WONG OI LING, the administratrix of the estate of TSANG CHI KIU, Deceased v. LAI YU

DCCJ 4705/2014

[2018] HKDC 767

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 4705 OF 2014

---------------------------

---------------------------

--------------------------

DECISION

--------------------------

INTRODUCTION

1.  The plaintiff’s summons is one for default judgment under O 13 r 6, seeking, inter alia, a declaratory judgment under O 15 r 16 of the Rules of the District Court, Cap 336 (“RDC”).

2.  Under the summons, the plaintiff is claiming declaratory reliefs against the defendant Lai Yu (黎汝) (“the defendant”) for, inter alia, the possessory title of the front portion of 5^th Floor, No 35 Kai Ming Street, Hung Hom, Kowloon, Hong Kong (“the Front Portion”).

BACKGROUND

3.  The following facts can be found in the amended statement of claim.

4.  The plaintiff is the widow of Tsang Chi Kiu（“曾志喬”）, deceased (“the Deceased”).  The Deceased died intestate on 3 September 2014, leaving his widow (the plaintiff herein) and two sons.  The plaintiff applied for and was granted letters of administration for the estate of the Deceased on 13 May 2015 and hence became the administratrix of the estate of the Deceased as of that date.

5.  The defendant was the registered owner of a property situated at and known as 5^th Floor, No 35 Kai Ming Street, Kowloon (“the Property”) which was divided into the front and rear portion.  The Front Portion was part of the Property. The Deceased acquired the Property by an assignment dated 26 July 1958 which was registered in the Land Registry by Memorial No UB281144.

6.  The rear portion of the Property was the subject matter of a decision by His Honour Judge Kent Yee in DCCJ 916/2013 on 3 July 2014 (See Ho Kwai Chun (何桂珍) v Lai Yu (黎汝 ), DCCJ 916 of 2013) where the occupier took out a similar application for adverse possession.

7.  It is claimed that the Deceased had during his lifetime become the lawful owner and/or person in lawful possession of the Front Portion of the Property under the following circumstances.

8.  On or about 22 February 1982, the Deceased and one Mr Lai Shing Yan (“Lai”), who was not the registered owner of the Property and whose relationship with the defendant is not clear on the pleadings, entered into a provisional agreement for sale and purchase of the Front Portion of the Property (“the Provisional Agreement”). 

9.  The Provisional Agreement was written in Chinese and was signed by Lai and the Deceased.  It was witnessed by the plaintiff.   

10.  Clause 1 of the Provisional Agreement provides that Lai, in his capacity as purported owner of the Front Portion of the Property, agreed to sell the same to the Deceased at the price of HK$130,000.00.

11.  Clause 2 of the Provisional Agreement stipulates that the Deceased must pay the first payment in the total sum of HK$60,000.00 by 28 February 1982.  The Deceased duly paid the first payment by 3 instalments, namely, HK$10,000.00 on 22 February 1982, HK$30,000.00 on 24 February 1982 and HK$20,000.00 on 27 February 1982. 

12.  Pursuant to Clause 3 of the Provisional Agreement, the Deceased began to pay monthly instalments in the sum of HK$1,200.00 from April 1982 onwards.

13.  In or about April 1982, the Deceased and his family moved into the Front Portion of the Property and began exclusive possession of the same while paying Lai the monthly instalments as agreed.

14.  In or about October 1982, the Deceased was informed by the solicitors acting for Lai, namely, Messrs Lau Chan & Ko that, due to the delay by Lai in completing the transaction, the Deceased could reduce the amount of monthly instalments from HK$1,200 to HK$600.  The Deceased accepted the offer and duly reduced the amount of the monthly re-payment to HK$600.

15.  In or about September 1983, the Deceased was informed by Messrs Lau Chan & Ko that they could no longer able to contact their client to make the necessary arrangements to complete the transfer the Front Portion of the Property to the Deceased.  Upon learning this, the Deceased stopped making further monthly payments.

Whether Provisional Agreement was void ab initio or repudiated

16.  Lai was not the registered owner of the Property at all material times.  It is therefore not clear how he could be able to transfer the legal ownership of the Front Portion of the Property to the Deceased.  Thus, it has been pleaded in the amended statement of claim that the Provisional Agreement was void ab initio.

17.  Further or in the alternative, the plaintiff pleaded that, even if the Provisional Agreement was not void, since Lai or the defendant failed to transfer the Front Portion of the Property to the Deceased, they were in breach of the Provisional Agreement and the Provisional Agreement was repudiated as a result of the breach. 

18.  The plaintiff further avers that the Deceased accepted the said repudiation in or about October 1983 when he stopped paying the remaining monthly instalments.  Therefore, according to the plaintiff’s case, the Provisional Agreement was thereby rescinded.

Adverse possession

19.  In the aforestated premises, the plaintiff in her amended statement of claim pleaded that at all material times the Deceased had no licence, authorization or permission, whether expressly or impliedly from the defendant, his agent or servant to exclusively occupy the Front Portion of the Property.  Further, as the Deceased did not pay any rent to the defendant, or his servant or agent, therefore, the Deceased was in adverse possession of the Front Portion since he moved into it in or about April 1982.  Alternatively, the plaintiff says that the Provisional Agreement was rescinded in or about October 1983 and therefore the Deceased and his successor was in adverse possession of the same after that date.

Service of the writ

20.  Due to the rather unusual circumstances under which the Deceased and his family had come into occupation of the Front Portion of the Property, the court has taken extra steps to ensure that there would be proper service of the writ on the defendant.  This was done after a number of requisitions were raised by the court to try to locate the defendant and the solicitors followed up with the enquiries which unfortunately yielded no positive result.  

21.  On 20 September 2017, Master M Lam ordered that the sealed copy of the writ and a sealed copy of her Order be effected on the defendant by publishing a notice once in “Oriental Daily”, a Chinese newspaper widely circulated in Hong Kong.  The writ shall then be deemed to have been served on the defendant on the date of the publication of the notice.

DISCUSSION

22.  In the present case, what the plaintiff is asking the court to do is to exercise its discretionary power to grant declaratory reliefs under O 15 r 16 and O 19 r 7 of the RDC.

23.  It is trite that under O 15 r 16, a declaration can be granted without trial, by way of a default judgment under O 19 r 7, if the plaintiff has a genuine need for such relief and the court can properly grant it based on the merits of the case and a declaration may be made on interlocutory application: See Hong Kong Civil Procedure 2018 §§15/16/2; 15/16/7.

24.  It has been well established that the normal practice of the court is that a declaration would not be made without a trial: Patten v Burke Publishing Co Ltd [1991] 2 All ER 821.  Millet J (as he then was) explained the nature of the practice in the opted cited passage as follows:-

“… the rule is a rule of practice only. It is not a rule of law. It is a salutary rule and should normally be followed, but it should be followed only where the claimant can obtain the fullest justice to which he is entitled without such a declaration.”

25.  In Law Yuk Cheung v Loa Ku Tai DCCJ 4/2-12, the plaintiff successfully applied for judgment against the defendant in default of defence under O 19 r 7 of the RDC for declarations under the Limitation Ordinance, Cap 347 on the ground of adverse possession. 

26.  O 19 r 7(1) provides that “…on the hearing of the application the Court shall give such judgment as the plaintiff appears entitled to on his statement of claim.”  Therefore, in considering an application under O 19 r 7(1), the court cannot receive any evidence thereunder, but must give judgment according to the pleadings alone: (See §19/7/11 of Hong Kong Civil Procedure 2018; Smith v Buchan (1888) 58 LT 710; Young v Thomas [1892] 2 Ch 135 (CA).  It is therefore not necessary on the hearing of the summons or motion for judgment to prove the case by evidence: Lam Shing Shou v Lam Hon Man (unrep., HCA 361/2001, [2002] HKLRD (Yrbk) 94).        

27.  Based on the plaintiff’s pleaded case as stated on the amended statement of claim, I am satisfied that the Deceased had both factual possession and the requisite intention to possess the Front Portion of the Property since October 1983 when Lai rescinded the Provisional Agreement: see Wong Tak Yue v Kung Kwok Wai David [1998] 1 HKCFAR 55, CFA at §55.

28.  Further, based on the amended statement of claim, I am satisfied that Lai had repudiated the Provisional Agreement when he failed to transfer the Front Portion of the Property to the Deceased in or about September 1983 and the Deceased accepted the repudiation in or about October 1983 when he stopped paying the remaining monthly instalments. The Provisional Agreement was thereby rescinded.

29.  I accept the plaintiff’s above pleaded case and find that the Deceased obtained adverse possession of the Front Portion of the Property since the date of acceptance of the repudiation in October 1983.  It is sufficient to extinguish the title of the defendant when the writ was issued on 5 December 2014.  Hence, I am satisfied that the plaintiff as the adminsitratrix of the Deceased is entitled to claim declaratory reliefs under ss 7 & 17 of the Limitation Ordinance, Cap 347.

30.  As to the plaintiff’s claim that the Provisional Agreement was void ab initio because Lai was not the registered owner of the Property, in my view, this is open for argument as a matter of law. I therefore do not think the plaintiff can prove her case without calling evidence on this issue.  I do not think the court can grant declaratory reliefs based on this ground. However, this issue has become academic given my conclusion on the adverse possession issue.         

31.  In the above circumstances, I am satisfied that the plaintiff will not be able to obtain the fullest justice to which she is entitled to without the declarations she is now seeking in this case.

32.  For the above reason, I make the following declarations sought by the plaintiff in the amended statement of claim:-

(1)   A declaration that the defendant’s title to the Front portion of the Property has been extinguished and the defendant is debarred from taking any action to recover the same pursuant to Section 7 and Section 17 of the Limitation Ordinance, Cap 347;

(2)   A declaration that the Deceased’s estate, has acquired a possessory title to the front portion of the Property and is entitled to be registered as the owner of the Front Portion of the Property.

33.  I also order that the plaintiff will be entitled to the costs of the action and the application with certificate for counsel, even though I doubt very much she will ever be able to recover such costs from anybody. However, I consider justice will be achieved in this case when the title of the Front Portion of the Property can be   registered in her name by granting the above declaratory reliefs.