Case Document

DCCJ 4825/2014

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 4825 OF 2014

--------------------

BETWEEN
	LI SAU SING	Plaintiff
and
	CTMA HOLDINGS LIMITED	1^st Defendant
	HONG KIN YAT	2^nd Defendant
	LOYAL MAX CORPORATION LIMITED	3^rd Defendant
	CHAN YUEN TING	4^th Defendant
	CHAN YUEN TING as the administratrix of the estate of SO CHUNG WO, deceased	5^th Defendant
	CHENG KIN MING	6^th Defendant
	LAM TAM LUEN	7^th Defendant
	CHAU KA CHUN as the executor of the estate of NGO TSIN (or CHIN) TO, the deceased owner of 4th Floor of No 217 Castle Peak Road	8^th Defendant
	TSANG KWOK KIN	9^th Defendant
	LEUNG TING BU	10^th Defendant
	LEI CHENG UK AND LAI KOK ESTATE CHIU CHOW KUNG SHEUNG YUE LAN ASSOCIATION LIMITED	11^th Defendant
	TO WAI HUNG	12^th Defendant
	SIU MING	13^th Defendant
	TSANG KOON FOO	14^th Defendant (Discontinued)
	YAU LIN KIU	15^th Defendant
	CHU HAU YIN	16^th Defendant
	LAW YUEN KING WAH NENA	17^th Defendant
	URBAN RENEWAL AUTHORITY	18^th Defendant

--------------------

Before : Deputy District Judge Liu Man Kin in Chambers

Date of Hearing : 29 September 2015

Date of Reasons for Judgment : 5 October 2015

--------------------------------------

REASONS FOR JUDGMENT

--------------------------------------

1.The plaintiff applied for default judgment against the defendants for declarations in relation to adverse possession of a shop (“the Shop”) on the ground floor under the common staircase of 2 adjacent buildings (“the Application”).

2.At the conclusion of the hearing, I dismissed the plaintiff’s application with no order as to costs. These are my reasons.

Background

3.The plaintiff made the Application in his summons dated 10 June 2015 (“the Summons”). The Application was made on the basis that none of the defendants has given a notice of intention to defend and none of them has filed a defence to the plaintiff’s claim. The plaintiff has made an affirmation on 10 June 2015 (“the Plaintiff’s Affirmation”) in support of the Application. Whether the Plaintiff’s Affirmation is relevant to the Application will be discussed below.

4.I am satisfied that the Writ of Summons (with a Statement of Claim annexed thereto), the Summons, the Plaintiff’s Affirmation, the Amended Writ of Summons and the Amended Statement of Claim have been duly served on the defendants. I am also satisfied that none of the defendants has filed a notice of intention to defend nor a defence to the plaintiff’s claim.

5.The question before me is whether the plaintiff is entitled to have judgment for the reliefs claimed in the Amended Statement of Claim in these circumstances.

Judgment only given on pleaded case

6.It is well established that a default judgment would only be given on the pleaded case and no evidence is permitted. The authority on the point is Lam Chi Fat v Liberty International Insurance [2002] 3 HKLRD 480, in which Ma J (as he then was) said:-

“26. …… As I have noted above, the interlocutory judgment entered on 28 January 1995 pursuant to Order 13, rule 2 was made in default of Acknowledgement of Service. No reasons for the judgment were given in these circumstances. This judgment was therefore entered on the basis that the facts as contained in the Writ of Summons, were true and admitted by the defendants : see Hong Kong Civil Procedure 2002 Vol 1 at paragraph 13/0/10 referring to Cribb v Freyberger [1919] WN 22 (English Court of Appeal). This, I should add, is also the position where judgment is entered in default of pleadings (in this situation the facts are those as contained in the relevant pleading) : see Young v Thomas [1892] 2 Ch. 132, at 137 (English Court of Appeal).

27. The basis for default judgments I have just referred to, give rise to the obvious consequence that as the facts on which the plaintiff's claim is based are deemed to be admitted, judgment will only be given on the plaintiff's claim provided the pleaded facts give rise to the relief sought. Where, however, the facts do not give rise to the relief sought, then unless the Writ or Statement of Claim is amended, no judgment will be given. In default judgment situations, the court looks to the pleaded facts alone and no other evidence will be permitted. As I have said, if the plaintiff wishes to rely on other facts, leave to amend will be required together with all that this entails (such as re-service, etc). See here : Smith v Buchan [1888] 58 LT 710 (English High Court); Young at 136; Hong Kong Civil Procedure 2002 Vol1 at 19/7/11.” (Emphasis added)

See also Hong Kong Civil Procedure 2015, Volume 1, paragraphs 13/01/10 and 19/7/11.

7.Accordingly, the Plaintiff’s Affirmation is irrelevant to the Application. Whether the court would allow the Application depends upon the facts pleaded in the Amended Statement of Claim. The court would not look to any evidence. In other words, if there is any deficiency in the Amended Statement of Claim, that can only be cured by appropriate amendments to the Amended Statement of Claim, not by any affidavit evidence filed by the plaintiff.

Deficiency in the plaintiff’s pleaded case – whether the possession was “adverse” to the defendants?

8.The plaintiff’s Amended Statement of Claim (“ASOC”) is as follows:-

“1. At all material times since about 1994, the Plaintiff has been the exclusive possessor, occupier and controller of a shop (“Shop”) situates at the ground floor under the common staircase of two adjacent buildings erected respectively on Nos. 217 and 219 Castle Peak Road, Kowloon, Hong Kong.

2. (a) The said building erected on No. 217 Castle Peak Road (“No. 217 Castle Peak Road”) consists of six floors;

(b) The said building erected on No. 219 Castle Peak Road (“No. 219 Castle Peak Road”) consists of six floors; and

(c) The said staircase (“Staircase”) is erected between No. 217 Castle Peak Road and No. 219 Castle Peak Road and serves all the floors of both No. 217 Castle Peak Road and No. 219 Castle Peak Road.

3. (a) The Shop is located on the ground floor at the space next to the Staircase; and

(b) The area of the Shop which has been exclusively possessed, occupied and controlled by the Plaintiff includes:-

(i) the ground floor space next to the Staircase as particularized in pink on the plan annexed hereto (“Plan”);

(ii) the ground floor space underneath the Staircase as particularized in brown on the Plan;

(iii) the storage cabinet hanging from the ceiling above the entrance to the ground floor of the Staircase as particularized in green on the Plan; and

(iv) a display shelf on the wall at the entrance to the ground floor of the Staircase as coloured red on the Plan.

4. By the provisions of (a) the Deed of Mutual Covenant of No. 217 Castle Peak Road and registered under Memorial Number UB244569 in the Land Registry and (b) the Deed of Mutual Covenant of No. 219 of Castle Peak Road registered under Memorial number UB248872 in the Land Registry, the Shop is lying in the common area of No. 217 Castle Peak Road and No. 219 Castle Peak Road.

5.The 1^st Defendant was formerly known as “CTMA Limited”, which is the registered owner of the whole of ground floor and cockloft of No. 217 Castle Peak Road.

6.The Defendants herein are the registered owners of No. 217 Castle Peak Road and/or No. 219 Castle Peak Road having sole and exclusive ownership and full right and privilege to the use occupation and enjoyment of the whole of the respective floors of No. 217 Castle Peak Road and/or No. 219 Castle Peak Road respectively owned by them as more particularly set out herein below.

(a)    No. 217 Castle Peak Road

Defendant :    Floor

1^st Defendant    :    Ground Floor and Cockloft

2^nd and 3^rd Defendants :    1^st Floor

4^th and 5^th Defendants :    2^nd Floor

6^th and 7^th Defendants :    3^rd Floor

8^th Defendant :    4^th Floor

9^th Defendant :    5^th Floor

(b)   No. 219 Castle Peak Road

Defendant :    Floor

10^th Defendant :    Ground Floor and Cockloft

11^th Defendants :    1^st Floor

12^th and 13^th Defendants :    2^nd Floor

14^th and 15^th Defendants :    3^rd Floor

16^th Defendant :    4^th Floor

17^th Defendant :    5^th Floor

7. The Defendants are thus co-owners of the No. 217 Castle Peak Road and/or No. 219 Castle Peak Road of which the Shop forms a part.

8. (a) In or about April 1968, the Plaintiff’s late father, namely Mr. Lee Wing Foon, purchased the right of exclusive possession, occupation and control from the then possessor and occupier of the Shop.

(b) The said purchase is evidenced by a Chinese memorandum dated 1^st April 1968.

9. The Plaintiff’s late father commenced a business in time-piece repairs in the Shop since about 1^st April 1968.

10. In 1994, the Plaintiff succeeded his late father’s said business and continued the exclusive occupation, possession and control of the Shop.

11. At all material times since 1968, the Plaintiff’s late father and the Plaintiff have always treated the Shop as a property owned exclusively by them.

12. When the Shop is not open for business, it has always been locked up to bar anyone from entering into the same.

13. At all material times, no one has ever attempted to interfere with the exclusive possession, occupation and control of the Shop by the Plaintiff’s late father and/or the Plaintiff.

14. At all material times, no one has ever challenged the right of the Plaintiff’s late father and/or the Plaintiff in respect of their exclusive occupation, possession and control of the Shop and no one ever asked them to pay any rent for the said exclusive possession, occupation and control of the Shop.

15. Neither the Plaintiff nor his late father had ever paid any rent for their exclusive possession, occupation and control of the Shop.

16. By reason of the exclusive possession, occupation and control of the Shop by the Plaintiff’s late father which was continued by the Plaintiff with the requisite intention to exclude all others at large, the rights, interests and title of the Defendants and/or their predecessors-in-title in respect of the Shop have been extinguished and the Defendants are barred from recovering the same under the Limitation Ordinance (Chapter 347).

17. The rateable value of the Shop is within the jurisdiction of the District Court.

AND THE PLAINTIFF CLAIMS:

(1) A declaration that all the Defendants’ rights, interests and title in the Shop have been extinguished;

(2) A declaration that the Plaintiff has acquired a possessory title in respect of the Shop;

(3) Further and other relief; and

(4) Costs.”

9.In my judgment, by reading the Amended Statement of Claim, one does not know whether the plaintiff’s possession of the Shop was “adverse” to the defendants.

10.Adverse possession is “possession as of wrong”. See Wong Tak Yue v Kung Kwok Wai & Another [1998] 1 HKLRD 241, per Li CJ at 250G.

11.A possession is “possession as of wrong” when the possession is without the consent of the owner. In JA Pye (Oxford) Ltd v Graham[2003] 1 AC 419, Lord Browne-Wilkinson said at paragraph 36:-

“… due to a conscious or subconscious feeling that in order for a squatter to gain title by lapse of time he has to act adversely to the paper title owner. It is said that he has to “oust” the true owner in order to dispossess him; that he has to intend to exclude the whole world including the true owner; that the squatter’s use of the land has to be inconsistent with any present or future use by the true owner. In my judgment much confusion and complication would be avoided if reference to adverse possession were to be avoided so far as possible and effect given to the clear words of the Acts. The question is simply whether the defendant squatter has dispossessed the paper owner by going into ordinary possession of the land for the requisite period without the consent of the owner.” (Emphasis added)

12.Similarly, in Whittlesea City Council v Abbatangelo [2009] VSCA 188, the Court of Appeal of Victoria said at paragraph 6(a):-

“The reference to “adverse possession” in s.14(1) of the Act[1] [the Limitation of Actions Act 1958 of Victoria, equivalent to the Hong Kong Limitation Ordinance s.13(1)] is to possession by a person in whose favour time can run and not to the nature of the possession. The question is simply whether the putative adverse possessor has dispossessed the paper owner by going into possession of the land for the requisite period without the consent of the owner, with the word “possession” being given its ordinary meaning. Whether or not the paper owner realizes that dispossession has taken place is irrelevant”. (Emphasis added)

13.According to the ASOC, in or about April 1968, the plaintiff’s late father (“the Father”) purchased the Shop from the then possessor and occupier (“the 1^st Possessor”) of the Shop. In 1994, the plaintiff succeeded his late father’s business and continued the exclusive occupation, possession and control of the Shop. However, by reading the ASOC one does not know:-

(a) How did the 1^st Possessor come into possession of the Shop? Whether the 1^st Possessor’s possession of the Shop was with the consent of the owners of the 2 buildings?

(b) Whether the transfer of the possession of the Shop from the 1^st Possessor to the Father in or about April 1968 was with the consent of the owners of the 2 buildings?

(c) Whether the succession of the Shop by the plaintiff from the Father in 1994 was with the consent of the owners of the 2 buildings?

With all these unknowns, one cannot conclude that the plaintiff’s possession of the Shop was possession as of wrong, ie possession without the consent of the owners of the 2 buildings at all times.

14.I have not overlooked that the plaintiff pleaded that the Father and him had always treated the Shop as a property owned exclusively by them. However, there is no averment in the ASOC suggesting that the “exclusive ownership” was not conferred by the defendants but was merely an assertion by the plaintiff against the defendants’ title to the Shop, ie possession as of wrong.

15.I am also aware of the pleas that no one has ever attempted to interfere with the exclusive occupation, possession and control of the Shop by the Father and by the plaintiff, and no one has ever challenged such occupation, possession and control, and neither the Father nor the plaintiff has ever paid any rent. However, one essential element is missing, ie the plaintiff’s possession of the Shop was without the defendants’ consent. An owner may allow someone to live on the land owned by him, giving exclusive occupation, possession and control of the land to the occupier and not demanding any rent from the occupier. In this scenario, the occupier’s possession of the land would still not be adverse to the owner, for the possession is with the consent of the owner.

16.In my judgment, the facts pleaded in the ASOC are insufficient to show that the plaintiff’s possession of the Shop was adverse to the defendants.

Conclusion

17.For these reasons, I am unable to grant the Application.

18.Since no defendant has taken part in the Application (Miss C Yau for the 18^th Defendant appeared in the hearing as an observer only), I made no order as to costs.

19.Lastly, it remains for me to thank counsel for the assistance rendered to the court.