MUTUAL LUCK INVESTMENT LTD. v. YEUNG CHI KUEN & OTHERS

HCMP 6047/1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 6047 OF 1998

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(Heard Together)

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J U D G M E N T  (P A R T II)

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1. This is the second part of my judgment in these actions. It should be read together with the first part, which is written in Chinese and will be handed down at the same time. The reasons why I write this part of the judgment in English instead of Chinese are as follows,

(a) This part of the judgment will deal exclusively with the defence of the 39th Defendant by reference to adverse possession. The other Defendants do not rely on this defence. Hence, this part of the judgment would not affect their cases.

(b) Although the other Defendants were not legally represented at the trial, the 39th Defendant had the benefit of being represented by Mr Yeung. I trust that her lawyers would discharge their duties in explaining this part of the judgment (as well as the first part) to the 39th Defendant.

(c) Complicated legal concepts which may have general public importance are involved in dealing with the defence of the 39th Defendant. The written submissions of counsel and the oral submission of Mr Yu, SC (counsel for the Plaintiff) were in English. To that extent, the trial has been conducted partly in English.

(d) I have consulted parties and there is no objection from the parties that this part of the judgment be written in English.

A copy of this part of the judgment will also be sent to the other Defendants. If the other Defendants wish to have Chinese translation of this part of the judgment, they could make a request in writing and the Court will make the appropriate arrangement.

2. I would not repeat what I have said in the First Part of my judgment concerning the background of the case. The Plaintiff, as the registered owner of the land, is suing the Defendants for recovery of possession of Lot No. 1457 of Demarcation District 123, Yuen Long, New Territories ["Property"]. Most Defendants operated fishponds at the Property and they also lived in buildings erected on the bunds of the fishponds. The Plaintiff acquired the title to the Property in 1989. Prior to that, the registered owner of the Property was a Fung Lok Kung Sze (豐樂公司) with certain persons as managers. Fung Lok Kung Sze was not a legal entity and on the evidence, it does not appear to be an ancestral Tso or Tong. In the circumstances, Mr Yu properly accepted that no point can be taken by reference to minority interest and he made no submission by reference to my earlier decision in Leung Kuen Fai v Tang Kwong Yu Tong [2002] 2 HKLRD 705.

3. As I said, the defence of the 39th Defendant is adverse possession. She occupies 3 fishponds within the subject lot. According to her Re-re-amended Defence, she commenced occupation of the land which is now identified as Pond 54 (as shown in Exhibit P-2) in November 1966, of the land regarding Pond 55 in April 1969 and the land regarding Pond 46 in mid 1972. Her evidence was that these pieces of land were given to her husband Mr Ho Kun (何根) who turned them into fishponds. I shall discuss her evidence in greater details later. She said that the occupation of these fishponds by her husband and her were without the consent of the then owners of the Property and their possession was therefore adverse. She relied on the Limitation Ordinance, Cap. 347 and argued that the title of the predecessor in title of the Plaintiff has been extinguished.

4. In response, the Plaintiff relied on the following to argue that the defence of adverse possession cannot avail the 39th Defendant,

(a) The Property was leased out by the predecessor in title. Hence, until the termination of those tenancies in 1990 by a notice to quit issued in June 1989, the owner was not entitled to seek possession. In short, the persons dispossessed were the tenants, not the owner who was the landlord. By reason of the principle laid down in Taylor v Twinberrow [1930] 2 KB 16 and reiterated by Lord Nicholls in Chung Ping Kwan v Lam Island [1997] AC 38 at p. 46E to 47E, time did not start to run against the owner until 1990.

(b) Ho Kun and the 39th Defendant were sub-tenants rather than squatters.

(c) By reason of the extension of the leasehold of the Plaintiff to 2047 under the New Territories (Extension) Ordinance, Cap.150, such extension being not made pursuant to an option to renew in the original Grant, the effect was the same as a surrender and re-grant. By reason thereof, time started to run again upon re-grant. In this connection, the Plaintiff relied on the decision of Sakhrani J in Unijet Limited v Yiu Kwai Hoi, HCA 13637 of 1998, 21 June 2002.

Although the Plaintiff had sought to rely on a letter written in the name of the 39th Defendant as acknowledgment of the Plaintiff's title, Mr Yu informed the court in his closing submissions that he would not make any submission on this point. In view of my decisions on the other points, I also do not find it necessary to deal with this argument.

5. It can be seen that if the Plaintiff succeeds on either one of these points, on the basis of my findings as to the title of the Plaintiff and the termination of the tenancies as set out in the First Part of my judgment, they should be entitled to judgment against the 39th Defendant.

6. The Plaintiff did not adduce any evidence to contradict the evidence of the 39th Defendant as to the commencement dates of the occupation of the three fishponds by the 39th Defendant and Ho Kun. The 39th Defendant said she was married to Ho Kun in mainland China when she was about 20 years old. They were farmers and they came to Hong Kong in 1961. Their first daughter was born a few days after their arrival in Hong Kong. They lived elsewhere for about one year before they came to live at Fung Lok Wai where the Property is situated. Ho Kun had a relative called Chiu Kun (趙根) and he operated a fishpond or fishponds at the location of Ponds 49 and 52 shown in P-2. Ho Kun and the 39th Defendant built a hut at the east bund of Pond 49 on a location marked by the 39th Defendant on Exhibit D-12 with a red dot (which I identified as location 1 in pencil). At that time, Ho Kun worked for Chiu Kun as a mason and assisted in excavating the land to construct fishponds.

7. About 5 to 6 years later, Ho Kun was given the piece of land now shown as Pond 54. That transaction was, according to the 39th Defendant, evidenced by a document dated 10 November 1966 (Exhibit D-5). Ho Kun employed workers to excavate the land and turned it into a fishpond. The family erected a house by the side of the pond and moved to live there. It was in fact erected inside the pond with supporting piles hammered into the bottom of the pond. Over the years, several other houses were built at the west bund of Pond 54. A chicken shed and a duck shed were also erected at Pond 54.

8. About 3 or 4 years later, Ho Kun got another piece of land adjacent to this pond. This was evidenced by another document dated 3 April 1969 (Exhibit D-6). Again, Ho Kun turned the land into another fishpond. It became Pond 55. They erected a duck shed at the northwest part of Pond 55.

9. Later, they got Pond 46 from Man Mui (文妹), the mother of Chiu Kit Tse (趙傑子). This transaction was not evidenced by any document. There seems to be some confusion in the evidence of the 39th Defendant as to the date when they got this piece of property. At one stage, she said it was 8 to 10 years after they got Pond 55. Later on, she said it was after the birth of her son Kam Ming (錦明, born on 12 September 1972) and before the birth of her daughter Yung Kuen (容娟, born on 26 May 1974). I find the latter part of her evidence more reliable. For reasons already given in the First Part of my judgment, I found as a fact that when Pond 46 was given to Ho Kun, it was a gei wei (基圍). Gei wei is different from fishpond. It was for rearing of shrimps instead of fish farming. After they got Pond 46, Ho Kun turned it into a fishpond. Another duck shed was built at the northeast side of the pond.

10. According to P-9, the Government Survey Map revised in August 1974, Pond 46 was already there in 1974 together with a temporary structure at the northeast side of the pond, which was probably the duck shed. Ponds 54 and 55 were connected to each other in those days.

11. The 39th Defendant also produced some documentary evidence and photos to evidence the occupation of these ponds by her family. However, the earliest photograph was taken in 1972 (at the top of G19 showing part of Pond 54 and some of the structures erected there. None of the utility receipts and business invoices or receipts bears a date earlier than 1973. There is a letter from the Hong Kong N.T. Fish Culture Association dated 7 December 1998 which stated that Ho Kun had been a member of the association since 8th August 1969 and had all along been operating fishponds at Fung Lok Wai.

12. The daughter of the 39th Defendant Ho Chuen Tai (何轉娣) also gave evidence that since her birth in October 1968, her family has been living at the house on the bund of Pond 54 where her mother is currently living (viz. the house identified as Structure 5 at D637).

13. Initially, I had some doubts about the authenticity of D-5 and D-6. These two documents are quite crucial to the case of the 39th Defendant. According to her own evidence, she had been told by her husband before his death in 1984 that these two documents were related to the lands and she should keep safe custody of the same. Yet she did not disclose them until a late stage. The two actions herein were commenced in November 1998 and February 2000 respectively. Discovery of these documents was made by a Supplemental List of Documents filed in October 2001. Given the importance of these documents, I would imagine that as soon as the 39th Defendant became aware of the Plaintiff's action in 1998 by reason of the letter from Messrs Kao, Lee & Yip dated 28 September 1998, she would retrieve these documents and hand them to her solicitors. However, it is quite obvious that she did not do so. In the Defence filed on her behalf in both actions, it was pleaded that she commenced occupation of the three fishponds since 1962. This was clearly inconsistent with D-5 and D-6. Her case as to commencement of occupation was rectified in her first witness statement filed on 7 March 2000. In her supplemental witness statement filed on 17 July 2001, she made specific reference to these two documents.

14. Ng Chung Hing (吳松興) signed on D-5 and D-6 as a witness. When he gave evidence, he confirmed the veracity of these documents and he also gave evidence to confirm the transfer of Pond 54 to Ho Kun. For reasons given in the First Part of my judgment, I find Mr Ng to be an honest and reliable witness. I therefore accept the authenticity of D-5 and D-6. The late production of these documents by the 39th Defendant have not been explored at the trial and there could be innocent explanation for the same.

15. Although I have reservations about the other parts of her evidence, I accept the evidence of the 39th Defendant as summarized in Paragraphs 7 to 9 above regarding the respective commencement dates of the occupation of the three fishponds. I therefore make the following finding of facts,

(a) the 39th Defendant commenced occupation of Pond 54 in November 1966;

(b) she commenced occupation of Pond 55 in April 1969;

(c) she commenced occupation of Pond 46 some time between September 1972 and May 1974. Due to the lack of specific evidence, I am unable to determine a more precise date in this regard. Fortunately, in view of reasons given later, it makes no difference.

16. The evidence also shows that the family of the 39th Defendant has been occupying these three fishponds continuously since the respective dates of commencement of occupation. They had exclusive use of the ponds and from time to time erected link fence around their ponds.

Against whom could the 39th Defendant assert adverse possession?

17. However, even assuming that their occupation of the land was without the consent of the registered owner (a point I shall deal with later), the Plaintiff's argument was that at the most their occupation was only adverse to the then tenant of the land. For reasons already given in the First Part of my judgment, I find as a fact that these three ponds fall within the boundary of the First Tau Shui Mun (第一竇水門). Further, as stated in the First Part of my judgment, I find as a fact that during those years, the First Tau Shui Mun was leased to Chiu Shui Hei (趙水喜) by way of a periodic tenancy running from year to year.

18. On those findings, Mr Yeung conceded that Mr Yu was correct in the submission set out in Paragraph 4(a) above. Is that concession correct? To answer this question, one must have regard to the nature of a yearly tenancy. If it were regarded as a tenancy automatically renewed every year, then it might be suggested that there was a moment of time in between each renewal when the landlord came into possession (see Tang Shu Tin v Tang Kin Kwok [1994] 2 HKC 727). If that were so, time might start to run against the landlord at the first day of the next year after the squatter entered into possession. However, although this point has not been argued before me, I am of the view that this analysis is incorrect. Firstly, Lord Nicholls in Chung Ping Kwan v Lam Island [1997] AC 38 at p. 48D to F held that by reason of the renewal, the landlord was not entitled to possession and time should not run against him. Although His Lordship did not expressly deal with the argument that there was a moment in time in between the renewal when the landlord could say to have possession, the case of Tang Shu Tin had been cited.

19. Moreover, the true nature of yearly tenancy is not the same as several tenancies of one year each renewed every year. Halsbury's Laws of England, 4th Edn., Reissue, Para. 178 summarized the legal nature of a yearly tenancy as follows,

"Where a tenancy from year to year continues beyond the first year, it is not treated as a tenancy determining and recommencing with every year. The tenant has a lease for one year certain, with a growing interest during every year thereafter, springing out of the original contract and parcel of it."

Gray's Elements of Land Law, 3rd Edn., p. 346 propounded the classical theory as to the nature of a yearly tenancy as follows,

"in the absence of a valid notice to quit, a periodic tenancy takes effect, not as an aggregation of distinct terms, but as a single, infinitely expandable, term. The units of time which constitute the periodic tenancy are seen as comprising (at least retrospectively) one single unbroken term which, unless and until duly determined, perpetually elongates itself by the superaddition of a fresh unit or period. The term grows period by period 'as a single term springing from the original grant'. There cannot be said to be a termination of one tenancy at the end of each period, followed by the commencement of a new letting on the tacit exercise of some option to renew the term. The tenancy simply continues as one integral term until duly determined by notice and no maximum term can be predicated at its outset."

(see also Megarry & Wade, The Law of Real Property, 6th Edn. Para. 14-064)

20. Section 12(2) of the Limitation Ordinance has partly altered the position in the context of adverse possession. It provides,

"(2) A tenancy from year to year or other period, without a lease in writing, shall, for the purposes of this Ordinance, be deemed to be determined at the expiration of the first year or other period, and accordingly the right of action of the person entitled to the land subject to the tenancy shall be deemed to have accrued at the date of such determination:

Provided that, where any rent has subsequently been received in respect of the tenancy, the right of action shall be deemed to have accrued on the date of the last receipt of rent."

21. This sub-section cannot assist the 39th Defendant. Rent in respect of the First Tau Shui Mun was paid together with the rent in respect of other land under the tenancy of Chiu Shui Hei (and since his death, Chiu Yat Hung). This had been paid up to 1989. Hence, by reason of the proviso in that sub-section, time did not start to run against the Plaintiff until 1990.

22. I therefore hold that the concession of Mr Yeung was correctly made and by reason thereof, the defence of adverse possession cannot avail the 39th Defendant in the present case.

Had there been payment of rent by the 39th Defendant or her husband?

23. There is a conflict in the evidence in this regard. The 39th Defendant said she and her husband have never paid any rent to any person regarding the occupation of the three ponds. She was supported by her daughter Ho Chuen Tai. She said she learnt from the 39th Defendant that they had never paid rent. However, she had written a letter dated 15 October 1998 in the name of the 39th Defendant to the solicitors for the Plaintiff in which she described the 39th Defendant as "tenant" (租户).

24. On the other hand, the Plaintiff relied on the following as evidence that Ho Kun had paid rent in respect of the three ponds. In August 1998, a clerk of Messrs Kao, Lee & Yip, Mr Lau Sum alias Lau Shui Yin ["Lau"] visited Fung Lok Wai to investigate who was using the fishponds there. He brought along some proforma record called Memorandum of Property to assist him. Exhibit P-15 was the form he used to collect information from the 39th Defendant. It recorded that Ho Kun passed away about 14-15 years ago. It was also recorded on the form that a rent of $5,000 was paid. Lau said the 39th Defendant told him that Chiu Kit Tze was her landlord. Lau said he was told by the 39th Defendant that they had not paid rent for 3 to 4 years since 1991 and he just recorded this down. Lau also recorded the structures found at the ponds, including their reference numbers assigned by the Government painted on the structures.

25. Ng Chun Hing also gave evidence that he honestly believed that the 39th Defendant and Ho Kun had paid rent to Chiu Kit Tze. He had to correct himself in this respect: initially he testified that Ho Kun did pay rent to Chiu Kit Tze, when he was recalled he clarified that he only thought so but he did not actually witnessed such payment. He thought that since he had to pay rent for his land to Chiu Kit Tze and Ng Shui Wai and Ng Shui Loi had paid rent by crops prior to the transfer of pond 54 to Ho Kun, he believed Ho Kun should have paid rent as well. Although at some stage he expressed some doubt whether the same arrangement was made after the land was turned into ponds, when he was cross-examined by Mr Yu for the last time, he agreed that he still thought they had paid rent.

26. I do not find the 39th Defendant to be a credible witness on this issue. Although she is an old lady, she is by no means incapable of understanding what evidence is in her favour and what evidence is against her interest. In general, she was much less forthcoming when she was cross-examined by Mr Yu as compared with giving evidence-in-chief. In my judgment, the complaint of Mr Yu that her complaint of bad eyesight was deployed selectively to suit her convenience is justified. She was evasive when she was asked by Mr Yu about her witness statement and repeatedly resorted to lapse of memory and her illiteracy in her answers. When she could not give a satisfactory answer to a question, she just repeated her evidence in her own favour. A good example of this was when she was cross-examined about her earlier evidence that Pond 46 was previously operated by Man Mui as a gei wei after the recording of her earlier evidence was played back to her. That was clearly inconsistent with her subsequent evidence that Pond 46 was paddy field before her husband got it from Man Mui. When such inconsistency was pointed out to her by Mr Yu, instead of offering a credible explanation, the 39th Defendant kept repeating that the area at Pond 46 was sometime inundated with water but sometime not.

27. A telling illustration of the credibility of the 39th Defendant was her response when Lau was asked by Mr Yu to identify her in court. When she heard that, she ducked down for quite some time. Hence, Lau could not find her initially. It took her daughter (who was sitting next to her) to ask her to get up and Lau was then able to identify her. She attempted to explain this by saying that she was only fixing her shoe. When this excuse obviously could not hold water due to the time lapse involved, she put up another excuse by saying that she ducked down because she was tired and not feeling well. When it was put to her that she ducked down for fear of being identified, she retracted her earlier admission¹ and said she did not hear Mr Yu asked Lau to identify her². She then kept saying that she ducked down to fix her shoe. Having observed the witness, it is quite clear to me that the 39th Defendant ducked down to avoid being identified by Lau. The excuses put forward by her are not the true reason for her action. This is significant in the context of the present issue because the 39th Defendant's case was that she had never seen Lau before the trial. If that were true, she had no reason to fear that Lau could identify her in court.

28. The 39th Defendant said that she had never allowed the Plaintiff's solicitor to go into her premises. However, the photographs produced by the Plaintiff (Exhibit P-14) clearly show that representatives of solicitors for the Plaintiff had gone into the premises to post Notice to Quit in 1998 and take photos. When those photos were shown to her, she evaded by saying that she could not see clearly (in contrast to her response when a much smaller photo at G19 was shown to her by her counsel). At the end, when confronted with the incontrovertible fact that the photos were taken inside her premises, she said it was possible for the representative of solicitors for the Plaintiff to enter her premises without her consent by going through a gate which was not locked up. Exhibit P-14(4) shows that the photo was taken when there were people and dogs in the premises and in my judgment, it is most likely that the 39th Defendant had no knowledge of the incident.

29. P-14(3) and (5) verified the structure reference numbers of two of the houses within the premises occupied by the 39th Defendant as recorded in the Memorandum prepared by Lau, viz. Exhibit P-15.

30. The 39th Defendant prevaricated when she was asked about the letter written by her daughter in her name to Messrs Kao Lee & Yip in October 1998. She said she had no knowledge of this letter and when Mr Yu read the contents of the letter and explained the same to her, she kept saying that she did not understand the same. Even when the letter was explained to her point by point, she maintained that due to her illiteracy, she could not understand. Although she was obviously not very educated, I do not believe her. When she maintained she did not understand despite Mr Yu's explanation of the contents of the letter to her in every day's language a number of times, I think she was trying to fence off questions regarding this letter as she knew very well that this letter contained something prejudicial to her case. Her professed ignorance of the contents of the letter cannot be justified by her illiteracy. She has been legally represented for quite some time and I have no doubt that her lawyers have explained to her the implication of this letter to her case.

31. I therefore form the impression that when the 39th Defendant gave evidence, she would not be forthcoming as to the truth in respect of matters which might be prejudicial to her. With the assistance of lawyers, she must be quite alert to the significance as to payment of rent by her and Ho Kun. I cannot rely on her evidence in this regard.

32. In respect of the evidence of her daughter, she explained that she was somehow misled by Lau in writing the letter of 15 October 1998 using expressions like "tenant" and "landlord". She testified that her mother indicated to her that she was worried about legal costs after a meeting with the solicitor Wong Wai Sum ["Wong"]. Therefore she discussed the matter with her brother. The two of them resolved to terminate the representation by Wong. In order to do that, she contacted Lau and Lau told her to write a letter to the Plaintiff's solicitors for that purpose. She said Lau told her to identify the tenant in the letter. Hence she used the expression "tenant" to describe her mother.

33. I find Ho Chuen Tai to be an intelligent witness and it is clear from cross-examination that she appreciated the distinction between a tenant and an occupier who did not pay rent. It is clear to me that she would not consciously use the expression "tenant" to describe her mother if she knew that her mother did not pay rent. She said when she used the expression she did not apply her mind to it. Is that likely to be the case bearing in mind that she knew she was writing to the solicitor of the Plaintiff? Another possibility is that she did not know her mother did not pay rent when she wrote the letter.

34. Having carefully considered all the evidence, and re-read my notes of her evidence and listened to recording of the crucial parts of her evidence, I conclude that the truth of the matter was that when she wrote the letter, she did not know her mother's case was that they never paid rent. She almost said as much in her evidence. She gave the following evidence about her telephone conversation with Lau in her evidence in chief. When Lau asked if they paid rent, she said she did not answer because she did not know if the land was rented from others³. That does not sit well with her evidence that at the meeting after the family knew about the letter from the Plaintiff's solicitor in the end of September 1998, the 39th Defendant told them that they had not been paying rent. When this inconsistency was brought up in cross-examination by Mr Yu, she tried to explain by saying that she was correct in telling Lau she did not know as she did not witness with her own eyes as to whether rent were paid⁴. I cannot accept that explanation. Given her intelligence and her belligerence as demonstrated by her response in the course of her cross-examination, I believe if she had really been told by her mother that no rent had been paid, the first thing she would have said to Lau when asked about payment of rent was that they did not pay rent over the years.

35. I therefore conclude that the 39th Defendant did not tell her children that they had not been paying rent in that family meeting at the end of September 1998.

36. Although Mr Yeung has tried his best in discrediting Lau, I find on the balance of probabilities that the information set out in P-15 was collected by Lau from the 39th Defendant. It is quite clear that P-15 was complied by Lau from information collected on site. I do not understand Mr Yeung to be suggesting that Lau made up those information himself. There was no reason why Lau would go to the extent of fabricating information against the 39th Defendant. As I said, P-15 contained records of reference numbers of structures found at the premises occupied by the 39th Defendant and they were verified by photographs produced as P-14. The year in which Ho Kun passed away was also accurately recorded. Further, at the back of P-15, Lau recorded information of an occupant Ho Kam Sing, a cousin of Ho Chuen Tai. The 39th Defendant confirmed in her evidence that Ho Kam Sing has been living at the premises for about 20 years as recorded. This sort of information was unlikely to be obtained by Lau from persons at the site other than the 39th Defendant or her family members. If such information were obtained from another family member instead of the 39th Defendant, I would expect her to call such person to be a witness. The response of the 39th Defendant when Lau was asked to identify her in court is indicative that she was the person from whom Lau got the information at the site.

37. Mr Yeung compiled a table purportedly showing the discrepancies of the information contained in the Memoranda of Properties prepared by Lau regarding other occupants. I take those into account but I think Mr Yu was correct in pointing out that some discrepancies are understandable given the circumstances in which the information were collected and the way people imparted information. It is quite clear that I cannot regard all the information in P-15 as absolutely accurate. In fact, on the question as to the commencement of occupation, P-15 seems to record 1961. This is inconsistent with my findings above. On the last payment of rent by the 39th Defendant, P-15 recorded both "1991" and "non-payment for 3 to 4 years" (viz. 1994 to 1995). Lau explained that this was what he was told by the 39th Defendant and he just wrote down what she said.

38. In my judgment, the crucial point is whether P-15 could be relied as evidence showing that the 39th Defendant had paid rent to Chiu Kit Tze in the past. The name Chiu Kit Tze was recorded and I see no reason why that could not be regarded as an accurate record of what 39th Defendant told Lau. In respect of such simple and fundamental matter, I do not think the 39th Defendant or Lau would make any mistake when P-15 was compiled even with due allowance on account of other discrepancies in the other Memoranda.

39. The case of the 39th Defendant (and Ho Kun) as a sub-tenant of Chiu Kit Tze is inherently more probable than their occupation of the three ponds as squatters. All the neighbours of the 39th Defendant in the First Tau Shui Mun were sub-tenants of Chiu Kit Tze and made payment of rents. The predecessors of Ho Kun regarding Pond 54 paid rent to Chiu Kit Tze by crops. Man Mui had occupied Pond 46 before Ho Kun and she was the mother of Chiu Kit Tze. Was there any reason why amongst all the occupiers of the First Tau Shui Mun, only Ho Kun and the 39th Defendant were exempted from payment of rent? There is no suggestion that they were relatives or close friends of Man Mui or Chiu Kit Tze. In fact, Chiu Kun, the relative of Ho Kun, had paid rent for his occupation of Ponds 49 and 52 (as evidenced by reference to the obligation to pay rent in the Assignment dated 25 September 1986 made with Man Chan Fan, D34). The areas which made up of the three ponds were occupied by others instead of being abandoned as wasteland before Ho Kun acquired the same. There is simply no sound reason why Chiu Kit Tze or whoever managed the properties for him would suddenly forget about these three ponds and took no action whilst he was still collecting rent all through these years regarding the adjacent ponds.

40. Moreover, in a letter dated 24 June 1991, Messrs Chan, Lau & Wai wrote on behalf of Chiu Yat Hung to Messrs Ho & Wong informing the Plaintiff the particulars of certain sub-tenants at Fung Lok Wai. Ho Kun (written as Ho Kan in the letter, but the Chinese characters showed that it was the same person) was included as one of the sub-tenants. Although the source of information of Chiu Yat Hung was not disclosed in that letter, given that the First Tau Shui Mun was sublet to Chiu Kit Tze and many of the names set out in that letter were sub-tenants of the First Tau, it is reasonable to infer that the information was supplied by Chiu Kit Tze or whoever managed the First Tau for him.

41. On the whole, I am satisfied on the evidence before me that Ho Kun and the 39th Defendant had been sub-tenants of the three ponds. As in the case of most of the sub-tenants of Chiu Kit Tze, it is likely that they paid rent until 1990's.

42. Since the occupation of the three ponds were, until the termination of the tenancy of Chiu Yat Hung by the Notice to Quit of 1989 (see the First Part of my judgment), with the consent of the registered owner, the possession by Ho Kun and the 39th Defendant cannot be regarded as adverse. Their right to occupy the three ponds were derived from their sub-tenancies with Chiu Kit Tze and such occupation cannot be characterized as "possession as of wrong" (see Wong Tak Yue v Kung Kwok Wai David [1998] 1 HKLRD 241 at p. 249J).

43. Hence, on the facts, the 39th Defendant failed to establish any defence of adverse possession.

New Territories Leases (Extension) Ordinance Cap. 150

44. In Chung Ping Kwan v Lam Island [1997] AC 38, the Privy Council dealt with the legal implications of the New Territories (Renewable Crown Leases) Ordinance Cap. 152 to squatters who had been in adverse possession of properties in the New Territories. The focus in that case was on the deemed renewal in 1973 of leases granted by the Government pursuant to option to renew contained in New Territories leases. It was held that the operation of the Limitation Ordinance barred a lessee (who had slept on his right for the requisite period of time) from recovery of possession, whether such claim was made by virtue of his original legal estate under the lease or by virtue of the legal estate acquired by him pursuant to the option to renew. At p. 48F to G, Lord Nicholls said,

"...[T]he lessee has slept on his rights. There seems to be no compelling reason why, as between him and the trespasser, his rights under the renewal option in the lease should not be defeated just as much as his other rights under the lease. It is true that when he exercises the option the lessee obtains a new legal estate, but this is no more than implementation of a pre-existing contract. He acquires a new legal estate by virtue only of a right included in the lease whose title has been extinguished as against the trespasser. To ignore the legal source of the lessee's entitlement to his new legal estate would be to exalt form (a new legal estate) over substance (a pre-existing right to the estate)."

45. The renewal in 1973 only ran up to 1997. In the present case, I have to consider the matter in the context of the extension of the Government Leases in the New Territories beyond 1997. The Plaintiff relied on the principle set out by Lord Nicholls at p. 46H to 47B,

"On the determination of the lease, therefore, the landlord is entitled to oust the squatter however long he may have been on the land. Those claiming through the landlord are similarly entitled: their right to possession is no better, and no worse, than the right of the landlord from whom they derive their title. So if the landlord grants a new lease, the lessee of the new lease may eject the squatter.

In principle the position cannot be different if the lessee under the new lease is the same person as the lessee under the original lease. There seems to be no sensible reason why the landlord's ability to confer on a new lessee a title as good as his own should be subject to an exception when the new lessee is the original lessee."

And at p. 47D to E,

"A lessee' ability to regain possession in reliance on a new lease is no more than a striking illustration of the principle that dispossession of a lessee sets time running against the lessee and those claiming through him as lessee, but not against the landlord and those claiming through him as reversioner. A trespasser on leased property is more vulnerable than a trespasser on property occupied by the freeholder. In the latter case the title which the squatter bars is the freehold title. In the former case the title which is barred is leasehold only, because that is the extent of the title of the person who has been dispossessed. Adverse possession defeats the rights, whatever they may be, of the person against whom the possession is adverse. It does not defeat the rights of others."

46. Under Annex III of the Joint Declaration of the Government of the People's Republic of China and Government of the United Kingdom of 19 December 1984, Government leases in the New Territories that expired before 30 June 1997 without any right of renewal could be extended to 30 June 2047. The annual rent would be charged from the date of extension equivalent to 3 per cent of the rateable value of the property. Paragraph 1 of Annex III provided that all rights in relation to such leases shall continue to be recognized and protected under the law of Hong Kong. Articles 120 and 121 of the Basic Law contained similar provisions.

47. To implement that, the New Territories Leases (Extension) Ordinance Cap. 150 was enacted in 1988. Parts I and IV thereof came into force on 26 February 1988 whilst Parts II and III came into force on 25 April 1988. Part II provided for extension of New Territories Leases. Section 6 reads,

"The term of a lease to which this Ordinance applies is extended, from the date on which it would, apart from this Ordinance, expire, until the expiry of 30 June 2047, without payment of any additional premium."

48. It is noteworthy that the extension was granted as soon as Section 6 came into operation, viz. 25 April 1988 although the actual period of extension started to run from the expiry of the original lease, viz. 27 June 1997 (the renewal in 1973 was for 24 years less three days from 1 July 1973). Hence, the section is worded in the present tense, "is extended". The Chinese version also makes this clear. The first part of the section reads,

"本條例所適用契約的年期現予續期,"

The Ordinance came into force in two stages because prior to the implementation of the extension, the lessee was given an option to exclude his lease from the application of the Ordinance prior to 25 April 1988, see Section 5. It shows that the position of the parties crystallized on 25 April 1988. This reinforces my construction of Section 6.

49. Although such renewal took place in 1988, it was confirmed by Article 120 of the Basic Law upon the resumption of the exercise of sovereignty over Hong Kong by the People's Republic of China and the establishment of the Hong Kong Special Administrative Region. Article 120 reads,

"All leases of land granted, decided upon or renewed before the establishment of the Hong Kong Special Administrative Region which extend beyond 30 June 1997, and all rights in relation to such leases, shall continue to be recognized and protected under the law of the Region." (my emphasis)

The New Territories (Extension) Ordinance Cap. 150 was adopted as the laws of the Hong Kong Special Administrative Region by the Provisional Legislative Council on 1 July 1997 under Section 7 of the Hong Kong Reunification Ordinance. Section 5 of that ordinance added a new Section 2A to the Interpretation and General Clauses Ordinance Cap. 1, sub-section (1) thereof stipulated that all laws previously in force (including Cap. 150) shall be construed in line with the Basic Law.

50. Article 121 of the Basic Law supports my aforesaid conclusion. It provides,

"As regards all leases of land granted or renewed where the original leases contain no right of renewal, during the period from 27 May 1985 to 30 June 2047, the lessee is not required to pay an additional premium as from 1 July 1997 ..." (my emphasis)

"從一九八五年五月二十七日至一九九七年六月三十日期間批出的，或原沒有續期權利而獲得續期的，超出一九九七年六月三十日年期而不超過二○四七年六月三十日的一切土地契約，承租人從一九九七年七月一日起不補地價..."

This Article mirrors paragraph 2 of Annex III of the Joint Declaration. The Basic Law became effective as of 1 July 1997. The use of past tense regarding the act of renewal indicated that New Territories leases were renewed before 1 July 1997 to a date beyond 1 July 1997. Reading this together with Section 6 of the New Territories (Extension) Ordinance Cap. 150, the matter is beyond doubt.

51. This analysis has some bearings on the legal effect of the extension. On 25 April 1988, but for the operation of Section 6, the leasehold interest would run up to 27 June 1997. In the context of squatter's title regarding land subject to New Territories Leases, provided that he has extinguished the title of the lessee by virtue of 20 years' adverse possession, the squatter's right to remain in possession cannot be disturbed by the Government as lessor for the reasons given by Lord Nicholls in Chung Ping Kwan at p. 48C to E. With the grant of an extension in 1988, which was regarded by implication of law as a surrender and re-grant (see Jenkin Lewis v Kerman [1971] 1 Ch 477 at 496), the position of the squatter was prejudiced. Subject to the application of the rationale in Chung Ping Kwan cited in Paragraph 44 above (which I shall deal with later), upon a surrender by the lessee, we would have precisely the same situation as in St. Marylebone Property v Fairweather [1963] AC 510.

52. Lord Nicholls declined to express any view on that decision in Chung Ping Kwan at p. 47F as it was unnecessary to do so (since there was no question of surrender in the context of the New Territories (Renewable Government Leases) Ordinance, Cap. 152, Section 4 thereof provided for deemed renewal on 1st July 1973, the date immediately after the original term expired). However, His Lordship referred to the critique by Professor Wade on that decision in "Landlord, Tenant and Squatter" (1962) 78 LQR 541 as a powerful one. In that article, Professor Wade advocated that the minority view of Lord Morris in Fairweather should be preferred. By reference to Coke's Commentary upon Littleton at 338b, Professor Wade observed that although a surrender could operate to determine the estate as between the lessor and lessee, it should not prejudice the rights or interests of persons who were not parties nor privies thereto (including a squatter).

53. Results opposite to that of Fairweather have held to arise in the context of registered leasehold land under the Land Registration Act 1925, see Spectrum Investment Co v Holmes [1981] 1 WLR 221, Central London Commercial Estates v Kato Kagatu (1998) EG 185. Of course, we do not have the equivalent of that piece of legislation in Hong Kong. Our land registration system is still a system of registration of instruments rather than registration of title. However, from a policy point of view, it is difficult to see why the substantive rights of a squatter should differ between registered land and unregistered land bearing in mind the objectives of the law of adverse possession, one of which was to facilitate proof of title in conveyancing in unregistered land (see an article by Martin Dockray "Why do we need adverse possession?" (1985) Conv 272).

54. I shall come back to Fairweather later. In the meantime, I have to ask whether the rationale of Lord Nicholls in Chung Ping Kwan as set out in Paragraph 44 above is applicable to an extension of lease pursuant to the New Territories Leases (Extension) Ordinance Cap. 150. In the recent case of Unijet Limited v Yiu Kwai Hoi, HCA 13637 of 1998, 21 June 2002, Sakhrani J held that the crucial feature in Chung Ping Kwan was that the deemed renewal was made pursuant the option to renew in the original lease (see Para. 76 of the judgment). That feature is absent in the extension pursuant to Cap. 150. Hence, Sakhrani J held that the full force of the principles set out in Paragraph 45 above were applicable (see Paras. 80 to 83).

55. Whilst the dicta of Lord Nicholls cited in Paragraph 44 above referred to option to renew and a new legal estate by virtue of a right included in the lease, that was because the Privy Council was dealing with an option to renew on the facts of Chung Ping Kwan. I do not think Lord Nicholls intended to confine the rationale to new estate obtained pursuant to an option to renew. A new interest granted pursuant to statute could come within the scope of such a rationale provided there was sufficient nexus between the old legal interest and the new one. This is obvious from His Lordship's citation with approval of the Victorian case of Bree v Scott (1904) 29 VLR 692. In that case, pursuant to the provisions of Land Act 1869, a Crown licensee was entitled to demand a Crown Grant of the land in respect of which he had been a licensee for at least three years. The licensee concerned had been a licensee between 1878 and 1885 and in 1885, she got the Crown Grant pursuant to the Land Act 1869. The squatter had been in possession since 1878 and the issue was whether the period before the actual Crown Grant could be taken into account for the purposes of limitation. The successor in title of the Grantee argued that the legal title under the grant was a new estate and time started to run again in 1885. That argument was rejected. At first instance and on appeal, the court laid emphasis on the fact that the licence was the seed of the Grant which came into fruition in 1885. At p. 712, A'Beckett J dealt with the argument of the successor in title,

"This contention would, I think, be correct if there had been no connection between the rights under the grant and those under the licence and lease, but the question is whether there has not been such a continuity of interest in the land as to impose the duty of dispossessing the trespasser so as to prevent the Statute running, on the first acquisition of an interest from the Crown which would have enabled the lawful occupant to dispossess the intruder."

Then at p. 713,

"This inactive licensee and lessee afterwards acquired a legal estate in the fee, not by virtue of any new right unconnected with her prior interest, but by the maturing of a right which had its inception in the licence. No doubt, up to the issue of the grant, there was no certainty that the fee would be acquired; the right to the land was inchoate, and might have been lost, but it was in fact perfected, and we have to say whether the nature of this new title is such as to wipe out all the consequences of past inaction, and to give a new term of fifteen years within which inaction must continue before the illegal occupant could acquire title."

The conclusion of the Full Court (in upholding the decision of Madden CJ at first instance) was at p. 714,

"The changes in the legal interest of the person who might have brought the action against the defendant in the present case made no changes in her rights as against the defendant; the right to turn her out was as good in the licensee as in the grantee. On the whole, I agree with the view of the Chief Justice that time ran in favour of the defendant from the time at which she entered into possession, and not from the date of the Crown grant ..."

56. Framed in the present context, the crucial issue is notwithstanding the extension pursuant to Cap. 150, whether there was such a continuity of interest that the new legal estate of the Plaintiff (or more accurately, that of its predecessor in title) could not be regarded as a new right unconnected with the prior interest under the old lease, but should be regarded as the maturing of a right having its seed in the old lease. As Lord Nicholls said at p. 48G, one should not ignore the legal source of the lessee's entitlement to his new legal estate.

57. Mr Yu submitted that the effective cause for the extension of the lease was purely political and it was not by virtue of any inherent property rights within the original lease that the extension came about. Reference was made to the fact that when the original Government lease was granted to the lessee, no one could reasonably have anticipated that the United Kingdom and Chinese Governments would enter into the Joint Declaration in 1984.

58. In my judgment, such an approach is too narrow and restrictive. It cannot be denied that there was a nexus between the old lease and the new legal estate obtained pursuant to Section 6 of the New Territories Leases (Extension) Ordinance Cap. 150. Under Section 2 of that ordinance, the ordinance only applies to New Territories lease granted by the Government that existed at the commencement of that section, viz. 26 February 1988. Hence, without the Grant in 1918 as deemed to be renewed in 1973, the Plaintiff could not have the benefit of the extension.

59. It is true that the Plaintiff's right under the extension derived from statute rather than an inherent property rights within the original lease. But so was the right of the grantee in Bree v Scott (1904) 29 VLR 692. In that case, the statute had been enacted when the grantee became a licensee of the land whilst in the present case, Cap. 150 was only enacted in 1988. Is this a material distinction?

60. To answer this question, one needs to go back to the judgment of Lord Nicholls in Chung Ping Kwan. At p. 48B, His Lordship identified the issue as follows,

"Thus the question to be addressed is whether adverse possession bars the lessee from asserting against the squatter this specifically enforceable right, and the legal estate which flows from this right, as much as it bars the lessee from asserting the squatter the other rights granted to him by the lease."

61. To resolve this, Lord Nicholls first examined the matter from the angle of the lessor by reference to Section 9(1) of the Limitation Ordinance, under which time does not start to run against a reversioner so long as there is a prior estate or interest. At p. 48D, Lord Nicholls observed,

"This principle seems apt to be applied also to a specifically enforceable prior right to call for a legal estate ... when the person having the right is already lawfully in possession. In the latter case, as much as [the case of a lease], the reversioner has no right to enter and eject the trespasser."

At p. 48E, His Lordship continued,

"This pre-existing interest, precluding the landlord from ejecting the lessee, would be a fatal flaw in a claim by the landlord to oust a trespasser. The trespasser is as much entitled to set up and rely upon this interest as a deficiency in the landlord's right to possession as he is entitled to set up and rely upon a lease for this purpose."

62. After such analysis, Lord Nicholls considered the converse situation of the lessee who has slept on his rights and came to the conclusion set out in Paragraph 44 above.

63. It seems to me on proper reading of the judgment of Lord Nicholls, the material question is not whether the right of the lessee to the new legal estate stemmed from an option to renew or other right inherently built into the old lease or right bestowed on the lessee when the old lease was granted. The material question is whether there was a specifically enforceable right in the lessee to call for the new legal estate by reason of his interest under the old lease when he was already lawfully in possession. If he had such a right, Section 9(1) would operate in favour of the lessor and conversely, if such a lessee had slept on his rights, the fact that he acquired a new legal estate could not assist him. That is precisely why Lord Nicholls said that the legal source of the lessee's entitlement to his new legal estate could not be ignored.

64. Applying such a test, the answer is obvious. The right of the Plaintiff's predecessor in title under Section 6 of the New Territories Leases (Extension) Ordinance Cap. 150 is a specifically enforceable right. Such a right was conferred upon Fung Lok Kung Sze when, as between it as lessee and the Government as lessor, it was lawfully in possession. Hence, at all material time, the Government could rely on Section 9(1) to maintain that time has not started to run against it. As regards the squatter, on the assumption that I were incorrect in all my above findings as to the boundary of the First Tau Shui Mun and the status of Ho Kun and the 39th Defendant, Fung Lok Kung Sze slept on its rights by failing to commence proceedings against the 39th Defendant to recover possession. The right of Fung Lok Kung Sze to obtain the new legal estate pursuant to the extension was not by virtue of any new right unconnected with its prior interest (see Paragraph 58 above). Hence, the rationale in Chung Ping Kwan applies to the new estate obtained by a Government lessee pursuant to the New Territories Leases (Extension) Ordinance Cap. 150 as much as it applied to the new estate pursuant to the deemed renewal in 1973.

65. The nexus between the old estate and the new estate is further underscored by my analysis in Paragraphs 48 to 51 above. The new estate could not have come into existence without a surrender of the old estate. It is not necessary for me to resolve the difficult issue whether this analysis amounts to a complete abrogation of Fairweather. I am only concerned with the application of the approach laid down by Lord Nicholls in Chung Ping Kwan in the context of an extension under the New Territories Leases (Extension) Ordinance Cap. 150. I would however observe that given the fact that most titles in Hong Kong are held by way of leasehold, if Fairweather is applied with full force, the operation of the doctrine of adverse possession in Hong Kong could be curtailed and its utility in facilitating investigation of title circumscribed.

66. I am aware that in coming to this conclusion as to the application of Chung Ping Kwan to the extension under the New Territories Leases (Extension) Ordinance Cap. 150, I am adopting a stance contrary to that taken by Sakhrani J in Unijet Limited v Yiu Kwai Hoi, HCA 13637 of 1998. His Lordship in Paragraph 74 of his judgment referred to the judgment of Lord Nicholls at p. 49G to H to support his conclusion. For reasons already given in Paragraph 55 above, with greatest respect, I do not think one should read the dicta of Lord Nicholls as confining the operation of his rationale to cases where new legal estate was granted pursuant to an option to renew. The issue is whether the right to the new estate has such connection with the old lease that vis-a-vis a squatter, the lessee's right to rely on such an interest is extinguished together with his right to possession under the old lease. Section 2 of the New Territories Leases (Extension) Ordinance Cap. 150 provides the necessary link as much as the option to renew provided the link in respect of the 1973 renewal.

67. Hence, applying the rationale laid down in Chung Ping Kwan, a squatter does not need to rely on the "carry forward" provisions in Section 7 of the New Territories Leases (Extension) Ordinance Cap. 150 to preserve their rights. In Chung Ping Kwan at p. 52B and C, Lord Nicholls suggested that but for the primary analysis of the Board, the equivalent provisions in Section 4(4)(c) of the New Territories (Renewable Crown Leases) Ordinance Cap. 152 could not assist the squatters. At p. 52B-C, His Lordship considered the position if time were to run afresh from 1973,

"If that were the legal position, no squatter however long in possession had a right which could survive the determination of the original lease.... [T]his "carry forward" provision cannot have been intended to give a squatter, in respect of the deemed new lease, a right he would not have enjoyed in respect of an actual new lease."

68. In Unijet, Sakhrani J held that the contrary contention upheld by the Court of Appeal in Yeung Kong v Fu Mei Ling [1994] HKC 1 must be regarded as having been overruled by Chung Ping Kwan. It has to be remembered that in Chung Ping Kwan, the Privy Council was concerned with a squatter who did not have 20 years adverse possession by 1973. On the other hand, in Yeung Kong, the Court of Appeal was dealing with a pre-1953 squatter, viz. one who had acquired a good possessory title against the lessee by 1973. In fact, the Court of Appeal in Chung Ping Kwan accepted the analysis in Yeung Kong with regard to pre-1953 squatters.

69. Although strictly speaking, Lord Nicholls' observations cited in Paragraph 67 above were obiter, one have to accept that the reasoning in those observations is inconsistent with the reasoning in Yeung Kong. Of course, even if it were only obiter, the views of Lord Nicholls must be highly persuasive. However, with the greatest respect, I must confess that I have some difficulties with the construction adopted by Lord Nicholls regarding the "carry forward" provisions. It seems to me that at least one of the purposes of these provisions was to preserve rights and interests which would otherwise perish by reason of lapse or determination of the old lease. Such rights and interests include mortgage or charge (see Section 7(a)(i) of the New Territories Leases (Extension) Ordinance Cap. 150), covenants, easements and tenancies (Section 7(a)(iii)) apart from possessory titles. Some, if not most, of these rights and interests are encumbrances over the estate of the lessee. With the determination of the old legal estate, these rights and interests could not survive but for a statutory extension of the same. I venture to suggest that one objective of this section was to achieve such an extension. Lord Nicholls' construction in the dicta cited in Paragraph 67 above would defeat this objective of Section 7(1)(a). Since I do not find it necessary to express a concluded view on the point and given my invidious position as counsel appearing in Yeung Kong, I would leave the argument open for further discussions on some other occasions.

70. For the reasons given in Paragraphs 46 to 66 above, I hold against the Plaintiff on the effect of the New Territories Leases (Extension) Ordinance Cap. 150.

Conclusions

71. I therefore hold that the defence of adverse possession could not assist the 39th Defendant. In the first place, as a matter of fact, her possession at the material time was not adverse since she and Ho Kun had paid rent for their occupation of the three ponds. Secondly, even if there were any adverse possession, it would only be adverse vis-à-vis Chiu Kit Tze as a sub-tenant of Chiu Shui Hei (and later Chiu Yat Hung).

72. That being so, bearing in mind my findings in the first Part of this judgment regarding other issues insofar as they are relevant to the case of the 39th Defendant, the Plaintiff is entitled to judgment for recovery of possession of the three ponds against the 39th Defendant. Although in respect of Pond 55, part of it was outside the boundary of Lot No.1457, I accept the submission of Mr Yu that the presumption of encroachment enuring for the benefit of one's landlord is applicable (see Megarry & Wade, the Law of Real Property, 6th Edn., Para. 21-027; Halsbury's Laws of Hong Kong, Vol.17, Para. 235.146; Kingsmill v Millard (1855) 11 Exch 313). Hence, the Plaintiff is entitled to recover possession of the whole of Pond 55 from the 39th Defendant. As in the cases of the other defendants, I will grant an order nisi that there be a stay of execution for 4 months to enable the 39th Defendant and her family to make the necessary arrangement for vacating from the fish ponds.

73. Regarding the Plaintiff's claim for mesne profit, according to Exhibit P-15, the 39th Defendant paid rent until 3 or 4 years before 1998 (viz. 1994-5). Although there was also a reference to 1991 and the Plaintiff herself said she had never paid rent, I find on the balance of probabilities that she had paid rent until 1994-5. Applying my ruling in the first part of the judgment, mesne profit regarding the three ponds shall be paid by the 39th Defendant from 1st January 1995 at the rate of $5,000 per year until vacant possession is delivered. Judgment for the aforesaid shall be entered in High Court Miscellaneous Proceedings No. 6047 of 1998. There is no need to make any order other than order for costs with regard to High Court Action No. 1871 of 2000 which only served as a set of "fall-back" proceedings in the event that the Plaintiff were not successful in the 1998 proceedings.

74. I also make a cost order nisi that the 39th Defendant shall pay the costs of the Plaintiff regarding High Court Miscellaneous Proceedings No. 6047 of 1998, such costs to be taxed if not agreed. Regarding the costs of High Court Action No. 1871 of 2000, in the light of the Defence filed in the 1998 proceedings disputing the validity of the Notices to Quit served in 1989, I perfectly understand why the Plaintiff wanted to play safe to issue a further set of proceedings on the basis of the 1999 Notices to Quit. In the circumstances, it was reasonable for the Plaintiff to commence the 2000 proceedings. I see no reason why the rationale of the decision of the Court of Appeal in Leung Lai Ha v Hon Sau Ling [1992] 2 HKC 109 cannot be applied. I therefore order that the 39th Defendant should bear the costs of the Plaintiff with regard to High Court Action No. 1871 of 2000. There was substantial duplication in terms of the documents filed in both set of proceedings. This would be taken into account by the taxing master and I direct that the taxation of costs (if any) of both set of proceedings should be heard together.

75. Either party is entitled to apply to this court for variation of the order nisi as to costs and the order nisi as to stay of execution.

Footnote

1 Evidence of the 39th Defendant at 3:57 on 13 September 2002

2 Evidence of the 39th Defendant at 4:03 on 13 September 2002

3 Evidence of Ho Chuen Tai at 10:59 a.m. on 17 September 2002

4 Evidence of Ho Chuen Tai at 2:50 to 2:52 p.m. on 17 September 2002