LAU WING HONG AND OTHERS v. WONG WOR HUNG AND ANOTHER

                 HCA 1454/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1454 OF 2003

_____________________

_____________________

JUDGMENT

_____________________

1. This is the adjourned pre-trial review of this action.  The plaintiffs apply by summons to strike out the defence and counterclaim of the defendants and ask for judgment. 

2. The plaintiffs are the registered owners of what have been described as “the Trespassed Land” in the statement of claim namely, the following lots of land all in Demarcation District 185, Shatin, New Territories :

(a) Lot No. 137 section A, sub-section 3;

(b) Lot No. 137 section A, sub-section 4;

(c) Lot No. 137 section A, sub-section 5;

(d) Lot No. 137 section B, sub-section 1; and

(e) Lot No. 137 Remaining Portion of section A.

3. The plaintiffs’ case is that the defendants have been trespassing on the Trespassed Land since in or about 1990.  It is pleaded in para. 16 of the statement of claim that in or about 1990 without the consent or approval of the plaintiffs, the defendants began to grow plants and trees in the portion of land coloured pink and depicted as ABCDEFGHI on the plan annexed to the statement of claim.

4. The defendants admit that they have been trespassers but their case is that their trespass took place from 1974.  They plead in para. 11 of the defence and counterclaim that without the prior consent or approval and intentionally to the exclusion of any person including the plaintiffs, they in 1974 began to grow plants and trees in the area coloured pink in the Plan III annexed to the defence and counterclaim which was extended in or about 1997 to the areas as depicted as ABCKJ on the plan referred to in the statement of claim.  The defendants also aver that in 1974 they built certain wire fence and gate around the area coloured pink in the Plan III annexed to the defence and counterclaim which in 1977 was extended to the area as depicted as ABCKJ in the plan referred to in the statement of claim. 

5. There is no dispute that the only defence relied on by the defendants is that the plaintiffs’ claim is statute-barred by reason of adverse possession on the part of the defendants and the counterclaim for the declaratory relief is on the same basis.

6. In view of the decision of the Court of Appeal in Chan Tin Shi v. Li Tin Sung & Ors [2005] 1 HKC 1, the defence and counterclaim is unsustainable and bound to fail.  It was decided by the Court of Appeal that the effect of the New Territories Leases (Extension) Ordinance, Cap. 150 was to create a new estate.  That being so, the fact that a squatter’s right may have been acquired would not affect the new lease which took effect either on the coming into operation of the New Territories Leases (Extension) Ordinance or upon expiry of the old lease in June 1997.  That decision is really determinative of this action.  Even assuming that the facts as asserted by the defendants are established, the defendants have no sustainable defence and counterclaim on the law as presently determined by the Court of Appeal in Chan Tin Shi. 

7. However, Chan Tin Shi is a decision that will be determined by the Court of Final Appeal.  I am told that the matter has been set down for hearing in November this year.  The question to be determined by the Court of Final Appeal is one of great general and public importance.  The question formulated by the Court of Appeal in their judgment dated 27 January 2005 in Chan Tin Shi is as follows :

“Whether the effect of Section 6 of the New Territories Leases (Extension) Ordinance Cap. 150 was to create a new estate in respect of government leases (save those excepted or excluded under that Ordinance), so that any person in adverse possession of the land cannot rely under the Limitation Ordinance Cap. 347 on possession prior to :
	(a)	25 April 1988; or
	(b)	30 June 1997,
	those being alternate dates which might possibly be argued as being relevant.”

8. Mr. Ngai submitted that the court should adjourn the plaintiffs’ summons to strike out the defence and counterclaim pending the outcome of the Court of Final Appeal’s decision in Chan Tin Shi. 

9. Mr. Ngai also relied on the decision in Derby & Co Ltd v. Weldon (No. 3) [1989] 3 All ER 118 for the proposition that the court in exercising its discretion whether to strike out the claim is not bound to apply the law as so stated by the Court of Appeal and is entitled to take into account the possibility that the decision may be reversed.  That case, however, provides, in my view, no assistance to the defendants and is clearly distinguishable.  It is clear from the judgment of Vinelott J at page 127 that amendments would be made to the statement of claim by adding additional and overlapping claims to the claim for the tort of conspiracy.  The striking out and deletion of the conspiracy claim would not significantly alter the course of the trial as the same or substantially the same facts would have to be investigated in relation to the other heads of claims.  In those circumstances, it is not surprising that Vinelott J decided not to strike out the claim for conspiracy.  That is of no assistance to the defendants.

10. I accept that I have discretion in the matter as to whether to adjourn the plaintiffs’ application or to deal with it now.  As I mentioned at the start, this is the adjourned pre-trial review.  The trial has been set down for hearing in July.  The appeal to the Court of Final Appeal will not be heard until November.  There is a possibility that the Court of Final Appeal will reverse the decision of the Court of Appeal.  There is also a possibility that the Court of Final Appeal will uphold the decision of the Court of Appeal.  In that event, if the matter is adjourned it seems to me that the plaintiffs would be unduly prejudiced.  Not only will they have to await the outcome of the decision in Chan Tin Shi but if the Court of Final Appeal did uphold the decision of the Court of Appeal, they may have to wait many months thereafter to obtain a hearing of their application.  That delay, in my view, would be unduly prejudicial to the plaintiffs.  They are entitled, in my view, to have the matter determined on the law as it presently stands.

11. In Hong Kong Ferry (Holdings) Co Ltd v. Chan Kwan Fat & Ors [1995] 1 HKC 542, the Court of Appeal was dealing with the situation where there was a pending appeal to the Privy Council on the effect of the New Territories (Renewable Crown Leases) Ordinance, Cap. 152.  The court there held that since there was a pending application for leave to the Privy Council, the correct course was to dismiss the appeal that they were dealing with but to stay execution of the order made below until after the determination of the application for leave to appeal to the Privy Council and further staying such execution, if that application was successful, until after the determination of the appeal to the Privy Council in that case.

12. That course was also adopted by Le Pichon J (as she then was) in Kung Wong Sau Hin & Anor v. Sze To Chun Keung & Ors [1996] 2 HKC 616 where she was also dealing with the effect of the New Territories (Renewable Crown Leases) Ordinance, Cap. 152.  She was dealing with an application to strike out the defence which she struck out as the defence was bound to fail on the law then in force.  However, she also ordered that the execution of the order for possession should be stayed until after the determination of the appeal in the Privy Council case.

13. More recently in Hong Kong Kam Lan Koon Limited v. Realray Investment Limited, HCA 15824 of 1999, by his ruling dated 30 March 2005 Lam J also refused an adjournment pending appeal to the Court of Final Appeal in Chan Tin Shi and dealt with the O.14A application before him and ordered a stay of execution. 

14. As I have said, there is a possibility that the Court of Final Appeal may reverse the decision of the Court of Appeal.  I am satisfied that I should not make an order at this stage which may prejudice the position of the defendants should that event occur.  Nevertheless, it seems to me that I ought to deal with the application to strike out and not adjourn the summons because the plaintiffs are entitled to have the matter determined on the law as it presently stands.  It seems to me that the prejudice to the plaintiffs far outweighs the prejudice to the defendants if the matter were adjourned.  It seems to me that in the interests of justice the matter ought to be dealt with by my dealing with the application to strike out.  There really is no answer to the summons to strike out, so I will strike out the defence and counterclaim and give judgment to the plaintiffs but it seems to me to be right to grant a stay of execution to the defendants so that their position is not prejudiced in the event the Court of Final Appeal reverses the decision of the Court of Appeal.  That is the order I make and I will hear the parties on the formal order that I should make.