BIRKENHEAD PROPERTIES AND INVESTMENTS LTD. v. LEUNG YIU and Others

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

1996, No. 257
(Civil)

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J U D G M E N T

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Mayo, J.A.:

1. The Appellants are appealing against an order of Wong J made on 12th November 1996. The Judge upheld Master O'Donnell's order dated 4th March 1994 granting possession of the land in question to the Respondents and the order of Master Chan dated 24th May 1994 refusing leave to the Appellants to lodge an appeal out of time. A Respondent's notice is also before us.

2. One of the difficulties encountered on this appeal is in determining exactly what was decided by Wong J, who did not deliver a written judgment.

3. An order was however drawn up which records the order made by the judge. The substantive part of the order reads:

"ON APPEAL by the 1st, 5th, 17th Defendants and the said Leung Fuk Yau from the Order herein of Master O'Donnell dated 4th March 1994 whereby it was ordered that:-

1. the Plaintiff do recover possession of Lot No. 769 in D.D. No. 99, Mai Po, San Tin, Yuen Long, New Territories on the ground that the Plaintiff is entitled to possession and that the persons in occupation are in occupation without licence or consent; and
2. the costs of this action to be the Plaintiff and to be taxed if not agreed with Certificate for Counsel

AND Order herein of Master C.B. Chan dated 24th May 1994 whereby it was ordered that the 1st, 5th, 17th and 18th Defendants' Summons dated 15th April 1994 for leave to appeal out of time be dismissed and costs of the application including costs reserved on 29th April 1994 be to the Plaintiff in any event.

IT IS ORDERED that the said appeal be dismissed with costs to the Plaintiff."

4. Before considering all of the implications of the order it is necessary first to have regard to a short history of this litigation.

5. The Respondents are the registered owners of the land in question which is situated in the New Territories. On 15th June 1993 they issued notices to quit which were posted up on the land.

6. The land was occupied by squatters and the Respondents wished to obtain vacant possession. The squatters did not comply with the notices and the present proceedings were commenced and Master O'Donnell made the order which has been referred to.

7. An appeal should have been lodged within five days of the Master's order. It was not. The application to Master Chan previously referred to was unsuccessful hence the appeal out of time to Wong J.

8. It should be added that the Notice of Appeal which was eventually heard by Wong J was not lodged by A1 and A5 until 16th September 1994 and by A17 and Mr. Leung until the 5th August 1996. The former delay was approximately 6 months and the later over 2 years.

9. It is important to bear these dates in mind because delay which has to be explained is only delay up to the date when the appeal is lodged and does not include any delay which may occur in prosecuting the appeal.

10. At this stage it is necessary to make reference to two matters which have considerably complicated this litigation.

11. The first is the rather unsatisfactory state of the law relating to adverse possession over the period of time since the commencement of this case.

12. It would appear to be common ground that before 19th August 1994 it was generally believed that squatters rights acquired or in the course of being acquired prior to 1973 did not survive the New Territories (Renewable of Crown Leases) Ordinance Cap. 152. This view of the law flowed from the judgment of Godfrey J as he then was in Lam Kee-on v. Lam Ming [1992] 2HKC 317.

13. On 19th August 1994 the Court of Appeal, which included Godfrey, JA as a member held that squatters rights which had been acquired before 1973 did survive the Ordinance. This case was Yeung Kong v. Fu Mei-ling [1994] 2 HKC I.

14. There was a further complication in that another Division of the Court of Appeal held in Chung Ping-kwan and Others v. Lam Island Development Co. Ltd. [1994] 2HKC 11 that where squatters rights were being acquired in 1973 they did not survive the Ordinance. This case went on appeal to the Privy Council and the decision was reversed thus bringing squatters in the process of acquiring rights in 1973 into the same position as squatters who had already acquired their rights.

15. This was a matter of some importance in the present case. It was a central plank of the Appellant's case that the law on this subject had been in disarray until July 1996 when the Privy Council tendered its advice to Her Majesty.

16. This was not the case on this appeal. The Appellants are all contending that they have been in possession of the land in question since before 1953 and that they accordingly will have acquired their rights in 1973.

17. Mr. Jat for the Respondents submitted that as the rights had been acquired by 1973 they fell squarely within the ambit of Yeung Kong v Fu Mei-ling and that the Lam Island case had no application whatever to the present situation. The law was clear from 19th August 1994 onwards that the squatters could assert their rights. In my view this contention is correct.

18. The second complicating factor relates to the issuance by mistake of Crown Permits to the Appellants allowing them to occupy the land in consideration of a fee.

19. The question which arose was whether the payment of the fees to Government would negative the squatters possessory right by reason of lack of intention to possess.

20. Until 15th March 1996 there was uncertainty on this issue. This uncertainty was resolved on that day by the decision of Mrs Justice Le Pichon who held in Kung Wong Sau-hing v. Szeto Chun-keung [1996] 3HKC 292 that Crown Permits defeated squatters rights. The Court of Appeal upheld this decision and there was a further appeal to the Privy Council. In one of the last appeals which was heard from Hong Kong they reversed the Court of Appeal and Mrs Justice Le Pichon and held that squatters rights vis a vis the registered owner are not affected by the issue or acceptance of the Crown Permits.

21. This enabled Mr. Shum who was representing the Appellants to argue that as the law now stood his clients were undeniably able to succeed in their claims and this being the case the Respondents had suffered little or no prejudice as a consequence of the delay which had occurred. He was also able to reinforce his arguments by contending that the action (or perhaps more accurately the inaction) of the Appellants and their various legal advisors had been largely brought about as a result of their not wishing to anticipate the result of the ongoing litigation I have referred to.

22. With this background in mind it is convenient now to revert to the position which faced Wong J when he heard the appeal on 12th November 1996. He had before him affidavit evidence which attempted to justify the delay which had occurred.

23. It is fair to say that the only reason advanced for the delay which had occurred was the changes of law which I have referred to.

24. Mr. Shum who was also representing the Appellants before Wong J applied to the Court for a preliminary issue to be tried. The issue which he proposed should be tried was whether Kung Wong Sau-hing v. Szeto Chun-keung had been correctly decided. Mr. Jat opposed the idea of hearing a preliminary issue but notwithstanding this Wong J did proceed in the manner proposed by Mr. Shum and decided that the case was determinative of the instant litigation and made the order I have referred to.

25. One of the questions which has to be determined on this appeal is whether Wong J in fact made an adjudication on whether or not leave should be granted to the Appellants to proceed with their appeal notwithstanding the fact that it was out of time.

26. It would appear to be clear from the recollections of both counsel who were present that the judge did not direct his mind to this issue and I do not think in the circumstances that it can be assumed that simply on account of the fact that he made the order he did that he made an adjudication on the leave point.

27. The significance of this is that if no adjudication has taken place the issue remains undetermined and it is necessary for us to hear the matter de novo. A consequence of this is that there is no question of our being asked to interfere with the exercise of Wong J's discretion which in turn means that the threshold which has to be surmounted by the Appellants to obtain the necessary leave is lower than would otherwise be the case.

28. Another consequence of this relates to the supporting evidence which is properly before us.

29. Mr. Albert Ho the solicitor representing the Appellants swore a lengthy affidavit (his 3rd) after the hearing before Wong J. Mr Jat, who contends that there was an adjudication before Wong J as to leave, submits that the requirements set out in Ladd v. Marshall [1954] 1 WLR 1489 have to be complied with before we would be entitled to receive the affidavit.

30. At the hearing Mr. Jat agreed that we should consider the affidavit on a de bene esse basis. In my view as there has not been an adjudication by Wong J this problem does not arise. The affidavit is properly receivable by the court.

31. In fact this determination is not of critical importance in this appeal. As indicated earlier in this judgment the important time to consider in relation to the delay which has occurred is the period up to when the appeal was lodged. There was already evidence before Wong J that the delay was attributable to the changes which had occurred in the law.

32. Mr. Ho's 3rd affidavit does not deal with much evidence outside this save for evidence of inconclusive discussions and negotiations which took place between the respective solicitors in which attempts were made to reach an accommodation on the basis that the Respondents should agree to the judgment they had obtained being set aside on certain terms.

33. I do not think that these negotiations have any important bearing upon the issues which we have to determine on this appeal.

34. On the basis that this application is being heard de novo it is next necessary to consider the principles to be applied to such an application. I have no doubt that the correct approach to adopt is the one adopted in Norwich and Peterborough Building Society v. Steed [1991] 1WLR 449:

(a) Length of delay.

(b) Reasons for delay.

(c) Chances of succeeding if the application is granted.

(d) The degree of prejudice to the Respondent if the application is granted.

35. I accept the validity of the submission made by Mr. Shum that it is also necessary to have regard to all the circumstances.

(a) Length of delay.

36. As mentioned earlier the length of delay was approximately 6 months for A1 and A5 and slightly in excess of 2 years for A17 and Mr. Leung.

37. In the context of previous applications made for extensions of time in other cases even the 6 months delay is substantial delay. 2 years delay is of course much worse.

38. For delay of this order to be countenanced a convincing explanation needs to be forthcoming.

(b) Reasons for delay.

39. From a perusal of all of the material which was before us the main reason advanced for the delay was what Mr. Shum described as the state of turmoil in the law.

40. Bearing in mind the necessity of focusing attention on the relevant period of delay that is 5 days from the date of Master O'Donnell's Order dated 4th March 1994 the only "turmoil" which occurred was the decision in Yeung Kong v. Fu Mei-ling which was delivered on 18th August 1994.

41. I do not think that any ongoing negotiations between the parties can be a justification for delay unless there is an explicit agreement struck between the parties that matters should be delayed. There was no such agreement in the present case.

42. What the "turmoil" in the law amounted to was that there was by virtue of the decision in Yeung Kong a change in the way that adverse possession was not defeated by the enactment of New Territories (Renewable of Crown Leases) Ordinance Cap. 152.

43. What is clear is that a change in the law cannot be justification for delay.

44. Authority for this proposition can be found from the p.1224 of the judgement of Roskill L.J. in Property and Reversionary Ltd. v. Templar [1977] 1 WLR 1223.

"It is in the light of that present position that the landlords have now applied to this court for leave to appeal out of time. They are, of course, a long way out of time, for it is now some 2½ years since Judge Fay gave his decision. But it is said by Mr. Goodhart that the reason why this court should now give leave to appeal out of time is because this is a case where the parties are in a continuing contractual relationship and that it is wrong that that relationship should still continue and will continue, under the 21 years' lease, to be governed until 1986 by a decision of Judge Fay which on the assumption I have already mentioned, is to be treated as erroneous.

He relied on a decision of this court in ln re Berkeley (1944) 171 L.T. 303. In that case there had been earlier decisions at first instance. Then there was a subsequent decision of this court which showed that the earlier decisions were wrong, and it was sought to appeal out of time against the second of those decisions. Lord Greene M.R. said, at p.305:

'It seems to me that the principle to be extracted is this. It is not sufficient for a party to come to the court and say: "A subsequent decision of a superior court has said that the principle of law on which my case was decided was wrong." The court will immediately say to him: 'That bald statement is not enough for you. What are the circumstances? What are the facts? What is the nature of the judgment? Who are the parties affected? What, if anything, has been done under it?' and so forth. In other words, the whole of the circumstances must be looked at. If the court, in the light of those circumstances, considers it just to extend the time, then it will do so. That seems to me to be the proper principle and it is entirely in accordance with the view taken by this court in the most recent case under this rule of Gatti v. Shoosmith [1939] 1 Ch. 841.'

It is therefore plain that it is not enough for Mr. Goodhart to say that the recent decisions of the House of Lords clearly show that Judge Fay's decision was wrong. He must show there are special reasons why he should be allowed to argue that the judgment should not stand."

45. This authority was followed by Cheung J in Country Rich Development Ltd v Ma Chun Fuk-kiu and others [1995] 1 HKLR 265 where he considered a number of other authorities in point.

46. I have no doubt that this is correct and that the explanation which has been given by the Appellants can not amount to justification for the lengthy delay which occurred.

(c) The chances of the appeal succeeding if the application is granted.

47. It is here that the Appellants are on their strongest ground. It is highly probable that the Appellants would succeed on their appeal if this application is granted. It is not however certain that they would. They will still have to prove that they have been in possession of the land for the period of time they are claiming. Also it is possible that the "state of turmoil" in the law may not be at an end. In this connection it is not inconceivable that our Final Court of Appeal might not follow Kung Wong Sau Hing.

(d) Prejudice.

48. As indicated earlier Mr. Shum submitted that as the law presently stands his clients are entitled to remain on the land. This being the case the Respondents have not in reality suffered any prejudice.

49. I do not agree with this analysis of the position. At the time when judgment was entered against the Appellants there was every reason to believe that the law was wholly in favour of the Respondent.

50. As a result of the delay which has occurred the Respondent have been deprived of the fruits of the judgment they obtained for a period of almost 4 years.

51. Even if it were true that there had been no prejudice this of itself would not justify indulgence being granted to the Appellants. See The Adhiguna Meranti [1988] 1 HKLR 410.

52. I accept that what is required by Norwich & Peterborough Building Society is that the Court should undertake a balancing exercise in determining whether or not relief should be given.

53. I have no doubt that if such a balancing exercise is undertaken there can only be one result. That is that leave should not be given to extend the time for prosecuting this appeal.

54. In saying this I am mindful of the fact that no acceptable explanation has been given for the substantial delay which occurred. What is also true is that regardless of what the Appellants prospects of success may be it is more important that there should be finality in the law. The Rules of the Court have to be adhered to and compliance with them can only be waived if compelling reasons are forthcoming. They have not been forthcoming in this case.

55. For these reasons I consider that this application should be dismissed. In my view the Respondents should be entitled to their costs and the Appellants costs should be taxed in accordance with the Legal Aid Regulations.

Le Pichon, J.:

56. I agree that this appeal ought to be dismissed.

57. The facts and history of this litigation are fully set out in the judgment of Mayo JA. I need do no more here than to recapitulate the salient features and dates relevant to this appeal.

58. The Respondent/Plaintiff is the registered owner of Lot No.769 in D.D. No.99, Mai Po, Yuen Long, New Territories. It took out proceedings for possession under Order 113 of the Rules of the Supreme Court and obtained an Order on 4 March 1994. On 15 April 1994, the 1st, 5th and 17th Appellants/ Defendants ("A1, A5 and A17") applied for leave to appeal out of time. This application was dismissed by Master C.B. Chan on 24 May 1994. On 16 September 1994, A1 and A5 filed a Notice of Appeal to the judge out of time. Almost two years later, A17 and Leung Fuk Yau ("Mr Leung") also filed a Notice of Appeal to the judge out of time. These two appeals came before Wong J. on 12 November 1996. Each of the Notices of Appeal sought leave to appeal against the Orders and decisions of Master Chan and Master O'Donnell out of time, for the setting aside of the Orders made by them and for unconditional leave to the Appellants to defend the Respondent's claim.

The Order dated 12 November 1996

59. The Appellants submitted that because the appeal was dismissed, the judge must have heard the appeal out of time before dismissing the same on the merits, and that this must imply that leave to appeal out of time was granted. For the Respondent, it was submitted that if the learned Judge had been minded to grant the extension to appeal out of time, the Order would have been worded differently and the two matters, i.e. leave to appeal out of time and the substantive appeal itself, would have been dealt with separately. As no distinction was drawn, the court was invited to conclude that it was more consistent that the dismissal related to both the application for extension of time as well as the substantive appeal itself.

60. It is common ground that when the matter came on before the learned Judge, the Appellants raised the substantive legal issue as a preliminary point. The only issue at which the court's attention was directed and engaged was the substantive legal issue, viz. the Court of Appeal's decision in Kung Wang Sau Hin v. Sze To Chun Keung and Ors [1996] 3 HKC 292 which the learned Judge held was binding on him. Whilst it is difficult at this stage to ascertain what was in the learned Judge's mind when he made the Order, the undisputed fact is that although the issue of granting leave to appeal out of time was raised in counsel's written submissions, it was not addressed at the hearing itself.

61. Having regard to the conclusion reached on the preliminary issue, the outcome of the leave application was academic inasmuch as it could not have had any bearing on the final disposition of the substantive appeal. Those circumstances do not strongly warrant a conclusion that there was any determination on the leave application whether in favour of the Appellants or the Respondent. In fact, the more likely scenario is that the issue was not decided one way or the other so that one is left with having to approach the question de novo, with the consequence that neither party has the burden of making out a case for interfering with the exercise of the learned Judge's discretion.

Appellants' application to adduce further evidence

62. The court was invited to read parts of Mr Albert Ho's 3rd affirmation dated 3 July 1997 de bene esse. Essentially, they deal with events that occurred between the hearing by the Master in March 1994 and the hearing before Wong J in November 1996 although Mr Ho had filed two earlier affirmations, (on 22 April 1994 and 15 September 1994 respectively) in support of the application to Master Chan and the Notice of Appeal to the Judge.

63. Order 59, rule 10(2) provides as follows :

"(2) The Court of Appeal shall have power to receive further evidence on questions of fact, either by oral examination in court, by affidavit, or by deposition taken before an examiner, but, in the case of an appeal from a judgment after trial or hearing of any cause or matter on the merits, no such further evidence (other than evidence as to matters which have occurred after the date of the trial or hearing) shall be admitted except on special grounds."

64. It is common ground that after there has been a trial or hearing on the merits, fresh evidence will not be admitted in the Court of Appeal unless the conditions laid down in Ladd v. Marshall [1954] 1 WLR 1489 are satisfied. A strict approach is adopted. See the Supreme Court Practice 1997 at 59/10/9. The conditions are that leave to adduce further evidence on appeal will only be granted -

1. if it is shown that the evidence could not have been obtained with reasonable diligence for use at the trial,
2. if the further evidence is such that if given, it would probably have an important influence on the result of the case, though it need not be decisive, and
3. if the evidence is such as is presumably to be believed.

65. The Appellants' stance as regards the 3rd affirmation is that it is within the words in parenthesis in Order 59, rule 10(2) so that the Ladd v. Marshall conditions do not apply. Implicit in this is that the relevant "judgment" for the purposes of rule 10(2) is that of Master O'Donnell. This is hardly consistent with the Appellants' submission on the effect of the Order of Wong J, namely that there was an adjudication of the leave issue, albeit impliedly. It appears to be a case of the Appellants wanting to have the best of both worlds.

66. Be that as it may, if the learned Judge made no determination of the leave point and that were to constitute "a cause or matter" for the purposes of Order 59, rule 10(2), then there would not appear to have been a hearing on the merits to render Ladd v. Marshall applicable. But for the purposes of the High Court Ordinance, Cap.4, "cause" means any action or criminal proceeding; "matter" means every proceeding not in a cause; and "action" means a civil proceeding commenced by writ of summons or in such other manner as may be prescribed by any law. See section 2 of Cap.4. That being the case, "cause or matter" is referable to and can only mean the action as it stands between the existing parties. See Amon v. Raphael Tuck & Sons Ltd. [1956] 1 QB 357 at 369. Thus, whilst the leave point was either a sub-issue or one of several issues before Wong J, in my judgment, there was but a single cause or matter before him i.e. the appeal from the order for possession.

67. As the hearing before Wong J was undoubtedly a hearing on the merits, Ladd v. Marshall applies. The 3rd affirmation does not meet the first of the Ladd v. Marshall conditions; it is therefore not to be adduced as evidence before this court. Nor is such a result unjust : the evidence sought to be adduced by the 3rd affirmation ought to have been before the learned Judge. It was not and there is no explanation as to why it was not, much less any acceptable reason for triggering the "special grounds" exception provided for in Order 59, rule 10(2).

Leave to appeal out of time

68. In Norwich and Peterborough Building Society v. Steed [1991] 1 WLR 449, Lord Donaldson MR summarized the position succinctly (at 454 G-H) :

"... Once the time for appealing has elapsed, the respondent who was successful in the court below is entitled to regard the judgment in his favour as being final. If he is to be deprived of this entitlement, it can only be on the basis of a discretionary balancing exercise, however blameless may be the delay on the part of the would-be appellant. The classic statement of the elements of this equation is to be found in the judgment of Griffiths L.J. in C.M. Van Stillevoldt B.V. v. E.L. Carriers Inc. [1983] 1 W.L.R.207, ... and are, as McCowan L.J. has set them out, namely (1) the length of the delay; (2) the reasons for the delay; (3) the chances of the appeal succeeding if an extension of time is granted; and (4) the degree of prejudice to the respondent if the application is granted."

69. In the case of A1 and A5, the delay is six months and in the case of A17 and Mr Leung, the delay is two years and five months. These periods of delay are, on any view, significant, the time for appealing being 5 days from the Master's decision.

70. What were the reasons for the delay?

71. Whatever they were, the lack or absence of legal representation was not one of the reasons. Although at the hearing before Master O'Donnell the Appellants appeared in person, it is apparent from Mr Ho's 1st affirmation that he first became involved in this litigation from about the middle of March 1994, i.e. 10 days or so after the Master made the order for possession. Prior to the Court of Appeal's decision in Yeung Kong v. Fu Mei Ling Mary [1994] 2 HKC 1 which was delivered on 19 August 1994, the reason why no application for leave to appeal out of time was lodged was none other than that the prospects of success for appealing the judgment of Master O'Donnell, as Mr Ho frankly acknowledged, were "practically nil". So, advisedly, no appeal was lodged. Although with the Court of Appeal's decision in Yeung Kong those prospects changed, nothing was done for a further four weeks and then only in respect of A1 and A5.

72. In the course of his submissions, Mr Shum for the Appellants sought to invoke the "turmoil" in the law relating to adverse possession by squatters stemming from Lam Island Development Co. Ltd. v. Lai Moon Hung, 1993, MP 1571 and culminating in the Privy Council's judgment in Chung Ping Kwan v. Lam Island Development Co. Ltd. [1997] AC 38 as one of the principal reasons for the delay insofar as the Notice of Appeal in respect of A17 and Mr Leung is concerned. The Privy Council's judgment in Lam Island was delivered on 8 July 1996. The Notice of Appeal to the Judge out of time was filed by A17 and Mr Leung some four weeks later.

73. I do not accept that the Lam Island litigation is a valid reason for the delay. The Lam Island issue is confined to situations where the relevant period of occupation straddles 1 July 1993, when under the New Territories (Renewable Crown Leases) Ordinance, Cap.152 new Crown leases were deemed to have been granted. It does not arise in the present case since each of the Appellants here claim to have been in possession prior to 1953 and therefore would have had 20 years' occupation prior to July 1973. Nor is it the case that the Privy Council's decision could have impinged on Yeung Kong which involved a different point.

74. Thus, the only discernible reason is a change in the law resulting from the Court of Appeal's decision in Yeung Kong on 19 August 1994.

75. But it is not sufficient merely to show that there has been a change in the law : there must be special circumstances.

"It would only have come to this, that more than a year after the decision in Craig v. Phillips, the Court of Appeal had come to a different decision on a vexed point of law. In my opinion that is not sufficient ground, in the absence of very special circumstances, to deprive a man of a judgment which has been given in his favour." (emphasis added)

See per Jessel M.R. in Craig v. Phillips (1877) 7 Ch D 249 at 251.

"In my opinion it is for the interest of the public that litigants should know as soon as possible when certainty has been reached, and that if people have deliberately elected to let the time for appealing go by, the Court should not give them leave to appeal without special circumstances." (emphasis added)

See per Lindley L.J. in Esdaile v. Payne (1889) 40 Ch D 520 at 534-5.

76. As Cheung J noted in Country Rich Development Ltd v. Ma Chun Fuk-kiu [1995] 1 HKLR 265 at 269, subsequent decisions appear to depart from the requirement of special circumstances in favour of enlarging the time for appealing "if it is just to do so". See for example In re J. Wigfull & Sons' Trade Marks [1919] 1 Ch 52 at 58-9 and in In re Berkeley [1945] 1 Ch 1 at 4 where Lord Greene M.R. held :

"I find no difficulty in reconciling the statement that the different decision is not necessarily a ground for enlarging the time with the statement that the court can enlarge the time if it is just in the circumstances to do so. It seems to me that the principle to be extracted is that it is not sufficient for a party to come to the court and say that a subsequent decision of a superior court has determined that the principle of law on which his case was decided was wrong. The court will say to him : 'That bald statement is not enough. What are the facts? What is the nature of the judgment? Who are the parties affected? What, if anything, has been done under it?' and so forth. In other words, the whole of the circumstances must be looked at. If the court, in the light of those circumstances, considers it just to extend the time, then it will do so. That seems to me to be the proper principle and it is entirely in accordance with the view taken by this court in the most recent case under this rule - Gatti v. Shoosmith [1939] Ch 841." (emphasis added)

77. More recently, in Property and Reversionary Investment Corpn. Ltd. v. Templar [1977] 1 WLR 1223, the Court of Appeal appears to have resuscitated the "special reasons" requirement :

"It is therefore plain that it is not enough for Mr Goodhart to say that the recent decisions of the House of Lords clearly show that Judge Fay's decision was wrong. He must show there are special reasons why he should be allowed to argue that the judgment should not stand." (emphasis added)

See per Roskill L.J. at 1225. In that case, special reasons were shown to exist. There the parties were in a continuing contractual relationship governed by a 21 year lease and future obligations between them should not depend on a construction shown to be wrong.

78. Are there special circumstances or is it just and expedient in all the circumstances that time for lodging the appeal in the present case be enlarged? In the case of A17 and Mr Leung, the answer is plainly no. If, as I have found, the 3rd affirmation cannot be adduced in evidence, there is simply no explanation given, much less any acceptable explanation, for lodging the Notice of Appeal almost two and a half years after the making of the order for possession.

79. Even if one were to have regard to the matters deposed to in the 3rd affirmation, that does not take matters further. As noted above, the Lam Island litigation had nothing to do with the issue which arises in the present case. Negotiations between the parties in the fall of 1994 and from May to October 1995 that did not come to fruition may be an excuse but are not a reason or justification for the delay. The Crown Permit issue (viz. whether the application for and holding of permits mistakenly issued by the Crown in the belief that the land was Crown land negatived the necessary animus possidendi on the part of the squatter) first arose in the Kung case which I decided on 15 March 1996. By August 1996, at the time when A17 and Mr Leung lodged their Notice of Appeal, that issue was against them, the Court of Appeal having affirmed my decision. It is not readily apparent why those circumstances (wholly adverse to the Appellants' case) should prompt the filing of an application for leave to appeal out of time.

80. Turning to A1 and A5, the explanation proffered is not because they did not have legal representation or that the delay was due to the absence of legal aid : the Notice of Appeal was lodged at a time when legal aid had not been granted. The only reason that can be discerned is the change in the law caused by the Court of Appeal's decision in Yeung Kong and the Appellants' desire to take advantage of that. Further, it is not a case that after learning of the Yeung Kong decision on 19 August 1994 (already by then five months out of time), the Appellants proceeded with any despatch. It took another four weeks before a Notice of Appeal on behalf of A1 and A5 was lodged. There is no explanation for this further delay. Thereafter, matters were allowed to drift for another two years. If anything, what has occurred is the very antithesis of prosecuting the appeal with diligence.

81. In my judgment, no special circumstances have been made out to warrant the enlargement of time sought. Nor would it be just in all the circumstances to grant such an enlargement.

82. Finality in litigation is of central importance to every litigant : it lies at the very foundation of our legal system. The rules designed to facilitate such finality are generally to be adhered to so that litigants will know where they stand. As this court held in The Adhiguna Meranti [1988] 1 HKLR 410, the purpose of the rules is to provide a timetable for litigation. Extensions of time would invariably defeat that purpose and should not be granted in the absence of special circumstances.

83. Mr Shum's case for enlargement rests essentially on the prospective appeal's chances of success. In view of the Privy Council's judgment in Sze To Chun Keung v. Kung Kwok Wai David [1997] 2 HKC 231, the Appellants have a strong case on the merits. That decision is binding on this court but not on the Court of Final Appeal. But the merits point is nothing more than the mirror image of the change in the law point. That alone is insufficient for the reasons already stated. To permit the validity of a judgment to be revisited because of judicial developments that occur long after the date for lodging an appeal has passed will only serve to perpetuate a continuing state of uncertainty and promote a lack of finality in litigation that cannot be in the public interest.

84. Finally, on the question of prejudice, I do not agree that the Respondent will suffer no prejudice because execution has already been stayed. The fact is that it has been kept out of the land to which it was en titled under a judgment validly obtained. There is also prejudice in terms of evidence to meet the allegations of possession going back several decades if the appeal were allowed. Moreover, lack of prejudice is not a reason for granting an extension. See the Adhiguna Meranti (supra) at 411H applied in Chiu Sin Chung v. Yu Yan-yan Angela [1993] 1 HKLR 225 at 228 where it was noted (at 229, line 25) that the additional period of uncertainty is prejudice in itself.

85. I would dismiss this appeal with costs.

Nazareth, V.-P.:

86. I also agree that this appeal should be dismissed.

87. For the reasons given by Le Pichon J, I would refuse leave for the third affirmation of Mr Ho to be adduced in evidence. But I have to say that even if it were admitted, I cannot see that it would affect my conclusion that the appeal should be dismissed.

88. As to the application for leave to appeal out of time, as indicated, for the reasons given by Mayo JA and Le Pichon J, it seems to me also that time should not be extended and that leave should be refused.

89. Finally, I agree that the respondent should have its costs of the appeal to this Court.

90. The appeal is accordingly dismissed. There will be an order nisi that the respondent is to have its costs of the appeal and that the appellant's own costs are to be taxed in accordance with the Legal Aid Regulations.