Kiuwide Co Ltd v. The Secretary for Justice for and on behalf of the Director of Lands

HCMP 253/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 253 OF 2015

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________________________

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(By Original Action)

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(By Counterclaim)

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JUDGMENT

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A. Subject matter

1.This is an appeal against the Order of Master M Wong on 3 May 2016 whereby it was ordered, interalia, that the defendant’s (“the Government”) Counterclaim against D2 to D16 be struck out.

B.    Background

2.Lot 951 in DD 381 (“the Lot”) is held from the Government under the New Grant (“the New Grant”) which was granted to Madam Tseung Ding Man (“Madam Tseung”) in 1957.

3.Between 1959 and 1962, Madam Tseung subdivided the Lot into Sections A to P and the Remaining portion, and had assigned Sections A to P to various assignees, whilst keeping the Remaining Portion in her own name.

4.By an Assignment dated 30 June 1986 and registered in the Tuen Mun Land Registry, the plaintiff became the registered owner of Section J of the Lot.

5.According to the plan attached to the New Grant (“the New Grant Plan”), there was a purple area which was within the boundary of the Lot and was situated in the Remaining Portion of the Lot (“the Purple Area”).

6.It is the plaintiff’s case that its director and his family have been occupying Section J and the Purple Area (as well as some other areas) for many years.

7.Indeed, by an order of DHCJ Marlene Ng dated 19 December 2013 in HCMP 1003/2013, the plaintiff had obtained title to the Purple Area by adverse possession against Madam Tseung. 

8.Whilst the Government accepts that the Purple Area was included in the New Grant Plan, it says that there was a realignment of the boundary of the Lot by a series of letters between the Government and Madam Tseung in October and November 1958.

9.It is the Government’s position that by the letters, Madam Tseung either had never taken possession of the Purple Area or possession of the Purple Area had been surrendered to the Government prior to Madam Tseung’s assignments to the various purchasers. 

10.Thus, if the Government is right, the Purple Area is Government land.  If the plaintiff is right, the Purple Area is land over which it had acquired title through adverse possession.

11.When the plaintiff was claiming adverse possession against Madam Tseung over the Purple Area, it wrote through its solicitors to the Government on 20 May 2013 inviting the Government to participate in the proceedings.

12.The Government replied by letter dated 19 June 2013 saying it was not going to participate in the private proceedings but “nothing herein… prejudices the Government’s position that the Purple Area … is Government land and its rights to issue proceedings for appropriate declarations from the Court.”

13.On 18 December 2014, the Government issued a notice under the Land (Miscellaneous Provisions) Ordinance (Cap 28) requiring the plaintiff to cease unlawful occupation of the Purple Area before 9 January 2015.

14.Against this background, the plaintiff filed and served the Originating Summons (“OS”) dated 2 February 2015 seeking, inter alia, a declaration that the Purple Area is an area over which a Government lease was granted under the New Grant in favour of Madam Tseung; that the plaintiff is the registered owner of the Purple Area by the order of DHCJ Marlene Ng; and the Government is estopped from denying the aforesaid.

15.Since 23 March 2015, the Government had indicated their intention to file a counterclaim against the plaintiff.  But nothing was done until 11 May 2015, two days before the first hearing of the OS, when a counterclaim joining 15 additional defendants was filed and served on the plaintiff (“the Counterclaim”).

16.The 15 additional defendants, D2 to D16 are successors in title of Madam Tseung of other sections of the Lot (ie, Sections A – P, except Section J).

17.In the Counterclaim, the Government sought, inter alia, a declaration that the boundaries of each of Sections A to P had prior to the date of the first assignments been realigned or modified by agreement between the Government and Madam Tseung; and that the areas occupied by the plaintiff including the Purple Area remained unleased Government land.

18.By summons dated 18 June 2015, the plaintiff seeks to strike out:

(a)   the Counterclaim or parts thereof (in particular para 12 and para 1 of the Prayer of Relief) under Order 15, rule 5 and/or Order 18, rule 19 on the ground that it may prejudice, embarrass or delay the fair trial of the action; and

(b)  the joinder of the causes of action and the 15 additional defendants under Order 15, rule 5 on the ground that it may embarrass or delay the trial or is otherwise inconvenient.

19.The matter came before Master M Wong on 29 January 2016 and by his Decision handed down on 3 May 2016, the Master ordered the joinder of D2 to D16 be struck out and effectively the Counterclaim be also struck out.

20.Since then, the Government has attempted to amend its Counterclaim by supplying further particulars of its case against D2 to D16 by summons dated 21 February 2017.  The Government has also issued what it called 15 protective writs against D2 to D16 (but not yet served) to secure against time-bar.

21.It is the Government’s position that it will not proceed with the writs if this appeal is allowed.  But if there is a dismissal of the appeal, the Government will ask for an order (also by summons dated 21 February 2017) that the OS and the actions under the 15 writs be consolidated or they be tried at the same time or one after the other.   

C.    Submissions and Discussion

22.I will deal with Counsel’s submissions together with the discussion of the main issues involved in this appeal.

23.In my view, the main issues are:

(a)   The construction of Order 15, rules 3(1), 5(1) and 5(2); and

(b)  The exercise of the court’s discretion on whether the joinder and the counterclaim should be struck out.

C1.   Order 15, rules 3(1), 5(1) and 5(2)

24.It is Mr Ho SC’s (together with Mr Yin) submission that the relevant terms for considering joinder and counterclaim are contained in Order 15 of the Rules of the High Court, the relevant parts of which are:

“ 3. Counterclaim against additional parties (O. 15, r. 3)

(1) Where a defendant to an action who makes a counter-claim against the plaintiff alleges that any other person (whether or not a party to the action) is liable to him along with the plaintiff in respect of the subject-matter of the counterclaim,or claims against such other person any relief relating to or connected with the original subject-matter of the action, then, subject to rule 5(2), he may join that other person as a party against whom the counter-‌claim is made.

…

5. Court may order separate trials, etc. (O. 15, r. 5)

(1) If claims in respect of two or more causes of action are included by a plaintiff in the same action or by a defendant in a counterclaim, or if two or more plaintiffs or defendants are parties to the same action, and it appears to the Court that the joinder of causes of action or of parties ‌… may embarrass or delay the trial or is otherwise inconvenient, the Court may order separate trials or make such other order as may be expedient.

(2)   If it appears on the application of any party against whom a counterclaim is made that the subject-matter of the counterclaim ought for any reason to be disposed of by a separate action, the Court may order the counterclaim to be struck out or may order it to be tried separately or make such other order as may be expedient.”

25.It is Mr Ho’s submission that there is a common issue that arises between the Government and the plaintiff and each of D2 – D16, who are current owners of Sections A to P. 

26.He submits the following common issue arises, ie, whether the boundaries of the Lot have been modified / realigned by agreement between Madam Tseung and the Government prior to the first assignments affects not only Section J and the Purple Area which are registered in theplaintiff’s name or occupied by the plaintiff but all the other sections carved out of the Lot, ie, Sections A to P now occupied by D2 – D16.

27.Hence, the Government argues that it has established a proper case to join D2 to D16 to the Counterclaim under Order 15, rule 3(1), subject only to Order 15, rule 5(2). 

28.The powers under rule 5(2) include not just strike-out, but the power to order the counterclaim to be tried separately or such other order as may be expedient.  It is the Government’s position that since the plaintiff has only sought to strike-out the Counterclaim, this is the only question which concerns the court and nothing else.

29.In his oral submission, Mr Ho further made the point that the plaintiff was only seeking to strike out the Counterclaim on the basis that it would embarrass, delay the trial or otherwise inconvenient: see Order 15, rule 5(1).  Mr Ho submits, however, that the power to strike-out does not arise under rule 5(1).  He says the words “or make such other order” should not include the power to strike out, as this power is not expressly spelled out under the rule 5(1).  The power to strike out, if meant to exist, would take the form of express wording as in the case under rule 5(2). 

30.I disagree with Mr Ho.

31.First, paragraph 1 of the plaintiff’s summons for strike out dated 18 June 2015 says:

“ … the Counterclaim ... be struck out under the Rules of the High Court (Cap. 4A) O. 28, r. 7(3) and/or O. 15, r. 5 and/or O. 18, r. 19 on the ground that it may prejudice, embarrass or delay the fair trial of the action;”

32.It is obvious that the court’s power under, inter alia, Order 15, rule 5 is invoked and is not a limitation to Order 15, rule 5(1).  The word “prejudice” is not within rule 5(1).  It does not appear the plaintiff has limited itself to rule 5(1) by tracking the exact wordings of rule 5(1).  Even if it was so limited, as the summons has cited Order 15, rule 5, the court may consider whatever order is just or appropriate in the circumstances.  For the avoidance of doubt, I disagree that the court is precluded from considering other forms of relief / order and should consider only striking out as the Government suggested.

33.Secondly, such narrow interpretation of the rules is unnecessarily fettering the discretionary power of the court under Order 15, rule 5.  Looked closely, it does not seem that rule 5(1) and rule 5(2) are mutually exclusive of each other and to be read as if these were two limbs conferring different powers on the court, one with the power to strike-out, the other without.  This is made clear by the wordings common to both sub-rules that the court may make “such other order as may be expedient”.  The overriding guiding principle is what is just and expedient in the circumstances of the case.  If the subject matter of the counterclaim may prejudice, embarrass or delay the trial, it may follow that it ought to be disposed of by a separate action.  In other words, there may be many reasons why the counterclaim needs to be disposed of separately.  One of such reasons is that it may prejudice, embarrass or delay the trial.  In such case, the plaintiff may ask the court to exercise the discretion to strike out the counterclaim.  Thus, even though the words “prejudice, embarrass or delay” are not found in rule 5(2), it does not mean the court’s discretion is curtailed or the court is excluded from considering striking out where it finds that the counterclaim ought to be disposed of by a separate action as it would cause embarrassment or delay to the trial.  Alternatively, if it appears to the court that the joinder of causes of action or party prejudices, embarrasses or delays the trial, the court may strike out the same under the “such other order” provision if it is just and expedient to do so. 

34.Thirdly and most importantly, it is the Government’s case that the joinder should be made under Order 15, rule 3(1), which states that the joinder is subject to rule 5(2).  Rule 5(2) expressly provides for the power to strike-out.  To ask the court to only look at rule 5(1) and submit there is no power to strike out is inconsistent with the Government’s own stance to invoke joinder jurisdiction under rule 3(1).

35.For this reason alone, it is pivotal to construe the power to strike-out under rule 5(2).

36.On the interpretation of the relationship between joinder under rule 3(1) and what is expedient to do under rules 5(1) and (2), much assistance can be derived from Ernst & Young (a firm) v Butte Mining Plc (No 2) [1997] 1 WLR 1485, 1493D – 1494B:

“ … The subject matter of the counterclaim need not be of the same nature as the original action or even analogous to it. A counterclaim is in substance a separate action: the only limitation is the identical limitation on the inclusion of various different causes of action in the same counterclaim to that imposed on the inclusion of different causes of action in an original action: see Ord.15,rr.1(2) and 2(3). And rule 3(1) specifically provides for the joinder as additional defendants to counterclaim of persons who are not plaintiffs in the action.

The safeguard against any misuse of this procedure is afforded by the overriding discretionary jurisdiction conferred by rule 5(2), to which rules 2(1) and 3(1) are expressly made subject. This rule affords the court the ultimate say in what should or should not proceed by way of counterclaim. If the court thinks for any reason that the subject matter of the counterclaim ought to be disposed of by a separate action, the court may make such order as may be expedient. Any excess may be curbed in this way.

This construction is entirely in accord with the history of the counterclaim and the authorities. Section 24(3) of the Supreme Court of Judicature Act 1873 (36 & 37 Vict. c. 66) created the counterclaim for the statutory purpose of enabling all matters in dispute between the parties to be completely and finally determined and all multiplicity of disputes with respect to any of those matters to be avoided. The counterclaim was devised and designed for use for the purposes of procedural convenience, enabling the subject matter of claim and counterclaim to be tried in one action: see e.g. Beddall v. Maitland (1881) 17 Ch.D. 174 and cases cited. If this procedureisinvokedwherethereisnosuchproceduralconvenience, the court is afforded the means to take the appropriate counter-‌measures. I should add that the availability of a counterclaim is not intended to affect the substantive rights of the parties, but afford a means for determining those rights: see Stumore v. Campbell & Co. [1892] 1 Q.B. 314, 316.

The leading authority is Manchester,Sheffield,and LincolnshireRailway Co.v.Brooks (1877)2Ex.D.243.  The two plaintiff railway companies sued for tolls due to them jointly.  The defendant set up separate counterclaims against each of the plaintiffs for damages for the delay in the delivery of goods.  Notwithstanding the absence of mutuality, the court refused to strike out the counterclaims, because they could conveniently be tried together with the action.  The decision in this case and in a number of other scantily reported 19th century decisions all support the view that there is absent any such limitation on the possible subject matter of a counterclaim as is contended for by E.&Y., but that the court has a discretionary power to limit use of the counterclaim to cases where it is procedurally convenient and that, in the exercise of such discretion, the absence of mutuality may be a weighty factor in favour of striking out the counterclaim in order to protect the plaintiff from the over-complication of the litigation and the resulting delay: see Wood on English and International Set-off (1989), pp.253–255 and consider The Normar [1968] P.362, 372–373.”

[Emphases supplied]

37.Then at pp 1495 – 1496, Lightman J went on to say that:

“ There are two stages to be considered on this as on any application under rule 5(2). The first is whether the subject matter ought to be disposed of in a separate action. The second (which only arises if the first is answered in the affirmation), is what order ought to be made.

Stage 1. Stage 1 involves essentially a balancing of the considerations of procedural convenience in favour of and against disposal in a separation action. …

Stage 2. I must then turn to the second question, namely whether I should strike out the counterclaim or order it to be tried separately or make some other order which is expedient.

...

The starting point in considering this issue is to determine what, if any, are the appropriate guidelines in the exercise by the court of its discretion under rule 5(2). I agree with Mr. Boyle QC that the starting point is to be found in the dictum of Neill L.J. in Boocock v.Hilton International Co.[1993]1W.L.R. 1065,1076c:‘…the surest guideline for the exercise of any general discretion is to consider what the justice of the case demands.’  But, in deciding what the justice of the case demands, it is in my view, necessary to have in the forefront of the mind the statutory object of the creation of the counterclaim, namely procedural convenience.” 

[Emphases supplied]

38.I shall adopt the above principles when considering whether the Master’s decision to strike out the joinder and the counterclaim of the Government was correct.

C2.   The exercise of discretion: procedural convenience or inconvenience

39.It is Mr Ho’s submission that since the boundary dispute, ie, whether there was a realignment of the boundaries between the Government and Madam Tseung, would affect not just the plaintiff’s land, but the land of D2 – D16 as well, it is in the interest of efficient case management that the Government’s claim against the plaintiff be tried together with its claim against D2 – D16 to avoid multiplicity of proceedings and the risk of inconsistent findings over this common issue.

40.This seems to ignore the plaintiff’s submission that although all the sections of the Lot share a common grant, under section 4 of the Government Leases Ordinance (Cap 40) (“the Ordinance”), each section of the Lot is deemed to be subject to a separate government lease.  It is well settled that the Government is acting in its private capacity as landlord in relation to Government leases.  The Government, as private landlord, is free to negotiate and reach different agreements with different tenants which are not binding upon any other owners of the other sections of the Lot. 

41.Indeed, as is recognised in paragraph 12 of the proposed Amended Counterclaim, there were separate negotiations with D2 to D16 going on with a view to regularizing their respective occupations of areas purportedly outside the boundaries. 

42.The Government claimed and pleaded that none of D2 – D16 have responded: paragraph 12 of the proposed Amended Counterclaim.  But this does not prevent that eventually some or part or all of D2 – D16 may reach private / separate agreement with the Government.  Thus, even on the Government’s own case, there may or may not be the need to resolve the common issue with all the other defendants.

43.That much is made clear by the Government’s own pleading that “in the event” the plaintiff succeeds, then the realigned boundary applies to all the additional defendants: see paragraph 14 of the proposed Amended Counterclaim. Plainly, the Government is suing on a contingency basis. 

44.In this regard, Mr Ho counters by submitting that the Government is suing on an “as is” basis.  Effectively, he is saying that this is the Government’s case as pleaded and there is a common issue to be determined on how the boundaries should be drawn between the plaintiff and all the other defendants. 

45.I disagree.  I agree with Ms Eu SC (together with Ms Cheung) that the Government can and is free to draw the boundaries through private agreement with each of the tenants not just now but in the future.  For as long as the negotiations are going on, some or part or all of the additional defendants may reach agreement with the Government and may not have any common issue to resolve in the Amended Counterclaim. 

46.Moreover, each section owner (ie, each defendant) may be occupying each section on a different set of facts which may or may not be common to each other; and may have nothing to do with the common issue identified by the Government.

47.It is difficult to see how it would be procedurally convenient or promotes procedural convenience to try (a) the common issue, which does not necessarily arise, and (b) all the other non-common issues which do not concern the plaintiff, or amongst the defendants.

48.The Government argues that it is premature to consider what other facts or issues may be raised by D2 – D16 as they have not filed their defences yet.  The court can always consider separate trials or trial of separate issues when all the defences are available.

49.In my view, this is precisely the reason why the presence of the Counterclaim promotes procedural inconvenience.  Procedural convenience or inconvenience involves consideration of efficient case management which in turn should ensure not just speedy resolution but also that the case be resolved in the least time and costs-consumptive fashion.  It would be costly, time-consuming, and prolonging the procedures to wait and see all the defences, then determine what the next step to be. 

50.It would be far more convenient to see all the defences, to identify whether common issues exist / arise and if so, vis-à-vis which defendants, before joining and counterclaiming.  To join and counterclaim first then disjoin or order separate trials or trial of separate issues or seek other form of order is to put the cart before the horse.  The reason is very simple.  Uncertainty of the defences may cause wastage of time and effort.  For example, amongst the 15 additional defendants, perhaps only 5 are interested in defending; and this mutual issue of boundary dispute may only arise vis-à-vis 2 of them.  Joining them all now and wait to see what defences they may (or may not raise) causes at the very least the delay in time, if not cost-consumptive as well. 

51.As a matter of fact, in respect of this current appeal, quite a number of the defendants have written to suggest they adopt a neutral stance or are not interested in participating.  Although not directly on the boundary dispute, the current appeal will no doubt have an impact on all the defendants’ occupation of each section.  The lack of interest is a good indication that the Government’s dispute with the plaintiff does not necessarily concern / affect the other defendants.

52.At this juncture, it is worth mentioning Mr Ho’s oral submission that he disagreed that the burden is on the Government to justify the Counterclaim; and the burden is on the plaintiff to show procedural inconvenience (a term coming from Ernst & Young) to justify striking out the Counterclaim.   

53.I reject this submission.  At 15/5/1, Vol 1, HongKongWhiteBook 2017, it is said:

“ The power of the court under this rule is discretionary (Thomas v. Moore [1918]1K.B. 555,CA,perPickford L.J.: ‘joinder of parties and joinder of causes of action are discretionary in the sense that if they are joined there is no absolute right to have them struck out, but it is discretionary in the Court to do so if it thinks right’). The plaintiff,if challenged,must justify the joinder and no extra burdenshould be imposed on the defendant through the plaintiff needlessly enlarging the area of the dispute (per Collins M.R. in Saccharin Corp. v. Wild [1903] 1 Ch. 410 at 422, where the plaintiff was limited in the first instance to three out of 23 causes of action for infringement of patents).”

54.Mr Ho seeks to distinguish Saccharin saying it was a case where the plaintiffs literally threw 23 different actions against the defendant, thereby casting the onerous burden on the defendant to examine the grounds in each action to refute infringement of patent in each case.  I understand Mr Ho to be submitting that in the present case, the Government has pleaded a complete cause of action by raising the boundaries dispute which is an issue common to and which the Government has counterclaimed against the plaintiff and D2 – D16.

55.But as submitted by Ms Eu and stated above, the Government’s case on the common issue against the additional defendants is made on a contingent basis and separate negotiations with each of the defendants are on-going.  The best the Government can say is it may or may not have a case on the common issue vis-à-vis each of D2 – D16.

56.Moreover, the Government has chosen to insist on joining the defendants by way of counterclaim at this stage (even though they have now issued writs against the defendants, which they have now done but not when the case was before Master M Wong), seeing what defences may be raised, which would enable the Government to know the case of each defendant, before taking the next step.  I take the view that, although not exactly the same, this is similar to the situation in Saccharin, where an unnecessary burden was imposed upon the defendant to disprove each of the 23 causes of action.  Here, the analogy is that the burden is cast on the plaintiff to justify the Counterclaim against each of the parties, ie, D2 – D16, without even knowing what case each of them are going to raise.  This cannot be right.

57.I hasten to add that apart from disputing the applicability of the principles stated in the White Book citing Saccharin, Mr Ho has provided no authority to support his proposition that the burden is on the plaintiff to justify the Counterclaim or establish procedural inconvenience within the meaning of Ernst & Young.

58.I also wish to add that even if I am wrong about the burden, for reasons stated herein, the exercise of the court’s discretion in this case is not going to be in favour of the Government.

59.In an attempt to refute the plaintiff’s contention that the Government’s case against the additional defendants were unparticularised, the Government responded by proposing to amend the counterclaim to insert more particulars against the defendants.

60.However, it seems clear that even on the Amended Counterclaim,the Government has only pleaded the boundary disputes as the only common issue amongst the plaintiff and the other defendants.

61.For reasons which I have already explained above, I do not think there is any procedural convenience to gain by joining and counterclaiming against all the defendants.  On the contrary, it is procedurally inconvenient in the sense that this is inefficient case management, and will enhance costs and time.  I further note and agree with Ms Eu that the plaintiff’s case vis-à-vis the Government is in fact ready for determination.  It would delay the proceedings between the plaintiff and the Government if the plaintiff is put to wait upon the filing of the defences, see what issues are common or indeed whether there are common issues at all, and as the Government suggested, only then decide whether there should separate trials or trials of separate issues, etc.  This is unfair and prejudicial to the plaintiff. Nor is it just or expedient in this case do so.

62.I agree with the plaintiff that the overloading of the proceedings with factual circumstances pertaining to the separate Government lease of each defendant of the Lot will add to the cost and delay of the plaintiff’s OS.  The evidence suggests that the Purple Area forms part of the home of the plaintiff’s director and his family.  The Government has not suggested otherwise.  It is unfair and unjust for the plaintiff’s claim over the Purple Area to be further delayed to enable the Government to counterclaim unrelated and unascertained issues relating to D2 – D16, who may or may not resist the Counterclaim with defences which may or may not be common to the dispute over the Purple Area.

63.In contrast, no or little prejudice will be suffered by the Government.  Now that the Government has issued separate writs against each of the defendants, it is even clearer that the Government is in a no-lose position.  The Government can proceed separately against each of the defendants focusing on the genuine disputes which are individual or specific to each defendant. The Government can still proceed with its consolidation application at a later stage, after the main issues of each suit are identified when pleadings of each suit are closed.

64.For these reasons, I uphold the Master’s decision to strike out the joinder and the counterclaim and the Government’s appeal is dismissed.

65.For the sake of completeness and in deference to the parties’ submission, I shall mention Ms Eu’s submission about the Government’s refusal to participate in the Adverse Possession proceedings and now turns around to claim that the Purple Area is Government land.  She submits the Government is estopped from denying the plaintiff’s title to the Purple Area.  Ms Eu further relies on this to support the unfair and unjust conduct of the Government which is prejudicial to the plaintiff and aims at procrastinating the proceedings.

66.Mr Ho submits that the criticism is unfair.  The plaintiff’s claim against Madam Tseung premised upon adverse possession and raised no boundary disputes of the Lot with which the Government was concerned.  Furthermore, any declaration obtained by the plaintiff against Madam Tseung would only be binding on Madam Tseung and those claiming through her: Wong Yiu v Leung Sum and Leung Sui Ying, HCMP 2421/1987. Importantly, the plaintiff would have absolutely no case to claim adversary possessory title against the Government which requires a possession of 60 years.

67.In Fairweather v St Marylebone Property Co Ltd [1963] AC 510 at 536, it was held that:

“ No one supposes that adverse possession against a lessee during his term is itself adverse possession against his landlord.”

68.Thus, any successful claim by the plaintiff against Madam Tseung would only bar the latter’s title between themselves and cannot be binding upon the Government.  

69.I agree with Mr Ho that the Government’s refusal to participate in those proceedings between the plaintiff and Madam Tseung was reasonable as there was no or little commonality of issues which justify the Government intervening in those proceedings.

D.    Other matters

D1.   Government’s Summons to amend Counterclaim

70.As I have dismissed the Government’s appeal, it is unnecessary to consider its summons to amend the Counterclaim.

D2.   Government’s consolidation application

71.Both the plaintiff and the Government do not dispute that consolidation is an exercise of the court’s power of discretion.

72.The Government has filed but not yet served the 15 protective writs against D2 – D16. 

73.It is unknown whether defences would be filed or if so, what defences there would be.  In the circumstances and in the exercise of the court’s discretion, it is premature to order consolidation at this stage.

74.I shall adjourn the Government’s summons for consolidation sine dine with liberty to restore.

E.    Disposal

75.The Government’s appeal against Master M Wong’s decision dated 3 May 2016 is dismissed with costs to the plaintiff, certificate for two counsel.

76.I make no order on the Government’s Summons dated 21 February 2017 seeking amendment of the Counterclaim.

77.The Government’s Summons dated 21 February 2017 for consolidation is adjourned sine die with liberty to restore.  Costs be reserved.

F.    Note of thanks

78.I am indebted to Counsel’s most able assistance.

Ms Audrey Eu SC, leading Ms Prisca Cheung, instructed by Chan Lau & Wai, for the plaintiff (in original action) and the  1^st defendant (in counterclaim)

Mr Ambrose Ho SC, leading Mr Michael Yin, instructed by the Secretary for Justice, for the defendant (in original action) and the plaintiff (in counterclaim)