HSBC PRIVATE TRUST (HONG KONG) LTD v. AU-YEUNG CHUNG

HCA1662/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1662 OF 2001

R U L I N G

1.  This is a possession claim by the plaintiff in respect of land in the New Territories in which it alleges that the defendant is a trespasser.  The defendant denies this and counterclaims for a possessory title based on adverse possession for more than 20 years.  This, therefore, starts as a very familiar action for the court.  Nevertheless, on the first day of the trial, Mr Suen, who appears for the defendant, has applied by summons to amend the plaintiff’s re-amended reply and defence to counterclaim by adding a counterclaim to the defendant’s counterclaim.

2.  The basis of this proposed pleading is this.  Firstly, it will only arise if the defendant’s counterclaim succeeds and the court adjudges that there has been adverse possession for the requisite period thereby extinguishing the plaintiff’s title.  In such circumstances, the plaintiff counterclaims damages or compensation from the defendant for the loss of the plaintiff’s land to the defendant.  This is said to arise from the combined effect of the provisions of Article 6 and 105 of the Basic Law, which are these: Article 6:

“The Hong Kong Special Administrative Region shall protect the right of private ownership of property in accordance with the law;

Article 105:

“The Hong Kong Special Administrative Region shall, in accordance with the law, protect the right of individuals and legal persons to the acquisition, use, disposal and inheritance of property and their right to compensation for lawful deprivation of their property. Such compensation shall correspond to the real value of the property concerned at the time and shall be freely convertible and paid without undue delay.”

3.  Ideally, Mr Suen would wish for me to allow the amendment now, and after a short adjournment to enable the defendant to re-amend her pleadings, to deal with this point and then for the trial to proceed.  Realistically, that is not going to be possible.  The application is made very late.  Normally one would be critical of a party making such a late application but this type of claim is one that is completely undeveloped in our jurisprudence.  Mr Recorder McCoy, S.C., in a judgment handed down in September this year, and another by Deputy High Court Judge Saunders, also in September, have considered, without coming to any concluded view, that such a claim for compensation may be available.  Mr Recorder McCoy has, in his case, given directions for the trial of this issue but I have no indication as to when that trial is to take place.  I would have thought that his decision would then be appealed, perhaps all the way to the Court of Final Appeal.  Mr Szeto, for the defendant, says I should dismiss the application for two reasons.  Firstly, on the ground that it discloses no cause of action and, secondly, in my discretion, because it is too late.

4.  Sensing a number of procedural difficulties, Mr Suen has asked me to rule at this stage by way of case management as to whether I should merely adjourn his summons to abide the result of the trial, and if I dismiss the plaintiff’s claim and uphold the defendant’s counterclaim, then enter a caveat in the judgment to the effect that the judgment would be subject to my then hearing the plaintiff’s summons for re-amendment  of the reply and defence to counterclaim, and, if successful, then give directions and try the issue of compensation.  If he succeeds he would be content to then go on with the trial on this basis.  If he fails he wishes to reconsider his position on the summons.  Mr Szeto says that I should not allow the summons to be adjourned, I should hear it all out on its merits now and, he says, then dismiss it because that would be the right thing to do; his client, a poor widow, is entitled to know where she stands at the outset. 

5.  In my judgment, I do not think it right to approach this summons on a piecemeal basis.  I would wish to dispose of it one way or the other now before the trial starts, firstly, as a matter of good case management and, equally importantly, the defendant should know where she stands before she embarks on defending the action.  She should know what she is in for; what are the risks that she faces.  There are also legal aid considerations as to whether the Director of Legal Aid would be prepared to extend her certificate to cover this sort of Basic Law claim.  For all these reasons I am not prepared to do what Mr Suen asks for.  I wish to hear out the application to amend now and to rule on it before the start of the trial.