LIU KA LOK CAROL v. PUN LAI YIN STELLA AND OTHERS

HCMP 689/2024

[2025] HKCFI 2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 689 OF 2024

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J U D G M E N T

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A. INTRODUCTION

1.  This is an appeal from a Master’s decision giving the Plaintiff (“Madam Liu”)  judgment for recovery of a property under Order 113 of the Rules of the High Court (“RHC”).  It raises the question on the legal effect of an unenforced judgment (obtained by a plaintiff’s predecessor in title)  on the running of time for a defence in adverse possession.

2.  Madam Liu’s predecessor in title of the subject property (“Madam Wong”)  sought to recover possession against the 1^st and 2^nd Defendants (“Pun and Yang”)  in a prior High Court Action.  Pun and Yang raised adverse possession and estoppel in their defence and counterclaim.  In the course of that litigation, Madam Liu became the registered owner of the subject property without informing the Court.  Madam Wong then obtained judgment for possession in 2019 (“the 2019 Judgment”).  The Court of Appeal upheld the 2019 Judgment in 2023 and declined to give Pun and Yang leave to appeal to the Court of Final Appeal.  Meanwhile, Madam Wong had not enforced the judgment. 

3.  Five years since she became the registered owner, Madam Liu issued the present originating summons in 2024 (“the OS”)  to seek recovery of possession from Pun and Yang pursuant to Order 113.  Pun and Yang, once again, raised the defence of adverse possession, but failed before a Master.

4.  This is Pun and Yang’s appeal, seeking dismissal of the OS or its conversion into a writ action.

5.  Madam Liu has the paper title.  She claims that she was a “privy” of Madam Wong, so Pun and Yang’s adverse possession defence is barred by res judicata and constitutes an abuse of the court’s process.  Pun and Yang’s possession should be counted from 2019 and their defence in adverse possession is bound to fail.

6.  Pun and Yang accept the result in the prior High Court Action, but they deny that Madam Liu is a privy of Madam Wong.  The OS is a fresh possession claim, of which the issues are different from those in the prior High Court Action.  Pun and Yang have been in undisputed possession of the subject property for over 12 years and Madam Liu’s claim is time-barred.  There is obiter dicta by the Court of Appeal that an unenforced order would not stop time from running for a fresh possession claim, which is the case with this OS.  Further, it is an abuse of process for Madam Liu to rely on the 2019 Judgment when she became registered owner secretly during the trial which led to the Judgment but neither informed the Court nor sought to be added or substituted as a plaintiff.

7.  A Master gave judgment on the OS, granting an order for possession to Madam Liu, with costs of $150,000.

B.   UNDISPUTED OR INDISPUTABLE BACKGROUND

8.  The following facts are largely undisputed or indisputable as being supported by documentary evidence.

9.  Since 18 January 1975, Mr Chung Kauw George (“Mr Chung”)  had been the sole registered owner of Lot No. 1294 in Demarcation District 222 (“Lot 1294”). 

10.  From 30 April 2014 to 25 April 2019, Madam Wong (i.e. Madam Liburt Wong Chung), wife of Mr Chung, had been the registered owner of Lot 1294, acquiring title by an assent. 

11.  Mr. Chung had also been the sole registered owner of a house built on Lot 1030, adjoining Lot 1294 (“House A”, also known as “House 163”). House A was eventually sold and owned by different purchasers until 17 June 2011 when it was assigned to Pun and Yang.

12.  According to Pun and Yang, the disputed portion which stood on Lot 1294 (“Red Portion”)  has been in their exclusive possession since House A was assigned to them. House A, along with the Red Portion, have been fully enclosed on all sides by concrete and wooden walls, at the latest, since May or June 2011.

13.  On 31 October 2014, under HCA 2198/2014 (“the 2014 Action”)  Madam Wong sought recovery of the Red Portion against Pun and Yang.  Pun and Yang counterclaimed on the ground of adverse possession and estoppel. 

14.  Meanwhile, on 9 April 2019, the trial of the 2014 Action concluded, with only the oral closing submissions to be held on 3 May 2019.

15.  On 25 April 2019, Madam Liu became the registered owner of Lot No. 1294, without informing the Court.

16.  On 5 June 2019, DHCJ Allen Leung handed down the 2019 Judgment, which dismissed Pun and Yang’s counterclaim and ordered Pun and Yang to deliver up vacant possession of the Red Portion (described as the “Trespassed Portion” in that judgment)   to Madam Wong. 

17.  Amongst others, the findings were that the ground, first and second floors and roof of House A were owned by different owners until 16 May 2008.  The Trespassed Portion had not been fully enclosed by a so-called “Orange Wall”, which was likely to have been built, earliest, after 3 April 2005.  Pun and Yang have failed to prove that they had used and enjoyed the Trespassed Portion as if it was their own to the exclusion of the world as of 31 October 2014 (§§131, 135, 138, 143, 146).

18.  Pun and Yang appealed.  In CACV 302/2019 (“the Appeal”), upon the application of Pun and Yang, the Court of Appeal gave leave for Madam Liu to be joined as a respondent for the purpose of the Appeal only.  Madam Liu did not file any grounds of appeal.  The Court of Appeal unanimously dismissed the Appeal by a judgment handed down on 7 June 2023 (“CA’s Judgment”).

19.  On 6 October 2023, the Court of Appeal further dismissed Pun and Yang’s application for leave to appeal to the Court of Final Appeal.

20.  At no point in time in the litigation up to seeking leave to appeal to the Court of Final Appeal had Madam Liu ever been substituted or added as a Plaintiff to the 2014 Action. 

21.  Despite a demand letter dated 15 December 2023 from Madam Liu, Pun and Yang have failed to deliver up vacant possession of the Red Portion. 

22.  On 24 April 2024, Madam Liu commenced this action afresh by the OS against Pun and Yang to recover possession of the Red Portion.

23.  On 12 November 2024, a Master gave judgment to Madam Liu.  This is Pun and Yang’s appeal.

C.   PARTIES’ CASES

24.  Pun and Yang claim to have been in adverse possession since about 2011, at the latest. 

25.  Madam Liu’s opposition to the adverse possession claim has, in gist, 3 limbs:

(1)  The adverse possession defence is barred by res judicata in the narrow sense because the defence has already been decided in the 2019 Judgment and Madam Liu is a privy of Madam Wong.

(2)  The adverse possession claim is barred by res judicata in the wider sense as this defence could and should have been raised in the 2014 Action.

(3)  The 2019 Judgment has already unequivocally determined Pun and Yang’s claim of adverse possession from 1993 to December 2014 when the writ for the 2014 Action was issued.  Hence, Pun and Yang can only establish a new period of possession commencing after the 2019 Judgment, which falls short of 12 years before the OS was issued and is bound to fall.

26.  Pun and Yang’s case is that the OS ought to be dismissed because:

(1)  Madam Liu was not privy to the 2014 Action.  The OS is a fresh application and it is open for this Court to find a new adverse possession defence.

(2)  Madam Liu’s contention that Pun and Yang can only run their case on adverse possession from 2019 is wrong in law because the unenforced 2019 Judgment does not have the legal effect of breaking Pun and Yang’s continuity in possession of the Red Portion.

(3)  Madam Liu could and should have added herself as a plaintiff in the 2014 Action and claimed for possession.

(4)  Madam Liu has abused the court process by “standing by” without joining in the 2014 Action as a plaintiff and only making her current claim afresh in the OS.

27.  In the alternative, O.113 should not be invoked or disposed of summarily and the case should be sent to trial due to the substantial disputes of fact and of law.

D.   ISSUES

28.  I have summarized the dispute into the following issues:

(1)  Whether Pun and Yang have been in possession of the Red Portion for 12 years before the OS; and

(2)  Whether Pun and Yang are barred by res judicata in the narrow sense from claiming adverse possession; and

(3)  Whether Pun and Yang are barred by res judicata in the wider sense from claiming adverse possession.

E.  LEGAL PRINCIPLES

E1.  Appeal against Master’s decision

29.  It is trite law that an appeal from a master to a judge in chambers is dealt with by way of rehearing, and the judge is to treat the OS as though it came before him for the first time.

E2.  Order 113 of the Rules of the High Court

30.  Order 113, r.1, RHC allows the Court in proper cases to deal with possession of land claims summarily and swiftly:

“Where a person claims possession of land which he alleges is occupied solely by a person or persons (not being a tenant or tenants holding over after the termination of the tenancy)  who entered into or remained in occupation without his licence or consent or that of any predecessor in title of his, the proceedings may be brought by originating summons in accordance with the provisions of this Order.”

31.  The Court’s approach to Order 113 was helpfully summarized by Recorder Abraham Chan SC at §§9 & 11 of Mark Alexander Saunderson v Jason Swin Apolinario [2022] HKCFI 1844 as follows:

(1)  Order 113 is for clear cases only.

(2)  If the case is a clear one, the mere fact that the defendant has contested it is immaterial.

(3)  The test is essentially whether the issue(s)  between the parties, be they on fact or law, are such as to entitle the defendant to a trial.

(4)  If on analysis of the issue(s)  the matter is only capable of determination in one way (favouring Madam Liu in this case)  then it is proper for the Court to exercise its power under Order 113 regardless of how vigorously the defendant opposes this.

(5)  The approach under Order 113 is akin to that under Order 14.

(6)  If it can be shown on the available evidence that there are genuine or substantial issues of facts arising from an application under Order 113, which require adjudication at trial, then the Court has discretionary case management power under Order 28 r.8 to order the proceedings to continue as if begun by writ.

E3.  Adverse Possession

32.  To establish possessory title based on adverse possession, the squatter has to establish both possession (for 12 years in the present case)  and the requisite intention to possess the subject land to exclude the world at large, including the owner of the paper title: Wong Tak Yue v Kung Kwok Wai David (1997-1998)  1 HKCFAR 55, at p.68E, I & J.

33.  Enclosure of land is the strongest possible evidence of adverse possession and the requisite intention to possess: see Powell v McFarlane & anor (1979)  38 P & CR 452, at 478, per Slade J.

34.  When possession is certain and unequivocal, the requisite intention to possess is to be presumed: Ho Hang-wan v Ma Ting-cheung as personal representative of Ma Sze-tsang, deceased[1990] 1 HKLR 649, 654.

E4.  Effect of unenforced judgment on the running of time

35.  An unenforced judgment for recovery of land does not stop the running of time in adverse possession by the same occupier.  This principle was discussed, obiter, by the Court of Appeal in Grand Wayfair Investment Co Ltd v Chan Yung Kan & Others, CACV 238/2013, 26 September 2014. 

36.  In Grand Wayfair, the plaintiff had been the registered owner of the subject lot since 1983 and commenced the proceedings in 2007 to claim for possession of the subject lot against the occupiers.  During trial, it transpired that the plaintiff had obtained default judgment against one group of the occupiers in 1993 (“the 1993 judgment”). However, the 1993 judgment was never enforced. The trial judge found that the group of occupiers remained in occupation of the subject lot as before, and hence dismissed the plaintiff’s case.

37.  On appeal, the appellant plaintiff raised, by way of submission, that the 1993 judgment was binding on the occupiers, and had the effect of breaking the continuity of the possession of the subject lot by those occupiers (at §14).  On the other hand, the case of the respondent had always been that possession of land by his family had been continuous since 1960 and they had not lost possession of the land notwithstanding the 1993 judgment or dismissal of the application to set it aside in 1994.  It was not disputed that the plaintiff had not taken any steps to enforce that judgment.  (at §15)

38.  The judge found as a fact that D2 remained in possession since 1993. There was then more than 12 years’ adverse possession after 1993 when the plaintiff commenced the action in 2007.  D2 did not have to rely on possession from 1960 to 1993 to defeat the plaintiff’s claim. (at §16)

39.  The plaintiff submitted that D2 could not do that because he did not plead or advance a case of possession starting to run from 1993.  CA did not accept that.  D2’s case remained that he had been in continuous possession from 1960 to 2007.  Inherent in such a case was that D2 had been in possession from 1993 to 2007.  (at §17)

40.  Significantly, CA went on to analyze, by way of obiter, the effect of an unenforced judgment on the running of time, at §§26–29:

“26. On the contention that the 1993 judgment, even without any execution or actual eviction of the 2^nd Defendant from the Land, has the legal effect of breaking the continuity in possession by the latter, Mr Chan was not able to cite any authority to support such a proposition. Analysing it as a matter of principle with the limited assistance we have from counsel, we cannot agree, as presently advised, that the mere entry of judgment has such an effect as a matter of law…. For a squatter who remains in occupation after a judgment has been entered against him, the quality of his factual possession and his intention to possess would not change. No doubt, his possession (and thus his possessory title to the land)  is precarious and he could be evicted if the plaintiff seeks to enforce the judgment by a writ of possession. But in terms of the quality of possession, there is no material difference from his possession before the judgment, which is equally defeasible by the superior title of the registered owner. Neither can we see any difference in terms of the intention to possess on the part of the squatter stemming from the entry of the judgment.

27. The question of continuity of possession should not be confused with the question of enforceability of a judgment of possession. For the latter purpose, normally time stops to run after the writ has been issued. Thus, a plaintiff needs not worry about the accumulation of time after he has issued a writ. And that must equally be applicable to a plaintiff who has obtained a judgment for possession. The time limit for enforcement of that judgment is 12 years, see s 4(4)  of the Limitation Ordinance, Lougher v Donovan [1948] 2 All ER 11 and Re Li Man Hoo [2013] 4 HKLRD 247 .

28. But this does not mean that there is a break of continuity of possession by the defendant in the absence of any actual effective enforcement of the judgment. First, in respect of people other than the plaintiff who has issued the writ (and a plaintiff who has sought to enforce a judgment obtained pursuant to that writ), the defendant is entitled to rely on his possessory title as much as before. Thus, in a case where there is a third person who (for some reason having a superior title to the plaintiff)  did not sue for possession at the same time as the plaintiff, he cannot rely on the judgment obtained by the plaintiff to break the continuity of possession by the defendant in a future claim for possession.

29. Second, if for some reason the plaintiff could not enforce the judgment, like the present instance where there has been a lapse of more than 12 years since the date of judgment, the defendant is entitled to the accumulated period of possession in a fresh action by the same plaintiff notwithstanding the entry of the earlier judgment which has since become ineffective. To hold otherwise would be inconsistent with the limitation on enforcement of judgment under s 4(4).”

F.  WHETHER PUN AND YANG HAVE BEEN IN POSSESSION OF THE RED PORTION FOR 12 YEARS BEFORE THE OS

F1.  Factual evidence of possession

41.  There is no dispute that Pun and Yang executed assignments on 17 June 2011 for purchasing G/F, 1/F, 2/F of House A.  After they obtained possession of House A, they instructed a contractor to carry out renovation works which were completed in August 2011.  Aerial photos taken on 16.11.2011 and the 2011 Survey Sheet showed that House A and the Red Portion were fully enclosed by 2011.  Madam Liu’s written submission (§18)  in the Appeal admitted enclosure of the Red Portion since 2009.  The evidence strongly and unequivocally points to possession for over 12 years.

F2.  Whether Pun and Yang’s continued possession was broken by the 2019 judgment

42.  Madam Liu submits that the possession of Pun and Yang should be counted from the 2019 Judgment (not the 2014 Action).  I am unable to agree. 

43.  Firstly, this case falls squarely within the obiter dicta of Grand Wayfair.  In Ng Sew Hoi v Chong Yin Sing, [2024] HKCFI 414, 8 February 2024, DHCJ Jenkin Suen also held that:

“Assuming that a paper title owner has failed to enforce a judgment for possession or, like the present instance, his claim for possession is struck out, the squatter is entitled to claim a possessory title based on the accumulated period of possession in a fresh action commenced by the paper title owner. Logically, the squatter should also be entitled to claim the same in a fresh action commenced by the squatter.

44.  Mr Ray Kwan, counsel for Madam Liu, submits that Grand Wayfair is distinguishable in that Madam Liu there obtained a default judgment in 1993 but, without “actual effective enforcement”, ie within 12 years.  There was thus no interruption in the continuity of possession.  Accordingly, the judgment was time-barred under s.4(4)  of the Limitation Ordinance, Cap 347 (“LO”): §27 of Grand Wayfair.  He submits that Ng Sew Hoi is distinguishable on the same ground.

45.  With respect, I do not accept Mr Kwan’s submission, as it confuses the question of continuity of possession and enforcement, which CA warns against in §27 of Grand Wayfair.  CA held that it was open to the 2^nd defendant to rely on possession from 1993 to 2007 to defeat the claim of the plaintiff (same plaintiff in both actions), and it was not strictly necessary to consider the points arising from the 1993 judgment (§22).  In a similar vein, Pun and Yang are as much entitled to rely on their continuous possession (undisturbed by the 2019 Judgment)  against Madam Liu.  Madam Liu did not sue for possession at the same time as Madam Wong, so she cannot rely on the 2019 Judgment to break the continuity of possession by Pun and Ms Yang (§28).  Madam Liu has not put forth a contrary authority.

46.  Secondly, neither Madam Wong nor Madam Liu has ever enforced the 2019 Judgment by applying for a writ of possession. Indeed, Madam Liu accepts (in §19 of her affirmation)  that CA’s Judgment did not change the fact that she was not a party to the 2019 Judgment.  Mr Kwan also confirms in his oral submission that Madam Liu has no standing to enforce the 2019 Judgment because she was not a party to that judgment. 

47.  Thirdly, Madam Liu has never been joined as a party to the 2014 Action despite:

(1)  Her knowledge of the existence of the 2014 Action before it ended with the 2019 Judgment (§5 of her written submission before the Court of Appeal);

(2)  §16 of CA’s Judgment that there did not seem to be any good reason why the writ and 2019 Judgment could not have been amended or varied to add or substitute Madam Liu as a plaintiff.

In the end, Madam Liu was only joined as a party for the purpose of the Appeal. 

48.  In summary, applying Grand Wayfair, Pun and Yang have been in continuous possession of the Red Portion for over 12 years before issue of the OS.  Their continuous possession, as against Madam Liu (a new owner), has not been broken by the 2019 Judgment.  Pun and Yang thus satisfy the 12 year requirement for its defence in adverse possession.

G.  RES JUDICATA IN THE NARROW SENSE

G1.  Legal principles on res judicata

49.  A party will not be permitted to relitigate in subsequent proceedings issues which have already been adjudicated upon in previous proceedings by a court of competent jurisdiction: Ray Chen v. Anita Wan Ching Lam & Another, HCA 4582/2001, 9 May 2002, §22(1), Ma J (as he then was).

50.  To bar a claim by virtue of res judicata, the earlier decision must satisfy the following criteria:

(1)  The earlier decision must be judicial in the relevant sense;

(2)  It was pronounced;

(3)  The tribunal had jurisdiction over the parties and the subject matter;

(4)  The decision was final and on the merits;

(5)  It determined the question raised in the later litigation;

See Power Securities Company Ltd v Sin Kwok Lam and ors [2019] HKCFI 2920, at §§56 and 60, Coleman J.

51.  Judgments in personam are binding only as between the parties to them and those who are privies.  It is essential that the party to be estopped by privity must have some kind of interest, legal or beneficial, in the previous litigation or its subject matter: Power Securities, §60.

52.  In contrast, a decision in rem may be described as one by a tribunal with jurisdiction to determine not merely on the rights of the parties, but also on the disposition of the thing.  The importance of this distinction is that a judgment in personam binds only the parties to the proceedings, as distinguished from one in rem “which fixes the status of the matter in litigation once for all, and concludes all persons”: Si Tou Choi Kam v Wealth Credit Ltd [2018] 4 HKC 247, at §§21-22, per Cheung CJHC (as he then was).  

53.  To determine if the third party is a privy to the parties to the proceedings, the following principles in Lo Kai Shui v HSBC International Trustee Ltd & Ors (No.2) [2023] 6 HKC 411, §56, per Kwan VP are relevant:

(1)  The key issue is whether the degree of identification of interest makes it just for the third party to be bound by the outcome of proceedings about the issue, regardless of which way that outcome goes. The law is slow to recognize privity of interest between different persons (§§56-57).

(2)  The required commonality between two parties is a direct interest in the subject matter of the litigation, a parallel or corresponding interest in that subject matter, and not simply a financial interest in the result of the action (§58).

(3)  Privies include any person who succeeds to the rights or liabilities of a party on death, insolvency, by assignment or by statute, or who is otherwise identified in estate or interest. The party estopped by privity must have some interest, legal or beneficial, in the previous litigation or its subject matter, and accordingly assignees are privies of the assignor (§58).

(4)  Privity requires parallel interest in the merits of an action, not simply a financial interest in the result. Thus, for a party to be privy of another party to a proceeding, the cause of action or defence of the two parties should be such that either the party or privy could have presented the same legal arguments and both the party and the privy would benefit directly from a successful result (§61).

54.  However, a third party who: (a)  is a privy to a party in a previous proceeding by virtue of acquiring title to a property from the latter; but (b)  is not joined in as a party to the proceeding, will only be bound by the judgment in personam to the proceeding if his title arose after the date of judgment.  See Powell v Wiltshire [2004] EW CA Civ 534 (CA), at §§18, 20-25, 55, 56, 61.  The English Court of Appeal held that:

(1)  For estoppel per rem judicatam to apply, there must be an identity of interest between the party to the first action and the party to the second.  The same title must have come into question in both action (at §18).

(2)  A judgment only bound privies in estate if they derived their title after the judgment was delivered (at §§18, 25)  because the seller no longer represented the purchaser’s interest in the earlier action after the purchaser acquired the interest (at §§21, 55).

(3)  The court refused to bind Mr. Powell or the intermediate parties under estoppel per rem judicatam since they acquired their interests before the earlier judgment (at §§26, 61).

G2.  Application of the legal principles on res judicata

55.  Madam Liu submits that Pun and Yang are attempting to re-litigate issues that have already been adjudicated.  It is the same Red Portion which has been trespassed, the same enclosed area and the period of occupation from 2011 onwards fell within the period from 1993 in the 2014 Action.  Pun and Yang should be barred from running the same defence in this case.

56.  Further, Mr Kwan submits that Madam Liu had paid the purchase price for Lot 1294 and has succeeded to the rights and liabilities of Madam Wong by way of assignment.

57.  Applying the legal principles in Section G1, I am unable to agree that res judicata in the narrow sense applies:

(1)  The act of possession by the squatter itself can give the squatter possessory title to the land in concern; thus, in a claim of adverse possession, the court is adjudicating between two competing titles. What a successful adverse possession claim does is thus that it only extinguishes the paper title owner’s right to recover possession against the squatter; the paper title owner still has a good title against the whole world.  See Hong Kong Kam Lan Koon Ltd v Realray Investment Ltd (No.5) [2007] 5 HKC 122, at §§34, 35, 39, per Lam J (as he then was).  Accordingly, in the context of the present dispute, the 2019 Judgment is not a decision in rem, as it is not a determination regarding the status of the Red Portion but the competing titles of Madam Wong and Pun and Yang.  In any event, it is not Madam Liu’s case that the 2019 Judgment is a decision in rem.  The 2019 Judgment was a judgment in personam.

(2)  Madam Liu is not the privy of Madam Wong. The latter had assigned Lot 1294 to Madam Liu, but not the rights under the 2014 Action or the 2019 Judgment.

(3)  Even if Madam Liu is a privy of Madam Wong, Madam Liu’s title to the land arose before the 2019 Judgment.  The 2019 Judgment is not binding on her: Powell v Wiltshire. 

(4)  The 2019 Judgment did not determine the questions raised in this OS:

(a)  The 12 years of possession that Pun and Yang had to establish in the 2014 Action was to commence before 2002; whereas that in the present OS was 2012. 

(b)  Even if the 2019 Judgment were binding, all that was found was that the relevant enclosure did not take place before 2005 or 2008.  Nowhere in the 2019 Judgment did the trial judge find that the relevant enclosure did not exist since 2011.

58.  Mr Kwan relies on Sherman Ngai Wing Lee [2023] HKCFI 3056, §43. However, that case was concerned with a litigation between a beneficiary and a trustee (at §7), and the question was whether other beneficiaries were “privies” as such.  It is different from the vendor and purchaser relationship between Madam Wong and Madam Liu here.

H.  RES JUDICATA IN THE WIDER SENSE

59.  Res judicata in the wider sense serves as an estoppel preventing a party from raising in a subsequent litigation matters which could and therefore should have been brought forward as part of the subject in contest in a previous litigation: Ngai Few Fung v Chueng Kwai Heung [2008] 2 HKC 111, at §§11-12, per Cheung JA.

60.  The plea is available not just as between the parties to the previous and later proceedings, but also to their privies.  The onus is on the party alleging abuse.  See Gurdas S Choithramani v Mayer Brown [2021] HKCFI 380, §63, DHCJ To. 

61.  Madam Liu argues that the adverse possession defence is barred by the 2019 Judgment pursuant to res judicata in the wide sense, as that defence could have been raised in the 2014 Action.  Although she was not a party to the 2014 Action, she was entitled to rely on the 2019 Judgment which affirmed the predecessor-in-title’s right to possession.  Pun and Yang were represented by the same lawyers throughout the 2014 Action.  They had the full opportunity to address all relevant issues. 

62.  These submissions need only to be stated to be rejected.  Pun and Yang’s current defence is against a new paper title owner whom Pun and Yang could not have anticipated at the trial of the 2014 Action.  The legal representation is an irrelevant point.  The analyses in paragraph 57 above equally apply.

63.  On the other hand, Madam Liu could have but did not have herself substituted as Madam Liu in the 2014 Action.  She knowingly stood by, waiting for the 2014 Action to be fought out by Madam Wong: Lo Kai Shui, §§65-66, Kwan VP.  Madam Liu herself was abusing the process in issuing this OS.

64.  I find that res judicata in the wider sense does not apply. 

I.  CONCLUSION

65.  Based on the evidence, Pun and Yang have shown continuous possession with intention to possess since at least 2011, and hence for over 12 years before the OS was issued.  Their possession has not been interrupted by the 2019 Judgment.  Their adverse possession defence is not barred by res judicata in both the narrow and wide sense.

66.  Madam Liu’s application under O.113 cannot get off the ground.  As all the issues raised are points of law and there is little dispute of facts, there is no need to convert the proceedings into a writ action. 

67.  The appeal is thus allowed.  The order made by the learned Master is set aside and the OS is dismissed.

68.  Cost should follow the event.  On a nisi basis, I order that costs here and below, with certificate for one counsel, shall be paid by Madam Liu to Pun and Yang, summarily assessed at $400,000 before the Master and $300,000 for this appeal.

69.  I thank counsel for their assistance.