CHENG WAI KWONG v. CHANG LAI YUE

DCCJ 3743/2024

[2026] HKDC 992

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 3743 OF 2024

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JUDGMENT

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Introduction

1.  On 8 July 2024, the Plaintiff issued the specifically indorsed Writ of Summons (“Writ”) commencing the present proceedings against the Defendant.

2.  By the summons dated 28 May 2025 (“Summons”), the Plaintiff applied for default judgment against the Defendant pursuant to Order 13 rule 6 & Order 19 rule 7 of the Rules of the District Court (Cap 336H) (“RDC”).

3.  The Plaintiff’s case in essence is that he has been in adverse possession of the following lots since around 1998:

(1)  Part of Section C of Lot No 433 in Demarcation District No 107, Yuen Long, New Territories, Hong Kong;

(2)  Section C of Lot No 1736 in Demarcation District No 107, Yuen Long, New Territories, Hong Kong; and

(3)  Part of Lot No 1738 in Demarcation District No 107, Yuen Long, New Territories, Hong Kong.

(collectively “the Land”)

4.  In the Summons, the Plaintiff seeks, inter alia, the following reliefs:

(1)  A declaration that the Defendant’s title to the Land as identified and shown in yellow hatched black on the plan (“Plan”) annexed to the Statement of Claim (“SOC”) has been extinguished pursuant to section 17 of the Limitation Ordinance (Cap 347) (“LO”); and

(2)  A declaration that the Plaintiff is the owner in possession of the Land as identified and shown in yellow hatched black on the Plan.

The Plaintiff’s Pleaded Case

5.  The Plaintiff’s case as pleaded in the SOC is as follows.

6.  The Defendant has been the registered owner of the Land.

7.  From around 1994 to 1997, the Plaintiff’s father (“Father”) rented the Land, together with a portion of an adjacent lot, from one Mr Chan, who held himself out as a sub-lessor of the Land. The annual rent was HK$10,000.

8.  Since around 1994, the Father used the Land as an outdoor warehouse for storing motorcycles in the course of his motorcycle trading business. He erected a two-storey container structure on the Land to serve as an office, equipped with a toilet and an electric meter room. He also constructed iron films of around 6 feet high around the Land as division walls. He applied for electricity supply to the Land and paid the electricity bills until the Plaintiff took over his business in around 2005.

9.  Since around 1998, the Father was unable to contact the said Mr Chan, and ceased paying rent thereafter.

10.  Upon the Father’s retirement in 2005, the Plaintiff assumed exclusive control, possession and occupation of the Land. He continued to run the motorcycle business established by the Father, occupying the Land for the same purpose. He incurred expenses for the repair and maintenance of the Land, as well as the structures and facilities thereon, and settled the electricity bills of the Land until 2017, when the Land was leased to a tenant (“Tenant”).

11.  In around 2005, the Town Planning Board objected to the use of the Land as a warehouse for motorcycles. The Plaintiff then applied for planning approval of the Town Planning Board to use the Land for temporary “open storage of motorcycles for sale”. The application was approved in around 2006 and a short term waiver was granted for a term of 3 years.

12.  Between around 2005 and 2007, the Plaintiff also permitted lorries to be parked on the Land and collected parking fees as an additional source of income.

13.  In around 2008 to 2009, the Plaintiff arranged for his employees to stay overnight on the Land to watch over his motorcycles, most of which were imported from Japan and were valuable.

14.  In around 2009, the Plaintiff applied for renewal of the said planning approval. The application was approved and the short term waiver was extended for 1 year.

15.  Since around March 2017, the Plaintiff authorised Wing Sun Motors Co, a company operated by a friend of the Father, to act as his agent in leasing the Land to the Tenant. The rental income was collected by the Plaintiff and/or the Father.

16.  Since March 2020, the Plaintiff, under the trade name of Kwong Hing Trading Co, leased the Land to the Tenant. The rental income was collected by the Plaintiff and/or the Father.

Procedural History

17.  On 8 July 2024, the Plaintiff commenced the present proceedings.

18.  On 14 February 2025, Master J Chow granted an order for substituted service of the order and the Writ by inserting an advertisement of a Chinese notice of these proceedings once in the Hong Kong Commercial Daily (“Order”).

19.  Pursuant to the Order, an advertisement was published in Hong Kong Commercial Daily on 15 April 2025.

20.  The Plaintiff took out the Summons on 28 May 2025. The Plaintiff, by paragraph 3 of the Summons, sought directions that the Summons be served on the Defendant by way of substituted service by inserting an advertisement of a Chinese notice in the Hong Kong Commercial Daily.

21.  At the hearing of the Summons on 22 July 2025, Deputy District Judge B Mak noted from two “Statutory Declarations of Cheng Kwei Sheng” made in 1982 and 1988, in which an address in the United States (“US Address”) reportedly of the Defendant had been provided. The statutory declarations stated that the Defendant was the sister of the said Cheng Kwei Sheng. The learned judge accordingly set aside the Order and directed that the Summons be adjourned sine die, with liberty to restore.

22.  The Plaintiff attempted to serve the Writ on the Defendant at the US Address but in vain.

23.  On 27 February 2026, Deputy District Judge Tony Ko restored the Order. The Summons was also restored to be heard by this Court.

24.  While no directions had been made by the Court with respect to the service of the Summons on the Defendant, the Plaintiff in any event published the Summons in an advertisement in Hong Kong Commercial Daily on 3 June 2025 and 13 May 2026.

25.  As the Writ (which is specifically indorsed with the SOC) has been properly served on the Defendant pursuant to the Order, pursuant to Order 65 rule 9 of the RDC it is not necessary for the Plaintiff to serve the Summons on the Defendant.[1] The Plaintiff’s publication of the Summons by advertisement was merely an act out of abundance of caution.

26.  Having considered the matters above, I am satisfied that the Plaintiff has properly served the Writ on the Defendant by way of substituted service.

27.  Mr Him Ho of Counsel appeared at the hearing of 21 May 2026 for the Plaintiff. The Defendant, however, has not taken any steps to defend the present proceedings and did not appear at the hearing on 21 May 2026.

28.  In the circumstances, I consider it expedient to proceed with the hearing in her absence pursuant to Order 32 rule 5 of the RDC.

Applicable Principles

29.  In considering whether to grant default judgment under Order 19 rule 7 of the RDC, the Court cannot receive any evidence but must give judgment according to pleadings alone: Hong Kong Civil Procedure 2026 at §19/7/11.

30.  The Court’s practice in granting declaratory reliefs in a default judgment application is summarised in Hong Kong Civil Procedure 2026 at §19/7/20:

(1)  It is not the normal practice of the Court to make a declaration without a trial. However, this is only a rule of practice which should not be followed when the plaintiff has a genuine need for the declaratory relief and justice will not be done if such relief is denied.

(2)  Where declaratory relief is sought, the Court will scrutinise the application for default judgment carefully and does not hastily grant the relief sought.

(3)  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.

31.  For adverse possession, the relevant legal principles are summarised by the Court of Appeal in Tsang Foo Keung & Anor v Chu Jim Mi Jimmy [2017] 3 HKC 527 at §22:

(1)  The claimant must show that he has both factual possession during the relevant period and the requisite intention to possess.

(2)  What constitutes a sufficient degree of exclusive physical control 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.

Discussion

32.  Upon reviewing the SOC alone, I am satisfied that the Plaintiff has been in continuous and uninterrupted exclusive possession of the Land with requisite intention to adversely possess it.

33.  The Father enclosed the Land by building iron films as division walls, thereby effectively excluding others, including the Defendant. He also built a two-storey container structure to serve as an office. He arranged for electricity supply to the Land and paid the associated bills.

34.  After the Plaintiff took over possession of the Land upon the Father’s retirement in around 2005, he continued to use the Land for the motorcycle business, paid the electricity bills, obtained approval from the Town Planning Board, and expended money for repair and maintenance of the Land. He further assigned staff to watch over his motorcycles such that any unauthorised entry onto the Land would be effectively prevented.

35.  When the Plaintiff leased the Land to the Tenant in 2017 and received rent, he continued to be in adverse possession of the Land through the Tenant: Cheung Yat Fuk v Tang Tak Hong & Ors (2004) 7 HKCFAR 70 at §19.

36.  As the Plaintiff came into possession of the Land following the Father without interruption, he is entitled to tack onto the Father’s period of possession of the Land: Cheung Yat Fuk (supra) at §4.

37.  In light of the facts pleaded in the SOC, I find that there has been continuous adverse possession of the Land for a period exceeding 27 years, since around 1998. By virtue of section 17 of the LO, the Defendant’s title to the Land has been extinguished. Accordingly, the Plaintiff has acquired an indefeasible possessory title to the Land as against the Defendant.

38.  I also find that the Plaintiff has a genuine need for the declaratory reliefs sought, and that justice would not be done if such reliefs were denied. The declarations would enable the Plaintiff to show the world at large that he has acquired possessory title to the Land. I see no useful purpose that would be served by requiring the Plaintiff to go through a full-blown trial.

39.  In the circumstances, I am of the view that it is right and just to grant the declarations sought in the Summons.

40.  As a remark, Mr Ho, out of fairness, drew the attention of the Court of the fact that back in 2013, a Mr Fung Shek Wa, a friend of the Plaintiff’s father, commenced legal proceedings against the Defendant asserting that he had been in exclusive possession of the Land adverse to the Defendant, and thereby seeking declaratory relief of possessory title to the Land (HCA 2258/2013). Mr Ho further referred to the decisions of Mr Registrar KW Lung of 29 April 2014 and of Deputy High Court Judge B Chu of 18 September 2014, who dismissed Mr Fung’s application for default judgment on grounds of service and the state of evidence placed before them. I have retrieved the files of the said proceedings and noted that Mr Fung has ceased prosecuting the proceedings since September 2015. Accordingly, granting declaratory reliefs in favour of the Plaintiff herein will not be in conflict with any court order(s) / judgment(s) made under Mr Fung’s proceedings.

Conclusion

41.  By reason of the aforesaid, I make an order in terms of paragraphs 1 and 2 of the Summons.

42.  As for costs, as the Defendant is not actually traceable and has not defended, I make an costs order nisi that there be no order as to costs of the present proceedings, including the costs of the Summons.

43.  I thank Mr Ho for his assistance.