Man Whi Chung v. Man Ping Nam

HCA001975/2002

HCA 1975/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1975 OF 2002

____________

____________

Coram: Deputy High Court Judge A Cheung in Chambers

Date of Hearing: 4 & 5 December 2002

Date of Judgment: 20 December 2002

_______________

J U D G M E N T

_______________

Joinder of defendant

1.This is yet another piece of litigation involving the Man Sham Chung Wui ("the Wui"), the manager of which, Mr Man Ping Nam, is sued in the present action in his capacity as registered manager of the Wui.

2.This judgment deals with an application by the Applicant, Mr Man Mei Kwai Jimmy, to be joined as a co-defendant in the action.

3.On 1 February 2002, I handed down a judgment in High Court Action No. 9852 of 1998 involving Mr Man Ping Nam, in his capacity as registered manager of the Wui, as plaintiff, and Mr Man Mei Kwai as defendant (by original action) and between the two gentlemen together with others as parties by counterclaim. In my judgment, I set out the background and nature of the Wui, as well as the respective interests of the two gentlemen in the Wui. I will not repeat myself here. The background may also be gleaned from the judgment of the Court of Appeal handed down on 11 December 2002 (CACV 193/2002).

4.As for the facts involved in the present litigation, I will be as brief as possible, lest what I say here should affect the eventual adjudication of the disputes between the parties.

5.The Wui with the Defendant as its sole manager is the registered owner of two pieces of land known as Sheung Tong and Ha Tong respectively. By a written tenancy agreement in Chinese made in 1985 between the Defendant (in the present action) and two co-tenants, one of whom was the late father of the Plaintiff (in the present action), the Defendant as manager of the Wui agreed to let both Sheung Tong and Ha Tong to the co-tenants for a term of 10 years expiring in 1995. The stated user was container and open storage. The tenancy agreement expressly provided that:

"倘若租約期滿後甲方[the Wui]不需要此農地時乙方[the co-tenants]有優先租用而價錢另商另議。"

6.In 1988, the tenancy agreement was replaced by a new one between the Defendant as manager of the Wui and the Plaintiff's father and a new co-tenant, the original co-tenant having dropped out of the picture by then. The replacing tenancy agreement in 1988 was only in relation to Sheung Tong. (The yet unexpired tenancy relating to Ha Tong was surrendered by the original co-tenants back to the Wui.) Under the 1988 tendency agreement, Sheung Tong was let by the Wui to the new co-tenants for a term of ten years. Clause 5 of the 1988 tenancy agreement expressly provided as follows:

"期滿之日，乙方[the co-tenants]應自行交回上述承租地段交還甲方[the Wui]管理，惟取得甲方同意時可獲得優先續租乙方。"

7.It is the Plaintiff's case that the new co-tenant also dropped out of the picture subsequently, and eventually the Plaintiff's late father became the sole tenant under the 1988 tenancy agreement relating to Sheung Tong. The Plaintiff's case is that his father passed away in 1994, and since his demise, the Plaintiff has become the lawful successor to his late father's interest under the tenancy agreement.

8.Furthermore, it is the Plaintiff's case that he and his late father (together with the two former co-tenants) have done much in converting the land in question from fish pond land to land that can be lawfully used for open storage, thereby greatly increasing the value of the land. The Plaintiff therefore claims against the Defendant, amongst other things, the following relief:

"(1) A Declaration that the Plaintiff has acquired an equitable and beneficial interest in ... "Sheung Tong"...

(2) A Declaration that the Defendant is obliged to renew with the Plaintiff the tenancy for the land, "Sheung Tong", which commenced from 1 June 1988 and expired on 30 May 1998, for a new term of 10 years at the open market rent subject to the deduction taking into account the improvement to the Land provided by the Plaintiff and the Deceased [i.e. the Plaintiff's late father]."

9.In the defence filed by the Defendant, the Defendant does not dispute the making of the two tenancy agreements or the so called "conversion project" relied on by the Plaintiff in his pleading regarding the conversion of the land in question into open storage land, but does not admit the Plaintiff's claim of entitlement to a renewal of the tenancy of Sheung Tong or his claim of an equitable or beneficial interest in Sheung Tong.

10.By a summons dated 19 June 2002, the Applicant applies to be joined as the 2nd Defendant in the present action, pursuant to O.15 r 6 (2)(b), the Rules of the High Court (Cap. 4). In a nutshell, the Applicant claims that he has a sufficient interest in the subject matter of the litigation to be joined, and that he has reasonable grounds for believing that the Defendant has not been defending the action, putting it mildly, whole-heartedly, and he needs to join in as a defendant to defend the Plaintiff's claim, in protection of his own interest as a member of the Wui (and incidentally the similar interests of other members of the Wui).

11.The Applicant's application is, however, opposed not only by the Plaintiff, but also by the Defendant.

Order 15 rule 6(1) & (2)

12.O.15 r 6(1) and (2) reads as follows:

"6. (1) No cause or matter shall be defeated by reason of the misjoinder or nonjoinder of any party; and the Court may in any cause or matter determine the issues or questions in dispute so far as they affect the rights and interests of the persons who are parties to the cause or matter.

(2) 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) order any person who has been improperly or unnecessarily made a party or who has for any reason ceased to be a proper or necessary party, to cease to be a party;

(b) order any of the following persons 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."

13.The general principles relating to the joinder of parties, particularly the joinder of an additional defendant against the wish of the plaintiff, are conveniently set out in Hong Kong Civil Procedure 2002 (Vol. 1) paras 15/6/1-15/6/12.

14.It is essential for an intending defendant to show that he is sufficiently interested in the proceedings to which he or she wishes to be joined as an additional party. Under r 6(2)(b)(i) ("limb (i)"), a 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", may be added as a defendant.

15.In the present case, it is not being suggested by the Applicant that he is a person "who ought to have been joined as a party". Rather he is saying that he is a person "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".

16.The construction and application of limb (i) reached its high watermark in the well-known English Court of Appeal case of Gurtner v Circuit [1968] 2 QB 587, in which the Motor Insurers' Bureau successfully applied to be joined as a 2nd defendant to a road traffic claim made by an injured pedestrian against a motorist who had since the accident emigrated and could no longer be traced. Lord Denning MR said (at p. 595 D-F):

"It seems to me that when two parties are in dispute in an action at law, and the determination of that dispute will directly affect a third person in his legal rights or in his pocket, in that he will be bound to foot the bill, then the court in its discretion may allow him to be added as a party on such terms as it thinks fit. By so doing, the court achieves the object of the rule. It enables all matters in dispute to "be effectually and completely determined and adjudicated upon" between all those directly concerned in the outcome."

17.Diplock LJ (as he then was) delivered a concurring judgment, emphasising the peculiar nature of the intervenor's interest in the proceedings, namely that by an agreement reached with the Minister of Transport which could be specifically enforced by the Minister for the benefit of road traffic victims, the Bureau had to satisfy any damages that might be awarded to the plaintiff pedestrian in that case. The learned judge said (at pages 602G-603A and 603C-E):

"Clearly the rules of natural justice require that a person who is to be bound by a judgment in an action brought against another party and directly liable to the plaintiff upon the judgment should be entitled to be heard in the proceedings in which the judgment is sought to be obtained. A matter in dispute is not, in my view, effectually and completely "adjudicated upon" unless the rules of natural justice are observed and all those who will be liable to satisfy the judgment are given an opportunity to be heard.

...

I do not think the rules of natural justice depend upon a technicality as to the procedure by which the liability of a person who is bound to satisfy the judgment obtained by the plaintiff in the running-down action is enforceable. So long as it is legally enforceable against that person either directly by the plaintiff or indirectly by the Minister for the plaintiff's benefit under such a contract as exists in the present case, the court has jurisdiction to add that person as a party and ought normally to exercise its discretion by granting his application to be added. I think, therefore, that the bureau is entitled to be added as a party to the present action and to this extent, at any rate, this appeal should be allowed."

18.Salmon LJ (as he then was) agreed with both judgments.

19.In so deciding, the Court of Appeal did not follow the "narrow construction" placed by Devlin J (as he then was) in Amon v Raphael Tuck & Sons Ltd [1956] 1 QB 357. In Amon, Devlin J reviewed the authorities, including an earlier English Court of Appeal decision in Moser v Marsden [1892] 1 Ch. 487 in which the Court of Appeal drew a sharp distinction between an intervenor who had a legal interest in the subject matter of the litigation and one who merely had an indirect and commercial interest in the litigation, and eventually concluded that a narrow construction as exemplified by the decision in Moser itself should be adopted. Moser is a decision heavily relied on by Mr Chong, appearing for the Defendant, in opposition to the present application.

20.To complete the story in this regard, in Pegang Mining Co Ltd v Choong Sam [1969] 2 MLJ 52, 56, Lord Diplock, giving the advice of the Privy Council, said that a party might be added under limb (i) if "his rights against or liabilities to any party to the action in respect of the subject matter of the action be directly affected by any order which may be made in the action." In the view of the Privy Council, Devlin J's narrower interpretation of limb (i) in Amon had been rightly overruled by the Court of Appeal in Gurtner v Circuit.

21.As regards the alternative basis for joinder set out in O. 15 r 6(2)(b)(ii) ("limb (ii)"), which confers on the court a wider jurisdiction to allow joinder, the correct interpretation of this limb has been set out in a passage from Kerr LJ's judgment in Sanders Lead Co Inc v Entores Metal Brokers Ltd [1984] 1 WLR 452, 460 D-H, as was accepted by the local Court of Appeal in Wong Chun Loong Tony v Ada Ltd [1991] 1 HKC 86, 94 D-I:

"In my view, the rule requires some interest in the would-be intervener which is in some way directly related to the subject matter of the action. A mere commercial interest in its outcome, divorced from the subject matter of the action is not enough. It may well be impossible, and would in any event be undesirable, to attempt to categorize the situation in which the interests of would-be interveners are sufficient to satisfy the requirements of the rule. The authorities show that the existence of a cause of action between the intervener and one of the parties is not a necessary prerequisite for this purpose. But they also go no further than to show that there must be some direct interest in the subject matter, such as an alleged infringement of a patent, trademark or copyright with which the intervener is concerned (see Tetra Molectric Ltd v Japan Imports Ltd [1976] RPC 547 and Rexnord Inc v Rollerchain Distributors [1979] FSR 119) though even in such cases the interest of the intervener must raise an existing issue and not merely a contingent one: see Spelling Goldberg Productions Inc v BPC Publishing Ltd [1981] PRC 280. Another illustration is provided by cases where the intervener can show that he will in some way be compelled to 'foot the bill,' depending on the outcome of the action: see Gurtner v Circuit [1968] 2 QB 587, 595, though I bear in mind that the wording of RSC O. 15 r 6(2) was then much narrower than it is now. However, as Mr Hirst rightly conceded, no case has gone so far as to allow intervention by someone who is only a creditor, or alleged creditor, with no more than a creditor's commercial interest in the outcome of the action, and in my view it makes no difference whatever that the creditor in question is one who has obtained a Mareva injunction whose fate may in some way depend on the outcome."

22.In Wong Chun Loong Tony, the intervenor had a binding agreement with one of the defendants for the borrowing of money. The plaintiff commenced the action to prevent the defendant in question from lending the money to the intervenor. The Court of Appeal held that the intervenor had a sufficient interest in the action to be joined. At p. 95 B-D of the judgment, Clough JA analysed the situation as follows:

"For the purposes of (b)(ii) there must exist between the fifth defendant (as the person seeking to intervene) and 'any party to the cause or matter ... a question or issue arising out of or relating to or connected with any relief or remedy claimed in the cause or matter' which the court considers 'it would be just and convenient to determine as between' the fifth defendant 'and that party as well as between the parties to the cause or matter'. Thus, if the court is to have jurisdiction under (b)(ii) it is initially necessary that the question or issue mentioned in (b)(ii) should be common to (1) the intervener and a party to the cause or matter and (2) the parties to the cause or matter."

23.In Yu Cho Wah v Ho Chi Kwong Michael [1999] 3 HKC 68, four daughters successfully applied to be joined as defendants in an action involving a property in Lamma Island belonging to their deceased father's estate, in which the administrator was sued as defendant, on the ground that they had an interest in the property in that under Chinese customary law, they were entitled to dowry before their respective marriages. The court had evidence before it that a claim to dowry under Chinese customary law could only be made before a daughter's marriage, which was not the case of the four daughters in that case; yet the court allowed the joinder application on the ground that the four daughters might have a claim to an interest in the property in question and what, if any, claim they might have on their deceased father's estate was a matter to be decided by the court at trial, after the joinder (see p. 71 E-G). In other words, a person with a doubtful interest in the subject matter of the litigation was allowed to be joined, so that the doubt over his interest could be resolved at trial together with the relevant issues between the original parties.

24.On the other hand, in Kwan Chi On v Hong Kong Baptist University [1998] 1 HKC 88, the court did not allow joinder by an intervenor, a party in a pending probate action, in a discovery action commenced by the plaintiff, an opposing party in the probate action, for discovery of documents from the defendant university that could be used as evidence in the probate action. The court held that the admissibility of the documents as evidence in the probate action could and should be fought in the pending probate action, not the discovery action which was not concerned with any such issue.

Applicant's interest in Sheung Tong

25.Turning to the Applicant's interest in the present case, the Applicant bases his interest as a member of the Wui. Much evidence has been filed regarding whether the Applicant has actually sold his shares or entitlement under the Wui to an outsider, and whether he is merely holding his membership or entitlement in trust for the outsider because of the (disputed) rule of the Wui that no member may sell his interest to a person outside the Man clan. I believe that by the end of the hearing, this was not seriously pursued. In any event, this is a non-point. If as per the Defendant's case, such a purported transfer of membership to an outsider is prohibited by the custom and rule of the Wui, the transfer will be invalid and null and void, in which case the Applicant will still remain a member of the Wui. On the other hand, if, notwithstanding the custom or rule, the transfer is effective, it would mean that the Applicant is holding his membership in trust for the outsider as nominee/bare trustee. In my judgment, in that capacity, the Applicant is in no less a position to apply for joinder than a member who has not sold his membership; the only difference is that the Applicant would be applying for joinder in protection of the interest of his beneficiary and in discharge of his duty as trustee, whereas the member would be applying to be joined to protect his own interest. Whether the interest is sufficient to entitle joinder is a separate question.

26.What is the interest of a Wui member in the Wui, the property of the Wui and the income of the Wui? This need not be answered in vacuum. I am concerned with the subject matter of the present litigation. The subject matter of the litigation is the Plaintiff's claim to an equitable or beneficial interest in Sheung Tong, a piece of property registered in the name of the Wui with the Defendant as its manager. The Plaintiff also claims that he is entitled to a tenancy of Sheung Tong for a term of 10 years "at the open market rent subject to the deduction taking into account the improvement to the Land" made by the Plaintiff and his late father. In other words, the subject matter of the litigation may be described as an unspecified proprietary interest in the Wui's land or a leasehold interest (for ten years) in the Wui's land, or simply, Sheung Tong.

27.What, if any, interest does the Applicant have in relation to Sheung Tong or the Plaintiff's claim to Sheung Tong as analysed above? In my earlier judgment, I have already dealt with the nature of a wui in general and the nature of the particular Wui in the present case (at paragraphs 22-26) and I concluded (at paragraph 29) that the present Wui is a traditional Chinese association within the meaning of section 15 of the New Territories Ordinance (Cap. 97), and indeed since the enactment of that section (and its predecessors) manager after manager have been registered pursuant to the provisions as registered mangers of the Wui, including the Defendant. This analysis of the situation has been accepted by the Court of Appeal (see paras 3 and 8 of its judgment). For the law on "business tongs" in general, see another recent Court of Appeal decision in Tang Man Kit v Hip Hing Timber Company Limited CACV 137/2002, 11 December 2002.

28.In paragraph 25 of my previous judgment, I set out the expert evidence placed before the Court relating to the interest of the Wui members in the Wui land, which I accepted:

"23. Wui members have interests in the Wui land. But I cannot tell whether in the present case how clearly identifiable and "direct" the interests are. ... And I cannot tell whether the members of the Wui in question are "separate co-owners" or joint co-owners" because it is not made clear to me how the Wui land came into existence. Was it formed from pieces separately owned by individuals who later created the Wui? Or was it purchased with money contributes by prospective Wui members? In the former case the Wui members are "separate co-owners," in the latter case they are "joint co-owners."

26. ... Wui members, whether "separate co-owners" or "joint co-owners" had considerable power in supervising Wui management. They could object to an action of the manager, but if it were not stopped beforehand, they (even being "separate co-owners") could not lawfully nullify or terminate it without paying compensation to the innocent third party. Nor could they (even being a majority), in disregard of the chosen (especially registered) manager, proceed to manage the Wui land themselves without his consent. In short, if the majority members disagreed with the manager, they could force him to change course or remove him from his post or make him compensate them but they must not violate the established procedure of management and harm others."

29.In the Court of Appeal, Le Pichon JA said (in para 23):

"I now turn to consider the nature of the respondent's claim made in the counterclaim against the appellant. The first question to address is the nature of the respondent's "interest". It is common ground that the Wui is an unincorporated association. It is also common ground that each member of the Wui has an entitlement to share in the income derived from the assets of the Wui. The asset in question consists of land in the New Territories. The legal estate of the land is vested in the registered manager. No member of the Wui is entitled to have or call for the legal estate of any part of the land belonging to the Wui to be vested in him as such unless all the members were to give their consent. It is the registered manager who has power to dispose of or otherwise deal with the land (subject to any necessary consent from the Secretary.)"

30.Cheung JA (dissenting) said (in para 65):

"The respondent is a member of the Man Shum Chung Wui, a clan governed by Section 15. He is a beneficial owner of the Wui land: (see Tang Yau Yi Tong v. Tang Mou Shou Tso [1996] 2 HKLR 212, Chap Yick Clansman's Association v. Mok Fai [1997] HKLRD 580 and Leung Kuen Fai v. Tang Kwong Yu Tong HCMP No. 3305 of 1999)."

31.In Tang Yau Yi Tong v Tang Mou Shau Tso [1996] 2 HKLR 212, a tong wished to sell a piece of property registered under its name on which an ancestral hall once stood on the site of the property. The sale was objected to by a number of persons, including members of a tso on the ground that the tso was entitled to one-third of the property. The Court of Appeal allowed the members of the tso to sue in their capacity as members of the tso, holding that the tso was not by itself a legal entity and could not sue. Further, the Court made a declaration that the personal defendants as members of the tso were entitled to beneficial interest in the suit property, as a result of which the manager of the tong was not entitled to sell the suit property without the consent of the personal defendants.

32.Tang Yau Yee Tong as well as other relevant cases in this difficult area of the law have been carefully considered in, if I may say so with respect, a very learned judgment by Deputy High Court Judge Lam in Leung Kuen Fai v Tang Kwong Yu (or U) T'ong [2002] 2 HKLRD 705, 714C-717B (paragraphs 16-23). The learned deputy judge derived a number of propositions from the relevant case law (at p. 717C-718B, paragraph 24):

"24. From these authorities, I derive the following propositions which are relevant for present purposes:

(a) In respect of land in the New Territories within the scope of s.13 of the New Territories Ordinance, a Tso is recognised as a form of Chinese customary landholding.

(b) In the context of Hong Kong law, it has been established that the concept of trust is applicable to a Tso with the managers as trustees and the members as beneficiaries. It is to be noted that this is an application of concepts of English law to a Chinese customary institution. However, by reason of the local circumstances, certain concepts in English trust law were held to be inapplicable, eg the rule as to perpetuity.

(c) The members of a Tso are the living male descendants of the focal ancestor from time to time. They have the beneficial interest in the property. The managers could not dispose of the property against the wishes of the members.

(d) In practice, with unanimous consent of all the members, the Tso property could be sold, partitioned or distributed. The members could also decide on the use of the surplus income generated from Tso property. However, as noted by Deputy Judge Robert Tang QC, Chinese customary law did not provide for that. Rather, it was allowed to happen because no-one would raise objection given the unanimous consent of the members.

(e) In the absence of a sale or partition or distribution, each member only has a life interest in the Tso property. As observed by Mills-Owens J, the interest of a member arose automatically by birth. Likewise, it extinguished automatically upon death of the member. Since the interest would not form part of the estate of a deceased member, there is no question of succession. The extent of the life interest at any point in time depends on the number of living members in the Tso.

(f) Although the court recognised that there might be unborn interests, I am not aware of and Counsel did not cite any case touching upon the nature of such interest. In particular, it has not been decided whether the practice in sub-para. (d) above is consistent with the interest of the unborn members in Tso property. One possible explanation is that in accordance with Chinese custom applicable under s.13 of the New Territories Ordinance, the future descendants simply have no interest whatsoever in the property until they are born and the managers are not obliged to protect their interests as trustees. However, I should not express any conclusion as to that in the absence of any evidence of Chinese custom before me. As the matter stands, I have to leave this question open and I propose to decide the present case without reference to these unborn interests since I do not find it necessary for me to do so for reasons given below."

33.Leung Kuen Fai was a case concerning whether there can ever be obtained a possessory title to land held by a tso or tong, and if the answer is "yes", in what circumstances that could happen. A major issue is whether apart from the registered manager, the members of the tso or tong, including those who were born from time to time during the period of adverse possession, can sue the squatter for trespass. In paragraphs 25-31 of the judgment, the learned deputy judge dealt with in great detail the interest of members of a tso or tong in land registered in the name of the tso or tong, and the competing arguments that were advanced before him, including arguments drawing analogy on unincorporated associations, incorporated companies, trust, and administration of intestate estate. In paragraph 32 of his judgment (at page 720 E-I) the learned judge concluded on the authorities cited earlier that "it is obvious that the exiting members of the tso have beneficial interest in the tso property". Moreover, at paragraph 33 (at pages 720J-721B) he said that members of the tso could sue for possession of the tso land against a stranger, particularly if for any reasons the registered manager failed to take action, and the registered manager should be joined as a co-defendant.

34.In the recent decision by Chu J in Tang Kam Wah v Tang Ming Yat HCA 10141/1998 (26 November 2002), a case concerning the validity of a lease purportedly granted by some but not all of the managers of two tsos, the learned judge referred to the earlier authorities including Leung Kuen Fai and concluded in paragraph 68 of her judgment as follows:

"In my judgment, the following are well accepted principles of law with regard to Tso, Tso property and the managers appointed under Section 15:

(1) A Tso is a form of Chinese customary holding.

(2) The concepts of the English law of trust are capable of applying to a Tso with regard to property it holds, its members and also its manager(s) appointed under Section 15.

(3) Property held by a Tso is in the nature of trust property to which all members enjoy a beneficial interest.

(4) Section 15 was created to facilitate transactions relating to Tso land. Upon the registration of the appointment, the manager is in the position of a trustee and has full power to deal with the Tso land, subject to the supervision of the District Officer through the system of consent."

(The further conclusion of the learned judge in that case (in paras 73-78) that under section 15, the Secretary for Home Affairs' consent to a letting of tso/tong land is a mandatory requirement, which was also the conclusion that I reached in HCA 9852/1998, must now be read subject to the Court of Appeal's aforesaid decision in Tang Man Kit and Le Pichon JA's majority judgment in CACV 193/2002.)

35.As was indicated in my earlier judgment, if anything, members of a wui in the nature of the present Wui have a greater interest and role to play relating to the activities of the Wui than their counter-parts under a tso or ancestral-worship type of tong. It is clear from the above authorities that members of a tso or tong enjoy a beneficial interest, albeit a life interest, in the property registered in the name of the tso or tong. The case of the members of the Wui is an a fortiori one. Having read carefully the majority judgments in CACV 193/2002, including the passage from Le Picheon JA's judgment extracted above, I do not find anything that goes against the case law that has been summarized by me above or the conclusions that I have just drawn from the case law.

Applicant's interest in the present litigation

36.In my judgment, whether under limb (i) or limb (ii), the Applicant has shown a sufficient interest which is a legal (i.e. equitable) and direct (as opposed to a pure commercial) interest in the subject matter of the litigation. He has a beneficial interest (together with all other members of the Wui) in Sheung Tong. The present action concerns a claim by the Plaintiff to an equitable or beneficial interest in Sheung Tong. The claim directly affects the beneficial interest that the Applicant has in Sheung Tong. The declaration sought by the Plaintiff, if granted, will bind not only the registered manager, i.e. the Defendant, but also all members of the Wui as their representative, as per s. 15 ("whenever any land is held from the Government under lease or other grant, agreement or licence in the name of a clan, family or t'ong, such clan, family or t'ong shall appoint a manager to represent it"). The Applicant will not only be affected commercially. His beneficial interest in Sheung Tong is at stake.

37.Likewise, the claim for a new tenancy of ten years - a leasehold interest in the property in question - will also affect the beneficial interest of the Applicant in the property. The long leasehold interest will be an encumbrance on the property, and thus will affect the beneficial interest of the Applicant as member of the Wui. He is not only affected commercially or financially in terms of the rental incomes to be derived from the claimed new tenancy that will have to be distributed by the registered manager to the Wui members. The leasehold interest represented by the claimed tenancy will affect the beneficial interest of the Applicant in Sheung Tong.

38.In other words, limb (i) is satisfied.

39.As regards the wider limb (ii), all that it requires the intervenor to possess is "some interest" (per Kerr LJ in Sanders Lead Co Inc) which is in some way directly related to the subject matter of the action. I have no doubt that the beneficial interest of the Applicant as a member of the Wui in the subject property is a sufficient interest in that sense. Putting it in terms of the test posed by the Court of Appeal in Wong Chun Loong Tony in the passage already extracted above, the question or issue common to (1) the intervenor and the Plaintiff and (2) the Plaintiff and the Defendant is this: whether the Plaintiff has a beneficial or equitable interest in the subject property and/or whether the Plaintiff is entitled to a new tenancy over the property, in which property the Applicant has a beneficial interest as member of the Wui.

40.To illustrate the inter-connections further: just as the registered manager of the Wui could counterclaim against the Plaintiff for trespass, mesne profits and so forth, in respect of the Plaintiff's continued occupation of the land after the expiry of the 1988 tenancy agreement, the Applicant could, as member of the Wui, commence a similar action against the Plaintiff as per Lam DJ's judgment in Leung Kuen Fai, particularly if the Defendant should fail for whatever reasons to take out such an action or counterclaim.

41.An action or counterclaim for trespass, mesne profits and so forth and the Plaintiff's claim for a declaration of beneficial or equitable interest in the land or for the creation of a new tenancy over the land, are just two sides of the same coin.

42.In other words, I am also satisfied that limb (ii) is fulfilled in the present case.

Exercise of discretion

43.Of course, the Court has a discretion to exercise even if a case falls within the provisions. But the fact that a case falls within either limb is by itself a strong reason for allowing the joinder. The rules of natural justice require that a person who is "affected" (in the sense of either limb (i) or limb (ii)), or is potentially affected (as per Yu Cho Wah), by a decision of the court be given a proper chance to be heard.

44.Moreover, multiplicity of proceedings should be avoided: Wong Chun Loong Tony, at page 98B-D. As was illustrated above, it is indeed open to the Applicant to commence a new action to sue the Plaintiff for trespass, joining the registered manager as a co-defendant, as per Leung Kuen Fai. In such an action, no doubt the Plaintiff (as defendant there) would repeat all the material facts that have been pleaded in the present statement of claim to mount a defence to the claim of trespass as well as a counterclaim for a declaration of interest in the land and for a new tenancy against his co-defendant, i.e. the registered manager of the Wui. That illustrates, in my judgment, the desirability of allowing the Applicant to be joined as the 2nd Defendant in the present action.

45.Moreover, there is much material filed by the parties in relation to the present application on whether the Defendant has been resisting the claim of the Plaintiff whole-heartedly or as diligently or aggressively as he should or is expected to be.

46.I will not further lengthen this judgment by referring to the many correspondences that have passed between those representing the Applicant and those representing Defendant. Without any intention whatsoever to prejudge the issues involved in the present action, all that I would like to say is that the Plaintiff's claim, as pleaded in the statement of claim, is by no means straightforward. The pleaded basis for an equitable or beneficial interest in the subject property is not crystal clear. The inter-relationship between the claim for an equitable or beneficial interest in the subject property and the additional claim for the renewal of a tenancy for another term of ten years is not particularly easy to understand. In those circumstances, there is, in my judgment, on the material placed before me, some justification for the Applicant's claim that the defence of the Wui in relation to the Plaintiff's claim could be asserted in a more positive and aggressive manner, which is not the approach or tactics adopted by the Defendant.

47.In fact, in an open letter written to all members of the Wui by the solicitors acting for the Defendant dated 14 March 2002, the view was expressed on behalf of the Defendant that according to the "preliminary view of counsel", based on the facts alleged by the Plaintiff, the Plaintiff "would have acquired a proprietary/beneficial interest in that part of the land known as "Sheung Tong" and, in the premises, the Wui would be obliged to grant a tenancy to [the Plaintiff] in accordance with the contractual arrangement between the Wui and him". It should be noted that at the time when this letter was written, the Plaintiff had not even clarified his stance relating to the details of the new tenancy which he was seeking from the Wui, such as the term of the new tenancy and the rental payable. It was only in the statement of claim filed subsequently that the Plaintiff clarified that he is asking for a new tenancy of a term of ten years at open market price less the credit to be given to the improvement that has been done on the land.

48.As regards the defence filed on behalf of the Defendant in the present action, apart from putting the Plaintiff to proof of the factual allegations and the legal contentions that have been pleaded in the statement of claim, it basically puts forward no positive defence. Thus for instance, the very specific and express terms in the two previous tenancy agreements relating to the unconditional delivery up of vacant possession of the subject land by the tenants to the Wui upon the expiry of the respective terms have not been referred to in the defence as constituting a defence to the Plaintiff's claim.

49.Furthermore, only a defence has been filed. There is no counterclaim for recovery of possession of the subject property (in case the Plaintiff should fail in his claim), or for that matter, for payment of mesne profits or damages.

50.There has never been any application for interim payment either, despite the nature of the Plaintiff's claim.

51.To be fair, Mr Chong, appearing for the Defendant, did give the Court some explanations as to why no counterclaim has been filed nor application for interim payment made. I need not go into the explanations here, which involve some sort of a temporary arrangement agreed between the Plaintiff and the Defendant regarding the Plaintiff's continued occupation of the subject property pending the final adjudication of the earlier action which resulted in my earlier judgment and the Court of Appeal's latest decision. Mr Chong made the rather surprising submission, particularly bearing in mind that he is acting not for the Plaintiff but for the Defendant, that under that temporary arrangement, the Plaintiff is free to commence the present action against the Defendant for a declaration of interest in the subject land and entitlement to a new tenancy, whilst his client is not, on the other hand, entitled to counterclaim for possession or mesne profit.

52.All this, in my judgment, gives credence to the Applicant's assertion that the Defendant, for whatever reasons - legitimate or otherwise, has not been defending the present action as vigorously as the members of the Wui (or some of them) may legitimately expect him to do. For all that we know, there may be very good reasons for that. It is not for me to speculate here. But on the material before me, there is indeed some justification for the Applicant's wishing to be joined so as to protect his own interest in the present litigation.

Section 15

53.During submission, there was some suggestion that s. 15, requiring the registration of a manager to represent a tso, tong or for our purpose, the Wui, precludes by implication the intervention of a member of the tso, tong or wui in litigations between an outsider and the registered manager as representative of the tso, tong or wui. This argument cannot stand together with the authorities cited by me above, which clearly recognise the beneficial interest of the members in the land registered in the name of the tso, tong or Wui, and the members' title to sue in relation to the property in case something is being done or is sought to be done contrary to the interest of the members, particularly when the registered manager for whatever reason is not taking any or any sufficient action to defend the members' interest. As I said, I do not read anything that has been said by the majority in CACV 193/2002 as contradicting what I have just said.

Order

54.For all these reasons, in the exercise of my discretion, I make an order that the Applicant be added as a 2nd Defendant in the present action, that the title of this action be amended accordingly, that leave be granted to the Plaintiff to amend the writ and the statement of claim by filing and serving the amended writ and the amended statement of claim within 14 days from the date this judgment is handed down, that leave be given to the original Defendant and the Applicant (as 2nd Defendant) respectively to file and serve an amended defence (if any) and a defence within 14 days thereafter; and that leave be granted to the Plaintiff to file a reply (if any) to the said amended defence (if any) and the defence respectively within 14 days thereafter.

55.As regards the costs of the present application, given the nature of the application, the grounds relied on in support of the application, the respective grounds relied on by the Plaintiff and the Defendant in opposition to the application, the costs incurred for the substantive hearing, and last but not the least, the general principle that costs should follow the event, I make an order nisi that the costs of and occasioned by the application be costs in the cause. Unless any party applies to vary this order within 14 days after this judgment is handed down, the same shall become absolute after the expiry of the 14-day period.

56.I would like to thank counsel for their assistance.

Representation:

Mr Kwok Shui Hay, instructed by Messrs K M Lai & Li, for the Plaintiff

Mr K M Chong, instructed by Messrs Christine M Koo & Ip, for the Defendant

Mr Louis K Y Chan & Mr Jacky Jim, instructed by Messrs Wong & Poon, for the Applicant