WONG HOI TUNG TSO v. ALL OCCUPIERS (WHOSE NAMES ARE UNKNOWN, EXCEPT THE 2ND TO 5TH DEFENDANTS) AND OTHERS

HCMP 761/2015

[2025] HKCFI 3031

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 761 OF 2015

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DECISION

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I.  Introduction

1.  This case concerns the Plaintiff’s (“P”) action to obtain vacant possession of Lot 80 of DD 100 (“Land”) against the Defendants.  At the hearing on 7 May 2025 (“the Hearing”), I heard the application by the 2^nd, 3^rd, 4^th Defendants and the Intended 6^th Defendant (respectively “D2”, “D3”, “D4”, “D6”, collectively, “Ds”) to set aside the default judgment on 23 July 2024 (“Setting Aside Application”).  By my order, the Setting Aside Application was dismissed with costs against Ds (“the Order”).  In gist, the Order was made as I found that:

1.1  Ds have failed to satisfy the Court that default judgment was irregular ie obtained based on bad or ineffective service. 

1.2  Ds have failed to satisfy the Court that their defence has any real prospect of success. 

2.  Ds have since on 20 May 2025 filed notice of appeal to judge in chambers against the Order (“the Notice of Appeal”).  Before me now is Ds’ application by summons that the execution of the Order be stayed pending the determination of Ds’ appeal (“the Stay Application”).  As P oppose the Stay Application, by parties’ consent summons dated 23 May 2025, the Stay Application is to be disposed of by me on paper. 

3.  Ds’ Stay Application was filed together with the affirmations of D2, D3, D4 and D6 (“the Stay Affs.”).  Having sight of the Stay Affs., I note that:

3.1  Ds say that they will suffer serious prejudice in the absence of a stay, in that P is at liberty to take vacant possession of the Land and/or sell the Land and/or demolish or alter structures therein.  

3.2  Ds say that there is minimal prejudice to P. 

3.3  Ds have confirmed they “rely on the evidence before the learned Master and verily believe that they demonstrate a reasonable prospect of success” and thus do not purport to rely on any fresh evidence for the purposes of their intended appeal.  

4.  Having considered both sides submissions, I hereby refuse and dismiss the Stay Application, with costs to be paid by Ds to P forthwith.  Below are my reasons.  

II.  Legal principles

5.  The principles regarding applications for stay pending appeal is trite and not in serious dispute between parties.  In gist:

5.1  The existence of an arguable appeal ie one with reasonable prospects of success is the minimum requirement before a court would consider granting a stay.  The threshold is one of “strong grounds” of the proposed appeal, which is higher than that of chances of success for considering whether leave to appeal should be granted^[1].

5.2  If the appellant fails to show a reasonable prospect of success, it is not necessary for the Court to consider whether the execution of the judgment will render a successful appeal nugatory.^[2]  

5.3  If there is an arguable appeal, the appellant shall provide additional reasons as to why a stay is justified eg where an appeal will be rendered nugatory.^[3]

5.4  The Court must not forget the position and/or prejudice that would be caused to the respondent in the appeal in the event a stay is granted. If necessary, the Court should consider imposing conditions for stay to minimize the prejudice caused to the respondent.^[4]

5.5  The Court ultimately embarks on a balancing exercise and uses its common sense, bearing in mind the starting point being that the successful party is not to be deprived of the fruits of his success.^[5]

5.6  In assessing the strength of the appeal for the purposes of a stay application, a broad-brush approach should be adopted. ^[6] 

6.  Further, on the nature and scope of an appeal from master to judge in chambers^[7]:

6.1  An appeal from master to judge in chambers is a hearing de novo.

6.2  Save as to possible issues on costs, parties are not confined to the points taken before master. 

6.3  Insofar as any appellant wishes to rely on new evidence for the purposes of the appeal, O 58 r 1(5) of the Rules of the High Court provides that “No further evidence (other than evidence as to matters which have occurred after the date on which the judgment, order or decision was given or made) may be received on the hearing of an appeal under this rule except on special grounds.” [emphasis added].

6.4  “Special grounds” in the quoted rule, as is trite, refers to what is commonly known as the “Ladd v Marshall” conditions, ie (a) that the evidence could not have been obtained with reasonable diligence for use at the hearing below, (b) the evidence must be such that, if given, it would probably have an important influence on the result of the case, though it need not be decisive, and (c) the evidence must be such as is presumably to be believed.

7.  Further, for the purposes of the Setting Aside Application:

7.1  Whilst Ds heavily rely on HKCP Vol 1, §13/9/5 which says “when a defendant deposes that he has not received the writ through the post, the court has little option but to believe this”, the sentence is expressly subject to the following sentence, “save when there is sufficient material to cast doubt upon the defendant’s credibility to enable the court to disbelieve him (which is a matter of evidence dependent on the circumstances of the case)”.  Wei Bingqing v Xie Diangrong (unrep, HCA 2654/2003, Hon Chung J, 2.8.2005) is cited.  

7.2  In Wei Bingqing v Xie Diangrong, the Court at p 12 referred to Bank of China (Hong Kong) Ltd v Cheung King Fung, Francis and Anor (unrep, CACV 66/2005, 22.7.2005) that the passage is not to be read as suggesting that the court must accept a defendant’s assertion no matter how improbable.  Further, it was pointed out that:

a.  The burden is on the applicant to prove that judgment was irregular.  How much evidence is required to discharge the burden of proof is a matter of evidence, and must depend on the circumstances of the particular case. 

b.  The court has discretion as to whether to order cross-examination of the deponent of an affirmation of service.  Whether to order such cross-examination again depends on the circumstances of each case.  

c.  Proof that a letter has been properly addressed, prepaid and posted to the proper address of the person to be served and not returned by the post office affords prima facie evidence that it has been duly delivered.  

7.3  Where the Court finds the default judgment to be regular, the defendant must show a “real prospect of success”, which is not merely “arguable”- the case of the defendant and the evidence he adduces in support must be potentially credible and carries some degree of conviction. ^[8]

III.  Analysis

8.  Having considered carefully parties’ submissions, I find that Ds have failed to demonstrate any reasonable prospect of success for their appeal, be it on the issue of service of the Amended Originating Summons dated 28 July 2022 (“the AOS”) and the Statement of Claim dated 16 August 2022 (“the SOC”) or the merits of their defence.  As such, the Stay Application is accordingly dismissed.

A.  Service

9.  On the issue of service, Ds “rely on the same written and oral submissions before the learned Master”^[9] at the Hearing, and further made the suggestion that the Court should consider “the reasonable possibility that those court documents naturally fell off or were removed by third parties…before Ds would have the chance to pass through those areas, such that….Ds’ affirmations stating that they have never seen the court documents…”[10]. No further submissions were made by Ds as to why my decision and/or analysis therein were wrong.  As such, I shall first summarize succinctly my reasons given at the Hearing as follows, followed by my reasons as to why the “Fell-off/Removed” allegation has no reasonable prospect of success.  

10.  On law, as summarized above, Ds’ point that “when a defendant deposes that he has not received the writ through the post, the court has little option but to believe this” is subject to the important proviso “save when there is sufficient material to cast doubt upon the defendant’s credibility to enable the court to disbelieve him”.  Nor is the passage suggesting that the court must accept a defendant’s assertion no matter how improbable, and the burden is squarely on Ds to prove irregularity.  Here, there is clearly sufficient material to cast doubt upon Ds’ credibility, nor has Ds satisfied their burden of proof. 

11.  On service to D2 by inserting and posting into D2’s mailbox:

11.1   Service was by inserting and posting by ordinary mail the documents into his mailbox at 香港新界元朗西堤街10-12號遠東樓4字樓C室 (“Yuen Long Address”).  This was the address for service D2 himself provided in his affirmation back in 2015, and it has not been suggested that this was no longer his address;

11.2   D2, by bare allegation, says that he has never received the letters from his mailbox at the Yuen Long Address.

11.3   I find D2’s allegations unbelievable as:

a.  the letters were never returned.

b.  whilst D2 says that his letterbox was not large enough, the photos adduced by D2 simply did not reflect that.

c.  while D2 refers to the point that, on some dates his letter box was all full and letters falling out, that is simply not the state of his box as exhibited.

12.  On service to Ds by posting to conspicuous places of the Land, specifically on the gate of the main entrance (“Gate”) and on the red door of an adjacent structure (“Adjacent Red Door”):

12.1   Firstly, at the Hearing, I wholly rejected Ds’ assertion that the P’s solicitors removed the documents after sticking them on the Gate and the Adjacent Red Door and taking photos of them.  This amounted to an allegation of perverting the course of justice.  Ds needed cogent evidence for fraud, forgery or similar allegations.  The Bar Code also has similar requirements to that end.  I found that there was no evidence whatsoever, let alone cogent evidence, to substantiate this allegation. 

12.2   As to service on the Adjacent Red Door, I accepted P’s submissions that, by comparing Ds’ claimed occupied areas and their apparent change of case over time, it appears to be a contrived case tailored for explaining why they did not see the documents posted.  In any event, during service on 12 July 2022, those acting for P in fact met and personally served on D4 the relevant documents at what was perceived as the front entrance of the structures on the Land ^[11]. There was no proper reason to doubt that such location was indeed the front entrance of the structures on the Land where the alleged occupants ie Ds would have passed-by.

12.3   Ds’ attempt to suggest any act of perverting the course of justice, and their incredible arguments and change of case to suit an explanation for not noticing the documents, were matters that I should take into account to disbelieve Ds when they say they have never seen the documents. Given the status of the pictures, I found that the documents were stuck on conspicuous space of the Land.  Further, I found it unbelievable that someone who allegedly lived on the Land and/or regularly paid visits there would have ignored such conspicuous plastic bags, stuck at the Land on multiple occasions and on multiple spots over a long period of time as P has proved undisputedly.  

13.  Returning to Ds’ newly raised argument that the plastic bags containing the AOS and/or the SOC might have “fallen-off” or been “removed” by third parties: 

13.1   This is a matter never raised on the evidence by Ds at the Hearing.  Whilst Ds may raise new points as an appeal to Judge in chambers de novo, any allegations which require new evidence would have to satisfy the Ladd v Marshall test.  The suggestion that the documents and/or plastic bags might have “fallen-off” or been “removed” is, as the materials stand before me, completely unsupported by evidence and a bare theory from the bar table.  Nor has Ds even attempted to suggest (be it by affirmation or submission) as to how the Ladd v Marshall test could be satisfied and/or what new evidence may be adduced to substantiate this new theory. 

13.2   Further, Ds’ “fell-off” or “removed” theory is contradicted by the evidence before me at the Hearing.  

a.  From the photographs exhibited by P^[12], the plastic bags appear for all intents and purposes to be reasonably securely affixed at the relevant places and structures at the Land, and on multiple occasions and locations. Indeed, as can be seen at eg [D/pp 385,386, 422, 423], the multiple plastic bags were not only stuck, but also secured by tying and hanging, with clips securing said documents to the plastic bag, to the relevant locations.  There being never any attempts to dispute the relevant affirmation of service and/or call the affirmants for cross-examination, Ds have no basis to doubt the validity and/or quality of service by P. 

b.  The Land or its vicinity were never suggested to be well populated by any measure.  No evidence whatsoever had been adduced by Ds as to the surroundings of the Land and/or who else (beyond Ds) would venture into the Land and for what imaginable purposes.  Nor is it possible to imagine why any third-parties, unrelated to these proceedings, would take away evidently important legal documents with serious consequences.  

13.3   Against such evidence, the suggestion that all these plastic bags, on all the multiple occasions over time, all conveniently fell-off and/or were taken away is, with respect, completely without basis and stand to be dismissed ad limine.

13.4   The new allegation is no answer in relation to D2 in any event, who was served at his Yuen Long Address. 

14.  In the end, in light of undisputed compliance with the relevant rules for service and/or orders for substituted service by P, the burden to prove irregular service lies squarely on Ds.  Ds’ case, based purely on speculation and bare allegations, cannot possibly satisfy the burden, especially in light of their demonstrated tendency to make serious accusations without basis (such as that of fraud by P’s solicitors) which casts grave doubt on Ds’ credibility.  I have no difficulty in finding that Ds’ appeal on the issue of service has no reasonable prospect of success.  

B.  Merits

15.  On the issue of merits, Ds again “rely on the same written and oral submissions before the learned Master”^[13] at the Hearing, and further submitted the following:

15.1   Ds put “focus on the defence of adverse possession”, and say they “have a reasonable prospect of success even if the Court finds that the default judgments are regular”;

15.2   This is “not a full fledged…trial” and Ds should not be “held to a standard of proof of a squatter at the stage of an actual adverse possession trial”;

15.3   The Court should “consider whether there is a reasonable prospect that when the case goes to the final stage of trial, whether Ds would succeed in their defence of adverse possession”;

15.4   “discovery and evidence stage has not begun”, and Ds have in their affirmations “reserved the right to adduce further evidence at a later stage of trial pending discovery”;

15.5   Ds had to take out the Setting Aside Application “on an extremely urgent basis”;

15.6   Ds “cannot have sought extension of time to adduce…evidence and/or could not have “’sneaked in’  such evidence…[in] affirmation in reply…”

15.7   It was “overly harsh for the Court to put Ds to the standard that they needed to have all the evidence (ie full set of utility bills and photographs spanning the entire alleged period of occupation…or even an expert report proving their occupation status)” at the Setting Aside Application stage.

15.8   There is “another reasonable possibility that Ds would be able to, in..due course of the discovery and evidence stage, …provide more evidence to support occupation of the…missing years”

15.9   The fact that Ds have written to the Water Supplies Department “does not mean that these are all the exhaustive measures that Ds have taken and will take to gather evidence”… and there is a “prospect that throughout discovery and evidence stage, more evidence could be gathered”.

15.10 That a member of P’s solicitors was able to enter part of the occupied area does not render Ds’ case completely unbelievable. 

16.  I shall again first summarize succinctly my reasons regarding merits given at the Hearing as follows, and my reasons as to why Ds’ new submissions are again without reasonable prospect of success. 

17.  As I have found the judgment to be regular, the burden on Ds is to show that they have a real prospect of success.  Ds must satisfy the court that their case and the evidence that they adduce in support of it is potentially credible and carries some degree of conviction.  Thus, the court must form a provisional view of the probable outcome of the action: see HKCP, Vol 1, §13/9/14. 

18.  Ds at the Hearing relied on two grounds: (1) they had purchased the occupied areas from one Mr Wong Tin Yau, or “some elderly person surnamed Wong”; and (2) they were adverse possessors, using the occupied areas for purposes such as fishpond, pig shed, and living therein. 

19.  Firstly, on the case of “purchase of land”, there is no assertion by Ds suggesting how the alleged vendor of the Land had authority to represent P, the proper owner of the legal title, to sell the Land.  This is alarming especially when at least D2 would have known Madam Li Kwai Kiu was the manager who let the Land to D2 as tenant^[14]. At the time, Wong Tin Yau was not the manager of P.  Hence, the case on their affirmation does not even get off the ground.  An alleged agent who did not have actual or apparent authority to bind the principal cannot acquire apparent authority simply by representing to the third party that he had such authority. See: Thanakharn Kasikorn Thai Chamkat v Akai Holdings Ltd (2010) 13 HKCFAR 479. 

20.  Secondly, when it comes to the issue of adverse possession, Ds’ allegations were entirely baseless.  As I found at the hearing, Ds have been unable to properly explain the lack of documentary evidence proving possession and occupation between 1985 and 2015^[15].  I noted that some bills showing usage were available in the year around 1984 to 1985^[16], one dated May 2015^[17], and then another for August to October 2024^[18]. Ds had time to gather evidence from the relevant utility company showing that the electricity bills account were active.  However, no electricity bills, nor water bills, were presented regarding actual usage during any of the other intervening years, nor were there reasons given as to the absence.  It renders Ds’ case incredible (and in any event not of real prospect of success), especially when the purported use of the Land was for farming, including fishpond and pig shed, as well as for living therein, and as such water and electricity ought to have been used throughout the years if Ds’ allegations were true at all. 

21.  Ds’ new arguments made for the purposes of the Stay Application misconceived my reasoning as explained at the Hearing.  Ds were never “held to the standard of proof of a squatter at the stage of an actual adverse possession trial”- that standard would have been one of balance of probability.  At this stage, given my finding that the default judgment was regular, Ds must satisfy the court that their case and the evidence that they adduce in support of it is potentially credible and carries some degree of conviction.  The unexplained lack of evidence for possession, which ought to have been available to Ds if their case were true, led to the inevitable result that Ds’ case and evidence neither potentially credible nor carry any degree of conviction.  

22.  Ds’ arguments that more evidence may be available come the time of trial carries no force. 

22.1   At least D2, D3 and D4 were aware of this action more than 10 years ago in 2015.^[19]

22.2   Ds were the applicants who presented the Setting Aside Application, with the burden of proof they have to satisfy in law.  If they required more time and/or opportunity to gather evidence, seek discovery and/or file further affirmations, there are mechanisms under the Rules of the High Court for them to do so.  If they have chosen not to (or were otherwise unable to) do so, then they must bear the consequences of presenting the Setting Aside Application in the state and with the evidence (or lack thereof) that was before me.  To that end, Ds’ allegations that they “could not have sought time to adduce evidence” or “could not have put in evidence in affirmation in reply” are baseless and hollow. 

22.3   Given this is a Stay Application, I shall further consider whether Ds may nonetheless satisfy the Ladd v Marshall test in adducing further evidence at the appeal before Judge, such that they may have a better prospect of success.  Plainly, Ds cannot, as Ds have not explained at all how any new evidence (which they cannot even identify) (a) could not have been obtained with reasonable diligence for use at the Hearing, (b) would probably have an important influence on the result of the case, or (c) is presumably to be believed.  

22.4   As such, at the intended appeal, beyond Ds’ asserted hope that “something may turn up come trial”, the Court will be left with the same lack of evidence and explanation that I faced at the Hearing.  The lack of evidence is all the more striking given the fact that yet 3 more weeks had passed between the Hearing and Ds’ skeleton for this Stay Application, and still Ds are unable to at the very least identify what new evidence they may possibly find in their favour.  If there is nothing to begin with, there is nowhere for dust to settle. 

23.  Thirdly, at the Hearing, Mr Ho for Ds suggested that enclosure, regardless of lack of proof of occupation, would be enough. I rejected his submission. 

23.1   Factually, Ds have provided no evidence showing when the area has started to have been fenced off.  Indeed, on P’s case and as established by cogent evidence, some of the structures were built with the approval of the relevant government departments as applied by P.  Prima facie, the structures, without occupation, could not be regarded as an act of possession contrary to P’s right.  Hence, the allegation that the Land was fenced and/or enclosed for the material period does not get off the ground. 

23.2   Nor legally has Mr Ho provided any authorities to support his contention that mere enclosure, without occupation, would have been enough.  

24.  Ds further misconceived P’s point, which I accepted, regarding P’s legal representatives being able to enter the Land (without obstacles nor fences) to effect service.  

24.1   The starting point was that beyond bare allegation Ds had no evidence at all to prove when they have allegedly fenced off the Land.  Insofar as it is alleged that the fencing was by D2 shortly after his alleged purchase of the Land in 1985 this was again unhelpful, for on cogent evidence D2 rented his area from Chan Kwai Kiu, then manager of P, in 1986^[20], a fact which Ds had no proper answer to whatsoever.

24.2   In support of Ds’ case of adverse possession, it was Ds’ case that they have fenced off the Land with locked gates^[21], such that no outsiders could enter without permission.  Based on this allegation, Ds’ counsel submitted that “enclosure was enough” for adverse possession. 

24.3   The hitherto unchallenged evidence from P was that, as of 18 April 2015, P’s representatives were able to enter into the Land and affix court documents contained in plastic bags by leaving the same at structures and erections found on the Land marked as S1-1, S1-2, S2, S4, S5, S6, a Worn Lorry and an Iron Wire-fence Gate.^[22]  P’s representatives could not post up documents at the frontage of S-3, not because of wires, but because of holes and bushes making it dangerous to do so, and was nonetheless able to throw the documents near to S-3.^[23]  As shown in Exhibit LPFT-1, such structures were within the Land.  This renders Ds’ case of complete enclosure by fence and/or locked gate of the Land, such that outsiders could not enter without permission, unbelievable. 

25.  As stated in HKCP, Vol 1, §13/9/14, where judgment is regular, it is not sufficient for Ds to show a merely “arguable” defence that would justify leave to defend under O 14 summary judgment applications.  As such, just as bare surmise and Micawberism with a hope that something might turn up on investigation will not get one leave to defend in an O 14 application^[24], a fortiori it will not suffice to establish a “real prospect of success” as required in an application to set aside regular default judgment.  Accordingly, I find no reasonable prospect of success in Ds’ intended appeal on the merits of their defence. 

C.  Prejudice

26.  Given my finding on the lack of reasonable prospect of success of Ds’ appeal, it is unnecessary for me to deal with the alleged prejudice in length.  Suffice it to say, P being the successful party at the Hearing is prima facie entitled to enforcement.  I accept P’s submissions that Ds have failed to show any prejudice which could not be compensated by damages (if any), and in any event some of the structures on the Land were subject to building orders dating back to 6 July 2012 and are bound to be removed in any event.

IV.  Conclusion and Costs

27.  Given the above, I dismiss the Stay Application. Costs should follow the event. I order on a nisi basis that Ds shall pay P’s costs for the Stay Application forthwith, to be taxed if not agreed, with certificate for counsel.