SECRETARY FOR JUSTICE v. WONG LAI YIN AND ANOTHER

HCA 2169/2017

[2021] HKCFI 1195

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2169 OF 2017

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DECISION

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1.  On 22 January 2021, I handed down the decision in this action. I dismissed the 1^st defendant’s appeal against Master Gary CC Lam’s decision. I refused his application to strike out or expunge paras 6 and 7 of the statement of claim and to expunge items 8 and 9 of the plaintiff’s list of documents from the evidence at trial.

2.  By summons dated 4 February 2021, the 1^st defendant applies for leave to appeal against the decision.  I shall adopt below the defined terms used in the decision. 

3.  Following the guidance laid down by the Court of Appeal in Tsang Wing Kwai v Tsang Wing Fai [2018] 5 HKLRD 350, [2018] HKCA 759 at para 24, I gave directions for the lodging of written submissions.  Having read the submissions, I am satisfied that an oral hearing is not necessary and the summons is suitable for disposal on paper only.

4.  In the draft notice of appeal, the 1^st defendant puts forward five proposed grounds of appeal.

Legal principles

5.  The principles governing the threshold for granting leave to appeal are not in dispute.  The applicant needs to show that the appeal has a “reasonable prospect of success” or there is some other reason in the interests of justice why the appeal should be heard: section 14AA(4) of the High Court Ordinance, Cap 4.  A “reasonable prospect of success” means an appeal with prospects that are more than “fanciful”, without having to be “probable”: SMSE v KL [2009] 4 HKLRD 125 at para 7.

The first ground

6.  Under the first ground, the 1^st defendant contends that I erred in law in holding that the Letters are not protected by without prejudice privilege on the basis that a reasonable observer would conclude that at the time of the Letters, there was no extant dispute between the plaintiff and the 1^st defendant over the Government Land.  The 1^st defendant puts forward four propositions in support. 

7.  First, I erred in law in setting the test on “dispute” as if there could only be a “dispute” if the 1^st defendant did by words or conduct positively assert his rights over the Government Land or deny the government’s right over it. 

8.  Second, I failed to consider that, objectively speaking, the 1^st defendant’s stance had already been made known to the DLO that he would not vacate from the Government Land as demanded.  More specifically, the 1^st defendant had never admitted or acknowledged the allegation that his occupation of the Government Land was unlawful.  In fact, in the First Letter, by stating that he and his family had been in possession of the Government Land for years, the 1^st defendant was asserting that his occupation was not unlawful.

9.  Third, I erred in finding that the 1^st defendant’s non-response to the 1^st DLO Letter, the 2^nd DLO Letter and the accompanying notice or his inaction during the first period showed that there was no “dispute” to the DLO’s claim over the Government Land.  I failed to consider properly the fact that the 1^st defendant had never complied with the DLO’s demand.  I ought to have interpreted the non-response or inaction as the 1^st defendant’s representation that he would deny the government’s right over the Government Land.

10.  Fourth, I failed to properly understand the purport, meaning and effect of the First Letter in its proper context.  I ought to have found that the 1^st defendant denied in that letter that his occupation was unlawful.  I ought to have found that the 1^st defendant’s suggestion of a tenancy at a nominal rent was not a conventional request for tenancy and that the suggestion was instead a proposed compromise to resolve the dispute between the parties.

11.  The 1^st defendant’s submissions made under this ground are substantially a rehash of the arguments advanced at the hearing.  I have dealt with those arguments in the decision.

12.  Importantly, I identified in para 16 the material question which I needed to answer in order to determine whether there was a dispute between the government and the 1^st defendant over the Government Land at the time of the Letters.  In paras 53 to 82, I reviewed the content of the Letters and considered and weighed the surrounding factual circumstances which existed both before and after the Letters were sent.  In doing so, I sought to ascertain the view of a reasonable person in the position of the DLO at the time of the First Letter.

13.  In respect of the first proposition under this ground, I did not set out the test on “dispute” as presently alleged by the 1^st defendant.   What the 1^st defendant did or say (or did not do or say) in the face of the DLO’s demand was a circumstance, and an important one, which I took into account against the then factual context in considering what a reasonable person would have concluded.  See paras 55 and 56.  In the process, I did not formulate or apply any new test for “dispute” as now suggested by the 1^st defendant.  Nor did I identify the 1^st defendant’s word or conduct (or any other matter) as the definitive criterion when answering the material question identified in para 16.

14.  In respect of the second and third propositions, I dealt with the argument in paras 57, 58, 72, 73, 76 and 77.  More specifically, I explained how a reasonable person would interpret the 1^st defendant’s non-response or inaction in the proper factual context.

15.  In respect of the fourth proposition, I dealt with the argument in paras 68 and 69. 

16.  This proposed ground of appeal has no reasonable prospect of success.  

The second ground

17.  Under this ground, the 1^st defendant submits that I erred in law in holding that the 1^st defendant was seeking indulgence from the DLO in the First Letter such that he could continue to stay on the Government Land.  I ought to have found that by asking for a lease at nominal consideration, the 1^st defendant was seeking the government’s recognition of his entitlement to occupy the Government Land.  I also erroneously proceeded on the basis that in order to find that a “dispute” existed, the 1^st defendant must put forward his potential claim of adverse possession fully, extensively and without reservation in the First Letter.

18.  This ground is primarily a repeat of the arguments put forward at the hearing.  See, eg, para 75.  I dealt with them in paras 68, 69, 76, 77 and 78. Furthermore, I did not lay down any requirement that the 1^st defendant must put forward his full case of adverse possession in order to demonstrate that there was a “dispute”.  In the decision, I raised the query why the 1^st defendant was making an allusion to an adverse possession claim in an oblique and opaque manner.  I took into account this query when evaluating whether a reasonable observer would conclude that the 1^st defendant was contemplating an adverse possession claim, thus disputing the government’s right. 

19.  I do not consider that there is any reasonable prospect of success in this ground.

The third ground

20.  Under this ground, the 1^st defendant submits that I erred in holding that the 1^st defendant was not giving up any right of his own in the request for tenancy and hence was only asking for a concession and not giving one himself and that I did so contrary to the authorities: Re Estate of Joachim Thomas [2011] 5 HKLRD 538 at para 32; Poon Loi Tak v Poon Loi Cheung Desmond [2020] 1 HKLRD 511 at paras 18 to 19.  As a matter of law, it is not necessary for the without prejudice communication to contain a concession or offer of compromise.

21.  I dealt with this issue in paras 68, 75 and 78 of the decision.  The important point here was that by asking for a tenancy, the underlying premise must have been a recognition by the 1^st defendant that the DLO had the legal right to grant such a tenancy in the first place.  And this recognition was wholly inconsistent with any possessory right which the 1^st defendant alleges that he has in the land.  It was in this sense that I concluded that the 1^st defendant was asking for a favour or indulgence.  Viewed this way, the 1^st defendant’s attempt to “negotiate” (the word being used in the loose sense as explained in paras 50 and 78) does not point to there being a dispute in the first place. 

22.  In the decision, I did not say that since the First Letter did not contain any concession made by the 1^st defendant, the letter could not qualify as a without prejudice communication.  Under this ground, the 1^st defendant has misinterpreted my observation made in para 78 and taken it out of context.

23.  There is no merit in this ground.

The fourth ground

24.  Under this ground, the 1^st defendant complains that I failed to consider properly or at all the conduct of the parties and the events subsequent to the First Letter. 

25.  I considered the subsequent events in paras 80 and 81.  I found the subsequent events to be equivocal on the question whether the 1^st defendant was disputing the government’s right previously. 

26.  The 1^st defendant’s complaint under this ground is not reasonably arguable.

The fifth ground

27.  Under this ground, the 1^st defendant contends that I erred in law in disregarding the importance of the “without prejudice” marking appearing in the First Letter.

28.  I went through the case law on the express use of the “without prejudice” marking in paras 37 to 43.  I summarised the approach which the court should adopt in para 42, namely that such marking is a factor that should be taken into account in the factual enquiry but ultimately the weight and significance it should carry would depend on the specific facts of each case. Having taken into account the relevant circumstances, I arrived at the conclusion in para 70 that the marking was used either unthinkingly or unjustifiably. 

29.  I consider that this ground is not reasonably arguable.    

Some other reason?

30.  The 1^st defendant submits that the appeal should be heard in the interests of justice as the Court of Appeal should be asked to clarify the legal test for “dispute” for without prejudice purposes, including, eg, whether it requires a party to assert one’s right against the other party or to deny the other party’s right before a “dispute” can be found to exist (see para 7 above).

31.  I do not agree that there is a need for such clarification.  The legal principles on without prejudice privilege are well established.  Parties cited extensive authorities in Hong Kong and England at the hearing.  The outcome of the present case turned on the application of these established legal principles to the specific facts here.  Application of the law to the facts is the task of the first instance court.  On the whole, the gist of the proposed grounds of appeal is that I did not properly or correctly perform that task.  I have come to the view that the proposed grounds are not reasonably arguable.  In the circumstances, there is no point which has properly arisen for clarification by the Court of Appeal.

32.  The 1^st defendant further submits that the plaintiff had never taken the First Letter to be an admission or acknowledgment by the 1^st defendant of the government’s title to the Government Land until after the commencement of the action (or until after the 1^st defendant took out the striking out application).  It would, it is submitted, be unjust and unfair to now allow the plaintiff to rely on the First Letter.

33.  The submission is not understood.  On the premise that the First Letter is not covered by the without prejudice privilege, I do not see why it is unjust or unfair for the plaintiff to rely on it.

Conclusion

34.  None of the proposed grounds of appeal enjoy any reasonable prospect of success.  There being no other reason why the appeal should be heard, I dismiss the 1^st defendant’s application seeking leave to appeal. 

35.  I order that the plaintiff do have costs of the application, summarily assessed at $40,000.