LIU KAM HOI AND OTHERS v. LIU PING KUEN

HCA 6728 /1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 6728 OF 1998

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BETWEEN

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DECISION

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A. Introduction

1.  This is the hearing of two striking out Summonses taken out by the registered co-owners (“the Applicants”) of Lot No. 285 in DD 52, Fu Tei Au, Sheung Shui, NT (“the Lot”) against Mr Liu Ping Kuen (“LPK”).

2.  The Applicants are the Plaintiffs in HCA 6728/98 (“the 1998 Action) and the Defendants in HCA 73/11 (“the 2011 Action”) respectively.

3.  LPK is the Defendant in the 1998 Action and the Plaintiff in the 2011 Action. He is the son of Liu Fun Kee, now deceased (“the Deceased”).  The parties in the 2011 Action are simply the flip side of the parties in the 1998 Action.

4.  In the 1998 Action:

(1) The Applicants seek possession from the Deceased the parts of the Lot occupied by him on the basis that the lease relating to those parts of the Lot had expired by way of the service of a notice to quit. At the time of the issue of the action, the Deceased was still alive.  However, LPK took over as the Defendant in the claim after the Deceased passed away in October 1998.

(2) The Deceased (and later LPK) initially defended the claim^[1]principally on the basis that a substantial part of the Lot (identified as the “Yellow Portion” in the Amended Defence and Counterclaim) occupied by the Deceased and his family members were leased to the Deceased by way of an oral agreement (“the Oral Agreement”).  The Oral Agreement was to the effect that the Deceased and his family members could stay there as long as they paid rent each year. 

(3) However, in 2010, the defence was changed^[2] and mounted on the basis that substantial parts of the Yellow Portion (now identified as Portions 1B, 1C and 1D in the Yellow Portion) had been adversely possessed by the Deceased and his family members since 1970, 1985 and 1986 respectively. It is still part of the Re-Amended Defence that a small part of the Yellow Portion (identified as Portion 1 and Portion 1A) was subject to the Oral Agreement.  At the same time, a large part of the Yellow Portion on the right side of the road dividing the Lot into two distinct halves has also been left out of the picture in the Re-Amended Defence and Counterclaim.  I would for convenience call this left out part as Portion Z.

(4) LPK further counterclaims, inter alia, for a declaration of possessory title by adverse possession of Portion 1B only.

5.  LPK later issued the 2011 Action on 13 January 2011 against the Applicants. The Statement of Claim was dated 18 March 2011.

6.  In the 2011 Action, LPK claims a declaration of possessory title over Portions X, Y (which are the same as Portions 1C and 1D) and Z on the above mentioned basis of adverse possession commencing in 1985 and 1986. 

7.  In the present applications, the Applicants ask for:

(1) In respect of the 1998 Action:

(a)  the striking out of the references to Portions 1C and 1D in various paragraphs[3] of the Re-Re-Amended Defence and Counterclaim (“RRAD & CC”); and

(b) the entering of partial judgment against LPK for the delivery of vacant possession of Portions 1C and 1D as referred to in the RRAD&C.

(2) In the 2011 Action, the striking out of the Statement of Claim.

B.    The grounds in support of the applications

8.  For the Applicants, Mr Ambrose Ho, SC, raises three grounds in support of the applications.   I will deal with them as follows.

The first ground

9.  First, Mr Ho says it is LPK’s own pleaded case[4] that the alleged adverse possession of Portions 1C and 1D only commenced in around 1985 and 1986.  Thus, the soonest he could obtain possessory title to these portions is 2005 and 2006.   But, before the requisite 20-year period has run, the Applicants have already by the 1998 Action sought to recover these parts of the Lot.   LPK therefore can never succeed in his claim for possessory title to these portions.

10.  I think Mr Ho is clearly right in his submissions.   In this regard, it is pertinent to note that even LPK’s own counsel had previously confirmed to Suffiad J that he did not counterclaim in the Re-Amended Counterclaim in the 1998 Action for possessory title over Portions 1C and 1D because the 20 years adverse possession would only have accrued some time in or after 2006, and therefore could not have been the subject of the Re-Amended Counterclaim^[5].

11.  Mr Paul H M Leung for LPK however submits that it is unclear that the Applicants’ pleaded claim in the 1998 Action included a claim for possession of Portions 1C and 1D.  Given that striking out should only be granted in a clear and obvious case, in light of this doubt, the Applicants’ first ground should fail.

12.  With respect, I do not agree with Mr Leung.

13.  In the Amended Statement of Claim of the 1998 Action, the Applicants were seeking to recover the parts of the Lot said to have been leased to the Deceased.  It is true that in this pleading, there is no precise identification of these parts of the Lot by way of description or a plan. 

14.  But, as mentioned above, in the Amended Defence and Counterclaim (dated 14 July 1999), in his own defence, the LPK clearly regarded the Yellow Portion as the disputed parts (being subject to the Oral Agreement) of the Lot in the proceedings.  The position to regard these as the disputed parts has not changed even after the further amendments made in 2010 by introducing Portions 1B, 1C and 1D in the Yellow portion as areas occupied by way of adverse possession.   

15.  Looking at it in another way.  It is common ground that the Applicants are the registered owners of the Lot, which includes the Yellow Portion.  It is also common ground that the Deceased and his family members have been occupying various parts of the Lot.  No matter on what basis (whether because of the Oral Agreement or adverse possession) the Deceased and his family members contend that they are entitled to continue to occupy those parts of the Lot, in my view, it cannot be clearer that by the 1998 Action, the Applicants are seeking to recover those parts of the Lot that have been occupied by the Deceased and his family members under the lease alleged by the Applicants.  Those parts cover (in both sides’ case) Portions 1B, 1C and 1D in the Yellow Portion.

16.  One may also ask rhetorically, if LPK did not regard or understand that the Applicants are seeking to recover areas of the Lot that included Portions 1C and 1D, why would it be necessary for him to plead by way of defence adverse possession relating to these portions.

17.  In my view, reading the relevant pleadings realistically, pragmatically and as a whole, it is clear that the Applicants were seeking to recover in the 1998 Action those parts of the Lot which includes portions 1C and 1D.

18.  In the premises, I agree with Mr Ho that LPK’s claim of adverse possession to Portions 1C and 1D is thus plainly and obviously unsustainable for the above reasons.  

19.  I would therefore strike out the references to Portions 1C and 1D in the relevant paragraphs in the RRAD&CC and enter partial judgment in favour of the Applicants as sought.  I would also strike out the parts of the Statement of Claim in the 2011 Action which relate to the claim for possessory title over Portions 1C and 1D (identified as Portions X and Y in that Statement of Claim).

The second ground

20.  Mr Ho’s second ground^[6] for striking out is that it is an abuse of process for LPK to now seeking to claim possessory title to Portion Z by way of adverse possession in the 2011 Action, as he has elected to abandon any such claim previously.   The argument runs as follows. 

21.  Mr Ho submits that LPK has elected to abandon any claim for any interest in Portion Z in the following manner:

(1) In the Amended Defence and Counterclaim (filed in July 1999), LPK’s counterclaim related to asserting an interest by way of the Oral Agreement over the Yellow Portion, which was the whole portion of the Lot (except the portions said to be occupied by other persons) including the part on the right hand side of the road (i.e, Portion Z).

(2) At a later time, when seeking to amend his case to one of adverse possession, LPK filed two drafts of the Re-Amended Defence and Counterclaim. In neither of the drafts was an assertion or a claim of adverse possession made to Portion Z (where, in contrast, he pleaded matters of adverse possession relating to Portions 1C and 1D).

(3) Furthermore, in support of his application for leave to amend, LPK filed three affirmations.  In these affirmations, LPK again did not assert any interest in relation to Portion Z (where again in contrast, he deposed to allegations of adverse possession to Portions 1C and 1D).   

(4) At the hearing before the Master and Recorder A Chow relating to his application for amending the Amended Defence and Counterclaim, arguments were advanced on the basis without any reference to any allegations of or claim for adverse possession of Portion Z^[7]. 

22.  The above conducts amount to (Mr Ho further says) explicit election not to make any claim over Portion Z.  Thus, LPK’s present attempt to revive his claim on Portion Z in the 2011 Action is (contended Mr Ho) a clear abuse of the court’s process and should be disallowed. 

23.  Mr Leung for LPK however submits that there could not be any election to abandon the claim over Portion Z.  This is so because the counterclaim made in the 1998 Action had been launched well before 2005, and LPK could not have included such a claim under the 1998 Action.

24.  Again with respect, I disagree with Mr Leung.

25.  As I mentioned above, in the various amendments and the affirmations made in support of the amendments in 2010, LPK had expressly made references to and allegations of adverse possession over Portions 1C and 1D (where adverse possession is also said to have begun in 1985 and 1986), even though he also could not mount, and did not in fact make, any counterclaim over these portions in the 1998 Action.

26.  When the said explicit lack of references to or making of any allegations of adverse possession over Portion Z is looked at against this context, and the background that, in resisting the claim, the Deceased and LPK originally included Portion Z in the Yellow Portion where they claimed an interest by way of the Oral Agreement, I accept that LKP’s above mentioned conducts amount to clear and unequivocal election to abandon any claim over Portion Z, which has been communicated to the Applicants.  He is bound by the principle of election. See: Spencer Bower, Estoppel by Representation (4^th ed), paras XIII.3.1 – 3.3; Scarf v Jardine (1882) 7 App Cas 345 at 361-2.

27.  It is therefore an abuse of process for LPK to seek to revive the claim over Portion Z in the 2011 Action.  I would therefore also strike out the Statement of Claim of the 2011 Action relating to the claim over Portion Z on this ground.

The third ground

28.  As I have allowed the Applicants’ applications on the above two grounds, it is not necessary for me to deal with Mr Ho’s further ground, where he says there have been various recent acknowledgements of the Applicants’ title by LPK as trespassers.  Mr Ho argues that the running of time under ss 23 and 24 of Limitation Ordinance (Cap 347) is thus postponed and the Applicants’ right of action is deemed to have accrued only on the date of the acknowledgement. 

29.  Suffice for me to say that I think there are some merits in Mr Leung’s arguments (for LPK) that it is at least arguable (for the purpose of a striking out application) that there have not been any valid acknowledgments of title, as LPK has affirmed that he was laboured under a mistake when making those conducts now relied on by Mr Ho.

30.  But as I said earlier, I do not need to decide on this point.

C.  Conclusion

31.  For the above reasons, I allow the applications. 

32.  I further order that costs of the applications be to the Applicants to be taxed if not agreed.

33.  I also wish to thank Counsel for their helpful assistance.