LAU YING YUI v. VERYWELL INVESTMENTS LTD

DCCJ 4871/2015

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 4871 OF 2015

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JUDGMENT

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1.  The plaintiff (“Madam Lau”) claims possessory title to Lot No 87 in Demarcation District No 5, Tai Po, New Territories (“the Land”).

2.  The defendant (“Verywell”) is the registered owner of the Land. Verywell denies Madam Lau’s claim.  Verywell counterclaims for an order requiring Madam Lau to deliver vacant possession of the Land to Verywell, and for damages for trespass.

MADAM LAU’S CASE

3.  In or about 1966, Madam Lau was reunited with her natural parents, Mr Fung Shing (“Mr Fung”) and Madam Chan Tai (“Madam Chan”), who at that time had already been living on the Land without the permission of the then registered owner of the Land.  Mr Fung and Madam Chan built a stone structure on the Land in 1962, and they were living in that stone structure.

4.  In 1977, Mr Fung passed away.  In 1986, Madam Chan was diagnosed with cancer.  From then on, Madam Lau took over the work of tending vegetables and fruit trees and rearing chicken on the Land and treated the land as her own home.

5.  Madam Lau moved to live on the Land in mid-1989 when Madam Chan was in hospital.  In September 1989, Madam Chan passed away.  After that, Madam Lau’s family moved to the Land and treated the Land as their own.  Since then, Madam Lau and her family have had complete and exclusive physical control of the Land for her family and her own benefit.  Madam Lau and her family did so without the permission of the then registered owner of the Land or any other person.

VERYWELL’S CASE

6.  Verywell’s defence contains non-admissions and denials.  No particular is given in the defence.

7.  In paragraph 9 of its defence, Verywell made the following averment:-

“It is averred that the Plaintiff has never had the requisite possession nor the requisite intention to possess in respect of [the Land] for the purpose of adverse possession.” (Emphasis added)

8.  Verywell counterclaims for vacant possession of the Land and damages for trespass.

UNDISPUTED FACTS

9.  I would first set out the facts which are not disputed.

10.  Kong Fu Realty Limited (“Kong Fu”) became the registered owner of the Land on 11 February 1978.

11.  On 27 May 2010, Kong Fu commenced proceedings under DCMP 1456/2010 to claim for vacant possession of the Land against Madam Lau (who is the 1^st defendant in those proceedings) and all persons in occupation of the Land (who are the 2^nd defendant in those proceedings).  Kong Fu’s claim for vacant possession was made under Order 113 of the Rules of the District Court (“RDC”).

12.  On 16 July 2010, Madam Lau filed an affirmation in opposition in DCMP 1456/2010.

13.  On 23 August 2010, the court made an order by consent in DCMP 1456/2010 dismissing Kong Fu’s claim with no order as to costs (“the Dismissal Order”).

14.  On 14 August 2015, Kong Fu entered into a sale and purchase agreement (“the SPA”) with Verywell, by which Kong Fu agreed to sell and Verywell agreed to purchase the Land at the price of HK$3,681,500 in accordance with the terms of the SPA.  In the SPA,

(a)   Kong Fu declared that the Land might have been occupied as disclosed in a report called “DTZ Report July 2015”.  See the schedule to the SPA, Part VI, (1A)(b).

(b)   Verywell declared that it had inspected or was deemed to have inspected the DTZ Report July 2015 prior to entering into the SPA and had full knowledge of the location, layout and occupation status of the Land, and agreed that it would complete the purchase despite the Land or any part thereof might be occupied by a third party without the knowledge or consent of Kong Fu.  See the schedule to the SPA, Part VI, (1B)(d).

15.  On 7 October 2015, the transaction as per the SPA was completed and an assignment of the Land was executed by Kong Fu in favour of Verywell.

THE EVIDENCE

Madam Lau’s evidence

16.  Madam Lau has given evidence to support her case.  In her evidence, Madam Lau says:-

(a)   She was born in 1951.  Her natural parents are Mr Fung and Madam Chan. Since her parents were very poor, while she was about 1.5 months old, her parents gave her to Mr Lau Chun Fook (“Mr Lau”) and Madam Wan Kiu (“Madam Wan”).  Mr Lau and Madam Wan are Madam Lau’s foster parents.  Madam Lau adopted the surname of her foster father as her surname.

(b)   In or about 1966, Madam Lau requested Madam Wan to allow her to see her natural parents and to reunite with her natural parents.  She reunited with Mr Fung and Madam Chan in or about 1966.  At that time, Mr Fung and Madam Chan were living in a stone structure on the Land, which was built in 1962 after the original structure had been damaged by a storm in that year.

(c)   After reuniting with her natural parents, Madam Lau shared time equally between her natural parents and her foster parents.  She often stayed overnight with her natural parents on the Land.

(d)   Apart from living in the stone structure, Mr Fung and Madam Chan also planted vegetables and fruit trees on the Land.  They also reared chicken on the Land.  They cordoned off the Land with metal fencing.

(e)   Madam Lau married in 1970.  After that, she no longer lived on the Land but lived with her husband and children in Fung Yuen Tsuen in Tai Po.  From time to time, she would go to visit her natural parents with her husband and children.

(f)   In 1977, Mr Fung passed away.  At that time, Madam Chan’s health was also deteriorating.  Hence, from 1977 onwards, Madam Lau would go to the Land on a regular basis to help Madam Chan to tend to vegetables and fruit trees and to rear chicken on the Land.  During this period, Madam Chan told Madam Lau that the Land was Madam Chan’s property as she was not paying any rental to anyone and neither had anyone demanded her to pay any rental.

(g)   In 1986, Madam Chan was diagnosed with cancer.  From then on, Madam Lau took over the work of tending vegetables and fruit trees and rearing chicken on the Land.  Madam Lau treated the Land as if it was her home as she had spent a lot of time there looking after the Land and Madam Chan there.

(h)   Madam Chan’s health condition was continuously deteriorating.  In mid-1989, while Madam Chan was in hospital, Madam Lau moved to the Land and to live thereon permanently to look after the vegetables and the fruit trees and to rear chicken.

(i)   Madam Chan passed away on 15 September 1989.  Before her death, Madam Chan entrusted the Land to Madam Lau and asked Madam Lau to take care of the stone structure and the Land.  Madam Chan told Madam Lau that as she (Madam Chan) had lived there for so many years without the permission of the owner, she treated the Land as her own property.  Madam Chan told Madam Lau to continue to occupy the Land so that no one (including other relatives) could take away the Land from Madam Lau.

(j)   After the death of Madam Chan, Madam Lau immediately surrendered the tenancy in Fung Yuen Tsuen and terminated all utilities services at that address.

(k)   After the funeral of Madam Chan, at about the end of September 1989, Madam Lau’s whole family, ie Madam Lau and her husband, and their 5 children, moved to the Land and lived thereon.

(l)   After moving to the Land, Madam Lau changed the door (including the lock) to the Land.

(m)   After entering into the Land and living thereon, Madam Lau notified the schools of her 5 children of the change of address.  She also rented a post box in Tai Po Post Office as there was no mail delivery service to the Land at that time.  Later, when there were post boxes in Mui Shue Hang village, Madam Lau had a post box in the village.  The address of the Land is usually known as No 64, Mui Shue Hang village, Tai Po.

(n)   Over the years, Madam Lau and her family made numerous improvements to the Land, including repairing and improving the stone structure and the chicken house, building a lavatory, repairing the fencing, and repairing a slope near the kitchen.

(o)   Over the years, Madam Lau has not asked for any permission to stay on the Land from anyone.

(p)   Since the end of 1989, Madam Lau and her family have been in occupation of the Land and treat the Land as their home.  The Land has always been surrounded by a fence to the exclusion of all others.

(q)   Madam Lau has annexed several photos (“the Photos”) showing the life of herself and her family members on the Land.

17.  Mr Roland Tang, counsel for Verywell, makes the following criticisms in relation to Madam Lau’s evidence:-

(a)   Under cross-examination, Madam Lau says that electricity bills and water bills for the Land have been addressed to her as the customer at the Land for quite a long time.  These would have been important evidence in support of her claim for adverse possession.  Yet, not a single electricity bill or water bill has been produced.  In addition, she states that that she has 2 bank accounts, and that monthly statements have been sent to her with the Land as the address.  Again, not a single bank statement has been produced.

(b)   Further, in §8 of her supplemental witness statement, Madam Lau states that she has other documentary proof of her physical possession of the land as well^[1].  Again, none has been produced.

(c)   Madam Lau has not produced a single document, whether from a bank, or any of the utilities providers showing that she was in actual physical occupation of the land at any given time, not to mention the professed continuous physical occupation of the land since September 1989.

(d)   Without such evidence, it is difficult to see how Madam Lau can be said to have discharged the burden of proving the fact of actual physical possession and the requisite intention to possess.  See the analysis in this respect in The Hong Kong Buddhist Association v Cheng Ka Leung Michael (HCMP 4108/2003, 8 Sep 2006; affirmed in CACV 358/2006, 15 May 2007) in §§33 to 45.

(e)   Mr Tang also submits that the Photos themselves do not show that the Photos were taken on the Land.  Mr Tang also says that Madam Lau has not produced any document to show that Mr Fung is her natural father and Madam Chan is her natural mother.

18.  I would deal with these criticisms later in this judgment.

The Surveyor’s report

19.  Madam Lau has also produced an expert report by Mr Tang Sze Kin, Eric (“the Surveyor”), a registered professional surveyor (land surveying) under Surveyor Registration Ordinance (Cap 417) and an authorized land surveyor under the Land Survey Ordinance (Cap 473), in support of her case.  By the order made in the case management conference on 9 December 2016, the Surveyor’s report is adduced as evidence in the trial without calling the Surveyor.

20.  The Surveyor’s report focuses on the existence of the stone structure on the Land.  In the report, the Surveyor gives the following opinion:-

(a)   The stone structure was observed in the aerial photos taken in 1976, 1982 and 1989.  According to the site survey conducted by the Surveyor’s company in May 2016, a house has been found in the location of the stone structure.  The Surveyor believes that the house has been erected within the Land for over 40 years.

(b)   Fence was firstly observed in the aerial photos taken in 1976.  The Surveyor takes the view that probably the fence was hidden by the overgrown trees and could not be observed from the subsequent aerial photos. 

21.  The Surveyor’s report is not challenged by Mr Tang.

Verywell -  no factual or expert witness

22.  Verywell has elected not to call any factual or expert witness.

MADAM LAU’S CLAIM

Any res judicata?

23.  Mr Brain Wong, counsel for Madam Lau, submits that Verywell is estopped from claiming possession of the Land from Madam Lau by the operation of the doctrine of res judicata:-

(a)   The Dismissal Order, although it is an order by consent, is still as effective as an order made upon adjudication.  See Liquidation Committee of Foshan Hongda Development Ltd v East Legend Investment Ltd [2009] 1 HKLRD 169 at §20.

(b)   As a result of the Dismissal Order, Kong Fu, while it remained as a registered owner of the Land, was not entitled to commence proceedings to claim possession of the Land from Madam Lau.

(c)   What cannot be done by Kong Fu cannot be done by its successors-in-title, including Verywell.

24.  With respect to Mr Wong, I am unable to accept these submissions.

25.  In the Foshan Hongda case, Cheung JA said:-

“19. In the present case the defendant obviously had notice of the issue of the Company’s standing at the outset of the case, namely in the same month when it received the writ. It then issued the striking out application. That, however, was not the only issue that it had noticed because the plaintiff in response to the striking out, applied to substitute the Liquidation Committee as the new plaintiff. The standing of the Liquidation Committee was then extensively canvassed by the Mainland legal experts who put forward opposite views on the matter. Faced with such evidence the defendant then chose to abandon the striking out and allowed the Liquidation Committee to be substituted as the plaintiff. In such circumstances, in the absence of other evidence, the only reasonable conclusion one may draw is that the defendant had accepted the standing of the plaintiff to sue. There was no other evidence to contradict this conclusion. This being the case it clearly was an abuse by the defendant to raise this issue again at the beginning of the trial in the guise of a preliminary issue when as a matter of law it could not have raised this issue by way of defence.

20.    It is well established that a judgment by consent is as effective as an order made upon adjudication, see In re South American and Mexican Company, ex parte Bank of England [1895] 1 Ch. 37 and Kinch v. Walcott [1929] AC 482.  This is unlike the situation in, for example, Siebe Gorman & Co. Ltd v. Pneupac Ltd [1982] 1 WLR 185 where a party applied for extension of time and the other party did not object to it and they recorded the terms by a consent order.  In such a case there may be room for argument that there is no agreement between the parties.  This is not such a case.  In my view the Judge was plainly wrong to allow the matter to be raised again.  He had overlooked the fact that when the defendant agreed to the amendment it was fully appraised of the contentions of the parties on the issue of standing and had taken a considered position on this issue.  If it was wrong not to decide the issue after it had been raised, it would be even worse to allow this issue to be reopened after the parties had agreed to the substitution of the plaintiff.”

26.  One can immediately see that whether a consent order constitutes res judicata depends upon the basis leading to the consent order, ie whether the consent order is made as a result of an agreement between the parties or a concession made by a party.  It would not be correct to say that any consent order would constitute res judicata regardless of the circumstances.

27.  In the present case, the basis of the Dismissal Order in DCMP 1456/2010 is unknown.  In these circumstances, Madam Lau cannot say that there is a res judicata in her favour by reason of the Dismissal Order.

28.  I further notice that the application made by Kong Fu in DCMP 1456/2010 is an application under Order 113 of RDC.  Order 113 is summary proceedings for possession of land.  The court may dismiss an application for summary judgment if at the time of the application the plaintiff knows that the defendant has an arguable defence which cannot be resolved in summary proceedings.  If the court makes a dismissal order in these circumstances, that does not mean that the plaintiff cannot sue the defendant again in respect of the same matter.  It is not known whether the Dismissal Order in DCMP 1456/2010 falls within this category.

29.  For these reasons, I refuse to accept the res judicata point made by Mr Wong.

Adverse possession – the principles

30.  I now turn to the adverse possession claim made by Madam Lau.

31.  The principles in relation to adverse possession are well known.  A useful summary has been provided by the Court of Final Appeal in Incorporated Owners of San Po Kong Mansion v Shine Empire Ltd [2007] 10 HKCFAR 588, in which Nazareth NPJ in giving the reasons for the judgment of the court said:-

“7. The principles for the application of ss. 7(2), s.17 and the associated provisions of the Limitation Ordinance are well settled. They were formulated and set out by Slade J in Powell v McFarlane [1977] 38 P & CR 452, approved by the House of Lords in JA Pye (Oxford) Ltd v Graham [2003] 1 AC 419, and adopted by this Court in Wong Tak Yue v Kung Kwok Wai (1997-98) 1 HKCFAR 55. Their application has not been disputed in these proceedings, and they have been relied upon by both parties. The authorities mentioned, not only approve those principles, but provide explanation of them and guidance in their application. Of particular relevance to dispossession are the following passages in Slade J’s judgment in Powell:-

“(1) …

(2) If the law is to attribute possession of land to a person who can establish no paper title to possession, he must be shown to have both factual possession and the requisite intention to possess (“animus possidendi”).

(3) Factual possession signifies an appropriate degree of physical control. It must be a single and conclusive possession, though there can be a single possession exercised by or on behalf of several persons jointly. Thus an owner of land and a person intruding on that land without his consent cannot both be in possession of the land at the same time. The question what acts constitute a sufficient degree of exclusive physical control must depend on the circumstances …… acts of possession done on parts of land to which a possessory title is sought may be evidence of possession of the whole. Whether or not acts of possession done on parts of an area establish title to the whole area must, however, be a matter of degree ..…. is that the alleged possessor has been dealing with the land in question as an occupying owner might have been expected to deal with it and that no-one else has done so.

(4)   …… the animus possidendi involves the intention, in one’s own name and on one’s own behalf, to exclude the world at large, including the owner with the paper title if he be not himself the possessor, so far as is reasonably practicable and so far as the processes of the law will allow.

…… An owner or other person with the right to possession of land will be readily assumed to have the requisite intention to possess, unless the contrary is clearly proved.  This is why the slightest acts done by or on behalf of an owner in possession will be found to negative discontinuance of possession.  The position, however, is quite different from a case where the question is whether a trespasser has acquired possession.  In such a situation the courts will require clear and affirmative evidence that the trespasser, claiming that he has acquired possession, not only had the requisite intention to possess, but made such intention clear to the world.  If his acts are open to more than one interpretation and he has not made it perfectly plain to the world at large by his actions or words that he has intended to exclude the owner as best he can, the courts will treat him as not having had the requisite animus possidendi and consequently as not having dispossessed the owner.” (pp 470-472)” (Emphasis added)

Finding of facts

32.  Madam Lau impresses me as an honest and reliable witness.  Under cross-examination, she directly answers all the questions put to her.  She is a forthcoming witness with nothing to hide.  I accept her evidence.

33.  Mr Tang very properly tells this court that Verywell does not have a positive case.  Due to this reason, Mr Tang has not suggested that anything said by Madam Lau is untrue or incorrect.

34.  Mr Tang’s criticisms against Madam Lau’s evidence are those summarized in paragraph 17 above, which is focusing on the non-production of the bank statements, the utilities bills and the documents mentioned in §8 of Madam Lau’s supplemental witness statement.

35.  In order to test the validity of these criticisms, one has to go back to the pleadings.  As shown in the averment in paragraph 9 of the defence, Verywell is requiring Madam Lau to prove the following and not anything else:-

(a)   requisite possession for the purpose of adverse possession; and

(b)   requisite intention to possess for the purpose of adverse possession.

36.  As said by the Court of Final Appeal in Incorporated Owners of San Po Kong Mansion:-

(a)   “requisite possession for the purpose of adverse possession” is whether the person claiming adverse possession has sufficient degree of exclusive physical control of the land in question;

(b)   “requisite intention to possess for the purpose of adverse possession” is whether the person claiming adverse possession has made it perfectly plain to the world at large by his actions or words that he has intended to exclude the owner as best he can.

37.  With respect to Mr Tang, I do not see in what way the electricity bills, the water bills and the bank statements can prove that Madam Lau has been having exclusive physical control of the Land and has intended to exclude the owner as best she can.  Those documents may be relevant to whether Madam Lau has been living on the Land and occupying the same. However, whether Madam Lau has been living on the Land and occupying the same is not an issue raised by the averment in paragraph 9 of the defence.

38.  Even if evidence showing Madam Lau has been living on the Land and occupying the same is necessary, Madam Lau has given oral evidence on this.  Mr Tang is unable to challenge the veracity of Madam Lau’s evidence.  I accept the evidence.  I further note that in DCMP  1456/2010, the manager of Kong Fu has made an affirmation dated 27 May 2010, in which the manager said:-

“3. Since its acquisition of the said land, the Plaintiff has not ever granted any licence or consent to other party or parties for occupation of the said land. On a date unknown to the Plaintiff, the 1^st Defendant [ie Madam Lau] and the 2^nd Defendant wrongfully and without the Plaintiff’s consent or licence gained entry to the said land and have since remained in wrongful occupation thereof and erected some unauthorized building structures including a squatter and/or placed various objects and chattels on the said land without the licence or consent of the Plaintiff. Such acts of the 1^st Defendant [ie Madam Lau] and the 2^nd Defendant had amounted to trespass and wrongful occupation of the said land.”

This is also evidence showing that Madam Lau has been occupying the Land.

39.  Mr Tang draws my attention to the Court of First Instance’s decision in The Hong Kong Buddhist Association, in which the learned deputy judge said:-

“42. Further, the documents produced show that even to this day the utilities accounts from the Water Supplies Department and The Hongkong Electric Co Ltd remain in the name of Mr Lau Yim, Madam Lo’s late husband. No explanation was offered as to why, if Mr Michael Cheng was asserting a proprietary right to the property during the relevant period, both authorities were not notified of a requirement on the part of Mr Michael Cheng to have the accounts sent to him.

43. In simple terms, Mr Michael Cheng, by not registering the property with those authorities in his name, was not taking responsibility for the utilities accounts incurred in respect of the property. Such an attitude is entirely inconsistent with an assertion to a proprietary right in relation to the property.” (Emphasis added)

40.  I confess that I have difficulties in understanding these.  With respect, a person claiming adverse possession would have no need to “assert a proprietary right” to the land.  All he has to show is the requisite possession and the requisite intention to possess.  I would follow and apply the principles as set out by the Court of Final Appeal in Incorporated Owners of San Po Kong Mansion in considering this case.

41.  As to the documents mentioned by Madam Lau in §8 of her supplemental witness statement, reading §8 carefully, those documents are documents sent to Post Office Box 711 at Tai Po Post Office.  These documents would not have much relevance to the adverse possession claim made by Madam Lau.

42.  In respect of the Photos, of course the Photos themselves cannot tell at where the Photos were taken.  However, Madam Lau has given oral evidence and has told this court that the persons in the Photos are herself and her family members, and all the Photos were taken on the Land.  Mr Tang is unable to challenge these.  I accept Madam Lau’s evidence.

43.  Mr Tang also makes the point that Madam Lau has not produced any documentary evidence to prove the relationship between her on the one hand and Mr Fung and Madam Chan on the other hand.  With respect to Mr Tang, I do not see any merit in this point.  Madam Lau has told this court that Mr Fung and Madam Chan are her natural parents.  Mr Tang does not have any basis to challenge this.  I accept Madam Lau’s evidence.

44.  The Surveyor’s report is not challenged by Mr Tang.  I accept that the Surveyor has the expertise to express the opinion in the report, and I accept his opinion.

The requisite possession

45.  I find that since late September 1989, Madam Lau has been having the requisite possession of the Land for the purpose of adverse possession.

(a)   At all times, the Land has been fenced.  Madam Lau has conducted repairing works of the fencing.  The fencing is strong evidence showing the Madam Lau has exclusive physical control of the Land.

(b)   Further, Madam Lau and her family has been living in the stone structure over the years and has made improvements to the structure.  This is also evidence showing that Madam Lau has sufficient degree of physical control of the Land.

(c)   Planting vegetables, fruit trees and rearing chicken is also evidence of possession.  See Tsoi Ping Hung v Cheung Chow Lan [2015] 2 HKLRD 1122 at §4.11.

The requisite intention to possess

46.  I also find that Madam Lau has the requisite intention to possess the Land for the purpose of adverse possession since late September 1989.

(a) Maintaining and repairing the fencing is an unequivocal act makes it plain to the world that Madam Lau intends to exclude all the others, including the registered owner, from the Land as best she can.

(b) Further, maintaining, repairing and improving the stone structure is also an act demonstrating the requisite intention to possess.

Adverse possession established

47.  By reason of the aforesaid findings, Madam Lau has begun to have adverse possession of the Land since late September 1989.  From late September 1989 until the date of the writ herein (ie 28 October 2015), more than 20 years^[2] have elapsed. Accordingly, Madam Lau has established her claim for adverse possession.

48.  The unsuccessful claim for possession made by Kong Fu in DCMP 1456/2010 (commenced by Kong Fu on 27 May 2010) does not have the effect of stopping time to run.  See Adverse Possession (2^nd Edition), Jourdan and Radley-Gardner, §15-19; Markfield Investments Ltd v Evans [2001] 1 WLR 1321 at [20]; Higgs v Lesbel Maryas Investment Co Ltd [2009] UKPC 47 at [57], and Ofulue v Bossert [2009] AC 990 at [70].

49.  In any event, before the commencement of DCMP 1456/2010 by Kong Fu, the 20-year limitation period has already expired.

Jurisdiction

50.  In accordance with PD27 §4, Madam Lau pleads the following in her statement of claim:-

“22. This claim of the Plaintiff falls within the jurisdiction of the District Court pursuant to section 35 of the District Court Ordinance Cap 336 Laws of Hong Kong.”

51.  Verywell pleads the following in the defence:-

“7A. Paragraphs 15-21 are not admitted.

……

9.    Save as hereinabove expressly admitted or not admitted, the Defendant denies each and every allegation contained in the Statement of Claim as if the same were set forth and traversed seriatim.”

52.  On 12 April 2017, this court invited the parties to make submissions on several issues, including evidence showing that Madam Lau’s claim is within the jurisdiction of this court.

53.  Both Mr Wong and Mr Tang have made submissions on the jurisdiction issue.

54.  There is no dispute that s 35 of the District Court Ordinance (“DCO”) is the relevant statutory provision.  I take the view that Madam Lau’s claim would be within the jurisdiction of this court^[3], provided that the annual ratable value of the Land on the date of the writ^[4] was less than HK$240,000.  The difference between the parties is whether the annual ratable value of the Land was less than HK$240,000 on the date of the writ.

55.  Mr Wong submits that DCMP 1456/2010 is the evidence showing that Madam Lau’s claim is within the jurisdiction of this court.  Mr Wong says that in DCMP 1456/2010, Kong Fu commenced proceedings in this court to seek to recover vacant possession of the Land.  Accordingly, the annual ratable value of the Land must be less than HK$240,000.  With respect to Mr Wong, I am unable to accept these submissions.

(a)   One must not overlook that in DCMP 1456/2010, eventually Kong Fu’s claim was dismissed by consent.  There is no evidence showing what led to the Dismissal Order.  It is not known whether the dismissal is due to jurisdiction.

(b)   Further, DCMP 1456/2010 was commenced by Kong Fu on 27 May 2010.  The writ herein was issued on 28 October 2015.  There is a more than 5-year time gap between DCMP 1456/2010 and these proceedings.  Even if the annual ratable value of the Land in May 2010 was less than HK$240,000, that does not mean that the annual ratable value of the Land would still be less than HK$240,000 on the date of the writ herein.

56.  I have considered whether I should use the purchase price as stated in the SPA to infer the annual ratable value of the Land on the date of writ herein.  The SPA was signed by Kong Fu and Verywell on 14 August 2015, just about 2 months before Madam Lau issued the writ herein.  The purchase price of the Land as per the SPA is HK$3,681,500.  I have asked Mr Tang whether I may use that purchase price to infer that the annual ratable value of the Land on the date of the writ herein was less than HK$240,000.  Mr Tang submits that I should not do so, for I should not guess in the absence of any evidence, and the annual ratable value of the Land is not something in respect of which I may take judicial notice.  Having considered the matter for some time, I am persuaded by Mr Tang and accept his submission on this point.

57.  Mr Tang’s position is that by §9 of the defence, Verywell has denied the plea as to jurisdiction made by Madam Lau in §22 of the statement of claim. Madam Lau therefore is required to adduce evidence to prove that her claim is within the jurisdiction of this court.  She has failed to discharge that burden.

58.  It is trite that a plaintiff bears the burden of adducing evidence to prove his case.  However, it is equally trite that in respect of issues which have been admitted or conceded by the other side, it would not be necessary to adduce evidence to prove those issues.

59.  Mr Tang relies upon the general traverse in §9 of the defence and submits that Verywell has denied the jurisdiction issue.  With respect to Mr Tang, this submission is flawed.

60.  Firstly, the difference between the parties on the jurisdiction issue is whether it can be said that on the date of the writ herein, the annual ratable value of the Land was less than HK$240,000.  The question of annual ratable value is a factual issue.  On this factual issue, Madam Lau has made a positive averment in §22 of her statement of claim.  The general traverse in §9 of the defence cannot be taken as a denial of this averment.

61.  RDC, Order 18 rule 13 provides:-

“(1) Subject to paragraph (5), an allegation of fact made by a party in his pleading is deemed to be admitted by the opposite party unless it is traversed by that party in his pleading or a joinder of issue under rule 14 operates as a non-admission of it.

……

(3) Every allegation of fact made in a statement of claim or counterclaim which the party on whom it is served does not intend to admit must be specifically traversed by him in his defence or defence to counterclaim, as the case may be; and a general denial of such allegations, or a general statement of non-admission of them, is not a sufficient traverse of them.

……

(5) A party who—

(a) fails to deal with an allegation; but

(b) has set out in his defence or defence to counterclaim the nature of his case in relation to the issue to which that allegation is relevant,

is to be taken to require that allegation to be proved.” (Emphasis added)

62.  A general traverse is of limited use.  Recently, in Lau Kwai Yin v Tack Hsin Restaurant (London) Ltd. [2016] 1 HKLRD 831, Bharwaney J said:-

“2. In this action, the plaintiff claims damages for personal injuries sustained by him as a result of an explosion which occurred on 12 April 2009. At the time, he was employed by the 1st defendant as a dim sum chef in their restaurant kitchen. It is pleaded in §8 of the statement of claim that, at about 3:30 pm on that day, he was about to deep fry some food, using the wok range on which a wok that was half-filled with hot cooking oil had been placed. When he switched on the main burner valve, there was a sudden explosion and the wok toppled over. The hot cooking oil in the wok spilled out and splashed all over the plaintiff who sustained severe scaldand burn injuries.

3.    The 1st defendant employer simply states in §10 of its defence that:-

“Paragraph 8 of the Statement of Claim is noted.”

Such an averment is neither a denial nor a statement of non-admission.  The general traverse contained in §22 of the defence of the 1st defendant that:-

“Save as herein before expressly admitted or not admitted, each and every allegation made in Statement of Claim as against the 1st Defendant is denied as if the same were set out herein and traversed seriatim”

cannot be construed as having the effect of denying the allegation of fact contained in §8 of the statement of claim.  

4.    A general traverse can be conveniently deployed to deal with a long and complicated statement of claim or counterclaim, containing multiple allegations which are less immaterial.  It should not be adopted in dealing with an essential allegation and it will not be construed as covering an essential allegation: see Jim Mai Gi v Choy Kwun Ping [1981] HKLR 674; Kwangtung Provincial Bank v Tang Chik Leung [1985] 1 HKC 93.  Accordingly, in the absence of a specific traverse of §8 of the statement of claim by a denial or a statement of non-admission, the averment contained in §8 of the statement of claim is deemed to be admitted by the 1st defendant employer.” (Emphasis added)

63.  If Verywell really takes issue with Madam Lau on the jurisdiction of this court, the defence must contain a specific traverse of §22 of the statement of claim by a denial or a statement of non-admission.  There is no such specific traverse in the defence.  Verywell cannot deny the jurisdiction pleaded by Madam Lau in §22 of the statement of claim by a general traverse in the defence.  Following Lau Kwai Yin, I hold that the averment as to jurisdiction made by Madam Lau in §22 of the statement of claim is deemed to be admitted by Verywell.

64.  Secondly, Verywell counterclaims against Madam Lau for, inter alia, vacant possession of the Land.  By seeking an order in this court requiring Madam Lau to deliver vacant possession of the Land to them, Verywell has by its conduct admitted that the annual ratable value of the Land would be less than HK$240,000.  Otherwise, Verywell would not seek the vacant possession order in this court.

65.  Thirdly, there are at least 2 interlocutory orders by consent in these proceedings, ie (a) the consent order made by the Registrar on 11 April 2016, and (b) the consent order made by Master D Ho on 7 July 2016.  Further, Verywell has made an application to this court for an order extending the time to file and exchange witness statements by a summons dated 21 July 2016.  The conduct of seeking all these orders from this court clearly indicates that Verywell does not dispute the jurisdiction of this court over Madam Lau’ claim and Verywell’s counterclaim.

66.  For the reasons above, in my judgment, Verywell has admitted that Madam Lau’s claim is within the jurisdiction of this court.  The admission means that Verywell has conceded that the annual ratable value of the Land was less than HK$240,000 on the date of writ herein.  That being the case, the annual ratable value of the Land is not an issue requiring proof from Madam Lau.

67.  For the reasons above, I hold that Madam Lau’s claim is within the jurisdiction of this court.

68.  I further say that the jurisdiction issue cannot be a defence to Madam Lau’s claim.  If Madam Lau’s claim is not within the jurisdiction of this court, by the operation of DCO s.41(1), I am required to transfer the claim to the Court of First Instance and cannot simply dismiss the claim.

69.  DCO s.41 provides:-

“(1) The Court shall, either of its own motion or on the application of any party, order that an action or proceeding be transferred to the Court of First Instance where an action or proceeding commenced in the Court, not being a counterclaim, is outside the jurisdiction of the Court but is within the jurisdiction of the Court of First Instance.

(2) The Court may, if it thinks fit, instead of ordering that the action or proceeding be transferred, order that it be struck out where, on the application of a defendant, it appears to the Court that the plaintiff or, if more than one, one of the plaintiffs knew or ought to have known that the Court had no jurisdiction.” (Emphasis added)

70.  DCO s 41(2) is clearly not applicable.  Verywell has never made an application for an order striking out Madam Lau’s claim under this subsection. Further, there is no evidence showing Madam Lau knew or ought to have known that her claim is not within the jurisdiction of this court^[5].

71.  If Madam Lau’s claim is not within the jurisdiction of this court, it must be within the jurisdiction of the Court of First Instance.  In accordance with DCO s 41(1), this court has a mandatory obligation to transfer the claim to the Court of First Instance in those circumstances.  See Wong Kwong Wa v Hip Hing Construction Co. Ltd. (DCPI 2039/2006, 11 July 2007).  This court cannot simply dismiss the claim because of the jurisdiction hurdle.

The proper reliefs

72.  Madam Lau’s claims for, inter alia, an order requiring Verywell to execute an assignment of the Land in her favour.  The claim for this order is misconceived, and I cannot give her this order.

73.  I repeat what I have said in Wang Hanzhen:-

“53. Notwithstanding the plaintiff’s success in adverse possession, the plaintiff would not take over the title of the defendant. The defendant’s title has only been extinguished vis-à-vis the plaintiff. It remains as a title vested in the defendant and could be surrendered to the Government. See Wong King Lim v The Incorporated Owners of Peony House (CACV 3/2012, 29 May 2013), per Yuen JA at [33.2] and per Lam JA (as he then was) at [37]. Applied by Recorder Jat SC in Tsang Cho Kiu v Lam Tsat Fuk (HCMP 1077/2-13, 10 December 2013).”

74.  In my judgment, the proper reliefs to be given to Madam Lau would be the declarations in the forms as set out in §54 of Wang Hanzhen.

VERYWELL’S COUNTERCLAIM

75.  Madam Lau has made out her adverse possession claim against Verywell. Accordingly, Verywell’s claim for vacant possession of the Land is dismissed.

76.  Trespass is actionable at the suit of the person in possession of land. See Clerk & Lindsell on Torts (21^st edition), §19-10.  As Verywell has already been dispossessed by Madam Lau and the Land is now in Madam Lau’s possession, Verywell is not entitled to sue Madam Lau’s for trespass.  Accordingly, Verywell’s claim for trespass is dismissed.

77.  For these reasons, I dismiss Verywell’s counterclaim in its entirety.

78.  I observe that there is no evidence showing what loss and damage has been suffered by Verywell as a result of the alleged trespass.  In these circumstances, even if I am with Verywell on the trespass claim, I would follow Born Chief Co. (t/a Beijing Restaurant) v Tasi George & Another [1996] 2 HKC 282 and award nominal damages of HK$10 to Verywell only.

CONCLUSION

79.  For the reasons above, I give judgment to Madam Lau and make the following declaration:-

(a)   that Verywell has lost the right to bring any action to recover the Land, by virtue of section 7(2) of the Limitation Ordinance (Cap.347); and

(b)   that by virtue of section 17 of the Limitation Ordinance (Cap 347), Verywell’s title to the Land had been extinguished.

80.  I dismiss Verywell’s counterclaim.

81.  Both Mr Wong and Mr Tang have agreed that costs should follow the event, with a certificate for counsel.  I order that:-

(a)   costs of Madam Lau’s claim (including all costs reserved, if any) be paid by Verywell to Madam Lau, with a certificate for counsel; and

(b)   costs of Verywell’s counterclaim (including all costs reserved, if any) be paid by Verywell to Madam Lau, with a certificate for counsel. 

82.  I thank Mr Wong and Mr Tang for their helpful assistance.