LAM KIN LAI v. LI HA CHING AND OTHERS

HCA 2102/2018

[2020] HKCFI 751

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2102 OF 2018

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J U D G M E N T

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Introduction

1.  This is the determination of the plaintiff’s application for default judgment pursuant to Order 19 rule 7 of the Rules of the High Court by way of written submissions without a hearing.

2.  Between 13 November 1916 and 12 December 1956, the 1^st to 3^rd defendants and one Tang Wan Shan, deceased, were the registered owners and joint tenants of the premises at the ground floor of 9 Kat On Street, Wanchai, Hong Kong (the “Property”).  Upon the death of Tang Wan Shan on 12 December 1956, the Property became vested in the 1^st to 3^rd defendants as surviving joint tenants.

3.  In or around August 1947, the plaintiff’s father entered into an oral monthly periodic tenancy agreement in respect of the Property with the 1^st to 3^rd defendants and Tang Wan Shan.  Since then the plaintiff’s father and family occupied the Property as their permanent home.  The plaintiff was born on 22 December 1951 and has since been living there. 

4.  From August 1947 until October 1987, the plaintiff’s family, including the plaintiff and his father, paid rent to the 1^st to 3^rd defendants’ agent at the premises on the 2^nd floor of 9 Kat On Street, Wanchai, Hong Kong.  Thereafter, the plaintiff’s family ceased paying rent to the 1^st to 3^rd defendants or their agent, but continued using and occupying the Property as their permanent home for the plaintiff, his father and members of his family with the intention to possessing the Property to the exclusion of the whole world including the 1^st to 3^rd defendants.  The plaintiff’s father died on 23 February 2013, leaving the plaintiff and his family in sole occupation and possession.

Procedural history

5.  On 10 September 2018, the plaintiff issued a writ of summons with a statement of claim seeking a declaration against the 1^st to 3^rd defendants that he has acquired a possessory tittle to the Property. 

6.  On 13 September 2018, the plaintiff’s process server inserted a sealed copy of the writ of summons with accompanying documents into the mail box of the 1^st to 3^rd defendants at their last known address, i.e. 2^nd floor, 9 Kat On Street, Wanchai, Hong Kong.  No response was received from the 1^st to 3^rd defendants.

7.  On 15 October 2018, the plaintiff’s process server attended above last known address of the 1^st to 3^rd defendants.  He was informed by an occupier there that the 1^st to 3^rd defendants no longer resided in that address and that he did not know where their residence was and how to reach or contact them.

8.  The plaintiff’s solicitors conducted probate search at the Probate Registry and death search at the Deaths Registry on each of the defendants.  They also search through the Hong Kong Law Society for existence of any will, codicil or other testamentary disposition made by the 1^st to 3^rd defendants.  They were unable to find any information as to the existence or whereabouts of the 1^st to 3^rd defendants.

9.  On 8 July 2019, the plaintiff amended the writ of summons joining the Secretary of Justice as the 4^th defendant in the event that the government may claim an interest in the Property as bona vacantia. 

10.  On 15 October 2019, the court granted an order for substituted service of the amended writ of summons by advertising a notice of the present proceedings in Sing Tao Daily News.

11.  On 8 November 2019, upon the 4^th defendant confirming that the government did not intend to participate in this action, the court granted an order removing the 4^th defendant as a party to this action.

12.  On 2 December 2019, the amended writ of summons was duly served on the 1^st to 3^rd defendants by advertising a notice of the current proceedings in Sing Tao Daily News.

13.  None of the 1^st to 3^rd defendants responded to the notice or filed any defence.  By a summons of 10 March 2020, the plaintiff seeks default judgment against them pursuant to Order 19 rule 7. Au-Yeung J ordered that the summons be determined on paper.

Principles applicable to a claim for declaratory relief in default judgment

14.  The principles applicable to an application for default judgment under Order 19 rule 7 have been usefully summarized at paragraph 19/7/20 in Hong Kong Civil Procedure 2020 Vol 1 as follows:

“The Declaration - It is not the normal practice of the court to make a declaration without a trial, particularly where the declaration is that the defendant in default of defence has acted fraudulently … However, this is only a rule of practice which should not be followed when the plaintiff had a genuine need for the declaratory relief and justice would not be done if such relief were denied (Lam Shing Shou v Lam Hon Man [2002] H.K.L.R.D. D3; Lai Wai Kuen v Wong Shau Kwong, (unrep., HCA 3424//2993, [2004] H.K.E.C. 1373); Law Yuk Fong v Man Ching Wai (unrep., HCA 2195/2015, [2017] H.K.E.C. 57). This rule of practice does permit limited exceptions (Kin Ming Holdings International Ltd v Lam Moon Yuen, (unrep., HCA 2350/2005, [2006] H.K.E.C. 269) and John Robert Lees v Dragon Investment Co. II LLC, (unrep., HCA 1180/2003, [2006] H.K.E.C. 214).

Where declaratory relief is sought, the court will scrutinize the application for default judgment carefully and does not hastily grant the relief sought ......

Where declaratory relief is sought, the court expects maximum assistance to be provided in order for the relief to be granted. However straightforward this kind of application may seem, the court should not be expected to deal with the matter on a do-it-yourself basis and rubber-stamp the uncontested application without further ado ......

The declaratory reliefs to be granted should not be in terms wider than what the plaintiffs are entitled to and what is necessary to do justice to them (Lee Kwok Leung v Loa Shang (unrep., DCCJ 2165/2014, [2015] H.K.E.C 569), [16].”[1]

In practice, the court seldom grants declaratory relief in default of defence.  However, this is only a rule of practice and not a rule of law which will give way to the paramount duty of the court to do the fullest justice to the plaintiff to which he is entitled.  

15.  In Lam Shing Shou v Lam Hon Man & ors,[2] Chu J (as she then was) granted the plaintiff declarations to the effect that the approvals to successions of ownership in land in New Territories given by various District Officers in 1947, 1997 and 1998 should not have been given.  The reason was because the declaratory relief was the only and substantial relief sought by the plaintiff and justice could not be done if the plaintiff was to be denied the declaratory relief sought.

16.  In Lai Wai Kuen v Wong Shau Kwong,[3] a property was owned by two tenants-in-common.  One of co-tenants passed away at age 91 years and very little was known of the other co-tenant.  A co-executrix of the estate of the deceased co-tenant wished to rebuild the house on the property.  She sought an order from the court that the other co-tenant’s interest in the property had been extinguished.  The court granted the declaratory relief in a default judgment as it was satisfied that the other co-tenant had been ousted and the co-executrix had a genuine need to rebuild the house.

17.  In Wu Chi Kwong v Estate of Cheung Man Yau,[4] the plaintiff claimed adverse possession of various lots of land in the New Territories against the defendant (who was at least aged 21 years in 1905 and was presumed dead as he had not been seen or heard of since 1934). No defence was filed.  Recorder Gerard McCoy SC was satisfied that the plaintiff had established a case of adverse possession and it would be wrong not to purify the titles which had effectively been abandoned by the registered owner since 1934.

18.  Law Yuk Fong v Man Chung Wai and Man Chung Choi[5] is another case of adverse possession in which Deputy High Court Judge Marlene Ng (as she then was) granted declaratory relief in a default judgment.

Legal principles on adverse possession

19.  The relevant provisions under the Limitation Ordinance are sections 7(2), 8(1), 13(1) and 17. These sections provide as follows:

“7(2) No action shall be brought by any other person to recover any land after the expiration of 12 years from the date on which the right of action accrued to him. ……

8(1) Where the person bringing an action to recover land, or some person through whom he claims, has been in possession thereof, and has while entitled thereto been dispossessed or discontinued his possession, the right of action shall be deemed to have accrued on the date of the dispossession or discontinuance.

13(1) No right of action to recover land shall be deemed to accrue unless the land is in the possession of some person in whose favour the period of limitation can run (hereafter in this section referred to as adverse possession) and where under the foregoing provisions of this Ordinance any such right of action is deemed to accrue on a certain date and no person is in adverse possession on that date, the right of action shall not be deemed to accrue unless and until adverse possession is taken of the land.

17. Subject to the provisions of section 10, at the expiration of the period prescribed by this Ordinance for any person to bring an action to recover land (including a redemption action), the title of that person to the land shall be extinguished.”

20.  Prior to the amendments introduced on 1 July 1991, the period stipulated in section 17 of the Limitation Ordinance was 20 years instead of 12.  As the cause of action accrued before 1 July 1991, by reason of the transitional provisions in section 38A the limitation period applicable to the plaintiff’s claim is 20 years.[6]

21.  The legal principles applicable to adverse possession are very well settled.  These have been usefully summarized by Deputy High Court Judge Marlene Ng (as she then was) in Law Yuk Fong.  To establish possessory title based on adverse possession, the squatter must be shown to have both factual possession of the suit land and the requisite intention to possess (animus possidendi) for the whole of the limitation period.

22.  In order to qualify for a claim in adverse possession, the relevant possession must be adverse in the sense that the occupier has dispossessed the paper owner and has entered into possession without the consent of the paper owner and continued in possession. In Powell v McFarlane & Anor, Slade J said:[7]

“(3) Factual possession signifies an appropriate degree of physical control. It must be a single and conclusive possession, though there can be a single possession exercised by or on behalf of several persons jointly. … The question what acts constitute a sufficient degree of exclusive physical control must depend on the circumstances, in particular the nature of the land and the manner in which land of that nature is commonly used or enjoyed. …Everything must depend on the particular circumstances, but broadly, I think what must be shown as constituting factual possession is that the alleged possessor has been dealing with the land in question as an occupying owner might have been expected to deal with it and that no-one else has done so.”

23.  Further, possession must be single and exclusive, and the person in actual possession has effective control of the land.[8] Lord Hope in J A Pye (Oxford) Ltd & anor v Graham & anor said as follows:[9]

“70. The general rule ……is that only one person can be in possession at any one time. Exclusivity is of the essence of possession. …… Once possession has begun, …… his possession is presumed to continue. But …… it can …… be lost when it is given up or discontinued. When that happens, possession can be acquired by someone else. ……”

Possession is never adverse, if it is enjoyed under lawful title.  Thus, if a person occupies or uses land under a tenancy or licence of the paper title owner, he is not in “adverse possession” against the paper title owner.[10]  In Moses v Lovegrove,[11] Romer LJ contrasted adverse possession with “permissive possession or possession as of right”, i.e., whether from the position of the occupier his right to occupation is derived from the owner in the form of permission, agreement or grant.[12]

24.  Furthermore, section 12(2) provides as follows:

“A tenancy from year to year or other period, without a lease in writing, shall, for the purposes of this Ordinance, be deemed to be determined at the expiration of the first year or other period, and accordingly the right of action of the person entitled to the land subject to the tenancy shall be deemed to have accrued at the date of such determination:

Provided that, where any rent has subsequently been received in respect of the tenancy, the right of action shall be deemed to have accrued on the date of the last receipt of rent.”

In Hayward & anor v Chaloner,[13] Russell LJ held that the possession of a tenant under an oral yearly tenancy was considered adverse once the period covered by the last payment of rent has expired.

25.  As to the requisite intention to possess, the principles can be found in Wong Tak Yue v Kung Kwok Wai & Another (No 2):[14]

“The requisite intention to possess had been referred in various authorities under its Latin tag ‘animus possidendi’. I shall refer to it simply as the intention to possess. As Slade J observed in Powell v McFarlane & Anor (1979) 38 P & CR 452 at pp 471-472, the intention to possess requisite for adverse possession:

…involves the intention to one’s own name and on one’s own behalf, to exclude the world at large, including the owner with the paper title if he be not himself the possessor, so far as is reasonably practicable and so far as the process of the law will allow.”

Although the squatter must intend to exercise exclusive control for his own benefit, he need not have a conscious intention to exclude the true owner.  It is enough that the squatter intends to exclude the owner “as best as he can” or “so far as reasonably practicable and so far as the process of the law allow”.  An intention to own the land or even an intention to acquire ownership is not required for establishing the animus possidendi. The animus possidendi can be established even if the squatter mistakenly believes himself to be the owner of the land.

26.  The burden of proof is on the party claiming adverse possession, and the evidence he has to adduce must be compelling.  The standard of proof is the civil standard of balance of probabilities.  All it means is that the evidence adduced must be of such a quality and nature that, if accepted on the balance of probabilities, it is sufficient to establish both factual possession as well as an intention to possess.

Discussion

27.  In an application pursuant to Order 19 rule 7, the court would give judgment according to the pleadings alone, so it is not necessary for the plaintiff to prove the case by evidence.[15]  What this court has to be satisfied is that on the evidence this application is one to which Order 19 rule 7 applies and that on the pleading a case of adverse possession has been sufficiently pleaded.

28.  I am satisfied on the basis of the 3^rd Affirmation of Chiu Wai Tung that the plaintiff has obtained an order from Master Grace Chan on 15 October 2019 for substituted service of the writ of summons on the 1^st to 3^rd defendants; that substituted service has been effected in the manner as prescribed by the order on 2 December 2019; and that no acknowledgement of service or defence has been filed or served by any of the 1^st, 2^nd or 3^rd defendants.  This application is therefore one to which Order 19 rule 7 applies.   

29.  Here, none of the 1^st to 3^rd defendants gave any notice of intention to defend or adduce any affidavit evidence.  On the statement of claim filed by the plaintiff, it was plain that the plaintiff and his father and later the plaintiff and his own family had been in continuous and uninterrupted possession and occupation of the Property since the plaintiff’s birth on 22 December 1951. The plaintiff pleaded that since November 1987, neither the plaintiff nor his father paid rent to the 1^st to 3^rd defendants, but the plaintiff and his father (since 23 February 2013 the plaintiff and his family) continued using and occupation of the Property with the intention to possess the Property to the exclusion of the whole world, including the 1^st to 3^rd defendants and continued exercising the right of ownership.  The cause of action had accrued to the 1^st to 3^rd defendants since November 1987.  There was no evidence of any claim to the title of the Property by the 1^st to 3^rd defendants or any other person since then.  The plaintiff has adequately pleaded a case of adverse possession of the Property against the 1^st to 3^rd defendants for more than 20 years prior to commencement of this action.  The 1^st to 3^rd defendants’ title to and interest in the Property has therefore been extinguished by virtue of section 17 of the Limitation Ordinance.    

30.  Accordingly, I make a declaration to the above effect.  I make no order as to costs.