Chang Min Tat FJ (delivering the judgment of the Court):

In the course of hearing an urgent application for stay of execution, it occurred to us that a much more satisfactory course in the circumstances of this case would be to hear the substantive appeal itself and though this would not make available to us the undoubted advantages of knowing the learned Judge's grounds of decision, we formed the opinion that in an O. 14application which this proceeding was, nothing really turned on the credibility of witnesses and no real obstacle presented itself to the course we proposed to take. Apart from our inherent jurisdiction, r. 25 of the Federal Court (Civil Appeals) (Transitional) Rules, 1963 enables the appeal to be heard in such conditions.

By nine agreements in writing, called Equipment Leasing Agreements, all in identical form save as to the dates, the amounts and the objects of the leases, the respondents leased on various dates between 2 September 1975 and June 1976 certain very expensive machinery at substantial rentals, all in excess of $7,000 odd per month, for a period of 30 months commencing from the dates of the agreements. Ex facie, the agreements were exactly what they were said to be - leasing agreements of chattels or contracts of bailment with no element of sale. Under these agreements, the appellants as lessees had no interest that could be seized by way of execution and there could be no question of any assignment or mortgage of an option to purchase. And if they purported to assign any proprietary rights in the machinery or otherwise deal with the objects of lease as owners, or "do or permit any act likely to endanger the safety or condition of the goods of prejudice or jeopardise the lessor's ownership of the goods" (cl. 18(f), the respondents as lessors would become entitled to immediate possession and to terminate the leases. The lessees were also not entitled, as under a hire-purchase agreement, in the absence of any provisions of this effect, to sub-hire them. Clause 19(i) refers to expiration or other determination of the lease and it is reasonably clear that the expiration refers to termination by effluxion of time and the "other determination" to the exercise of the lessors' rights arising upon any breach or breaches of the terms and conditions of the lease on the part of the lessees.

Clause 19(ii) reads:

(ii) Upon the determination of the lease (other than by effluxion of time) the lessee shall pay the lessor:

(a) any arrears of rentals accrued as at the date of termination;

(b) any sums other than rentals which may become payable under the agreement;

(c) any expenses incurred by the lessor in tracing and/or recovering possession of the goods or in enforcing the provisions of this lease;

(d) an amount equal to the unpaid rentals for the remainder of the period of this lease.

In each leasing, the second appellants executed a document termed a Guarantee and Indemnity to guarantee the due payment of all sums of money due from the lessees to the lessors and to indemnify the lessors against all losses, damages, costs and expenses.

Each lease was consensually varied as to the terms and the amounts of the payment. Whereas in the lease agreements, the total amount of the hiring charges was expressed in one lump sum to be paid by equal monthly parts for the period of the hire, with a leftover residual value of only $1, the lump sum, decreased, in part, by the hire-rents hitherto paid, (i) was now further diminished by a certain rebate, (ii) then had added on to it accrued interest, (iii) and again was diminished by a more substantial residual value, (iv) and lastly increased by an amount termed hiring charges. The net amount became the total rent for the period of the hire, now increased to 36 months from the date of the variation and the monthly instalment of rent is one-thirty-sixth of this total rent. One of the results of this variation was that the monthly hire was, in actual figures, re