PROSPEROUS WORLD LAND INVESTMENT CO LTD v. LAI FUNG SHAN

DCMP 3931/2019

[2020] HKDC 1033

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 3931 OF 2019

________________

________________

________________

_________________________

DECISION

_________________________

1.  This is an appeal by the plaintiff against the decision of Master Maurice Lam dated 26 June 2020 (the “Order of Master Lam”) by which the learned Master dismissed the plaintiff’s application for a summary order for possession under O.113 of the Rules of the District Court, and ordered that the proceedings be continued as if it had begun by Writ.

2.  There are two further applications before the court: the plaintiff’s application to amend the Notice of Appeal and the defendant’s invitation for the court to vary Master Lam’s cost order.

3.  This is an appeal from master so it is a hearing ab initio before this court, although this court will also “give the weight it deserves to the previous decision of the Master” but not bound by it (paragraph 58/1/2 of Hong Kong Civil Procedures).

The plaintiff’s case

4.  The plaintiff is making an application for summary possession against the defendant and every other person in occupation of the External Wall on the Ground Floor of Metropole Building, Nos. 53-63 Peking Road and Nos. 12, 12A, 12B and 12C Hankow Road, Kowloon, Hong Kong (“the Subject Property”) together with a structure measuring about 3.37 x 0.96 x 3.08 metres (in length, width and height respectively) which is adjacent to the Subject Property (the “Structure”), together with the plot of land on which the Structure is situated.

5.  The Originating Summons has been amended by consent to add the sentence “together with the plot of land on which the Structure is situated” as stated in the above paragraph.

6.  As such, the plaintiff has also applied to amend the wordings in the Notice of Appeal in a similar way. As this is a hearing ab initio in any case, I see no reason why the court should not exercise its power (O.20, r.8(1)) to approve such amendments.

7.  Further, this appeal concerns the learned Master’s decision in relation to the Structure (together with the land it is situated) only. The plaintiff is content with the decision in relation to the Subject Property be allowed to stand.

8.  The Subject Property is part of a property acquired by the plaintiff on 13 February 1973 and at that time, there was a wall-shop attached to the Subject Property (the “Wall-shop”) occupied by a Tsang Pui Man (“Ms. Tsang”), who paid the plaintiff a monthly fee for the plaintiff’s permission to continue to occupy the Wall-shop.

9.  In May 1991, a written tenancy agreement was signed between the plaintiff and Ms. Tsang in relation to the Wall-shop and this was renewed every 2 years until the last agreement dated 4 November 1999.

10.  After this tenancy expired, Ms. Tsang continued to occupy the Wall-shop until a license agreement was signed on 23 December 2002. The licence agreement instead named the space as an “Advertising Sign Space” The reason for this, according to the plaintiff, was the concern about possible legal implications for the plaintiff because Ms. Tsang was selling imitation jewellery.

11.  Whichever way that space is named, there is no evidence before the court to dispute that this still refers to the same Wall-shop.

12.  This license agreement was renewed every 2 years with the last one dated 20 January 2009.

13.  The plaintiff believed that Ms. Tsang passed away in 2009 but in any case, at some point in time, the Wall-shop became occupied by Lo Kang Ming (“Mr. Lo”).

14.  The plaintiff entered into a similar licence agreement with Mr. Lo on 17 January 2011. This was renewed on 9 July 2013.

15.  When that expired on 31 December 2014, there was an oral agreement between the plaintiff and Mr. Lo for the agreement to be continued on a monthly basis.

16.  However, Mr. Lo failed to pay the license fees since around April 2015. After various lawyers’ letters before action, a writ was issued on 23 February 2016 seeking vacant possession and meaner profits etc. Default judgment was entered on 28 April 2016 and a Writ of Possession was duly issued.

17.  However, on 22 June 2016, it has come to the plaintiff’s notice that someone was trying to demolish the Wall-shop. The plaintiff called the police but no action was taken by them. The plaintiff has obtained a survey report and instructed solicitors to issue a pre-action letter before initiating the current action.

The defendant’s case

18.  The defendant’s was Ms. Tsang’s daughter but she had not been involved with Ms. Tsang’s business during her life time. It is not disputed that, after the death of Ms. Tsang, the defendant had “succeeded” Ms. Tsang’s Fixed Pitch Hawker’s Licence on 1 September 2009.

19.  However, after Ms. Tsang’s death, the Wall-shop was occupied by Mr. Lo who, totally unrelated to the defendant, ran a company there. The defendant claimed that she tried to ask Mr. Lo to leave but was not successful, so she agreed that Mr. Lo would act as her assistant, and she would also attend the Wall-shop.

20.  After Mr. Lo disappeared, the defendant applied to the Food and Environmental Hygiene Department and successfully discharged Mr. Lo’s licence. She claimed that she was all along not aware of Mr. Lo’s agreements with the plaintiff.

21.  The defendant decided to renovate the Wall-shop on 21 June 2016 but found it sealed and later locked with a new lock.

22.  However, the defendant claimed that, because she held a Fixed Pitch Hawker License for the Wall-shop, she entered and continued to renovate it. She also moved the structure of the Wall-shop a little distance away from the external wall. The renovation was completed in July 2016 and she continued to run her business there without any license / tenancy agreement with the plaintiff or paying any sums of money.

23.  In essence, the defendant’s grounds to oppose the O.113 application (as stated in the defendant’s affirmation and paragraph 21 of the defendant’s second affirmation) are:

a.  There was no tenant / landlord relationship between the plaintiff and defendant;

b.  The Wall-shop was occupying Government land and not land privately owned by the plaintiff; and

c.  The defendant could rely on the Fixed Pitch Hawker Licence to conduct business in the wall-shop without need for permission from the plaintiff.

Analysis

24.  In my view, the defendant’s grounds are clearly misconceived.

25.  The doctrine of “relativity of titles” is trite: as far as the relative possessory titles between the plaintiff and the defendant are concerned, it is irrelevant that the Wall-shop has been occupying Government land.

26.  The plaintiff came to possess the Wall-shop (and, of course, the land it was standing on) since 1973 by way of numerous written or oral tenancy or licence agreements etc. It is trite that a squatter could be in adverse possession of land through a licensee or tenancy (Cheung Yat Fuk v Tang Hak Hong & Others (2004) 7 HKCFAR).

27.  The defendant, by her own account, was not involved in Ms. Tsang’s business in the Wall-shop until after her death in 2009. Thus, she only came to occupy the Wall-shop after Ms. Tsang’s death if not after the disappearance of Mr. Lo, but in any case no earlier than 2009.

28.  The absence of any agreement between the plaintiff and the defendant would only confirm that the defendant was a later squatter compared to the plaintiff being an earlier squatter in possession: Ms. Tsang and Mr. Lo. who had both occupied the Wall-shop earlier clearly had such agreements with the plaintiff.

29.  Therefore, the operation of the doctrine of “relativity of titles” holds that the plaintiff has a superior possessory title than the defendant and any later occupiers in relative terms.

30.  It matters not that they may be both squatters on Government land: the doctrine does not require the plaintiff to establish adverse possession against the registered owner first before claiming a superior title against the defendant. (Tang Man Kit v Hip Hing Timber Co. Ltd (CACV 137/2002, 13 May 2005), Chow Kum Wing v Lam Wing Ching (CACV 31/1985), Asher v Whitlock (1865) LR 1 QB 1).

31.  The defendant is entirely misconceived that the Fixed Pitch Hawker Licence may somehow confer to her some proprietary rights in the Wall-shop. In fact, the licence clearly states that it does not: paragraph 16 under the “Licence Conditions” stated “The licence does not vest any proprietary rights or interest in land in the licensee.” (Page 206 of the Trial Bundle)

32.  In other words, the granting of the hawker licence does not interfere with the doctrine of “relativity of titles”.

33.  O.113, r.1 RDC provides that:

“Where a person claims possession of land which he alleges is occupied solely by a person or persons (not being tenant or tenants holding over after the termination of the tenancy) who entered into or remained in occupation without his licence or consent or that of any predecessor in title of his, the proceedings may be brought by originating summons in accordance with the provisions of this Order.”

34.  In this case, it is not in dispute that the Structure and the land it is standing on is occupied by the defendant and her husband, that neither the defendant or her husband are “tenant or tenants holding over after the termination of a tenancy”, and that the defendant and her husband have entered into and remained in possession of the Structure and the land it was standing on without the plaintiff’s licence or consent, or that of any of the plaintiff’s predecessor in title.

The learned Master’s reasons for refusal

35.  The learned Master refused to grant an Order for possession (as far as it was related to the Structure) essentially on two grounds:

a.  The plaintiff does not have a perfect title on the piece of land and that this does not make a clear and obvious case. O. 113 is a judgment in rem which binds all the world, including those who had a superior title (i.e. the Government) so this cannot be right.

b.  The defendant had renovated the Structure and did not accept that this now belonged to the plaintiff. The identification of the Structure and dispute in ownership would raise a triable issue.

36.  Regarding the first ground, I think that the learned Master has erred in law by not giving due consideration to the doctrine of “relativity of titles”.

37.  O.113 concerns with the applicant being “a person claiming possession” without specifying that this person has to have a perfect or absolute title.

38.  As such, it must follow that O.113 only concerns with possessory titles and the applicant only needs to show a superior possessory title relative to the occupier. In this case, even in the defendant’s own case (as explained above), the plaintiff has clearly established this.

39.  Further, a judgment under O.113 in rem would only mean that it binds all the occupiers of the premises concerned. The Government is not an occupier of the Structure so the order has no effect on its interest.

40.  As for the second ground, I cannot see anywhere in the two affirmations of the defendant that the defendant has raised any evidence in disputing in the identification of the Structure or its ownership.

41.  In fact, the defendant stated clearly that she entered the Wall-shop after the disappearance of Mr. Lo, and because there was a water leak, she decided to renovate it. She even identified the Wall-shop by stating that there were legal documents and seals attached to the roller shutter. There is, therefore, no dispute that this was the same Wall-shop involved in the plaintiff’s case against Mr. Lo.

42.  I simply cannot see how any renovation and maintenance work on the Wall-shop, or moving it a little distance away from the wall would somehow make that the defendant’s property, even if that was raised in the defendant’s affirmations.

43.  Further, even if the defendant did raise evidence that she had completely demolished the Wall-shop and replaced it with a new structure, that new structure should still belong to the plaintiff due to the legal maxim of “whatever is affixed to the soil belongs to the soil” given that the plaintiff has shown superior possessory title to the land it would be standing on.

44.  In fact, none of these grounds was raised by the defendant. Instead, it is quite clear from her affirmations that the grounds of objection (and evidence produced) were simply that a) she held a Fixed Pitch Hawker’s License identifying the Wall-shop; b) that Wall-shop was on Government land; and c) therefore the plaintiff was not entitled to evict her. I have already dealt with this argument in paragraphs 31 and 32 above.

45.  In conclusion, I find that the defendant has failed to raise a triable issue in relation to the plaintiff’s claim for possession of the Structure (together with the land it is standing on).

46.  As for the remaining issue, the defendant did not put before the court any grounds that the costs order made by the Learned Master be varied. In any case, in view of my findings above, I see no need to consider this.

Order

47.  Accordingly, I will give the following orders:

a.  The Plaintiff do recover possession of a structure measuring about 3.37 metres in length, 0.96 metre in width and 3.08 metres in height (“the Structure”), which is attached or adjacent to the External Wall on the Ground Floor of Metropole Building, Nos. 53-63 Peking Road and Nos. 12, 12A, 12B and 12C Hankow Road, Kowloon, Hong Kong (“the Subject Property”), the locations of which being depicted in red and green respectively in the extracts of the Approved Building Plan attached to the Originating Summons, together with the plot of land on which the Structure is situated;

b.  The Order of Master Lam be set aside except for any order or orders made in relation to the Subject Property alone;

c.  The defendant do pay the plaintiff’s costs of this appeal and of the hearing below, with certificate for counsel granted.