NG HAK KEUNG (formerly known as NG SAM CHU) v. LEUNG YAU KING, the surviving Administratrix of the Estate of Leung Hung, Deceased

DCCJ 2066/2016

[2020] HKDC 564

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 2066 OF 2016

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BETWEEN

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JUDGMENT

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A. Claim

1.  By a re-amended writ of summons endorsed with a re-amended statement of claim dated 6 March 2019, the plaintiff asks for:

(1) a declaration that the defendant’s title to the Property (as defined below) has been extinguished by virtue of section 17 of the Limitation Ordinance (Cap 347);

(2) a declaration that the plaintiff has been in adverse possession of the Property for a period exceeding 12 years prior to the commencement of the action and has acquired an indefeasible possessory title to the Property; and

(3) an order that the plaintiff’s name be entered into the Land Register of the Land Registry of Hong Kong as the registered owner of the Property.

2.  By a summons dated 9 March 2020, the plaintiff applied for default judgment to be entered against the defendant pursuant to Order 19 rule 7 of the Rules of the District Court.

B. Background

3.  The plaintiff’s case is as follows: Leung Hung was the registered owner of All That one equal undivided 19^th part or share of and in All Those pieces or parcels of ground registered in the Land Registry as the Remaining Portion of New Kowloon Inland Lot No. 1781 and the Remaining Portion of New Kowloon Inland Lot No. 1842 together with the exclusive right to the use occupation and enjoyment of All That 4^th Floor, No.78 Tak Ku Ling Road, Kowloon, Hong Kong (the Property).

4.  After acquiring the Property in September 1967, Leung Hung resided in the Property with his mother Lee Lou (“Madam Lee”).

5.  In about July 1971, the plaintiff moved into the Property to take care of Madam Lee, who is his aunt.  The plaintiff later moved back to his own home after Madam Lee’s health became stable.

6.  On or about 14 July 1978, Leung Hung passed away in a traffic accident.  The plaintiff visited and would occasionally stay over at the Property to take care of Madam Lee.  Since then, the plaintiff had solely been responsible for paying the rates and utilities of the Property.

7.  In about October 1978, the defendant, who is the widow of Leung Hung, came to reside in Hong Kong in the Property.  However, on or about 26 February 1979, the defendant left and did not return again to the Property.  In or about 1980, the plaintiff’s elder brother managed to contact the defendant near Main Street East in Shaukiwan in relation to the application for Letters of Administration.  At that time, the defendant informed the plaintiff that her address was G/F, No 42 Hoi Ngan Street, Shaukiwan, Hong Kong (the “Last Known Address”).  It was subsequently found out that the correct English name for 海晏街 is Hoi An Street, instead of Hoi Ngan Street.

8.  On or about 23 September 1980, the Letters of Administration was granted to Madam Lee and the defendant, as administratrices of the estate of Leung Hung.  The Property formed part of the estate of Leung Hung.  The defendant and Madam Lee were the only beneficiaries of the estate of Leung Hung.

9.  In or about June 1981, Madam Lee and the defendant attended the government offices to collect the letters of administration.  The defendant indicated to the plaintiff and Madam Lee that she only wanted a gold necklace as Leung Hung had promised to give her a gift, and she did not want anything else from Madam Lee’s family.  After the plaintiff and Madam Lee bought a necklace for the defendant, the defendant informed the plaintiff and Madam Lee that she would cut ties with Leung Hung’s family and start a new chapter in life.

10.  After that time, the plaintiff could not locate the defendant as the plaintiff could not find the building at No 42 Hoi An Street, Shaukiwan. Attempts to find her in the Shau Kei Wan district was also in vain.

11.  The defendant had never moved back to the property since she left in 1979.  On or about 6 August 1988, Madam Lee passed away.  Since Madam Lee had no other issues or relative, the plaintiff collected Madam Lee’s belongings (including the keys to the Property) from the nursing home.  Since then, the plaintiff had been coming to the Property from time to time to clean up and would stay over at 2 to 3 days per week.  The plaintiff continued to pay for all rates and utilities of the Property.

12.  From about 27 October 1991 onwards, the plaintiff ceased living at his own premises and moved into the Property with his family.  Upon moving in, the plaintiff had changed the lock of the main door of the Property and took possession without permission and licence from anyone.  The plaintiff incurred a sum of HK$60,000 for the renovation of the Property in about 1991.  Only the plaintiff and his family members possessed the keys to the Property.  Since then the plaintiff had treated himself as the sole and exclusive owner of the Property. 

13.  The plaintiff was informed in 1993 by the previous chairman of the Incorporated Owners of the Property that he had attempted to send a letter (in relation to the renovation of the building where the Property was situated) to the defendant at the Last Known Address in November 1993 by registered post. The letter was returned for the reason “demolished”.  The plaintiff had paid for all maintenance fees for the repair projects of the building where the Property was situated as the owner of the Property.

14.  It is thus the plaintiff’s case that he had been in adverse possession of the Property in excess of 12 years before the commencement of the action. By reason of the above facts and by virtue of section 17 of the Limitation Ordinance (Cap 347), the defendant’s title and rights to the Property had been extinguished.

15.  The annual rateable value of the Property does not exceed HK$240,000 and the claim is within the jurisdictional limit of the District Court.

C. Service

16.  An attempt by the plaintiff’s solicitors to carry out a land search of the Last Known Address (whether with Hoi An Street, or Hoi Ngan Street) was unsuccessful.  No registration of the Last Known Address could be found.

17.  The plaintiff’s solicitors could not find No 42 at Hoi An Street in Shau Kei Wan, Hong Kong.  A copy of a letter notifying anyone with an interest in the Property to contact the plaintiff’s solicitors had been posted at the entrance of the Property.  No enquiries had been received.

18.  The plaintiff then applied for an order for substituted service after putting in evidence that there was no record of the defendant having passed away in Hong Kong from the Births and Deaths Registry, and that he believed the defendant to be still in Hong Kong.  A substituted order was granted on 16 November 2016.  Pursuant to the said order, service of the writ of summons together with the statement of clam was effected by inserting an advertisement in Chinese once in the Apple Daily newspaper.

19.  Pursuant to the order of Master Raymund Chow dated 25 February 2019, service of the re-amended writ of summons with the re-amended statement of claim was dispensed with.

20.  By virtue of O 65 r 9, the plaintiff was strictly speaking not required to serve the summons of the present application on the defendant.

21.  The defendant has not filed any acknowledgment of service nor defence to the plaintiff’s claim.  The defendant did not appear at the hearing of the application either.  In the circumstances, I am satisfied that the court may proceed in the defendant’s absence pursuant to Order 32, r 5.

Nature of Interests – Joint Administrators

22.  “The interests vesting in the personal representative does not vest in him beneficially…he has his estate merely as the minister and dispenser of the goods of the dead”[1].

23.  “Where more than one executor or administrator is appointed, the joint office is treated as that of an individual person…They have a joint and entire interest in the estate …which is incapable of being divided; and in case of death such interest vests in the survivor without any new grant by the court.”[2]

24.  Thus, when Madam Lee passed away, the interest of the Property originally vested in both Madam Lee and the defendant together vested in the defendant upon Madam Lee’s passing away in 1988.

The Law – Default Judgment and Declaratory Relief

25.  In considering whether to grant judgment in default, the court cannot receive any evidence but must give judgment according to the pleadings alone[3].

26.  Hong Kong courts have in the past granted declaratory relief in adverse possession cases before: in Law Yuk Fong v Man Chung Wai & Anor[4], DHCJ Marlene Ng (as she then was) considered the relevant principles and referred to and summarised a number of decisions in which declaratory relief was granted in cases involving interests of land:

“Declaratory relief and default judgment

13. In an application for default judgment under Order 19 rule 7 of the RHC, the court would give judgment according to the pleadings alone, so it is not necessary for the plaintiff to prove the case by evidence.[5] But Order 19 rule 7 of the RHC is not mandatory but discretionary, and the court retains its discretionary power whether to give judgment or to extend a party’s time to plead when it is just to do so.[6] Further, the statement of claim must show a case for the order the plaintiff seeks to obtain. Hong Kong Civil Procedure 2017 goes on to say:

“...... it is not the practice of the court to make a declaration of right in default of defence, ...... but where such relief is to be granted without trial or evidence, the right course for the court is not to make a declaration but to state on what footing the relief is to be granted (Wallesteiner v. Moir [1974] 1 W.L.R. 991; [1974] All E.R. 217; per Buckley and Scarman L.JJ.).[7] ......

The principle that a declaration will not be granted when giving judgment ...... without trial, e.g. where judgment is obtained in default of defence or notice of intention to defend, is a rule of practice and not of law and will give way to the paramount duty of the court to do the fullest justice to the plaintiff to which he is entitled (Patten v Burke Publishing Co. Ltd [1991] 1 W.L.R. 541; [1991] 2 All E.R. 821.)”[8]

“Where declaratory relief is sought, the court will scrutinize the application for default judgment carefully and will not hastily grant the relief sought ......

Where declaratory relief is sought, the court expects maximum assistance to be provided in order for the relief to be granted. However straightforward this kind of application may seem, the court should not be expected to deal with the matter on a do-it-yourself basis and rubber-stamp the uncontested application without further ado ......

The declaratory reliefs to be granted should not be in terms wider than what the plaintiffs are entitled to and what is necessary to do justice to them ......”[9]

14. In Top One International (China) Property Group Co Ltd v Top One Property Group Ltd, Fok J (as he then was) recognised the above principles, but declined to grant default judgment in favour of the plaintiff against the 1^st and 3^rd defendants on its claim for breach of share charge and dishonest assistance in breach of fiduciary duties. The learned judge said:[10]

“83. In my view, notwithstanding Mr Lam’s persuasive submissions, it would not be appropriate to grant the declaratory relief sought by way of default judgment. In the absence of a judgment reached after hearing evidence, a declaration could be based only on unproved allegations and the Court ought not to declare as fact that which might not have proved to be such, had the facts been investigated: Wallesteiner v Moir, p.1029 (Buckley LJ) and Patten v Burke Publishing Co Ltd [1991] 1 WLR 541, 544A (Millett J (as he then was)).”

15. But I note in that case both the 1^st and 3^rd defendants filed their respective defence in the action. The 3^rd defendant was also formerly represented until he filed notice to act in person giving a PRC address (so his former solicitors remained as solicitors on the record). The 3^rd defendant failed to participate in various interlocutory stages of the action due to ill health, and he failed to attend various hearings although papers had been served on his former solicitors who remained on the record. An unless order was made, and the 1^st and 3^rd defendants failed to comply with the unless order. Thus, their respective defence was automatically struck out, and whilst the plaintiffs sought default judgment against them, the 1^st and 3^rd defendants applied to reinstate their defence. The 3^rd defendant explained he had been ill and he did not have “a permanent place of stay at all times” due to business commitments, so he did not receive various court documents. Further, he confirmed his and the 1^st defendant’s intention to defend the action, and they had instructed new solicitors.

16. The factual circumstances in Top One International (China) Property Group Co Ltd were a far cry from the present situation. There the 1^st and 3^rd defendants did defend the action, had some reasons for inaction (eg ill health) and were willing to engage solicitors to further defend the action. But here D1 and D2 did not respond to and/or defend P’s claim at all.

17. As recognised by Fok J (as he then was), the general proposition that a declaration will not be granted when giving judgment without trial (eg judgment in default of defence) is a rule of practice and not of law, and will give way to the paramount duty of the court to do the fullest justice to the plaintiff to which he is entitled.

18. In Lam Shing Shou v Lam Hon Man & ors,[11] the plaintiff sought declarations to the effect that the approvals to successions of ownership in land in New Territories given by various District Officers in 1947, 1997 and 1998 should not have been given. Chu J (as she then was) noted that since the declaratory relief was the only and substantial relief sought by the plaintiff, the course suggested in Wallesteiner v Moir, ie to state the footing on which the relief is granted but not to give a declaration to the effect that that footing reflects the legal position, had no application, and justice could not be done in the case before her ladyship if the plaintiff was to be denied the declaratory relief sought.

19. In Lai Wai Kuen v Wong Shau Kwong,[12] a property was owned by tenants-in-common. One co-tenant passed away at age 91 years, and very little was known of the other co-tenant. A co-executrix of the estate of the deceased co-tenant wished to rebuild the house on the property, and sought an order from the court as to the extinction of the defendant’s interest in the property. The court was satisfied the co-executrix (who applied for default judgment) had a genuine need for the declaratory relief “and the court could properly grant her such relief based on the merits of the case” (ie the court was satisfied there was ouster of the other co-tenant).

20. In Wu Chi Kwong v Estate of Cheung Man Yau,[13] the plaintiff claimed adverse possession of various lands in the New Territories against the defendant (who was at least aged 21 years in 1905 and was presumed dead as he had not been seen or heard of since 1934). The Official Solicitor accepted service of the proceedings on behalf of the estate of the defendant, but no defence was filed. Recorder Gerard McCoy SC held that P established a case of adverse possession, and the merits were overwhelmingly in his favour, so it would be wrong for the court not to purify the titles which had effectively been abandoned by the registered owner since 1934.”

27.  HHJ Alex Lee (as he then was) in Lee Kwok Leung and anor v Li Foa Shang[14] granted declaratory relief in an adverse possession case where the defendant had similarly not filed any documents nor appeared at the hearing, after having been satisfied that the pleadings in that case supported a case of adverse possession.

28.  In the present case, declaratory reliefs are the only and substantial relief sought.  I am satisfied that, if a case of adverse possession is made out, the balance of justice weighs towards departing from the rule of practice to not grant declaratory reliefs for the following reasons:

(a) The defendant never participated in the proceedings by entering appearance or filing acknowledgement of service of defence or otherwise.

(b) The period of continuous exclusive possession has been over 28 years.

(c) The plaintiff, although participated in the meetings of the Incorporated Owners of the Property and contributed to the renovation costs of the general repair but was never allowed to vote at the meetings.

(d) The declaratory relief is the only relief that the plaintiff requires.

The Law – Adverse Possession

29.  Section 7(1) of the Limitation Ordinance, Cap 347, provides for a limitation period of 12 years in an action to recover land.  Under the transitional provision i.e. section 38A, a limitation period of 20 years applies to causes of action which accrued before 1 July 1991: Tsang Wing Kit Eric & Another v Occupiers & Others [2009] 3 HKC 496.

30.  Since the plaintiff’s case is that adverse possession occurred some time in October 1991 by him, the relevant limitation period in the present case is thus 12 years.

31.  The principles concerning adverse possession are well known and have recently been summarized by the Court of Appeal in Tsang Foo Keung v Chu Jim Mi Jimmy [2017] 3 HKC 527:

(1) In order to succeed in claiming possessory title by adverse possession, the claimant must show that he has both the factual possession during the relevant period and the requisite intention to possess.

(2) The requisite factual possession is a sufficient degree of exclusive physical control, and what is sufficient depends on the circumstances of the case and, in particular, the nature of the land and the manner in which land of that nature is commonly enjoyed.  What must be shown is that the alleged possessor has been dealing with the land as an occupying owner might expect to deal with it.

(3) The requisite intention is to exclude the world at large, including the owner, from the land so far as is reasonably practicable and so far as the law allows.

(4) The person claiming adverse possession has the burden of proving both exclusive physical control and the requisite intention by compelling evidence.  It cannot be lightly assumed that the paper title holder has foregone his interest in land.

(5) Evidence of subjective intent should be approached with caution. Intention is normally better assessed by inference drawn from the acts of the possessor in the light of nature of the land and its use.

32.  Mr Cheung, Counsel for the plaintiff submitted, and I accept that the plaintiff’s continuous and uninterrupted physical/factual possession and his intention to possess are sufficiently and properly pleaded in the re-amended statement of claim as set out in paragraphs 12 – 13 hereinabove.  I am satisfied that the plaintiff have occupied the Property exclusively since October 1991 and the plaintiff has shown the requisite intention to possess the Property and has established possessory title against the defendant.

Conclusion

33.  I will thus grant the following order:

(1) A declaration that the defendant’s title to the property known as All That one equal undivided 19^th part or share of and in All Those pieces or parcels of ground registered in the Land Registry as the Remaining Portion of New Kowloon Inland Lot No 1781 and the Remaining Portion of New Kowloon Inland Lot No 1842 together with the exclusive right to the use occupation and enjoyment of All That 4^th Floor, No 78 Tak Ku Ling Road, Kowloon, Hong Kong (the Property) has been extinguished by virtue of section 17 of the Limitation Ordinance (Cap 347).

(2) A declaration that the plaintiff has been in adverse possession of the Property for a period exceeding 12 years prior to the commencement of the action and has acquired an indefeasible possessory title to the Property.

(3) There be no order as to costs of this action and of this application.