Tsang Shu Wo v. Person Unknown in Occupation of Lot No.2643rp in D.D.120, Yuen Long, New Territories, Hong Kong and Another

HCMP 3279/2013

[2019] HKCFI 2529

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 3279 OF 2013

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J U D G M E N T

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Introduction

1.On 27 September 2018, dates for the trial of this action were fixed for 7 to 13 January 2020, with a time estimate of 5 days, to be heard by Anthony Chan J. Also, a PTR was fixed for 3 October 2019.

2.Less than one month before the PTR, on 11 September 2019, the plaintiff issued a summons (“Substitution Summons”) seeking leave to appoint Man Cheung Lam (“Mr Man”) as substituted plaintiff in substitution for the plaintiff, and for leave to re-amend the statement of claim in accordance with the draft annexed to the summons.  The application was returnable at the PTR.  It was opposed by the 2^nd defendant.

3.On 2 October 2019, the day before the PTR, the plaintiff issued a new summons (“Joinder Summons”) seeking leave to withdraw the Substitution Summons, and instead to join Mr Man as the 2^nd plaintiff to the action, and to re-amend the statement of claim in accordance with the draft annexed to the summons.  The summons also sought directions relating to consequential amendments to pleadings and adopting Mr Man’s affirmation dated 11 September 2019 as his witness statement as to fact for the trial.

4.At the PTR on 3 October 2019, I granted leave for the Substitution Summons to be withdrawn, with costs to the 2^nd defendant, and I adjourned the Joinder Summons to 14 October 2019 to permit proper preparation for an argument, where the 2^nd defendant indicated that it would be strenuously opposed.

5.It can be said at once that it is at least unfortunate that at a routine PTR three months in advance of long fixed trial dates, the Court was faced first with an application to substitute someone in place of the existing plaintiff, and subsequently instead to add that person as an additional plaintiff.

Background

6.These proceedings were originally commenced by way of an originating summons dated 5 December 2013.  At first, there was only one defendant, but the 2^nd defendant was subsequently added on his own application.  The 2^nd defendant has been the only active defendant.  Later, by an order made by consent, but only in January 2017, the action was reconstituted as a writ action, and pleadings were filed.

7.The statement of claim was dated 17 February 2017.  In it, the plaintiff claimed at all material times to have been a sub-tenant entitled to have exclusive possession of some land (“Land”), which was owned by the Tang Siu U Tso registered under the New Territories Ordinance. The managers of the Tso had entered into a head lease (“Head Lease”) with three persons surnamed Tang, one of whom Tang Chi Yung had entered into the sub-tenancy agreement with the plaintiff (“Sub-Lease”).  The Sub-Lease was for a period of five years commencing 21 July 2012 to 20 July 2017.

8.The plaintiff’s claim was that despite requests and demands and even the commencement of these proceedings, the defendants continued wrongfully to occupy some part of the Land, constituting trespass and unlawful interference and occupation.  The remedy sought was delivery up of vacant possession of that part of the Land, and an order that the defendant should pay the plaintiff mesne profits and/or damages to be assessed.

9.The 2^nd defendant’s defence was pleaded as a challenge to the plaintiff’s title and interest under the Sub-Lease, alleging that the plaintiff has never been a sub-tenant of the Land on various grounds being: (a) the extension of the Head Lease had not been signed by all the managers of the Tso; (b) the 2^nd defendant and his family had since the late 1970s been occupying part of the Land with the consent of the managers of the Tso, including one of the co-tenants under the Head Lease; (c) the Head Lease contains an express term prohibiting sub-letting, so that Tang Chi Yung had no authority to enter into the Sub-Lease; and (d) the Sub-Lease was entered into by Tang Chi Yung alone without the authority and/or consent of the other co-tenants.

10.With the consent of the 2^nd defendant, the plaintiff was granted leave to amend the statement of claim on 25 September 2017.  The primary amendment was by reference to a new sub-lease dated 4 September 2017 (“New Sub-Lease”).  The amended statement of claim added paragraphs 15A and 15B as follows:

“15A. By another Sub-Tenancy Agreement dated 4^th September 2017, Tang Chi Yung (with the confirmation of Tang Tong, one of the managers of the Tso) sub-let the Land to Man Cheung Lam for a term commencing from 21^st July 2017 to 3^rd July 2019 with right to renew if Tang Chi Yung shall be entitled to continue renting the Land from the Tso for whatever term.

15B.   Man Cheung Lam grants permission and licence to the Plaintiff to continue using and occupying the Land and proceed with this legal action to recover possession of the Land including the portion occupied by the 1^st and 2^nd defendants …”

11.In his amended defence, the 2^nd defendant pleaded to those two paragraphs by admitting the fact of the purported New Sub-Lease, but challenging its validity, or its operation, for the same reasons he challenged matters relating to the Sub-Lease.

12.In the proposed re-amendments to the statement of claim, as well as re-naming the plaintiff as the 1^st plaintiff and identifying Mr Man as the 2^nd plaintiff, it is proposed to add paragraphs 15C to 15E, as follows:

“15C. By a Sub-Tenancy Agreement dated 1^st August 2017 made between Tang Chi Yung and the 2^nd Plaintiff, Tang Chi Yung further sub- let the Land to the 2^nd Plaintiff for a term of 5 years commencing from 21^st July 2017 to 20^th July 2022 at the yearly rent of HK$60,000.

15D. By the written confirmation of Tang Chi Yung and Tang Tong (as manager of the Tso) dated 26^th August 2019 witnessed by Tang Chi Hok, they confirmed that the meeting of members of the Tso was convened and resolved that the Tso continued to lease the Land to Tang Tung Chiu, Tang Wing Shing and Tang Chi Yung from 20^th July 2019 to 30^th September 2022, and Tang Chi Yung continued to sublet the Land to the 2^nd Plaintiff from 21^st July 2019 to 20^th July 2022 on the same terms and conditions as such contained in the Sub-Tenancy Agreement dated 4^th September 2017.

15E.     By reason of the sub-tenancy agreement mentioned in paragraphs 15A-15D hereinabove, the 2^nd Plaintiff is entitled to possession of the Land since 21^st July 2017, whereas the 1^st and 2^nd Defendants have been in wrongful occupation of part of the Land as set out in paragraph 7 hereinabove.  As the 2^nd Plaintiff became the sub-tenant replacing the 1^st Plaintiff after commencement of litigation, this Honourable Court granted leave for the 2^nd Plaintiff to be joined in this action.”

13.The draft re-amended statement of claim also has amendments to the prayer by which both the 1^st and 2^nd plaintiffs seek an order for delivery up of that part of the Land to the 2^nd plaintiff, and payment to the 1^st and/or 2^nd plaintiffs of mesne profits and/or damages to be assessed.

The Arguments

14.Mr Chong for the plaintiff says that the issues for trial crystallised by the pleadings as they stand are: (a) whether the Head Lease was validly made, which is essentially a matter of law; (b) whether the Sub-Lease was validly made, which is also essentially a matter of law; (c) whether the 2^nd defendant that his family have been occupying the disputed Land with the consent or licence or permission of the manager(s) of the Tso or of Tang Wing Shing, one of the co-tenants under the Head Lease, and if so the legal consequence that follows; and (d) whether any consent for the 2^nd defendant to occupy would have been revoked upon the relevant parties entering into the Head Lease or the Sub-Lease, which is also essentially a matter of law.

15.Mr Chong also submits that exactly the same issues arise on the proposed re-amendments, save that references to the New Sub-Lease need to be added to issues (b) and (d).

16.Mr Chong relies on the underlying purpose of the procedural law on joinder, which is to ensure that all issues between the existing and joining parties be resolved in one set of proceedings, so as to avoid time and expense and the risk of inconsistent findings in multiple proceedings.  He submits that the court should adopt a liberal approach particularly having regard to the CJR, and that the test as to joining a new party is whether there is a bona fide claim and a proper question to be tried as between the intended plaintiff and the defendant that is necessary or just and convenient for resolution between them as well as between the plaintiff and the defendant in the existing proceedings.

17.Mr Koo does not really dispute those principles, but says they do not meet the real point which is that the proposed joinder and re-amendments seek to plead a new cause of action which has accrued only after the date of the original commencement of the action.  Whilst there was some confusion in Mr Chong’s submissions as to whether Mr Man’s proposed claim was a new cause of action, or the same as the already pleaded cause of action, I consider that Mr Man’s proposed claim is plainly a new cause of action.  It is Mr Man’s claim, not the plaintiff’s.  It is to be brought on the basis of possessory rights arising under the New Sub-Tenancy to which Mr Man is a party, but the plaintiff is not.  Mr Koo says this kind of proposed amendment is simply not possible, and he relies on Eshelby v Federated European Bank Ltd [1932] 1 KB 254, as considered and applied by the Hong Kong Court of Appeal in Lark International Finance Ltd v Lam Kin Marisa [2000] 4 HKC 688 and Wing Siu Co Ltd v Goldquest International Ltd [2003] 2 HKC 64.

18.Mr Chong submits that as the New Sub-Lease only came into existence in September 2017, neither the plaintiff nor Mr Man can be faulted for the latter not being joined as a co-plaintiff at the time of commencement of the proceedings.  Indeed, Mr Chong expressly accepts that Mr Man had no locus standi to sue as at that date.

19.It might be thought that that is precisely Mr Koo’s point.  Relying on Eshelby, he says that bringing in a new cause of action and a new plaintiff is not amending the proceedings at all, but seeking to bring a new cause of action which could not have been sued upon at the time the writ was issued.  That is not permissible under the rules, and cannot be done without the consent of all parties.  This was echoed by Keith JA in the Lark case (at 699I-700A).

20.In the Wing Siu case, Rogers VP referred (at §9) to Keith JA’s judgment, and noted that whilst it was a view apparently expressed in absolute terms that might give rise to the impression that it was a rule of law, the very fact that the formulation used included an exception where there was the consent of the defendant would indicate that the rule is, on its face, not an absolute rule.  He went on (at §10) to identify that the rule that a cause of action which arose after the date of the issue of the writ cannot be included in the claim is linked with the ‘relation back’ theory, namely that amendments to a pleading relate back to the date of the original pleading.  But he also noted that the relation back theory cannot be regarded as absolute in all situations.  Reference was made to Liff v Peasley [1980] 1 WLR 781, where (at 803D-E) Brandon LJ stated that the general proposition underlying the ‘relation back’ theory:

“seems to me to be an entirely sensible proposition so long as the amendment concerned does not involve the addition of a new party, either as plaintiff or defendant, or the raising of a new cause of action, but involves only the modification, by addition, deletion or substitution, of pleas or averments made between existing parties in respect of a cause or causes of action already raised. Where, however, the amendment concerned involves the addition of a new party or the raising of a new cause of action, it appears to me to be unrealistic and contrary to the common sense of the matter to treat it as relating back in the same way.”

21.Rogers VP went on to consider a line of English cases – including Maridive & Oil Services (SAE) v CNA Insurance co (Europe) Ltd [2002] 2 Lloyd’s Rep 9, on which Mr Chong has placed some reliance – and identified (at §17) that the distinction drawn in the English cases appears to be between permitting an amendment which allows the real dispute in the case to be determined and one which introduces into the action a cause of action which could be said to be incurably bad because it did not exist at the date of the original claim.  Whilst he also noted that two judges of the English Court of Appeal in the Maridive case expressed the view that there should be a flexible attitude dependent on the justice of the case, he concluded (at §18) that it could not be said that the original rule in the Eshelby case has disappeared, and that he had not been shown any case which had gone so far as permitting, in the face of opposition, an amendment which would introduce into a writ a cause of action which simply did not exist at the date of the issue of the writ.

22.Mr Koo also drew my attention to two cases in which first instance judges felt bound to apply the law as it has been developed in Hong Kong.  One was the decision of Mr Recorder A Chow SC (as Chow J then was) in Telecommunications & Technology Asia (BVI) Ltd v Outblaze Ltd (unreported, HCA 2541/2009, 13 May 2011), in which he stated he should apply the law as developed in Hong Kong.  The then Recorder had, however, also noted that at first instance in the Wing Siu case, Ma J (as he then was) had acknowledged that the English High Court decision in Vax Appliances Ltd v Hoover plc [1990] RPC 656 supported the proposition that causes of action which accrued only after the issue of a writ could be pleaded by way of amendment, but observed that it would fall to a higher court to overrule the clear effect of the Lark case.

23.The other was the decision of then DHCJ Saunders in Chan Yuen Yee v Chan Chuck Kwong [2005] 2 HKLRD 416, where he reluctantly felt bound by the decisions of the Court of Appeal.  He lamented that it was particularly unfortunate that in none of the Hong Kong decisions does it appear that the attention of the court was drawn to the decision of Jacob J in Beecham Group plc v Norton Healthcare Ltd (No 1) [1997] FSR 81, in which it had been held that leave to amend the writ to add a cause of action not in existence at the time of the issue of the writ could be granted provided that (a) the cause of action in the original writ was valid at the time of issue, and (b) the new cause of action was valid at the application for leave to amend. Jacob J considered the rules to be sufficiently general and flexible to accommodate such amendments.  In the particular case before him, the then Deputy Judge considered (at §§18-19) disallowing the proposed amendment would only have the effect of imposing unnecessary delay, cost and expense, and that it was easily argued that to allow the amendment would be completely sensible and consistent with the modern approach to the principles of case management underlying litigation.  Nevertheless, no matter how sensible he might find a particular course of action in any particular case, he felt bound by the decisions of the Court of Appeal, so declined the application for amendment.

24.For his part, Mr Chong place reliance on DKK Trading & Development co Ltd v Multi Best Manufacturers Ltd [1986] HKLR 155, in which DHCJ Cruden held that the relation back principle does not apply to joinder of a new defendant into an existing action, so that a plaintiff was entitled to seek amendment so as to assert the new cause of action against the new defendant because the joinder of that new defendant took effect only from the date of joinder.  In response, Mr Koo says that the case must be treated as wrongly decided in the light of the subsequent Court of Appeal authorities.  In any event, he says, the current application is not concerned with the joinder of a defendant.  Rather, it is concerned with the proposed joinder of a plaintiff who is acknowledged not to have had a cause of action as at the date of the writ, and who is in any event not prejudiced because he can commence new proceedings by his own writ.

25.During argument, Mr Koo accepted in response to a question from me that if Mr Man were to commence a new action, it is at least likely that case management considerations would identify that the two actions would either be consolidated or, perhaps more probably, be heard together.  Hence, absent the current fixed trial dates for the present action, trial dates would likely be fixed to deal together with the claims against the 2^nd defendant as regards the alleged trespass and unlawful occupation of part of the Land brought both by the plaintiff and Mr Man.  He also accepted the corollary, namely that if two actions were brought but dealt with separately, that might give rise to duplication of time and effort and the risk of inconsistent decisions arising from the multiplicity of proceedings.

26.Though it is fair to note that the 2^nd defendant has not pleaded any response to the allegation and claim which might be brought separately by or for Mr Man, the 2^nd defendant has already pleaded a case in response to the allegations relating to the New Sub-Tenancy.  I have already noted that the defence relies on the same matters as are pleaded by way of defence to the Sub-Tenancy under which the plaintiff claims possessory rights to the Land.  It seems to me to be unlikely that the 2^nd defendant’s response to the proposed paragraphs 15C-15E will be very much different than challenging the validity of the underlying layers of tenancy, including perhaps a challenge to the validity of the meeting (or the minute of the meeting) of 26 August 2019.  Mr Chong went so far as to suggest that as a person who is not a party to any of the tenancy agreements, and who is not even a member of the Tso, the 2^nd defendant has no locus to challenge the meeting of 26 August 2019.  I do not agree, as it seems to me that the 2^nd defendant must be entitled at least to test the validity of the various arrangements as are said to give rise to the rights of possession claimed by the plaintiff or Mr Man.  But the extent of that challenge is likely to be similar to previous challenges already made on the pleadings, and relatively limited in extent.

27.In those circumstances, I am not prepared to accept that the Court’s powers of case management under the rules are so limited or inflexible as to prevent permitting joinder of Mr Man as a plaintiff, and the re-amendments as would assert his claim, if in the exercise of discretion that seems to be the appropriate way to manage these two similar and overlapping claims.

28.I think I can properly take into account that both the Lark and the Wing Siu decisions pre-date the change in approach permitted and mandated under the Civil Justice Reforms introduced in April 2009, including the introduction of the underlying objectives in RHC Order 1A.  I also note that in Chan Mei Lin & others v Lee Hong (unreported, CAC 44/2015, 3 December 2015) the Court of Appeal noted (at §28), albeit apparently obiter, that the court’s discretion under Order 20 rule 5(1) is a wide one, and that the decision in Eshelby does not create an inflexible rule and the case has to be considered together with the discussions in subsequent decisions of the English Court of Appeal.

29.Where both the plaintiff and Mr Man make similar claims in trespass and unlawful occupation, based upon the same and other broadly similar tenancy and sub-tenancy agreements, the challenge to which from the 2^nd defendant is also the same or similar, it would clearly make sense for those matters to be dealt with in one action and at one trial.

30.Further, and in any event, I do not accept that the relation back principle, or the general rule against permitting amendments which introduce a cause of action which did not exist at the date of the original writ, apply to the circumstances where what is proposed is the addition of a new plaintiff to bring a claim on a cause of action which has accrued since the date of the original writ containing a valid claim brought by the original plaintiff.  The kind of limitation questions which are sometimes of concern where an existing plaintiff seeks to add a new cause of action to a claim containing a different course of action are irrelevant in the circumstances.  For all practical purposes, Mr Man’s claim would only be asserted at the point that he is joined as a party.  Where it is accepted that Mr Man could today issue a writ bringing exactly the same claim as is proposed to be brought in these proceedings, it seems to me to be an exercise in artificiality to suggest that there is no power to permit him to bring that claim within these proceedings.

31.The question then becomes one of the proper exercise of a discretion.

32.Mr Koo asserts that if the joinder and re-amendments were to be permitted that would introduce new facts and evidence regarding the extension of the Head Lease arrangements and the New Sub-Tenancy, as well as the alleged written confirmation of the meeting, the conduct of that meeting and the alleged resolutions passed.  Mr Koo also says that the amendments are not clear, and the 2^nd defendant is entitled to seek further and better particulars of them, and be given sufficient time to investigate and respond, in order to raise whatever bona fide defence he might have to this new claim.  Mr Koo’s bull point is that he cannot possibly do that, without prejudice to the 2^nd defendant, in the three months remaining before the trial dates fixed.  He also states that it would be quite wrong to vacate those dates, and that Mr Man is not prejudiced as he can always commence a new action against the 2^nd defendant.

33.I acknowledge those points, but I do not think that they point against the exercise of discretion in favour of permitting joinder and re-amendment in the particular circumstances.  First, the 2^nd defendant has already pleaded a response to allegations based upon the New Sub-Tenancy (which were raised by the red amendments to the statement of claim, in paragraphs 15A and 15B).  Secondly, those facts must already have been considered and addressed in the witness statements already filed.  The 2^nd defendant has already filed witness statements from himself, his father and Tang Kin Kwok, one of the managers of the Tso.  Thirdly, it seems unlikely in the circumstances that the 2^nd defendant can do other than raise similar challenges to validity to the extension of the tenancy arrangements which have occurred during the rather slow progress of these proceedings to a trial.  Whilst that may require some further factual material, it ought to be obtainable within a matter of weeks.  In so saying, I do not accept Mr Koo’s rather speculative suggestion that there may be substantial new issues in dispute arising from the proposed joinder and re-amendments.  Fourthly, the plaintiff has already given disclosure of the documents necessary as a result of, and in anticipation of, the proposed green amendments, and relevant copies have been provided for inspection.  Fifthly, it seems unlikely that any or any substantial further disclosure would be required from the 2^nd defendant (who is unlikely to have any further relevant documents in his possession, custody or power).

34.I accept, of course, that the looming trial dates put the parties, and the 2^nd defendant in particular, under some pressure of time in completing the necessary preparations for a trial.  But there is some force in Mr Chong’s submissions that, even if the plaintiff’s and Mr Man’s causes of actions are separate (as I consider them to be), they arise from a continuum of similar circumstances, and so give rise to at least similar if not largely identical issues to be resolved, many of which are essentially legal points.  Of the remaining time, the plaintiffs cannot complain if a significant proportion of it is given to the 2^nd defendant’s preparation.  Even against some pressure of time, it seems to me to be far preferable and fair and appropriate case management for these matters to be brought to trial on the originally fixed trial dates.

Result

35.Therefore, taking into account all of the circumstances, it seems to me that this is a proper case in which to permit the joinder of Mr Man as 2^nd plaintiff, and in which to permit the re-amendments proposed in the form produced in the additional hearing bundle for the PTR.  I so order.  I also direct that service of the re-amended statement of claim be dispensed with.

36.I shall further give directions as follows:

(a)  leave to the 2^nd defendant to serve his re-amended defence within 28 days, namely by 5pm on 13 November 2019;

(b)  leave to the 1^st and 2^nd plaintiffs to file their amended reply (if any) by 5pm on 22 November 2019;

(c)  the affirmation of the 2^nd plaintiff filed on 11 September 2019 shall stand as his witness statement as to fact, and stand as evidence in chief (unless the trial judge shall otherwise directs);

(d)  leave to the 2^nd defendant to file further or supplemental witness statement(s) as to fact by 13 December 2019, which will stand as evidence in chief (unless the trial judge otherwise directs).

Other PTR Directions

37.In respect of other directions which might be given at the PTR, I have had the benefit of some proposals. In the exercise of my case management discretion I make the following further directions:

(a)  the plaintiffs shall lodge with the Court and serve on the 2^nd defendant and agreed trial bundle by 5pm on 16 December 2019;

(b)  all pleadings and witness statements shall be annotated in the right-hand margin with paginated references to the documents referred to therein;

(c)  the plaintiffs shall lodge with the Court and serve on the 2^nd defendant their opening submissions and list of authorities, together with copies of authorities, by 5pm on 20 December 2019;

(d)  the 2^nd defendant shall lodge with the Court and serve on the plaintiffs his opening submissions and list of authorities, with copies of authorities (but without duplicating authorities already provided in copy by the plaintiffs), by 5pm on 30 December 2019.

Costs

38.Whilst the plaintiff and Mr Man have succeeded in the application made by the Joinder Summons, against the opposition of the 2^nd defendant, it seems to me that the opposition was entirely appropriate, if ultimately unsuccessful.  In essence, the timing of the application identified that the plaintiff and Mr Man were seeking an indulgence.  In any event, there is no reason otherwise to depart from the standard approach applicable on applications for amendments.  In the circumstances, the costs of and occasioned by the Joinder Summons shall be payable by the plaintiff to the 2^nd defendant, to be taxed if not agreed, in any event.

39.Other costs of the PTR in general shall be in the cause.

Postscript

40.As I have already indicated, the red amendments were made to the statement of claim in September/October 2017.  Those amendments introduced the fact of the New Sub-Tenancy entered into by Mr Man.  The amendments themselves, in particular paragraph 15B, identify that it was recognised that this fact must have affected the plaintiff’s claim in a material way.

41.Hence, Mr Chong was correct in acknowledging that the Joinder Summons could and should have been issued significantly earlier than just before the PTR.  Whilst I have held that I have the power to order joinder and permit the proposed re-amendments, the plaintiff and Mr Man might consider themselves to be fortunate that it seems to me fair and appropriate, even against the chronology, to have made those orders in the exercise of my discretion.

42.I should, therefore, not want this judgment to stand as any form of precedent that it is appropriate to make applications to join a new party, and make substantial amendments, only a few months in advance of long fixed trial dates.  I have exercised my discretion in permitting joinder and amendment on the particular facts of this case.  I would anticipate that similar late applicants in most other cases would experience at least a strong judicial wind blowing in their face, and the likely dismissal of their applications.

Mr KM Chong and Mr Alvin Chong, instructed by Raymond Chan, Kenneth Yuen & Co, for the plaintiff

The 1^st defendant was absent

Mr Ernest Koo, instructed by Simon Wong & Co, for the 2^nd defendant