FUNG KAI LOI v. FUNG TAI YIU AND OTHERS

1981 No. MP1350

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

MISCELLANEOUS PROCEEDINGS

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DECISION

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1. I should have preferred to deliver my decision in writing. Evidently, this matter is pressing and it is highly desirable for it to be disposed of expeditiously.

2. This is an application by the plaintiff for further amendments to be effected to the Re-Amended Reply and Defence to Counterclaim. The summons was adjourned by the Master for my attention. What is being placed before this Court is, I am told, yet a new version of proposed further amendments. No point was really taken by the defendants on the wholly different averments notice of which was not given, so complains Miss Eu, until very late in the day. The proposed further amendments in purple are principally embodied in paragraphs 6(c) & (d). These purple further amendments seek to introduce licences yet of a different kind. I should mention right from the beginning that an alternative licence plea has already been put in place by the existing paragraphs 6(a) & (b).

3. A further amendment is also being sought to paragraph 9, but that is purely cosmetic and would stand or fall with the purple amendments in the new 6(c) & (d).

4. Paragraph 6(c) can be summed up as follows :

what the plaintiff proposes to raise as yet another alternative is that if there should exist a licence or if the possibility of the subsistence of a licence (which is denied by the plaintiff) is real, such a licence is terminable only by a reasonable notice.

5. Paragraph 6(d) pleads in the further alternative that the defendants' predecessors-in-title had allowed and/or encouraged the plaintiff's predecessors-in-title and/or the plaintiff to cultivate and incur expenses on the land, including payment of Crown rent. Thus, by paragraph 6(d) the plaintiff hopes to be able to argue a licence coupled with an equity. What will be argued is, if paragraph 6(d) be allowed, that the plaintiff has, in effect, a perpetual licence to remain so long as he continues to cultivate the land and discharge governmental levies. This licence coupled with an equity is supposed to be backed by some obscure allegations of toiling and expenses incurred on the land made in sub-paragraph (d).

6. First of all, paragraph 6(d)(i) does not identify any particular alleged expenditure.  It merely refers to "incurred expenses (on the land) including paying the Crown rent".

7. In paragraph 6(d)(ii), Counsel for the plaintiff now desires to embrace matters contained in paragraphs 4-8 of the Statement of Claim. What then are in paragraphs 4-8 of the Statement of Claim by which Mr Chain now offers as particulars? Paragraph 4 of the Statement of Claim is an allegation that the plaintiff's late father was let into possession and thereafter remained in adverse possession of the land now under consideration. Particulars are given under paragraph 4 for "Possession", but it is fairly obvious that the particulars so given are particulars of alleged adverse possession. They are not and not intended to be particulars in aid of an equity. These particulars are centered on use and occupation of the land in defiance of the rights of the owner in terms of cultivation, pig farming and vegetable farming, receipt of all profits of every conceivable undertaking and payment of outgoings and Crown rent.

8. Paragraph 5 pleads the death of the plaintiff's father who died intestate in 1941 and the succession by the plaintiff and his clan brother to his intestate estate. Paragraph 6 sets out the events after the death of the plaintiff 's father. Succession aside, the plaintiff and his clan brother allegedly "took and continued possession adverse to the owner". Particulars given are again clearly for adverse possession. It is a verbatim repetition of the particulars given for the adverse possession in paragraph 4. These particulars of adverse possession relate exclusively to user, expenses and outlay for and incidental to such alleged adverse possession. The plaintiff's case is not one of these claimants of adverse possessory title having been instructed to toil or incur expenses on the land. The very basis of adverse possession is that everything done is said to have been without any instructions from the owner and inconsistent with his title. In other words, activities are alleged to have been wholly unconcerned with the owner.

9. Paragraph 7 cites the death of the clan brother in 1964, but there is a total silence on the passing of his estate. What is being pleaded is merely this : "Thereafter the plaintiff continued and is still in exclusive possession of the said land adverse to the registered owner thereof ". Particulars of adverse possession are again n given. They are in identical terms.

10. Paragraph 8 contains an assertion of inaction on the part of the defendants and their predecessors-in-title.

11. Whilst paragraph 6(d)(i) seeks to rely on cultivation and expenses (not necessarily building expenses), paragraph 6(d)(ii) is hoped to be supported by expenses and outlay exclusively for and incidental to adverse possession. Paragraphs 4-8 of the Statement of Claim can offer no more. In paragraph 6 (d)(i), permission and encouragement are alleged to have been given by the defendants' predecessors-in-title for cultivating and incurring expenses on the land, but paragraph 6(d)(ii) calls in aid particulars for adverse possession which are repugnant to allegations of acquiescence or encouragement on the part of an owner. Insofar as paragraph 6(d)(i) could be taken as an attempt to particularise the alleged equity, matters given in support of this alleged equity in sub-paragraph (d)(i) would seem to be grossly dissimilar with those in sub-paragraph (d)(ii).

12. Fairly read, it may be said that paragraph 6(d)(i) purports to set up some form of equity which is defined and particularised by paragraph 6(d)(ii). Matters particularised to found that equity are taken from particulars for adverse possession. But activities for adverse possession are conduct in defiance of true ownership. The alleged equity here is based on use and occupation in recognition of the owner's title in circumstances raising an equity. The two concepts are mutually exclusive, and the mental element for the activities under each is totally different. It would be quite ludicrous to run these two defences on identical particulars.

13. Having tried my best to understand the proposed amendments in paragraph 6(c) and (d), they should now be examined in the context as pleadings. Paragraphs 6(c) and (d) clearly stem from the same premise on which paragraphs 6(a) and (b) have been advanced, that is to say, the possibility of a licence.

14. I should turn now to paragraph 11A of Re-Amended Defence and Counterclaim. In paragraph 11A, the defendants are prepared to acknowledge the plaintiff as likely holding a gratuitous or revocable licence which, the defendants have hastened to add, was terminated by the filing of the Counterclaim. In the existing paragraph 6 of the Re-Amended Reply & Defence to Counterclaim, any possibility of a licence to the plaintiff is denied. The denial is made in paragraph 6(a). In paragraph 6(b), the plaintiff pleads, in the alternative, a licence coupled with interests and rights. Paragraphs 6(a) and 6(b) are not now in issue. In paragraph 6(c), a further alternative i.e. a licence terminable on reasonable notice is proposed to be put forward on the same assumption of a possible licence (which is denied). A further slightly different alternative is sought to be run in paragraph 6(d), a licence coupled with an equity. The upshot of all this is: sub-paragraphs (b), (c) and (d) would provide a web of alternative pleas in response to the same premise, i.e. the possibility of a grant of a licence to the plaintiff.

15. These are surely all proper matters for a Reply and Defence to Counterclaim. The plaintiff cannot fairly be expected to anticipate such an alternative assertion of the defendants and run in advance in his Statement of Claim these alternative answers.

16. The plaintiff appeared before Godfrey J. to withdraw or discontinue his claims in these proceedings. What transpired before the learned judge is not very clear. Both counsel attending me today were not before the judge on the last occasion. Mr Yip, solicitor for the plaintiff, in his affirmation for use before the learned judge, said the following:

 

"To clarify the plaintiff's position of the present summons herein, the plaintiff seeks to discontinue or withdraw his claim in these proceedings but will continue to defend the counterclaim by the defendants, if the defendants desire to proceed therewith. "

17. The plaintiff appeared by counsel before Godfrey J., whereas the defendants by a solicitor. An order by consent was procured from the learned judge in the following terms:

 

"This action be dismissed with costs to the defendants, the counterclaim to stand for trial unaffected by this order. "

The latter portion of the consent order has been much debated as to whether any or any sufficient preservation was sought and granted. None of the parties before me has seen fit to return to the judge for proper guidance on that portion of the Order.

18. I am left with misgivings as to what was precisely intended. Miss Eu, counsel for the defendants submits that once dismissed, all causes of action, be it an alleged adverse possessory title or be it an alleged licence, on which the plaintiff relied or could have relied, must now be taken as being wholly untenable. Thus, so Miss Eu argues, further amendments for an alleged licence coupled with an equity should not be let in by way of defence when it could not be re-ventilated as a cause of action.

19. The crucial question seems to me to be: "Must the plaintiff raise the purple amendments as causes of action, or could not the plaintiff elect to rely on them as a defence to the Counterclaim which was deliberately kept alive?" In my view, there is no room here to apply the wider concept of estoppel that a litigant be estopped when he "has had an opportunity of proving a fact in support of his claim or defence and chosen not to rely on it". (Emphasis added). Ord v. Ord [1923] 2 K.B. 432 at page 443 per Lush J. It would certainly be more or at least equally appropriate for the plaintiff to plead these purple amendments in his Reply and Defence to Counterclaim. Definitely, the plaintiff did not abandon his defence on the alleged licence. His solicitor was adamant that he "will continue to defend the counterclaim". The Statement of Claim he consented to be dismissed also contained no reference to any licence. There was no compelling reason why the plaintiff should shift his allegations from Reply and Defence to Counterclaim to the Statement of Claim for dismissal by Godfrey J. If he had done so, he could not have successfully defended any counterclaim. On the contrary, he deliberately reserved his right to defend the Counterclaim if prosecuted. The plaintiff is therefore not caught by the wider net cast in S.C.F. Finance Co. Ltd. v. Masri [1987] 1 Q.B. 1028 and Yat Tung Investment Co. Ltd. v. Tai Hang Bank Ltd. [1975] A.C. 581.

20. In conclusion, the point of an abuse of the court process fails.

21. Paragraph 6(c)(i) pleads a licence terminable by reasonable notice. Standing on its own, it does not take the matter further than the defendants' averment of a possible licence in paragraph 11A of the Re-Amended Defence and Counterclaim. Repetition would be quite unnecessary. Therefore, paragraph 6(c)(i) has to be examined in conjunction with paragraph 6(c)(ii). Paragraph 6(c)(ii) seeks to introduce reasonable notice of a fixed period which is said to be "not less than one year ending with harvest".

22. It is not clear as to why the alleged reasonable notice should apply. I have made an effort to try to understand the legal basis on which it is founded. Paragraph 6(c)(ii) pleads "that by reason of the fact that the suit land comprises largely of lychee trees, which is a biennial crop, reasonable notice in all the circumstances of the case is not to be less than" the alleged duration. I do not know why land planted largely with lychee trees may call for such a notice. Not one word is said as to whether the alleged length of notice arose at common law or by custom or otherwise by what nature or extent of the plantation. As for the reference to "all the circumstances", Mr Chain is kind enough to provide the Court with a summary. I have attempted in vain to search in it for the basis for such alleged reasonable notice. Mr Chain gave the impression that he suffered from like predicament. At the repeated invitation of the Court, the summary that counsel finally presents is as follows:

 

"That the plaintiff's father was let into the suit land by the defendants' predecessors in title in about 1920 on the representation he could use the land as his own. ”

That portion, I am told, comes from the Plaintiff's affirmation. I am assured that evidence of that nature would be led later in the proceedings, but that is simply not good enough. That is not pleaded particulars. Moreover, on what justification can it be maintained that a promise to use land as one's own would give rise to this kind of notice? Mr Chain's summary continues:

 

"So the late father cultivated the land and grew laichee trees and did other agricultural activities. He built a house for the family and raised a family there. After his death, the plaintiff and his elder brother took over and did the same. After his elder brother's death, the plaintiff did the same. The plaintiff says : for all the 60 years, the owners just stood by and did nothing to disturb their enjoyment of the land. "

23. The Court is still left in the dark, just as much as it was before the summary. In addition, there is a total lack of particulars to enable this Court to assess, at least, the likelihood of success of such an allegation when the Court ultimately turns to consider prejudice and delay caused by this late application.

24. Counsel for the plaintiff has been asked constantly for particulars to the point of embarrassment. It would be futile to consider an unless order. It is obvious that no better particulars can be furnished.

25. Paragraph 6(c)(ii) is insupportable as it stands.

26. Paragraph 6(d)(i) is inherently tied to paragraph 6(d)(ii). In vie w of the defendants' own allegation in paragraph 11A of the Re-Amended Defence and Counterclaim, no useful purpose would be served by allowing it to come in alone.

27. Next, I turn to paragraph 6(d). This is an averment of the defendant's predecessors-in-title allowing and/or encouraging the plaintiff's predecessors-in-title and/or the plaintiff to cultivate and incur expenses on the land, including payment of Crown rent. If indeed outlay for the enjoyment of alleged adverse possession could be treated as expenses to support an alleged licence coupled with an equity, we do not know when those alleged expenses were incurred, what type of expenses they were and how much is said to have been so spent. This Court is a so not informed as to precisely what is alleged to have been allowed and/or encouraged, when they were given, how much of these alleged permission or encouragement of the defendants' predessors-in-title was acted on and how anyone is said to have been misled or prejudiced. If there had been any building expenditure, we do not know the time of alleged erections, what they were, how much was incurred and how many remain standing to-day. This Court is also not told precisely by whom expenses were incurred or paid, and if any right has accrued to the plaintiff's predecessors-in-title, how the plaintiff himself came to have succeeded to these rights. The Court is left without any explanation also as to how the plaintiff's clan brother's interests, if any, had been inherited or assumed by the plaintiff.

28. Indeed, paragraphs 6(d)(i) and (ii) can only lead to a futile legal exercise. In them, I can find no prospect of successfully raising any valid defence to the defendants' Counterclaim. Moreover, particulars are lacking. It is plainly a sad story of there being not enough flesh put on an incomplete set of skeleton. I am driven to the conclusion that paragraph 6(d) should not be admitted.

29. The application of the plaintiff is very late. The prejudices caused to the defendants are obviously grave, particularly when they are now ready to go to trial. If the plaintiff's application were acceded to, considerable delay to this much postponed proceedings would inevitably result for the reasons given by Miss Eu. Difficulties would be doubly increased by the vague and widely-ranged allegations for which no more particulars can apparently be expected.

30. The Courts generally view last minute application for amendments with disapproval. This matter could have been raised by the plaintiff in at least April this year or shortly before the parties appeared before Godfrey J. Even if I were able to overcome the difficulties which I have been at pains to explain, I would in all the circumstances find it unjust to grant the indulgence sought by the plaintiff. The application of the plaintiff is therefore dismissed and subject to what counsel have to say, with costs to the defendants.