BEHRENS NG MO CHEE CINDY AND OTHERS v. CREDIT WORLD LTD.

CACV 33/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 33 OF 2000

(ON APPEAL FROM HCA 4404/1999)

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J U D G M E N T

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Hon Mayo VP:

1. This is an interlocutory appeal from the decision of Deputy Judge To who declined to grant to the defendant the relief it sought in a summons to strike out the plaintiffs' claims or alternatively to order that the claims be prosecuted separately. At the conclusion of the hearing, we dismissed the appeal with costs, but said that we would hand down our reasons in due course. This we now do.

2. This is the second time an appeal has been lodged in relation to this summons. On an earlier occasion another Judge made an order which provided for the trial of preliminary issues. We allowed the appeal against this order and the summons was then heard by Deputy Judge To.

3. The action is being brought by the owners of some of the podium flats against the developer of a residential project called Grand Palisades at Tai Po.

4. Put very simply the claim being made by the 17 plaintiffs who are respectively the owners of 10 ground floor flats in one of the defendant's developments is that gardens adjoining their flats should be exclusive to their flats. They all claim that representations to this effect were made when they purchased their flats and that when the Assignments and Deeds of Mutual Covenant were prepared the gardens were included in the common areas of the development as a whole.

5. While it is true that the particulars of the various misrepresentations alleged vary from plaintiff to plaintiff it is undoubtedly the case that there are various themes which recur time and again.

6. What is however a constant is that all the plaintiffs seek orders that their respective Sale and Purchase Agreements and consequential conveyances should be rescinded.

7. It is apparent from reading the decision of the Judge that the emphasis of the hearing before him was on Order 15 rule 4 rather than Order 18 rule 9 of the Rules of the High Court.

8. Order 15 rule 4(1) provides:

"Subject to rule 5(1) two or more persons may be joined together in one action as plaintiffs or as defendants with the leave of the Court or where -

(a) if separate actions were brought by or against each of them, as the case may be, some common question of law or fact would arise in all the actions, and

(b) all rights to relief claimed in the action (whether they are joint, several or alternative) are in respect of or arise out of the same transaction or series of transactions."

9. It would appear that the defendant's main concern is that if all the plaintiffs' claims are heard together at the same time this will prejudice their interests. The reason for this being that the cumulative effect of all the claims for misrepresentation might lead the Judge hearing the action to conclude that there must be some merit in the contentions being advanced having regard to the number of purchasers making complaints many of which are of a similar nature.

10. The Judge rejected this contention. He did so on the basis that a Judge hearing an action of this nature would be able to weigh and consider the evidence adduced before him on its merits and that he would not be influenced simply by the fact that a number of similar claims were being advanced.

11. It is necessary to consider what alternatives would be available in the circumstances. It would hardly be satisfactory to order that all the different plaintiffs' claims should be heard by different Judges at different times.

12. One problem which immediately would arise is that if this course is adopted there is a substantial risk that conflicting and different results may obtain in cases which are virtually indistinguishable on the facts.

13. If however it is suggested that one Judge should hear all the cases one after the other a similar objection might be made that after the Judge had heard some of the cases he might be influenced in hearing the remaining cases.

14. I do not think that the Judge can be validly criticised for coming to the conclusion that the application could not succeed simply on the basis of any possible perceived prejudice.

15. The question which then has to be considered is whether the Judge was right as a matter of principle to decline to make the order sought.

16. In his decision the Judge was guided by the approach adopted by the Court of Appeal in Payne v Daily Sketch and Daily Graphic Ltd [1921] KB 1. This was that for joinder to be justified it was necessary that the claims being made should involve common questions of law or fact. This should be of sufficient importance in proportion to the rest of the action to render it desirable that the whole of the matters should be disposed of at the same time.

17. The Judge then went on to analyse the case as best he could in an attempt to determine whether the interests of justice would be served by hearing all the plaintiffs' claims in the manner contemplated in the amended statement of claim or whether it was desirable to have separate actions.

18. He was not assisted in his endeavours by the fact that at the time when he heard the summons no defence had been filed. However it is appreciated that it would be wrong to expect the defendant to file a defence until this important preliminary issue is resolved.

19. What is very clear is that there is a common theme to all the claims being made by these plaintiffs. They were all purchasing similar types of flats in the same development from the same developer. They all make complaints of a similar nature. The documents relating to the transactions are similar particularly the Deed of Mutual Covenant. While it will almost inevitably be the case that the different plaintiffs will adduce different evidence in relation to the alleged oral representations this is not of itself in any way conclusive of this matter.

20. Although no defence has yet been filed it would seem to be reasonable to anticipate that a similar defence will be run to all of these claims. There was presumably a common policy concerning the layout of the gardens and common areas.

21. The Judge dealt with these issues in this way:

"The matter now before me is different. The issue before me is whether there is a common question of fact or law bearing sufficient importance in proportion to the rest of the action to render it desirable that there should be a joinder of the plaintiffs. In my opinion, a common question of fact does not mean a common finding of fact so that in respect of all the plaintiffs, the finding of fact is identical. So long as the question of fact to be determined is common among the plaintiffs, the fact that the eventual outcome may be resolved differently among the plaintiffs does not mean that the question of fact is not a common one.

Here, the common question of fact is whether there was implied representation by the model, the brochure and the price, assuming that the oral representation by the sales representatives to the different plaintiffs were different. The installation of the water tap from a metered source from within the podium flat and the building of the partition wall by the defendant dividing the various podium gardens, if proved, will be literally 'concrete' evidence supporting the allegation that the implied representations and the oral representations by the sales representatives were in fact made. All these matters together formed the common question of fact which in my opinion require identical investigation. Of course, I am not excluding the possibility that the court may resolve in favour of some of the plaintiffs and may resolve against the others. The legal effect of the deed of mutual covenant is of course a common question of law which also requires identical investigation.

As for the oral representations made by the sales representatives, these were made under similar circumstances, though involving different members of the sales team and may be on different dates. However, the provisional sale and purchase agreements were all signed on the same day. Even assuming that these representations do not form part of the common question of fact and would require separate investigations, I would have thought the conversation between the respective plaintiff and the sales representative during which the oral representations were made would have taken no more than a few minutes. Even if this conversation is hotly contested at trial, this issue is a proportionately small one when compared with the other common issues of fact and law requiring identical investigations. If the oral representations are proved, there will be the further common question of law as to the legal effect of the representation."

22. I have no doubt that the Judge adopted the correct test and his analysis of the factual position is essentially well founded. He exercised the discretion reposed in him properly and there are no grounds to justify interfering with decision. In my view this appeal had to be dismissed with costs.

Keith JA:

23. I agree. There is nothing which I can usefully add.