMENT

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Clough, J.A.:

1. This is the judgment of the court.

2. The 5th defendant (Mr. Tony Wong Chun Loong) and the plaintiff (Ada Limited) appeal and cross-appeal respectively against the conditional order purportedly made under the inherent jurisdiction of the court by Godfrey J. on the 9th August 1990 granting the 5th defendant leave to intervene and be added as a defendant in this action. The 5th defendant seeks to have the order modified in the manner hereinafter indicated. The plaintiff seeks to have the order set aside save for that part of it which orders the 5th defendant to pay the plaintiff's costs of the 5th defendant's application to intervene. The court was informed by counsel during the hearing that on the 12th December 1990 the plaintiff applied for leave to discontinue the action save for this and another interlocutory appeal. The only practical purpose of the present appeal and cross-appeal is therefore to determine the incidence of costs between the parties concerned.

3. The action is concerned with the affairs of two groups of companies, namely the Jademan Group and the Sing Tao Group. The complex background resulting in this and other litigation has been helpfully and comprehensively summarised in the judgment of Liu J. delivered on the 30th August 1990 concerning matters relating to the ex parte injunction granted by Kaplan J. in this action on the 1st August 1990. For the purposes of this appeal it suffices to give the following outline of the relevant background.

4. The holding company controlling the Jademan Group is Jademan (Holdings) Limited, ("Jademan"), a public company listed on the Hong Kong Stock Exchange. The plaintiff is a wholly owned subsidiary of Jademan. At all material times the 5th defendant and his related interests held 42 per cent of the equity in Jademan, the public held 28.4 per cent and the 4th defendant (Sally Aw Sian) held the remaining 29.6 per cent. The 5th defendant was formerly Chairman of Jademan but resigned on the 14th June 1989. Shortly thereafter a new board took over control of the management of Jademan. Since the 6th July 1989 Mr. Chin Kwok Chung, alias Tony Zie ("Mr. Zie") and Mr. Lam Kin Ming ("Mr. Lam") have been members of the new board of Jademan. They evidently control a company called Tabor Incorporated ("Tabor").

5. The holding company controlling the Sing Tao Group is the 1st defendant, Sing Tao Holdings Limited, a company incorporated in Bermuda and listed on the Hong Kong Stock Exchange. The 4th defendant is the Chairman of the 1st defendant and has voting control of that company. The plaintiff holds 2,000 of the first defendant's 310,600,000 issued 25 cent shares. The date of acquisition of the plaintiff's shares does not appear from the evidence. In his judgment Liu J. mentions that the shares were registered in the plaintiff's name on the 30th May 1990. The 2nd defendant is a wholly owned subsidiary of the 1st defendant and is incorporated in Hong Kong. The 3rd defendant is incorporated in the Virgin Islands and is a joint venture of the 2nd and 4th defendants. It is significant that the Sing Tao Group (through Sing Tao Capital Choice Limited, another Virgin Island company), also had a substantial interest in the Jademan Group and must therefore have been interested in any change in the control of the management of the Jademan Group.

6. The present action is one of several involving the participants in the struggle for control of Jademan after the 5th defendant's resignation as Chairman. At the time he resigned, most of his shares (i.e. 225,818,000 25 cent shares amounting to 39.54 per cent of the equity in Jademan) were charged to creditors who were pressing for payment. On the 10th August 1989 the 5th defendant entered into a complex arrangement ("the Tabor agreement") with Messrs. Zie and Lam and their company Tabor under which they assumed the 5th defendant's obligations to his creditors. By June 1990. Tabor had paid off the 5th defendant's original creditors and become first mortgagees of his shares which had previously been deposited with the original creditors. The relevant parties were by this time locked in litigation over the voting rights of the shares, Tabor's claim under the Tabor agreement to exercise an option to purchase 129,000 of the shares and the 5th defendant's claim to be entitled to redeem the shares.

7. The 5th defendant was looking to the Sing Tao Group for finance to redeem his shares and recover his voting rights. A scheme put forward in April 1990 fell through after Jademan's financial advisers had contended it amounted to a "concert party" between the 1st, 4th and 5th defendants to gain control of Jademan in breach of the Code on Takeovers and Mergers. Ultimately a scheme ("the Arbus Agreement") was arranged pursuant to a facility letter dated the 28th June 1990 whereby the 3rd defendant offered the 5th defendant the finance necessary to discharge his debt to Tabor and redeem his shares. It seems that the 5th defendant accepted this offer and drew down these facilities on the 28th June and the 10th and 12th July 1990 when he tendered payment of his debt to Tabor. However these tenders were refused and the 5th defendant applied to the court on the 17th July 1990 for an order authorising him to redeem his shares. This application was listed for hearing before Godfrey J. at 10 a.m. on the 1st August 1990.

8. The plaintiff, which is the creature of Jademan (and no doubt activated by Messrs Zie and Lam) was anxious to prevent the 3rd defendant (or the Sing Tao Group) from financing the redemption of his Jademan shares by the 5th defendant under the Arbus Agreement. Being the holder of 2,000 shares in the first defendant the plaintiff embarked on the present action which is a derivative action by the plaintiff as a minority shareholder for the benefit (according to paragraph 1 of the statement of claim filed on the 7th September 1990) of the general body of shareholders (other than the 4th defendant) of the 1st defendant. The substance of the plaintiff's claim was that the Arbus Agreement was a "connected" transaction by a "concert party" in breach of the Listing Rules (upon which the Stock Exchange had been asked to deliver a ruling, which was pending when the action was instituted) and that the fourth defendant had procured the Agreement for her own benefit and in breach of her fiduciary duty as a director of the first defendant.

9. Before issuing its writ the plaintiff obtained ex parte from Kaplan, J. on the 1st August 1990 at 8.45 a.m. (immediately before, as Kaplan J. was informed, the hearing by Godfrey J. of the 5th defendant's redemption application) an interlocutory injunction the material part of which ordered that:

10. It will be seen that the injunction does not refer to the Arbus Agreement but is so framed as to have the effect of preventing the 1st, 2nd and 4th defendants until trial or further order from putting the 3rd defendant in funds to finance the 5th defendant under the Arbus Agreement or any other arrangement for the redemption of the 5th defendant's shares. In the plaintiff's generally endorsed writ issued on the same day the same relief byway of perpetual injunction was sought together with (1) derivative claims on behalf of the 1st defendant for damages and an account by the 4th defendant as constructive trustee for breach of fiduciary duty and (2) a claim for damages by the plaintiff against all the defendants.

11. Notice of the interlocutory injunction was given to the 5th defendant on the 1st August 1990 at about 10 a.m. in the Supreme Court immediately before the hearing of his redemption application by Godfrey J. A copy of the injunction was also faxed to the 5th defendant's solicitors on the same day. On the 2nd August the plaintiff filed its notice of motion dated the 1st August applying for the continuation of the interlocutory injunction. On the same date the 1st, 2nd and 3rd defendants (who were at all material times separately represented from the 4th defendant) issued their summons applying to discharge the ex parte injunction. On the 7th August the hearing of the plaintiff's notice of motion and the 1st, 2nd and 3rd defendants' summons was adjourned to be heard on the 15th August (when the interlocutory injunction was discharged by consent and Liu J. began the hearing which concluded with his reserved judgment on the 30th August) and the ex parte order was continued until further order.

12. On the 8th August there was inconclusive correspondence between the solicitors respectively acting for the 5th defendant and the plaintiff regarding the joinder of the 5th defendant in the action and his claim to be heard on the injunction issue on the 15th August. Thereafter, on the 9th August the 5th defendant issued a summons under Order 15 rule 6(2) (for service on the plaintiff and all the then defendants), returnable that afternoon at 3.30 p.m., seeking abridgment of time for service and applying to be added as an intervening defendant and to be represented and heard on the interlocutory injunction issue. The summons was supported by the affirmation of the 5th defendant inter alia invoking Order 15 rule 6(2) and/or the inherent jurisdiction of the court and indicating that he sought to be added as a defendant in the action, and/or to be permitted to be heard on the interlocutory injunction issue on the 15th August 1990.

13. At the hearing of the summons there was no appearance by any of the then defendants or their representatives. It is not clear whether they had been served. Be that as it may, the learned judge heard submissions by leading counsel, Mr. Edward Chan, for the 5th defendant in support of the application, and by Mr. Barrie Barlow opposing the application on behalf of the plaintiff. The judge ordered under the inherent jurisdiction of the court that the 5th defendant be added as a defendant in the action subject to two terms and that the plaintiff's taxed party and party costs of the application were to be paid by the 5th defendant in any event. The nature of the terms imposed and the reasoning of the judge appear from his note of the hearing in which he recorded as follows:

14. The 5th defendant raises no objection to the first term imposed by the judge but, by his notice of appeal, he seeks to set aside the second term (precluding him from asking for costs in any proceedings in the action) as having been imposed by a wrongful exercise of the judge's discretion. The judge's order regarding the costs of the application is also sought to be set aside and it is contended on the 5th defendant's behalf that he should have his costs of the application in any event.

15. The plaintiff originally contended, in addition to the other matters raised in his cross-appeal, that the appeal was incompetent for want of leave under section 14(3)(e) of the Supreme Court Ordinance (Cap. 4) because it related to costs only. However on the resumption of the hearing of the appeal on the 12th February 1991 this point was abandoned by Mr. Barlow for the plaintiff. Save for the order for costs of the application made in its favour, the plaintiff's cross-appeal seeks to set aside the substantive part of the judge's order. It is therefore convenient to deal first with the grounds for the cross appeal, because if they can be substantiated the order must be set aside with costs below to the plaintiff and the term attacked by the 5th plaintiff would have to be set aside with the substantive order.

16. The first ground for setting aside the order was that the 5th defendant had only a commercial or financial interest in the outcome of the action and not a direct interest in its subject matter so that the judge had no basis for exercising the inherent jurisdiction of the court and permitting the 5th defendant to intervene in reliance upon The Mardina Merchant [1975]1 WLR 147. The second ground was, in substance, that if the judge did have jurisdiction to permit the intervention of the 5th defendant he exercised his discretion wrongly when making his order because in the circumstances it was neither just nor convenient to permit the intervention which would be likely to delay and extend the pending nearing of the pending interlocutory injunction issue.

17. As regards the first ground for the cross-appeal Mr. Barlow contended (1) that the judge erred in relying on the inherent jurisdiction of the court and that (2) it was implicit that in relying on that jurisdiction the judge had held that he had no jurisdiction to permit the intervention of the 5th defendant under Order 15 rule 6(2). In the forefront of Mr. Chan's argument against the cross-appeal was the contention that the case fell within Order 15 rule 6(2)(b)(ii). Strictly this should have been the subject of a respondent's notice to the cross-appeal but Mr. Barlow very sensibly did not oppose Mr. Chan's taking this point without a respondent's notice and it was therefore argued. This proved to be the real issue on this aspect of the cross-appeal. We agree with Mr. Barlow's submission that if the case does fall within Order 15 rule 6(2) it is not necessary or desirable to invoke the inherent jurisdiction as Brandon J. was constrained to do in order to do justice when exercising the Admiralty jurisdiction of the High Court in an action in rem in circumstances where the jurisdiction to permit the intervention of a third party under Order 75 rule 17(1) proved to be too narrow.

18. Mr. Chan also sought initially to rely on Order 15 rule 6(2)(b)(i) to provide the jurisdictional basis for the judge's order. Mr. Chan's written submissions contained no indication of this and when he initially addressed this court Mr. Barlow opposed the taking of this point on appeal in the absence of a respondent's notice. Mr. Chan reserved his position on (b)(i), but when he came to his reply he did not seek to deal with Mr. Barlow's arguments on b(i) based on the decision of willmer J. in The Result [1958] P 154. We therefore regard Mr. Chan as having impliedly abandoned his attempt to rely on (b)(i). We emphasise, however, that we do not intend to be taken to have formed any view as to the applicability or otherwise of (b)(i) in the present case on such limited argument as was advanced to the court without citation of all the relevant leading cases, some of which. are cited later in this judgment.

19. Coming now to (b)(ii), this provision was introduced in 1971 to widen the jurisdiction of the court. This is manifest from the difference between the wording of O.15 rule 6(2)(b)(i) and (ii) which provide respectively:

20. The authorities on what is now (b)(i) are difficult to reconcile. Thus, as the editors of the Supreme Court Practice 1991 Vol. I point out at pp. 193-4 (para 15/6/5), in Pegang Mining Co. Ltd. v. Choong Sam (1969)2 MLJ 52 (P.C.) the Privy Council expressed the opinion (see per Lord Diplock at p.56) that a party might be added under the former equivalent of (b)(i) if:

In adopting this wide interpretation of the rule the Privy Council (per Lord Diplock at p. 55) preferred the approach of Lord Esher in Byrne v. Brown (1889) 22 QBD 657 (C.A.) which had been rejected by Devlin J. in Amon v. Raphael Tuck & Sons Ltd. [1956]1 QB 357. In the view of the Privy Council Lord Devlin's narrower interpretation of the rule in Amon's case had been rightly over-ruled by the Court of Appeal in Gurtner v. Circuit [1968]2 QB 587 (C.A.).

21. However the House of Lords seemed to adopt amore restrictive view in Vandervell's Trustees Ltd. v. White [1971] AC 912 and so rule b (ii) was introduced to confer a wider jurisdiction, as was recognised by the Court of Appeal in Tetra Molectric Limited v. Japan Imports Limited [1976] RPC 541 per Buckley L.J. at p.544: see also Astro Exito Navegacion S.A. v. Southland Enterprise Co. Ltd. [1982]1 QB 1248 per Ackner L.J. at pp.1255H-1257D (where the actual decision of the court was subsequently doubted by the House of Lords in Astro Exito Navegacion S.A. v. Chase Manhattan Bank N. A. [1983] 2 AC 787).

22. In our opinion the wide scope and flexibility of (b)(ii) is accurately stated in the following dictum of Kerr L.J. in Sanders Lead Co. Inc. v. Entores Metal Brokers Ltd. [1984]1 W.L.R. 452 (C.A.) at p.460 D-H:

23. The substance of Mr. Barlow's argument was that the 5th defendant had no relevant legal interest, but only a commercial or financial interest in the action which was concerned with the internal management of the first defendant and the alleged misfeasance of the 4th defendant. Hr. Barlow acknowledged that the 5th defendant might have a legal interest in the enforcement of the Arbus Agreement but contended that this was irrelevant in the action.

24. For the purposes of b (ii) there must exist between the 5th defendant (as the person seeking to intervene) and "....any party to the cause or matter ... a question or issue arising out of or relating to or connected with any relief or remedy claimed in the cause or matter...." which the court considers ...."it would be just and convenient to determine as between" the 5th defendant ".... and that party as well as between the parties to the cause or matter". Thus if the court is to have jurisdiction under (b)(ii) it is initially necessary that the question or issue mentioned in (b)(ii) should be common to (1) the intervener and a party to the cause or matter and (2) the parties to the cause or matter.

25. At the time the matter came before Godfrey J. the primary relief sought by the plaintiff's generally endorsed writ was a perpetual injunction framed in the same wide terms as the ex parte interlocutory injunction, but clearly effective to prevent the 1st, 2nd and 4th defendants from financing the 3rd defendant to enable it to perform the Arbus Agreement. The continuance of the ex parte interlocutory injunction was also sought.

26. On any realistic view the injunctive relief sought by the plaintiff at this stage (but subsequently abandoned on the 15th August 1990) was primarily sought to prevent the performance of the Arbus Agreement. Thus in paragraph 17 of his affidavit sworn on the 1st August 1990 in support of the plaintiff's ex parte application for an injunction Mr. Pett, the plaintiff's solicitor deposed:

27. All the defendants were resisting the plaintiff's claim for injunctive relief. They sought to procure the performance of the Agreement and, to this end, to satisfy the court that the Agreement had been made without any breach of the relevant Stock Exchange rules or of the 4th defendant's fiduciary duties. There was therefore a real question or issue ("the question") between the plaintiff and all the defendants to the cause regarding the Arbus Agreement the performance of which the plaintiff sought to prevent by the injunction. The question was whether the proposed performance of the Agreement by the 3rd defendant, employing funds borrowed from or procured by the 1st defendant (or any of its subsidiaries), would occasion a breach of the relevant Hong Kong Stock Exchange Rules and involve misfeasance by the 4th defendant as the Chairman of the 1st defendant and of the Sing Tao Group.

28. As between the 5th defendant and the 3rd defendant there was a binding contract in the form of the Arbus Agreement. The facility letter dated the 28th June 1990 stated that funds would not be available after the 5th July 1990 and that if Tabor did not accept cheques, drafts or cash they were to be returned to the 3rd defendant. However, as indicated earlier in this judgment, the Agreement must have been extended because the 5th defendant made tenders of the necessary funds to Tabor on the 10th and 12th July. Indeed it was part of the plaintiff's case, as stated in Mr. Pett's affidavit that there was an agreement between the 3rd and 5th defendants.

29. The injunctive relief sought (and obtained on an interlocutory basis) against the 1st, 2nd and 4th defendants would in all probability result in a breach by the 3rd defendant (there being no evidence that it had sufficient free assets or access to funds other than from the Sing Tao Group) of its obligations to the 5th defendant under the Arbus Agreement which was in a real sense the subject matter or substantially the subject matter of the action. The 5th defendant had a direct interest in enforcing the Agreement against the 3rd defendant. As Mr. Chan put it, he had a legal right to see that the contract was performed.

30. However it would be no defence to the 3rd defendant in an action by the 5th defendant on the Arbus Agreement to plead that it could not raise the finance to perform its obligations under the Agreement because its associated companies had been injuncted from lending or providing the necessary funds. The 3rd defendant would remain legally liable to perform the Agreement even if the perpetual injunction sought by the plaintiff in the action were granted. The Agreement imposed an obligation upon the 3rd defendant to finance the 5th defendant without any condition qualifying this obligation by reference to the availability of funds to the 3rd defendant from any of its associated companies. Accordingly we accept Mr. Barlow's submission that the question (defined above) did not arise as between the 3rd defendant and the 5th defendant for the purposes of (b) (ii).

31. But, in our opinion, the question (as defined above) did exist on the 9th August 1990 (when the matter came before Godfrey J.) as between the 5th defendant and the plaintiff because, as between those parties, it arose out of, was related to or was connected with the injunctive relief claimed by the plaintiff in the action. Thus the evidence adduced on behalf of the plaintiff in support of its ex parte application for interlocutory injunctive relief disclosed that the primary and immediate aim of the plaintiff in bringing the action was to prevent the performance of the Arbus Agreement and thereby prevent both the 5th defendant (and the 3rd defendant or its associated companies) from recovering (or obtaining) the voting rights attached to the 5th defendant's shares in Jadmean which he had charged in favour of Tabor. Moreover the 5th defendant was served with notice of the ex parte injunction which he would defy on peril of contempt proceedings.

32. The plaintiff's claim for perpetual injunctive relief in the action against the defendants would succeed or fail according to which way the defined question were decided by the court. The relief claimed would manifestly cause injury to the 5th defendant who claims that the defined question should be decided against the plaintiff and that he should be allowed to intervene as a defendant and to counterclaim for damages against the plaintiff for wrongful interference with the Arbus Agreement. In our opinion it is at least arguable that unless the defined question is decided in favour of the plaintiff the perpetual injunctive relief now sought by it in the action against the defendants (which would in all probability result in a breach of the Arbus Agreement by the 3rd defendant) would in all the circumstances amount to the intentional and wrongful interference by the plaintiff with its contractual rights against the 3rd defendant: see Clerk & Lindsell on Torts, 16th edition, para 15-19. We therefore conclude that, once the injunctive relief was sought in the action by the plaintiff against the defendants for the purpose acknowledged by the plaintiff, the defined question existed between the plaintiff and the 5th defendant and the latter's legal rights were affected thereby.

33. In support of the second ground of cross-appeal Mr. Barlow contended that it would be neither just nor convenient to permit the intervention of the 5th defendant. The plaintiff was making no claim against him and the 5th defendant was insisting on intervening. Notwithstanding the first term (precluding any application by the 5th defendant for the adjournment of the interlocutory injunction hearing fixed for the 15th August) imposed by the judge it was likely, Mr. Barlow contended, that there would be delay in the disposal of the pending hearing. The reason advanced for such delay was that there was nothing to prevent the 5th defendant filing voluminous evidence for that hearing.

34. It seems to us that there is no substance in these arguments. Intervention by an additional defendant must almost invariably involve a degree of consequential delay in the proceedings. Moreover it could not have been in the interest of the 5th defendant to drag his feet. He wanted to redeem his Jademan shares. The whole purpose of his intervention was to get the ex parte interlocutory injunction discharged and oppose its continuation. The consent order made by Godfrey J. in the redemption proceedings on the 2nd August 1990 had stayed those proceedings on the footing that the mortgagees would accept an unconditional tender on or before the 6th September 1990. It could only be in the interest of the 5th defendant to have the injunction proceedings disposed of without delay.

35. Furthermore, as the practice notes in the Supreme Court Practice, 1991 Vol. I, p.193, para 15/6/7 indicate, the purpose of rule 6(2)(b)(ii) is the same as Order 16 rule 1(1)(c), namely:

In the present case, if the 5th defendant were not permitted to intervene he would not be bound by a decision of the defined question adverse to him. It would be open to him to litigate that question against the plaintiff in separate proceedings claiming wrongful interference in his contractual rights. Such multiplicity of proceedings would be avoided if the 5th defendant were permitted to intervene in this action and thereby be bound by the court's determination of the defined question.

36. Moreover, the primary objective of the 5th defendant was quia timet relief. At the material time he claimed that his contractual rights would be wrongly interfered with by the relief claimed in the action, but not being a party to the action or within the protection of the plaintiff's undertaking as to damages, given to the court for the benefit of the then intended defendants on the granting of the ex parte injunction, he was precluded from protecting his legal rights in the action. He was left to take separate proceedings against the plaintiff in which any claim for quia timet relief would give rise to obvious jurisdictional problems while the present action was maintained. In all the circumstances it is, in our opinion, clear that it would be just and convenient to permit the 5th defendant to intervene in this action under Order 15 rule 6(2)(b)(ii). Accordingly there was, in our judgment, no need for the judge to invoke the inherent jurisdiction (if any) of the court to permit the intervention of the 5th defendant. He should have been permitted to intervene under (b)(ii). The judge did not exercise that jurisdiction.

37. We come now to the 5th defendant's appeal. Assuming, but of deciding, that the court has inherent jurisdiction to add a defendant in a situation where the wide provisions of order 15 rule 6(2) are not applicable and that the second term (inhibiting the 5th defendant from applying for costs in any of the proceedings) imposed by the judge was within the proper exercise of his discretion under that jurisdiction (if any), we do not consider that the term could be properly imposed, for the reasons given by the judge, as a term when permitting the intervention of the 5th defendant in the circumstances of this case under rule 6(2) (b) (ii).

38. Such intervention could be permitted on such terms as the court considered just but only if the court considered it would be just and convenient to determine the defined question as between the plaintiff and the 5th defendant as well as between the plaintiff and the original defendants. Having concluded that the "just and convenient" requirement of (b) (ii) was satisfied it seems to us that it cannot be right to deprive the 5th defendant of his normal right to invoke the discretion of the court if successful in resisting the contentions of the plaintiff on the defined question in order to protect his legal rights. There is certainly no reported case in which any such term has been imposed.

39. The reason given by the judge for imposing the term was that the 5th defendant was being added as a defendant at his own request and it would be wrong for the plaintiff, who had brought the action, to have to bear any additional costs, whatever the event, "it might nave incurred" by reason of the joinder of the 5th defendant as a defendant in the action. The judge seemed to regard himself as granting some form of indulgence to the 5th defendant which should only be permitted at the 5th defendant's own expense. This line of reasoning (as to which we express no opinion) is, in our judgment, inappropriate when the court is exercising its jurisdiction under Order 15 rule 6(b)(ii) on a "just and convenient" basis. Having concluded that the jurisdiction under (b)(ii) should have been exercised in this case we would therefore discharge the second term as to costs, not on the basis that the judge erred in exercising his discretion under the inherent jurisdiction (as to which we express no opinion) nut on the basis that he failed to exercise the available jurisdiction under (b)(ii) under which the condition was inappropriate in all the circumstances.

40. As regards the costs of the nearing of the 5th defendant's application to intervene, the judge's order, requiring the 5th defendant to pay the plaintiff's costs in any event was consistent with his reasons for imposing the second term regarding costs in the body of his order, namely that the plaintiff should not have, in any event, to pay for the indulgence being given to the 5th defendant by the court. It seems to us that he order regarding the costs of the application should fall away with the term on the basis that the proper order as to these costs should be the order appropriate to a successful application by a party to intervene under O.15 rule 6(2)(b)(ii).

41. In the present case the 5th defendant made his application on snort and minimal notice, but his solicitors had attempted unsuccessfully on the previous day to obtain the plaintiff's consent to the proposed joinder. The usual order in such a case would be for the costs of the opposed application to be in the cause: see the orders made in Tetra Molectric Limited v. Japan Imports Limited [1976] R.P.C. 541 (C.A.) at p.546 and Rexnord Inc. v. Rollerchain Distributors Ltd. [1979] F.S.R. 119 at p.120. However it now appears that the action is being discontinued. Under such circumstances and as this court is having to exercise its own discretion in this matter we intend to order that the plaintiff is to pay the 5th defendant's taxed party and party costs of the application in any event.

42. Accordingly we dismiss the cross-appeal and allow the appeal. We will therefore vary the order made below by deleting the second term (as to costs), setting aside the judge's order as to the costs of the application and substituting an order that the costs of the application be awarded to the 5th defendant against the plaintiff in any event. We also make an order nisi awarding the costs of the appeal to the 5th defendant against the plaintiff.

Representation:

Mr. Edward Chan, Q.C. & Mr. Wilson Chan (M/S Wai & Co.) for Appellant/5th Defendant

Mr. B. Barlow (M/S Wilkinson & Grist) for Respondent/Plaintiff