LAU MUK FAT (SUING AS THE MANAGER OF LAU SHAU WO TSO) v. WONG KWOK WA AND OTHERS

HCA 1006/2017, HCA 1879/2011, HCA 802/2019,
HCA 896/2012, HCA 897/2012 & HCMP 944/2018
(Heard together)

[2022] HKCFI 3166

HCA 1006/2017

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1006 OF 2017

________________________

________________________

AND

HCA 1879/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1879 OF 2011

________________________

________________________

AND

HCA 802/2019

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 802 OF 2019

________________________

________________________

AND

HCA 896/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 896 OF 2012

________________________

________________________

AND

HCA 897/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 897 OF 2012

________________________

________________________

AND

HCMP 944/2018

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 944 OF 2018

________________________

________________________

(Heard Together)

________________________

DECISION

________________________

A.  INTRODUCTION

1.  These matters have a long and somewhat tortuous history.  At issue before the Court at the present hearing was how to best case manage the 6 sets of proceedings going forward.

2.  There are, in essence, three proposals before the Court, which can be summarized as follows:

(1)  The application of Mr Wong Kwok Wa (“WKW”)[1]: to effectively consolidate all but one of the proceedings (namely, HCA 1006/2017), with a full recast of pleadings, but adopting the evidence and discovery that had already been filed to date.  At the hearing, this was further developed into a fallback option of consolidating HCA 1879/2011 with HCA 802/2019 and HCMP 944/2018, whilst leaving HCA 896/2012 and HCA 897/2012 undisturbed. (“WKW’s Application”)

(2)  The application by Madam Mok Mei Ling Rekei (“Madam Mok”)[2]: to consolidate HCA 802/2019 and HCMP 944/2018, with consequential directions to be given in respect of pleadings and further conduct thereof (“Madam Mok’s Application”).

(3)  The position put forward in answer to the above applications by Lau Muk Fat (“LMF”, suing as manager of Lau Shau Wo Tso)  (“the Tso”): to proceed to trial of HCA 1879/2011, HCA 896/2012 and HCA 897/2012 (collectively, “the Main Actions”, for which directions had already been given on 13 September 2013 that they should be heard together),without further consolidating the Main Actions with the subsequent sets of proceedings. It was further suggested that those subsequent proceedings ought to be stayed pending the resolution of the Main Actions.

3.  There was also before the Court a strike out application by the 2^nd to 12^th Defendants in HCA 1006/2017 (“the 1006 Dings”)[3] to strike out the action against them (“the Strike Out Application”).

4.  At the hearing, WKW was represented by Counsel Mr Tony H H Chow, Madam Mok was represented by Counsel Mr Raymond Tsang, the Tso was represented by Counsel Mr Billy N P Ma, and the 1006 Dings were represented by Ms Evelyn L C Cheng.

B.  BACKGROUND

5.  Given the various issues that arise for consideration in contemplating which course to adopt, it is necessary to set out the background and procedural history in some detail. What follows is not intended to be an exhaustive summary of the background or all the issues in the cases, but only what is essential for the purposes of the present decision.

B1.  The Development Agreement

6.  By a development agreement originally dated 15 December 1994 between the Tso and WKW, as varied by supplemental agreement dated 31 August 1995, LMF as manager of the Tso was to provide various lands to WKW as developer to coordinate and develop small houses with the involvement of various indigenous villagers (“Dings”)  (“the Development Agreement”).  In consideration for the provision of the lands, the Tso would obtain a share of the houses to be constructed thereon.

7.  Pursuant to the Development Agreement, WKW eventually procured 17 small village houses to be constructed on 17 building lots.  The houses were to be split between the Tso and WKW at a ratio of 4 to 6 (the Tso being entitled to 6 houses, WKW being entitled to 9 houses, and the parties to split the interest for the remaining 2 houses at 4:6 interest).

8.  There is some dispute as to the precise mechanism for selection and allocation, but what is not disputed is that the Tso had been allocated and conveyed 6 houses/lots in around June 2011 (“the Tso’s 6 Houses / Lots”).  There thus remained 11 houses/lots which were unallocated (“the 11 Unallocated Houses / Lots”), and which are the subject of the various actions now before the Court.

B2.  The Main Actions

9.  The first action to be initiated was HCA 1879/2011.  In a lengthy Amended Statement of Claim dated 23 March 2012 (“1879 ASOC”), the Tso makes various claims against inter alia that WKW.  It is unnecessary to set out each and every aspect of the claim, but for present purposes, the following are most pertinent. In essence, the Tso claims that:

(1)  WKW is in breach of and/or liable for delay in various aspects of the Development Agreement, such that the Tso has suffered loss and damage;

(2)  WKW misrepresented various matters to the Tso, leading to the Tso selecting the 6 houses in June 2011, which were inferior in quality, and in consequence the Tso has suffered loss and damage;

(3)  WKW is liable to specifically perform the Development Agreement in that he should: (i)  select 9 houses/lots out of the 11 Unallocated Houses / Lots and (ii)  assign and transfer 40% interest and benefit in the remaining 2 houses/lots to the Plaintiff; and in addition thereto, he is liable for damages owing to his breaches and/or delay in performing the Development Agreement.

(4)  Alternatively to the relief for specific performance, the Tso seeks declaratory relief that it is entitled to 2/11 of the rights and interest in the other 11 Unallocated Houses/Lots; and yet further or alternatively, damages in lieu of or in addition to specific performance.

10.  The HCA 1879/2011 action also involves the 2^nd to 13^th Defendants therein (“the 1879 Dings”), who are certain other of the Dings (not the same as the 1006 Dings)  whose involvement in the arrangements were necessary in order to render the Development Agreement workable.  The Tso seeks inter alia declaratory relief against them that their Lots are held on trust for the Tso, damages for breach of trust, and orders that they do transfer or assign their Lots to the Tso or other persons nominated by the Tso.  Save for filing defences wherein they largely indicate that they have “no knowledge” of the various matters in the 1879 ASOC, they have not taken an active part in the proceedings.  

11.  HCA 896/2012 and HCA 897/2012 were commenced on 28 May 2012 by the Tso.

12.  In HCA 896/2012, the Tso alleges again various breaches and/or delay in performance of the Development Agreement and seeks inter alia relief against WKW for:

(1)  Specific performance of the Development Agreement to the effect that he is liable to procure and transfer assignment of a lot in the name of the 2^nd Defendant in HCA 896/2012 (Tsang Hon Lung, a Ding involved in the arrangement who has similarly taken a non-active stance)  to the Tso; and

(2)  Alternatively to the above, damages for breach of the Development Agreement in addition to or in lieu of specific performance.

13.  In HCA 897/2012, the Tso alleges various breaches of the Development Agreement, makes an allegation that there had been an express grant of easement whereby the Tso would be afforded access to the Tso’s 6 Houses / Lots, and makes a further claim that there had been misrepresentation in respect of a box sewerage system for the Tso’s 6 Houses / Lots (which was promised, but not built). The Tso seeks relief against WKW for inter alia:

(1)  A declaration that WKW had expressly granted the easement;

(2)  Specific performance of the agreement for the grant of the said easement;

(3)  Damages for breach of the said agreement for grant of the easement;

(4)  Damages for misrepresentation in respect of the box sewerage system, or alternatively specific performance to construct the same.

14.  WKW filed defences and counterclaims in the respective actions on 15 November 2012[4]. He makes various denials and factual averments regarding the allegations in the various actions. By way of the Counterclaims in each of the actions, WKW seeks inter alia:

(1)  Declaratory relief that the Development Agreement is “unlawful, illegal, contrary to public policies and hence unenforceable and void”;

(2)  Injunctive relief restraining the Tso from executing, performing or carrying out the Development Agreement;

(3)  Declaratory relief that the Tso is estopped from alleging any breach of the Development Agreement on the basis of WKW’s delay in its performance; and

(4)  Declaratory relief that the Tso is estopped from asserting any interest in the 11 Unallocated Houses / Lots.

15.  As can be seen from the above, the Main Actions concern various disputes centering around the performance and alleged breaches of the Development Agreement. The matters pleaded by both sides concern events from the time of the origination of the Development Agreement up to around 2012 at the latest.  To state the obvious, Madam Mok is not a party to the Main Actions.

16.  As mentioned above, a direction had been given relatively early on in September 2013 that the Main Actions were to be heard together (and quite properly so).  I confirmed with the parties at the hearing that essentially all relevant steps had been taken in the Main Actions to bring the matters to trial (viz. discovery, filing of witness statements and expert reports, etc.).  The only outstanding question was whether the Main Actions should be somehow consolidated or heard together with the subsequent actions (discussed below).  If not, then the Main Actions are ready to be set down for trial.

B3.  Subsequent Developments

17.  Because of subsequent developments, the material particulars of which are outlined below, the Main Actions have been languishing in somewhat of a procedural no-man’s land for a number of years now.

18.  The first event of note is the initiation of HCA 1006/2017 by the Tso on 26 April 2017.  The action is brought against WKW as 1^st Defendant, with the 2^nd to 12^th Defendants being other Dings involved in the arrangements for the Development Agreement, who had not been made parties in the original HCA 1879/2011.  The pleading largely repeats the pleading in HCA 1879/2011, except there is additional relief sought as directed against the 1006 Dings (essentially mirroring the relief sought against the 1879 Dings, see paragraph 10 above).   The Tso readily admits that this action has served as a “protective writ” to prevent the 1006 Dings from dissipating the subject Lots or the Unallocated Houses, and thus the sealed copy of the writ had been registered in the Land Registry on 28 April 2017 against the relevant lots / houses.

19.  On 12 February 2018, WKW sent a letter to the Tso through his legal representatives (“Selection Letter”)  purporting to select 9 Houses / Lots per the selection mechanism in the Development Agreement.

20.  Subsequently, on 25 June 2018, Madam Mok initiated HCMP 944/2018 (“the 944 OS”).  By the 944 OS and evidence filed in support thereof, she alleges that she is the registered owner of 9 of the 11 Unallocated Houses, having allegedly been assigned the relevant legal titles by various registered owners solicited by WKW under the Development Agreement by way of a sale and purchase agreement dated 21 April 2017 (i.e. allegedly a few days prior to the initiation of HCA 1006/2017)  (“the Mok SPA”).  By reason thereof, she seeks declaratory and injunctive relief, the effect of which is to inter alia withdraw or vacate the registration of the various instruments in the Land Registry in respect of those 9 houses / lots.

21.  The Tso’s case is that the Mok SPA is plainly a sham. There is presently no dispute between the parties that Madam Mok is WKW’s wife, nor is there any dispute that no money actually changed hands pursuant to the Mok SPA.  There is also no dispute that the Mok SPA was only registered in the Land Registry on 25 July 2017, some three months after the initiation of HCA 1006/2017.  There are various other unusual features of the transaction which need not be fully set out herein.

22.  In view of the above, the Tso commenced HCA 802/2019 on 7 May 2019, which names WKW, Madam Mok and 12 of the Dings as Defendants (these Dings overlapping substantially with those in HCA 1006/2017). The Statement of Claim repeats much of what is set out in HCA 1879/2011 and HCA 1006/2017, but then importantly and substantively adds claims and causes of action specifically in relation to Madam Mok and the Mok SPA.  In particular, there is a plea of conspiracy to defraud, followed by pleas of dishonest assistance and knowing receipt.  To summarise the prayer for relief, it seeks inter alia:

(1)  Declarations that the Mok SPA (and subsequent assignments based thereon)  is/are unlawful and/or invalid and should be voided;

(2)  A declaration that Madam Mok does not have legal title or interest in the 9 Unallocated Houses / Lots;

(3)  A declaration that Madam Mok (or alternatively Madam Mok and the 3^rd and 4^th Defendants)  is/are holding the legal titles of the Unallocated Houses / Lots on trust for the Tso and WKW (at the 4 to 6 ratio);

(4)  A declaration that the Selection Letter was not a valid or binding selection by WKW;

(5)  A declaration that WKW had breached the Development Agreement by disposing of the 9 Unallocated Houses before proper selection;

(6)  Various consequential orders premised upon WKW being required to specifically perform the Development Agreement;

(7)  Pleas for return of the unused land; and

(8)  Various pleas for damages and/or accounts.

23.  HCA 802/2019 and the 944 OS are hereinafter referred to as “the Subsequent Actions”.  Neither of the Subsequent Actions has progressed beyond the initial pleadings. This is similarly so for HCA 1006/2017.

24.  As is evident from the above summary, a key point of dispute and the main complaints in the Subsequent Actions concern the events surrounding the Mok SPA and the impact thereof on the title to the 9 Houses / Lots.  These events occurred well after the events complained of in the Main Actions.

25.  Notwithstanding the above, Madam Mok pressed ahead with the hearing of the 944 OS, and was initially successful in obtaining relief thereunder before Recorder Linda Chan SC (as she then was)  on 28 June 2019.  This was, however, subsequently set aside by the Court of Appeal on 14 May 2021.  The full reasoning of the Court can be found at [2021] HKCA 706.  Suffice to say for present purposes that the Court of Appeal considered there were triable issues, in view of the various unusual features of the Mok SPA (paragraph 21 above)  and other features as discussed more particularly at paragraphs 38 to 50 of the Court of Appeal decision.  The Court of Appeal concluded at paragraph 43 that:

“43. In this respect, we should add that, given that there is a triable issue as to whether the SPA and the Assignment are sham transactions, there is also a triable issue as to whether Wong has made any selection of 9 Houses/Lots out of the 11 Unallocated Houses/Lots in accordance with the Development Agreement.”

26.  Directions were then given by the Court of Appeal that the 944 OS was to continue as if begun by writ, and that further directions should be sought from the Court of First Instance on the future conduct of the proceedings, including (a)  directions on the filing of pleadings and evidence as appropriate and (b)  directions on whether, and if so how, the proceedings should be tried together with HCA 802/2019.

27.  The parties then attended before Master Ho on 31 August 2021, who directed that the present summonses be taken out. The applications thus came before this Court, over a year later.

C.  RELEVANT LEGAL PRINCIPLES - CONSOLIDATION

28.  There is no great dispute between the parties as to the principles on consolidation.

29.  O.4, r.9(1), Rules of the High Court provides:

(1)   Where two or more causes or matters are pending, then, if it appears to the Court -

(a)   that some common question of law or fact arises in both or all of them, or

(b)   that the rights to relief claimed therein are in respect of or arise out of the same transaction or series of transactions, or

(c)  that for some other reason it is desirable to make an order under this rule, the Court may order those causes or matters to be consolidated on such terms as it thinks just or may order them to be tried at the same time, or one immediately after another, or may order any of them to be stayed until after the determination of any other of them.

30.  On the relevant principles, I would gratefully adopt the summary by Deputy High Court Judge MK Liu in China Health Group Ltd (formerly China Healthcare Holdings Ltd)  & Ors v Li Zhong Yuan & Ors [2021] HKCFI 3806 at paragraphs 13 to 14:

“13. As explained by Zervos J (as he then was)  in Komal Patel v Chris Au(HCA 183/2014, 2063/2015, 14 January 2016), [12] – [17]:

(1)  In deciding whether to order consolidation, the court has an unfettered discretion. The power is to be exercised in a flexible way with regard to the particular circumstances of the situation. The objective of such an order is to save time and costs. There is no hard and fast rule that just because the parties are identical and some common question of fact or law is involved in both actions, it would be expedient and proper to order consolidation.

(2)  The court has an unfettered discretion in deciding whether to order consolidation of two or more causes or matters. Even though the power is to be exercised with some degree of flexibility, a court must nevertheless be satisfied that it would be proper and expedient to make such an order, having regard to the particular circumstances of the situation, including, amongst other things, that the objective of such an order is to save time and costs, and that where there is a substantial overlapping of issues and parties, it is desirable to resolve the disputes in the different actions on one occasion by the same judge.

(3)  Where there was “substantial overlapping of issues and parties” it was desirable that the disputes in the different actions to be resolved on one occasion and by the same judge.

(4)  The question of whether actions should be tried together or one after another had to be approached from the perspective of case management rather than principles of law; the Court is primarily concerned with savings of time and costs, and also with the avoidance of unnecessary delay, undue complexity and overloading of issues. In considering “the practical implications of trying the actions together”, relevant factors include, inter alia, the additional time needed to address further issues, the adoption or admission of the evidence of witnesses in subsequent trials, the risk of losing reserved trial dates and the different stages the actions had reached before going to trial.

(5)  The emphasis is on the efficient and just resolution of disputes before the courts. The court should take a practical and common-sense approach to meet the justice of the situation.

14. See also Chan Shing Lam v Winscore International Ltd [2021] HKCFI 3563 in which Recorder Dawes SC said:

‘12. The principles under [Order 4 rule 9(1)] are trite:

(1)  The Court has a wide and unfettered discretion under Order 4, rule 9. There is no hard and fast rule on how this discretion ought to be exercised, but the Court should take a practical and common sense approach to ensure justice is best served.

(2)  Even though the Court’s discretion should be exercised flexibly, it must be satisfied that it would be proper and expedient to make such an order, having regard to the all the circumstances. It should consider, amongst other things, that the objective of the rule is to save time and costs, and where there is a substantial overlapping of issues and parties, it is desirable to resolve the disputes in different actions on one occasion before the same judge.

(3)  Following the Civil Justice Reform, the emphasis is on ensuring the efficient and just resolution of disputes before the courts.’

See Komal Patel and Ors v Chris Au and Ors, HCA 183/2014 and HCA 2063/2015 (14 January 2016)  at §§11-17; Yong Li Investments Ltd v Lee Sing Leung Robin [2018] HKCFI 1711 at §§16-17, 22, and 25-27.”

31.  Whilst there were various other cases cited by the parties, those citations largely served to illustrate certain aspects of similarities in the facts.  I have borne the above principles in mind when considering the arguments raised by all parties as to the way forward.

D.  CONSOLIDATION – WKW’S APPLICATION

32.  Having considered the parties’ submissions and the relevant papers in the hearing bundles, I would exercise my discretion against WKW’s application and disallow the application to consolidate the Main Actions with the Subsequent Actions. This is the case whether for the application as originally made, or in relation to the fallback argument developed by Mr Chow at the hearing.

33.  First, I am conscious of the very different stages where the actions find themselves. Whilst the Main Actions are essentially ready for trial, the Subsequent Actions are very much at a nascent stage, the 944 OS having gone through the process of the appellate procedure and only just having been ordered to continue as if begun by writ (per paragraph 26 above).

34.  It is unfortunate that the setting down of the Main Actions had been held up by the appeal process in the 944 OS, and then by the applications presently before the Court. It would be even more unfortunate that they should be further held up or delayed to allow time for the consolidation process to run its course.

35.  Second, as mentioned at paragraphs 15 and 24 above, the key complaints or matters raised in the Main Actions and the Subsequent Actions concern different time periods. The options presented to the Court are twofold in this regard.  Either those disputes regarding the events earlier in time could be determined first (in the Main Actions), or everything could be determined in the proposed consolidated action:

(1)  Factually and logically, there should be little dispute that it is necessary to determine the disputes in the Main Actions prior to considering what happened afterwards, since whatever findings there are in that respect will impact on how the Court approaches the issues and the events in the Subsequent Actions.  The only question is whether this should take place separately or whether it ought to be consolidated to be coherently considered.

(2)  This also includes, in particular, consideration of what aspects of the findings against WKW in the Main Actions will flow into and impact the position in the Subsequent Actions.  In this regard, whilst I do not consider the disposal of the Main Actions would (contrary to the Tso’s submissions)  naturally cause the Subsequent Actions to be settled or fall away, there is at least some clear overlap insofar as WKW is concerned. He would be bound by issue estoppel insofar as the “background” to the Subsequent Actions is concerned.  This would then hopefully crystalize or narrow down those aspects of the dispute to be dealt with in the Subsequent Actions.  In this regard, there is some apparent benefit in having the Main Actions heard first.

(3)  Whilst there is a degree of attraction in everything being consolidated and determined together (as to which, see the discussion below on the matters which had given me some pause), on balance, I did not think that this outweighed the overall prejudice to be suffered by the Tso if the matters were to be consolidated.

36.  Third, WKW’s proposal for consolidation entails entirely recasting the pleadings and joining together a total of 27 defendants.  It does not seem to me that such a course of action would save costs at all when the Main Actions are at such a progressed stage:

(1)  Across the two groups of actions, there are 27 defendants in total, the majority of whom are the Dings.  Whilst it is true that many of the Dings have taken no active part in the process to date, at least some of them have filed defences in HCA 1879/2011.

(2)  I also bear in mind that the HCA 802/2019 action includes not only pleas regarding the events pre-dating 2012, but also serious allegations of conspiracy to defraud against quite a number of the Dings (together with WKW and Madam Mok).   As such, one cannot assume that the Dings in HCA 802/2019 can or would necessarily continue to adopt a neutral stance throughout.

(3)  On the other hand, there are no allegations of conspiracy to defraud, dishonest assistance or knowing receipt levelled against the 1879 Dings.  It would similarly be unwieldy, time consuming and costly to have to subject the 1879 Dings to the time and expense of being involved with these subsequent allegations when they do not concern them at all.

(4)  The recasting exercise would thus likely not just involve the limited participation of the Tso, WKW and Madam Mok, but could well entail quite a number of defendants incurring additional time and costs.

(5)  There would, presumably, also need to be further evidence filed to deal with the events subsequent to the matters complained of in the Main Actions.  The events in question concern Madam Mok and the circumstances surrounding the Mok SPA. These matters occurred long after the original breaches complained of and are, by and large, evidentially separate from what is in issue in the Main Actions.  It would similarly not make sense to incur these later costs in a consolidated action involving all 27 defendants.

37.  The above are relatively straightforward and, in the circumstances of this case, what I consider to be rather self-evident points against the proposal for consolidation.

38.  There were, however, two issues which have given me some pause, and which I explored at length with parties during the course of the hearing.

39.  First, I had some concerns over how the relief sought by the Tso in the Main Actions could be maintained in view of the prima facie transfer of the 9 Houses / Lots to Madam Mok as currently reflected on the register.  In essence, I queried whether the specific performance aspects prayed for in the statements of claim in the Main Actions against WKW could be ordered by the Court given the current disputed status of the 9 Houses / Lots.  I also queried what impact this potential difficulty would have on the conduct of the Subsequent Actions, particularly since the relief in HCA 802/2019 is partially premised upon WKW being ordered to specifically perform the Development Agreement (paragraph 22 above).

40.  Second, and relatedly, I queried with Mr Ma what impact and bearing the findings in the Main Actions might have on the issues raised in the Subsequent Actions, and more particularly, whether Madam Mok would be bound by any of the findings.  This query was raised in the context of the argument put forward by the Tso that if the Tso were successful and the Development Agreement were enforceable “it would follow that [Madam] Mok would have no interest in the subject Houses”.  This was further developed by Mr Ma during the hearing that Madam Mok might be bound by res judicata and/or some form of estoppel.

41.  Both of the above issues arise because of the subsequent involvement of Madam Mok, the fact that she is not party to the Main Actions, and the fact that the Main Actions as currently pleaded do not deal with or mention the Mok SPA events at all.

42.  On the first query, Mr Ma impressed upon the Court the submission that the Tso and WKW are the key parties to the dispute surrounding the Development Agreement, and that any orders to be made would be made against WKW personally.  That may well be the case.  However, there remains a concern that the Court will be hesitant to order specific performance when there is an apparent impediment to it being effectively carried out.  The only fallback position for the Tso that I could see from the papers was the fact that the Tso has sought damages in addition to or in lieu of specific performance - an option that is undoubtedly open to the judge if the Tso is in fact successful.

43.  As to the second query, despite Mr Ma’s best efforts to persuade me otherwise, I cannot presently see how Madam Mok, not being party to the Main Actions and indeed not even being a witness to be called in the Main Actions, (i) would herself be bound by the result of the Main Actions; and (ii)  could be compelled to comply with any order made in the Main Actions.  There certainly could not be any res judicata insofar as she is concerned.  And indeed, I do not consider from the evidence before me that there would be issue estoppel vis à vis Madam Mok. At best, one might say that WKW would be bound by the findings in the Main Action, and Madam Mok’s case that could be run would necessarily be limited insofar as she relies on WKW as the key protagonist involved in the execution of the Development Agreement.

44.  I would note that this is not the occasion to pre-judge or finally determine questions of scope of relief, or res judicata or any form of estoppel, issues that are best fully argued and left to the trial judge(s)  who will have full grasp of the facts and evidence.  The pertinent question for the Court is whether on the possibility of there being such limitations if the matters are to proceed separately, it is still nonetheless viable and appropriate in the particular circumstances of this case to allow the Main Actions to proceed without consolidating the actions.

45.  The above queries would be essentially solved, of course, if the matters were consolidated. The issues surrounding the Mok SPA would be determined in addition to those already set out in the Main Actions.  Consequently, the relief to be ordered could be fashioned in a way which takes into account the involvement and position of all actors in this drama.  This would also negate the possibility of there being old ground traversed in the Subsequent Actions, and the danger of there being inconsistent findings by a different court if the Subsequent Actions are heard by a different judge.

46.  I must confess that this has not been an easy decision to weigh, but on balance, I consider that despite the limitations and possible complications that could arise, they do not render it impossible for the Main Actions to proceed first. Whatever potential concerns there are in the circumstances of this case, I consider that such concerns are outweighed by the factors discussed above at paragraphs 32 to 36.

47.  Finally, I note that the Tso had pointed to prior correspondence where WKW himself had suggested that the Main Actions should proceed and HCA 802/2019 should be stayed pending the resolution of the Main Actions.  Various other points had also been made concerning WKW’s deployment of delaying tactics, circumvention of procedural rules concerning pleadings and the like.  These are peripheral points at best.  Certainly, one might observe that WKW has changed his stance and been somewhat intransigent in the case management of the matters thus far.  Indeed, the case management steps taken by all parties to date leave much to be desired.  However, the more relevant question for this Court remains whether it is proper and expedient on the present set of circumstances to order consolidation.  For the reasons above, I consider that it is not.

48.  As such, WKW’s Application is dismissed.

49.  I would note at this juncture that in the course of submissions, Mr Chow had indicated that if WKW’s Application was unsuccessful, there was a possibility of WKW seeking to amend the defence in the Main Actions in order to bring in the subsequent developments relating to the Selection Letter and the Mok SPA.  This Court has not been asked to consider such an application and no draft had been produced at the hearing.  As indicated to the parties at the hearing, it would be incumbent upon WKW to apply and justify such a late amendment if he really considers it necessary and appropriate to bring these matters in via such a channel.

E.  HCA 1006/2017 – STRIKE OUT APPLICATION

50.  The background to the Strike Out Application is found in the decision of Hon Keith Yeung J in [2020] HKCFI 2789, where he found against the Tso in its default judgment application against WKW.  In essence, the judge found that the Writ had not been served on WKW, which meant that its validity had expired.  HCA 1006/2017 is thus an action which no longer concerns WKW. Following Hon Keith Yeung J’s decision, the remaining defendants (the 1006 Dings)  have applied to strike out the action against them.

51.  There is little dispute on the relevant principles for strike out applications. O.18, r.19, RHC states as follows:

“(1)  The Court may, either of its own motion or on application, at anystage of the proceedings order to be struck out or amended any pleading or the indorsement of any writ in the action, or anything in any pleading or in the indorsement, on the ground that - … (L.N. 152 of 2008)

(b)  it is scandalous, frivolous or vexatious; or

(c)  it may prejudice, embarrass or delay the fair trial of the action; or

(d)  it is otherwise an abuse of the process of the court;

and may order the action to be stayed or dismissed or judgment to be entered accordingly, as the case may be.”

52.  I would also gratefully adopt the following trite principles on striking-out as recently summarised by DHCJ Douglas Lam SC in Chan Kai Yan v Leung Chi Kit [2019] HKCFI 1828 at §8 as follows: -

“(1)  Striking out is for plain and obvious cases. The question for the court is whether the allegations as pleaded in the statement of claim disclose some cause of action or raise some question that ought to be tried. It is not concerned with an assessment of the strength or weakness of the case. The mere fact that the case is weak and not likely to succeed is no ground for striking it out. The court would only strike out when it is impossible, and not just improbable, for the case to succeed:§8(1), (emphasis added)

(2)  A reasonable cause of action means a cause of action with some chance of success when only the allegations in the pleading are considered. The court will therefore assume the facts as pleaded in the statement of claim to be proved and determine, on that basis, whether the pleading discloses a reasonable cause of action: §8(2), (emphasis added)

(3)  Where a statement of claim does not disclose the cause of action relied upon but there is reason to believe that the case can be improved by amendment, the court may give an opportunity to amend, even though the formulation of the amendment is not before the court: §8(3).[5]

(4)  A proceeding is frivolous when it is not capable of reasoned argument, without foundation or where it cannot possibly succeed. A proceeding is vexatious where it is oppressive and/or lacks bona fide. To strike out a litigant's claim on the grounds that it is frivolous or vexatious and he has thus abused the process of the court is a serious finding to make, and one would expect the discretion to be sparingly exercised”: §8(4).”

53.  The 1006 Dings rely on the limbs in O.18, r.19(1)(b)  to (d), RHC. As developed by Ms Cheng at the hearing, the arguments are in essence:

(1)  To maintain HCA 1006/2017 would be an abuse of process considering the great degree of overlap with HCA 802/2019 (the pleadings are largely similar, save that HCA 802/2019 adds the matters concerning Madam Mok and the Mok SPA)  (citing inter alia Lam Pak Cheung v Lin Zhen Lue [2009] 1 HKLRD 35 at §§37-58).

(2)  HCA 1006/2017 is frivolous and/or vexatious because it discloses no independent cause of action against the 1006 Dings in the absence of WKW being a party, and the action is bound to fail.

(3)  Relatedly, it is suggested that the absence of WKW would prejudice, embarrass or delay the fair trial of the matter given the centrality of his role as set out in the pleading and the fact that he would not be a party to the eventual trial.

54.  In answer, the Tso refers to the following matters:

(1)  It was rational and reasonable for HCA 802/2019 to have been taken out, as they had not discovered or been made aware of the events concerning Madam Mok and the Mok SPA until after HCA 1006/2017 was commenced. Given their case is that the Mok SPA was a sham created after the date of initiation of HCA 1006/2017, this was not something which could have properly been amended or pleaded into the earlier case.

(2)  It is, however, necessary to maintain HCA 1006/2017 given the registration on the land register as a “protective writ” in relation to the 1006 Dings.

(3)  There were and are thus sensible reasons for bringing successive actions and advancing both the claims in HCA 1006/2017 and HCA 802/2019 (citing Yifung Developments Ltd v Liu Chi Keung Ricky & Ors, HCA 3020/2015, unreported judgment dated 29 August 2016 at §§36-43; as applied in Cheung Ping Sum v Wong Chi Hang [2018] HKCFI 70 at §§21-26).

55.  I accept the Tso’s submission that the initiation of HCA 802/2019 was necessary in light of the developments as to the Mok SPA and the events which transpired after HCA 1006/2017 had been initiated.  They could not have known or anticipated the subsequent developments as at the date of initiation of HCA 1006/2017.  I do note, however, that there is a great degree of overlap in the two actions, and further, it makes much more sense for HCA 802/2019 to proceed given WKW is still a party to the later action.  As such, it would be prudent to stay HCA 1006/2017 as there is no purpose in maintaining the actions in tandem.  A stay rather than a striking out is more appropriate given the writ has been registered in the Land Registry.

56.  There were also two other points made by the Tso:

(1)  First that there had been a breach of Practice Direction 19.1 by the 1006 Dings in that they had not spelt out the grounds upon which they relied for striking out at least 5 clear working days before the hearing. In this regard, Ms Cheng referred me to correspondence dated 31 August 2021 from those instructing her where there was reference to HCA 802/2019 “render[ing] [HCA 1006/2017] unnecessary.  It would be a waste of costs and Court’s time, and thus, an abuse of process to let [HCA 1006/2017] hang in the air any longer” and thus proposing the option of strike out (or alternatively staying HCA 1006/2017).

(2)  Second that the Tso had indicated in the affirmation evidence filed on 13 December 2021 that HCA 1006/2017 should be stayed, but that this proposal was not taken up by the 1006 Dings.

57.  The above are not dispositive points, but will have some bearing on costs.  Suffice to say that:

(1)  I consider that whilst the pre-action correspondence was not particularly detailed, in the circumstances of this strike out where the primary complaint is abuse of process, the broad reasons previously given suffice to comply with Practice Direction 19.1.

(2)  As I had observed at the hearing, despite the indications from both sides suggesting the possibility of staying HCA 1006/2017, it would appear neither side followed up after the filing of evidence by the Tso in December 2021.  The matter then proceeded to the present hearing where both sides argued on the strike out in addition to stay.

58.  In the circumstances, HCA 1006/2017 is ordered to be stayed.

F.  CONSOLIDATION – MADAM MOK’S APPLICATION

59.  This aspect is relatively less controversial.  I consider it right and appropriate that the Subsequent Actions should be consolidated.  They concern aspects of the same events (mainly centering around the Mok SPA), and involve overlapping parties.  Given both actions are at a nascent stage, and the fact that the 944 OS has already been ordered to continue as if begun by writ, it makes sense that the two matters should be consolidated.

60.  Accordingly, I give the directions that:

(1)  The two sets of proceedings, namely HCA 802/2019 and the 944 OS, be consolidated, with HCA 802/2019 as the lead action (“the Consolidated Action”).

(2)  Madam Mok’s claim in the 944 OS shall continue as per Paragraphs 3 and 4 of the Order of the Court of Appeal dated 14 May 2021 in the 944 OS, as a counterclaim in the Consolidated Action.

(3)  The Tso, as the plaintiff in the Consolidated Action, do file and serve its Consolidated Statement of Claim within 42 days of the date of this Order.

(4)  The Defendants in the Consolidated Action do file and serve their respective Consolidated Defence(s)  (and Counterclaim(s), if any)  within 42 days therafter.

(5)  The Plaintiff in the Consolidated Action do file and serve its Consolidated Reply(ies)  (and Defence(s)  to Counterclaim, if any)  within 28 days thereafter.

(6)  There be liberty to apply.

61.  As part of the proposals by the parties, it had been suggested that the Subsequent Actions ought to be stayed pending the determination of the Main Actions. (As indicated above, WKW had previously suggested this but resiled from it by the time of the hearing, instead preferring the option of global consolidation; conversely, the Tso had put forward a suggestion for stay at the hearing).

62.  Having considered matters in the round, I do not consider it appropriate to stay the Subsequent Actions.  This is for the following reasons:

(1)  Assuming the Main Actions are not further held up by any other interlocutory applications, they should proceed to setting down. Given the complexity of the issues involved, one can assume that the trial date eventually fixed will not be for some time, being at least months if not over a year away.

(2)  If the Subsequent Actions were to be stayed at such a nascent stage, by the time the Main Actions are determined (and perhaps any appeal processes are dealt with), it will likely be years before the Subsequent Actions are restarted. To only then go through the exercise of preparing pleadings, witness statements and the like, will not be conducive to parties recalling the relevant events and being able to give coherent instructions. It is better that these steps leading towards trial are taken sooner rather than later.

(3)  Further, there is a possibility that if the parties are diligent in their case management, the Subsequent Actions will be able to ‘catch up’ somewhat in timetabling to the Main Actions.  It would be far better for this suite of disputes to be dealt with efficiently and closer in time than for there to be yet further years where the remainder of the disputes are left languishing in abeyance.

(4)  Despite the Tso’s optimism, it is not necessarily the case that the Subsequent Actions will fall away or be settled upon the conclusion of the Main Actions. Certainly if WKW’s defence succeeds in the Main Actions, then such an outcome is more likely.  However, if the Tso succeeds, then one would presume that they would wish to further pursue the reliefs sought in the Subsequent Actions (paragraph 22 above).  In order to do so, they would need to establish the causes of action specifically pleaded in HCA 802/2019 as those matters would not have been dealt with in the Main Actions.

(5)  Considering matters in the round, and bearing in mind one cannot presume that WKW would be successful in his defence in the Main Actions, it is better that the parties press ahead with the Subsequent Actions.

63.  In the circumstances, the Subsequent Actions will be consolidated per the directions above, and will not be stayed.

G.  COSTS

64.  As there are quite a few different aspects and considerations to deal with, parties are directed to fix a date (in consultation with counsel’s diaries)  for a 1 hour hearing to address the Court on costs. Submissions, no longer than 5 pages, are to be filed 7 days prior to the hearing.

65.  I thank counsel for their assistance.