NG MO CHING the administratrix of the estate of NG SHIL MING, deceased AND ANOTHER v. The Estate of TONG SHUN, deceased AND ANOTHER

HCA 849/2016

[2018] HKCFI 862

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 849 OF 2016

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JUDGMENT

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1.  This is the trial of an action which concerns certain land in the New Territories. The 1^st plaintiff is the administrator of the estate of the 2^nd plaintiff’s father. Only the 2^nd plaintiff has played any part in these proceedings.

2.  The 1^st defendant is the estate of Tong Shun who, according to the plaintiffs, was, when he was alive, the legal title owner of the land which is the subject matter of the claim.

3.  The 2^nd defendant, Mr Wong Hei Ting, lives close to the land, asI shall explain.  The land itself is in Yuen Long, and so far as the documentationthat I have been shown is concerned, it is in Demarcation District number 107. 

4.  These proceedings are brought, I am told, so that the 2^nd plaintiff can regularise his title to the land.  In deciding the case, I have had written submissions on behalf of the plaintiffs, a chronology and a dramatis personæ.  I have also had substantial oral submissions by counsel for the plaintiffs, Mr K M Chong.  I have had oral evidence from Mr Ng, the 2^nd plaintiff.

5.  The 1^st defendant, that is the Estate of Tong Shun, has played no part in these proceedings.  I am told that the Official Solicitor was involved at one point in the proceedings, but only to receive service.  Mr Tong Shun himself died a very long time ago.  To be precise, on 26 January 1937.

6.  Before describing the facts, I should explain what has happened in these proceedings.  They were issued on 1 April 2016, when the writ was issued.  Over the course of the following months, the 2^nd defendant did participate in the proceedings and indeed, was represented by solicitors and counsel.  He filed an Acknowledgement of Service on 28 April 2016 indicating that he would contest the proceedings.  On 24 May 2016, an amended Acknowledgement of Service indicated that he would not contest the action. 

7.  On 12 April 2017, the plaintiffs filed a summons for judgment, in default of defence.  On 26 April 2017, the 2^nd defendant, Mr Wong Hei Ting, filed a summons for leave to file a defence and counterclaim out of time, and also filed a re‑amended Acknowledgement of Service to the effect that he did intend to contest the action. 

8.  He filed, at that time, an affirmation dated the same date, that is, 26 April 2017.  In it, he said in effect, that whilst he had received counsel’s advice to the effect that he should not dispute the plaintiffs’ claim, the advice was that he should file a counterclaim in respect of adverse possession of a different piece of land.  This was spelt out in a without prejudice letter from his then solicitors on 10 May 2016. Essentially, what was proposed was a swap of land.  Privilege in these documents has obviously been waived by their production in these proceedings.

9.  I am told that what happened then was that at a call-over hearing before Wilson Chan J on 28 April 2017, the plaintiffs clarified their case.  Again, the detail will become clearer in due course, but essentially, I am told, it was made clear that so far as the 2^nd defendant was concerned, the plaintiffs’ claim did not affect any land which he currently occupied.  It appears there had been a misunderstanding in that regard.

10.  At all events on 5 May 2017, the Acknowledgement of Service was filed again to the effect that the 2^nd defendant would not contest the action.  He was granted leave to withdraw his own summons on 9 May 2017.

11.  Against that background, on 10 May 2017, the plaintiffs applied for judgment, presumably on the basis that there was now no opposition.  Wilson Chan J invited the plaintiffs to file evidence to assist the court in determination of the issues.

12.  The substantive hearing then took place on 20 September 2017, before Madam Justice B Chu.  She ordered that the action be set down for trial and that is how it comes before me today.

13.  The 2^nd defendant by now had filed a Notice to Act in Person, on 14 September 2017.  He wrote to the court on the same day explaining roughly what I have outlined a moment ago about his position.  He did add:

“ I am of 84 year old now. I cannot walk, therefore I cannot attend the hearing on 20 September 2017. Hope the court would not make costs or order against me.”

14.  He has not, so far as I am aware, played any part in these proceedings since.  There is, however, an Affidavit of Service before the court, so he has been aware of today’s hearing.

15.  Against that background, I come now to consider the facts, which have been carefully explained to me by counsel, and been the subject of oral evidence before the court by Mr Ng, the 2^nd plaintiff.

16.  The land was originally acquired back in the 1920s by a Chinese Customary Land Trust which was the Heung.  In 1928, share certificates were issued by the Heung to one of its members.  The member concerned was Mr Tong Shun, whose estate is the 1^st defendant.  The land was allocated to him in 10 lots.  This is shown by the stubs of share certificates, to which I was taken.  These lots form a rectangle of about 10,000 square feet, subdivided into 10 lots of about 1,000 square feet each.

17.  The lots were assigned by the Heung to Mr Tong Shun in 1932.  The evidence is that in 1948, Mr Tong Shun’s wife died, and in 1953, one of the executors, who I take to be his son, by a Chinese memorandum, sold the lots to Mr Ng Shil Ming.  Mr Ng Shil Ming is the father of the 2^nd plaintiff, Mr Ng.

18.  The plaintiffs’ case is that since then, that is to say since 1953, the first father entered into possession of the land and then, following the father’s death in 1990, his son has continued up until today.

19.  The evidence is that upon entering into the Chinese memorandum, in 1956 the vendor and Mr Ng Shil Ming gave joint instructions to a firm of solicitors called Lo & Lo to handle the conveyance.  Their case is that because essentially the transaction was mishandled by a managing clerk, the conveyance was not executed.

20.  The share certificates, that is the 1928 share certificates which it is said have been left with the firm of solicitors, were apparently lost.  Nevertheless, the 2^nd plaintiff’s father, it is said, treated himself as owner of the land.  There is some evidence in this regard which goes back a very long way also.  The evidence is in the form of a statutory declaration executed on 8 September 1972 by Mr Arthur Kwai Wing Lui, a solicitor and partner in the firm of Lo & Lo at the time.

21.  He gives some support to the plaintiffs’ version of events.  He says he is not in a position to say whether or not the share certificates had, in fact, been left with the firm but in any event, had been unable to find them.  Nevertheless, the fact that the statutory declaration was obtained at all, does give a measure of independent support to an important aspect of the plaintiffs’ claim, based upon what they say was the agreement to sale and purchase of the land in 1953.

22.  There is some further documentary evidence in this respect, whichrelates to applications to the District Commissioner of the New Territories by the 2^nd plaintiff’s father.  There is no doubt that he made these applications, and indeed in at least one of them, there is a photograph of him.  There are three: one in 1962, one in 1965 and one in 1969.  They cover different lots.

23.  What they are described as in the evidence is a modification of tenancy to do with the erection of structures on the land.  The 1962 application and the 1969 application each include lots which are relevant to the 2^nd defendant. 

24.  According to the evidence, what happened next, essentially, was that the 2^nd plaintiff’s father and the family emigrated to Canada. Certainly at some point in time and perhaps at that point in time, the land in question, that is the total block of land, contained the house in which the family lived and indeed, in which the 2^nd plaintiff tells me he was born in July 1956.  After that time, the evidence is that the 2^nd plaintiff’s father let the land out, subject to informal tenancy agreements.  He died in 1990.

25.  On 13 May 1994, the 2^nd defendant began proceedings against, among others, the executors of Mr Tong Shun, seeking a squatter’s title in respect of two particular lots, that is to say, numbers 51A and 211A.  The action included other lots, but these are the two that are relevant for present purposes.

26.  In brief, the evidence is that the 2^nd defendant has a similar block of land which, though not continuous (because there is something in between the two lots) is closer to the lots in respect of which the plaintiffs seek relief in this action.

27.  However, and this is the significant point, lots number 51A and 211A are, according to the plaintiffs’ case, within the plaintiffs’ block.  There have been a number of maps in the evidence and the court was taken through the maps carefully.  The position does, in fact, become relatively clear when the maps are studied with care.

28.  The 2^nd defendant’s summons was undefended and resulted in an order which was made on 13 September 1994 by Master Britton in Chambers.  That order declared that the title to property, on the part of the defendants whowere executors of the estate of Tong Shun and his wife, had been extinguished, pursuant to section 17 of the Limitation Ordinance (Cap 347).  The order recited that the plaintiff had established a possessory title to the land and was accordingly entitled to be registered as holder of the land in the District Lands Registry at Yuen Long.

29.  There were, in total, covered by the order, six lots, of which two are the lots presently in dispute between the plaintiffs and the 2^nd defendant, that is to say, lots 51A and 211A.

30.  According to the 2^nd plaintiff, he knew nothing about those proceedings or that order.  However, in 1999, his mother did commence legalproceedings and these are dealt with in the 2^nd plaintiff’s evidence.  Essentially what he says is that these proceedings were brought pursuant to tenancy agreements.  His mother did obtain a final judgment in those proceedings, which were HCMP 6326/1999, but I am told that that action effectively gave the plaintiffs possession of the land, but did not regularise their title and it is that which is the goal of these proceedings.

31.  In them, the plaintiffs seek essentially relief under two heads.  Firstly, they seek to enforce the 1953 agreement, so as to enable the legal title of the 1^st defendant to be transferred and assigned to the 1^st plaintiff or at her order or direction.  And secondly, they seek an order that the order of Master Britton be set aside so far as it relates to lots 51A and 211A.

32.  The claim is that the 1953 agreement was sufficient to give the plaintiffs an equitable interest in the land which, albeit many years later, should be put into effect.  So far as the order of Master Britton is concerned, it is said that the judgment should be set aside on the grounds of fraud or fraudulent misrepresentation, since at all times, the plaintiffs were inactual or constructive possession of lots 51A and 211A and the 2^nd defendant could not have dispossessed them and could not have obtained a squatter’s title.

33.  Standing back from the history, the case, as presented to me therefore, concerns a rectangular block of land which the plaintiffs say has become theirs.  They say there was an agreement to purchase it in 1953 and that thereafter they occupied it physically, as they did until 1974, or they rented it out.

34.  The 2^nd defendant has a different block of land close by, but for one reason or another, has claimed two relatively small parts of the plaintiffs’ block.  These are coloured in orange in a schedule to the Statement of Claim.

35.  Although this does not appear in the evidence, at the hearing it has been explained, and indeed the court was shown a picture on the 2^nd plaintiff’s phone, that virtually the whole of the block, which is the subject of the claim, has now been covered by a warehouse.  I am told that this warehouse has been relatively recently erected and has not yet been let out.  It is a substantial, though not huge, building and essentially has taken the place of the agricultural land that was once there.

36.  The 2^nd defendant’s land is also, I was told, now subject to light industrial use and he himself lives in what I was told a comfortable house close by.

37.  I was concerned at the hearing to establish two points.  The first was that no one else has asserted any claim to the land in question and I was assured that no one else, other than the 2^nd defendant, has done so.  I was also concerned to ensure that, particularly given his old age, the 2^nd defendant would not be affected in any way at all by the order which the plaintiffs are seeking. 

38.  I am mindful of the fact that, although he was represented by solicitors and counsel, he no longer is and no longer played any part in these proceedings and, as I have said, did not come to court today. Again, I am assured that he will not be affected in any way at all by these proceedings.

39.  So what it comes down to, therefore, is that the plaintiffs have gone ahead, they have used the land, they have erected a substantial building on the land.  That case is unopposed.  It was opposed at one time by a party; that is the 2^nd defendant who was legally advised and then, it seems, was happy to step aside from these proceedings, subject to costs.

40.  It is obviously unusual to have a situation in which a party seeks to enforce an agreement which goes back so long in time.  But I bear in mind the points made to me by counsel as to the complexity of the law relating to land holdings in the New Territories and also the important part that Chinese Customary law plays in that regard.

41.  A lot of work has gone into making this claim good.  Many documents have been looked up that go back many, many decades.  I consider that the plaintiffs have made the first part of their claim good.

42.  So far as the 2^nd defendant is concerned, the difference is that in his case, there is actually an order of the court to the effect that the two lots in dispute, in his case that is to say lot 51A and lot 211A, have vested him by virtue of adverse possession.  The courts will never lightly set aside an order in these circumstances.

43.  Although the case was put on the basis of fraud and fraudulent misrepresentation in the submissions, there is no evidence as to that.  It was put in the alternative by counsel at the hearing, on the basis of mistake.

44.  I am entitled to take into account the fact that the 2^nd defendant no longer seeks to argue to the contrary.  I am entitled to take into account the fact that his case is, on the face of it, an oddity because the two bits of land that are relevant, so far as he is concerned, are not in his own block but are in the plaintiffs’ block.

45.  Counsel in the alternative put the case against him on the basis of mistake.  I am persuaded that in the unusual circumstances of the case, that is an adequate reason to set aside the order of Master Britton of 13 September 1994.

46.  I will therefore make an order in terms of paragraph 1, 2 and 3 of the draft that has been submitted to me. 

47.  I will make an order in terms of paragraph 4, which is that there be no order as to costs as between the 1^st and 2^nd plaintiffs and the 1^st defendant.

48.  I will now hear counsel as to why costs should be awarded against the 2^nd defendant, as he seeks in paragraph 5 of the draft order.

(Submission on costs)

49.  I will not order costs against the 2^nd defendant for two reasons. 

50.  The first is that, as this case has shown, the issue of title is extremely complicated in this matter.

51.  The second is that the plaintiffs were seeking an order to set aside the Master’s order on the grounds of fraud or fraudulent misrepresentation.  There is no evidence as to that, and in those circumstances, I am going to make the same order for costs against the 2^nd defendant as against the 1^st defendant, that is, no order as to costs.