TONG KWOK KEUNG v. TONG KWOK KEE

DCMP 2470/2014

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 2470 OF 2014

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

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

DECISION

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

INTRODUCTION

1. On 30 January 2015, I handed down my reasons for decision (“the Decision”) refusing to grant summary possession of 1^st Floor, Grand Mansion, No 10 Playing Field Road, Kowloon, Hong Kong (“the Property”) against the defendant pursuant to Order 113 of the Rules of District Court, Cap 336.  I made the order that the case to be proceeded as if the same has been commenced by writ.  I also made a costs order nisi that the costs of the Order 113 application be costs in the cause of the action with certificate for counsel.

2. There are two summonses before me.  They are as follows:-

(1) the plaintiff’s application for leave to appeal against the Decision; and

(2) the defendant’s application for variation of the costs order nisi seeking the costs of the Order 113 application be to the defendant with certificate for counsel.

3. The background of the case was set out at paragraphs 2 to 13.  In essence, the dispute revolves around of whether it was the plaintiff or the father who put up the purchase price for the Property. I found that there are substantial factual disputes.  I was satisfied that the factual assertions made by the defendant are believable which makes O.113 inappropriate. I found that the nature of the disputes between the plaintiff and the defendant would be more suitable to be determined in the context of a writ. Ihave given reasons in support for refusal of the summary possession in the Decision at §§16 to 23. I do not propose to repeat them here.

4. Mr Ho for the plaintiff accepts all the matters at §§16 to 23 of the Decision may be in issues.  He argues that summary judgment can still be obtained even by putting the defendant’s case to its highest.  It was on that basis, I dealt with the legal argument on the disputed facts put forward by the defendant. After the hearing, I ruled against the plaintiff for each legal argument that he relied on.

LEAVE TO APPEAL

Principles for leave to appeal

5. It is clear that leave should be granted only if the court is satisfied 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: see section 63A(2) of the District Court Ordinance.

6. The plaintiff needs to satisfy this court that the intended appeal has a reasonable prospect of success.  It involves the notion that the prospects of succeeding must be reasonable and therefore more than fanciful without having to be probable: SMSE v KL [2009] 4 HKLRD 125 at §17.

The Plaintiff’s Proposed Grounds of Appeal

7. The proposed grounds of appeal suggested errors in the court’s finding:-

(1) in holding the defendant as a putative legatee had locus as beneficiary to resist the plaintiff’s application for possession;

(2) in holding that despite the plaintiff undeniably holds a better title to the Property than the defendant and the application under Order 113 ought not be granted;

(3) in holding that the plaintiff is suing on behalf of the father’s estate and on that basis conclude that “in the absence of a grant, a purported beneficiary does not have the locus to sue on behalf of the estate”;  and

(4) in holding that should the plaintiff be regarded as a trustee of the Property in favour of the father’s estate, the plaintiff is powerless to recover the Property from the defendant.

8. In fact, the plaintiff relies on same grounds advanced at the first instance hearing for the O.113 application which I have already fully canvassed and dealt with in the Decision. 

9. During the hearing for leave to appeal, Mr Ho for the plaintiff indicates that he would focus mainly on Ground 2 for the application.  The remaining grounds are just supplementary to Ground 2.  However, I would deal with each and every ground for completeness.

Ground1

10. I think the plaintiff has mis-read my Decision.  I never held as what has been framed under Ground 1 that the defendant as a putative legatee had locus as beneficiary to resist the plaintiff’s application for possession. On the basis of the defendant’s case, I held that the plaintiff is one of the beneficiaries of an un-administered estate of the father.  The plaintiff is as much as a putative legatee as the defendant when he is bringing the action in this present case. He has no locus to take out this application. Ihave given reasons in supportin the Decision at §§34 to 39. I do not repeat here.  This ground has no merit.

Ground 2

11. Being the registered owner, the plaintiff is holding better title than the defendant. Such fact is undeniable.

12. Mr Hoargues that the plaintiff, as registered legal owner of the Property, has a better right of title to the Property than the defendant who is merely a potential legatee under the father’s estate.  Therefore he is entitled to an order for possession against the defendant.  He submits that there is simply no need for the plaintiff to rely on father’s estate’s purported equitable interest in the Property in taking out these proceedings. 

13. Mr Ho points out that the learned author of Megarry and Wade, The Law of Real Property8^th edn 2012 suggested that Order 113 applications are determined solely by reference to the relativity of titles between the parties. He quotes §§4-008 and 4-026 to support his argument.  They read as follows :-

Ҥ4-008

(a) Relativity of titles.

“At common law … there is no such concept as an ‘absolute’ title.  Where questions of title to land arise in litigation the court is concerned only with the relative strengths of the titles proved by the rival claimants.  If party A can prove a better title than party B he is entitled to succeed notwithstanding that C may have a better title than A, if C is neither a party to the action nor a person by whose authority B is in possession or occupation of the land.”

Some examples will illustrate this fundamental doctrine and the right and wrong occasions for the plea of jus tertii.  If last year S dispossessed O of land which had hitherto belonged to O, and O is taking no action, there are now two incompatible titles to the land.  As between O and S, O is the owner, because he can recover the land by bringing an action.  However, as between S and the rest of the world (except O and persons claiming through him) S is owner, for he is in possession and that is equivalent to ownership as against all persons who have no better right.  Thus S can sue strangers for trespass or nuisance, just as O could before.  Furthermore, S can convey the land, or make any other disposition which an owner can make.  If S dies, the land will pass under his will or intestacy.  But all such rights derived through S are subject to O’s (or his successor in title’s) paramount right to recover the land.  S’s possession at once gives him all the rights and powers of ownership, at least for the purpose of the civil law.  S has, in fact, a legal estate, a fee simple absolute in possession.  But so also has O, until such time as his title is extinguished by limitation.”

§4-026

SUMMARY POSSESSION PROCEEDINGS

Under Part 55 of the Civil Procedure Rules there are two swift remedies against a person who occupies land without the consent of a person who has a right to possession of them.  It has been held that these remedies are available not only to an estate owner (whether or not he is in possession of the land), but also to a licensee, whether he is in possession or merely has a contractual right to possession, even though he could not have brought ejectment under the old law. A mere contractual right of access is not, however, sufficient. The result is striking.  Not only will possession be protected against all save those who have a better right to possess the land, but the mere right to possess will also be, even where the person having that right has no estate in or title to land. This extension of remedy demonstrates the courts’ unwillingness to be fettered “by the arcane and archaic rules relating to ejectment”, and it has been suggested that the law “should develop and adapt to accommodate a claim by anyone entitled to use and control, effectively amounting to possession of the land in question”.

14. Under §4-008, the learned author was referring to a competition oftwo titles.   He explained the relativity of titles as between the owner, squatter and trespasser.  It relates to possessory title and adverse possession.  In ourpresent case, itdoes not involve a title dispute. The main issue between the parties is whether it was the plaintiff or his father, who put up the purchase price of the Property in 1962. The defendant is not relying on adverse possession of the Property.  Therefore, this passage does not apply to the present situation.

15. Under §4-026, the learned author was explaining the summary possession proceedings are available as remedies not only to the estate owner, but also to a licensee. The learned author also emphasized that apart from those who have a better right, those with mere right to possess even he has no estate in or title to land will also be protected.  The law should develop and adapt to accommodate a claim by anyone entitled to use and control, effectively amounting to possession of the land in question.

16. In my view, the learned author was referring to the use of the Order 113 procedure is not of restrictive nature.  It covers the defendant’s situation. With respect, I think Mr Ho’s reliance on these passages is misplaced. To say that “Order 113 applications are determined solely by reference to the relativity of titles between the parties” is obviously quoting the learned author out of context.  The plaintiff’s argument must fail.

17. Mr Ho submits that I erred in the consideration of Order 113 application to look beyond the relativity of titles and take into account the defendant’s potential interest under the father’s estate.  It is the plaintiff who invited the court to take the factual dispute in defendant’s favour for legal argument. In my view, it is totally wrong for the plaintiff to turn it around to say that the court should not have considered the father’s beneficial interest in the Property as alleged by the defendant. In fact, the presence of these factual issues is the very reason why the court refused the order for summary possession.

18. The approach in dealing with an application under O.113 was stated in the Decision at paragraphs 14 and 15.  In the instant case, the defendant can raise issues which should be determined in a proper trial.  The evidence does not clearly and obviously transpire that the defendant unlawfully occupying the Property.  Under such circumstances, the court would not grant a possession order to the plaintiff.

19. The plaintiff fails to convince me the Decision in this respect (at §33) would reasonably be overturned.  Accordingly, I see no reasonable prospect of success in the intended appeal of this ground.

Ground 3

20. I think the plaintiff has mis-read my Decision.  I never held as what has been framed under Ground 3 that the plaintiff is suing on behalf of the father’s estate.  I would simply repeat what I have said in paragraphs 34 to 39 of the reasons stated in the Decision.  There is no merit in this ground.

Ground 4

21. It could be seen that the plaintiff is only repeating his submissions made in the application for possession. Ihave fully canvassed and given reasons in supportin the Decision at §§27 to 31. I do not repeat here.  This ground fails.

22. For the reasons mentioned above I do not consider the plaintiff has demonstrated the intended appeal has reasonable prospects of success.  I further considered that there is no other reason in the interests of justice why the appeal should be heard. 

23. In any event, even if I were wrong on the aforesaid analysis on any of the grounds, there is also another reason as to why the court should not resolve this case by way of O.113 application.  If the court were to rule in plaintiff’s favour at this present stage, there may be a likely contest between the administrator of the father/mother’s estate and the plaintiff for the rights over the Property. The court has already appointed an administrator for the mother’s estate in HCMP 664/2011.  As a result, the possession order by this court does not serve any meaningful purpose.  The matter will just be continued until the beneficial ownership of the Property has been determined (§39 of  the Decision)  

24. In the circumstances, I dismiss the plaintiff’s application for leave to appeal.

VARIATION OF COSTS ORDER NISI

25. It is trite that a court always retains a discretion on the issue of costs. 

26. In the Decision, I made an order nisi that costs of the Order 113 application be costs in the cause with certificate for counsel.  The defendant applies to vary to that the plaintiff to pay the defendant costs of the Order 113application, with certificate for counsel, to be taxed if not agreed. 

27. With regard to the costs order for Order 113 application, I have considered Lam Pak Cheung v Lin Zhen Lue and others [2009] 1 HKLRD 35 where Recorder Fok held that:-

“49. If the Plaintiff ought to have anticipated that there would be substantial disputes as to the facts so that the originating summons procedure would not be appropriate, it would have been likely that the Court would have penalised him as to costs upon making an order under RHC Order 28 rule 8 for the proceedings to continue as if commenced by writ: see Hong Kong Civil Procedure 2008 (Vol.1) Note 28/8/2 at p.532 and Lai Kwong Ma v. Tang Hop Wan [1976] HKLR 51. If not, it would appear that the usual costs order on an order to continue as if by writ is that the costs be in the cause: see Hong Kong Civil Procedure 2008 (Vol.1) Note 28/8/2 at p.532.”

28. Mr Cheung for the defendant submits that it is apparent to a plaintiff that there existed a serious dispute of facts.  According to a pre-action correspondence from Messrs. S Y Fung, solicitors for the defendant dated 6 October 2014 (“the Letter”) to the plaintiff, the defendant has indicated clearly that the he would oppose to the O.113 application on the ground that the purchase price of the Property was paid by the father. The plaintiff should not have adopted the originating summons procedure.  Mr Cheung submits that it is a case suitable for an order of costs to follow the event. 

29. I do not agree.  I note that the plaintiff have instructed his legal representative to give notice to the defendant to vacate from the Property by correspondence on 4 July 2014. The defendant failed to respond despite repeated requests and demands.  As a result, the plaintiff took out the originating summons on 12 September 2014. The Letter was sent only after the issue of the O. 113 summons.  

30. Further, the content of the Letter does not adequately show that the plaintiff knew at the outset that the defendant was relying on a contention that the Property has been used as a family home and the defendant has been occupying since childhood.  The plaintiff could have known the line of arguments raised only after the filing of the defendant’s affirmation on 4 November 2014.

31. It is also important to note that those issues which I have regarded as giving rise to arguable matters to be determined at trial were raised by me during the Order 113 hearing.  They include (i) the age when the plaintiff alleged to have acquired the Property; and (ii) the father’s view that the Property belonged to him when he prepared the Will.  Under such circumstances, I find that it is unfair to conclude that the plaintiff ought to have anticipated that there would be substantial disputes as to the facts so that the originating summons procedure would not be appropriate.

32. In my view, the outcome of the case will largely be determined on the strength of the parties’ evidence to be adduced at trial.  In the circumstances, I maintain that the correct order for costs to be costs in the cause.  It will meet the broad justice of the situation.

33. By reasons aforesaid, the defendant’s application to vary the costs order nisi must fail.

34. The costs order nisi dated 30 January 2015 be made absolute.

CONCLUSION

35. I dismiss the plaintiff’s summons for leave to appeal.  I make an order nisi that the plaintiff shall pay the defendant’s costs of this application, to be taxed if not agreed, with certificate for counsel. The order will be made absolute 14 days from the date of this decision.

36. I dismiss the defendant’s summons for variation of costs.  I make an order nisi that the defendant shall pay the plaintiff’s costs of this application, to be taxed if not agreed, with certificate for counsel. The order will be made absolute 14 days from the date of this decision.