Lei Shing Hong Credit Ltd v. Lam Mei Yee and Others

HCMP 213/2023

[2026] HKCFI 4393

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 213 OF 2023

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BETWEEN

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D E C I S I O N

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Introduction and Undisputed Background

1.There is before me an application by Summons dated 4 November 2025 (“the Summons”) filed by the Plaintiff (“P”) to: (a) join Turbo Finance Group Limited (“Turbo”) as the 3^rd Defendant; and (b) add Turbo as the 3^rd Defendant, add the relief sought against Turbo and other minor amendments to the Originating Summons dated 10 February 2023 (“OS”).

2.P and Turbo are both licensed moneylenders.

3.On 3 April 2020, the 1^st Defendant (“D1”) purchased House No. 36 (“House”) and Motorcycle Parking Space No. M2 of The Carmel, 168 Castle Peak Road (“the Property”) with the assistance of a loan of HK$25.56M from Sonic Start Limited secured by an all-monies mortgage over the Property (“Sonic Mortgage”).

4.By a facility letter dated 24 March 2022, P agreed to grant a mortgage loan of HK$22.4M to D1 (“P Loan”) to be secured by a guarantee from the 2^nd Defendant (“D2”), D1’s husband, and a first legal charge over the Property.

5.On 25 May 2022, D1, D2 and Turbo entered into a loan agreement whereby Turbo lent HK$2.2M to D1 (“Turbo Loan”) for a period of 3 months secured by a guarantee from D2 and a second mortgage executed by D1 over the House (“Turbo Mortgage”). The Turbo Mortgage was registered on 22 June 2022 and on the Defendants’ (“Ds”) case by operation of s.5 of the Land Registration Ordinance, Cap. 128, had priority from the date of execution, i.e. 25 May 2022.

6.On 27 May 2022, D1 executed a First Legal Charge over the Property in favour of P as security for the P Loan (“P Mortgage”). It was registered on 30 May 2022 and therefore took priority from 27 May 2022. On the same day, the Sonic Mortgage was discharged.

7.By the OS, P claimed against Ds inter alia for: (a) repayment of monies and interest due under the P Loan; and (b) an order for possession of the Property.

8.Turbo was not made a party to the OS and no relief was sought against it notwithstanding P’s awareness of Turbo since May 2023 and Turbo by their then solicitor’s letter dated 24 May 2023 had informed P’s then solicitors inter alia that it enjoyed higher priority than that of P.

9.By Order dated 20 October 2023, Master D To granted P judgment on the OS (“Master’s Order”) and ordered:

(1) P do recover against Ds the sum of HK$22,724,751.91 together with interest on the sum of HK$22,137,369.35 at the judgment rate (presently is 8.798%) per annum with a daily rate of HK$5,336.02 from 21^st October 2023 and thereafter at judgment rate until full payment;

(2) D1 do within 28 days after service upon her of this Order deliver to P possession of [the Property] …

(3) Upon Ds paying to P the money hereby ordered to be paid and all other moneys (if any) secured to P by [the P Mortgage], P (subject and without prejudice to the due exercise of any power of sale for the time being vested in it) do redeliver to D1 possession of [the Property] and release to D1 the security constituted by [the P Mortgage] as D1 may agree or the Court may direct; and

(4) There be liberty to apply.

10.By Order dated 10 October 2024, DHCJ KC Chan dismissed Ds’ appeal against the Master’s Order (“the Judge’s Order”).

11.P has obtained possession of the Property on 2 May 2025. However, according to P because of the disputed issue of priority between P and Turbo, the Property has yet to be sold.

12.By open letter dated 23 March 2026, P has proposed: (a) a new originating summons (“the New OS”) be taken out by P for its substantive relief against Turbo with leave for Lam 8^th be relied upon in support; and (b) the New OS be heard together with the Summons at a hearing to be fixed with the hearing scheduled before me be vacated. That was not agreed to by Turbo taking the view that the Summons should be withdrawn.

Applicable Principles

13.O.15, r.6(2) of RHC provides:

“Subject to the provision of this rule, at any stage of the proceedings in any cause or matter the Court may on such terms as it thinks just and either of its own motion or on application –

(a) …

(b) order any of the following person to be added as a party, namely-

(i) any person who ought to have been joined as a party or whose presence before the Court is necessary to ensure that all matters in dispute in the cause or matter may be effectually and completely determined and adjudicated upon; or

(ii) any person between whom and any party to the cause or matter there may exist a question or issue arising out of or relating to or connected with any relief or remedy claimed in the cause or matter which in the opinion of the Court it would be just and convenient to determine as between him and that party as well as between the parties to the cause or matter.”

14.The applicable principles governing joinder include the following:

(1) The purpose of the rules on joinder is to bring all parties to the disputes relating to one subject-matter before the Court at the same time so that the disputes may be determined without the delay, inconvenience and expense of separate actions and trial;

(2) The rule should be construed liberally so as to ensure that, as far as possible, all matters in dispute between the parties are completely and finally determined and all multiplicity of legal proceedings with respect of any of those matters is avoided;

(3) The test to apply in a joinder application is whether there is a bona fide claim and a proper question to be tried between the plaintiff and the intended defendant that is necessary or just and convenient for resolution between them as well as between the plaintiff and the defendant in the proceedings. At the joinder stage, the court will not engage itself in scrutiny of the applicant’s case, or an adjudication of disputed facts;

(4) Whilst the rules provide an application for joinder may be made “at any stage”, (a) joinder at a late stage without any explanation for the delay in making the application for joinder may be refused; (b) where the matter has proceeded to trial without objection as to parties the court may elect to deal with the matter only as regards the parties before it; and (c) even after judgment, so long as anything remains to be done in the action.

See: Advanced Connection Limited v Able Technology (Hong Kong) Limited & Ors [2019] HKCA 1092 per Chu JA at §§14 and 20; Profit Step Development Limited & Anor v Sun Rising Development (Agriculture) Limited & Ors (unrep) HCMP 2152/2010, 28 October 2010, per Tang Ag CJHC at §7 and per Stone J at §9; Re Harrison [1891] 2 CH 349 at 353 per Chitty J (as he then was); and Re Duke of Buccleuch [1892] P 201 at 212 per Fry LJ.

Discussion

15.Mr Jonathan Chang SC and Mr Jonathan Fung, counsel, for Turbo submitted that P’s joinder application is plainly misconceived and should be dismissed. Essentially, counsel raised a “jurisdiction” point and a “discretion” point.

Re: the jurisdiction point

16.Mr Chang submitted that there was “nothing more to be done” in these proceedings, as the OS has been finally disposed of upon the entering of judgment by the Master’s Order, the dismissal of Ds’ appeal by the Judge’s Order, the period for appeal having expired without any appeal and P having already recovered possession of the Property. He relied on the authorities of Re Duke of Buccleuch and Shanghai Shipyard Co Ltd v Opus Tiger 1 Pte Ltd & Anor [2022] 1 SLR 643 at §§11-18. As explained in the latter case by Judith Prakash JCA, the power to order joinder “at any stage of proceedings” only exists while the underlying proceedings remain afoot. Whilst such power exists before judgment, the power to order joinder post-judgment exists if and only if something “remains to be done”.

17.Adopting the approach in Shanghai Shipyard Co Ltd at §17 (quoted below in full) to determine whether “something remains to be done”, considering the nature of the underlying action (a mortgage action under O.88 of RHC) and the nature of the remedy sought by that action (the OS sought payment by D1 and D2 of all moneys due to P and delivery up of vacant possession of the Property), I cannot see anything that remains to be done when the Master’s Order has granted all that P had sought in the OS.

18.However, Mr Christopher Chain SC and Miss Regina Yip, counsel for P, urged me to apply the more liberal approach in the more recent English authorities in particular, C Inc plc v L and another [2001] 2 All ER (Comm) 446 per Aikens J (as he then was) at §§82-84. In that case, the word “proceedings” in r.19.2(2) of the Civil Procedure Rules 1998 were given a broad interpretation and it was held that it should include all stages of an action from the time it has been started until it becomes finally complete or moribund, and so even after a judgment has been obtained, if it has not been satisfied so that further action may still be needed to enforce that judgment, proceedings remained afoot. The words “matters in dispute” were also broadly interpreted to include any matter in dispute between any existing party and the new party. C Inc plc was approved by the English Court of Appeal in Prescott v Dunwoody Sports Marketing [2007] 1 WLR 2343 per Lawrence Collins LJ (as he then was) at §23.

19.However, for the reasons given by Judith Prakash JCA in Shanghai Shipyard Co Ltd, I would also apply the orthodox position in Re Duke of Buccleuch as I agree with the problems with the liberal approach as identified by the learned judge at §§14-18:

“14. With respect, we disagree with the approach taken by the Judge and we hold that the liberal standard in C Inc is not part of Singapore law. This is so for a few reasons. First, the liberal standard has troubling implications for finality in litigation as it adopts a much broader conception of what constitutes a thing that ‘remains to be done’ so that proceedings would be considered ongoing even after a final judgment had been extracted and attempts at enforcement had commenced. Thus, the joinder of new parties would be possible so long as a single cent of judgment debt remained unpaid (see De La Sala [v Compania De Navegacion Palomar, SA and others and other appeals [2020] 1 SLR 950] at [200]-[201]).

15. Second, we disagree with the Judge that it is necessary to adopt the liberal standard to eliminate technical arguments about whether or not proceedings were concluded and interpret the phrase ‘at any stage of the proceedings’ with an inclination towards keeping the court’s power under that rule alive, so as to give effect to the purpose of O 15 r 6(2) (see [Reignwood International Investment (Group) Co Ltd v Opus Tiger 1 Pte Ltd and other matters [2021] SGHC 133] at [65]-[67]). Contrary to what the Judge held, under the orthodox position, the fact that a court has made a final judgment or order does not per se exclude the court’s power to order joinder under O 15 r 6(2)(b), provided that something ‘remains to be done’. As such, whether proceedings remain afoot for the purposes of O 15 r 6(2)(b) turns on a substantive consideration of whether something ‘remains to be done’ in the case and not a formalistic assessment of whether a final judgment or order has been made by the court.

16. Indeed, that was the reasoning adopted by Fry LJ in The Duke of Buccleuch. In that case, the plaintiff’s vessel collided with the defendant’s, and the plaintiff commenced an action against the defendant for loss of its vessel, cargo and crew’s effects. After the House of Lord had upheld the trial judgment on liability, an application was made for the consignees of the cargo to be substituted as the plaintiff to the action, and an issue arose as to whether the court still had power to join the consignee as a plaintiff to the action by that stage. But Jeune J (as first instance) and Lord Esher MR (in the Court of Appeal) held that the court had the requisite power to order joinder because damages remained to be assessed and there had been no final judgment (at 208-209 and 211). On the other hand, Fry LJ said (at 212):

‘I base my decision upon the words ‘at any stage of the proceedings’. It has been argued that the rules do not apply after final judgment. They apply, in my opinion, as long as anything remains to be done in this case. In this case there remains the assessment of damages.’

17. Fry LJ therefore concluded that the court had the power to order joinder, not because there had been no final judgment, but because something ‘[remained] to be done’ in that case – namely, the assessment of damages. In our view, to determine whether something ‘remains to be done’, the approach taken must be conditioned on the nature of the underlying action, with especial attention to the nature of the remedy sought by it. Generally, however, where there has been a judgment on the merits conclusively determining parties’ right in the action (for example, a judgment determining both liability and quantum in an ordinary writ action for damages), and the time for appealing against that judgment has expired, then nothing ‘remains to be done’ and the court’s power to order joinder ceased on the expiry of the time for appealing.

18. Third, we will add that it does not appear that the liberal standard has found favour in English law. The English cases subsequent to C Inc do not go so far as to say the court may order joinder up to such time as a judgment has been fully satisfied, but only accept the more limited proposition that the court has the power to order joinder of parties after judgment has been given (see Blackstone’s Civil Practice 2013: The Commentary (Maurice Kay ed-in-chief, Stuart Sime & Derek French eds) (Oxford University Press, 2013) at para 14.84; Dunwoody Sports Marketing v Prescott [2007] 1 WLR 2343 at [23]). This, as we have considered above, is consistent with the position under The Duke of Buccleuch in so far as something ‘remains to be done’ in the matter.”

20.Whilst Mr Chain submitted that the liberal approach is consistent with the CJR objectives, I cannot see how the liberal approach in the present case would be consistent with the CJR objectives and the objective of O.15, r.6 of RHC. The objective of O.15, r.6 is in so far as possible, all matters in dispute between the parties should be completely and finally determined without the delay, inconvenience and expense of separate actions and trial, and all multiplicity of legal proceedings with respect of any of those matters is avoided. In the present case, if P is correct and Ds should remain in these proceedings with Turbo joined as a party to determine the issue of priority/subrogation, then it should have and could have applied for joinder of Turbo back in May 2023. As a result of the conscious decision of P not to join Turbo in the OS, the dispute between the parties could not and has not been finally determined in the OS. The need for further proceedings, with the delay and incurring of further costs, would not be avoided even if joinder is allowed.

21.As a fall-back position, Mr Chain submitted that even applying the orthodox approach, “something remains to be done”.

22.Firstly, he submitted that the grant of possession of the Property was not “unconditional” or was not granted “perpetually” in the sense if Ds were to pay to P the moneys owed by them, they would have to give back possession of the Property (see paragraph (3) of Master’s Order). However, the Master’s Order has provided for that scenario and factually, it is unlikely that that scenario will arise when both D1 and D2 have been adjudged bankrupt.

23.Secondly, he submitted that there were practical difficulties in the sale of the Property as a result of the disputed priority, but Mr Chain appears to accept the affirmations filed on behalf of P apart from asserting that the Property is yet to be sold because of the disputed issue of priority between P and Turbo, hardly substantiate why the Property cannot be sold despite the issue of priority has not been resolved. Besides, by Turbo’s solicitors letter dated 3 September 2025, it has been indicated that Turbo is agreeable for the Property to be sold by P and will cooperate with P to execute any necessary release for purposes of achieving the sale.

24.Thirdly, he relied on the “liberty to apply” provisions in the Master’s Order and the exception to the doctrine of functus officio as keeping the OS “alive”. In Huang Lidong v Kwong Wing Chung (No.2) [2024] 5 HKC 261 at §§32-36, Anthony Chan J (as he then was) explained that:

“32. Once an order has been drawn up, entered or otherwise perfected, the court will be functus officio as regards that order and cannot reverse it. In Adayani v Chan Oi Ling [2000] 4 HKC 233, Keith JA held at [7]:

‘There must, of course, come a time in any proceedings when the court must be regarded as having completed its task. When that time is reached, the court is said to be functus officio. Once that stage has arrived, the court has no further jurisdiction over the case. But when does that stage arrive? The answer given by the common law is when the judge’s order has been drawn up, entered or otherwise perfected. As Slesser LJ said in Millensted v Grosvenor House (Park Lane) Ltd [1937] 1 KB 717 at p.722:

‘ It was not sought to be disputed… that it is within the power of a judge at any time before judgment is entered and perfected to alter its terms. This is the effect of two judgments, the case of In re St Nazaire Company (1879) 12 Ch D 88, in which case it was held, following In re Australian Direct Steam Navigation Co, Millers’ case (1876) 3 Ch D 661, that a judge can always reconsider his decision until the order has been drawn up, and the case of In re Suffield & Watts ex parte Brown (1888) 20 QB D 693, to the effect that ‘so long as the order has not been perfected the judge has a power of reconsidering the matter, but, when once the order has been completed, the jurisdiction of the judge over it has come to an end’…’

33. Before a judgment or order is perfected, the court has power on the application of any party or even of its own motion to review that matter and correct the judgment or order, if necessary, by hearing further evidence. However, in cases where an order does not need to be perfected, once the order is made, the court is functus officio and cannot reverse it.

34. The power to re-open or re-consider a judgment or order must be exercised judiciously, not capriciously and only where exceptional or strong circumstances demand recourse to it in the interest of justice. In considering whether the power should be exercised, the court has to balance the need for certainty and finality in a court’s decision with the duty of the court to do justice between the parties and avert an unnecessary appeal. The court should be guided by its overriding objective of dealing with the case before it justly, although every case will depend upon its particular circumstances.

35. When a judgment or order is perfected it cannot be corrected or re-opened, save under the ‘slip rule’, or where there is liberty to apply, or where statutory rules otherwise apply, although it may be set aside on grounds of fraud or misrepresentation. The court, however, has inherent jurisdiction to make supplemental orders after trial in appropriate circumstances, and to deal with reserved costs.

36. Finally, if an order as drawn up is ambiguous, the court (at all levels) has an inherent or implied discretionary power to clarify the original order if its intention appearing from the body of the judgment is manifest. In the absence of any prejudice to the other party (in which event discretionary consideration may come into play), it matters not that an application for such clarification is made after the court’s order has been sealed since it operates to make plain what the court has in fact already decided. It does not involve the court acting when functus officio.”

25.Mr Chain also submitted that the “liberty to apply” provisions should be interpreted broadly and would defeat any functus officio arguments relying on the cases of Re Lau Wang Chi Barry [2024] 4 HKLRD 500 at 506, Gee v Gee [2022] EWHC 1369 (Ch) at §21 and Australian Hardboards Ltd v Hudson Investment Group Ltd (2007) 70 NSWLR 201 at §§50 and 56.

26.However, with greatest respect, I cannot see how the authorities cited assist P when there is no basis to suggest that the Master’s Order needs to be “worked out” or further orders need to be granted in order to give effect to its terms which are clear and unambiguous in granting everything that P sought in the OS. The fact that liberty to apply has been granted does not necessarily mean that “something remains to be done” (see Shanghai Shipyard Co Ltd at §20) nor preclude a judgment from being final for the purposes of the functus officio doctrine (see Kirby v The Telegraph Plc & Anor [1999] EMLR 303 at 322 per Ward LJ).

27.Having considered all the parties’ submissions, I would agree with Mr Chang’s submissions that there is no jurisdiction for this court to grant the joinder application in the circumstances of this case. However, in case I am wrong, I go on to consider whether even if there is jurisdiction whether I should exercise my discretion to join Turbo as the 3^rd Defendant to the OS.

Re: the discretion point

28.Mr Chang relied on a number of factors which he submitted militated against this court joining Turbo to these proceedings instead of requiring P to commence fresh proceedings. In gist, these are as follows:

(1) The subrogation/priority issue is entirely separate from the relief P has sought and obtained against D1 and D2 in the OS;

(2) P’s unexplained delay in taking out the Summons;

(3) P’s proposal to issue the New OS is an admission that its dispute with Turbo can be fully litigated in separate proceedings such that there is no need to resuscitate these proceedings to achieve that purpose (see Global International Credit Limited v Li Hui Ling & Ors (unrep) HCA 684/2012, 10 December 2013 per DHCJ Le Pichon at §§25-27);

(4) Joinder of Turbo will be positively more wasteful of time and costs, for example, not all the 9 affirmations filed by D1 and D2 would likely to be relevant to the priority dispute between P and Turbo (particularly when on P’s own case, the transaction documents are the strongest possible evidence to determine the question of priority[1] and the allegations made by D1 and D2 that they were defrauded by Turbo need not be determined as between P and Turbo to resolve the issue of subrogation[2]); and

(5) The joinder would give rise to procedural complications given D1 and D2 have now both been adjudged bankrupt and even if leave is not required to proceed with the present proceedings, they would be required to be served with all the documents filed and would be entitled to file evidence and submissions.

29.I do not consider that Mr Chain had any real answers to the above submissions which appear to be forceful submissions against the exercise of my discretion. The fact that Mr Chain had submitted that P is not seeking any order against Ds and that they will be “non-participant” parties as well as P’s proposal to issue the New OS to which Ds would not be a party clearly demonstrate that Ds are not necessary parties to the dispute on priority and the issue of priority between P and Turbo need not be resolved as against Ds in the OS. Furthermore, there is plainly no prejudice to P if joinder is not ordered. Mr Chain also accepted that the delay was a relevant consideration in the exercise of the court’s discretion and that there was no real explanation for the delay in P’s affirmations save the suggestion that time was required to seek legal advice. However, he submitted that there was no prejudice to Turbo caused by the delay as whether the joinder application was made before or after judgment against Ds would not have made a difference. Yet had Turbo been joined and all the issues between the parties resolved prior to the Master’s Order, the issue of priority would have been resolved without the delay and need for further proceedings (whether by proceedings in the OS or in new proceedings).

30.Mr Chain further submitted that it was just and convenient for Turbo to be joined for the following reasons:

(1) P’s claim of subrogation against Turbo arises out of the same series of transactions which underpin P’s mortgage action against D1 and D2;

(2) The evidence already filed herein are pertinent to the dispute between P and Turbo and upon joinder, the entirety of the documents filed by P, D1 and D2 would be freely accessible to Turbo to peruse and deploy if it chooses to do so;

(3) In so far as P wishes to make any application such as discovery or interrogatories against D1 or D2 it could do so; and

(4) In addition to costs saving and procedural efficiency, there is no prejudice to Turbo but only procedural advantage.

31.As to (1), given the subrogation/priority issue as between P and Turbo primarily would depend on the construction of the transaction documents and much of the evidence filed by D1 and D2 would not be relevant and necessary, I do not regard this factor as particularly weighty.

32.As to (2), as mentioned, I am of the view that not all the evidence filed in the OS is relevant let alone pertinent to the issue of priority/subrogation. It is not P’s case they intend to rely on the evidence filed by Ds. I cannot see how when Turbo disputes Ds’ allegations against it that it would wish to deploy and rely on their evidence filed in the OS. Mr Chang confirmed that whilst Turbo has taken the view that factual disputes are raised making resolution of the issue of priority/subrogation unsuited to be determined in the OS or a new OS (as opposed to a writ action), it is not Turbo’s case that they will be raising factual issues concerning D1 or D2 nor will it dispute their evidence in the OS in the determination of the issue of priority. Given Mr Chang’s confirmation, (3) is speculative.

33.As to (4), I disagree that there is a saving of costs and no prejudice to Turbo given the evidence already filed may not be relevant or necessary to resolving the issue of priority/subrogation but Turbo and the Court would have to incur time and costs to trawl through the evidence to see what is relevant. I agree litigating in standalone proceedings would focus the Court and the parties on the issue of priority/subrogation and the evidence could be quite limited such that further costs may not be very significant.

34.In view of the circumstances of this case and having considered all the submissions made by counsel, on balance, I do not consider that it would be just and convenient to add Turbo as a party to the OS to determine the issue of priority/subrogation as between P and Turbo.

Disposition and Orders

35.Accordingly, I would dismiss the Summons.

36.It was agreed that costs should follow the event and that the costs of the Summons be summarily assessed with certificate for two counsel. I therefore will order that P should pay the costs of and occasioned by the Summons to Turbo with certificate for two counsel, to be summarily assessed, if not agreed.

37.I will further direct that P should lodge and serve its list of objections (limited to 3 pages) to Turbo’s Statement of Costs within 7 days from the handing down of this Decision and there will be a summary assessment of costs on paper.

38.Lastly, I thank counsel for their helpful assistance.

Mr Christopher Chain SC leading Miss Regina Yip, instructed by Messrs. Tim Chan & Co. for the Plaintiff

Mr Jonathan Chang SC leading Mr. Jonathan Fung, instructed by Messrs. Anthony Siu & Co. for the Intended 3^rd Defendant

The 1^st and 2^nd Defendants were not represented and did not appear