THE YIN NIN SAVINGS MORTGAGE LOAN & LAND INVESTMENT CO LTD AND ANOTHER v. OCCUPIER(S) OF PREMISES (save and except the 2nd Defendant to the 9th Defendant) AND OTHERS

HCMP 1739/2003

[2021] HKCFI 825

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 1739 OF 2003

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DECISION

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1.  This is the paper application for leave to appeal by the 1^st and 2^nd Plaintiffs against my decision dated 7 October 2020 (“the Decision”), under which I allowed the appeal against the amendment order made by Master Hui dated 29 May 2019 (“the Appeal”) and directed the issue of separate representation to be considered by any master.

2.  The background of this case and my reasons for allowing the Appeal have been fully set out in the Decision and I do not want to repeat the same here.  For easy reference, I will adopt the same abbreviations that I used in the Decision.

3.  For this leave application, I have directed the 1^st and 2^nd Plaintiffs to file one set of written submissions.

4.  Mr Man, SC, counsel for the 1^st Plaintiff and who had not appeared me in the Appeal, has summarised the grounds of the intended appeal as follows:

(i)  The effect of the Amendment Order under the slip rule was simply to supplement the earlier Consent Order, by making express the Master’s manifest intention that leave be granted to the 1^st and 2^nd Plaintiffs for separate representation as at the time of the making of the Consent Order.

(ii)  The appeal from the Master to me was the Amendment Order under the slip rule, not the Consent Order.  The Master would be wrong in making the Amendment Order under the slip rule, say, if he did not actually in fact have the manifest intention to grant leave for separate representation, which he professed to have had at the time of making the original Consent Order.  There is no such finding in the Decision.

(iii)  Rather, the Decision determined the matter of substance of whether there should be separate representation.  However, for the Defendants to substantially challenge the Master’s grant of leave for separate representation on 9 October 2018, they should have either:

(a)  applied for leave to appeal out of time from the Master’s decision on 9 October 2018; or

(b)  if I was right in holding that the 9 October 2018 decision was an ex parte decision, applied to set aside the ex parte decision under O 32 r 6 of the RHC.

(iv)  The Defendants did neither of the above.  Hence the evidence necessary for such applications was never filed, and could never have been considered by the Master.  Instead, the only application before the Master at the 27 May 2019 hearing was an application under the slip rule pursuant to O 20 r 11 of the RHC.  In the circumstances, the Master was correct to only deal with the slip rule application at that hearing.

(v)  Accordingly, I was erred in holding that the Master was duty bound to reconsider the issue of separate representation in the hearing on 27 May 2019, and in setting aside the Amendment Order by reason of the Master’s failure to do so.

(vi)  In any event, given the serious and substantial delay, even if an application for leave to appeal out of time and/or an application to set aside an ex parte order had been properly made, the court should have upheld the Master’s Consent Order granting leave for separate representation.

5.  These are rather technical arguments.  The overall position is this.  The court had not had the proper opportunity to consider the full implications of allowing separate representations with the benefit of arguments from all the relevant parties.  The effect of the Decision is to set aside the Amendment Order made by the Master and directed the matter to be reconsidered by any master after giving proper opportunity to the parties to address the court.  In other words, I am not disallowing separate representations, but I take the view that the matter deserves proper consideration.  In particular, separate representations would affect the conduct of the proceedings by the court, and I have already pointed out in §20 of the Decision that the court has overriding power to overturn orders made by the consent of the parties in appropriate circumstances.

6.  Despite the CJR, appeal against master’s decision is still conducted by way of rehearing, though there is general prohibition against the parties from adducing new evidence in the appeal. Hence, I had to put myself in the position of the Master in dealing with the slip rule application, which the Master himself had directed the parties to make, in the hearing on 27 May 2019.  In my judgment, these are important considerations here which may have been overlooked by Mr Man.

7.  It is common ground that the Master was aware of the issue of separate representation when he approved the Consent Order on 29 October 2018.  No express leave for separate representations had been included in the draft Consent Order.  Requisition on separate representations was raised on 27 September 2018 and DD replied by way of the DD’s Letter on 2 October 2018.  Unfortunately, the other parties had not been asked by the court to address such issue.  Under such circumstances, what should have been done by the Master in the hearing on 27 May 2019?

8.  For the purpose of the present appeal, I am prepared to accept that the Master had considered himself having allowed separate representations when he approved the Consent Order, otherwise he would not have directed the parties to take out the slip rule application.  However, having met with the objections for separate representations by the 4^th, 6^th and 8^th Defendants, I take the firm view that the Master should have reconsidered the issue as the earlier leave, if any, was granted ex parte and the other parties had not been directed by the court to address this particular issue.  Further, the court has a legitimate concern over the conduct of its own proceedings, and so the Master should not have just allowed the slip rule application on the basis of his ex parte leave granted for separate representations when he approved the Consent Order.  This is what I would have done in the circumstances.

9.  In fact, there are various matters that have not been considered by the court in considering the question of separate representation.  One is the additional costs that may have to be borne by the Defendants arising from separate representations.  Second, the court has not considered the locus issue as mentioned in §31 of the Decision. Third, as raised by the 1^st Plaintiff for the first time in this leave application, the 1^st and 2^nd Plaintiffs claim that they have proceeded on the basis of separate representations and substantial costs have been incurred as a result.

10.  Rather than proceeding on the basis of separate representations and giving further case management directions with a view to avoid duplication of costs (as Mr Man suggests), the matter should be properly considered by the Master inter parte.   Hence, by way of rehearing, I do not agree with the Master that he should have proceeded on the basis of the ex parte leave (if that was indeed the case) and made the Amendment Order on 27 May 2019.  By making the decision on the spot, the Master was also disallowing the relevant Defendants to adduce further arguments and evidence to support their positions.

11.  The court has considerable case management power to regulate its own proceedings.  I take the view that the Decision was one that I was entitled to make in terms of my power and discretion.  There was no error in the decision process, and so the appeal has no reasonable prospect of success.

12.  Further, by way of additional comment, the intended appeal is not an efficient way to resolve the dispute in the present case.  Instead of wasting further costs in the intended appeal, the parties should focus on the issue of separate representation which will be considered by the court in due course.  There may also be further embarrassment that, if the case is to proceed on the basis of separate representations which may eventually lead to certain unfairness, the court may then have to consider whether to extend the time to appeal against the Consent Order itself.  On the basis of the Decision, the court will have to consider the issue of separate representation inter parte, and the court would be able to make appropriate directions for the future conduct of the case addressing the concerns of the parties.

13.  For these reasons, I refuse the application for leave to appeal against the Decision.  I also make a costs order nisi that the costs of this application be paid by the Plaintiffs to the 8^th Defendant which shall be made absolute 14 days after the date of the handing down of this decision.