WONG CHONG KWAI YIN v. TSANG HAU LING AND OTHERS

HCA 939/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 939 OF 2005

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D E C I S I O N

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1.  There is before me an application by summons by the 1^st defendant to strike out the plaintiff’s action on the ground that it is an abuse of the process of the court by reason of the delay in the proceedings that has occurred, and the prejudice that has been caused to the 1^st defendant. There is also an application by the 1^st defendant for leave to amend the defence, which is to be dealt with if the strike-out application is unsuccessful.

2.  This action, which was instituted by Madam Wong Chong Kwai Yin (“Madam Wong”) on 23 May 2005, concerns two pieces of land known as Lot Nos 1976 and 1978 in Demarcation District No 116 (“DD116”), Yuen Long, New Territories (“the two Lots”). 

3.  Madam Wong’s mental condition has deteriorated in recent years and the action is now being carried on by her daughter, Joanna Wong, as her next friend.

4.  The plaintiff alleges that Madam Wong had been in adverse possession of the two Lots (as well as other lots in the region which are not the subject matter of this action) since around 1967. 

5.  The registered owners of the two Lots were originally both Tsang Hoi Fan and Tsang Hon Kam, who were brothers.  They were registered as owners as early as in 1935. 

6.  The 1^st defendant, when the action was commenced, was Madam Tang Lan Fong (“Madam Tang”).  She was the wife of Tsang Chun Wai, who was the son of Tsang Hon Kam. 

7.  By an action instituted in 1999 (HCA 10749/1999) (“the 1999 action”) against Tsang Hoi Fan and Tsang Hon Kam, Madam  Tang obtained a judgment from Master Barnes (“the 1999 judgment”), apparently without opposition, declaring that she had acquired possessory title to a number of lots in DD116, including the two Lots, and that the title of the two defendants there, as registered owners, had been extinguished. 

8.  On the strength of that judgment, the 1^st defendant assigned the two Lots, in addition to other lots, to Tang Kwong Yin, the 2^nd defendant herein, on 1 February 2002. 

9.  This explains why the plaintiff’s action here before me was brought against Madam Tang and Tang Kwong Yin as the 1^st and 2^nd defendants respectively (although the 2^nd defendant assigned the two Lots back to the 1^st defendant on 5 July 2005, soon after this action was commenced).  For reasons that have not been gone into, at one stage the personal representatives of Tsang Hoi Fan and Tsang Hon Kam were joined in this action as the 3^rd and 4^th defendants respectively, but the action was subsequently discontinued as against them. 

10.  Madam Tang passed away on 23 November 2006.  The action is now being defended by Madam Tsang Hau Ling (“Madam Tsang”), the daughter of, and executrix of the estate of, Madam Tang. 

11.  In support of her claim of adverse possession, the plaintiff alleges that the 1999 judgment obtained by Madam Tang declaring she had obtained possessory title was obtained by fraud and by collusion and should be set aside.  Essentially it is alleged that Madam Tang had not in fact been in possession of the land in question (including the two Lots), but because her husband and his brother, who were successors to the registered owners, had experienced great difficulty in obtaining formal succession to the land, the 1999 action was devised as a means to inherit it, circumventing any necessary formal succession procedures. 

12.  The plaintiff also alleges that the defendants had, by themselves and/or their agents, in 2004 and 2005, entered into the two Lots without Madam Wong’s consent and harassed and intimidated her.  For these acts, the plaintiff claims damages for trespass and harassment. 

13.  The principles guiding the exercise of the court’s discretion to strike out proceedings in this type of application are set out in the Court of Final Appeal’s judgment in Wing Fai Construction Company Limited (in liquidation) v Yip Kwong Robert (2011) 14 HKCFAR 935. They are well-known, and I have borne them in mind and will not repeat them here. 

14.  On this application, Mr Paul Wong for the 1^st defendant argued that there had been inordinate and inexcusable delay and that the 1^st defendant would be prejudiced in a trial.  The alleged delay occurred, it is said, during the continuous period between October 2006 and April 2015. 

15.  To deal with the argument, it is necessary to examine the events during this period more closely.  As suggested by Mr Andrew Mak, who has appeared for the plaintiff, the history may be broken down into five periods: 

(1)   October 2006 to 1 April 2009

The plaintiff’s witness statements were filed in October 2006.  Thereafter Madam Tang died on 23 November 2006 and Madam Tsang obtained probate in August 2007.  Following Madam Tang’s death, the two sides started in 2007 to negotiate for a settlement.  Although Madam Tsang denied having negotiated with the plaintiff, the documents available show that Tsang Kwok Ip, her brother and one of the beneficiaries and executors named in the will (though he did not take up probate), had discussed with the plaintiff’s solicitors in August 2007, and a draft settlement agreement was revised in accordance with his comments, though it was eventually not entered into. 

Another round of negotiations took place between March and May 2008, between the plaintiff and Tsang Kwok Ip, and another draft settlement agreement was produced.  This contradicted Madam Tsang’s assertion that nothing of substance was ever discussed or exchanged, and on this application the 1^st defendant has failed to adduce any evidence from Tsang Kwok Ip, in relation to the course of negotiations. 

For a brief period between July and August 2008, the plaintiff acted in person, followed by a change of solicitors in August 2008. 

In these circumstances, it seems to me that the delay during this period was slight.  The death of Madam Tang was clearly a major event, following which the parties entered into negotiations.  I accept that the existence of negotiations is not necessarily an excuse for prolonged delay, but it is a factor to take into account. 

(2)   2 April 2009 to October 2010

On 2 April 2009 the Civil Justice Reform and the amended Rules of the High Court came into operation.  On 8 July 2009, the plaintiff, again, retained new solicitors, who would need some time to read into the case.  More importantly, on 13 July 2009, Madam Wong suffered an acute stroke, The medical report stated:

“Patient remained chair bound and aphasic. She required long-term foley catheter. She was not mentally fit for consent or making a statement on discharge.”

The evidence was that for about a year, the family was busy tending to Madam Wong’s needs because of her severe illness.  Madam Wong’s health problem also drained the family of financial resources, so that they made enquiries with the Legal Aid Department, but were given to understand that they might not be eligible for legal aid.  It seems to me that the inaction during such a period was, in the scheme of things, excusable. 

(3)   26 October 2010 to October 2011 

I do not think there was any delay during this period.  On 26 October 2010 Joanna Wong filed a notice of intention to proceed and a notice to act in person.  From January 2011 onwards she took various steps, in person, to try to have the proceedings carried on having regard to Madam Wong’s mental condition and Madam Tang’s death.  She instructed solicitors again in June 2011.  In October 2011 the parties were in touch with a view to mediation. 

(4)   October 2011 to 7 November 2014 

From October 2011 onwards steps were taken for mediation.  A legally qualified mediator was appointed.  The first session took place on 12 November 2011.  The subsequent two sessions did not take place until 11 September 2013, and 25 February 2014 respectively.  There is no clear evidence what happened in between, and prima facie it seems to me that there was unexplained delay during this 22-month period. 

A draft settlement agreement was prepared in October 2013 but the 1^st defendant did not comment upon it.  In the end, the mediation was unsuccessful and in July 2014 the mediator issued a certificate. 

(5)   7 November 2014 to April 2015

On 7 November 2014 Joanna Wong issued a summons applying for herself to be appointed as next friend of Madam Wong and for Madam Tsang to represent the estate of Madam Tang.  At the hearing, the Master directed certain medical evidence be filed.  The application was later replaced by another summons dated 9 April 2015.  In the light of the steps taken, I do not think there was delay during this period.

16.  It seems to me, therefore, that relevant delay only occurred to a slight extent during the initial period of October 2006 to 1 April 2009, and during a 22-month interval that fell within the period of October 2011 to 7 November 2014.  Such delay is not to be endorsed with approval but while the lapse of time from the writ of summons to the present is very considerable, clearly this action is far from the worst kind of cases of delay.

17.  In any event Mr Wong accepted that delay alone does not justify an order of striking out on the ground of abuse.  In addition, the 1^st defendant has to show prejudice caused by the delay. I have endeavoured to set out certain principles relating to the question of prejudice in Tsang Foo (also known as Fu) Keung and Key Kwong Development Limited v Chu Jim Mi Jimmy (unreported, HCA 7140/1995, 12 July 2013) at §80, to which I have referred.  I now deal with the matters mentioned in the evidence and argument as giving rise to prejudice and potential prejudice: 

(1)   The 1^st defendant referred to a person called Mr Cheung Hei.  It is said that the two Lots were let to him for farming purposes, and that he might have had relevant evidence to give, contrary to the plaintiff’s case.  However, Mr Cheung died in 2004, even before this action was commenced. The unavailability of his evidence is therefore irrelevant for present purposes.

(2)   The children of Mr Cheung Hei: – Madam Tsang said that the children of Cheung Hei did not live anywhere near the two Lots and no villagers could tell her their whereabouts.  However, there is no basis to suggest that had the action proceeded without delay, these potential witnesses could have been located and procured to give evidence. 

(3)   The evidence also refers to a person called Mr Tang (or Tsang) Lok Man who might have known Mr Cheung Hei personally and who might have been able to give evidence regarding the occupation of the two Lots by Mr Cheung Hei, but he had emigrated to Canada “some years ago” with his entire family.  Madam Tsang was unable to contact him.  Again, there is nothing to show that this was the consequence of any delay on the part of the plaintiff.  Further, it is to be noted that there is no evidence that Madam Tsang took any steps earlier to gather evidence in defence of the proceedings. Indeed, in §28 of her 3^rd affirmation, she said:

“... I did not care to locate or solicit evidence for this utterly non-sense and totally fictitious claim. Also, I was not representing Madam Tang before. I did not see the need to collect evidence not until I was appointed to carry on these proceedings on behalf of the 1^st Defendant in 2015.”

(4)   Madam Tang died on 23 November 2006, only a month after the plaintiff filed her witness statements.  It is accepted by the 1^st defendant that irrespective of any delay in the progress of the action, she could not have attended the trial in any event. 

(5)   Madam Wong’s mental condition had deteriorated, apparently after the stroke in 2009.  Madam Tsang said she would be deprived of her “right” to cross-examine Madam Wong.  With respect, I do not see it in the same way – the fact that Madam Wong could not give evidence is not necessarily prejudicial to the 1^st defendant; on the contrary, it could be to her benefit because if Madam Wong is unable to give evidence, submissions can be made as to the weight that could or should be placed on her statements. 

(6)   As Mr Mak pointed out, apart from Madam Tang, there were two witnesses whose statements had been filed in 2006 on behalf of the 1^st defendant, namely, Cheng Kei Wang and Lee  Fat  Choi.  There is no specific evidence from the 1^st defendant that these witnesses are no longer available.  Mr Wong argued that the general complaint in Madam Tsang’s affirmation that she could not locate witnesses is sufficient, and should be read as covering these two persons and that I should assume that they are both now   unavailable.  I do not agree.  In this situation the 1^st defendant must condescend to particulars with regard to the prejudice she alleges she would suffer.  It is notable that according to their statements, Mr Cheng is Madam Tsang’s husband, and Mr Lee is her sister’s husband.  In the absence of specific explanation, I cannot see why it is said that these two witnesses could no longer be located.

(7)   As to the documents and information from Wong Hui & Co, relating to the 1999 action and judgment, which are said to be unavailable now, in the way I see the action, the more important issue is whether there was the requisite possession and intention for adverse possession on the part of the plaintiff.  Anyway there are two answers to this allegation of prejudice.  First, the allegation that the 1999 judgment was procured irregularly was there in the statement of claim from Day One.  Madam Tang clearly knew that Wong Hui & Co acted in the matter, for she referred to them in her defence.  It was incumbent upon a defendant, even if the plaintiff was not progressing the action, to prepare for his own defence: see Tsang Foo Keung at §34, and the cases cited therein.  The 1^st defendant ought to have gathered any necessary information and documents when she knew the case raised against the 1999 judgment, which, judging from the defence, she did in 2005.  If as a result of her failing to do that in time, the evidence is lost, a defendant cannot put all the blame on the plaintiff.

Secondly, even without any delay, on Mr Wong’s argument, the documents would only have been sought from Wong  Hui  &  Co in around 2009, 10 years after the 1999  judgment.  There is nothing to show that the documents would have been available then and that they had been disposed of or lost only in the last couple of years and not before 2009.

18.  In all the circumstances, I am not satisfied that there is any or any sufficient prejudice caused by such delay in the proceedings as I have found, I am not satisfied that a fair trial has been rendered impossible by any delay attributable to the plaintiff, or consequently, that there has been any such abuse of the court’s process as should warrant the draconian order of a strike-out of the entire action.  For all these reasons, I reject the 1^st defendant’s application to strike out.

19.  Coming to the question of costs on the strike-out, Mr Wong argued that even if the application fails, there should be no order as to costs.  That was the result in certain previous cases but costs is a matter of discretion that depends on the facts and circumstances of each case.  I do not think it would be right in this case to deprive the plaintiff of all her costs.  I think that a fair order is that the 1^st defendant do in any event pay the plaintiff the costs incurred after the date of the filing of Joanna Wong’s affirmation, with certificate for one counsel, to be taxed if not agreed. 

20.  As to the 1^st defendant’s application for leave to amend her defence, what is proposed involved the deletion of the entire defence previously filed, which was apparently prepared by Madam Tang herself in Chinese, and the substitution of a defence and counterclaim prepared in English by the 1^st defendant’s present legal representatives. The only point raised by Mr Mak on this application is that the 1^st defendant should provide an explanation why she is seeking to withdraw the averments in the “home-made” defence, that Mr Mak said amount to admissions that the 1999 judgment was obtained not on a true basis but as a stratagem to bypass proper succession procedures. 

21.  It seems to me in the circumstances of this case we should strive to avoid needless arguments as to whether the averments in question are admissions and so on and so forth.  The plaintiff is not seeking and has not indicated any intention to obtain a judgment on admissions.  The amendments, if allowed, would not alter the fact that the statements in question had been made by Madam Tang before in the original defence.  At trial those statements could still be relied upon by the plaintiff, if appropriate and subject to arguments about their true meaning, as evidence against the 1^st defendant herself, or in support of the plaintiff’s case.  Approaching the matter practically, I think the proper way to move this case forward is to give leave to amend as per the summons.