LEE KWOK LEUNG AND ANOTHER v. LI FOA SHANG

DCCJ 2165/2014

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 2165 OF 2014

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JUDGMENT

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Introduction

1. This is the application by the plaintiffs to seek judgment in default against the defendant under Order 13 r 6 and Order 19 r 7 of the Rules of the District Court, Cap 336H.[1]

2. The plaintiffs’ case is that they and their predecessors in title of the plaintiff’s land[2] (“Lot 601”) have been in successive adverse possession of the defendant’s land[3] (“Lot 600”) continuously for more than 20 years starting from about 1989.  On that basis the plaintiffs seek, among other things, declarations from this court that the defendant’s title to Lot 600 has been extinguished; that he has lost the right to bring any action to recover the same; and that the plaintiffs have acquired a possessory title to, all the estate and other interests in and exclusive possession of Lot 600 and are accordingly entitled to be registered as the owner of the same in the Land Registry.

3. The plaintiffs do not know the defendant personally or his whereabouts.  As a result of various enquiries, the plaintiffs believe that the defendant is still alive and in Hong Kong.  Therefore, they applied for and was granted an order for substituted service from Master D Ho[4], pursuant to which the service of the Amended Writ Summons together with the Amended Statement of Claim[5] were effected by a Chinese advertisement published once in Ming Pao Daily News, a local Chinese newspaper widely circulated in Hong Kong.[6]  After that, a summons for the present application was taken out on 25 February 2015.[7]  Although the plaintiffs were strictly speaking not required to serve the summons of the present application on the defendant by virtue of O 65 r 9, they took the prudent step of publishing the summons in an advertisement in Ming Pao on 3 March 2015, which was about one month before the hearing. 

4. Up to the hearing of the present application, nothing has been heard from the defendant, nor has he filed anything documents for these proceedings.  The defendant did not appear at the hearing of the application either.  In the circumstances, I am satisfied that the court may proceed in the defendant’s absence: O 32, r 5.

The issues

5. In my view, the following major issues are involved in the present application:-

(i) whether the plaintiffs’ pleadings are sufficient to support their case of adverse possession against the defendant; and

(ii) whether it is appropriate in the present case to grant the declaratory reliefs as sought by the plaintiffs in the absence of any trial or evidence.

6. As regards (i), it is well-established that a court considering whether to grant a judgment in default cannot receive any evidence but must give judgment according to the pleadings alone: see Hong Kong Civil Procedure 2015, Vol 1, at §19/7/11.  It is also well-established that the court’s power to grant judgment under O 19 r 7 is discretionary and not mandatory: see ante, at §19/7/13.

7. As regards (ii), it is noted that it is not the practice of the court to make a declaration of right in default of defence.  When such relief is to be granted without trial or evidence, the right course for the court is not to make a declaration but to state on what footing the relief is to be granted: see Wallersteiner v Moir.[8] However, the aforesaid is only a rule of practice, which should not be followed when the plaintiff had a genuine need for the declaratory relief and justice would not be done if such relief were denied: see Patten v Burke Publishing Co Ltd,[9] applied in Lam Shing Shou v Lam Hon Man & Others.[10] 

As to (i): adverse possession

8. The following information is contained in the plaintiffs’ pleadings:-

(a) Lot 600 and Lot 601 in Demarcation District No 180 are two lots of land next to and adjoining each other.

(b) The defendant is the registered owner of Lot 600.

(c) On 2 March 1988, the property of Lot 601 was assigned to the father of the 1^st plaintiff (the father).  On 6 December 2000, the property was assigned to the father and the 1^st plaintiff as joint tenants.  Eventually on 19 October 2013, the property was assigned to the plaintiffs as joint tenants. 

(d) Since or about 1989, upon the construction and occupation of a three-storey village house on Lot 601 by the father, he began to occupy the adjoining Lot 600 for storage purpose.  He also fenced off a large portion of Lot 600 for his own use. 

(e) Since or about 2000, the plaintiffs have fenced off the entire Lot 600 which is only accessible therein by unlocking a gate with keys held by the plaintiffs. 

(f) Therefore, since or about 1989, Lot 600 has been in the successive exclusive possession of the father, the father and the 1^st plaintiff and then the plaintiffs. 

(g) Neither the defendant nor anyone claiming or deriving title from, under or through him has ever made any objection, claim or interruption in respect of the possession of Lot 600 by the plaintiffs or their predecessors. 

(h) The plaintiffs and their predecessors have never paid any rent or licence fees to the defendant or anyone claiming or deriving title from the defendant.

(i) All along, the plaintiffs and/ or their predecessors are responsible for the payment of government rent and the repair/maintenance costs and expenses in respect of Lot 600.

9. It is well-established that to prove adverse possession, a squatter must establish that he has both the physical possession of the land and the required intention to possess it to the exclusion of all others (animus possidendi): see Powell v McFarlane;[11]adopted in Wong Tak Yue v Kung Kwok Wai & Another.[12]  It is also well-established that periods of adverse possession by successive squatters might be aggregated if there was no gap in the adverse possession: see Cheung Yat Fuk v Tang Tak Hong & Ors.[13]

10. The plaintiffs’ pleadings support their case that they and their predecessors have been in physical possession of Lot 600 since or about 1989.  Also, by fencing off Lot 600, the plaintiff and their predecessors have manifested a clear intention to exclude others: see Seddon v Smith.[14]  I have not ignored the fact that the father had fenced off “a large portion” rather than the whole of Lot 600.  However, acts of possession done on parts of land to which a possessory title is sought may be evidence of possession of the whole: see Powell v McFarlane.[15]  I note also that the plaintiffs have fenced off the entire Lot 600 since or about 2000.  Moreover, all along the plaintiffs and/or their predecessors are responsible for payment of government rent and expenses in respect of Lot 600.  In all the circumstances, I am satisfied that the plaintiffs’ pleadings support their case that the adverse possession which the plaintiffs relied upon commenced since or about 1989 without a break up to the present.

11. According to the plaintiffs’ pleadings, the defendant’s cause of action to cover Lot 600 accrued before 1 July 1991.  As such, and Ms Chan (counsel for the plaintiffs) accepts, the applicable limitation period was one of 20 years: see s 38A, the Limitation Ordinance, Cap 347.  A period of more than 20 years has elapsed since or about 1989.  Therefore, by s7 of the same ordinance, the defendant has lost his right of action to cover the land.  Moreover, by s17 the defendant’s title to the land has also been extinguished. 

12. The Limitation Ordinance operates negatively to bar the right and extinguish the title of the paper owner, and does not effect a transfer of his estate to the squatter.  The new title of the squatter depends on the principle that possession gives a title, coupled with the extinction of the right of the paper owner, and it is subject to any easements, restrictive covenants and other rights which remained unextinguished.[16]

13. Accordingly, I am satisfied that the plaintiff’s pleadings support their case that the plaintiffs have obtained a possessory title to Lot 600 by means of adverse possession.

14. As regards the procedural requirements for default judgment, I am satisfied that the service of the Amended Writ of Summons and the Amended Statement of Claim have been effected by way of substituted service as ordered by Master D Ho.  There has never been any response from the defendant and nothing has been heard from him.  In the circumstances, I am also satisfied that judgment should be entered against the defendant in default. 

As to (ii): declaratory reliefs

15. The plaintiffs by their summons[17] seek the following declaratory reliefs:-

(1) A declaration that the plaintiffs have been in adverse possession of the Defendant’s Land, namely Lot No 600 in Demarcation District 180 (which is shown and identified in the Dimensioned Plan annexed to the Amended Writ of Summons dated 13 August 2014) for a period of more than 20 years prior to the commencement of this action;

(2) A declaration that the defendant’s title to and interest of the Defendant’s Land has been extinguished by virtue of Sections 7 and 17 of the Limitation Ordinance, Cap 347 of the Laws of Hong Kong;

(3) A declaration that the defendant has lost the right to bring any action to recover the Defendant’s Land by virtue of Section 7 of the Limitation Ordinance; and

(4) A declaration that the plaintiffs have acquired a possessory title to the Defendant’s Land and acquired all the estate, right, title, interest and benefit including inter alia the ownership and the right to exclusive possession and control, and physical occupation of and in the Land, and is accordingly entitled to be registered as the owner of the same in the Land Registry by virtue of the fact that the defendant’s title to the Land has been extinguished.

16. Notwithstanding the practice of the court not to grant declaratory reliefs in the absence of a trial or evidence, I am satisfied that this is a suitable case to depart from that practice.  This is because the declaratory reliefs are the only and substantial relief sought by the plaintiffs and that justice would not be done if they are to be denied of any declaratory relief.  That said, the declaratory reliefs to be granted should not be in terms wider than what the plaintiffs are entitled to and what is necessary to do justice to them.  Bearing this in mind, I have the following observations:-

(a) As regards (1), the plaintiffs’ case is one of adverse possession by successive squatters and therefore reference should be made to reflect that.  Moreover, instead of declaring that the adverse possession has been for a period “more than 20 years”, it would be sufficient to say that the period is “not less than 20 years”. 

(b) As regards (2), the reference to s 7 of the Limitation Ordinance is not pertinent.  Moreover, reference should be made to s 38A.  Besides, the reference to “and interest of” should be deleted in order to tally with the provision of s 17.

(c) As regards (3), reference should be made to s 38A as well as s7.

(d) As regards (4), what the plaintiffs are entitled to as a result of the adverse possession is a possessory title.  It would be sufficient to just declare that the plaintiffs have acquired a possessory title to the defendant’s land.  On the other hand, it appears to me that the words in that paragraph following “the Defendant’s Land” are not only unnecessary but also too wide and should therefore be deleted.  This is supported by the way in which the orders were framed in similarly cases like Mok Ching Ha v Wong Yik Lung;[18] Lai Wai Kuen v Wong Shau Kwong;[19] and Wu Chi Kwong v Estate of Cheung Man Yau.[20]  Moreover, as the Land Registry is not a party to this action, it is in my view not proper to make a declaration concerning the Land Registry: see Lai Wai Kuen v Wong Shau Kwong, supra. 

I understand that Ms Chan does not disagree with the above observations. 

17. Subject to the above qualifications, I make an order in terms of paragraphs (1) to (4) of the summons dated 25 February 2015. 

18. For the purpose of identifying Lot 600 which is the subject matter of this action, a copy of the Dimensioned Plan annexed to the Amended Writ of Summons is attached to this judgment.  The plaintiffs are given liberty to apply for further direction in case further clarifications are needed for the identification of the land.

19. As regards costs, as the defendant has not filed any documents or appeared, I make no order as to costs.