Rockwin Enterprises Ltd. v. Shui Yee Ltd. and Others

HCA019629/1999

HCA19629/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 19629 OF 1999

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Coram: Mr Recorder G. Ma, SC in Chambers

Dates of Hearing: 11 and 21 April 2001

Date of Judgment: 29 August 2001

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J U D G M E N T

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1.There is before the court an appeal by the plaintiff from the order of Master C. Chan dated 30 January 2001, in which he dismissed its application for the trial of a preliminary issue and also an application by the plaintiff under Rules of High Court Order 14A. Only the plaintiff and the 1st and 2nd defendants have appeared before me.

2.For convenience, I will where appropriate simply refer to the plaintiff as "Rockwin", the 1st defendant as "Shui Yee", the 2nd defendant as "Yieldmax" and the 3rd defendant as "Rican". As will presently become apparent, the parties have been or are involved in other proceedings.

Background

3.The action concerns the piece or parcel of ground registered in the Land Registry as Inland Lot No.3775 ("the Land") and the building on that land known as "Rockwin Court" ("the Building"). By a Deed of Mutual Covenant dated 21 January 1993, the Land was notionally divided into 100 equal undivided shares with 20 shares allotted to the whole of the ground floor of the Building ("the Ground Floor").

4.By clause 3.01(a) of and paragraph 1(a)(4) of the First Schedule to a Mortgage dated 31 December 1993 ("the Mortgage"), Rockwin as mortgagor charged to Shui Yee as mortgagee, inter alia, "ALL THAT 1/5th part or share of and in ALL THOSE 20 equal undivided 100th parts or shares of and in the Land And of and in the Building Together with the sole and exclusive right and privilege to hold, use, occupy and enjoy ALL THAT the Ground Floor of the Building". The resulting position as regards the Ground Floor was that Rockwin retained sixteen equal undivided shares while Shui Yee held four. The particular aspect of the Mortgage with which this action is concerned, is the question of the sole and exclusive right and privilege to hold, use, occupy and enjoy the Ground Floor.

5.I now set out a chronology of some of the more important events subsequent to the Mortgage (which I have largely gathered from the pleadings in this action as well as from the court documents in the actions which are referred to below) to set the context before identifying more precisely the disputes between the parties which are relevant to the matters before me :

(a) On 18 March 1994, Rockwin granted a licence of a part of the Ground Floor (called Portion B) to one Chan Ngun ("the Licence"). This licence was registered on 28 January 1995. As the Mortgage was registered on 29 January 1994, Shui Yee and Yieldmax's case is that the Mortgage has priority over the Licence.

(b) By an assignment dated 31 March 1994 ("the 31 March 1994 Assignment"), Rockwin assigned five equal undivided shares in the Land and the Building to Rican, together with the sole and exclusive right and privilege to hold, use, occupy and enjoy another part of the Ground Floor (called Portion A). The 31 March 1994 Assignment was registered on 27 May 1994 and re-registered on 23 September 1994. Again, Shui Yee and Yieldmax's case is that the Mortgage has priority over this Assignment.

(c) It is also their case that Rockwin was in breach of the Mortgage by entering into the Licence and the 31 March 1994 Assignment.

(d) On 17 January 1995, following default by Rockwin in making repayments under the loan facilities secured by the Mortgage, Shui Yee commenced proceedings against, inter alia, Rockwin (in HCA A527/1995). One of the reliefs claimed against Rockwin was an order for vacant possession of the Ground Floor.

(e) A settlement was reached in this action embodied in a Tomlin Order dated 3 April 1995 whereby Rockwin was to pay to Shui Yee certain agreed sums in instalments, in default of which and/or of other conditions as therein set out, Shui Yee was to be at liberty to sign judgment for the relief claimed in the action. This included the order for possession as aforesaid.

(f) Default occurred. Judgment was entered against Rockwin on 7 June 1995. By a summons dated 15 June 1995, Shui Yee applied for inter alia an order that Rockwin deliver vacant possession of the Ground Floor. This followed from the terms of the Tomlin Order referred to above.

(g) On 18 September 1995, Rockwin's solicitors wrote to Shui Yee's solicitors enclosing a draft agreement for the sale and purchase of the mortgaged property (including the Ground Floor). The purchaser was Rican.

(h) On 31 October 1995, Rican applied to be joined as a party in HCA A527/1995. According to the Affirmation of Li Siu Wing (a director of Rican) affirmed on 31 October 1994 in support, Rockwin and Rican had agreed in 1993 for the sale of the mortgaged property. The formal assignment was made however on 31 March 1994 - this was the 31 March 1994 Assignment.

(i) Rican's application for joinder was supported by Rockwin. In the Affirmation of Hui Chi Wai affirmed on 31 October 1995 filed on behalf of Rockwin, it was stated that Rockwin only intended under the Mortgage to mortgage a right of way through the Ground Floor to Shui Yee and that it was not intended that Shui Yee should have the sole and exclusive right and privilege to hold, use, occupy and enjoy the Ground Floor. For his part, Mr Li Siu Wing (in the Affirmation referred to in the previous paragraph) stated that Rican was told by Shui Yee that the latter had not mortgaged the whole of the Ground Floor. Of course, Shui Yee denied these allegations. As far as it was concerned, the whole of the Ground Floor was covered by the Mortgage.

(j) It is thus clear that the issue of whether the Mortgage covered the sole and exclusive right and privilege to hold, use, occupy and enjoy the Ground Floor was not only before the court in HCA A527/1995, but also formed the basis of Rican's application for joinder.

(k) By an Order of Master Woolley dated 3 November 1995, Rockwin was ordered to deliver vacant possession of the property charged under the Mortgage, which included the whole of the Ground Floor. This Order was made presumably pursuant to the 15 June 1995 summons. A writ of possession was issued on 11 January 1996 (in some documents I have seen reference to 19 January 1996 but this is immaterial for present purposes).

(l) On 18 January 1996, Rican commenced proceedings against Shui Yee (HCA A780/1996) seeking a declaration that the Mortgage insofar as it affected the Ground Floor, was invalid. The Statement of Claim in that action was dated 11 March 1996. The issue of whether the Mortgage covered the sole and exclusive right and privilege to hold, use, occupy and enjoy the Ground Floor was thus before the court in this action as well.

(m) By a summons dated 17 February 1996 (but filed only on 26 February 1996), Rican applied inter alia :

(i) for an order that HCA A527/1995 and A780/1996 be consolidated;

(ii) that the execution of the said Tomlin Order dated 3 April 1995 be stayed pending the outcome of the trial of the (intended) consolidated action or of HCA A780/1996.

(n) In support of this summons, Rican relied on two affirmations of Ou Zhi Jiang (affirmed respectively on 5 March 1996 and 19 April 1996). Mr Ou's 1st affirmation again made reference to Rican's case that the only part of the Ground Floor that was or was intended to be mortgaged to Rockwin was a right of way. Mr Ou's 2nd affirmation made reference to the affirmation of Li Siu Wing (to which I have referred in sub-paragraphs (h) & (i) above), in which this allegation was also made.

(o) On 5 March 1996, Rican applied by a further summons for a stay of execution of the writ of possession until 30 April 1996 or until further order. 30 April 1996 was the date fixed for the hearing of the two summonses taken out by Rican, to which I have earlier referred. By a consent order made by Master Betts dated 14 March 1996, the stay was granted pending the determination of the 17 February 1996 summons.

(p) By a summons dated 30 March 1996 (as amended), Shui Yee applied to strike out the Statement of Claim in HCA A780/1996 on the ground that it disclosed no reasonable cause of action.

(q) By an order of Master Jones on 29 April 1996, the said hearing date of 30 April 1996 was vacated and adjourned to a date to be fixed.

(r) The three summonses (two from Rican, one from Shui Yee) were eventually heard by Master Chu on 26 July 1996.

(s) On that day, Master Chu made the following orders :

(i) The 31 October 1995 summons for joinder was dismissed.

(ii) The 17 February 1996 summons for consolidation was also dismissed.

(iii) The Statement of Claim in HCA A780/1996 was struck out and Shui Yee was at liberty to enter judgment in that action against Rican.

(t) Following the orders referred to above, Master Chu on the same day extended the stay of execution on the writ of possession pending an intended appeal by Rican on the orders that had been made.

(u) Two Notices of Appeal were issued on 31 July 1996 against the said decisions of Master Chu. They were to be heard before Mr Justice Jerome Chan. However, on 6 November 1996, by consent, the appeals were ordered to be dismissed.

(v) By an Originating Summons dated 19 June 1997 (HCMP 1950/1997), Mr Chan Ngun (to whom Rockwin had granted the Licence: see sub-paragraph (a) above) seeks a declaration against Rockwin and Shui Yee to the effect that Shui Yee is and was not entitled to enforce the security in the Mortgage in respect of the exclusive right to occupy the Ground Floor. Mr Chan has directly raised the issue whether Shui Yee was entitled under the Mortgage to the exclusive right to occupy the Ground Floor.

(w) By an Originating Summons dated 12 August 1997 (HCMP 2555/1997), Pacific Union Investment Limited (who is apparently the owner of one equal undivided share in the Land with the exclusive right to hold, use and occupy Flat A on the 2nd Floor of the Building) seeks a similar declaration against Rockwin and Shui Yee to the effect that Shui Yee is and was not entitled to enforce the security in the Mortgage in respect of the exclusive right to occupy the Ground Floor. It too has directly raised the issue whether Shui Yee was entitled under the Mortgage to the exclusive right to occupy the Ground Floor.

(x) On 14 August 1998, following a public auction, the whole of the property charged under the Mortgage (which included the Ground Floor) was assigned to Yieldmax who has remained in possession of the Ground Floor.

(y) By a writ dated 14 October 1998 (HCA 17352/1998), Tsang Hin Man Terence and Lui Chi Wan (who are apparently the owners of one equal undivided share in the Land with the exclusive right to hold, use and occupy Flat F on the 2nd Floor of the Building) also seek a declaration against Rockwin and Shui Yee to the effect that Shui Yee is and was not entitled to enforce the security in the Mortgage in respect of the exclusive right to occupy the Ground Floor. Also raised again is the issue whether Shui Yee was entitled under the Mortgage to the exclusive right to occupy the Ground Floor.

The present action

6.From the above chronology, it can thus be seen that there have been three previous orders of the court (those of Master Chu dated 26 July 1996) from which there has been no effective appeal. It is Shui Yee's case that implicit in all three orders was a finding that the Mortgage covered the whole of the Ground Floor. This, as I have stated above, is the aspect of the Mortgage with which this action is concerned (and I would also add the aspect with which the three other pending proceedings are concerned).

7.In the present action, Rockwin seeks declarations to the effect that notwithstanding the provisions of the Mortgage, it and its successors and assigns were at all material times entitled to hold, use and occupy the Ground Floor and that Yieldmax was not entitled to exclusive possession of the Ground Floor. The relief sought by Rockwin in the present action also includes the setting aside of "the judgment/order for possession dated 3rd November 1995" in HCA A527/1995. This is presumably a reference to the said order of Master Woolley dated 3 November 1995.

8.The basis for Rockwin's claim is essentially this. Since the Mortgage only charged "ALL THAT 1/5th part or share of and in ALL THOSE 20 equal undivided 100th parts or shares of and in the Land And of and in the Building Together with the sole and exclusive right and privilege to hold, use, occupy and enjoy ALL THAT the Ground Floor of the Building" and not the whole of the 20 shares, the right to hold, use and occupy the Ground Floor did not belong exclusively to Shui Yee or its successors (being Yieldmax). It is contended that this right was to be shared between Rockwin and its successors or assigns and Yieldmax.

9.As I understand from the submissions of Mr Benjamin Chain for Rockwin, substantially (if not wholly) underpinning Rockwin's case is the argument that as a matter of construction of the Mortgage, Rockwin did not charge the whole of the right to hold, use and occupy the Ground Floor. Mr Chain put it quite simply: there was no reason why Rockwin would have retained 4/5th of the 20 undivided shares attributable to the Ground Floor if this retention was to be practically useless in that there would be no right to enjoy the Ground Floor. If this had been the intention, so he asked rhetorically, why would Rockwin not simply have mortgaged the whole of the 20 undivided shares?

10.For its part, Rockwin and Yieldmax of course dispute this construction. Their position on the true construction of the Mortgage is equally simple : under the Mortgage, Rockwin had charged the four undivided shares attributable to the Ground Floor together with the exclusive right to hold, use and occupy the Ground Floor. The fact that Rockwin retained some equal undivided shares in the Land (attributable to the Ground Floor) was not inconsistent with it having disposed of the whole of the exclusive right to the Ground Floor. Mr Chain accepted this was possible in theory but said that this was not the position in the case of the Mortgage.

11.However, a significant part of the Rockwin and Yieldmax's case (contained in their Defence) is that in any event, Rockwin is estopped from raising its arguments on what it says is the true construction of the Mortgage. Reference here is made, inter alia, to the following two aspects :

(a) The order of Master Woolley dated 3 November 1995, whereby Rockwin was ordered to deliver vacant possession of the property charged under the Mortgage, which included the whole of the Ground Floor and the writ of possession issued on 11 January 1996. Shui Yee argues that in the proceedings that led to the Order and the writ of possession, the extent of the rights of Shui Yee as regards the Ground Floor under the Mortgage must at the very least have been an issue (if not the central issue).

(b) The various summonses that were before Master Chu leading up to the orders made on 26 July 1996 and to the consent orders dismissing the appeals from those orders. Again, Shui Yee contends that central to these orders was the extent of Shui Yee's rights under the Mortgage regarding the Ground Floor.

12.For completeness, I should also point out that Shui Yee has pleaded other facts to support its case on estoppel.

13.As I see it, in summary, as raised in the pleadings, the present action is concerned with two main issues :

(a) Whether as a matter of the true construction of the Mortgage, the sole and exclusive right and privilege to hold, use, occupy and enjoy the Ground Floor had been charged under the Mortgage to Shui Yee.

(b) Whether the issue identified in paragraph (a) is one that Rockwin is permitted to argue in the first place or whether Rockwin is estopped from running its arguments on construction. Essentially, Shui Yee is saying that the issue of the construction of the Mortgage as identified above, is one that Rockwin should not be permitted to raise at all.

The present appeal from Master Chan and the Order 14A application

14.As I have already noted, Rockwin appeals from the order of Master C. Chan dated 30 January 2001. While maintaining that appeal, Rockwin now also seeks a determination under Rules of High Court Order 14A. This has become the main focus of the hearing. There is however no summons under Order 14A before me. Apparently the Registry did not permit this since the view was taken that such a summons ought to have been returnable first before a Master. Thus, the application under Order 14A is made orally under Order 14A, rule 2. I am not at all sure that the intent of rule 2 is to allow an application to be made in circumstances such as the present but no issue is taken as to this procedure and I say no more about it. It suffices that both parties are of the view (as I am) that I do have the jurisdiction to hear the application under Order 14A. The question is whether I should exercise that jurisdiction by determining the question that Rockwin invites this court to resolve.

15.Shui Yee and Yieldmax do, as a matter of principle, object to my determining the matter under Order 14A. It is therefore incumbent on me to determine first whether the relevant question is one that is appropriate for determination under Order 14A at all.

16.Mr Chain identifies the following question of construction as being suitable for determination under Order 14A :

"whether on the true and proper construction of the mortgage dated 31 December 1993 entered into between Rockwin and Shui Yee, the 1st defendant and its successors in title are entitled to hold, use, occupy and enjoy all that the Ground Floor of Rockwin Court to the exclusion of Rockwin and its successors in title?"

The court's approach in applications under Order 14A

17.Order 14A, rules 1(1)-(3) state as follows :

"Determination of questions of law or construction (O.14A, r.1)

1. (1) The Court may upon the application of a party or of its own motion determine any question of law or construction of any document arising in any cause or matter at any stage of the proceedings where it appears to the Court that-

(a) such question is suitable for determination without a full trial of the action; and

(b) such determination will finally determine (subject only to any possible appeal) the entire cause or matter or any claim or issue therein.

(2) Upon such determination the Court may dismiss the cause or matter or make such order or judgment as it thinks just.

(3) The Court shall not determine any question under this Order unless the parties have either-

(a) had an opportunity of being heard on the question; or

(b) consented to an order or judgment on such determination."

18.Once seized of an application under Order 14A, the court's approach is essentially a three-step approach :

(1) Is the relevant question one of law or of the construction of a document?

(2) If so, is that question one that should be determined under the Order 14A procedure?

(3) If the answer to (2) is "yes", what is the determination of that question and what orders should the court make as a consequence of determining that question?

19.Usually, step (1) will cause little difficulty for the court to ascertain.

20.Step (2) requires the court to be satisfied of the following :

(a) That the question of law or construction is one that is suitable for determination without a trial. In other words, the court has all the necessary facts and matters before it in order to determine the question of law or construction.

(b) That if so suitable and should it be determined by the court, that it will finally determine (subject to a possible appeal) the entire cause or matter or any issue or claim therein.

(c) Even if the above two conditions are fulfilled, that the court in its discretion is satisfied that the question is one that ought to be determined under Order 14A.

21.It is clear that the court has a residual discretion whether or not to embark on a determination of a question under Order 14A even where the first two requirements (set out in paragraphs 20(a) and (b) above) are fulfilled. This is clear from the word "may" in Order 14A, rule 1(1) and from the authorities.

22.I have been helpfully referred by Mr Chain to a judgment (unfortunately only in transcript form) of the English Court of Appeal in Korso Finance Establishment Anstalt v. John Wedge (unreported, 15 February 1994). There, one of the dominant issues was the construction of a letter of agreement for the acquisition of a master collateral commitment. Indeed, this was probably the dominant issue in that case since the letter of agreement was described as being at the "heart of the dispute". The judge in the court below had refused an application under Order 14A by the plaintiff on the basis that the court should not entertain the application unless the determination of the question would finally determine the entire matter. The learned judge was of the view that if the question had been decided against the plaintiff, he would nevertheless still carry on with the action even though if the point was decided in his favour, that would signal the end of the action since judgment against the defendants would inevitably follow.

23.The Court of Appeal allowed the plaintiff's appeal on the basis that the wording of Order 14A did not require that the determination of the relevant question should finally determine the action. It was enough that a claim or an issue in the proceedings would be finally determined. As Leggatt LJ said in his judgment (with which the other members of the court agreed), "In my judgment the question of construction is well capable of constituting an issue in the cause or matter. An issue may be said to be a disputed point of fact or law relied on by way of claim or defence". With respect, this is plainly correct. However, in my view, it does not follow that even if the determination of a question of law or construction would finally determine a claim or issue in the proceedings, the court should automatically be required to embark on the determination of a question under Order 14A. There is, as I have already remarked, a residual discretion vested in the court.

24.Quite how that residual discretion is to be exercised in any given case depends of course on the circumstances. In Korso, two factors were relevant to the Court of Appeal's decision to allow the appeal thereby enabling the question there to be determined under Order 14A :

(a) The question of construction was a dominant feature of the case, going to what was described as an important issue, namely, the primary liability of the defendants in that case. As I have remarked, the letter of agreement to be construed was said to be at the "heart" of the case.

(b) If the question of construction was dealt with, this might or would enable the parties to avoid the expense of trial and assist them in the efficient disposal of the action.

25.These are no doubt relevant (and in some cases decisive) considerations that a judge can legitimately take into account but there may be other considerations. Other considerations include the following :

(a) The court can take an overall view of the matter to see the context in which the question arises. If the court is of the view that there would not be a great saving of time or costs in determining the question (or indeed if it feels quite the opposite), this would be a factor against adopting the Order 14A procedure. For example, if the question involves an issue that is not determinative of the action or is but one of many issues or which may at the end of the day be an academic one, a court may well not embark on a determination under Order 14A. In such situations, it may be that a determination by the court leading possibly to appeals at two further levels, will result in more delay and expense to the parties than if the whole matter was decided at one go at trial.

(b) On the other hand, an issue may recur so much on a continuing basis that to determine it may not only be convenient but extremely desirable. For example, where the determination of an issue would result in the discovery process not being as extensive or expensive as might otherwise be the case, it may well be appropriate to use the Order 14A procedure.

26.It is of course not possible to set out all the circumstances which may be relevant in any given case to the exercise of the court's discretion. Much will depend on the perception and instinct of the Judge seized of the matter.

27.Of course, the residual discretion becomes exercisable really only where the two requirements (referred to in paragraphs 20(a) and (b) above) have been fulfilled. Here, it is important to emphasise that the question of law or construction is one that is suitable for determination without a trial. In other words, the court must have all the necessary facts and matters before it in order to determine the question of law or construction. Where the court is not seized of all relevant facts, it would be an extremely rare case (if ever) in which the procedure under Order 14A would be adopted. In Cable & Wireless HKT International Limited v. New World Telephone Limited (Stone J, unreported, 5 April 2000, HCCL 229/1999), the main concern of the court was that the factual basis for the determination of the question he was invited to determine, was uncertain. On appeal, the Judge's views were upheld by the Court of Appeal. I note that this approach is entirely consistent with those passages contained in Hong Kong Civil Procedure 2001 at paragraph 14A/2/4.

28.Finally, on the assumption that Steps (1) and (2) have been overcome, Step (3) involves the court actually determining the relevant question and making consequential orders flowing from its determination.

Is the question raised by Rockwin one that is appropriate to be determined under Order 14A?

29.The question identified by Mr Chain is without doubt one of the construction of a document. Mr Mok Yeuk Chi for the 1st and 2nd defendants did not seek to contend otherwise.

30.The crucial inquiry is whether that question one that should be determined under Order 14A in the first place.

31.In my judgment, it is not. I am of this view for the following reasons.

32.First, I am not satisfied that the question is one that is suitable for determination without a trial or that the court has all the necessary facts and matters before it in order to determine this question.

33.I am cognisant of Rockwin's contention that the question is simply one of the construction of the Mortgage. Thus, so Mr Chain argues, extrinsic evidence of what the parties did or said, is inadmissible. Mr Mok on the other hand contended that extrinsic evidence may in certain circumstances be admissible.

34.It is trite law that in construing a contract, the court is entitled to look at the factual matrix of the contract. For a recent statement of this, see Investors Compensation Scheme Ltd v. West Bromwich Building Society [1998] 1 WLR 896, at 912H-913B.

35.It is convenient at this point to refer again to what Rockwin contends to be the true construction of the Mortgage insofar as it relates to the Ground Floor. Under the Mortgage, Rockwin charged "ALL THAT 1/5th part or share of and in ALL THOSE 20 equal undivided 100th parts or shares of and in the Land And of and in the Building Together with the sole and exclusive right and privilege to hold, use, occupy and enjoy ALL THAT the Ground Floor of the Building". Rockwin's case here is that what was mortgaged were the four undivided shares attributable to the Ground Floor. It was not accepted that the enjoyment of the Ground Floor could necessarily form the subject matter of a mortgage. The effect of the Mortgage of four shares on the Ground Floor was, so it says, that Shui Yee and Rockwin became co-owners and tenants in common of the 20 equal undivided shares in the shares and both became entitled to hold, use, occupy and enjoy the whole of the Ground Floor with neither party able to exclude the other.

36.The effect of Rockwin's construction was that in the event (which occurred) Shui Yee realised the security which was the Mortgage, as far as the Ground Floor was concerned, this would not include the sole and exclusive right and privilege to hold, use, occupy and enjoy that part of the Building. In other words, the assignment of the property charged under the Mortgage (which included the Ground Floor) to Yieldmax, did not carry with it the sole and exclusive right and privilege to hold, use, occupy and enjoy the Ground Floor.

37.This is at first sight may seem a somewhat startling commercial result for it would mean that Shui Yee as mortgagee would not be able to assign the exclusive enjoyment of the Ground Floor. I do not have before me any evidence of the commercial value of the Ground Floor at the time the Mortgage was entered into, whether on the basis of an exclusive enjoyment of the same, of a shared enjoyment or otherwise. I would have thought that evidence of such values (particularly when compared to the amounts secured under the Mortgage) would be a relevant part of the factual matrix. Similarly, I would have thought that a court would also be interested in the conveyancing practice in Hong Kong at that time as far as shared (as opposed to exclusive) enjoyment of premises were concerned. I raised these matters with Mr Chain, who while accepting that they may well be relevant as part of the factual matrix, nevertheless made the point that Shui Yee and Yieldmax had not produced any evidence of these matters before the court. Thus, he argues, I should not allow these factors to influence my decision. It was incumbent on a party to place before the court all relevant factual matters if it was sought to be argued that the question of law or construction was somehow fact sensitive. Reference was made to the Korso case and to Hong Kong Civil Procedure 2001 at paragraph 14A/2/4.

38.I recognise the force of Mr Chain's argument but it seems to me there is a distinction between a situation where a party seeks to go trial hoping to hunt around for evidence or that something comes up during discovery (which was the situation identified in Korso) and the situation such as the present where the court entertains real doubts as to certain factual aspects on which it could be expected that both parties would or should provide evidence. In the present case, I am left with an uncomfortable feeling that to decide the question of construction which Rockwin urges upon me without being fully appraised of the factual matrix, would be extremely undesirable.

39.Secondly and more importantly, if I am wrong on the first point, I am of the view that in any event, this is not a case in which I should in the exercise of my residual discretion make a determination under Order 14A :

(a) From the background to the action and this application (which I have already set out), it is clear that the question which Rockwin invites the court to determine is one that has already featured in previous proceedings between the same parties. Shui Yee and Yieldmax's case is that Rockwin is estopped from relitigating this issue so that this question should not even be permitted to be argued by Rockwin. The estoppel argument is a serious and powerful argument and is in my view the dominant one in the present action. Whether Rockwin should be permitted to turn the clock back and reopen court orders that have been made, some by consent even (and acted on), in my view lies at the heart of this action rather than the question of construction urged upon me by Rockwin. As Mr Chain quite frankly accepted, the point he is now running could and should have been run in the earlier proceedings.

(b) In these circumstances, there must be a very real possibility that the question for determination under Order 14A is one that may well turn out to be academic or simply unnecessary to decide. I am particularly concerned about the potential total waste of time and costs should this question be determined by the court (especially with any appeals) when at the end of the day it could well be held that the question was an academic one or one that was unnecessary to decide or one that should never have been raised in the first place. I recognise Rockwin's argument that if the question is resolved against it, this would effectively result in the dismissal of the action and that therefore in these circumstances, there must be a potential saving of time and money for both parties. However, it must also be recognised that the possibility must exist that the question is resolved in Rockwin's favour. As I have said, what lies at the heart of this case is whether Rockwin should be permitted to raise the question of construction in the first place. Even if I am wrong in the view that this issue is at the heart of the case, it is at least a view that the trial judge may reasonably take. It would be standing the matter on its head to determine under Order 14A a question which at the end of the day may be a question that should never have been permitted to be run. This is different to a situation in which there are a number of independent issues in a case and the court chooses to decide one or more such issues under Order 14A. Here, we are concerned with an issue that ultimately, the court may, by reason of the matters I have already referred to, decide that it would not be right to determine.

(c) I am also conscious of the fact that for me to determine the question at this stage may probably impact on the three other pending proceedings referred to in paragraphs 5(v), (w) and (y) above (HCMP 1950/1997, HCMP 2555/1997 and HCA 17352/1998), where the same question (in relation to the same property) is raised. Applications for summary judgment, striking out or other relief may be sought in those other proceedings consequent on my determining the question. This would be undesirable, not to say somewhat bizarre in the extreme, if it turned out that the question was an academic one or should never have been permitted to be raised in the first place in the present proceedings.

Conclusion

40.For the above reasons, I decline to determine the question under Order 14A. Accordingly, I dismiss the application made under that order. As no separate arguments have been raised in the appeal from Master Chan's order dated 30 January 2001 in which he dismissed Rockwin's application for the trial of a preliminary issued, I also dismiss the appeal from that order. There will be a costs order nisi that the plaintiff will pay the 1st and 2nd defendants' costs 14A application.of and occasioned by the Order

Representation:

Mr Benjamin Chain, instructed by Messrs Cheng & Lo, for the Plaintiff

Mr Mok Yeuk Chi, instructed by Messrs David Y.Y. Fung & Co., for the 1st and 2nd Defendants

3rd Defendant, in person, absent