The Yin Nin Savings Mortgage Loan & Land Investment Co Ltd and Another v. Occupier(S) of Premises (Save and Except the 2nd Defendant To the 9th Defendant) and Others

HCMP 1739/2003

[2020] HKCFI 2594

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 1739 OF 2003

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BETWEEN

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Before:  Hon Lok J in Chambers

Date of Hearing:  5 September 2019

Date of Judgment:  7 October 2020

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DECISION

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1.This is an appeal by the 8^th Defendant against the order (the “Amendment Order”) of Master Hui (the “Master”) dated 27 May 2019, under which the Master amended the earlier consent order (the “Consent Order”) dated 9 October 2018 under the slip rule by adding a new paragraph granting leave to the 1^st and 2^nd Plaintiffs to be represented by separate legal representations.

Background

2.The present case concerns a claim for possession for various pieces of land in Lot No 1198 in Demarcation District No 109, Kam Tin, New Territories (the “Land”) commenced by the 1^st Plaintiff back in 2003.  On 22 April 2004, the 1^st Plaintiff filed its Statement of Claim.  On 6 May 2004, the 4^th to 8^th Defendants filed their Defence and Counterclaim based on adverse possession.  On 17 June 2004, the 1^st Plaintiff flied its Reply and Defence to Counterclaim. Since then, no further substantive action has been taken by the 1^st Plaintiff to prosecute the claim.  No discovery has been conducted and no witness statements has been filed.

3.Judgment has already been entered in favour of the 1^st Plaintiff against the 2^nd and 9^th Defendants, and the claims against the 3^rd and 7^th Defendants have been discontinued.  The remaining Defendants are, therefore, the 4^th, 5^th, 6^th and 8^th Defendants.

4.On 25 May 2018, Messrs Dundons (“DD”), acting for the then intended 2^nd Plaintiff, wrote to Messrs Edmund WH Chow & Co (“EWHC”), solicitors for the 4^th, 6^th and 8^th Defendants, and Messrs KM Tang & Co (“KMT”), solicitors for the 5^th Defendant, seeking their consent for the 2^nd Plaintiff to be added as a co-plaintiff.  After some exchanges of correspondence, a consent summons was signed by Messrs Mayer Brown JSM (“MB”), solicitors for the 1^st Plaintiff, DD, EWHC and KMT indicating their consent for amendment of the Originating Summons adding the 2^nd Plaintiff as a co-plaintiff in the present proceedings.

5.The consent summons was presented to the court for approval.  On 27 September 2018, the clerk of the Master issued a requisition to DD asking for justification to have separate legal representations for the 1^st and 2^nd Plaintiffs.  On 2 October 2018, DD wrote back to the Master answering the requisition (the “DD’s Letter”).

6.According to the DD Letter:

(i)  The 1^st Plaintiff was the only registered owner of the Land when the proceedings were commenced in 2003.

(ii)  In or about December 2017, the 2^nd Plaintiff and another company, Strength Power Group Ltd (“Strength Power”), purchased parts of the Land from the 1^st Plaintiff and the Land was later divided into Section A, Section B and a new Remaining Portion (“RP”).

(iii)  In or about June 2018, Section A was further sub-divided into various Subsections and a Remaining Portion of Section A (“RP-A”).

(iv)  The respective registered owners of the different portions of the Land are now as follows:

(a)  the 1^st Plaintiff owing RP;

(b)  the 2^nd Plaintiff owning Subsections 1 to 7 of Section A; and

(c)  Strength Power owning RP-A and all Section B.

(v)  The present action concerns the following claims against the respective Defendants:

(a)  the 1^st Plaintiff’s claim against the 8^th Defendant for possession of RP;

(b)  the 2^nd Plaintiff’s claim against the 4^th Defendant for possession of Subsection 7 of Section A;

(c)  the 2^nd Plaintiff’s claim against the 5^th Defendant for possession of Subsections 1, 2, 3, 4 and 6 of Section A; and

(d)  the 2^nd Plaintiff’s claim against the 6^th Defendant for possession of Subsection 5 of Section A.

(vi)  To justify separate representations, DD submitted that the 1^st and 2^nd Plaintiffs have interest in separate and distinct portions of the Land and the case against each remaining Defendant is also separate and distinct, and so there would be no conflict of interest between the two Plaintiffs.  No inconsistent steps are anticipated between the two Plaintiffs in running the present proceedings. Finally, there was consensus between all the relevant parties for the joinder and they were informed of the two Plaintiffs being separately represented.

7.After receiving the DD’s Letter, the consent summons was approved by the Master and the Consent Order was made on 9 October 2018.

8.Pursuant to the Consent Order, amended pleadings were filed by the Plaintiffs, the 4^th, 5^th, 6^th and 8^th Defendants in late 2018 and early 2019.

9.Subsequently, the 1^st and 2^nd Plaintiffs took out two summonses dated 6 and 14 March 2019 respectively to strike out certain parts of the amended pleadings of the 4^th, 5^th, 6^th and 8^th Defendants.

10.By a consent summons dated 13 March 2019, the parties agreed to adjourn the 2^nd Plaintiff’s striking out summons for argument.  The said consent summons was signed by separate solicitors for the 1^st and 2^nd Plaintiffs.

11.On 22 March 2019, the 1^st Plaintiff’s striking summons was heard before Registrar Kwang.  At the hearing, the Registrar raised the issue about separate representations, and he asked the parties to address the question as to whether there were exceptional circumstances justifying separate representations in the next CMS.

12.The next CMS took place before Master Ho on 23 April 2019.  After taking instructions, the 4^th, 6^th and 8^th Defendants indicated to the court that they would oppose separate representations.  Master Ho therefore ordered the issue to be adjourned to a further CMS on 28 May 2019 for substantive argument.

13.On 2 May 2019, Master Ho gave direction for MB and DD to write to the Master to clarify whether the Master had actually granted an order allowing separate representations in the earlier consent summons application.  After so writing, the Master directed for a summons to be issued to amend the Consent Order to the effect that express leave had been granted for separate representations.  The 1^st and 2^nd Plaintiffs did so accordingly.

14.In a 3 minutes’ hearing on 27 May 2019, the Master made the Amendment Order under the slip rule amending the Consent Order granting express leave for separate representations for the 1^st and 2^nd Plaintiffs.  In other words, the Master was not granting fresh leave for separate representations in that hearing.  The Master considered that he had already granted such leave when he approved the Consent Order back in October 2018, and so the amendment was made to reflect such manifest intention of the court.

15.In the CMS on 28 May 2019, Master Ho adjourned the matter for another CMS and directed the 4^th, 6^th and 8^th Defendants to address the court in writing as to whether an appeal against the Amendment Order would be lodged.  On 6 June 2019, the 8^th Defendant filed the Notice of Appeal against the Amendment Order made by the Master.  The 5^th Defendant confirmed that he is not appealing against the Amendment Order.  By the letter dated 11 June 2019, the 4^th and 6^th Defendants indicated that they were seeking approval from the Director of Legal Aid to appeal against the Amendment Order, but no such appeal has been lodged by them up to now.

Discussion

16.The general rule is that there should be no separate representation for co-plaintiffs.[1]

17.The rationale behind the rule is to guard against potential injustice and logistical complications arising from separate representation.  Injustice may also arise from the defendant having to be potentially liable for two sets of costs arising from the separate representation.  As observed by Pearson LJ in Lewis v Daily Telegraph Ltd (No 2):[2]

“ … … It would be extremely inconvenient and awkward, so far as one can seem, to have any separate representation in a matter of that kind. Many difficult problems would arise. How would the opening speech (or speeches) be made? Would it be right that the plaintiffs should have as against the defendants the advantage of two opening speeches instead of one? Then, in the conduct of the case, if there were two plaintiffs separately represented, would each plaintiff be allowed to cross-examine the other plaintiff’s witnesses and have the advantage of being able (as Lord Gardiner pointed out) to put leading questions to a witness who would be substantially on the same side? Again, when the defendants’ witnesses were called, would it be right that both plaintiffs, separately represented, should be allowed to cross-examine those witnesses? The same problem would arise in respect of the final speeches at the end of the case. Would separately represented plaintiffs be allowed to have two speeches?”

18.However, the court has inherent power to give leave for separate representation, but leave is not likely to be granted and full evidence must be submitted as to why an exceptional order should be made.[3]

19.It has also been suggested in Hong Kong Civil Procedure 2019[4] that co-plaintiffs must appear at the trial by the same solicitors and counsel, citing in support the case of Re Mathews[5], which in turn was cited with approval by To J in Worldpart Industrial Ltd v Lung Kai Nunnery & Anr[6], who observed that “co-plaintiffs will not be allowed to sever or take inconsistent steps and must appear at the trial by the same solicitor and counsel”.

20.The court has overriding power to overturn orders made by consent of the parties in appropriate circumstances[7], in particular those relating to case-management and interlocutory matters.  After all, the court has the duty to ensure that the proceedings before it are conducted in a proper manner.  Even if the parties consent, the court can revisit the matter if the conduct of the case agreed by the parties would disrupt the proper progress of the case.

21.There is an issue as to whether the 4^th to 8^th Defendants had in fact agreed for the 1^st and 2^nd Plaintiffs to be separately represented by giving their consent to the making of the Consent Order.  In light of my analysis above, it is quite unnecessary for the court to rule on this particular issue.

22.In any event, I take the view that, just by engaging in their correspondence with DD, which were the solicitors acting for the then intended 2^nd Plaintiff, and by indicating their consent to the proposed Consent Order, the 4^th to 8^th Defendants had not agreed for separate representation for the 1^st and 2^nd Plaintiffs.  The agreement only covered for the then 2^nd Plaintiff to be added as a co-plaintiff, and I agree with Mr Lui, counsel for the 8^th Defendant, that the court should not extend the terms of the agreement beyond the scope set out in the express terms of the intended Consent Order.

23.It is true that KMT, solicitors for the 5^th Defendant, had raised the question of separate representation in their letter dated 26 July 2018.  DD replied providing the justifications in their letter dated 3 August 2018.  Eventually, KMT agreed for separate representations in their letter dated 28 August 2018, provided that the facts stated in the DD’s letter are true.  Further, KMT reserved the right to make further application to the court in case of any change of circumstances.  All such correspondence was copied to the 4^th, 6^th and 8^th Defendants.

24.Despite such exchanges of correspondence, it cannot be said that 4^th, 6^th and 8^th Defendants had agreed for separate representation of the co-plaintiffs.  In any event, the court shall have the power to override any agreement made by the parties on such issue.  Further, such agreement, even if made, is not one that covers the conduct of the whole action.  For example, even if the Defendants have raised no objection to separate representation for the joinder application, there is nothing to prevent them to make subsequent application to the court, say, limiting the engagement of separate counsel for the trial.

25.It is also true that, after the making of the Consent Order, the 1^st and 2^nd Plaintiffs filed the Amended Originating Summons with MB and DD as the respective solicitors for the 1^st and 2^nd Plaintiffs.  The 4^th to 8^th Defendants then filed amended pleadings in reply to the Amended Statement of Claim, but that does not mean that these Defendants are estopped from challenging the separate representation of the Plaintiffs.  In any event, since the Master was relying on the slip rule as the basis to make the Amendment Order, the court is not required to look beyond what happened before the making of the Consent Order in deciding the question of consent or agreement.

26.It is regrettable that the court is required to deal with the present appeal.  The case has been commenced back in 2003 and there has been little progress with the case over a long period of time.  When the 2^nd Plaintiff applied to add as a co-plaintiff, it is clear from the draft Amended Originating Summons that the 1^st Plaintiff and the then proposed 2^nd Plaintiff intended to be represented by different solicitors.  Unfortunately, the remaining Defendants by then had not thought about the implications of separate representation and so they gave their consent for the making of the Consent Order.  To me, it was quite an afterthought on the part of the 8^th Defendant, and possibly the 4^th and 6^th Defendants, that they subsequently decided to object the separate representation of the two Plaintiffs.  Apparently, the possibility of them being asked to pay two sets of legal costs and the unnecessary prolongation of the proceedings possibly caused by separate representation are their main concerns.

27.On the other hand, I do not think that the Plaintiffs have fully considered their legal positions.  The Originating Summons was taken out in 2003.  By that time, the 2^nd Plaintiff was not the owner of any part of the Land.  Under such circumstances, how can the 2^nd Plaintiff maintain a claim for possession against any of the Defendants in the present proceedings commenced in 2003?  If the 2^nd Plaintiff seeks to bring an action in its own right, it should have commenced a separate action against the relevant Defendants after it became the owner of the relevant parts of the Land.  Such conduct, however, may have other implications.  The time reference for the court to determine whether the defence of adverse possession is established would become the date of the new writ and not the date of the present action, and that may have important implications both for the Plaintiffs and the Defendants.  Unfortunately, it seems that the parties have not thought about these issues.

28.When the Master was asked to approve the Consent Order back in October 2018, the Master was obviously aware of the general rule against separate representation as laid down in Noor Maritime[8].  The problem lies on the fact that the Master had only asked the 2^nd Plaintiff, but not the other parties, to justify separate representations.  As I see it, the Master was clearly influenced by the fact that all the relevant parties had given their consent for the making of the Consent Order, and so the Master had not asked the other parties for their views specifically on the question of separate representation.  As a result, the parties had not been directed to consider all the possible implications raised in the last paragraph, the procedural complications that may arise from separate representation and the additional costs that the relevant Defendants may have to pay resulting from separate representation.

29.There is an issue as to whether the present appeal is in substance an appeal against the Consent Order or the Amendment Order.  In the case of former, Mr Ngai, counsel for the 1^st and 2^nd Plaintiffs, submits that it is not appropriate for the court to grant leave to appeal out of time given the circumstances of the present case.

30.In my judgment, no such leave is required.  In case that the Master considered that he had already granted leave for separate representations back in October 2018, that decision was one made ex parte without hearing submissions from the remaining Defendants.  As it was an ex parte decision, the remaining Defendants should have the right to challenge such decision in a subsequent inter parte hearing.  As the 4^th, 6^th and 8^th Defendants subsequently did so, the Master was duty bound to reconsider the issue again in the hearing on 27 May 2019.  Unfortunately, the Master just amended the Consent Order under the slip rule without revisiting the issue.  Under such circumstances, the subject matter of the appeal is in substance the Amendment Order made on 27 May 2019.  The Amendment Order was also wrongly made and so I allow the appeal setting aside the Amendment Order.

31.As the appeal against master’s decision is conducted by way of rehearing, I can deal with the issue of separate representation in this appeal.  However, I have not heard submissions from the parties as to whether the 2^nd Plaintiff has the locus to bring the claim for possession against the relevant Defendants in this action. It is only fair to say that the question of locus only comes to my mind when I am writing this Decision, and it seems that nobody has thought about this important question.  If the 2^nd Plaintiff does not have such locus and the only person who has the right to bring the present proceedings is the 1^st Plaintiff, there is little justification to allow for separate representation in the case of the 2^nd Plaintiff.  Hence, the parties should be given the opportunity to further consider the question of separate representation after reading this Decision.  I therefore direct such issue to be reconsidered by any master after hearing further submissions from the parties.  If necessary, further evidence can be submitted to the court for consideration of such issue.

32.Finally, this application has nothing to do with the right of an individual to choose his legal representative.  This is nothing to prevent the 2^nd Plaintiff from commencing separation proceedings against the relevant Defendants through its own solicitors.  If the 2^nd Plaintiff seeks to benefit from the earlier proceedings commenced by the then owner of the Land in 2003, there is nothing unfair that the 2^nd Plaintiff has to rely on the legal representatives of the then owner to prosecute the claim.  After all, only the then owner of the Land (i.e. the 1^st Plaintiff) had the right to commence proceedings by that time.  There is simply no reason why the 2^nd Plaintiff should be allowed to engage separate representation to protect its own interests in the present action or to assist the 1^st Plaintiff to pursue the cause of action which was accrued back in 2003.

33.For the above reasons, I allow the appeal and make the direction accordingly.  I also make a costs order nisi that the costs of the appeal be paid by the Plaintiffs to the 8^th Defendant which shall be made absolute 14 days after the date of the handing down of this Decision.

Mr Matthew Ngai and Ms Mandy Chan, instructed by Mayer Brown for the 1^st Plaintiff and Dundons Solicitors for the 2^nd Plaintiff

Mr Victor TS Lui, instructed by Edmund WH Chow & Co, for the 8^th Defendant