香港中山同鄉會有限公司 v. 高榮及另二人

DCCJ 4726/2016

[2018] HKDC 134

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 4726 OF 2016

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DECISION

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Introduction

1.  This is the plaintiff’s application by summons filed on 29 November 2017 (the “Summons”) for default judgment pursuant to Order 19, rule 7 of the Rules of District Court (the “RDC”).

2.  The Statement of Claim was issued on 23 September 2016.  The plaintiff’s case in essence is that it had acquired possessory title to the property situated at 11/F & the Roof of 193 Fa Yuen Street, Kowloon, Hong Kong (the “Property”) by reason of adverse possession.  The plaintiff claims the following reliefs in the Summons:-

(1)   A declaration that the plaintiff has acquired possessory title of the Property by reason of adverse possession (paragraph 1).

(2)   A declaration that the 1^st, 2^nd and 3^rd defendant’s title to the Property has prior to the commencement of this action been extinguished and that the 1^st, 2^nd and 3^rd defendants are barred from bringing action against the plaintiff to recover the Property by virtue of sections 7 and 17 of the Limitation Ordinance (Cap.347) (paragraph 2).

(3)   An order that the name of the plaintiff be registered as the registered owner of the Property (paragraph 3).

Procedural steps taken

3.  By an affirmation of service dated 16 November 2016, the plaintiff’s process server confirmed that on 12 October 2016 he served the Writ of Summons endorsed with the Statement of Claim on the defendants by affixing the same to the conspicuous part of the Property and by inserting the same into the letter box of the Property.     

4.  By an affirmation of service dated 29 January 2018, the plaintiff’s process server confirmed that on 5 December 2017 he served the Summons on the defendants by inserting the same into the letterbox of the Property. 

5.  I am satisfied that the Writ endorsed with the Statement of Claim was duly served on the defendants.  The defendants failed to serve a defence, and accordingly the plaintiff is entitled to apply to the Court for judgment against the defendants pursuant to O.19, r.7 RDC.      

Grant of declaration without a trial: applicable principles

6.  It is trite that in default judgment applications under Order 19, rule 7 of the RDC, the court cannot receive any evidence but must give judgment according to the pleadings alone: Smith v. Buchan (1888) 58 L.T. 710; Young v. Thomas [1892] 2 Ch. 135 (CA) at 136 per Lindley LJ; Hong Kong Civil Procedure 2018, Vol.1, §19/7/11.      

7.  With respect to the grant of declaration without a trial, the normal practice of the court is stated in §19/7/20 of the Hong Kong Civil Procedure 2018, Vol.1.  The relevant principles may be summarised as follows:

(1)   It is not the normal practice of the court to make a declaration without a trial: Wallersteiner v. Moir (No. 1) [1974] 1 WLR 991 at 1029A-B per Buckley LJ; Top One International (China) Property Group Company Ltd v. Top One Property Group Ltd [2011] 1 HKLRD 606 at §§83 and 85 per Fok J (as he then was); Tsui Ming Sin v. Tsui Chi Ping & Anor., HCA 2550/2014 (2 February 2016, unreported) at §§13-15 per DHCJ Kenneth Kwok SC; Leung Pak Ki v. The Estate of Pang Kau, deceased & Anor., HCA 624/2009 (1 March 2016, unreported) at §6 per DHCJ Paul Lam SC. 

(2)   However, this is only a rule of practice which should not be followed when the plaintiff had a genuine need for the declaratory relief and justice would not be done if such relief were denied: Lam Shing Shou v. Lam Hon Man & Others, HCA 361/2001 (15 January 2002, unreported) at §13 per Chu J (as she then was); Lai Wai Kuen v. Wong Shau Kwong, HCA 3424/2003 (12 November 2004, unreported) at §6 per Lam J (as he then was).

(3)   Where declaratory relief is sought, the court will scrutinize the application for default judgment carefully and does not hastily grant the relief sought: Chau Yan Chi Catherine v. The Incorporated Owners of Fung Wah Factorial Building, DCCJ 1459/2014 (22 July 2014, unreported) at §14 per HH Judge Andrew Li; Chan Wing Go v. The Incorporated Owners of Wing Hong Factory Building, DCCJ 1736/2014 (9 October 2014, unreported) at §20 per DDJ Amy Chan.

(4)   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 applications may seem, the court cannot be expected to deal with the matter on a do-it-yourself basis and rubber- stamp the uncontested application without further ado: Ho Kwai Chun v. Lai Yu, DCCJ 916/2013 (3 July 2014, unreported) at §25 per HH Judge Kent Yee; Shue Huei Yue v. Tan Chung Meng, DCCJ 2294/2013 (1 August 2014, unreported) at §24 per DDJ J. Chow.

(5)   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 between them: Lee Kwok Leung v. Li Foa Shang, DCCJ 2165/2014 (10 April 2015, unreported) at §16 per HH Judge Alex Lee.

8.  It is with these principles in mind that I now turn to deal with the application for default judgment. 

Discussion

9.  In my judgment, looking at the SOC alone, the plaintiff has proved that it has acquired possessory title to the Property by reason of adverse possession and that the defendants’ title to the Property has before the commencement of this action been extinguished.  It is the plaintiff’s pleaded case that:-

(1)   The defendants are and were at all material times the registered owner of the Property (SOC, §1(a) and (b)). 

(2)   Shortly after they purchased the Property on 3 October 1963, the defendants allowed the plaintiff (which is a company limited by guarantee incorporated in Hong Kong on 23 April 1971) to use the Property as a temporary club premises rent-free until the plaintiff found a permanent club premises (SOC, §§1(c) and 4(i)).

(3)   From 1971 to 1997, the plaintiff used the Property as its temporary club premises holding various club activities (SOC, §4(iii)).

(4)   The defendants did not give the Property to the plaintiff nor did they agree that the plaintiff could use the Property for any other purposes, including renting it out for profit.  The defendants indicated that when the plaintiff no longer required the Property, the plaintiff had to return the Property to them (SOC, §§4(i) and (ii)).

(5)   On 10 February 1997, the plaintiff purchased another property on 1/F, No.116 Fuk Wah Street, Shamshuipo, Kowloon (the “Fuk Wah Street Property”) as its permanent club premises.  In August 1997, the plaintiff moved from the Property to the Fuk Wah Street Property and used the latter as its permanent club premises (SOC, §4(iv)).

(6)   Since August 1997, despite what the defendants had earlier indicated to the plaintiff, the plaintiff did not return the Property to the defendants. From August 1997 to August 1999, the plaintiff continued to be in possession of the Property (SOC, §§4(vi) and (vii)).

(7)   From 4 August 1999 to today, the plaintiff let the Property to various tenants and collected rents from them without the knowledge or consent of the defendants or its agents.  All the rents collected by the plaintiff were kept by it for its own use and benefit.  The plaintiff changed the locks of the Property from time to time and did not give the keys of the Property to the defendants or its agents (SOC, §4(viii)).

(8)   From August 1997, the plaintiff occupied the Property as its owner (SOC, §5).

(9)   From 1997 onwards, the plaintiff paid all the rates, management fees, water and electricity charges in respect of the Property.

10.  Therefore, the plaintiff has shown that it has both factual possession and the requisite intention to possess the Property (Wong Tak Yue v Kung Kwok Wai & Another (1997-98) HKCFAR 55 at 68E-F per Li CJ) for the requisite period of 12 years (sections 7 and 17 of the Limitation Ordinance (Cap.347)).  For the period of possession by the plaintiff’s tenants, it is well-established that if a squatter lets the land to a tenant, he remains in control or possession by the tenant through the receipt of rent: Tang Tak Hong v Cheung Yat Fuk [2002] 3 HKLRD 743 at paragraph 15 per Yuen JA.

11.  In the present case it is my view that the plaintiff has a genuine need for the declaratory reliefs and justice would not be done if such reliefs were denied because without the declarations persons dealing with the Property would be led to believe that the defendants are still the owner of the Property whereas in true and in fact they are not.  The declarations would enable the plaintiff to tell the world at large, including those dealing with the Property, that it has acquired possessory title to the Property.

12.  However, I am not prepared to make an order that the name of the plaintiff be registered as the registered owner of the Property.  In Shum Chin Kit v The Estate of Lok Lai Sheung, Deceased, HCMP 1647/1998 (unreported, 21 August 2001), an adverse possession case, the Court refused to make an order that the name of the plaintiff squatter be entered in the register kept in the District Land Office as the owner of the land.  Tong J said (at paragraph 12):-

“… it would also be inappropriate to ask the court to substitute the plaintiff's name in place of the defendant in the District Land Registry. … the Hong Kong land registration system involved the registration of instruments, not title. The acquisition of a squatter title to the property would not confer a right of registration.”

13.  I note that in Ho Yuet Po v The Estate of Cheo Ho (or How), Deceased, DCMP 2300/2012 (unreported, 24 April 2013), also an adverse possession case, one of the reliefs claimed by the plaintiff was an order that her name be registered in the register of the Land Registry as the registered owner of the property in substitution for the name of the defendant.  The Court granted an order to such effect.  However, it appears that the case of Shum Chin Kit has not been drawn to the Court’s attention. 

14.  I agree with what Tong J said in paragraph 12 of Shum Chin Kit. It would therefore be inappropriate to make an order in terms of paragraph 3 of the Summons. At the hearing, Mr Sio confirmed that the Plaintiff would withdraw the relief claimed in paragraph 3 of the Summons.

Order

15.  By reason of the matters aforesaid, I make an order in terms of paragraphs 1 and 2 of the Summons, i.e., a declaration that the plaintiff has acquired possessory title of the Property by reason of adverse possession and a declaration that the 1^st, 2^nd and 3^rd defendant’s title to the Property has prior to the commencement of this action been extinguished and that the 1^st, 2^nd and 3^rd defendants are barred from bringing action against the plaintiff to recover the Property by virtue of sections 7 and 17 of the Limitation Ordinance (Cap.347).

16.  There is no reason why costs should not follow the event.  Subject to paragraph 17 below, I make a costs order nisi that the plaintiff’s costs of this action, including costs of this application, be paid by the defendants to the plaintiff, to be taxed if not agreed, with certificate for counsel.

17.  I will disallow the costs for the preparation of the affirmation of 張玉山 filed on 29 December 2017.  It is well established that in default judgment applications under Order 19, rule 7 of the RDC, the costs of any affidavits in support will be disallowed: Jones v Harris (1887) 55 L.T. 884; §19/7/11, Hong Kong Civil Procedure 2018, Vol.1.

18.  I thank counsel for his assistance.