WONG TANG KIN KENNEDY, WONG HUNG HEE and WONG WAN LEUNG suing as Managers of WONG WAI TSAK TONG v. The Personal Representatives of HO MEI, deceased

HCA 1149/2021

[2025] HKCFI 3222

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1149 OF 2021

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BETWEEN

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J U D G M E N T

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A. INTRODUCTION

1.  This is the Plaintiff’s application by summons dated 18 February 2025 for default judgment (“Default Judgment Summons”).

2.  The Plaintiff consists of the current registered managers of the Wong Wai Tsak Tong (“the Tong”). The Plaintiff seeks declaratory reliefs against the Defendant in respect of Lot No.1028, Cheung Chau, NT, Hong Kong, also known as No. 50 Lung Tsai Tsuen, Cheung Chau, New Territories, Hong Kong (“the Subject Lot”), on the alternative bases of adverse possession or ownership of the Subject Lot.

3.  By order of the Court, the Official Solicitor has accepted service of the writ of this action on behalf of the Defendant (“the Estate”). There is subsequently an order for the action to proceed without a legal representative of the Estate.

B. THE PLAINTIFF’S PLEADED CASE

4.  By a Block Crown Lease dated 18 March 1905 (“the Government Lease”), the Government granted to the Tong a lease of over 600 lots covering over 90% of the land in the island of Cheung Chau, including the Subject Lot.

5.  The term of the Government Lease was extended to 30 June 2047 by operation of law under section 4(1) of the New Territories (Renewable Government Leases) Ordinance, Cap 152, and section 6 of the New Territories Leases (Extension) Ordinance, Cap 150, subject to the Block Crown Lease (Cheung Chau) Ordinance, Cap 488 (“Cheung Chau Ordinance”) below.

6.  The Tong had sub-let to Madam Ho Mei (“Madam Ho”) through 4 sub-leases, each for a term of 5 years, at an annual rent of $56, renewable on the same terms until the termination of the Government Lease. The last of such sub-leases was granted to Madam Ho on 7 November 1974, which was registered in the Land Registry under Memorial No. IS84252. This last sub-lease expired on 6 November 1979 and Madam Ho did not exercise her right to renew the same.

7.  On 8 September 1995 (“the Enactment Date”), the Cheung Chau Ordinance came into effect, such that the Government Lease was terminated by operation of section 3 of the Cheung Chau Ordinance.

(1) For land lots in Cheung Chau which were sub-let as of 8 September 1995 the sub-lessees were deemed to be direct Government lessees since that date, and the Tong lost all interests in those lots: sections 4(1) and 5(1) of the Cheung Chau Ordinance;

(2) For land lots which were not sub-let as of 8 September 1995, a separate Government lessee would be deemed to be granted by the Government to the Tong on the Enactment date and the Tong would be the registered owner: section 6(1).

8.  On 3 September 1996, the Tong commenced proceedings in the Lands Tribunal under LDMR 10/1996 pursuant to section 11(2) of the Cheung Chau Ordinance to claim compensation from the Director of Lands in respect of all land lots with sub-leases to which sections 4(1) and 5(1) apply. The Subject Lot was said to be among those land lots.

9.  Those proceedings were settled in or about 2004 and the Director of Lands paid compensation to the Tong (“the Settlement”).

10.  It is the Plaintiff’s belief that the Settlement covered the Subject Lot. However despite diligent searches and enquiries with the Judiciary and the Department of Justice, the relevant records, including the settlement agreement or consent order, cannot be found.

11.  Madam Ho died in 1998.

12.  On 18 July 2008, the Buildings Department issued 2 building orders in respect of the Subject Lot, which was served on the Tong and copied to Madam Ho. Shortly after that, the Tong arranged for personnel to inspect the Subject Lot and entered into possession by:

(a) Enclosing and locking the Subject Lot and posting warning notices to prevent people from entering; no one has since entered the Subject Lot without the consent of the Plaintiff;

(b) Arranging for tree-trimming and building works pursuant to the orders of the District Lands Office, Island, from 2010 to 2020;

(c) Paying all outstanding Government rents and rates on 27 October 2020.

13.  In or around 25 January 2021, Chiu, Szeto & Cheng (“CSC”), solicitor acting for Madam Ho’s daughter, Madam Chan Suk Yee (“Madam Chan”) alleged that the Tong had trespassed the Subject Lot and demanded for vacant possession. CSC also claimed that the notice, iron fences and locks put up by Madam Chan in the Subject Lot had been removed.

14.  The Plaintiff advances 2 alternative cases against Madam Ho Mei:

15.  First, the primary case is an Adverse Possession Claim. The Plaintiff asserts that Madam Ho had become the registered owner of the Subject Lot since the Enactment Date by operation of section 4(1) and 5(1) of the Cheung Chau Ordinance.

16.  Since 1 July 1995, at the latest, Madam Ho had not paid the rates demanded by the Government for the Subject Lot. Since 1 July 1997, at the latest, she had not paid the Government rents for the Subject Lot. On 10 March 1998, she passed away. By that date, at the latest, she had vacated the Subject Lot.

17.  Second, the alternative case in an Ownership Claim. The Plaintiff contends that if Madam Ho was not holding the Subject Lot, a separate Government Lease was deemed to be granted by the Government to the Tong since 8 September 1995 and the Tong has been the registered owner of the Subject Lot since then, by virtue of section 6(1) of the Cheung Chau Ordinance. The Plaintiff will have a claim in possession based on its title.

18.  The Plaintiff only seeks declaratory reliefs but not money judgment under the Default judgment Summons.

C. PROCEDURAL HISTORY

19.  The writ was issued on 30 July 2021 and renewed for 12 months from 30 July 2022.

20.  On 4 November 2021, Madam Chan had applied, ex parte, for appointment to represent the Estate. In her supporting affirmation, Madam Chan disclosed that Madam Ho’s husband had died and that they had 7 children, including Madam Chan. Madam Chan had applied for grant of letters of administration for the Estate on 10 February 2021.

21.  However, on or around 11 April 2022, she withdrew the ex parte application. A probate search by the Plaintiff’s solicitors showed that Ms. Chan’s application for grant was withdrawn on 19 April 2022. Ms Chan, personally, filed a Notice to Act in Person in the place of CSC on 20 May 2022.

22.  The Plaintiff’s solicitors have made attempts to trace Madam Ho’s family members or next-of-kin by an advertisement in Chinese on 14 July 2022.

23.  On 2 September 2022, the Official Solicitor was appointed to represent the Estate for the limited purpose of accepting service of the Writ.

24.  On 22 September 2022, the Renewed Writ was served on the Official Solicitor, who then acknowledged service.

25.  On 18 February 2025, the Default Judgment Summons was issued and served on Madam Chan on 20 February 2025 at her usual and last known address as stated in her Notice to Act in Person.

26.  On 29 April 2025, a summonses for an order to proceed under Order 15, rule 15 of the Rules of the High Court (“RHC”) was granted at the call-over hearing of the Default Judgment Summons.

27.  At the hearing on 6 May 2025, pursuant to Order 15, rule 15, this Court granted leave to the Plaintiff to proceed in the absence of a person representing the Estate and any judgment or order subsequently given or made in these proceedings, shall bind the Estate to the same extent as it would have been bound had a personal representative of Madam Ho Mei been a party to these proceedings. That was upon this Court being satisfied that the Plaintiffs had, in the 4 years since commencement of this action, used their best endeavours to find out who the personal representative for the Estate was and, in the absence of such a person, had notified Ms Chan.

28.  Despite being notified, Ms Chan has failed to attend the hearing date and adjourned hearing dates for the Default Judgment Summons. I therefore proceeded to deal with the Default Summons.

D. PRINCIPLES FOR GRANTING DEFAULT JUDGMENT

29.  In determining whether to grant default judgment under Order 19, rule 7, the Court must consider the application according to the pleadings alone and decide whether the Plaintiff appears to be entitled to judgment on its statement of claim. The Court cannot receive any evidence and it is thus not necessary for the plaintiff to prove its case by evidence. See Verde Breasil Industria De Produtos Plasticos LTDA, §§13-14, Au Yeung J. Therefore the supporting affidavit filed on behalf of the Plaintiff in the present case will not be considered.

30.  Where a declaration is sought without a trial, it is well to remember the words of Coleman J in Cheung Sai Lon v Cheung Sai Ha & Ors [2020] HKCFI 2551, at §31.

“31. However, the power to give such default judgment is discretionary. In the exercise of that discretion, it is to be recognized that it is not the normal practice of the Court to make a declaration without trial. This is not a legal or inflexible rule, but rather a rule of practice, which need not be followed when the plaintiff has a genuine need for declaratory relief and justice would not be done if such relief were denied.

32. Even on what might appear to be straightforward applications, the Court does not act as a ‘rubber-stamp’ merely because of the uncontested nature of the application. In each case, it is necessary to consider whether the declaratory relief is properly made out on the pleading, and whether it is appropriate in the overall exercise of discretion for such relief to be granted without a trial.

33. In the exercise of the discretion, the Court will consider all relevant factors, including whether the plaintiff has established a strong and obvious case for proprietary relief on the face of its pleading, and where the claim is proprietary, whether there would be any prejudice to the plaintiff’s property and rights. The importance of a claim to proprietary relief arises because of the distinction from a merely personal claim. An order for payment, without more, would only put a plaintiff in the position of an unsecured judgment creditor. But a declaration of a proprietary interest will secure that interest.”

31.  Ms Leung, counsel for the Plaintiff, has properly drawn to the Court’s attention that default judgment cannot be obtained against the estate of a deceased person when:

(1) The action is one in personam against the estate;

(2) The Official Solicitor’s appointment was limited to representing the estate to accept service of the writ; after accepting service, the Official Solicitor became functus official;

(3) No other person was appointed as executor or administrator against whom an order to continue can be obtained pursuant to Order 15, rule 7; and

(4) There was no person in existence against whom the step of entering judgment in the action could be taken.

See Re Amirteymour [1979] 1 W.L.R. 63, at 65H-66A; 66G-67B.

32.  However, Re Amirteymour has been distinguished as being a claim in personam: Bright Empire Enterprises Limited v Ho Kap Sin & The Personal Representative of Ho Yeung Fat, deceased [2022] HKCFI 2651, §12, Keith Yeung J.

33.  A person in possession of property to which another holds the legal title might be entitled to declaratory relief (i) of a negative nature, that the title owner could no longer bring any action against them for recovery of the Land, and (ii) of a positive nature, in respect of their right in the land, but that would be a remedy in rem as against the world: Lo Kwong Hung v The Registrar of Companies [2018] 1 HKLRD 173, §22, G Lam J (as he then was).

34.  The present case is thus properly distinguishable from Re Amirteymour in that it is a claim in rem and there is an order to proceed in the absence of the personal representative of the Estate.

E. THE CHEUNG CHAU ORDINANCE

35.  Three principles have to be established by the Plaintiff: (a) factual possession of the land; (b) intention to possess to the exclusion of all other persons, including the paper owner; and (c) the requisite period of possession, in the present case, 12 years.

36.  The relevant provisions of Cheung Chau Ordinance are set out below.

Section 2 defines “sub-lease” as: “a sub-lease granted by Wong Wai Tsak Tong which has been registered in the Land Registry before the commencement of this Ordinance [8 September 1995, i.e. the Enactment Day] of land or undivided shares in land held under the Block Crown Lease for a term of years specified in the sub-lease and renewable on the same terms until the termination of the Block Crown Lease, whether renewed or not, and includes such a sub-lease which has been assigned in whole or in part or has been retained in part following an assignment and which assignment has been registered in the Land Registry before the commencement of this Ordinance;” (underline added)

Section 2 defines “sub-lessee” as “a person who is the sub-lessee in a sub-lease, his executor, administrator and assign;”

Section 3: “Upon this Ordinance coming into operation as provided by section 1(2) [8 September 1995, i.e. the Enactment Day], the Block Crown Lease granted to Wong Wai Tsak Tong is terminated.”

Section 4(1): “As from the commencement of this Ordinance, all sub-lessees, other than the sub-lessees of the sub-leases referred to in section 9(1), are deemed to hold the land or undivided shares in land to which they are respectively entitled under the sub-leases directly from the Government as Government lessees.” (underline added)

Section 5(1):

“(1) As from the commencement of this Ordinance, all sub-leases, other than the sub-leases referred to in section 9(1), are—

(a) deemed Government leases as if a separate Government lease has been granted as from that date in place of each sub-lease to each sub-lessee respectively for the residue of the term of the Block Crown Lease as renewed under the New Territories (Renewable Government Leases) Ordinance (Cap. 152) and extended under the New Territories Leases (Extension) Ordinance (Cap. 150) and shall be deemed to contain—

(i) the same covenants, exceptions, reservations, powers and conditions contained in the Block Crown Lease, so far as they are applicable, provided that the sub-lessee who is deemed to be the Government lessee under section 4(1) shall replace Wong Wai Tsak Tong as the party bound;

(ii) without prejudice to subparagraph (i), a covenant by the sub-lessee who is deemed to be the Government lessee under section 4(1) to pay directly to the Government in the same manner and on the same days as specified in the Block Crown Lease the Government rent applicable under section 7(1) and to pay the rent applicable under section 7(2); and

(b) extended, from the date on which each sub-lease would, apart from this Ordinance, expire, until the expiry of 30 June 2047, without payment of any additional premium.”

Section 6(1): “A separate Government lease of all the land or undivided shares in land held by Wong Wai Tsak Tong under the Block Crown Lease but in respect of which sections 4(1) and 5(1) have no effect is, on the commencement* of this Ordinance, deemed to have been granted to Wong Wai Tsak Tong as from that date as Government lessee for the residue of the term of the Block Crown Lease as renewed under the New Territories (Renewable Government Leases) Ordinance (Cap. 152) and extended under the New Territories Leases (Extension) Ordinance (Cap. 150) and that Government lease contains the same covenants, exceptions, reservations, powers and conditions contained in the Block Crown Lease, so far as applicable.” (underlines added)

37.  The Court of Final Appeal considered in Wong Wan Leung & Others v Secretary for Transport (2001) 4 HKCFAR 69 the definition of “sub-lease” in the Cheung Chau Ordinance:

“Where s.2 defines a sub-lease as one granted by Wong Wai Tsak Tong ‘which has been registered in the Land Registry before the commencement of this Ordinance’ all this means is that sub-leases which have not been registered are excluded: Hence a sub-lease like the present one (where the last registration is dated 18 June 1920) is brought within the statutory scheme: And, for the purposes of the Ordinance, it matters not whether it was renewed upon the expiry of the 5 year term or not, because of the words ‘whether renewed or not’ in the definition section. But this has no impact upon the meaning of s.4(1). The statutory meaning of sub-lease cannot invert the meaning of s.4(1), as if entitlement in the section meant ‘whether entitled or not’.”

Section 4 coupled with s.6 has the effect of adjusting property rights as between the Tong and sub-lessees. Nothing suggests that the legislature intended to confer to sub-lessees or their descendants unexpected windfalls. Consider this proposition: A sub-lessee had, in the 1920s, surrendered the land to the Tong who, in the meanwhile, had made improvements upon it. Seventy years later – on the commencement date of the Ordinance – the descendants of the sub-lessee find themselves direct lessees of the Government in respect of the same land, and the Tong is ousted: This would be the inevitable consequence, on the respondent’s argument, so long as: (i) the sub-lease had been registered; and (ii) no deed of surrender superseded that registration in the Land Registry. This would be absurd.” (at p.80H to 81A, Litton NPJ)

F. THE ADVERSE POSESSION CLAIM

38.  The Plaintiff’s believes that the Subject Lot fell within the scope of sections 4(1) and 5(1) of the Cheung Chau Ordinance by reason that the Subject Lot was among the settled land lots under the Settlement.

39.  I am unable to agree as it is not clear whether Madam Ho was a party to the Settlement and what the terms of the Settlement were.

40.  The words “land to which the [the sub-leases] are respectively entitled under the sub-leases” in section 4(1) mean that the relevant sub-lease itself (as opposed to its mere registration) must have been subsisting as of the Enactment Date in order for sections 4(1) and 5(1) to apply: Wong Wan Leung, §§76F-77D; 80H-81A.

41.  The Plaintiff’s belief was similar to the respondent’s argument in Wong Wan Leung which was rejected by the CFA and the last sub-lease granted by the Tong to her had expired on 6 November 1979 without renewal. By the Enactment Date, 16 years had elapsed without any subsisting sub-lease in respect of the Subject Lot. Sections 4(1) and 5(1) did not apply to her.

42.  For completeness, I do agree that if Madam Ho had become a direct Government lessee by the Enactment Date, the facts set out in paragraph 12 above show that the Plaintiff has been in uninterrupted possession of the Subject Lot for over 12 years since shortly after 18 July 2008 until CSC’s demand letter. The possession was exclusive and with intention to exclude the whole world, including Madam Ho.

G. THE OWNERSHIP CLAIM

43.  Madam Ho was no longer “entitled” under her sub-lease as of the Enactment Date. Any entitlement to the land would have been reverted to the Tong. Accordingly, section 6 of the Cheung Chau Ordinance would have deemed the Tong as the Government lessee under a new separate Government lease on the Enactment Date. In fact, after Madam Ho’s death in 1998, the Tong had regained physical possession of the Subject Lot by its acts set out in paragraph 12 above. As owner, the Plaintiff is entitled to regain possession from the Estate.

44.  This is the cause on the pleaded facts that the Plaintiff appears entitled to judgment and I shall grant judgment on the basis of the Ownership Claim.

H. RELIEFS

45.  In this case, the Plaintiff has been in continuous possession of the Subject Lot for about 17 years till now. There is no useful purpose to be served by requiring the Plaintiff to go through a trial when the Estate, the only possible party having an interest in the Subject Lot, has shown no intention to defend despite having notice of these proceedings. Although the Plaintiff is, on a proper interpretation of the Cheung Chau Ordinance already a direct lessee of the Government, a declaration would do the fullest justice to the Plaintiff to clear any doubts as to the Plaintiff’s ownership and bar a claim by the Estate or other persons interested. I therefore grant a declaration to the Plaintiff based on the ownership claim.

I. CONCLUSION

46.  For the reasons set out above, I will make an order in terms of paragraph (1b) of the Default Judgment Summons, ie that there be a declaration that Madam Ho Mei was not holding the Subject Lot as a sub-lessee or not entitled to renew her sub-lease on 8 September 1995, and a separate Government lease was deemed to be granted by the Government to the Tong and the Plaintiff has become the registered owner of the Subject Lot since 8 September 1995.

47.  As the personal representative of the Estate is not actually traceable and has not defended, I make an order nisi that there be no order as to costs.

48.  I thank Ms. Leung for her assistance.