XCHRX SILVER FLASH LIMITED v. PERSONS UNKNOWN

1993, No. MP 1834

H E A D N O T E

APPLICATION FOR LEAVE TO APPEAL OUT OF TIME AS A RESULT OF THE COURT OF APPEAL IN FU MEI LING MARY V. YEUNG KONG & ANOTHER.

1993, No. MP1834

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

MISCELLANEOUS PROCEEDINGS NO.1834 OF 1993

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J U D G M E N T

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Background

1. This is an application by Choi Kiu and Wong Tin Sang for leave to appeal out of time against the decision of Master O'Donnell given on 7th March 1994. The Plaintiff is the registered owner of a property in the New Territories On 23rd June 1993, an application under Order 113 of the Rules of Supreme Court was issued against the defendants who were described as "Persons unknown" for possession of the property. According to the court record a number of persons including Choi Kiu and her son Wong Tin Chi attended before the masters on the hearing of the application. The application was adjourned three times and on 7th March 1994 Master O'Donnell heard the application and gave judgment against Choi Kiu, Wong Tin Chi and the others defendants. Stay of execution of the order for possession until 1st December 1994 was made by the learned master.

At the hearing before Master O'Donnell, Mr Wong Tin Chi representing the other defendants opposed the order for possession on the ground that they have lived on the property for sixty odd years. Although the learned master did not give any reason for the decision, it is apparent that the decision was based on the state of the authorities at that time. The construction then placed by the courts on the New Territories (Renewable Crown Leases) Ordinance, Cap. 152 was that the right accrued by a squatter on 1st July 1973 was extinguished by the automatic renewal of the Crown Lease on that date. So long as the registered owner commenced proceedings within twenty years from 1st July 1993 to recover possession of the land, the possessory right acquired by the squatter prior to that date would not be taken into account. In Fung Mei Ling v. Yeung Kong, (Civil Appeal No.47 of 1994, judgment delivered on 19th August 1994), the Court of Appeal construed the Ordinance differently. It was held in that case the right acquired by a squatter by reason of 20 years uninterrupted possession of the land was not defeated by the renewal of the Crown Lease on 1st July 1993.

2. On 28th October 1994 Choi Kiu and Wong Tin Sang Applied for extension of time to appeal against the decision of Master O'Donnell.

Wong Tin Sang is one of the sons of Choi Kiu. However, according to the court record, he did not appear at the hearing before Master O'Donnell. In her affirmation in support of the application, Choi Kiu stated that she and her family had been occupying the Plaintiff's land since 1936 and had built on it a wooden structure for the purpose of rearing pigs, storage and cooking. In September 1993 she consulted Mr Chan Wai Yip, a District Board Member of Tsuen Wan, about this action but she was not offered any specific advice. She appeared in person before Master O'Donnell on 7th March 1994 together with the other occupants and explained to him the facts including their occupation of the property since 1936. After the possession order had been granted to the Plaintiff, she thought that her case was very weak and had not lodged any appeal. However, she learned from the newspaper in about August 1994 that there had been a new decision in the Court of Appeal which was favourable to their case. Thereafter she consulted Mr Chan Wai Yip again in early September 1994. Mr Chan referred her to the Legal Aid Department for further consultation. She applied for legal aid in respect of the intended appeal on 22nd September 1994. Legal Aid Department refused her application by a letter dated 26th October 1994. Her son Wong Tin Chi then consulted her present solicitors on 26th October 1994. She was advised that she has acquired a possessory title by virtue of her possession in the land.

Extension of time to appeal : Principles

3. The principles governing application for leave to appeal out of time is set out in the case of Norwich and Peter Borough Building Society v. Steed [1991] 1 WLR 449. Four matters are to be considered, namely, (1) the length of the delay, (2) the reasons for the delay, (3) the chances of the appeal succeeding if an extension of time is granted and (4) the degree of prejudice to the respondent if the application is granted.

4. Mr Lam, Counsel for Choi Kiu, admitted that there was a delay in this case, a period of seven months, which cannot be said to be insubstantial. However, he argued that Choi Kiu had fully given her reasons for the delay. The decision of Fung Mei Ling was only delivered on 19th August 1994 and thereafter she had prosecuted her appeal with diligence. He submitted that if her case was to be accepted, she would have acquired a complete possessory title, at the latest, by 30th June 1973 in accordance with the decision of Fung Mei Ling.

Her possessory title was superior to the title of the Plaintiff and a claim for possession by the Plaintiff must fail. On the material before the court, Choi Kiu had a very good prospect in overturning the decision of Master O'Donnell. He further submitted that there was no prejudice to the Plaintiff. The fact that a judgment which was otherwise final would be reopened if the application was granted did not count as prejudice for these purposes because this was inherent in every application for an extension of time for appealing. By reason of the stay of execution granted by Master O'Donnell and the likelihood of the appeal being disposed of prior to the end of the period of stay, there was no real prejudice suffered by the Plaintiff by reason of the delay.

5. Mr Chan, counsel for the Plaintiff, opposed the application. Mr Chan's arguments can be divided into two stages. The first stage was in respect of the hearing before the Master and the second stage was the events that took place after the decision. In respect of the first stage, he submitted that Choi Kiu had filed no affirmation before Master O'Donnell setting out her defence in this matter. The allegation of long occupation was only made for the first time orally and informally through Choi Kiu's son at the hearing on 7th March 1994, seven months after the service of the Originating Summons and the supporting affidavit of the Plaintiff. There was no allegation that the failure to put forward her case before the Master was due to the then state of the authorities which is now said to be wrong. Her failure to properly put forward her case on affidavit could not be due to legal advice based mistakenly on the then state of the authorities since it was not alleged that any lawyer had been consulted prior to September 1994. It could not be due to the unavailability of legal advice since it was not alleged that legal aid had been applied for or that there was any attempt to do so prior to September 1994. It was not alleged that she did not then have the funds to apply for legal advice, in fact she has private legal representation now. Mr Chan submitted that if she had done what she should have done, and she was capable of so doing, namely, engaging private lawyer to advise her, she ought to have been advised that notwithstanding the authorities, the point had not been tested and was still an open point in the Court of Appeal as the defendants in Fung Mei Ling case were so advised. She could not say that due to the court being misled by a proposition of law, now decided to be wrong, that judgment was granted against her. The only reason why a judgment was obtained against her was because she did not do what she should have done, and was capable of doing, to protect her own interest.

6. In respect of the second stage, Mr Chan submitted that there was no explanation as to why Choi Kiu thought that she had a weak case. It was not alleged that it was based on any legal advice. Furthermore, she had not prosecuted her appeal diligently after the decision of Fung Mei Ling. She learned of the new decision from the newspapers in August 1994. She did not consult a lawyer but instead went to see the District Board Member who referred her to seek legal aid. She only first applied for legal aid on 22nd September 1994. The degree of prejudice to the Plaintiff was self-evident from the length of the delay since the expiration of the time of appeal in March 1994. The Plaintiff's right to treat the judgment as final should not depend on whether the Plaintiff had executed the judgment or disposed of the land in the meantime. The Plaintiff's goodwill in suggesting a long stay of execution to the court should not be turned against it. It was not sound public policy that the successful litigant should execute the judgment instead of granting indulgence to the other party, or else the successful litigant should risk the judgment being taken away on the ground that he had suffered no prejudice.

7. Mr Chan submitted that a subsequent decision of a superior court which changed the law was not a sufficient ground for granting leave to an appellant to appeal out of time. The appellant must show that there were special circumstances for so doing. Mr Chan submitted that no special circumstances were shown in this case.

8. In Craig v. Phillips, (1877)7 Ch. D.249, Jessel M.R. held that :-

"It would only have come to this that more than a year after the decision in Craig v. Phillips, the Court of Appeal had come to a different decision on a vexed point of law. In my opinion that is not sufficient ground, in the absence of very special circumstances, to deprive a man of a judgment which has been given in his favour."

9. In Esdaile v. Payne (1889)40 Ch.D. 520, Lindley L. J. held that :-

"In my opinion it is for the interest of the public that litigant should know as soon as possible when certainly has been reached and that if people have deliberately elected to let the time for appealing go by, the Court should not give them leave to appeal without special circumstances."

Lopes L.J. held in the same case that :-

"Though a strict adherence to rules as to time may sometimes produce hardship, I think that a loyal adherence to them is best for the public and for litigants."

10. Although these two cases refer to the requirement of special circumstances, subsequent decisions show that the court has power to enlarge the time for appealing if it is just to do so.

11. In In re J. Wigfull & Sons, Trade Marks [1919]1 Ch.52, Swinfen Eady M.R. held that :-

"In my judgment also, it is not necessarily a ground for enlarging the time that in some subsequent case a different view is taken of the construction of an Act of Parliament. The parties in the previous litigation had their advisers at hand; the judgment was pronounced in the court of first instance; they had an opportunity of considering whether, they should or should not appeal; and after considering, they determined not to appeal; and if years are allowed to go by without any appeal being presented, I am of opinion that a strong case on the facts should be made out before leave should be granted; that is to say, before the time should be enlarged ..... In my opinion the Court has power to enlarge the time for appealing if it is just that, under the circumstances, an order enlarging the time should be made."

12. In In re Berkeley [1945]1 Ch.1 Lord Greene M.R. held that :-

"I find no difficulty in reconciling the statement that the different decision is not necessarily a ground for enlarging the time with the statement that the court can enlarge the time if it is just in the circumstances to do so. It seems to me that the principle to be extracted is that it is not sufficient for a party to come to the Court and say that a subsequent decision of a superior court has determined that the principle of law on which his case was decided was wrong. The court will say to him : 'That bald statement is not enough. What are the facts? What is the nature of the judgment? Who are the parties affected? What, if anything, has been done under it?' and so forth. In other words, the whole of the circumstances must be looked at. If the court, in the light of those circumstances, considers it just to extend the time, then it will do so. That seems to me to be the proper principle and it is entirely in accordance with the view taken by this court in the most recent case under this rule - Gatti v. Shoosmith. [1939] Ch.841."

13. In Property & Reversionary Limited v. Templar [1977]1

WLR 1223, Roskill L. J. approved of the decision of In re Berkeley, he held that :-

"It is therefore plain that it is not enough for Mr Goodhart to say that the recent decision of the House of Lords clearly showed that Judge Fay's decision was wrong. He must show there are special reasons why he should be allowed to argue that the judgment should not stand."

Ruling

14. In my view, whether the test is based on special circumstances or whether it is just in the circumstances to grant leave, I am satisfied that I should exercise my discretion in favour of Choi Kiu. According to her, she has been in occupation of the property since 1936. The Plaintiff has not challenged this contention by way of affidavit evidence. This indicated that the Plaintiff has not taken any steps to recover possession of the property for an extremely long time. It was only on 23rd June 1993, which was near the end of the limitation period, that the Plaintiff commenced the present proceedings against the occupants so as to meet the 20 year limitation deadline commencing from 1st July 1993.

15. Choi Kiu, although assisted by her son, has been acting in person throughout the proceedings. This is not a case, as envisaged in In re Wigfull & Son's Trade Mark, where the litigants were assisted by the legal advisers who took a considered decision not to pursue further with the appeal. After the service of the proceedings, she consulted a District Board member instead of a lawyer. One must not assume that a litigant would necessarily seek the advice of a lawyer upon the service of the legal proceedings.

16. In respect of the argument that Choi Kiu had not protected her interest in the hearing before the master by filing an affidavit setting out her long occupation in the property, the answer must be that the Originating Summons issued under Order 113 contained no specific direction that the defendant must file an affidavit upon service of the proceedings. Despite the various adjournments there was no order requiring the defendant to file an affidavit in support of her claim. I am not aware of the age of Choi Kiu, but if she had been residing there since 1936 when she married her husband, she must be a very elderly lady by now. What her son told the master at the hearing, namely, that they had been residing there for the past sixty year, was consistent with her present contention that she has been in occupation of the property since 1936.

17. Whether the length of the period of the stay of the judgment is based on the goodwill of the Plaintiff or not, the fact remains that the judgment has not yet been enforced. The land has not been disposed of and the Plaintiff has not shown that it will suffer any additional prejudice if leave to appeal out of time is granted.

18. I am satisfied that after she learnt of the Court of Appeal judgment, she had diligently pursued her remedy, by seeking the help of a District Board member, then the Legal Aid Department and finally her present solicitor.

19. While one must bear in mind the exhortation that the rules must be observed, I am satisfied that this is a proper case where the discretion should be exercised in favour of Choi Kui. In the circumstances I shall grant leave to her to appeal out of time against the decision of Master O'Donnell. Although Wong Tin Sang is also named in the present application, he was not a party to the hearing before the master. The parties have not addressed me on the status of Wong Tin Sang. In the circumstances, I will defer from making an order in regard to him until I have further arguments from the parties.

20. The appeal itself remains to be heard. In view of the expiry of the stay on 1st December 1994. I shall extend the period of stay of execution of the judgment until the determination of the appeal. I direct that the appeal is to be restored as soon as possible. I will hear the parties on the costs of this application at the next hearing.