LI CHI SING v. HOP YICK TONG WITH TAM SHING PING AS MANAGER

DCCJ 4116/2014

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 4116 OF 2014

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REASONS FOR DECISION

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1.  By an amended Writ endorsed with an Amended Statement of Claim filed on 26 July 2016, the Plaintiff claims against the Defendant for inter alia declarations that the Defendant’s title to the parcel or piece of land situated at and known as Lot No 1994 in Demarcation District 95, North District, New Territories, Hong Kong (“the Land”) has been extinguished and that the Plaintiff has established a possessory title to the Land by way of adverse possession. Upon the Defendant’s failing to file an Acknowledgement of Service and a Defence, the Plaintiff took out the present application for a judgment in default against the Defendant.

Service of court documents

2.  By an order made by a Master on 21 September 2015, the Plaintiff was given leave to effect service of the Writ of Summons and Statement of Claim by way of substituted service. Pursuant to the order, the Writ and Summons and the Statement of Claim were posted to the Defendant’s last known address and an advertisement was posted in a local newspaper. Service of the Amended Writ, the Amended Statement of Claim and the present summons for default judgment were effected in a similar manner pursuant to a separate order for substituted service. On the Plaintiff’s evidence, I am satisfied that the service of the proceedings has been duly effected.

The Plaintiff’s case

3.  The Plaintiff’s pleaded case is fairly simple. In 1952, the late father of the Plaintiff purchased a wooden hut sitting on the Land. Under the agreement between the Plaintiff’s father and the previous owner of the Wooden Hut, the Plaintiff’s father agreed to pay rents to Hop Yick Tong, the registered owner of the Land. However, according to the Plaintiff, his father had never paid any rent. Nor had the Defendant or its representative ever demanded payment of rent.

4.  In about 1969, the Plaintiff’s father converted the wooden hut into a 2-storey stone hut. The stone hut was secured by a lock. No one but the Plaintiff’s father’s family had access to it.  The father passed away in 1997. Since then, the Plaintiff and members of his family have been in continuous and exclusive occupation of the Land.

5.  Mr Lun, counsel for the Plaintiff, submits that this is a straight forward case of adverse possession, given the undisputed evidence that the Plaintiff by himself and through his father has been in factual possession of the Land for a sufficiently long period with the requisite intention to possess the land (animus possidendi).

Analysis

6.  I accept that there is no inflexible rule against granting a declaratory relief without a trial (see Lai Wai Kuen v Wong Shau Kwong [2004] 4 HKC 528, per Lam J (as he then was) at para. 6). However, even if the Plaintiff has been in exclusive possession of the Land for a sufficiently long period with the requisite intention, for the following reasons I do not think it would be appropriate to grant the reliefs sought without a trial.

7.  A salient feature that distinguishes the present case from other common adverse possession cases is that the action is brought against a defendant which is said to be a Tong. The peculiar nature of a Tso/Tong and the practical difficulty of claiming adverse possession against a Tso/Tong was discussed in the case of Leung Kuen Fai v Tang Kwong Yu T'ong or Tang Kwong Yu Tso [2002] 2 HKLRD 705. In that case, the land in question was registered in the name of a Tso. The plaintiff claimed to have dispossessed the Tso for more than 20 years and sought declarations that the title of the Tso had been extinguished pursuant to s 17 of the Limitation Ordinance. Deputy Judge Lam (as he then was) heard the matter by way of a preliminary issue hearing, in which the issue was framed as:-

“Whether by reason of births of male descendants to the Defendant from time to time … the Defendant’s title to [the Property] … and the Defendant and its managers to recover possession of the Property, have been preserved intact notwithstanding any adverse possession thereof the Plaintiff might have been able to establish.”

8.  After carefully examining the authorities, the learned Judge held that:-

(1) Tso is recognised as a form of Chinese customary landholding;

(2) The concept of trust is applicable to such landholding with the managers as trustees and the members for the time being as beneficiaries;

(3) The existing members of a Tso have beneficial interests in the Tso's landed property and such interest is within the meaning of equitable interests in land in s 10(1) of the Limitation Ordinance;

(4) A new born member of a Tso does not claim through another person and the provision in section 22 of the Limitation Ordinance for the extension of the limitation period in case of infancy would apply to an infant member. In effect the limitation period would be extended to 6 years after the member has reached the age of majority;

(5) Whenever a new member is born, a new equitable interest in the Tso’s land arises. A new limitation period, which would not expire until 6 years after the new member ceases to be an infant, would start to run from the date of birth of the new member;

(6) By reason of section 10(2) of the Limitation Ordinance, the title of the trustees (or managers) would not be extinguished so long as there is at least one beneficial owner whose right to recover the land is not barred.

9.  Leung Kuen Fai was considered and upheld by the Court of Appeal in Wong Shing Chau v To Kwok Keung CACV 20/2008. As the birth of a new member will automatically give rise to a new equitable interest in the Tso’s or Tong’s and a new limitation period will start to run upon the birth of the new member, in practical terms it is almost impossible to establish a squatter title to a Tso’s or Tong’s land.

10.  In this case, except that Hop Yick Tong is known to have three members, nothing is known about it and its members. It would be inappropriate to enter a declaratory judgment against it by default.

11.  Mr Lun for the Plaintiff argues that the Defendant in this action is not a hereditary Tong because there is no written record of its creation. Such argument is with respect wrong because there is no requirement that a Tso/Tong must have a written document proving its nature as a hereditary Tso/Tong: Tsang Kwong Kuen v Hau Wai Keung Gaius & Others [2014] 5 HKLRD 622, at para 9.

12.  Mr Lun further argues that Hop Yick Tong, the present Defendant, is not a Tong at all because one of its members, namely 張容保, has a different family name. In the absence of evidence as to how 張容保 came to become a member of Hop Yick Tong, I do not think it is open to the Plaintiff to say that the inclusion of a person with a different surname is per se evidence that the Tong was never properly constituted. In fact, the Plaintiff in his own pleadings calls the Defendant a Tong managed by 譚昇平.

13.  Further, it is stated in the list of members attached to the Confirmatory Sale dated 4 October 1951 that each of the three members of the Tong, namely譚昇平, 譚官發 and 張容保has 1/3 interest in the Land. Even if, as Mr Lun suggests, the creation of a hereditary Tong failed for some reasons, the parties’ failure to create a Tong would not result in 譚昇平 becoming the sole owner of the Land. To succeed in his claim for adverse possession, the Plaintiff will have to join not only 譚昇平but also 譚官發 and 張容保 as parties to this action. Without joining the latter two, the court cannot proceed to deal with their interests in the Land.

14.  In the circumstances of this case, I am not convinced that the Plaintiff is entitled to the declaratory reliefs sought. Hence, I order that the Plaintiff’s summons dated 5 December 2016 be dismissed with no order as to costs.

15.  I thank Mr Lun for his assistance.