AU YEUNG ON v. CHE SHING CHEONG WILFRED AND OTHERS

HCMP 4745/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 4745 OF 1999

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BETWEEN 

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D E C I S I O N

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Background

1.  This is the Plaintiff’s appeal against the decision of Master Lung made on 27 September 2004 under Order 28 rule 10 of the Rules of the High Court dismissing the Plaintiff’s action for failure to prosecute proceedings with due dispatch.

2.  The Defendants were registered owners of a plot of land known as Sub-section 3 of Section H of Lot No 3719 in DD 104 (“Sub-section 3” or “the Lot”).  The Lot was resumed by the Government in 1999 and the Defendants agreed to accept a sum of $3,243,000 as compensation.  Following the resumption, the Plaintiff, Mr Au Yeung On, commenced action by originating summons on 6 August 1999 against the Defendants on the ground of adverse possession.  The compensation money is now being held by the Government pending the resolution of the present dispute.

3.  Except for introducing an amendment to the originating summons on 17 September 1999, Au Yeung On made no progress in the prosecution of his claim.  He had applied for legal aid but his application was refused on 12 October 2000.  Then on 18 October 2002, he instructed Messrs Johnny Chiu & Co (“Messrs Johnny Chiu”) and issued a Notice of Intention to Proceed on 7 November 2002.  But, the action did not progress further.  On 18 May 2004, the Defendants took out a summons to strike out the Plaintiff’s action under Order 28 rule 10.  Au Yeung On filed an affirmation in opposition on 28 June 2004.  The application to strike out the Plaintiff’s action was subsequently set down for hearing before Master Lung on 27 September 2004.

4.  In July 2004, Au Yeung On was diagnosed with liver tumor.  He passed away on 5 August 2004, about seven weeks before the hearing. 

5.  On 24 September 2004, Messrs Johnny Chiu took out a summons seeking a declaration that the firm had ceased to be solicitors acting for the Plaintiff.  That summons was heard on 27 September 2004 before Master Lung immediately before the hearing of the Defendants’ striking out application.  According to the Court record, an affirmation of service to the effect that that summons had been served on Au Yeung On by ordinary post had been filed with the Registry.  On 27 September 1999, Master Lung granted Messrs Johnny Chiu’s application to cease to act as solicitors for the Plaintiff and then proceeded to hear the Defendants’ application to strike out the Plaintiff’s action in the absence of the Plaintiff or his legal representative.  Upon reading the affirmations filed by the parties and upon hearing counsel for the Defendants, Master Lung ordered that the Plaintiff’s amended originating summons be dismissed for want of prosecution pursuant to Order 28 rule 10 of the Rules of the High Court.

6.  On 25 November 2004, Au Yeung On’s daughter, Almaz Au-Yeung, as the personal representative of the estate of Au Yeung On, obtained leave to be substituted as the Plaintiff in this action.  On 26 November 2004, Almaz Au Yeung filed a Notice of Appeal against the decision of Master Lung out of time.

7.  The appeal was heard before Deputy High Court Judge Saunders on 22 March 2005.  An issue before Deputy High Court Judge Saunders was whether section 6 of the New Territories Leases (Extension) Ordinance (Cap 150) has the effect of creating a new estate in respect of government leases so that any person in adverse possession of land could not rely on the Limitation Ordinance (Cap 347) in respect of possession prior to either 25 April 1988 or 30 June 1997.  That issue had been before the Court of Appeal in Chan Tin Shi and Li Tin Sung and Others CACV No 71/2003.  The opinion of the Court of Appeal was divided.  The parties went on appeal to the Court of Final Appeal in FACV No 7/2005.  Deputy High Court Judge Saunders adjourned the hearing of this appeal pending the determination by the Court of Final Appeal in FACV No 7/2005.  On 5 January 2006, the Court of Final Appeal delivered judgment in which the issue relating to section 6 of the New Territories Leases (Extension) Ordinance was resolved in favour of the Plaintiff. 

Appeal out of time

8.  Mr Cheung, counsel for the Defendants, took no issue that the appeal was filed out of time.  The delay here is not substantial.  The Notice of Appeal was filed 46 days after the prescribed period of appeal.  The delay is excusable due to the death of Au Yeung On, as a result of which no one could conduct the proceedings on the Plaintiff’s behalf.  The daughter had to apply for letters of administration and to apply for leave to search the court file and familiarise herself with the case.  This is an appropriate case for leave to be granted to enable the Plaintiff to appeal out of time if she is able to show merit in her appeal.

Grounds of appeal and grounds for striking out

9.  The Defendants sought to support the order of the Master on the following grounds:

(1) there are no merits in the Plaintiff’s claim;

(2) there has been contumelious and/or inexcusable delay in the prosecution of this claim; and further the Plaintiff had no intention to prosecute this claim; and

(3) the delay in prosecuting this claim has caused serious prejudice to the Defendants; and further the development of the land in question since the issue of the originating summons has made a fair trial impossible.

10.  The Plaintiff argued otherwise and relied on the additional ground that the Master’s order was irregular because it was obtained when Au Yeung On was deceased and unrepresented.  It would be convenient to deal with this ground of appeal first and get it out of the way before considering the real merit of the appeal.

Whether the Master’s decision was irregular

11.  Mr Chow, counsel for the Plaintiff, advanced for the first time during this appeal that the Master’s order striking out the Plaintiff’s action was irregular.  This ground had not been argued by Mr Sham who last appeared on behalf of the Plaintiff in this appeal.  Mr Chow referred to Almaz Au Yeung’s affirmation in which she alleged that on 24 September 2004, she received a letter from Messrs Johnny Chiu informing Au Yeung On of the hearing on 27 September 2004.  Almaz Au Yeung said she then spoke to a Mr Tam of Messrs Johnny Chiu and instructed Messrs Johnny Chiu to apply for an adjournment so that she could deal with the matter.  Presumably, she had also informed Messrs Johnny Chiu of the death of Au Yeung On.  She said, unknown to her, Messrs Johnny Chiu applied for a declaration that they ceased to act for Au Yeung On on 27 September 2004 and that following the making of an order to that effect by Master Lung, the Master heard the striking out application and struck out the Plaintiff’s action. 

12.  Mr Chow submitted that the order made by Master Lung was irregular for two reasons.  Firstly, he argued that the order declaring Messrs Johnny Chiu ceased to act as solicitor for the Plaintiff was irregular because the notice of hearing of that application could not have been served on Au Yeung On who was dead at that time.  He further argued that upon receipt of the request for adjournment by Almaz Au Yeung, Messrs Johnny Chiu should have informed the Master of the death of Au Yeung On and requested an adjournment of both Messrs Johnny Chiu’s application to cease to act and the Defendants’ striking out application.  Secondly, Mr Chow referred to Order 67 under which Messrs Johnny Chiu’s application to cease to act for Au Yeung On was made.  Mr Chow submitted that pursuant to Order 67 rule 6(1) Messrs Johnny Chiu should have continued to act as Au Yeung On’s solicitor on 27 September 2004 until the final conclusion of the action unless the order of the Master had been served on the Defendants and certain procedures had been complied with, but the order had not been served until 26 October 2004.  Hence, Mr Chow argued that Messrs Johnny Chiu should have informed the Master of the death of Au Yeung On and sought an adjournment of hearing of the Defendants’ striking out application on 27 September 2004.

13.  In respect of Mr Chow’s first argument, Mr Cheung, counsel for the Defendants, submitted that Almaz Au Yeung’s allegations against Messrs Johnny Chiu were very serious allegations made against one’s own solicitor and were extremely bizarre.  He argued that there must be more that had occurred between Almaz Au Yeung and Messrs Johnny Chiu which she did not disclose in her affirmation.  I think the allegations were very serious ones made against an officer of the court.  The allegations were so bizarre that they were hardly credible.  The general rule is that a retainer is terminated upon the death of the client.  If indeed Almaz Au Yeung had told Messrs Johnny Chiu that Au Yeung On had died, there is no reason why Messrs Johnny Chiu did not inform the Master to have himself discharged from acting for Au Yeung On and for the Master to make consequential directions under Order 15 rule 6A.  But I do not find it necessary to weigh what Almaz Au Yeung said in her affirmation against what was said in the affidavits filed by Messrs Johnny Chiu in support of the application to cease to act for Au Yeung On.  Whether I believe in Almaz Au Yeung’s allegations or not, the indisputable fact is that at the time Master Lung heard Messrs Johnny Chiu’s application to cease to act and the Defendants’ striking out application, the Plaintiff in that action, Au Yeung On was deceased.  The hearing of both applications were nullity and the Master’s order striking out Au Yeung On’s action is liable to be set aside as being irregular, howsoever blameless the Defendants were.

14.  As for Mr Chow’s second argument, I think it is purely technical and has no bearing on the order of Master Lung.  The effect of a solicitor’s failure to serve the master’s order declaring that he has ceased to be solicitor of his client on the other parties to a litigation and the related procedures of filing is that the solicitor shall until completion of those procedures be considered the solicitor of that client.  The effect therefore is that Messrs Johnny Chiu shall be considered as the solicitor of Au Yeung On until 26 October 2004 when the procedures were completed.  But in any event, Messrs Johnny Chiu had no authority to act for Au Yeung On as his retainer had been terminated on 5 August 2004 before the hearing of the Defendants’ striking out application.  Mr Chow’s second argument could have no bearing on the order of Master Lung, which in any event has to be set aside on the ground that Au Yeung On had died.

15.  However, as an appeal from a master’s decision is a hearing de novo, the ultimate question I have to decide is whether the jurisdiction to strike out the proceedings was properly exercised.  Regularity or otherwise of the Master’s decision based on a technicality which no longer exists before me on appeal is no longer relevant.  The technicality created by the death of Au Yeung On has been removed with Almaz Au Yeung substituting Au Yeung On as the Plaintiff in this action.  Thus, if as a matter of law the jurisdiction should be exercised on the facts of the case, it shall be my duty to uphold the decision of the Master despite the technicality rather than to allow the appeal and restore the action only for the purpose of remitting it back to the Master to have the proceedings struck out again.  That would be poor case management.  If despite the technicality the order of the Master could not be upheld, it is only just that the appeal should be allowed so that the proceedings could proceed with due dispatch as least from this moment on.  Despite the ingenuity of Mr Chow’s arguments, for reasons as I have explained, they do not advance the Plaintiff’s case any further because in any event the outcome of the appeal depends on its merit.  To the merits of the appeal I now turn.

The principles in striking out for failure to prosecute proceedings with due dispatch

16.  In an action begun by an originating summons, the plaintiff must before the expiration of fourteen days after the defendant has acknowledged service, file with the court the affidavit evidence on which he intends to rely: Order 28 rule 1A.  The plaintiff must also within a month thereafter obtain an appointment for the attendance of the parties before the court for the hearing of the summons: Order 28 rule 2.  If the plaintiff has not filed his evidence within time, the proper course for the defendant to take is to apply under Order 28 rule 10 for the proceedings to be dismissed for the plaintiff’s failure to prosecute proceedings with due dispatch.

17.  The principles governing the court’s exercise of jurisdiction in striking out originating summons proceedings, whether under Order 28 rule 10 or under the inherent jurisdiction, has been set out by the House of Lords in Birkett and James [1978] AC 297 which was followed by the Court of Appeal in Hongkong and Shanghai Banking Corp Ltd and Kuan Tao Sheng & Others [1998] 2 HKLRD 585.  In Birkett and James, the plaintiff issued a writ in July 1972.  The action proceeded with reasonable dispatch until June 1973, when an order was made for the trial of preliminary issues of fact which required the action to be set down for trial within 28 days.  No further steps were taken by the plaintiff until July 1975 when he gave notice of intention to proceed.  In October 1975, some six months before the limitation period applicable to the plaintiff’s cause of action was due to expire, the defendant applied for an order to dismiss the plaintiff’s action for want of prosecution.  The registrar refused the defendant’s application.  The parties went on appeal all the way to the House of Lords. 

18.  The House of Lords held that the power of the court to dismiss an action for want of prosecution should be exercised only (1) where the plaintiff’s default had been intentional and contumelious or (2) where there had been inordinate and inexcusable delay on his or his lawyers’ part giving rise to a substantial risk that a fair trial would not be possible or to serious prejudice to the defendant.  It also held that other than in a case of contumelious conduct on the plaintiff’s part, the jurisdiction should not normally be exercised within the currency of the limitation period, save in an exceptional case.  The following speech of Lord Diplock at 321 B-D is illuminating:

“The court may and ought to exercise such powers as it possesses under the rules to make the plaintiff pursue his action with all proper diligence, particularly where at the trial the case will turn upon the recollection of witnesses to past events.  For this purpose the court may make peremptory orders providing for the dismissal of the action for non-compliance with its order as to the time by which a particular step in the proceedings is to be taken.  Disobedience to such an order would qualify as “intentional and contumelious” within the meaning of the first principle laid down in Allen v McAlpine.  But where no question of non-compliance with a peremptory order is involved the court is not in my view entitled to treat as “inordinate delay” justifying dismissal of the action in accordance with the second principle in Allen v McAlpine a total time elapsed since the accrual of the cause of action which is no greater than the limitation period within which the statue allows plaintiffs to start that action.  To dismiss the action in such circumstances would, in my view, involve an error in principle in the exercise of judicial “discretion” which it is the function of the appellate court to correct.”

19.  There are two limbs under which the court’s jurisdiction to strike out proceedings may be exercised.  The first is that the plaintiff’s default in proceeding with due dispatch has been intentional and contumelious.  Intention is a question of fact which could be readily inferred from the delay to take action.  “Intentional and contumelious” has a special meaning.  In Birkett and James, Lord Diplock held at 321 that disobedience to the court’s peremptory orders providing for dismissal of the action for non-compliance with its order as to the time by which a particular step in the proceedings is to be taken would qualify as intentional and contumelious.  The plaintiff’s default occasioned by such intentional and contumelious conduct would justify the exercise of the jurisdiction to strike out the action even during the currency of the limitation period.

20.  The second limb is that the plaintiff has been guilty of inordinate and inexcusable delay giving rise to a substantial risk that a fair trial would not be possible or giving rise to serious prejudice to the defendant.  Whether a delay is inordinate and inexcusable is also a question of fact.  Usually long and unexplained delay would be inordinate and inexcusable.  But in addition to delay, the defendant has to show that such delay gives rise to a substantial risk that a fair trial would not be possible or gives rise to serious prejudice to the defendant, either as between themselves and the plaintiff or as between each other or as between them and a third party.  But unlike the first limb, the court’s jurisdiction to strike out under the second limb should not normally be exercised during the currency of the limitation period save in an exceptional case.  This is because if all that the plaintiff has done was to let the action go to sleep, which is short of an abuse of process of the court, there is nothing to prevent him from starting a fresh action within the limitation period and proceed with all proper diligence not withstanding that his previous action had been dismissed for want of prosecution.  More costs and time would have been wasted by dismissing an action within the currency of the limitation period than if the court were to make peremptory orders to ensure that the plaintiff would proceed with due dispatch.

21.  What is an exceptional case in which it is proper for the jurisdiction to be exercised even during the currency of the limitation period is difficult of definition.  In Birkett and James, Lord Salmon said at 328 that this can happen only in the most rare and exceptional circumstances.  Lord Edmund-Davies said at 334 that the case must be quite exceptional and difficult to imagine where the court should within the limitation period dismiss an action simply for want of prosecution.  This is an exceptionally high standard which his Lordship explained is partially justified by the fact that in a flagrant case the defendant can always seek peremptory orders which, if disobeyed, render the plaintiff liable to have his action struck out on the ground of contumelious default.  At 320, Lord Diplock quoted Spring Grove Services Ltd v Deane (1972) 116 SJ 844 as an example of an exceptional case.  That was a case where the plaintiff’s conduct in the previous proceedings has induced the defendant to do something which will create more difficulties for him in presenting his case at the trial than he would have had if the previous proceedings had never been started.  It seems from their Lordships’ speeches, the standard is as high as proving an abuse of the process of the court.  Thus, it is only in very rare and exceptional cases amounting to an abuse of the process of the court that this jurisdiction will be exercised within the currency of the limitation period.

22.  In Birkett and James, an order was made for the trial of preliminary issues of fact, suggesting that there were triable issues.  However, it appears that merit or lack of merit is not a relevant consideration in an application to strike out for want of prosecution under Order 28 rule 10.  It should also be noted that nowhere in the judgment did their Lordships refer to merit or lack of merit in the plaintiff’s case.  In my view, an application under this rule is premised on the plaintiff’s intentional and contumelious conduct or inordinate and inexcusable delay.  It has nothing to do with merit.  A meritorious action may be struck out because of intentional and contumelious default of the plaintiff in prosecuting the claim.  An application to strike out a plaintiff’s action for want of prosecution is not the same as an application for summary judgment against a defendant under Order 13, where merit is at issue.  It is an application to strike out an action for one specific reason, that is for want of prosecution or for failing to proceed with reasonable dispatch.  If it is alleged that the plaintiff’s action is unmeritorious, an application should be made to have it struck out under Order 18 rule 19 as disclosing no reasonable clause of action based on the pleading or as being scandalous, frivolous and vexatious or otherwise an abuse of process in that it is absolutely devoid of merit.  Otherwise, merit is usually a matter to be resolved at trial.  Accordingly, in my opinion, merit or lack of merit in the plaintiff’s case is not a relevant issue to be considered in an application to strike out for want of prosecution under Order 28 rule 10.  To succeed, the defendant does not have to prove lack of merit in the plaintiff’s action.  Nor can a plaintiff resist such an application on the ground of merit if he is guilty of intentional and contumelious default or inordinate and inexcusable delay.  My opinion on this point of law is beneficial to the Defendants in that they do not have to prove lack of merit in the Plaintiff’s case.  Despite the time counsel have spent arguing on merit, it is just a non-issue.  But, if I have to make a finding on this issue, I would find in favour of the Plaintiff.

23.  Having set out the law, I now turn to consider the merit of the appeal.

Limb (1) – Intentional and contumelious default

24.  Mr Cheung criticised the Plaintiff’s failure in filing affidavit evidence pursuant to Order 28 rule 1A in support of his originating summons.  It is true that the Plaintiff’s first affirmation in connection with this action was filed on 28 June 2004, six weeks before the fifth anniversary of the filing of his originating summons.  The affirmation was only filed in opposition to the Defendant’s striking out application pursuant to the direction of Master Ho.  It is obvious that this affirmation would not have been filed but for the Defendant’s striking out application.  Neither the Plaintiff nor counsel offered any explanation for the delay.  In the absence of explanation, I find the delay was inordinate and inexcusable.  Does that amount to intentional and contumelious default?

25.  Despite Mr Cheung argued that there had been contumelious delay in the prosecution of the claim, his argument only revolved around delay, the lack of merit, the lack of intention to proceed and prejudice.  No argument was advanced that the default had been intentional and contumelious within the meaning as defined by Lord Diplock.  The main thrust of Mr Cheung’s argument was that there was inordinate delay.  There was failure on the part of the Plaintiff to comply with Order 28 rule 1A in filing affidavit evidence setting out the basis of the claim within two weeks of acknowledgement of service by the Defendants and failure to set the case down for hearing within one month thereafter.  Mr Cheung submitted that had there been no striking out action taken by the Defendants, the originating summons would likely have been dormant indefinitely going beyond the limitation period.  He emphasised the total lack of explanation for the delay and submitted that the real reason was that the Plaintiff had no intention to proceed because of the lack of merit in his case. 

26.  I accept that there has been inordinate and inexcusable delay in the prosecution of this action by the Plaintiff, but I cannot agree that there was no intention on the part of the Plaintiff to proceed due to lack of merit.  Indeed the filing of the Notice of Intention to Proceed by the Plaintiff and the present appeal speaks for itself.  In my view, merit or lack of merit is not a relevant issue that I have to consider in the case of an application to strike out under Order 28 rule 10.  As I have said, if I have to make a finding on merit, I would find the Plaintiff has demonstrated an arguable case on the merit.  There was inordinate delay. It was unexplained and could not be explained as Au Yeung On had passed away.  It was inexcusable.  However, on the fact, no peremptory order had been made and there was no non-compliance of any such order.  The Plaintiff’s delay or default has not been intentional and contumelious within the meaning of Birkett and James.  The application to strike out based on this ground must be dismissed.

Limb (2) – Inordinate and inexcusable delay

27.  As was held in Birkett and James, inordinate delay by itself does not justify the action to be struck out.  The Defendants have to show that the delay gives rise to a substantial risk that a fair trial would not be possible or gives rise to serious prejudice to the Defendants.  As the application was made during the currency of the limitation period, the Defendants have, in addition, to show that this is an exceptional case which justifies the exercise of this extraordinary jurisdiction.

28.  I consider the delay inordinate and inexcusable.  Mr Cheung argued that the delay had given rise to a substantial risk that a fair trial would not be possible because the landscape had changed.  Sub-section 3 and the adjacent land had been resumed by the Government and converted.  Mr Cheung argued that Sub-section 3, the pond including the fish in question had now disappeared.  He said the Plaintiff had never been able to adduce evidence to identify exactly which part of the land he had occupied.  He also argued that with the departure of Au Yeung On, it had now become impossible for the Defendants to cross-examine him, in particular with regard to his alleged fish breeding business.  He further argued that Au Yeung On’s wife and daughter would not be appropriate witnesses for cross-examination.  Accordingly, he submitted that given this long lapse of time since the issue of the originating summons, a fair trial must now become impossible. 

29.  With respect, I am quite unable to agree with Mr Cheung’s argument.  Though the landscape had changed, the Defendants have a good collection of aerial photographs of the site in question taken over the years.  Those photographs and more of them are still available from the Lands Department.  They are incontrovertible.  The Defendants’ position would not be any worse off now than they were in 1999.  Furthermore, the Plaintiff bears the burden of proof.  The effect, if any, of the departure of Au Yeung On and his unavailability for cross-examination would therefore adversely affect the Plaintiff more than it would affect the Defendants who can rely on their registration as the owners of Sub-section 3.  The benefit of the opportunity of cross-examining Au Yeung On is illusory.  Furthermore, there is no suggestion that the delay has resulted in witnesses whom the Defendants intended to call or documents which the Defendants intended to produce being unavailable. The risk that a fair trial will become impossible is neither apparent nor real.

30.  The other prejudice relied on by Mr Cheung is that the Defendants were being denied longer of the compensation money which is being held by Government without interest.  The compensation money is well secured with the Government.  The prejudice which Mr Cheung had in mind was the possible loss of interest which could have been generated from the compensation money.  Though not insubstantial, it is not anything which cannot be compensated for by money and there is nothing to suggest that the Plaintiff is not good for any damages that may be awarded on a counterclaim.  As the question of interest would only arise if the Plaintiff is unsuccessful at the end of the day, I do not consider this as a real prejudice for the purpose of a striking out application.  Even if I am wrong about this, there is nothing to suggest that this is an exceptional case.

31.  In conclusion, this is just a case of the Plaintiff sleeping on his summons which he could have issued at the time when the striking out application was made.  Although the delay is inordinate and inexcusable, the Defendants have failed to show that the delay has given rise either to a substantial risk that a fair trial will become impossible or to serious prejudice to the Defendants.  Furthermore, the striking out application was made during the currency of the limitation period.  There is a total failure on the part of the Defendants to show that this is an exceptional case which justifies the exercise of this extraordinary jurisdiction by the Court.  The Defendants’ application to strike out the Plaintiff’s action on this ground must also fail. 

Merit

32.  The above conclusion is sufficient for me to dispose of this appeal.  I shall, however, just in case I am wrong about the issue as to merits, deal with that issue here.

33.  The Plaintiff’s claim is based on adverse possession.  What a squatter has to prove in order to establish a claim of adverse possession has been succinctly summarised by the learned authors of The Law of Real Property, Megarry and Wade, 6^th ed at paragraphs 21-016 – 21-018.  The squatter must prove that he has both factual possession of the land and the requisite intention to possess.  To establish factual possession, the squatter must demonstrate that by his acts he has taken a sufficient degree of exclusive physical control over the land in question.  This is a question of fact depending on all the circumstances, in particular the nature of the land and the manner in which such land is commonly enjoyed.  The type of conduct which indicates possession must vary with the type of land.  In the case of open land, absolute physical control is normally impracticable.  Fencing off or enclosing land is the strongest possible evidence of possession to the exclusion of others but is not the only possible evidence.  Where the squatter performs clear acts of ownership, he does not have to show that they inconvenienced or otherwise affected the owner. 

34.  In the originating summons, Au Yeung On pleaded that he had been continuously in adverse possession of Sub-section 3 and sub-sections 2 and 4 of Section H since 1950 and he built a house in sub-section 2 as his residence.  In his affirmation, he stated that since 1965 he had been employed by a Mr Liu Kam Chung to work on some fishing ponds in other lots.  He averred that since 1971 he began to use some fish ponds for his own fish farming business. 

35.  Apart from criticising the discrepancy between the Plaintiff’s case as pleaded in the originating summons and as averred in his affirmation as to the date when adverse possession began, Mr Cheung criticised the Plaintiff’s case of adverse possession since 1965 was not supported by the aerial photographs which indicated that in the 1960s there were no fish ponds in the Lot.  Be that as it may, it is sufficient for the Plaintiff to prove adverse possession for twenty years.  The evidence according to Au Yeung On and his wife, Yau Mui Fa, is that they and their family had been using Sub-section 3 at the latest since 1971.  That evidence is supported by the aerial photographs taken in 1972 by the Survey and Mapping Office of the Lands Department.  Even according to Mr Che Shing Cheong’s second affirmation filed on behalf of the Defendants, the Defendants do not dispute that since 1973, Sub-section 3 had been turned into a fish pond.  According to Yau Mui Fa, the pond used to be a large pond covering Sub-section 3 and the other three adjacent sub-sections but had been divided into smaller ponds due to the needs of Au Yeung On’s fish farming business.  This is also supported by later aerial photographs.   

36.  According to Au Yeung On, in about 1992, sub-section 4 was returned to its owner, Mr Liu Koon Keung, who succeeded his father Liu Kam Chung as the owner of the lot for a payment of $100,000.  Liu Koon Keung then filled up the pond and used it as parking space for container trucks and car repairs.  Liu Koon Keung also paid Au Yeung On a monthly fee for using part of Sub-section 3 so that he could use sub-section 4 more effectively.  Hence as shown in the aerial photographs, part of Sub-section 3 was also filled up and used for parking container trucks and for car repairing work. 

37.  The evidence tendered by the Defendants is that Sub-section 3 had not been built upon by the Plaintiff and had not been fenced off to the exclusion of others.  The Defendants produced photographs taken in August 1990 and August 1999 showing that they had free access to Sub-section 3 as evidence that the Plaintiff had no intention to occupy Sub-section 3 for his own exclusive use or enjoyment.  While fencing or enclosure is strong evidence of possession and exclusion of others, lack of fencing or enclosure is not conclusive of a lack of intention to possess or of lack of possession.  The type of conduct which indicates possession must vary with the type of land and the use to which the land is put.  It is not impracticable to have the fish pond enclosed.  The lack of enclosure is a factor which weighs against the Plaintiff. 

38.  On the other hand, there is no dispute that District Lands Office awarded ex-gratia compensation in the amount of $75,216.70 to Au Yeung On for resumption of his fish pond in Sub-section 3 and sub-section 2 and another amount of $24,741.50 in respect of installations in the fish pond.  This is strong evidence that Au Yeung On was in possession of Sub-section 3.  The District Lands Office would not have awarded the compensation if they were not satisfied that Au Yeung On was in actual possession of Sub-section 3.  There is no evidence from the Defendants to contradict this evidence.

39.  While there are some inadequacies in the Plaintiff’s case, such as the lack of enclosure and buildings on Sub-section 3, there are ample evidence of exercise of right of owner by the Plaintiff over Sub-section 3 which is inconsistent with the right of the Defendants as registered owners of the Lot.  For the purpose of resisting an application to strike out proceedings for want of prosecution, I think a similar test as that applicable to a defendant seeking leave to defend under an Order 14 application is applicable.  The plaintiff has to show that there are triable issues.  He has to satisfy the court that he has a real or bona fide cause of action.  His case must be supported by credible or believable evidence in the light of the evidence placed before the court.  The test at this stage is simply whether the plaintiff’s assertions are believable.  The Court has to make some assessment but must not embark on a mini trial on affidavits.  If the Plaintiff has to show merit in order to resist the application to strike out the proceedings, adopting the above approach, I am satisfied that she has shown triable issues and a meritorious claim.

Conclusion

40.  For the above reasons, I am satisfied that the order of the Master was erroneous as a matter of legal principle.  Accordingly, I grant leave to the Plaintiff to extend time for filing the Notice of Appeal, treat this hearing as the hearing of the appeal and allow the Plaintiff’s appeal.  I set aside the order of Master Lung made on 27 September 2004 dismissing the Plaintiff’s action for failure to prosecute proceedings with due dispatch.  I order that the action be restored and the checklist review hearing be fixed.  I make a costs order nisi that there be no order as to costs of the Defendants’ application to strike out before the Master and that the costs of this appeal, including the costs reserved at the adjourned hearing on 22 March 2005 be to the Plaintiff with certificate for counsel, to be taxed if not agreed.