IO WAI (the trustee of YU HENG LONG also known as ALEX YU) v. LEUNG TAK FAT AND OTHERS

DCMP 1864/2015

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 1864 OF 2015

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DECISION

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Introduction

1.  Yu Shan Ho (于善和), the deceased (“the Deceased”) was the registered owner of the property situated at and known as Unit 1, 7^th Floor, President Commercial Centre, 602-608 Nathan Road, Kowloon, Hong Kong (“the Property”) by virtue of an assignment dated 8 September 1978 (Memorial No UB16103555).

2.  In or about 1986, the plaintiff met the Deceased in Shanghai and developed a relationship with the Deceased.  On 24 January 1989, the plaintiff gave birth to the son of the Deceased, namely YU HENG LONG (于慶龍) also known as ALEX YU (“the Son”).

3.  By his last Will dated 19 December 1996 (the “Will”), the Deceased appointed his children Yu Wan Mui Teresa (于韻梅) also known as Teresa Wan Mui Yu and Man Mui Teresa Yu (“YWMT”) and Yu Hing Loi (于慶來) also known as Yu Hing Loi Lloyd (“YHL”) as the joint executors and trustees of his estate under the Will.

4.  Paragraph 5(3) of the Will of the Deceased reads as follows:-

“5. I DIRECT my Trustees to give effect to the following specific legacies all free of estate duty….

(3) To my son YU HENG LONG (于慶龍) also known as ALEX YU who was born in Macau on 24^th January, 1989 of (address stated) with the said YU HING LOI (于慶來) and NG MAN (吳敏) (“NM”) (Hong Identity Card Number and address stated) as joint trustees to vest upon the said YU HENG LONG (于慶龍) attaining the age of 30 years the landed property known as Room 701, Presidential Commercial Centre, 608 Nathan Road, Kowloon, Hong Kong.”

5.  The Deceased passed away on 22 January 1997.  Exhaustive attempts were made by the Son and/or his legal representatives Messrs. A M Mui & Kwan (“AMM&K”) to locate YWMT, YHL and NM but in vain.

6.  In or about November 2009, the Son commenced proceedings in HCMP 2390/2009 seeking the following (inter alia) reliefs:-

(1) An Order requiring YWMT and YHL or either of them as the executor(s) and trustee(s) under the Will to perform and carry into execution the trust of the Will;

(2) An Order requiring an account of the dealings of YWMT and YHL or either of them or any other person with the Property and an account as to what income the Property has derived; and

(3) Further or alternatively, an Order appointing the plaintiff to be the trustee of the Property and that an assent be given and conveyance of the legal title to the Property be made and given in the plaintiff’s favour under and subject to the terms of sections 66 and 70 of the Probate and Administration Ordinance Cap 10.

7.  By an Order made by To J dated 10 July 2012 (the “Order”), it was ordered (inter alia) that:-

(1) Subject to the First Charge of the Director of Legal Aid, an Order requiring an account of the dealings of YWMT and YHL or either of them or any other person with the Property and an account as to what income the Property has derived; and

(2) Subject to the First Charge of the Director of Legal Aid, an Order appointing the plaintiff to be the trustee of the Property and that an assent be given and conveyance of the legal title to the Property be made and given in the plaintiff’s favour under and subject to the terms of sections 66 and 70 of the Probate and Administration Ordinance Cap 10.

8.  Pursuant to the Order, the plaintiff became the registered owner of the Property by virtue of an Assent dated 14 October 2014 (Memorial No. 14121000060048) (“the Assent”).

9.  Yet I note that under the Assent, the property referred in the Schedule therein reads as “PRESIDENT COMMERCIAL CENTRE (總統商業大廈) at Nathan Road, UNIT NO. 1 on the SEVENTH FLOOR”.  The name of the subject building under the Assent does not correspond with the name of the building as set out in the Will which reads as “PRESIDENTIAL COMMERCIAL CENTRE”. The parties did not address the court regarding the impact and ramification about the mistake in the description of the name of the subject property. I shall deal with this issue at the end of the decision herein.

Present proceedings

10.  The present proceedings relate to a claim by the plaintiff, the registered owner of the Property and the trustee of the Son, for inter alia possession of the Property. The Originating Summons herein was issued on 16 July 2015.The Son was aged 26 at the time of the Originating Summons.  The Son will reach the age of 30 on 24 January 2019. The annual rent or rateable value of the Property does not exceed HK$240,000.

11.  It is the plaintiff’s case that on a date unknown to her, the 1^st defendant and/or the 2^nd defendant entered into possession of the Property without the Deceased’s or her consent.  The 1^st defendant and/or the 2^nd defendant has remained, and still remains, in possession of the Property without paying any rent or mesne profit to the plaintiff.  

12.  The 2^nd defendant being the occupiers and every other person in occupation of the Property were absent in this hearing.  The 2^nd defendant has never responded in these proceedings.

13.  The defence of the 1^st defendant is one of adverse possession. The 1^st defendant contends that the Deceased let the Property to him for a term of 2 years commencing from 11 March 1996 under a Tenancy Agreement dated 8 March 1996.  Since about 11 December 1996, the 1^st defendant had not paid rent and had decided to take adverse possession of the Property.  The Tenancy Agreement between the Deceased and the 1^st defendant expired on 10 March 1998.

14.  In the Defence and Counterclaim, the 1^st defendant claimed that he was in adverse possession of the Property from about 11 December 1996 and that by virtue of ss 7(2), 8(1) and 17 of the Limitation Ordinance, Cap 347 (the “Ordinance”), no action shall be brought by the deceased and/or the plaintiff and/or any person to recover possession of the Property.  In the present hearing, the 1^st defendant also relies on ss 9(3) and 22 of the Ordinance.

15.  In §§3(1) and (2) of the Reply & Defence to Counterclaim filed on 27 April 2016, the plaintiff contended that by virtue of ss10(2) and 9(2) of the Ordinance, the Son’s right to recover the Property has not been barred and the plaintiff’s title to the Property has not been extinguished. 

Present hearing

16.  By a Summons taken out on 26 April 2016 pursuant to Order 14, r 14A and/or Order 33, r.3 of the Rules of District Court (“the Summons”), the plaintiff applied for a summary determination of the following questions of law under Order 14A and/or Order 33 of the Rules of District Court as preliminary issues:-

“Whether, by reason of the beneficial interest of Yu Heng Long (于慶龍) (“the Son”) in the property situated at and known as Unit 1, 7^th Floor, President Commercial Centre, 602-608 Nathan Road, Kowloon, Hong Kong under clause 5(3) of the will of Yu Shan Wo (于善和), deceased dated 19th December 1996, (a) the Plaintiff’s title to the Property and (b) the right on the part of the Son and the Plaintiff to recover possession of the Property, have been preserved intact notwithstanding any adverse possession thereof the 1^st Defendant might be able to establish.”

And if the above questions were determined by the court in the plaintiff’s favour, then final judgement be entered in favour of the plaintiff for the reliefs claimed in the Statement of Claims, namely:-

(1) Possession of the Property;

(2) Mense Profit at such rate and for such period as this Honourable Court shall deem fit;

(3) Interests on such mense profits under Section 50 of the District Court Ordinance (Cap 336);

(4) Costs of this action, including costs of the Summons, be to the Plaintiff to be taxed if not agreed; and

(5) Further and/or other relief.

The Legal Principles governing Order 14A and Order 33

Order 14A of the Rules of the District Court

17.  On an Order 14A application, the court will take a three-step approach as stated in Rockwin Enterprises Ltd v Shui Yee Ltd & Others [2003] 3 HKC 174, §§18-21, 27 per Recorder Geoffrey Ma SC (as he then was):-

(1) The first step is to ask whether the relevant question is one of law or of construction of a document;

(2) If so, the second step is to ask whether the question is one that should be determined under the Order 14A procedure.  For that purpose:-

(i) The Court needs to be satisfied that the question is one that is suitable for determination without a trial. In other words, the Court has all the necessary facts and matters before it in order to determine the question of law or construction;

(ii) The Court also needs to be satisfied that the question will finally determine (i) the entire cause or matter or (ii) any issue or claim therein. The latter is sufficient: Shell Hong Kong Ltd v Yeung Wai Man Kiu Yip Co Ltd & Another (2003) 6 HKCFAR 222, §23 per Chan PJ;

(iii) Even if the court is satisfied that the aforesaid two conditions are fulfilled, the court retains a residual discretion as to whether to proceed under the Order 14A procedure;

(iv) It is inappropriate to use this procedure where the issues of fact are interwoven with the legal issues raised, and the question should not be determined on hypothetical facts: Shell, §24 per Chan PJ;

(3) The third step is to proceed to determine the question and the consequential orders to be made.

Where there is a dispute of facts

18.  It is settled that when considering the second step, if there is a dispute as to the facts, it is difficult to see how judgment under Order 14A can be entered in favour of a claimant:-

(1) Where a claimant seeks judgment under Order 14A, the facts would have to be based on either established facts or agreed facts: Netwell Properties Ltd v JCG Finance Co Ltd[2004] 2 HKLRD 138 at §6;

(2) If no facts have been agreed, the outcome of the evidence would be uncertain and it would not be in the interest of either parties to make a hypothetical decision: Sumner v William Henderson & Sons [1963] 1 WLR 823 at 828;

(3) The Court shall not deal with an Order 14A application by determining the issue on hypothetical facts i.e. on assumed facts and not admitted facts or facts which have been proven: Hondon Development Ltd v Powerise Investment Ltd (unreported, HCA 1208/1998, 13 November 1998) at §8;

(4) Among the facts which are to be treated as proved or admitted, there must be no hypothetical or future facts: Hong Kong Civil Procedure 2017, §14A/2/4, p 303.

No hypothetical rulings will be given

19.  It is obvious why the Court will not determine the question of law by an Order 14A procedure if there is a dispute of fact:-

(1) Where the issues of fact are interwoven with the legal issues raised, it will be undesirable for the court to split the legal and factual determination, for to do so would in effect be to give legal rulings in vacuo or on a hypothetical ruling: Netwell Properties Ltdat §6; Weltime Hong Kong Ltd v Cosmic Insurance Corp. Ltd (unreported, HCCT 72/2002, 29 September 2003) at §24;Hong Kong Civil Procedure 2017 §14A/2/4, p 303;

(2) If the point of law sought to be determined is sensitive to the facts, as in the case where facts are in dispute and can only be determined after trial or where fuller facts are required, it is not a suitable case for Order 14A: Weltime Hong Kong Ltdat §24.

Residual discretion

20.  Even if the Court is satisfied that (a) the question is one that is suitable for determination without a trial; and (b) the question will finally determine the entire cause or matter or any issue or claim therein, the Court retains a residual discretion as to whether to proceed under the Order 14A procedure.  An example would be that the Court may decline the application if it takes the view that there is no great saving of time and costs in acceding to it: Rockwin Enterprises Ltdat §25.

Order 33 of the Rules of the District Court

Order 33 Rules 3 and 4(2) of the Rules of the District Court provide that:-

“3. The Court may order any question or issue arising in a cause or matter, whether of fact or law or partly of fact and partly of law, and whether raised by the pleadings or otherwise, to be tried before, at or after the trial of the cause or matter, and may give directions as to the manner in which the question or issue shall be stated.

4(2). In any such action different questions or issues may be ordered to be tried at different places and one or more questions or issues may be ordered to tried before the others.”

21.  Under Order 33 rule 4 of the Rules of the District Court, the court has a discretion to order separate trials on different issues or separate trials on liability and quantum.  In exercising its discretion, the court has regard to the following two principles :-

(a) the general rule that all issues on the same case, e.g. (i) liability and compensation or (ii) the Issue and other disputes on liability and quantum in this case, are to be tried together at the same time;

(b) the need for case management and expeditious disposal of litigation which requires the court to identify whether important issues can be put forward for a speedy resolution.

22.  At the end of the day, the question whether the general rule may be departed from is a consideration of whether it is “just and convenient” to do so.  I refer to Wincheer Investments Ltd v Lobley Co Ltd HCA8145/1992, Findlay J (unreported, 23^rd February 1995) ([1995] HKLY 1032) where the learned judge said:-

“…… by ‘just’, I mean fair to both sides, without one side or the other gaining an undue advantage by a separation, and by ‘convenient’, I mean convenient to both sides and advantageous from the point of view of costs.”

23.   The Court of Appeal has summarized the principles governing applications for the determination of preliminary issues in Lee Yiu Kwan v Ting Yin Wah, CACV 311 of 2002 (21.4.2004).  I need not repeat the principles here.

24.   Order 33 rule 4(2) of the Rules of the District Court allows that “one or more questions or issues may be ordered to be tried before the others” in appropriate cases.  I also need to consider the plaintiff’s application under this rule.

Relevant provisions under the Time Limitation Ordinance Cap 347

25.  It would be helpful to set out the relevant provisions under the Ordinance for easy reference:-

Section 7 Limitation of actions to recover land

(2) No action shall be brought by any other person to recover any land after the expiration of 12 years from the date on which the right of action accrued to him or, if it first accrued to some person through whom he claims, to that person…

Section 9 Accrual of right of action in case of future interests

(1) Subject as hereafter provided in this section the right of action to recover any land shall, in a case where the estate or interest claimed was an estate or interest in reversion or remainder or any other future estate or interest and no person has taken possession of the land by virtue of the estate or interest claimed, be deemed to have accrued on the date on which the estate or interest fell into possession by the determination of the preceding estate or interest.

(2) If the person entitled to the preceding estate or interest, not being a term of years absolute, was not in possession of the land on the date of the determination thereof, no action shall be brought by the person entitled to the succeeding estate or interest after the expiration of 12 years from the date on which the right of action accrued to the person entitled to the preceding estate or interest, or 6 years from the date on which the right of action accrued to the person entitled to the succeeding estate or interest, whichever period last expires…….

(3) No person shall bring an action to recover any estate or interest in a land under an assurance taking effect after the right of action to recover the land had accrued to the person by whom the assurance was made or some person through whom he claimed or some person entitled to a preceding estate or interest, unless the action is brought within the period during which the person by whom the assurance was made could have brought such an action.

Section 10 Provisions in case of land held on trust

(2)  Where any land is held upon trust, including a trust for sale, and the period prescribed by this Ordinance has expired for the bringing of an action to recover the land by the trustees, the estate of the trustees shall not be extinguished if and so long as the right of action to recover the land of any person entitled to a beneficial interest in the land or in the proceeds of sale either has not accrued or has not been barred by this Ordinance, but if and when every such right of action has been so barred, the estate of the trustee shall be extinguished.

The plaintiff’s stance

26.  The plaintiff contends that by virtue of ss.10(2) and 9(2) of the Ordinance, the Son’s right to recover the Property has not been barred and the plaintiff’s title to the Property has not been extinguished.

27.  The Plaintiff relies on Leung Kuen Fai v Tang Kwong Yu (or U) T’ong or Tang Kwong Yu Tso [2002] 2 HKLRD 705, DHCJ Lam (as he then was) heard a matter concerning the applicability of s 10(2) by way of trial of preliminary issue.  The issue framed in that case is very similar to the issue framed in the present Summons, save that the beneficial interest in that case is the interest of members a T’ong.

Section 10(2) of the Ordinance

28.  The plaintiff contends that the trustee’s estate will not be extinguished if and so long as the right of any person entitled to a beneficial interest in the land “has not accrued” or has not been barred by the Ordinance.  The effect of s 10(2) is to statutorily stop the limitation clock until accrual of the beneficiaries’ interest: HSBC Private Trust (Hong Kong) Ltd v Au Yeung Chung, unreported, HCA 1662/2001, 4.1.2008, at §§54 and 56 per DHCJ Carlson; Leung Kuen Fai (supra), at §§2 and 46 per DHCJ Lam; Wong Shing Chau v To Kwok Keung [2007] 4 HKLRD 232 at §20 per Judge Simon Leung; On appeal, see: [2008] 5 HKC 372 at §11 per Le Pichon JA; Hui Fu Keung Christopher v Wong Sui Sum, unreported, DCCJ 4358/2013, 29.1.2016, §§64-66 per DDJ LC Cheng. 

29.  The plaintiff contends that the Son is entitled to a beneficial interest in the Property under Clause 5(3) of the Will.  The Son was only 26 years old at the time the Originating Summons was issued.  The Son’s right of action to recover the Property has not accrued or has not been barred.  By virtue of s 10(2), the plaintiff’s title to the Property has not been extinguished as the right of action of the Son, who is entitled to a beneficial interest in the Property, has not accrued or has not been barred. 

Section 9(2) of the Ordinance

30.  The plaintiff relies on s 9(2) and contends that time does not run against an owner of a future interest until the interest falls into possession.  No action shall be brought by a beneficiary entitled to the succeeding estate by virtue of a will after 6 years from the date the right of action accrued to him: Hui Fu Keung Christopher, §§63 per DDJ LC Cheng.

31.  Further or alternatively, the plaintiff contends that the Son has a future interest in the Property under Clause 5(3) of the Will which is within the meaning of s 9.  The Son was only 26 years old at the time the Originating Summons was issued.  By virtue of s.9(2), as the Son was entitled to the succeeding estate by virtue of the Will, no action shall be brought by the Son after 6 years from the date on which the right of action accrued to him.  The Son’s right of action to recover the Property has not accrued or has not been barred.  Alternatively, the Son’s right of action to recover the Property accrued at the time of the Assent (dated 14.10.2014) and the Son has 6 years from the date of the Assent (i.e. up to 13.10.2020) to recover the Property.  On this basis too, the Son’s right of action to recover the Property has not been barred. 

32.  S 9(2) deals with “accrual of right of action in case of future interest”.  The plaintiff maintains thatthe Son’s interest under the Will is clearly a future interest because it is a right to the enjoyment of land in a future time.  It is a contingent interest, contingent upon the Son’s attaining the age of 30.  If the Son unfortunately dies before attaining the age of 30, he would have no interest whatsoever in the Property.  It falls into possession only when the Son attains the age of 30 but not otherwise.  He has no present right to the Property at all.  There is therefore no basis for the 1^st defendant to contend that “the interest of the Son was not a contingent/conditional interest”.  The Son has to attain the age of 30 before his future interest falls into possession.  There is similarly no basis for the 1^st defendant to contend that “the Son had to do nothing nor comply with any condition” or that “the relevance of his attaining the age of 30 was only as to the vesting of the legal interest.

33.  Since the Son’s beneficial interest in the Property is a contingent future interest, time under s 10(2) does not run against him until his interest falls into possession, i.e., when he attains the age of 30.  Since the Son has not yet attained the age of 30, his cause of action has not accrued and is not yet time-barred.

The 1^st defendant’s stance

34.  The 1^st defendant’s submissions are twofold :-

(a) Firstly, the Son had an equitable interest upon the death of the Deceased by virtue of Clause 5(3) of the Will. This was a future interest, since it was an interest in the reversion.  This interest accrued on the date the preceding interest (1^st defendant’s tenancy) was determined i.e. on 11 March 1998 on which date time started to run.  The limitation period of 12 years expired on 10 March 2010.  This was extended by virtue of s 22 to 6 years after the Son reached majority, i.e. on 24 January 2013.  The action herein commenced on 16 July 2015 and is therefore statute barred.

(b) Alternatively, the 1^st defendant submits that adverse possession by the defendant began prior to the date of the Will on 19 December 1996 and the date of the operation of the same (i.e. the death of the settlor on 22 January 1997).  By virtue of s.9(3) of the Ordinance, the creation of the Will and the subsequent creation of the trust under Clause 5(3) of the Will upon the death of the settlor did not stop time from running.

(c) Sections 9(2) and 10(2) are inapplicable to the present case.  S 9(2) because the Son’s interest was not a future interest, but an immediate beneficial interest created on the death of the Deceased.  S 10(2) because the Son’s beneficial interest in the Property was extinguished, it having the same status as a legal interest by virtue of s 10(1).

35.  The 1^st defendant submits that where time has already begun to run against the settlor i.e. the Deceased, the settlement under Clause 5(3) of the Will would not affect the running of time.  In such connection, the plaintiff’s reliance on s.9(2) is totally misplaced.  It should be noted in the first place that once the Son’s right of action has been barred by operation of s 9(3) of the Ordinance, s 10(2) has no place of application since it provides that “but if and when every such right of action has been so barred, the estate of the trustee shall be extinguished”.

36.  Further, the 1^st defendant submits that the general rule is that a beneficiary entitled to an interest under a trust is treated as being in the same position as if he held a legal estate.  So if a beneficiary or beneficiaries are entitled to land under a trust, and a third party takes adverse possession of the land, time runs against the beneficiaries: Jourdan at §27-08.

37.  The 1^st defendant contends that the starting point is that squatter does not take possession subject to trusts.  In the simple case where a squatter takes possession of land held on trust, time runs against both trustees and beneficiaries.  Even though the squatter may be aware of the trust, he does not take possession subject to the beneficiaries rights unless he takes possession in the capacity of trustee: Jourdan at §27-09.

38.  The 1^st defendant submits that the present case falls within those simple cases where a squatter takes possession of land held on trust.  Time first began to run against the settlor i.e. the Deceased, then against the estate which was held by the Trustees for the benefit of the beneficiary i.e. the Son.  The 1^st defendant did not take the Property subject to trusts.

39.  Section 10(2) does not come into play. The plaintiff placed huge reliance on those cases of t’so as in Leung Kuen Fai(supra) or Wong Shing Chau v To Kwok Keung (supra) and the same case on appeal in [2008] HKC 372 where by operation of s 10(2), the title of the trustees would not extinguish so long as there is at least one member of the t’so who has independent interest in the land whose right to recover the land was not time-barred.  The 1^st defendant submits that those cases (and the operation of s 10(2) of the Ordinance therein) simply do not apply here.

Plaintiff’s reply to the 1^st defendant’s contentions

40.  The plaintiff submits that the 1^st Defendant’s reliance on s 9(3) is misplaced and has no application at all for the following reasons:-

(1) Firstly, s 9(3) is not directed at when the right of action accrues.  The time at which the right of action in case of future interests accrues is governed by s 9(2). 

(2) Secondly, on the 1^st defendant’s own case, s 9(3) was not considered in HSBC Private Trust (Hong Kong) Limited v Au Yeung Chung and Hui Fu Keung Christopher v Wong Sui Sum at all.  It is submitted that the reason that the sub-section was not cited in the above two cases was because it is wholly irrelevant to the issues before the courts, namely, when the cause of action in respect of land held on trust and/or in case of future interests accrues.  The authorities show that the trustee’s estate will not be extinguished if and so long as the right of any person entitled to a beneficial interest in the land “has not accrued” or has not been barred by the Ordinance. 

(3) Thirdly, the 1^st defendant is unable to cite a single Hong Kong case on the construction of s 9(3) or on the meaning of the word “assurance” contained therein at all.  Similarly, no English case has been cited on the construction of s 15(4) of the 1980 Act or on the meaning of the word “assurance” contained therein at all.

(4) Fourthly, and more fundamentally, ss9 and 10 are not modelled on the 1980 Act but on ss.6 and 7 of the 1939 Act.

(5) Fifthly, no case has been cited to show what “assurance” in s.9(3) means and whether the Will came within the meaning of “assurance” in s 9(3).

(6) Sixthly, on a true construction of s 9(3), the first part of the section, namely, “no person shall bring an action to recover any estate or interest in land under an assurance taking effect after the right of action to recover the land had accrued to the person by whom the assurance was made”, is dependent on the second part of the section, i.e., “unless the action is brought within the period during which the person by whom the assurance could have brought the action”.  In other words, if the person by whom the assurance was made could not have brought the action, the first part does not apply.  In the present case, the Deceased passed away on 22.1.1997 and could not have brought any action after 22.1.1997. 

41.  In the further 2^nd supplemental skeleton submissions filed by the plaintiff after the hearing, the plaintiff reiterates her stance that she does not accept the 1^st defendant’s contention that his adverse possession began on 11.12.1996.  The plaintiff reiterates her contention and the 1^st defendant’s reliance on s.9(3) is misconceived:-

(1) “Non-payment of rent by a tenant does not ordinarily cause time to run against the landlord…The landlord’s right to possession only accrued when the lease came to an end…however long the rent remains unpaid for, the landlord can start collecting it again … ” See: Jourdan’s Adverse Possession, 2^nd Ed, §24-17 .

(2) It was clearly held by the House of Lords in Fairweather v St Maryleboine Property Co Ltd [1963] AC 510 that “time does not run against the freeholder until the determination of the lease”: at 544 per Lord Denning. 

(3) In the present case, the 1^st defendant’s case is that the Tenancy Agreement ended on 10.3.1998.  It follows that the 1^st defendant’s alleged adverse possession could only begin on 10.3.1998. 

(4) In the present case, it is the 1^st defendant’s case that the Will is an assurance.  As the Will is dated 19.12.1996 and the Deceased died on 22.1.1997, the alleged “assurance” by the Deceased did not take effect “after the right to recover land had accrued to the person by whom the assurance is made” within the meaning of s 9(3), but before.  Plainly, s.9(3) does not apply. 

42.  All in all, the plaintiff maintains that the 1^st defendant has no viable defence to the plaintiff’s claim in this action.  

Analysis

43.  In the present Summons, the plaintiff contends that the points of law have been raised in §3(1) and (2) of Plaintiff’s Reply and Defence to Counterclaim of the 1^st defendant and the question of law is clearly and precisely formulated in the Summons. The plaintiff contends that there are also no conflicting allegations of fact, or issues of fact interwoven with the legal issues to be determined, because the Summons expressly states, “notwithstanding any adverse possession thereof the 1^st defendant might be able to establish”.  In other words, for the purpose of the plaintiff’s summons, but not otherwise, the facts are assumed in favour of the 1^st defendant. 

44.  However, it transpired during the hearing that the plaintiff was not willing to concede on the time upon which the 1^st defendant’s adverse possession begun.

45.  I need to decide if the court should invoke the jurisdiction under Order 14A or Order 33 to make a determination of the point of law now framed by the plaintiff under the Summons.  I have duly considered all the submissions and authorities submitted by the parties. I consider that the difficulty facing the plaintiff is that there is considerable dispute of facts between the parties in this case.  

46.  As the plaintiff is not ready to concede on the time upon which the 1^st defendant’s adverse possession began, the 1^st defendant submits which I accept that there are substantial disputed facts in the present case as revealed from the pleaded case of the parties in the 1^st Defendant’s Defence to Counterclaim (“DtCC”) and the Plaintiff’s Reply and Defence to Counterclaim (“R&DtC”). I take the view that this hinders the case be determined by an Order 14A or Order 33 application. The disputed facts as revealed from the pleadings include :-

(a) Whether the Property was vacant in early 1996;

(b) Whether there was a tenancy agreement of the Property dated 8 March 1996 made between the 1^st defendant and the Deceased.  Or was the Property instead leased out as the registered office of International Accounting Company Limited from 1992 to 1998;

(c) Whether the tenancy agreement of the Property dated 8 March 1996 made between the 1^st defendant and the Deceased was authentic;

(d) Whether the 1^st defendant has used the Property since about 11 March 1996 for carrying on a movie video rental;

(e) Whether the Deceased had collected rent from the 1^st defendant for eight months but ceased to do so after 11 November 1996;

(f) When did the 1^st defendant’s adverse possession begin and/or did the right of action first accrue to the Deceased and/or the plaintiff;

(g) Whether the plaintiff had attended the Property on about 28 January 1997;

(h) Whether Yu Hing Loi had attended the Property on or about 14 February 1997 and informed the 1^st defendant that the Deceased had passed away in late January 1997;

(i) Whether there had been a tenancy agreement between the 1^st Defendant and one李小明commencing 15 December 2001 until early January 2014;

(j) Whether there had been a tenancy agreement between D1 and one卓創偉commencing 1 April 2015 expiring on 31 March 2019; and

(k) Whether the 1^st defendant had made those payments and contributions pleaded in DtCC.

47.  The 1^st defendant contends that the Deceased let the Property to him for a term of 2 years commencing from 11 March 1996 under a Tenancy Agreement dated 8 March 1996.  Since about 11 December 1996, the 1^st defendant had not paid rent and had decided to take adverse possession of the Property.  Such contentions are not accepted by the plaintiff.

48.  In the Reply and Defence to Counterclaim of the 1^st defendant, the plaintiff denies that the Deceased entered into the purported Tenancy Agreement dated 8 March 1996 with the 1^st defendant.  The plaintiff avers that the Deceased leased the Property to one International Accounting Company Limited for a term of 2 years from 11 March 1996 to 10 March 1998 at the rent of $13,000 per month.  The Deceased gave an incomplete copy of the Tenancy Agreement to the plaintiff before he died on 22 January 1997.  The plaintiff denied that the 1^st defendant took physical possession of the Property and denied that the 1^st defendant took adverse possession of the Property since 11 December 1996.

49.  There were two different Tenancy Agreements purportedly in existence relating to the Property.  Without the parties’ agreement regarding the date of dispossession and date of commencement of the adverse possession by the 1^st defendant, this leads to serious factual dispute in this case.

50.  It is particularly important to note that the pleaded case of the plaintiff made serious allegations against the 1^st defendant by questioning the authenticity of the Tenancy Agreement of the Property dated 8 March 1996.  In all fairness, I consider that this issue must not be determined lightly without giving the 1^st defendant the chance to defend.

51.  The wordings of the relevant sections under the Ordinance are not straightforward.  I take the view that one cannot just isolate one single section or one single sub-section under the Ordinance to make a proposition which favours one’s case.  The period of time limitation for actions to recover land fixed by s 7 of the Ordinance should be read subject to, or together with all other relevant provisions provided under the Ordinance.

52.  In the present case, one has to view and consider the true meaning, interpretation and inter-relationship among all the relevant provisions under the Ordinance.  The most important issue in the present case is when the cause of action accrued or is deemed to have accrued.  If the parties cannot agree on the date of adverse possession which was taken by the 1^st defendant, one cannot take the appropriate point of time to assess the timing of when the adverse possession commenced.  There is substantial dispute of facts in the present case.  It thus poses difficulty on the court to consider the appropriate application of the relevant provisions under the Ordinance and the legal question now framed by the plaintiff.  The Court is not furnished with established facts or agreed facts which are material to determination of the questions of law raised.

53.  Further, the plaintiff’s application modeled from the case of Leung Kuen Fai v Tang Kwong Yu T’ong & Anor [2002] 2 HKLRD 705.  I agree with the 1^st defendant’s submission that the Leung case is fundamentally different from the present case for the purpose of an Order 14A application.  A careful review of the Leungcase would show thatthe case actually involved not much disputed facts.  The facts material to the determination of the legal issues were not in dispute i.e. “that at any point in time between 1923 to today, there was at least one member whose right of action has not been barred under the Limitation Ordinance or the Real Property Limitation Act 1833.  This is not disputed by Mr. Lim, Counsel for the plaintiff.”: §3 of the Judgment. 

54.  I also accept the 1^st defendant’s submissions that:-

(a) There are substantial disputes of facts in the present case where the issues of fact are interwoven with the questions of law raised.  It is obvious from the submissions of the parties set out above that the determination of the questions of law raised in the plaintiff’s Summons greatly hinge on the factual question of when did the 1^st defendant’s adverse possession begin and/or when did the right of action first accrue to the plaintiff.  Such factual question cannot be answered without resolving the series of disputes of facts listed above at trial;

(b) The plaintiff posed the questions of law “notwithstanding any adverse possession thereof the 1^st defendant might be able to establish”.  However, it transpires during the hearing that the plaintiff is not ready to concede or make a formal admission (as counsel in Savino Del Bene China Ltd v Convac Technologies Ltd (unreported, DCCJ 3504/2001, 2 June 2002) did in §8 of the Judgment) that the 1^st defendant’s adverse possession began on 11 December 1996.  In this regard, the Court is not furnished with established facts or agreed facts which are material to determination of the questions of law raised;

(c) If the plaintiff is not ready to make such concession, this application will essential be determined on hypothetical facts and thereby the plaintiff is effectively asking the court to give legal rulings in vacuo or a hypothetical ruling.  This runs against the authorities of Netwell Properties Ltd (above)and Weltime Hong Kong Ltd(above) (as well as the Whitebook p 303)and will fall short of finally determine (i) the entire cause or matter or (ii) any issue or claim in the present case.

55.  Without a trial on the above disputed factual issues, and without plaintiff’s formal admission as to the 1^st defendant’s case of adverse possession, I consider that it is not possible to determine the question of when the 1^st defendant’s adverse possession began and when was the right of action first accrued to the Deceased/the plaintiff/the Son.

56.  As observed by the court during the hearing and as can be seen in the parties’ stance and arguments set out above, given the complexity of both the disputed facts and the law in this case, to determine the legal issue by Order 14A and/or Order 33 with material disputed facts unresolved will not greatly save time and costs of the parties and the court.

Other matters

57.  As pointed out in paragraph 9 above, it is important to note that under the Assent, the property referred in the Schedule therein reads as “PRESIDENT COMMERCIAL CENTRE (總統商業大廈) at Nathan Road, UNIT NO. 1 on the SEVENTH FLOOR”.  The name of the subject building namely PRESIDENT COMMERCIAL CENTRE under the Assent does not correspond with the name of the building referred to under clause 5(3) of the Will which reads as PRESIDENTIAL COMMERCIAL CENTRE.  Pursuant to the Order made in HCMP 2390 of 2009, the plaintiff became the registered owner of the Property by virtue of an Assent.  However, the name of the building stated in the Assent does not match with the name of the building as depicted in the Will.  One cannot postulate the testator’s intention with hindsight or speculation.  As stated above, the parties did not address the court regarding the impact and ramification about the mistake in the description of the name of the subject property.

58.  Worst still, there are a number of errors regarding the description of the subject property appearing in the plaintiff’s court documents:-

(1) In order of Master S P Yip dated 15 February 2016, the word “PRESIDENTIAL” was used in depicting the 2^nd defendant in the heading and on the back sheet;

(2) In the Statement of Claim dated 17 February 2016, the word “PRESIDENTIAL” was used in depicting the 2^nd defendant in the heading and on the back sheet;

(3) In the Reply and Defence to Counterclaim of the 1^st defendant dated 26 April 2016, the word “PRESIDENTIAL” was used in depicting the 2^nd defendant in the heading and on the back sheet;

(4) In the Summons dated 26 April 2016, the word “PRESIDENTIAL” was used in depicting the 2^nd defendant in the heading and on the back sheet;

(5) In order of Master S P Yip dated 28 April 2016, the word “PRESIDENTIAL” was used in depicting the 2^nd defendant in the heading and on the back sheet;

(6) In the 3^rd Affirmation of the plaintiff affirmed on 26April 2016, the word “PRESIDENTIAL” was used in depicting the 2^nd defendant in the heading and on the back sheet.

59.  In the Statement of Claim dated 17 February 2016, the property situated at Unit 1, 7^th Floor, President Commercial Centre, 602-8 Nathan Road, Kowloon, Hong Kong is defined as “the Property” under paragraph 1.  In paragraph 6 of the Statement of Claim, it is pleaded that by paragraph 5(3) of the Will, the Deceased devised and bequeathed “the Property” to her Son.  As stated above, the Will refers to Presidential Commercial Centre not President Commercial Centre.  No attempt was made to clarify the wrong description of the subject building.

60.  In paragraph 4 of the 3^rd Affirmation of the plaintiff filed on 26 April 2016, the plaintiff affirmed that Yu Shan Wo (于善和), deceased became the registered owner of the Property by virtue of an assignment dated 8 September 1978.  The name of the Deceased was wrongly stated in this Affirmation.  In such affirmation, the property situated at Unit 1, 7^th Floor, President Commercial Centre, 602-8 Nathan Road, Kowloon, Hong Kong is defined as “the Property”.  In paragraph 8 of the affirmation, the plaintiff affirmed that by paragraph 5(3) of the Will, the Deceased devised and bequeathed “the Property” to his Son.  As stated above, the Will refers to Presidential Commercial Centre not President Commercial Centre.  Again, no attempt was made to clarify the wrong description of the subject building.

61.  In the Summons, under clause 1, the plaintiff is asking a summary determination of the questions of law stated therein by referring to the will of Yu Shan Wo (于善和).  The name of the Deceased was Yu Shan Ho (于善和).  The name of the Deceased was wrongly stated in the Summons.  Further, clause 5(3) of the Will of the Deceased refers to “Presidential Commercial Center” not “President Commercial Centre” as stated in the Summons.

62.  The above errors create ambiguities and are unsatisfactory as these errors relate to the subject property and the name of the testator which are very fundamental in these proceedings.

Conclusion

63.  By reasons of the above and balancing the interests of both parties and upon considering all the circumstances as well as the submissions of the parties, I rule that the issues of fact in this case are interwoven with the legal issues raised, this matter is inappropriate for summary determination and that final determination cannot be made without trial.  I also rule that any preliminary hearing will tend to increase the cost and time, and is likely to cause further delay to the present action.  Having considered all the issues and matters, I am of the view that there should not be a preliminary hearing.  In my view, there is little point in dealing with any points of law, in applications under Order 14A or under Order 33, rule 3, if the relevant facts are in dispute.

64.  If there is a dispute as to the facts, it is difficult to see how ruling can be made in favour of the plaintiff in this case.  There should be no hypothetical facts and where the issues of fact are interwoven with the legal issues raised, it will be undesirable for the court to split the legal and factual determination, for to do so would in effect give legal rulings in vacuo or on a hypothetical ruling, which the court will not do.  The court should in the trial take an overall view of the matter to see the context in which the question arises.  In the present case to decide the question of construction which the plaintiff urges upon the court without being fully appraised of the factual matrix, would be extremely undesirable.

65.  I am not persuaded that the issues and point of law as framed by the plaintiff should be determined without a full hearing.  The same isbest resolved in the context of a set of facts found at trial.  A single hearing would allow all issues to be decided together, avoiding multiplicity of proceedings and the consequential additional delay and expense.  The plaintiff’s Summons is therefore dismissed.

66.  There shall be an order nisi that costs be to the 1^st defendant, to be taxed if not agreed, with certificate for one senior Counsel.  The plaintiff’s own costs are to be taxed in accordance with the Legal Aid Regulations.

67.  It only remains for me to thank Counsel for their most helpful written and oral submissions and assistance rendered in this case.