SIU PAK MING v. PONG HEI MAN AND ANOTHER

HCA 314/2018

[2018] HKCFI 2373

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 314 OF 2018

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REASONS FOR DECISION

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Introduction

1.  The plaintiff (“P”) applies for default judgment pursuant to Order 19, rule 7 of the Rules of the High Court, Cap 4A and the inherent jurisdiction of the Court.

2.  This action concerns P’s claim for adverse possession of a property located at Ground Floor, No.7 Wong Chuk Street, Sham Shui Po, Kowloon, Hong Kong (“Property”).  P’s case is that he has continued exclusive possession and intention to possess of the Property since 31^st January 2006.  By virture of sections 7, 17 and 38A of the Limitation Ordinance (Cap 347), the title of the defendants was extinguished.

3.  Counsel Mr Devin CI Sio appeared for P at the hearing and the defendants were absent. 

4.  At the hearing, this Court declined to grant default judgment and ordered the action to proceed to trial.  Here are the reasons.

Background

5.  According to the statement of claim, P was at all times and still is the sole proprietor of an unlimited company called Tung Chin Textile Co and on 1 February 2000, P started a fabric trading business in the name of Tung Chin Textile Co at the Property, and that P had rented the Property from one Wing Cheetah Company Limited (“Wing Cheetah”) by 3 consecutive tenancy agreements.  The last tenancy agreement expired on 31 January 2006 and P’s case is that he has been in exclusive possession of the Property since.  The writ herein was issued on 5 February 2018.  

6.  According to P, Wing Cheetah was struck off as a registered company by the Companies Registry pursuant to section 291 of the Companies Ordinance on 7 April 2006.  

7.  According to the Land Registry record, on 20 April 1966, Madam Lau Toe, a married woman, and a Mr Vicete Lu (“D2”), both of No 135, Pratas Street, 3^rd floor Kowloon, purchased the Property as joint tenants by way of an assignment at a consideration of HK$107,000.

8.  According to the Land Registry record, a death certificate of Madam Lau Toe was registered in the Land Registry under Memorial No 0609120190013 although the actual registration date nor the death certificate have been placed before this Court.  According to paragraph 3(d) of the statement of claim, Madam Lau Toe died on 17 August 1984.  However, according to Mr Sio’s submissions, Madam Lau Toe died on 14 August 1984.  Anyway, Madam Lau was said to have died in the Philippines.  D1 then became the sole owner of the Property, being the survivor of the joint tenants.

9.  Then according to the Land Registry record, on 14 July 2006, there was the registration of an assignment dated 20 June 2006 (“Assignment”) to one Pong Hei Man (“D1”) under Memorial No 06071400120010. 

10.  A copy of the Assignment has now been produced in the 4^th affirmation of service of one Ng Chun Wing, a legal executive in P’s solicitors’ firm (“Ng”). As seen in the Assignment, the purported assignment was at a consideration of HK$1.00.  The Assignment appeared to be a self-made document (ie not by solicitors) and hand written and was purportedly signed by Madam Lau Toe and D2 as “Vendor” and D1 as “Purchaser”, and there was a purported signature of a witness called “Cecil Suen”.

The legal principles

11.  As set out in paragraph 19/7/11 of the Hong Kong Civil Procedure 2018, Vol 1, the court cannot receive any evidence in cases hereunder but must give judgment according the pleadings alone, and it is therefore not necessary on the hearing of the summons or motion for judgment to prove the case by evidence.  However, it is further set out under paragraph 19/7/11 that the court has, in the context of a claim for declaratory relief regarding possessory title to land in reliance on s 17 of the Limitation Ordinance, Cap 347, taken into account evidence filed by the plaintiff which cast doubts on whether the defendant is abandoning her entitlement to the land and default judgment was refused: see Fung Shek Wu v Chang Lai Yue (unrep, HCA 2258/2013 [2014] HKEC 716) per Registrar Lung, and later affirmed by this Court (unrep, HCA 2258/2013, [2014] HKEC 1558, at [40] – [42].

12.  Further, under paragraph 19/7/13, it is stated although Order 19 rule 7(1) is expressed in mandatory terms, the rule 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, and the court may, for instance, where there are matters affecting other parties waiting to be decided, order the motion to stand over until trial, or to stand over generally.

13.  Mr Sio had referred this Court to paragraph 19/7/20 where it is stated, amongst other things, that it is not the normal practice of the court to make a declaration without a trial particularly where the declaration is that the defendant in default of defence has acted fraudulently, although paragraph 19/7/20 goes on to state that this is only a rule or 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.

14.  In particular, it is stated that where declaratory relief is sought, the court expect maximum assistance to be provided in order for the relief to be granted, and however straightforward this kind of applications 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 present application

15.  There were three matters which raised concerns from the Court.

16.  First of all, it was by chance this the Court discovered from the Court’s paper files that there had been an earlier unsuccessful attempt on 6 March 2018 by P to apply for default judgment under Order 19 rule 7.  P’s summons was heard on 23 April 2018 before Madam Recorder Yvonne Cheng SC who duly dismissed the summons the same day with a written decision handed down the same day (“23.04.18 Decision”).

17.  It was clear, as set out in the 23.04.18 Decision that service on the defendants was unsatisfactory, and in any event, the application for default judgment was premature since time for filing the defence had not yet expired.  Madam Recorder Cheng was not satisfied that there had been proper service and this was because no explanation had been given as to why the Property was said to be the usual or last known address of either of the defendants, or otherwise as to how the usual or last known address of the defendants was ascertained.  As pointed out by the learned Recorder, after all, in the present case, it is P’s own case that P has been in exclusive possession of the Property since 1 February 2006. 

18.  What caused the Court concern was that P’s earlier summons and the 23.04.18 Decision were not included in the paginated bundles before this Court, nor was there any mention of the earlier summons or the 23.04.18 Decision by Mr Sio in his skeleton submissions, notwithstanding Mr Sio had attended the hearing before Madam Recorder Cheng.

19.  When this was pointed out at the hearing, Mr Sio apologized to the Court for the omission, and said because the present summons is a fresh application, only the papers concerning the present summons have been included in the paginate bundle.  However, as I have said during the hearing, in my view, it is P’s duty to place all matters before this Court, in particular when there had been an earlier application for the same relief which had been dismissed.

20.  Secondly, there is an obvious problem with the Assignment, since it was purported to be signed by Madam Lau Toe when according to the Land Registry record, she had died 12 years prior to the Assignment. This would in my view raise suspicion of fraud and/or forgery.  When this issue was raised at the hearing, Mr Sio then disclosed that P had made a report to the police regarding the Assignment.  Again, this was not disclosed in Mr Sio’s written skeleton submissions at all, and there was no explanations for the omission.

21.  Thirdly, on the writ, the addresses of the defendants were still stated to be the Property, which as seen above, are clearly not correct.  After P’s earlier summons was dismissed by Madam Recorder Cheng, according to the affirmations of service, the writ and the present summons were then served on D1 by registered and ordinary post, leaving and by posting up at an address of D1 on the Memorial No 06071400120010 dated 14 July 2016 (“123 Yu Chau Street Address”).  As for service on D2, he was served by registered and ordinary post, leaving and by posting up at an address stated in the assignment dated 20 April 1966 when he purchased the Property with Madam Lau Toe (“155 Pratas Street Address”).

22.  According to the Mail Tracking System of the Hong Kong Post Office, the delivery of the letter with the writ to D1 at the 123 Yu Chau Street was unclaimed by the addressee and returned to P, and similarly the letter with the writ to D2 at the 155, Pratas Street Address was unclaimed and returned to P.  Later, Ng had filed his 5^th affirmation of service in relation to the service of the present summons and he had produced a photograph of the entrance of the building at 123 Yu Chau Street.  There was however no number of the building shown in the photograph. 

23.  Since the registered letters to D1 and D2 were returned unclaimed, I am not satisfied that the defendants had notice of the writ and the present summons.  I have indicated that P should perhaps consider substituted service.

24.  In any event, since the Assignment is clearly problematic, it is not clear at this stage whether D1 has obtained any title to the Property.  It is also not clear under what circumstances or how Wing Cheetah became the landlord of P.  More importantly, the result of the police investigation is presently unknown.

25.  For all the above reasons, I have declined to grant default judgment.  I dismissed P’s summons issued on 22 August 2018.  I gave leave to P to amend the addresses of the defendants on the writ and directed that the matter to go to trial.  I made no order as to costs.