KWAN MAN SHING AND ANOTHER v. 張偉雄 AND ANOTHER

DCCJ 1708/2015

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 1708 OF 2015

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DECISION

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1.  This action concerns a piece of land in Tuen Mun, New Territories, the Remaining Portion of Section E of Lot No 1744 in Demarcation District No 132 (“Land”). By a Writ of Summons dated 20 April 2015, the Plaintiffs claimed vacant possession of the Land from the 1^st Defendant. The Writ was served by Kwan Chi On (“Kwan”), the father of the Plaintiffs, on the 1^st Defendant personally on 8 September 2015. Kwan is the predecessor in title of the Plaintiffs, having assigned the Land to them in 2003, and also their attorney in this action.

2.  On 19 November 2015, the Plaintiffs obtained judgment against the 1^st Defendant as no intention to defend was filed by the 1^st Defendant.  The Writ of Possession was issued to the bailiff on 7 March 2016 and the bailiff issued the Notice to Occupier to Quit on 26 April 2016.

3.  Cheung Tim Sau (“Applicant”), the father of the 1^st Defendant, applied to be joined as the 2^nd Defendant by summons filed on 24 April 2017.  The Applicant’s case is one of adverse possession, premised on claims of exclusive and continuous possession of the Land since 1979 when he started farming on the Land and adjacent lands and that he has planted fruit trees on the Land.  The Summons was heard before a Master on 9 August 2017, who ordered the Applicant to be joined as the 2^nd Defendant.  This is the appeal of the Plaintiffs against the order of the Master.

4.  The joinder application was made under O 15 r 6(2)(b) of the Rules of the District Court (“RDC”).  Mr Koo pointed out that O 15 r 10(1) of RDC is also relevant.  The following is an extract of the two provisions:-

“(2) Subject to this rule, at any stage of the proceedings in any cause or matter the Court may on such terms as it thinks just and either of its own motion or on application –

(a) …

(b) order any of the following persons to be added as a party, namely –

(i) any person who ought to have been joined as a party or whose presence before the Court is necessary to ensure that all matters in dispute in the cause or matter may be effectually and completely determined and adjudicated upon; or

(ii) any person between whom and any party to the cause or matter there may exist a question or issue arising out of or relating to or connected with any relief or remedy claimed in the cause or matter which in the opinion of the Court it would be just and convenient to determine as between him and that party as well as between the parties to the cause or matter.”

“10. (1) Without prejudice to rule 6, the Court may at any stage of the proceedings in an action for possession of land order any person not a party to the action who is in possession of the land (whether in actual possession or by a tenant) to be added as a defendant.”

5.  On the legal principles applicable to the exercise of the court’s discretion in deciding whether to allow the joinder, Mr Phang put it to me that whether there has been wilful default on the part of the Applicant and the merits of the proposed defence are matters that I should take into account.  He referred me to the cases of Yuen Ka Kwok v Ho Nai Sun [1980] HKLR 646 and Yu Wing Kan v Lau Shuk Lan [1990] 2 HKLR 583, which he said are illustrative of the point.  This is so, he submitted, despite what had been said by Riberio J, as he then was, in the case of Wing Hang Bank Ltd v Tsang Sze Yin HCMP 1689/1998, 30 December 1999 about an occupier not needing to explain why he did not intervene before judgment was entered and in terms of merits, that there is no threshold test of any kind to be satisfied before an occupier will be allowed to intervene.  It is Mr Phang’s submission that those principles were obiter and the later cases that applied them were therefore not real authority on the point.  He stressed that the Yuen Ka Kwok and Yu Wing Kan cases were not drawn to the attention of the court in the Wing Hang Bank case.

6.  Mr Koo did not seek to rely on the Wing Hang Bank case line of authority or challenge the need to consider wilful default and merits.  He pointed out that the test is more or less the same as that for setting aside a default judgment which has been entered regularly – that the court has unfettered discretion, and the primary and dominant consideration is whether the party seeking to join has shown a defence with real prospect of success.  The important point to draw from the Yuen Ka Kwok and Yu Wing Kan cases, Mr Koo submitted, is that those were not rigid rules, and that wilful default is only one of the many considerations to be taken into account in the court’s exercise of the discretion. 

7.  The Wing Hang Bank case involved a mortgagee’s action to recover possession of premises upon default of the borrower.  Similar underlying factual matrix can be found in the cases of Flying Mortgage Limited v Chan Kuen Kwong DCCJ 5004/2006, 13 February 2008 and Yu Fung Co Ltd v Olympic City Properties Ltd [2017] 2 HKLRD 406, the two other cases brought up by Mr Phang that applied the principles enunciated in the Wing Hang Bank case.  In such mortgagee actions, the parties have previous dealings with each other and the mortgagee is seeking to dispossess the mortgagor, someone the mortgagee has reason to assume to be the person in possession of the property.  In proceedings like the present one which was commenced for the purpose of evicting people whose occupation of the land was without permission of the registered owner, the registered owner does not always know who the trespasser is.  In such latter cases, there is available a mechanism for the registered owner to name all unknown occupier(s) as defendant.

8.  I should mention at this juncture two incidents that led to the Plaintiffs naming the 1^st Defendant as the party against whom they sought to recover the Land from.  The first was the payment of money to 5 individuals, including the Applicant, when a survey was planned for the establishment of the boundaries of the Land and the adjoining Remaining Portion of Lot 1744 in DD 132 (“Neighbouring Land”) in around 1998.  The second incident is a telephone call made by Kwan, on behalf of the Plaintiffs, to the Applicant on 15 March 2015 (“March 2015 Call”).  That there had been the said telephone conversation between Kwan and the Applicant is not disputed but the occurrence of the first incident about the survey and the payment is disputed by the Applicant. 

9.  According to Kwan, the owner of the Neighbouring Land handled the matter of the survey for him as he was not in Hong Kong then.  The surveyors, Messrs Ma & Associates Land Surveyors Ltd (“Surveyors”) asked that the trees on the Land be removed as a condition for the survey to be conducted.  The 5 persons claiming to have planted trees on the Land and were paid money back then included the Applicant, the Applicant’s brother, the Applicant’s son (brother of the 1^st Defendant) and the Applicant’s son-in-law. 

10.  It is the Plaintiffs’ case that there had been subsequent discussions with the Applicant and/or 1^st Defendant on the compensation to be paid for the fruit trees that were found to have been planted on the Land again after 2010.  Such discussions did not come to a fruitful end.  Then came the March 2015 Call.  During that conversation, the Applicant said the trees Kwan asked about were planted by the 1^st Defendant and he asked Kwan to have the cheque for compensation of HK$200,000 issued in the name of the 1^st Defendant.  The Plaintiffs pointed to this as indicative of the right of the Applicant being limited to the trees and not the Land itself.

11.  After the above two incidents, the Plaintiffs commenced this action against the 1^st Defendant only.  It is open to the Plaintiffs to sue all unnamed occupiers of the Land, but they chose not to do so.  The risk of other parties not named in the Writ of Summons and having an interest in the Land who may latter seek to be joined is something to be borne by them.  I note that in the first affirmation filed by the Applicant, he only averred to his being one of the persons occupying the Land.  It is therefore still possible that further parties claiming an interest in the Land may be joined subsequently if they can successfully persuade the court to exercise the discretion in their favour.

12.  The situation of the present case is, in my view, more akin to the case of Gotland Enterprises Limited v Kwok Chi Yau and others HCMP 4550/2003, 12 May 2017.  That action was commenced under Order 113 and the commentary in HKCP 113/8/12 refers to the same requirements of an explanation for not taking part in the proceedings earlier and a defence on the merits, as in an application for setting aside a default judgment.  Although Mr Koo placed greater emphasis on the merits of the Applicant’s case, he did not dispute wilful default as one of the factors that the court can take into account when exercising its discretion.  That being the case, I do not see the difference between Mr Phang and Mr Koo on the legal principles applicable as being one of great substance.  I will thus proceed to consider the issues of wilful default and merits in turn.

Wilful default

13.  The Applicant claims that he became aware of the proceedings only when the 1st Defendant was served with the Writ of Possession and the Notice to Occupier to Quit.  That was back in April 2016.  The Applicant said he applied for legal aid soon after that and his application was granted on 15 August 2016.  It was however only by April 2017 that the Applicant, upon being informed by his solicitors that the Plaintiffs were about to enforce the judgment for repossession of the Land that he sought to be joined as a defendant.

14.  Mr Phang asked me to be circumspect about this explanation, pointing out that the Applicant was present when the Writ of Summons was served on the 1^st Defendant.  A video was taken of what happened when Kwan visited the premises of the 1^st Defendant to serve the Writ of Summons on 8 September 2015.  That the Applicant was present is certain from the video taken by the process server; that the Applicant was aware of what the document was is however not.

15.  The Applicant refers to a representation made by Kwan about the nature of the Writ of Summons just before the 1^st Defendant threw the document onto the ground.  By that statement, Kwan suggested that the 1^st Defendant did not have to pay heed to the document.  The Plaintiffs refer to the latter part of the conversation that took place immediately after the 1^st Defendant threw the Writ onto the ground, when it was suggested to the 1st Defendant that he should find someone to translate it for him. 

16.  Despite parties’ concern over how to interpret what was said on that occasion, I do not find that to be of any great importance.  The Writ was served on the 1^st Defendant, not on the Applicant.  The representation was also made to the 1^st Defendant, not to the Applicant.  Mere presence of the Applicant does not necessarily impute knowledge.  The video does show the Applicant verbally supporting the 1^st Defendant in the commotion that followed the throwing of the Writ onto the Ground, but there is nothing to suggest that he would or should regard the conversation to be about the legal proceedings for repossession of the Land. 

17.  That the Writ was thrown onto the ground and the Applicant had every opportunity to find out what was going on is also neither here nor there.  Mr Phang characterized this as turning a blind eye to the obvious.  His stand may be premised on the assumption that the Applicant was aware of the purpose of the visit by Kwan having something to do with court proceedings.  After all, Kwan is not an officer of the court or an employee of a law firm.  It is the Plaintiffs’ case that there had been previous discussions in the hope of coming to amicable settlement on the compensation payable.  The visit of Kwan could be another such occasion which ended up in a row. 

18.  Mr Phang cited the case of Wong Kai Ho Justin v Doguil Beatriz M DCCJ 336/2014, 26 November 2011 to show that knowledge of the action in which possession was being claimed without taking steps to join in until after judgment would constitute wilful default. In that case, the tenant of the party seeking to join was sued as defendant for recovery of possession, and the joinder applicant was informed by the tenant of the action that had been commenced.  He had even instructed lawyers to write to the plaintiff’s lawyers to state his claim of adverse possession, although the details of his claim had not been provided.

19.  The Applicant had indeed been slow in taking out the summons for joinder after having acquired knowledge of the proceedings in April 2016, but his explanation that he only decided upon taking action when advised by lawyers that he would need to do so to protect his interest is not one beyond belief.  Unlike the applicant in the Wong Kai Ho Justin case who had forewarned the plaintiff of his adverse possession claim even before the action was commenced but had taken his time to intervene and allowed judgment to have been entered against the defendant, the Applicant in the present case only had legal representation some time afterwards.  Mr Phang tried to play down the importance of the old age of the Applicant and his relatively low level of education, but these are factors that the court does have to consider.

20.  There is also the point raised by Mr Koo about the onus on the Plaintiffs to name the right parties as defendants. Even though the Applicant and the 1^st Defendant are father and son, knowledge of the 1^st Defendant cannot be imputed to the Applicant simply by virtue of their relationship.  The various matters relied on by the Plaintiffs in suggesting wilful default on the part of the Applicant have all been explained.  The explanations proffered cannot be said to be very solid, they are nonetheless not inherently improbable.

21.  Having taken into account all the circumstances of the case, I do not find the failure of the Applicant to intervene in the proceedings earlier to have been due to his wilful default.

Merits

22.  The parties agree that two elements are required to establish adverse possession: (1) factual possession; and (2) the requisite intention to possess (animus possidendi).  Mr Phang has distilled what was said in the case of Incorporated Owners of San Po Kong Mansion v Shine Empire Ltd (2007) 10 HKCFAR 588, Gotland Enterprises Ltd v Kwok Chi Yau and Others CACV 260/2016, 19 January 2016 and Wu Yee Pak v Un Fong Leung & Others [2005] 2 HKLRD 169 in the following summary:-

(a)  Factual possession signifies an appropriate degree of exclusive 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 of what acts constitute a sufficient degree of exclusive physical control must depend on the circumstances.

(b)Not every use or occupation of land can satisfy this requirement.  For example, if a person only plants fruit trees without excluding others from entering the land, he is only using the land instead of occupying the same exclusively.

(c)  Intention to possess is the intention, in one’s own name and on one’s own behalf, to exclude the world at large, including the owner with paper title so far as is reasonably practicable and so far as the processes of law will allow.

(d)The slightest acts done by or on behalf of an owner in possession will be found to negative continuance of possession.  The position is quite different from a case where the question is whether a trespasser has acquired possession.  In such a situation the courts will require clear and affirmative evidence that the trespasser, claiming that he has acquired possession, not only had the requisite intention to possess, but made such intention clear to the world.  If his acts are open to more than one interpretation and he has not made it perfectly plain to the world at large by his actions or words that he has intended to exclude the owner as best he can, the courts will treat him as not having had the requisite animus possidendi and consequently as not having dispossessed the owner.

(e)  The burden is on the party claiming adverse possession, and the evidence he has to adduce must be compelling.

23.  According to the affidavit of Kwan, back in 1998, the owner of the Neighbouring Land wanted to survey the Land and the Neighbouring Land to establish their boundaries but was asked by the Surveyors to remove all the plantation so as to avoid obstruction to the lens of surveying instrument.  Kwan deposed to his asking another Mr Kwan, a personnel of the owner of the Neighbouring Land (“Agent”), to arrange for the removal of the plantation, as Kwan was not in Hong Kong at the time, and the eventual completion of the survey on 28 February 2001.  Kwan specifically mentioned that he gave authorization to the Surveyors to enter into the Land for the purpose of driving iron spikes into the ground.

24.  Mr Phang referred me to the Code of Practice applicable to the survey in question, where the specifications for using iron spikes as survey marks can be found.  It is stated there that “Iron spike will be at least 100 mm in length and 12 mm in diameter, driven into the ground to finish either flush with the ground surface or beneath it”.

25.  Relying on the conducting of the survey and the certificate of an authorized land surveyor on the setting out plan prepared upon completion of the survey which shows that it had been prepared in conformity with the said Code of Practice, the plaintiff submitted that the Surveyors would have to access the Land.  Mr Phang pointed to the evidence of the Applicant that he had never given any consent for the Surveyors to access the Land or to remove the plantation, while on the other hand Kwan has deposed to his authorizing the access by the Surveyors.

26.  Mr Koo asked me to view Kwan’s evidence about the removal of the plantation and the conduct of the survey with skepticism.  In the first place, such evidence is hearsay.  Whether access was required depends on the nature of the survey and there is no evidence form the Surveyors or the Agent on how it was carried out.  Further, even if the Surveyors entered the Land, that does not mean the Applicant had lost control since what constitutes exclusive occupation depends on the circumstances and regard should be had to the place being a rural area and cultivation without enclosure could be sufficient evidence of adverse possession. The question of whether there had been adverse possession is, Mr Koo submitted, a matter for trial.

27.  Mr Koo further submitted that, with the claim of the Applicant of exclusive possession since 1979, there is also the possibility of the Applicant having acquired title through adverse possession by 1999.  Given that there is no evidence on whether the Surveyors gained access to the Land, even if they indeed did do so, before or after 1999, it is open to the court to find that the Applicant had already dispossessed the Plaintiffs, or rather their predecessor, by the time the Surveyors accessed the Land for the purpose of conducting the survey.

28.  Mr Koo also asked me to consider possession as claimed by the Applicant does not mean possession in accordance with boundary lines – the Applicant may not be occupying the entirety of the Land and hence the Surveyors may not have to go into that part of the land that is occupied by the Applicant to prepare the setting out plan. He sought to distinguish the observations of the court in relation to the significance of the survey in the Gotland Enterprises case where there was a report showing that the surveyor had conducted physical inspection in order to assess the physical state of the land in question.  Mr Koo emphasized that in the present case the Surveyors only identified the boundaries.

29.  It is also Mr Koo’s submission that even if the Surveyors had entered the Land, that does not mean the Applicant had lost control since what constitutes exclusive occupation depends on the circumstances. 

30.  Mr Phang, on the other hand, referred me to paragraphs 2 and 8 of the Applicant ’s first affirmation.  In paragraph 2 of that affirmation, the Applicant gave his understanding of the area of the Land, after having specifically defined the term in paragraph 1 as meaning the plot of land in question, as being around 1,500 square metres.  In paragraph 8 of that affirmation, the Applicant also gave the area that is occupied by him and his family as being around 1,500 square metres.  Thus, Mr Phang said, there can be no mistake that the Applicant is saying that he has been occupying the whole of the Land.

31.  Although the Applicant deposed to the Land being fenced off by him, the Applicant is now saying that exclusive possession can still be established in the absence of fencing because, according to Mr Phang, the solicitors for the Applicant were not satisfied that the Applicant could further rely on the claim that there has been fences after a site inspection.  Mr Koo did not respond to this suggestion at all.

32.  I do not find the suggestion that the Surveyors did not have access to the Land in their exercise of drawing up the setting out plan to be realistic.  The Applicant claims that he and his family are occupying the area shown in the plan in exhibit “CTS-8”.  That clearly covers parts of the Land and the Neighbouring Land, including the place where the two plots of land adjoin each other.  With the setting out plan showing the dividing line between the two plots, the Surveyors would inevitably have to get into both plots to drive the iron spikes into the ground to establish the survey marks and to carry out measurement of the distances between them.

33.  However, there is still the question of when the Surveyors went there.  The certificate of the Surveyors shown on the setting out plan was signed on 28 February 2001.  Kwan only said he was approached by the Agent about the survey in 1998.  The site visit could have been carried out any time between 1998 and 2001, and if conducted after 1999, the Applicant could have defeated the title of the Plaintiffs already by then.  Without this important piece of information, simply on the basis of the affidavit evidence before me, I cannot conclude that the occupation of the Applicant has been discontinued by the survey conducted.

34.  The Plaintiffs also seeks to draw support from the March 2015 Call.  Nonetheless, although the Applicant did say “個塊地你架麻”, that could be a reference to the paper title only.  There was the express insistence of no commencement of work until compensation had been paid.  Whether the Applicant was laying claim to the trees on the Land only and not the Land itself by the March 2015 Call, and whether the trees were planted by the 1^st Defendant with the permission of the Applicant are matters to be resolved at trial.

35.  The same goes for the question of whether the act of planting trees by itself is sufficient to establish exclusive possession.  Each case has to be considered on its own merits.  Mr Koo has pointed me to the cases of Seddon v Smith (1877) 36 LT 168 and Lee Ah Tim v Tse Lung Yim DCCJ 529/2013, 22 October 2015 to show that lack of fencing is not necessarily fatal to an adverse possession claim.  I cannot at this stage rule out the possibility of the court finding that there has been exclusive possession in the present case.

36.  The Applicant referred to an incident in 1998 when he was approached by a Mr Kwan^[1] for repossession of the Land and the visit by the Applicant and some other members of his family to the office of this Mr Kwan in Central to assert that the owner of the Land had no right to evict them when they had occupied the Land for more than 20 years.  More has to be done to explore what this could or could not amount to.

37.  The Plaintiffs’ case of the further discussions held between the Plaintiffs and the 1^st Defendant after the re-emerging of trees on the Land after 2010 does not sit well with the payment of compensation for the removal of the trees as per the instructions of the Surveyors.  It does not make good sense for a registered owner to pay heed to the seemingly without-end request of the allegedly trespassing farmers repeatedly.  That raises questions on the Plaintiffs’ case on what happened back in 1998 and the subsequent Survey.

38.  There is no evidence from this Mr Kwan as to the occurrence of the incident and what transpired then, details of which, coupled with the oral testimony of all relevant parties, may be sufficient for the court to find that the Applicant has the requisite exclusive physical occupation as well as the intention to possess.  Hence, I would say that the Applicant has shown a defence with real prospect of success.

39.  The prejudice to the Plaintiffs is also a factor to be taken into account.  It is not clear why the action of the bailiff was halted after the issue of the Notice to Occupier to Quit on 26 April 2016.  There is nothing to contradict the statement of the Applicant in his affirmation that he was not pressed to take action for some period of time.

40.  Having taking into account all relevant considerations, I would exercise my discretion in favour of the Applicant and dismiss the appeal.  The Order of the Master dated 9 August 2017 is affirmed.

41.  On a nisi basis, I order the costs of the appeal, with certificate for counsel, be to the Applicant. The Applicant ’s own costs to be taxed in accordance with the Legal Aid Regulations.