SHUM SAU YUEN v. THE ESTATE OF SHUM KAR FUN, DECEASED AND ANOTHER

HCA 485/2023

[2024] HKCFI 304

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CIVIL ACTION NO 485 OF 2023

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J U D G M E N T

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A.  Claim

1.  By a writ of summons endorsed with a statement of claim issued on 29 March 2023, the plaintiff asks for declarations that:

(1)  The title of Shum Kar Fun (the “1^st Deceased”) and Koo Sau Yin (the “2^nd Deceased”, together the “1^st and 2^nd Deceased”) to Flat C, 5/F, Cheong Yuen Apartments, Nos. 2-8 Tsat Tsz Mui Road, Hong Kong (the “1^st Property”) or any part thereof has been extinguished by virtue of sections 7 and 17 of the Limitation Ordinance (Cap 347) (the “Ordinance”);

(2)  The title of the 1^st Deceased to Ground Floor, No. 83 Baker Street, Hung Hom, Kowloon (the “2^nd Property”) or any part thereof has been extinguished by virtue of sections 7 and 17 of the Ordinance.

(3)  The plaintiff has acquired an indefeasible possessory title to the 1^st Property and the 2^nd Property; and

2.  By a summons dated 8 November 2023, the plaintiff applied for default judgment to be entered against the 1^st and 2^nd defendants pursuant to Order 19 rule 7 of the Rules of the High Court (“RHC”) based on a claim in adverse possession, and the 1^st and 2^nd defendants having failed to give notice of intention to defend or file any defence.

B.  Background

3.  The 1^st and 2^nd Deceased are the registered owners of the 1^st Property and the 1^st Deceased is the registered owner of the 2^nd Property.

4.  The plaintiff’s pleaded case is as follows:

The 1^st Property

5.  The plaintiff had occupied the 1^st Property since 1997 continuously:

(1)  In around 1996, the plaintiff’s father came into possession with the keys to the 1^st Property from the 1^st Deceased.

(2)  In early 1997, the plaintiff’s father’s health deteriorated and was hospitalised. The plaintiff’s father entrusted the plaintiff to have custody of the keys to the 1^st Property.

(3)  In mid - 1997, without anyone’s knowledge, consent or authorisation, the plaintiff made duplicates of the keys to the 1^st Property for his own use.

(4)  In around late 1997, the plaintiff moved into the 1^st Property and replaced the locks with one that only the plaintiff had the keys to. The occupation was without the knowledge, consent or authorisation of anyone else.

(5)  Immediately after moving in, the plaintiff hired contractors to renovate the 1^st Property to make it habitable for himself.

(6)  The plaintiff hired contractors to conduct major renovation of the 1^st Property again in around 2000.

(7)  Since moving in, the plaintiff had treated the 1^st Property as his own and had paid all outgoings including rates, management fees, water and electricity fees.

(8)  The plaintiff had not paid rent to anyone for his occupation of the 1^st Property including his father and the 1^st and 2^nd Deceased.

The 2^nd Property

6.  The plaintiff had occupied the 2^nd Property continuously from around 1997 until it was ordered to be sold pursuant to the Land (Compulsory Sale for Redevelopment) Ordinance in October 2020:

(1)  As the plaintiff was renovating the 1^st Property in 1997, he discovered within the 1^st Property the keys to the 2^nd Property in an envelope written with the full address of the 2^nd Property.

(2)  After the plaintiff visited the 2^nd Property and found it to be in serious disrepair, he hired contractors to clean up the 2^nd Property and replaced the old and rusty gate with a new metal gate and locks without the consent, knowledge or authorization of anyone else. Only the plaintiff had possession of the keys to the new locks.

(3)  After major renovation of the 2^nd Property, the plaintiff had leased it to tenants as a landlord.

(4)  The plaintiff had all along treated the 2^nd Property as his own and paid all outgoings thereto.

(5)  The plaintiff had not paid rent to anyone else including his father and the 1^st Deceased.

C.  Service

7.  The 1^st Deceased passed away in 1998 and the 2^nd Deceased passed away in 1995.

8.  No grant of probate was made in respect of the 1^st and 2^nd Deceased. No relatives or descendants came forward to represent the estate of the 1^st and 2^nd Deceased despite efforts having been made to locate them.

9.  By an Order dated 11 September 2023, the Official Solicitor was appointed to represent the estate of the 1^st and 2^nd Deceased for the limited purpose of accepting the Writ.

10.  By another Order dated 18 October 2023, the plaintiff was granted leave to proceed with the action against the 1^st and 2^nd defendants in the absence of anyone representing them. Service of all future court documents on the 1^st and 2^nd defendants were dispensed with.

11.  The 1^st and 2^nd defendants have not filed any acknowledgment of service nor defence to the plaintiff’s claim. The 1^st and 2^nd defendants did not appear at the hearing of the application either. In the circumstances, I am satisfied that the court may proceed in the 1^st and 2^nd defendants’ absence pursuant to Order 32 rule 5 of the RHC.

The Law – Default Judgment and Declaratory Relief

12.  In considering whether to grant judgment in default, the court cannot receive any evidence but must give judgment according to the pleadings alone[1].

13.  Hong Kong courts have in the past granted declaratory relief in adverse possession cases before: in Law Yuk Fong v Man Chung Wai & Anor[2], DHCJ Marlene Ng (as she then was) considered the relevant principles and referred to and summarised a number of decisions in which declaratory relief was granted in cases involving interests of land:

“Declaratory relief and default judgment

13. In an application for default judgment under Order 19 rule 7 of the RHC, the court would give judgment according to the pleadings alone, so it is not necessary for the plaintiff to prove the case by evidence.[3] But Order 19 rule 7 of the RHC 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.[4] Further, the statement of claim must show a case for the order the plaintiff seeks to obtain. Hong Kong Civil Procedure 2017 goes on to say:

‘...... it is not the practice of the court to make a declaration of right in default of defence, ...... but where such relief is to be granted without trial or evidence, the right course for the court is not to make a declaration but to state on what footing the relief is to be granted (Wallesteiner v. Moir [1974] 1 W.L.R. 991; [1974] All E.R. 217; per Buckley and Scarman L.JJ.).[5]

......

The principle that a declaration will not be granted when giving judgment ...... without trial, e.g. where judgment is obtained in default of defence or notice of intention to defend, is a rule of practice and not of law and will give way to the paramount duty of the court to do the fullest justice to the plaintiff to which he is entitled (Patten v Burke Publishing Co. Ltd [1991] 1 W.L.R. 541; [1991] 2 All E.R. 821.)’ [6]

‘Where declaratory relief is sought, the court will scrutinize the application for default judgment carefully and will not hastily grant the relief sought ......

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 application 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 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 ......’ [7]

...

18. In Lam Shing Shou v Lam Hon Man & ors,[8] the plaintiff sought declarations to the effect that the approvals to successions of ownership in land in New Territories given by various District Officers in 1947, 1997 and 1998 should not have been given. Chu J (as she then was) noted that since the declaratory relief was the only and substantial relief sought by the plaintiff, the course suggested in Wallesteiner v Moir, ie to state the footing on which the relief is granted but not to give a declaration to the effect that that footing reflects the legal position, had no application, and justice could not be done in the case before her ladyship if the plaintiff was to be denied the declaratory relief sought.

19. In Lai Wai Kuen v Wong Shau Kwong,[9] a property was owned by tenants-in-common. One co-tenant passed away at age 91 years, and very little was known of the other co-tenant. A co-executrix of the estate of the deceased co-tenant wished to rebuild the house on the property, and sought an order from the court as to the extinction of the defendant’s interest in the property. The court was satisfied the co‑executrix (who applied for default judgment) had a genuine need for the declaratory relief “and the court could properly grant her such relief based on the merits of the case” (ie the court was satisfied there was ouster of the other co-tenant).

20. In Wu Chi Kwong v Estate of Cheung Man Yau,[10] the plaintiff claimed adverse possession of various lands in the New Territories against the defendant (who was at least aged 21 years in 1905 and was presumed dead as he had not been seen or heard of since 1934). The Official Solicitor accepted service of the proceedings on behalf of the estate of the defendant, but no defence was filed. Recorder Gerard McCoy SC held that P established a case of adverse possession, and the merits were overwhelmingly in his favour, so it would be wrong for the court not to purify the titles which had effectively been abandoned by the registered owner since 1934.”

14.  HH Judge Alex Lee (as he then was) in Lee Kwok Leung and anor v Li Foa Shang[11]granted declaratory relief in an adverse possession case where the defendant had similarly not filed any documents nor appeared at the hearing, after having been satisfied that the pleadings in that case supported a case of adverse possession.

15.  In the present case, declaratory reliefs are the only and substantial relief sought. I am satisfied that, if a case of adverse possession is made out, the balance of justice weighs towards departing from the rule of practice to not grant declaratory reliefs for the following reasons:

(a)  The period of continuous exclusive possession has been over 26 years.

(b)  The plaintiff requires a declaration to obtain the compensation for the compulsory sale of the 2^nd Property.

(c)  The declaratory relief is the only relief that the plaintiff requires to purify the titles to the 1^st Property and the 2^nd Property which had been abandoned by the registered owners.

The Law – Adverse Possession

16.  Section 7(1) of the Limitation Ordinance, Cap 347, provides for a limitation period of 12 years in an action to recover land. Under the transitional provision i.e. section 38A, a limitation period of 20 years applies to causes of action which accrued before 1 July 1991: Tsang Wing Kit Eric & Another v Occupiers & Others [2009] 3 HKC 496.

17.  Since the plaintiff’s case is that adverse possession occurred some time in 1997 by him, the relevant limitation period in the present case is thus 12 years.

18.  The principles concerning adverse possession are well known and have recently been summarized by the Court of Appeal in Tsang Foo Keung & Anor v Chu Jim Mi Jimmy [2017] 3 HKC 527:

(1)  In order to succeed in claiming possessory title by adverse possession, the claimant must show that he has both the factual possession during the relevant period and the requisite intention to possess.

(2)  The requisite factual possession is a sufficient degree of exclusive physical control, and what is sufficient 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.

(5)  Evidence of subjective intent should be approached with caution. Intention is normally better assessed by inference drawn from the acts of the possessor in the light of nature of the land and its use.

19.  Mr Lam, Counsel for the plaintiff submitted, and I accept that the plaintiff’s continuous and uninterrupted physical/factual possession and his intention to possess are sufficiently and properly pleaded in the statement of claim as set out hereinabove. I am satisfied that the plaintiff had occupied the 1^st Property and 2^nd Property exclusively since 1997 and the plaintiff has shown the requisite intention to possess: 1) the 1^st Property and has established possessory title against the 1^st and 2^nd Deceased; and 2) the 2^nd Property and has established possessory title against the 1^st Deceased.

Conclusion

20.  I will thus grant the following order:

(1)  The title of Shum Kar Fun and Koo Sau Yin to Flat C, 5/F, Cheong Yuen Apartments, Nos. 2-8 Tsat Tsz Mui Road, Hong Kong or any part thereof has been extinguished by virtue of sections 7 and 17 of the Limitation Ordinance (Cap 347).

(2)  The title of Shum Kar Fun to Ground Floor, No. 83 Baker Street, Hung Hom, Kowloon or any part thereof has been extinguished by virtue of sections 7 and 17 of the Limitation Ordinance (Cap 347).

(3)  A declaration that the plaintiff has acquired an indefeasible possessory title to Flat C, 5/F, Cheong Yuen Apartments, Nos. 2-8 Tsat Tsz Mui Road, Hong Kong and Ground Floor, No. 83 Baker Street, Hung Hom, Kowloon.

(4)  There be no order as to costs of this action and of this application.