XCHRX Kwok Chu Lan v. Wong Ka Yee Phoebe

DCCJ16123 & 15044/2000 (CONS)

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 16123 & 15044 OF 2000 (CONSOLIDATED)

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D E C I S I O N

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1. This is an application by the Applicant, Mr Wong Sai-cheong, to be joined as the 2nd Defendant in this action.

2. The Plaintiff brought the present action against the existing Defendant for the repayment of loan. It is the Plaintiff's case that the loan was secured by a second legal charge which was executed by the existing Defendant and the Applicant. However, the Plaintiff does not seek to enforce the second legal charge in the present action.

3. The Applicant admits that a loan was made to the existing Defendant, but he seeks to set aside the legal charge on the ground that the same was obtained by fraud on the part of the Plaintiff and one Madam Shum Suk-yee.

4. However, I must say that the issue in the Applicant's intended action is quite unrelated to the Plaintiff's claim in the existing action. As the Plaintiff is not seeking to enforce the second legal charge, it is not necessary for the court to decide on the validity of such charge in the Plaintiff's claim. Indeed it is not in dispute that a loan was in fact made to the existing Defendant, and so the only issue is whether such loan is enforceable or whether the making of such loan contravenes the provisions in the Money Lenders Ordinance. All these issues have nothing to do with the validity of the second legal charge. As the Plaintiff does not seek to enforce the second legal charge and the Applicant will not in anyway be bound by the decision of this court in the existing action, I do not see it fit to allow the Applicant to be joined as the 2nd Defendant.

5. Mr Mak, for the Applicant, also submits that in the case that the Applicant fails in the present application, the Applicant will certainly commence a separate action against the Plaintiff which may result in multiplicity of actions. However, I do not accept this to be a valid reason for me to exercise the discretion in favour of the Applicant. Devlin J. in the case of Amon v Raphael Tuck & Sons Limited [1956] 1 QB 357 said the following:

"If I may express with diffidence my own view of the rule, apart from the authorities, I would support the narrower construction. I do not, with deference to those who have thought otherwise, agree that the main object of the rule is to prevent multiplicity of actions, though it may incidentally have that effect. The court has other ways of doing that which are amply sufficient for the purpose - by ordering consolidation or the bringing of actions on together or third party proceedings and so on. The primary object of the rule I believe to be to replace the plea in abatement. The object of that plea was to "abate" an action in which all the proper parties were not before the court. The rule is more flexible than the plea, but its object is fundamentally the same. It is not to marry a future action to an existing one, but to ensure that all the necessary parties to the existing one (using "necessary" in the board sense of being necessary to effectual and complete adjudication in the existing action) are before the court. It does, of course, incidentally keep down multiplicity of actions, because if the necessary parties cannot get before the court in an existing action, they will naturally try to do so in another action, but that appears to me to be a desirable consequence of the rule rather than its main objective." (p.378)

Devlin J. also had the following to add:

"Of course, whatever the object, it is the words of the rule that now govern the matter and it is true that the words "all the questions involved in the cause or matter" are very wide. They are so wide that no one suggests that they can be read without some limitation. The limitation is not something that is left to be settled by the court in its discretion. It is there in the earlier words of the rule. The person to be joined must be someone whose presence is necessary as a party. Who makes a person a necessary party? It is not, of course, merely that he has relevant evidence to give on some of the questions involved, that would only make him a necessary witness. It is not merely that he has an interest in the correct solution of some question involved and has thought of relevant arguments to advance and is afraid that the existing parties may not advance them adequately. That would mean that on the construction of a clause in a common form contract many parties would claim to be heard, and if there were power to admit any, there is no principle of discretion by which some could be admitted and others refused. The court might often think it convenient or desirable that some of such persons should be heard so that the court could be sure that it found a complete answer, but no one would suggest that it is necessary to hear them for that purpose. The only reason which makes it necessary to make a person a party to an action is so that he should be bound by the result of the action, and the question to be settled therefore must be a question in the action which cannot be effectually and completely settled unless he is a party." (p.380)

6. In the present case, it is clear that:

(1) the Plaintiff does not have to rely on the validity of the legal charge in enforcing the claim against the existing Defendant;

(2) the existence of the loan is not an issue in the present case, and the question concerning the enforceability of the loan has nothing to do with the validity of the second legal charge; and

(3) the presence of the Applicant is not necessary for the court to decide on the claim by the Plaintiff against the existing Defendant.

7. Based on these factors, I will exercise my discretion in favour of the Plaintiff and refuse the Applicant's application.