Chan Mei Lin and Others v. Lee Hong
Read the full judgment text of CACV 44/2015 on BabelCite. This Court of Appeal judgment was delivered on 3 December 2015 before Lam VP, Chu JA, Poon JA.
Civil procedure – application to amend pleading – Defence and Counterclaim – Order 20 rule 5(5) of the Rules of the High Court (Cap 4A) – whether proposed amendments add a new claim that is time-barred under Limitation Ordinance (Cap 347) s.35(2) and s.7 – whether amendments arise out of same or substantially same facts as existing cause of action – continuous trespass to land – adverse possession – whether commencement of proceedings asserting title interrupts limitation period – Higgs v Leshel Maryas Investment Co Ltd [2009] UKPC 47 applied – revocation of licence – Eshelby v Federated European Bank Ltd [1932] 1 KB 254 distinguished – wide discretion under Order 20 rule 5(1) – Order 18 rule 9 – Vax Appliances v Hoover Plc – Hendry v Chartsearch Ltd – Wing Siu Co Ltd v Goldquest International Ltd – costs – costs follow the event – two counsel certification refused – land in DD 107, New Territories, Lot nos. 560 RP and 561 RP – 1st plaintiff's possessory title allegedly acquired by 1974 or 1982 – defendant's settlement with Allex Development Limited and assignment of Land at nominal consideration – 5th plaintiff's licence to use the House (H2 holiday house) on weekends and holidays – unauthorised construction work from mid to end 1999 – proposed further acts of trespass: occupation to exclusion of defendant from mid-2001 and fencing off 6,000 sq ft from September–October 2011 – Court of Appeal held counterclaim read with defence asserts title and stops time running – proposed amendments further acts of continuous breach of licence and trespass arising from substantially the same facts – revocation of licence amendment permissible – appeal allowed with leave to amend – consequential amendments to Reply and Defence to Counterclaim within 28 days – costs of appeal to defendant against plaintiffs – defendant to pay plaintiffs two-thirds of costs of hearing below.
Legal issues: Whether proposed amendments add a new claim that is time-barred under the Limitation Ordinance · Whether proposed amendments arise from the same or substantially the same facts as existing cause of action · Whether amendment pleading revocation of the 5th plaintiff's licence is permissible · Whether appeal is fit for two counsel to appear (costs certification)
Outcome: Appeal allowed; leave to amend Defence and Counterclaim granted, including the previously disallowed parts highlighted in yellow in the draft annexed to the Notice of Appeal. Plaintiffs granted leave to make consequential amendments to the Reply and Defence to Counterclaim within 28 days.
Cited by 7 cases · Cites 1 case
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CACV 44/2015 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CIVIL APPEAL NO. 44 OF 2015 (ON APPEAL FROM HCA NO. 2861 of 2001)
__________________________________ REASONS FOR JUDGMENT Hon Chu JA (giving the Reasons for Judgment and Decision on costs of the Court): 1.This is the appeal of the defendant by original action (“defendant”) against the decision of Deputy High Court Judge Yee disallowing part of the proposed amendment to the Defence and Counterclaim. After hearing submissions, we allowed the appeal and granted leave to amend, and reserved the decision on costs of the hearing below and in this appeal. We now give our reasons for the judgment and the decision on costs. Background 2.The 1st plaintiff by original action (“1st plaintiff’) was married to Mr Lee Cho Hing (“Mr Lee”), who passed away in 1992. The 2nd and 5th plaintiffs by original action (respectively “2nd plaintiff” and “5th plaintiffs”) and the defendant are their children. The 3rd and 4th plaintiffs by original action (respectively “3rd plaintiff’ and “4th plaintiffs”) are the children of Mr Lee’s brother, and the cousins of the 2nd and 5th plaintiffs and the defendant. 3.The dispute between the parties relates to several lots of land in DD 107 in the New Territories, namely, Lot nos. 808, 809, 811, 812, 814 and 815 (“the Other Lots”), and Lot nos. 560 RP and 561 RP (“the Land”). For the purpose of this appeal, we are only concerned with the dispute over the Land. 4.On the plaintiffs’ case, since 1954, Mr Lee and the 1st plaintiff operated a farm on the Other Lots. In 1962, Mr Lee purchased the Other Lots and later assigned to his mother to hold on trust for him. Unknown to Mr Lee and the 1st plaintiff, the farm had encroached upon the Land. The plaintiffs say that the 1st plaintiff and Mr Lee had acquired an adverse possessory title to the Land by 31 December 1974 or latest by 2 February 1982. 5.On 26 February 1982, at the direction of Mr Lee and the 1st plaintiff, the land in the Other Lots was assigned by Mr Lee’s mother to the 2nd to 5th plaintiffs, the defendant and their cousins separately. It is the plaintiffs’ case that their rights over the Other Lots are regulated by a Chinese written agreement dated 24 February 1982 entered into by the 2nd to 5th plaintiffs, the defendant and other parties. 6.Sometime in 1997, the plaintiffs and the defendant discovered the encroachment on the Land. The defendant was instructed and authorised by the plaintiffs to assert the 1st plaintiff’s possessory title in the Land with a view to eventually assigning the Land to the 2nd to 5th plaintiffs and the defendant. Sometime before 27 January 2000, the defendant reached a settlement with the then owner of Lot nos. 560 and 561, Allex Development Limited. Consequently, Allex severed the Land from Lot nos. 560 and 561 and assigned it to the defendant at a nominal consideration. The claim 7.In the Statement of Claim, the 1st plaintiff seeks a declaration that the defendant holds the Land as her agent and/or trustee and an order directing the defendant to assign and transfer the Land to her or at her direction. 8.The plaintiffs also claim that, between 1984 and 1985, the 5th plaintiff had, with the 1st plaintiff’s licence, constructed a brick house on the Land (“the House”, also referred to as the “H2 Holiday House” in the proposed Amended Defence and Counterclaim), which he has been occupying and using as a residence. Between February and June 2000, the defendant, however, committed acts that interfered with the 5th plaintiff’s occupation and enjoyment of the House. Accordingly, the plaintiffs seek declaratory and injunctive relief to stop the defendant from interfering with the 5th plaintiff’s use and occupation of the House. The counterclaim 9.The defendant denies holding the Land as the 1st plaintiff’s agent or trustee. He claims that by reason of his continuous use and occupation, he has by 1977 acquired an adverse possessory title over the Land. 10.The defendant further says that in 1986, he rebuilt the House from existing structures on the Land in pursuance of an agreement he reached with the 5th plaintiff, who had contributed to part of the costs. As part of the said agreement, the 5th plaintiff was given a licence by the defendant to stay at the House during weekends and holidays. Thereafter, the 5th plaintiff had used the House for weekend stays for less than 20 times a year, while the defendant had the use of the House for the rest of the time. 11.In between mid to end of 1999, however, the 5th plaintiff, acting through the 4th plaintiff, tried to rebuild the House into a two-storey structure, despite the defendant’s protest. In June 2001, the defendant noticed construction work was again being carried out on Lot no. 561RP, and therefore took action to stop it. Despite the defendant’s protest, the 4th and 5th plaintiffs continued to trespass upon Lot no. 561RP to carry out the construction work. 12.By way of counterclaim, the defendant seeks an injunction restraining the 4th and 5th plaintiffs from entering Lot no. 561RP without his consent and also damages for trespass. Application to amend the Defence and Counterclaim 13.By summons filed on 26 March 2014, the defendant applied to amend the Defence and Counterclaim. 14.The amendments, broadly speaking, fall into three groups. The first consists of clerical and cosmetic amendments, which are not controversial and was allowed by the Judge. The second relates to the deletion of paragraph 14(a)(iii), which effectively is to withdraw an admission of the authenticity of a letter dated 22 September 1998 from the 1st plaintiff to her children. This part of the amendment was disallowed by the Judge, from which there is no appeal. 15.The third group of amendment covers:
The Judge’s decision 16.The Judge considered the proposed paragraph 23(b) is a piece of update information of the original complaint about the unauthorised construction works carried out at the House by the 4th and/or 5th plaintiffs (see paragraph 11 above) and allowed it to be added to the pleading.[1] 17.The Judge, however, did not accept that the proposed paragraph 23(a) and (c) are instances of continuous trespass. He was of the view that the two sub-paragraphs raise a very different kind of trespass based on very different facts, and constitute a new claim within the meaning of section 35(2) of Limitation Ordinance, Cap. 347, which is already time-barred under section 7 of the same Ordinance.[2] He was further of the view that the new claim does not arise out of the same or substantially the same facts as a cause of action in respect of which relief has already been claimed in the counterclaim.[3] 18.The Judge therefore disallowed the proposed paragraph 23(a) and (c). He also disallowed the last part of the new paragraph 23A which pleads the revocation of the licence granted to the 5th plaintiff (see the italicised part in paragraph 15(2) above), and the respective deletions in paragraph 24(c)(i) and paragraph 1 of the prayer. These disallowed amendments are the subject matter of this appeal. Reasons for judgment 19.Order 20 rule 5(5) of The Rules of the High Court, Cap. 4A provides that an amendment to add or substitute a new cause of action may be allowed if the new cause of action arises out of the same facts or substantially the same facts as a cause of action in respect of which relief has already been claimed in the action by the applying party. 20.The defendant’s grounds of appeal are twofold. Firstly, it is said that the Judge was wrong to conclude that under the proposed paragraph 23(b) and (c), the defendant is seeking to add a new claim which was already time-barred. Secondly, it is said that the Judge was wrong to hold that the proposed amendments in paragraphs 23(b) and (c) do not arise from the same facts or substantially the same facts as the existing cause of action in the counterclaim. 21.On the first ground, Ms Wong SC, who appeared together with Mr Lui for the defendant, submitted that the injunction sought under paragraph 1 of the prayer in the existing counterclaim amounts to an assertion of title by the defendant and the relief, if granted, would necessarily require the recognition of the defendant’s title to Lot no. 561RP, and this would have stopped time from running against the defendant for the purpose of limitation. Reliance was placed on Higgs v. Leshel Maryas Investment Co Ltd [2009] UKPC 47, in particular the judgment of Lord Scott (at §47) that:
22.In response, Mr Chong argued that the injunction sought in the existing counterclaim is not an assertion of title, but an enforcement of the defendant’s contractual right under the licence agreement, which is contractual in nature. 23.In our view, the counterclaim must be read together with the defence. In the defence, the defendant disputes the 1st plaintiff’s claim to beneficial interest in the Land and asserts his beneficial interest in the Land. The counterclaim has adopted the entire defence[4]. It goes on to plead a claim in trespass to land on the basis that the unauthorised construction work to the House has gone beyond the use of Lot no. 561RP permitted by the licence granted to him. The claim of trespass and the injunctive relief sought in the counterclaim is therefore closely related to the defendant’s claim of beneficial interest in the Land in the defence. It is not a mere enforcement of contractual rights under the licence agreement because the defendant’s case on the grant (and breach) of licence is interwoven with his assertion of title in the Land. 24.On the second ground of appeal, Ms Wong’s submission is that the proposed amendments in paragraphs 23(b) and (c) should be regarded as further acts in a continuous course of breach of the licence agreement and trespass upon Lot no. 561 RP by the 5th defendant. 25.Mr Chong, on the other hand, argued that the claim of trespass in the existing counterclaim is not a claim for continuous trespass to land in that the act complained of, namely, the unauthorised construction work to the House, was said to take place from mid to end of 1999. 26.As observed above, the defendant’s counterclaim is for trespass to land in the form of construction work to the House, which goes beyond the use permitted by the licence. The acts alleged against the 5th plaintiff in the proposed paragraph 23(a) are occupying the House with his family to the exclusion of the defendant since mid-2001, and in paragraph 23(c), fencing off part of Lot no. 561RP since September to October 2011 thereby denying the defendant’s access to it. These acts are in their nature use and occupation of Lot no. 561RP in excess of what is permitted by the licence granted to the 5th plaintiff, and interferences with the defendant’s right over the lot amounting to trespass to land. Thus viewed, they can be regarded as further acts of a continuous breach of licence and trespass to land. 27.Although the defence pleads that the unauthorised construction work to the House took place from mid to end of 1999, it does not mean the trespass complained of in the existing defence and counterclaim is not a continuous one. Importantly, the injunction sought under paragraph 1 of the prayer has no temporal restriction and is prospective in nature. 28.In his written submission, Mr Chong also argued that the proposed amendment of revocation of licence is impermissible in that it is based on acts that occurred since the date of the writ, relying on Eshelby v. Federated European Bank Ltd [1932] 1 KB 254 at 268.[5] Although this argument had been made in the court below, the Judge did not refer to it in his Decision. No Respondent’s Notice has been filed to raise this argument. At the hearing before us, Mr Chong, correctly in our view, did not seek to advance this argument. We would additionally observe that the court’s discretion under Order 20 rule 5(1) is a wide one.[6] The decision in Eshelby does not create an inflexible rule and the case has to be considered together with the discussions in subsequent decisions of the English Court of Appeal: see, for example, Vax Appliances Limited v. Hoover Plc [1990] RPC 656 at 661, and Hendry v. Chartsearch Ltd [1998] EWCA Civ 1276, at §§19-23; see also the discussions in Wing Siu Co Ltd v. Goldquest International Ltd [2003] 2 HKC 64 at §§9-18. 29.For the above reasons, we allowed the appeal and gave leave to the defendant to amend the Defence and Counterclaim to include also the parts highlighted in yellow in the draft annexed to the Notice of Appeal. There is also leave to the plaintiff to make consequential amendments to the Reply and Defence and Counterclaim within 28 days thereafter. Decision on costs 30.Applying the normal rule of costs follow event, the costs of this appeal should be to the defendant against the plaintiffs to be taxed if not agreed. Although it was said on behalf of the defendant that the claim of possession was of immense importance to him, we are not persuaded that this appeal justifies the attendance by two counsel, having regard to the issues and complexity involved. We will not certify the appeal fit for two counsel to appear. 31.As for the costs before the Judge, the normal rule is that the party seeking the court’s indulgence to amend should bear the costs of and occasioned by the application to amend. In this case, the plaintiffs have successfully opposed the amendment to paragraph 14(a)(iii), which was the more contentious of the two areas of dispute before the Judge. We consider that the appropriate costs order is for the defendant to pay the plaintiffs the costs of and occasioned by the application to amend the Defence and Counterclaim, including two-third of the costs of the hearing before the Judge. And we so order.
Miss Lisa K Y Wong SC and Mr Mike Lui, instructed by Sun Lawyers, for the defendant [1] Decision at §40. [2] Decision at §§41-43. [3] Decision at §§49-51. [4] See Counterclaim §22. [5] Decision of the Divisional Court affirmed by the Court of Appeal [1932] 1 KB 423, but there was no appeal on this point. [6] See also Order 18 rule 9 which provides: “Subject to rules 7(1), 10 and 15(2), a party may in any pleading plead any matter which has arisen at any time, whether before or since the issue of the writ.” |
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