SECRETARY FOR JUSTICE v. NG WAI TONG

cacv 351/2003

in the high court of the

hong kong special administrative region

court of appeal

civil appeal no. 351 of 2003

(on appeal from DCMP NO. 562 of 2003)

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REASONS FOR JUDGMENT

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Hon Rogers VP:

1.  This is an appeal from a judgment and order of HH Judge Chan given on 5 September 2003.  The matter before the judge was an application under Order 14A of the Rules of the District Court.  The judge held that pursuant to sections of 5, 7, 9 and 12 of the Demolished Buildings (Re-development of Sites) Ordinance, Cap. 337 (“the Ordinance”) and section 51 and the Fourth Schedule of the Conveyancing and Property Ordinance, Cap. 219 collectively, the Financial Secretary Incorporated (“FSI”) has the right and power to recover vacant possession of Section A of the New Kowloon Inland Lot No. 113 (“the Land”) from the defendant and that the FSI has not been barred by any provision of the Limitation Ordinance, Cap. 347 or otherwise from taking action to recover vacant possession of the Land from the defendant.  The judge further ordered that the defendant should deliver vacant possession of the Land to the plaintiff forthwith.  At the conclusion of the hearing of this appeal the appeal was dismissed with costs with reasons to be handed down in writing.

Background

2.  The history of the matter may be shortly stated.  In April 1989 there was an order for demolition of the building which was on the Land.  There was a notice of final award in the sum of $165,350 which was issued and registered at the Land Registry pursuant to section 9(1) of the Ordinance.  It is sufficient to state that in July 1991 the building was demolished and in August 1991 the defendant commenced occupying the Land.  The defendant takes the stance, which is not disputed, that he occupies the Land without reference to the registered owner, namely Wong Hoy Chau, and has been a squatter or trespasser on the Land at all material times.  Mr Koo, who appeared on behalf of the defendant on this appeal, maintained that the defendant had possessory title, which was good against all the world except against the registered owner, but that the defendant had not been in possession of the Land for a sufficient period of time to be able to take advantage of any of the provisions of the Limitation Ordinance.

3.  As already mentioned the final awards were published in the Gazette in March 1990.  The consequence of that is that under section 12(1) of the Ordinance the amount of those awards together with any interest accrued and accruing thereon constituted a charge on the Land in favour of the FSI in trust for the person or persons entitled to the compensation.

4.  It was in those circumstances that on 25 February 2000 notice was given that the FSI intended to sell the Land in accordance with the rights under section 12(3) of the Ordinance.  So far there is no dispute that the FSI was entitled to do so.

5.  However, the defendant claimed that he was entitled to pay off the amounts of the awards and the interest that had accrued and remained outstanding.  The reason he wished to do so is clear.  If there were no charge there would be no basis for the FSI to be able to sell the Land.  In my view, the defendant was not so entitled and no right to be so entitled has been demonstrated on this appeal.  The only right given by the statute to make payment of the amounts outstanding is given to the owner under section 9(2) of the Ordinance.  That reads as follows:

“(2)Where any protected tenant who has been awarded compensation in accordance with section 7 does not, within the period limited by subsection (1), demand payment of the compensation awarded to him, the owner may deposit with the Treasury the sum awarded together with any interest accrued due thereon under subsection (5).”

6.  Mr Koo argued that the wording of this section was not specific enough to exclude the possibility of some other person paying off the amount due.  He goes further, however, and says that as a person in possession the defendant has a right and interest in the land, albeit not an indefeasible right accrued against the legitimate owner, and that as such his payment should be accepted so that his rights of possession as against the whole world should not be disturbed.

7.  Sections 7, 8 and 9 of the Ordinance make it quite clear that the liability to pay the final awards is a liability of the owner.  The right to pay the money under section 9(2) is extended to a mortgagee under the provisions of section 7(11).  But that is the limit.  Mr Koo’s further argument breaks down once it is realised that the only basis upon which a payment can be made is that it is made on behalf of the owner.  If the payment is made by the defendant on behalf of the owner it is, in itself an acknowledgement of the owner’s rights and this would, therefore, of itself negate the existence of a possessory title adverse to the owner.  The flaw in the argument was a matter which counsel was unable to answer satisfactorily.  Moreover, Mr Koo was unable to provide any authority or basis for the proposition that a third party, such as the defendant, could make a payment to the FSI to be held in trust for those in favour of whom awards had been made which the FSI was obliged to accept so as to discharge the liability of the registered owner of the property.  In those circumstances the appeal fell to be dismissed.

Hon Le Pichon JA:

8.  I agree.

Hon Barma J:

9.  I agree.