XCHRX HILDER CO. LTD. v. OCCUPIER(S) OF PREMISES AND ANOTHER

HCMP1534/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO.1534 OF 2001

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D E C I S I O N

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1. This is an appeal against two orders of Master Yuen dated 18 September 2001. Leave to appeal against the first order, which dismissed a summons by the 2nd defendant ("D2") to adduce further evidence by affirmation, has not been pursued. The court is only, therefore, concerned with the second order by which the learned master gave judgment to the plaintiff in terms of its originating summons for possession dated 20 March 2001.

2. The summons sought :

"... an Order that it does recover possession of all that piece or parcel of ground registered in North Land Registry as Lots No. 77 and 78 in Demarcation District No. 95, Kwu Tung, New Territories, Hong Kong (as more particularly delineated and shaded in pink on the plan annexed hereto) (the "Land") on the ground that it is entitled to possession and that the persons in occupation are in occupation without licence or consent."

3. The appeal was lodged out of time. In the notice of appeal D2 asked that "the time for appealing against the said orders be extended until after the hearing of the appeal."

4. Mr C.Y. Li, counsel for the plaintiffs, submits that D2's method of seeking an extension is procedurally flawed. He also submits that even if it had been done properly, namely by a separate summons seeking an extension of time ahead of the appeal itself, the application for time should be refused.

5. One of the factors to be considered on an application for leave to appeal out of time is the prospect of there being an injustice. If the delay is inexcusable the party seeking leave must show that there is a real prospect of success in the appeal. Other factors which a court will consider are the length of the delay, the reason for the delay and if any prejudice is caused to the other party.

6. The length of the delay is 27 days. This is neither a particularly short period nor a particularly long one. In my judgment it is not so short as to be merely overlooked. It is therefore a factor to be held against D2. The reason for the delay is a "mistake" by D2's solicitor. This does not render the delay excusable.

7. The prejudice suffered by the plaintiff is that it is facing a prosecution from the Planning Department alleging unauthorized use of the land in question. The matter is urgent. Whilst the appeal proceeds the alleged unauthorized use continues because the plaintiff does not have possession. Attempting to appeal out of time simply extends the urgency.

8. In short, I find the delay in appealing inexcusable and thus D2 must show a real prospect of success in the appeal. I must therefore consider the merits of the appeal. The most efficient approach therefore is to consider the appeal itself, on its merits, as if it were made within time. If the plaintiff can show that the appeal would have failed had it been brought within time, then it follows that D2 will have fallen well short of establishing real prospects of success.

9. For the reasons which follow I have decided that the appeal must fail and that the learned master was right to grant an order for summary possession to the plaintiff. Applying that determination to the test for granting leave to appeal out of time it follows that such leave should not be granted.

THE MERITS OF THE APPEAL

(1) Background facts

10. The plaintiff became the owner of land in the New Territories ("Lots 77 and 78") in 1992 Hau Wai Kai Tso ("the Tso") is the owner of the adjourning Lot 79. In 1993 the plaintiff complained about trespass on its land by the Tso. It transpired that a transportation company called "Fo Keung" was the tenant of Lot 79. Container trailers were being parked on Lot 78. In November 1993 the Tso terminated Fo Keung's tenancy of Lot 79 and the Tso confirmed to the plaintiff that it had regained possession of Lot 79.

11. In March 2001 the plaintiff commenced these proceedings against the unauthorized occupants of Lots 77 and 78, for possession. Legal proceedings having been commenced by the Planning Department against the plaintiff for the unauthorized use of the land. The plaintiff's response was that it was unaware of the authorized use and did not consent to it.

12. In these proceedings D1 has made no appearance. D2 has claimed adverse possession of the land since 1981 as a ground for resisting the plaintiff's summons for possession. Three reasons are advanced by the plaintiff why possession should be granted summarily. All the reasons were argued before the learned master. She considered it sufficient to decide the case on the basis of just one of the three grounds. Helpfully, she gave oral reasons for her decision. I uphold that decision and hereafter deal briefly, in addition, with the two remaining contentions made by the plaintiff.

13. However, as this is a hearing de novo, I set out the legal principles first of all.

Order 113 principles

14. In Vipac Engineers & Scientists Ltd v. Karpovich & Anor [1989] 2 HKC at page 360. Godfrey J said :

"If the case is a clear one, it cannot matter that the defendant has contested it. The right test, in my view, is whether the issue between the parties is one which the defendant is entitled to have sent to a trail - whether it be an issue of fact or of law. If the issue is seen on analysis to be capable of determination in only one way, in favour of the plaintiff, then, as it seems to me, it is proper for the court to exercise the power conferred on it by O113 and determine the matter, however vigorous the contest may have been"

15. When the issue is a claim of adverse possession Litton PJ in Wong Tak Yue v. Kung Kwok Wai & Anor [1998] 1 HKLRD at p.251 said :

"The law is clear. The owner of the land with the paper title is deemed in possession of the land. If the law is to attribute possession to a person who can establish no paper title to possession, and claims to be a mere trespasser, the burden is upon him to establish his intention to exclude the whole word : including the owner of the land. Only in this way can he establish "adverse possession" in terms of s. 13(1) of the Limitation Ordinance (Cap. 347)."

16. It was on the "intention" point that the learned master found that there could be no triable issue. If D2 failed on this point his case was in all other respects unsustainable. The learned master said as follows :

"What was left at this stage, before this court, as a point of contention, was, on the part of the defendants, in the form of affidavit, that they had cultivated the land since 1981, and since 1982, had used the land for storage, and that around about 1990 to 1991 he had permitted Cheung and Hau to use a portion of the land for vehicular storage.

But what was missing in his affidavit was, there was really no contention as to an exclusive intention to possess the two plots of land to the exclusion of the whole world. In fact, quite to the contrary, as appearing in the transactions between the parties and the conduct, in the year of 1993, when Cheung's usage of land was challenged by the land user; i.e. when the company, Fo Keung Transportation, was using the land for a usage not permitted by the Government Crown Lease, neither D2 nor Cheung had raised any protest about the land ownership concerning the plot of land used by Fo Keung for the purpose of vehicular storage. In fact, that was one of the grounds for which the tenancy of Fo Keung, on the usage of the neighbouring plot, Plot 79, was terminated."

17. Having reheard the submissions on appeal I agree. There had been a break in possession in 1993/1994 (about which D2 makes no adequate response in his affirmations) which must defeat any claim that there has been a continuous intention to occupy the land to the exclusion of the rightful owner. The owners of the neighbouring plot (79) had terminated Fo Keung's tenancy because they had been trespassing on the plaintiff's land.

18. However, the plaintiff's case does not end here. Two further grounds for summary possession are advanced :

D2's case lacks credibility and/or bona fides

19. The following features of the evidence weigh against D2 :

(i) D2's claim of being in occupation since 1981 is very vague. He, no doubt, selects the date of 1981 because it is exactly 20 years before this application. No particulars are provided as to how he came into possession at that particular time. He would have been 21 years old at the time. He merely states that he cultivated the land (a plot of about 50,000 square feet).

(ii) The only aerial photos produced are from 1992 and 1993.

(iii) D2 asserts that in 1986 there was a change of land use to vehicle storage and that in about 1990 he leased part of the land out to tenants for a similar purpose. These assertions have common features; they are mere assertions, lacking in particulars, vague and unsupported by documentary evidence.

(iv) The basis upon which the learned master found for the plaintiff, as outlined above, merits further analysis under this heading also. A term of Fo Keung's tenancy of Lot 79 from the Tso was that it required consent from the owner of Lot 78 to cross its land to have access to Lot 79. It never sought this consent from D2 (or indeed from anyone). The failure to gain consent was one of the grounds for terminating their tenancy of Lot 79. Had D2 had the intention of possessing the land to the exclusion of all others he would have claimed that consent from the plaintiff was not required. D2 was silent at the time and has said nothing by way of affirmation on this matter since.

Limitation Ordinance Section 12(3) and Section 13(3)

20. The simple and very forceful point made by Mr Li here is that even taking D2's claim of tenanting the land since about 1991 is true, by virtue of section 12(3) and section 13(3) of the Limitation Ordinance the tenanted period will only count for the purposes of adverse possession if the alleged lease is in writing. In this case there is no evidence of a written lease or any rent receipts.

21. Section 12(3) states :

"12. Accrual of right of action in case of certain tenancies

(3) Where any person is in possession of land by virtue of a lease in writing by which a rent of not less than $20 is reserved, and the rent is received by some person wrongfully claiming to be entitled to the land in reversion immediately expectant on the determination of the lease, and no rent is subsequently received by the person rightfully so entitled, the right of action of the last-named person to recover the land shall be deemed to have accrued at the date when the rent was first received by the person wrongfully claiming as aforesaid and not at the date of the determination of the lease."

22. Section 13(3) states :

"13. Right of action not to accrue or continue unless there is adverse possession

(3) For the purpose of this section -

(b) receipt of rent under a lease by a person wrongfully claiming, in accordance with section 12(3), the land in reversion shall be deemed to be adverse possession of the land."

23. When considering these provisions in Wong Luen Chun & Anor v. Secretary for Justice [1998] 4 HKC Barnett J said :

"...... by virtue of the provisions of the Limitation Ordinance to which I have referred, it is confined to the position where there is a lease in writing. I, for my part, would hesitate to extend the position beyond that."

24. Thus, the absence of a written lease is fatal to D2's claim of adverse possession by him for a total of at least 20 years.

25. In conclusion, for the above reasons I am satisfied that the plaintiff has demonstrated a clear case to which any purported defence would surely fail. This being the case the defendant has failed to establish sufficient grounds for granting an extension of time in which to appeal. The delay was not excusable and a real prospect of success in the appeal has not be shown. For the sake of completeness it should be added that, for the same reasons, had the appeal been brought within time it would have been dismissed.

26. The plaintiff shall have its costs of the appeal.