HARBOUR HERO ENTERPRISES LTD v. 周濃娣

DCCJ 4969/2016

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 4969 OF 2016

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DECISION

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Introduction

1.  On 10 October 2017, after hearing the parties, I pronounced a decision (“the Decision”) dismissing the defendant’s application for an order setting aside the default judgment obtained by the plaintiff on 23 March 2017 (“the setting aside application”). The facts have been set out in the Decision and I do not repeat the same herein.  For ease of reference, abbreviations used in the Decision are adopted in the paragraphs below.

2.  On 2 November 2017, the defendant herself took out a summons (“the time summons”) to seek leave to lodge an application for leave to appeal within 14 days from the date of the order to be made on the time summons.  The time summons was heard by me on 8 November 2017.  The defendant was acting in person in that hearing.   In that hearing, in answering the question asked by the court, the defendant said that she intended to appeal from both the decision giving leave to the plaintiff to file and serve an affidavit[1] (“the leave decision”) and the decision dismissing her application for an order setting aside the judgment (“the substantive decision”).  Upon the defendant’s undertaking that she would file and serve all the papers by 14 November 2017 for the purpose of making an application for leave to appeal from both the leave decision and the substantive decision, I gave time to the defendant to lodge the said leave to appeal application on or before 14 November 2017.  Costs of the time summons have been reserved.  My reasons for that decision are as follows:-

(a) In respect of the substantive decision, the defendant may make an application for leave to appeal from that decision within 28 days from the date of the decision[2], and the 28-day period would only expire on 7 November 2017.  In other word, when the defendant issued the time summons on 2 November 2017, the 28-day period had not yet expired.  At the time of the hearing on 8 November 2017, it was only 1 day after the expiration of the 28-day period.  Since the defendant was acting in person and she intended to make the leave application only slightly beyond the prescribed period, I granted her permission to do so.

(b) In respect of the leave decision, the defendant has to make an application for leave to appeal from that decision within 14 days from the date of that decision[3], ie on or before 24 October 2017.  By 8 November 2017, there was a delay in making that application for about 2 weeks.  No doubt there is a delay, but the delay is not very substantial.  Further, I was minded to give her time to make an application for leave to appeal in respect of the substantive hearing.  Taking all these into account, I also granted her permission to apply for leave to appeal from the leave decision on or before 14 November 2017.

3.  From 14 November 2017 onwards, the defendant has been legally represented again.  On that date, the defendant’s solicitors filed a summons for leave to appeal from the substantive decision and for stay of execution of the judgment (“the leave and stay summons”).  No application for leave to appeal from the leave decision has been made by the defendant.  The leave and stay summons is the only subject matter before the court in this hearing.

The principles

4.  The principles concerning leave to appeal are trite:-

(a) Leave to appeal shall not be granted unless this court is satisfied that the appeal has a reasonable prospect of success, or there is some other reason in the interests of justice why the appeal should be heard[4].

(b) Leave to appeal is not lightly granted.  Reasonable prospects of success means that the prospects of succeeding must be reasonable and therefore more than fanciful, without having to be probable[5].

(c) The court may grant leave under the “some other reason” limb if there is an issue where the law requires clarification by the Court of Appeal[6]. However, even if there is such an issue, if the “clarification” would not change the outcome of the appeal, the court may still refuse to grant leave.

Grounds of appeal

5.  The defendant’s legal representatives have prepared a draft notice of appeal and set out the grounds of appeal therein.  Those grounds in fact boil down to the following 3 points:-

(a) this court erred in conducting a mini-trial on affirmations;

(b) this court erred in holding that if there was any truth in the defendant’s case, the defendant would have no difficulty in adducing evidence to refute the plaintiff’s case by producing evidence from her neighbours to challenge the rental receipts produced by the plaintiff; and

(c) this court erred in holding that the reply letter dated 18 November 2015 constituted an acknowledgment of the plaintiff’s title to the land under s.23(1) of the LO and had the effect of extending the limitation period.

6.  I will deal with these points in turn in the paragraphs below.

No reasonable prospect of success

7.  Points 1 and 2 can be dealt with together.

8.  Since the defendant is applying for an order setting aside a regular default judgement, the defendant must show that her purported defence carries some degree of conviction.  The court has to examine the evidence to see whether the defendant has overcome that threshold.   In my view, what this court has done in the Decision is to go through this exercise, no more and no less.  I am not persuaded that this court has conducted a mini-trial on affirmations.

9.  I have set out the respective cases of the parties in the Decision[7], and I have provided the reasons why I do not regard the defendant’s case carrying the necessary degree of conviction for the purpose of setting aside a regular default judgment[8]. I am not persuaded that there is any error in my analysis, including the analysis in §25 of the Decision.

10.  With respect to Mr Hu, in my judgment, there is no merit in points 1 and 2.

11.  Under point 3, Mr Hu submits:-

(a) In the reply letter, the defendant describes herself as an occupier and not a tenant of the plaintiff.  The fact that the defendant addressing the plaintiff as the owner of the land should not be regarded as an acknowledgment of the plaintiff’ title to the land under s 23(1) of the LO.

(b) According to the defendant’s case, her adverse possession of the land began in 1998 and she has acquired a possessory title to the land by 2010.  Accordingly, even the reply letter dated 18 November 2015 is an acknowledgement, that letter cannot have the effect of reviving the plaintiff’s title to the land.

12.  My view is as follows:-

(a) In the reply letter, the defendant has clearly and unambiguously called the plaintiff as the owner of the land, and the defendant has also signed the letter.  I do not see any reason why the reply letter cannot be regarded as an acknowledgment of the plaintiff’s title to the land made by the defendant.

(b) As far as I am aware, there is no statutory provision in Hong Kong which is equivalent to s 29(7) of the Limitation Act in UK (“LA”)[9]. I have invited both counsel to make submissions on this.  Both Mr Hu and Ms Wong confirm that s 23 of the LO is different from s 29 of the LA, and both counsel confirm that there is no statutory provision in Hong Kong equivalent to s 29(7) of the LA.

(c) Mr Hu draws my attention to the fact that notwithstanding the absence of a statutory provision which is equivalent to s 29(7) of the LA in Hong Kong, the principle set out in Sanders v Sanders[10], ie when a title has been extinguished by statute, mere acknowledgment by the person who has acquired a possessory title under the statute cannot restore the old title, has been recognized and applied in previous District Court cases[11].  Further, the Court of First Instance has expressed a view that whether Sanders v Sanders represents the position in Hong Kong is an arguable issue[12].

(d) Ms Wong submits that whether the principle in Sanders v Sanders is part of the law in Hong Kong has not been determined by a higher court.  Ms Wong also submits that not putting a provision in the LO which is equivalent to s 29(7) of the LA is a deliberate choice of the legislature, and attention should be paid to this deliberate omission.  Ms Wong further submits that in any event, the answer on this point of law would not change the outcome of the setting aside application, for the defendant has failed to produce evidence carrying some degree of conviction to show that she has a real prospect of success if there is a trial.

(e) In the light of the Court of First Instance’s decision in Tsang Foo Keung and Key Kwong Development Ltd at [113], I am persuaded that whether the principle in Sanders v Sanders applies in Hong Kong is an open question.  However, unless it can be shown that I have erred in my analysis as set out in §§17 to 29 of the Decision, even if there is any error in the acknowledgment point mentioned in §§30 and 31 of the Decision, the substantive decision still stands as the defendant has failed to show with some degree of conviction that she has been an adverse possessor of the land since 1998 and has never been a tenant of the same.

(f) Accordingly, the defendant has no reasonable prospect of success in overturning the substantive decision by relying upon point 3.

13.  In my judgment, the defendant has no reasonable prospect of success in the appeal.

No other reason

14.  I do not see any other reason in the interests of justice why the appeal should be heard.  While whether the principle in Sanders v Sanders is applicable in Hong Kong is an interesting question of law, since the answer on this question would not change the outcome of the setting aside application, it would not be appropriate to grant leave to appeal to the defendant under the “some other reason” limb.

No stay

15.  The defendant has no reasonable prospect of success in the appeal, and there is no other reason justifying why the appeal should be heard.  Her application for leave to appeal must therefore be dismissed.  In these circumstances, there is no reason to stay the execution of the judgment.

Disposition

16.  I dismiss the leave and stay summons with costs to the plaintiff with a certificate for counsel (including costs of the time summons and all costs reserved, if any), to be taxed if not agreed.  For avoidance of doubt, a certificate for counsel is also granted for the hearing on 8 November 2017.  Save and except the costs of the time summons, the defendant’s own costs are to be taxed in accordance with the Legal Aid Regulations.

17.  It remains for me to thank Mr Hu and Ms Wong for the assistance rendered to the court.