THE INCORPORATED OWNERS OF NO 202 PORTLAND STREET v. WONG YU SHEK AND ANOTHER

CAMP 352/2021

[2022] HKCA 393

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 352 OF 2021

(ON AN INTENDED APPEAL FROM DCMP NO 3097 OF 2019)

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J U D G M E N T

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Hon Chow JA (giving the Judgment of the Court):

Introduction

1.  This is the 1^st Defendant’s application for leave to appeal the order of H H Judge KC Chan dated 24 June 2021 (“the Order”) dismissing the 1^st Defendant’s appeal against an earlier order of Master Jacqueline Lee dated 26 March 2021, whereby the Master granted an order for possession of the roof (“the Roof”) of a building (“the Building”) at No 202, Portland Street, Kowloon, against the 1^st Defendant under Order 113 of the Rules of the District Court, Cap 336H.

Background facts

2.  The Plaintiff is the incorporated owners of the Building incorporated on 26 July 2019, many years after the construction and occupation of the Building.  The rights and obligations of the co-owners of the Building inter se are governed by a Deed of Mutual Covenant dated 16 October 1958. Under Clause 2 of that document, the Roof is a common part of the Building.

3.  Ho Wing Hang (“Ho”) is a representative of Nice Step Investment Limited, the owner of the ground floor and mezzanine floor of the Building since 2003.  Ho is also authorized by the Plaintiff to act on its behalf in these proceedings.

4.  On around 14 March 2019, Ho discovered that there were some building materials placed on the Roof and a half‑finished platform‑like structure erected on a portion of the Roof.  Ho also saw a notice (“the Notice”) in Chinese issued by the Buildings Department affixed at a conspicuous spot on the Roof.  The Notice stated that the building works then being carried out on the Roof were unauthorized building works.  Immediate cessation of the works was demanded. The Notice also stated that the premises were subject to a closure order No COTF/00021/15 (“the Closure Order”), and no person, other than a public officer in the course of his duty, should enter or be in the same.  Ho took some photographs of the building materials and the half-finished structure and sent them to the Buildings Department through an online reporting system.

5.  Notwithstanding the Notice aforesaid, Ho found that, by April 2019, the structure on the Roof (“the Structure”) had been completed, as evidenced by two photographs taken by Ho referred to in §17 of the Judge’s Reasons for Decision handed down on 29 June 2021.

6.  On 3 May 2019, the Buildings Department issued an order (“the Demolition Order”) under section 24(1) of the Buildings Ordinance, Cap 123, requiring the owners of the Building to demolish the Structure.  Attached to the Demolition Order was a plan, which depicted the Structure as occupying about one-eighth of the area of the Roof. On 4 June 2019, the Buildings Department further issued a warning letter to the owners for failure to comply with the Demolition Order.

7.  On 16 August 2019, the Plaintiff’s solicitors issued a demand letter, which was posted on the Roof, to notify the occupier(s) to remove the Structure and vacate the Roof.  That demand was not acceded to.

8.  On 12 September 2019, the Plaintiff issued the Originating Summons in DCMP 3097/2019 under Order 113 of the Rules of the District Court against “All Person(s) in Occupation of ALL That piece or parcel of ground situate lying and being the Roof of No. 202 Portland Street, Kowloon, Hong Kong” to recover possession of the Roof.  On 27 November 2019, leave was granted to the 1^st Defendant to be joined as a party to those proceedings.

9.  The 1^st Defendant resisted the Plaintiff’s claim based on the defence of adverse possession.  The 1^st Defendant filed a number of short affirmations in support of her defence:

(1)  The 1^st Affirmation of the 1^st Defendant filed on 23 October 2019, in which the 1^st Defendant stated that she purchased the roof “without title deed” (無契天台) of No 202, Portland Street from a person called林運嬌 (“the Vendor”) for $185,000 on 16 December 2014.  Exhibited to that affirmation was a one-page document entitled “receipt” dated 16 December 2014 (“the Receipt”) stating that the Vendor received $185,000 from the 1^st Defendant as consideration for a structure on the Roof.

(2)  The 2^nd Affirmation of the 1^st Defendant dated 4 March 2020 and filed on 29 September 2020, in which the 1^st Defendant stated that at the time when she purchased the relevant property (有關物業) on 16 December 2014, she had been told by the Vendor that the property had been erected in 1982 and had been in use continuously (無間斷使用) since that time.  Exhibited to that affirmation were three receipts which the Defendant said were documents relating to the previous sale and purchase transactions of the property given to her by the Vendor.  The three receipts were for the amounts of $70,000, $50,000 and $185,000 dated 9 March 2011, 30 September 2011 and 16 December 2014 respectively.  The last of those documents was apparently the same as the Receipt.

(3)  An affirmation of 林慕雄 (“Lam”) dated 4 March 2020 and filed on 29 September 2020, in which Lam stated that (i) he had worked for an estate agency company for some 32 years, (ii) he had previously assisted in the sale and purchase of some building structures on the roof of No 202, Portland Street, (iii) the roof top structures had been erected for over 20 years, (iv) the 1^st Defendant purchased her roof-top structure through him, and (v) he also handled the sale and purchase transactions of the previous owners, 魏年香 and 石達仁, of the 1^st Defendant’s roof top structure.

(4)  An affirmation of 陳定南 (“Chan”) dated 4 March 2020 and filed on 29 September 2020, in which Chan stated that (i) he lived on the 6^th floor[1] of No 202, Portland Street during the period from 2009 to 2013, (ii) there were a few residential building structures on the roof top of the Building which were constructed by him in 1982, and (iii) those structures had all along been used by people (一直都有人使用).

10.  Master Jacqueline Lee heard the Originating Summons on 26 March 2021, and granted an order for possession of the Roof against the Defendants.

The Judge’s decision

11.  The 1^st Defendant appealed the Master’s Order to the Judge, who heard the appeal on 24 June 2021.  At the conclusion of the hearing, the Judge dismissed the 1^st Defendant’s appeal with costs.

12.  The Judge’s essential reasoning for his decision can be found in §§31 ‑ 45 of the Reasons for Decision, as follows:

(1)  The Judge assumed in the 1^st Defendant’s favour that she purchased a structure on the Roof in 2014 as evidenced by the Receipt.

(2)  However, the mere fact that that the 1^st Defendant purchased the structure did not show, or prove, that she had physically possessed or occupied the structure, still less that she had a sufficient degree of exclusive physical control necessary to establish adverse possession.

(3)  In respect of the 1^st Defendant’s assertion in her 2^nd Affirmation that she had continuously used the structure after her purchase and Chan’s assertion that the roof-top structures had continuously been used after their construction, the Judge took the view that –

(a)  As shown by the photographs taken by Ho, the Structure was built in around April 2019.  Thus, even if there was/were some earlier structure(s) on the Roof as mentioned by the 1^st Defendant, Lam and Chan, such structure(s) had been demolished at some point in time prior to April 2019.  There was no evidence from the 1^st Defendant as to when her structure was demolished, or the circumstances surrounding the construction of the Structure.  Apparently, enforcement action was taken by the Buildings Department in 2015 in respect of the previous structure(s), as evidenced by the Closure Order which bore the reference number COTF/00021/15.

(b)  Mere “use” of a piece of land did not amount to a sufficient degree of exclusive physical control for the purpose of adverse possession.  The 1^st Defendant had failed to give evidence as to “any occupation of the structure”, or how she “used” it.  She did not even say that she “lived” there, or produce any documentary evidence such as photographs, letters or receipts to show that she used the Roof as her address.  There was also no evidence from any neighbour to testify to the 1^st Defendant’s occupation or use of her structure.

(4)  In light of the clear evidence that the Structure was only built in April 2019, the 1^st Defendant’s allegation that she had “used” a structure on the Roof continuously (since her purchase in 2014) was literally untrue.

(5)  Chan’s evidence regarding the use of some structures on the Roof only related to the period of four years from 2009 to 2013, prior to the 1^st Defendant’s purchase of her structure in 2014.

(6)  The short affirmations of Lam and Chan did not contain any evidence of physical possession of any structure on the Roof by the 1^st Defendant.

(7)  There was even “scantier” evidence concerning the alleged factual possession of any structure on the Roof by the 1^st Defendant’s preceding squatters.  The bare assertions by the 1^st Defendant and Chan were far from being compelling evidence.

(8)  The evidence proffered by the 1^st Defendant did not “even begin to show the requisite sufficient degree of exclusive physical control by her from 2014-2019, let alone proving it, and let alone proving it for the entire requisite period”.

(9)  As the requisite exclusive physical control was not shown, the question of intention to possess did not arise.

The Judge concluded that “there is insufficient evidence to make believable [the 1^st Defendant’s] claim for adverse possession such as for the Court to send the claim to trial”, and accordingly dismissed the 1^st Defendant’s appeal against the Master’s Order.

13.  On 11 August 2021, the Judge further dismissed the 1^st Defendant’s application for leave to appeal the Order.

The present application

14.  By a summons filed on 23 August 2021, the 1^st Defendant renewed her application for leave to appeal the Order to the Court of Appeal. In the summons, it is stated that the grounds of appeal are mainly that “there is dispute on fact on whether or not the 1^st Defendant has acquired right of adverse possession against the Plaintiff on the roof structure in issue”.

15.  In the 1^st Defendant’s submission dated 23September 2021 in support of the application, the following points are made:

(1)  The 1^st Defendant’s purchase of a structure (in 2014) is a “concrete token of satisfaction of all the requirements” to establish a claim for adverse possession.  Her predecessors in title had also traded the structure one after the other as if it belonged to them, which was “conduct undoubtedly adverse to the rights of the Plaintiff and/or others”.

(2)  Order 113 is applicable only in simple cases. The present case involves a serious dispute as to whether or not adverse possession comes into the picture, and is not suitable for determination under Order 113.  The 1^st Defendant should be given an opportunity to give evidence in ordinary proceedings “as there is some factual basis to her assertion, she could possibly ultimately make out a case of adverse possession… she ought not [to] be required to prove her case or be adjudged on whether she can, she only is required to raise a triable issue”.  The 1^st Defendant has not been allowed to properly introduce oral evidence to support “her allegation of disputed fact of adverse possession”.

(3)  There are numerous squatters of roof structures existing in Hong Kong, and many developers are endeavouring to use “fast methods” to oust the roof squatters at the expense of justice.  A decision from the Court of Appeal in respect of the proper use of Order 113 would be of great value to the society one way or another.

Discussion

16.  Under section 63A(2) of the District Court Ordinance, Cap 336, leave to appeal shall not be granted unless the Court of Appeal hearing the application for leave is satisfied that – (a) the appeal has a reasonable prospect of success; or (b) there is some other reason in the interests of justice why the appeal should be heard.  For this purpose, reasonable prospects of success involve the notion that the prospects are more than “fanciful”, without having to be “probable” (see SMSE v KL [2009] 4 HKLRD 125, at paragraph 17 per Le Pichon JA).  It is not sufficient to show that the appeal is merely arguable.

17.  The Judge set out the approach to be adopted in an Order 113 application at §§8 ‑ 9 of the Reasons for Decision, which has not been disputed by the 1^st Defendant:

“[8] The starting point is that the jurisdiction conferred by Order 113 should only be exercised in clear cases. The test is whether the issue between the parties, be it one of fact or law, is one which the defendant is entitled to have sent to a trial (§113/8/10 Hong Kong Civil Procedure 2021).

[9] The test and approach have been considered by K Yeung J in Karupayee Ammal v Moorthy Selvaraj (HCMP 1341/2019, unrep, 24 January 2020). The learned judge alluded to them (at §§27-30) thus:

‘27. When considering an application under Order 113, the applicable approach is not to be significantly different from the approach under Order 14 – see Direk Mahadumrongkul v Lau Chun Keung & Others, CACV 133/1998 (unrep, 16 Oct 1998, per Nazareth VP at pp 7, having cited Vipac with approval).

28. In Re Safe Rich Industries Limited, CACV 81/1994 (unrep, 3 November 1994), Bokhary JA observed at §13 that the test at the summary stage is as simple as whether the defendant’s assertions are believable. No mini-trial on affidavit evidence should be attempted.

29. Mr Chan refers me to Mutual Luck Investment Ltd v Chiu Yim Man [1999] 3 HKC 399, wherein Keith J referred to an earlier decision of his Lordship and observed that:

“… As was said in Kung Wong Sau Hin v. Sze To Chun Keung (HCMP 1614/90), the Ord. 113 procedure will not

‘usually be an appropriate vehicle for the recovery of land which has been occupied by many families for very many years. Such cases will invariably raise issues of both fact and law which cannot properly be investigated without proper pleadings and following a trial at which the rules of evidence are adhered to.’

I do not read the learned Judge as meaning to lay down any invariable rule that any particular type of claims is not appropriate for the Order 113 procedure. The facts of each application will have to be looked at and considered separately. But the learned Judge is obviously correct in observing that where cases raise issues of both fact and law which cannot properly be investigated without proper pleadings and following a trial, the Order 113 procedure will be inappropriate.

30. As in an Order 14 application, the onus to show that there is a triable issue is on the Defendant.’”

18.  Thus, to justify sending the 1^st Defendant’s case to trial, she must at least show a believable case, or raise a triable issue, of the two essential elements of adverse possession, namely (a) factual possession in the form of a sufficient degree of exclusive physical control of the Roof, or a properly defined portion of the Roof, and (b) the necessary animus possidendi, ie an intention to possess the Roof, or a properly defined portion of the Roof, to the exclusion of all other persons including the paper owner, for a continuous period of not less than 12 years.

19.  In our view, the evidence proffered by the 1^st Defendant is wholly inadequate to show a believable case, or raise a triable issue, of her claim for adverse possession, for the following reasons:

(1)  According to Lam, there used to be a few structures on the Roof.  The 1^st Defendant purchased one of them in December 2014.  Assuming that the 1^st Defendant commenced to occupy her structure after the purchase, it seems clear that she did not occupy the whole of the Roof.  The 1^st Defendant has, however, failed to identify the portion of the Roof that she allegedly occupied after December 2014.

(2)  The evidence indicates that the 1^st Defendant’s structure had been demolished some time prior to 14 March 2019.  Since April 2019, a new structure, ie the Structure, which occupies about one-eighth of the area of the Roof, has been erected on the Roof.  There is no evidence to show that the Structure sits on the portion of the Roof previously occupied by the 1^st Defendant’s structure, or that the 1^st Defendant has ever occupied the portion of the Roof now occupied by the Structure.  There can thus be no basis for any claim of adverse possession by the 1^st Defendant of that portion of the Roof on which the Structure now stands, or indeed any particular portion of the Roof.

(3)  The 1^st Defendant’s evidence shows, at the highest, that she occupied, or had physical control, of a structure on the Roof during the period from December 2014 to March 2019.  The evidence regarding previous occupation or possession of the structure by her predecessor(s)-in-title is extremely scanty and, in our view, wholly insufficient to raise a triable issue of adverse possession.  Chan’s evidence, taken at its highest, can only show occupation of some unidentified structures on the Roof by some unidentified persons in the past.  Lam states that he previously assisted in the sale and purchase transactions of some structures on the Roof (including the 1^st Defendant’s structure), but says nothing about occupation of those structures by any person(s).  The totality of the evidence adduced by the 1^st Defendant, on any view of the matter, cannot add up to 12 years of continuous adverse possession of the whole Roof, or any defined portion of the Roof, immediately prior to the commencement of the present proceedings on 12 September 2019.

20.  We shall now briefly deal with the three points raised by the 1^st Defendant in her written submissions referred to in §15 above.

(1)  In respect of §15(1), the fact that the 1^st Defendant purchased a structure on the Roof in 2014, and that the structure had previously changed hands a few times, cannot, for the reasons mentioned in §19 above, give rise to a triable claim of adverse possession by the 1^st Defendant of the whole Roof or any defined portion of the Roof.

(2)  In respect of §15(2), the Judge was fully aware that the jurisdiction conferred by Order 113 should only be exercised in clear cases, and that the test is not significantly different from that under Order 14.  There is nothing to show that the Judge adopted an erroneous approach or principle.  As for the application of the correct approach to the facts of any given case, the Court of Appeal would generally not interfere with the decision of the judge below unless it is satisfied that that the decision is plainly wrong.

(3)  Lastly, in respect of §15(3), the fact that there may exist many squatters of roof top structures in Hong Kong, or some developers seek to use the procedure under Order 113 (described as a “fast method”) to oust squatters, are not relevant to the question of whether leave to appeal should be granted.  Those matters cannot properly be regarded as “some other reason” in the interests of justice why the appeal should be heard under section 63A(2)(b) of the District Court Ordinance.

21.  In all, we are of the view that the 1^st Defendant’s intended appeal does not have any reasonable prospect of success.  We also do not see that there is any other reason in the interests of justice why the appeal should be heard.

Disposition

22.  Leave to appeal the Order is refused, and the 1^st Defendant’s summons filed on 23 August 2021 is dismissed with costs to the Plaintiff.  We see no sufficient reason to award costs on an indemnity basis as sought by the Plaintiff.  The 1^st Defendant shall have leave to file and serve a statement of objection (limited to 2 pages) to the Plaintiff’s statement of costs dated 20 October 2021 within 7 days.  Subject to such further directions as may be given by the court, the Plaintiff’s costs will be summarily assessed without further reference to the parties.

23.  Lastly, we are of the view that the application for leave to appeal is totally without merit.  Accordingly, we make an order under Order 59, rule 2A(8) of the Rules of the High Court, Cap 4A, that no party may request the present determination to be reconsidered at an oral hearing inter partes.