Case Document

DCCJ 4969/2016

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 4969 OF 2016

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BETWEEN
	HARBOUR HERO ENTERPRISES LIMITED	Plaintiff
and
	周濃娣	Defendant

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Before: His Honour Judge MK Liu in Chambers (open to public)

Date of Hearing: 10 October 2017

Date of Decision: 10 October 2017

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DECISION

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Introduction

1.This case concerns a piece of land (“the land”), which is part of Section R of Lot No 2056 in Demarcation District No 91 (“the Lot”).

2.The plaintiff is the registered owner of the Lot and the defendant is the occupier of the land. The plaintiff is claiming for vacant possession of the land in these proceedings. On 23 March 2017, the plaintiff succeeded in obtaining a default judgment (“the judgment”) against the defendant.

3.On 12 July 2017, the defendant took out an inter partes summons (“the summons”) seeking an order to set aside the judgment. The defendant also filed her 1^st affirmation in support of the summons at the same time.

4.The defendant accepts that the judgment is a regular judgment, and therefore costs up to the filing of the summons and her 1^st affirmation (including perusal thereof) should be to the plaintiff in any event. The defendant is applying for setting aside the judgment on the ground that she has a real prospect of success in her defence against the plaintiff’s case.

Background

5.I would first set out the background.

6.Since 1949 onwards and until 13 November 2015, the Lot was owned by Hing Yip Tong (興業堂) (“the Tong”), which is a t’ong (堂) within the meaning of s 15 of the New Territories Ordinance. On 13 November 2015, the Lot was assigned by the Tong to the plaintiff.

7.The rateable value of the land does not exceed HK$240,000.

8.The writ of summons was issued on 12 October 2016.

9.On or about 2 November 2016, the defendant’s former solicitors acknowledged service of the writ of summons and gave notice of intention to defend the action. On about 28 November 2016, the defendant applied for legal aid.

10.On or about 23 March 2017, the Legal Aid Department granted a legal aid certificate to the defendant. On or about 18 April 2017, solicitors and counsel were assigned to give advice to the defendant in this case. On about 7 July 2017, the defendant’s legal aid certificate was extended to cover an application for setting aside the judgment on merit ground only.

11.It is the defendant’s case that:-

(a) On or about 28 August 1998, her ex-husband Mr Lee Chik Sam (李積深) (“Lee”) purchased a wooden hut from a Mr Kung Yuk Chuen (龔育泉) as their home. The defendant has produced a copy of the handwritten sale and purchase agreement (“the SPA”). The wooden hut was on the land. Since then, the defendant has been living on the land up to now.

(b) The defendant and Lee treated the land as their own. They arranged utilities supplies under the name of Lee.

(c) On 9 September 2002, the defendant and Lee had a divorce. After the divorce, the defendant continued to live in the wooden hut and on the land. Electricity supply was registered under the defendant’s name in about August 2003 and water supply was registered under the defendant’s name in about October 2003.

(d) Over the years, the defendant has incurred substantial expenses to repair and renovate the wooden hut.

(e) The defendant and Lee have never entered into any tenancy agreement concerning the wooden hut and the land.

(f) By about August 2010, the defendant has acquired a possessory title to the land by adverse possession.

12.The plaintiff’s case is as follows:-

(a) By an oral tenancy agreement (“the TA”) entered into between the Tong and the defendant, the Tong leased the land to the defendant for a term of 2 years at the total rent of HK$1,800.00 from 1 January 2014 to 31 December 2015. The TA and the respective rights therein were assigned by the Tong to the plaintiff together with the Lot.

(b) In June and July 2016, the plaintiff through its solicitors gave notice to the defendant, inviting the defendant to discuss the renewal of the TA. The defendant did not come to have any discussion and the TA was not renewed. As a result, the TA expired on 31 December 2015 and the defendant was a trespasser on the land after 31 December 2015, and is still unlawfully occupying the land.

13.On 10 August 2017, the plaintiff has filed affirmation evidence to show that 3 member of the Tong were born in 2013, 2015 and 2016 respectively. On 15 August 2017, the defendant’s solicitors wrote to the plaintiff’s solicitors to ask for particulars of the infant members of the Tong born from 1970’s onwards. There was no reply from the plaintiff until 6 October 2017, when the plaintiff took out a summons for leave to file a further affirmation to give more information on the infant members of the Tong. For the purpose of securing the just resolution of the disputes between the parties in accordance with their substantive rights, I allowed the plaintiff to put in that affirmation but ordered that costs of the plaintiff’s summons would be to the defendant in any event and with a certificate for counsel, to be taxed if not agreed. The defendant’s own costs would be taxed in accordance with the Legal Aid Regulations. For the purpose of facilitating taxation, I record that about 5% of the time in this hearing was spent on the plaintiff’s summons.

The principles

14.It is trite that in order to set aside a regular judgment, the applicant has to show “a real prospect of success”, which means that an applicant should show his purported defence carries some degree of conviction. See Premier Fashion Wears Ltd. v Li Hing Chung [1994] 1 HKLR 377, per Godfrey JA (as he then was) at 383; Hong Kong Civil Procedure 2018, Vol 1, 13/9/14.

15.In assessing whether the applicant has shown a real prospect of success, it should be borne in mind that that the court is handling an interlocutory application and there should be no mini-trial on affidavit evidence. See Maryo Development Limited v Tsang Yau May & Ors (CACV 101/2015, 11 January 2016), per Harris J:

“13. Godfrey JA speaks in terms of the defendant being required to show “a real prospect of success” and the court forming a provisional view of “the probable outcome of the action”. These formulations have their origin in the judgment of the English Court of Appeal in the “Saudi Eagle”. There is a danger that they can be read as requiring the court to undertake a mini-trial on the affirmations as to the likely outcome if the matter goes to trial. This is not what is required and perhaps the correct approach can be more helpfully summarised as requiring the court to form a provisional view as to whether or not the defendant has a realistic prospect of successfully defending the action. Determining this will involve assessing whether or not the defendant’s evidence on disputed factual matters has a realistic prospect of being accepted and, if it has, that the defendant has a realistic prospect of establishing a defence in law. The assessment has to be carried out mindful of the interlocutory nature of the application and with a sense of proportionality.”

16.With these principles in mind, I turn to consider whether the defendant has shown a real prospect of success.

Tenant of the Tong?

17.The defendant’s case is that she has been occupying the land as an adverse possessor at all times since 1998. She bears the burden to adduce evidence to show that her case carries some degree of conviction.

18.The plaintiff says that the defendant was a tenant of the Tong. The plaintiff has adduced various affirmations on this point.

19.According to the evidence produced by the plaintiff, from 1988 to 2015, there were 5 persons who acted as the representatives of the Tong collecting rent from all the tenants occupying various sections of the Lot:

Collection of Rent Representatives of Tong

Before 1992 詹水娣 (also known as水姐)

1992 - 2002 Kung Lam (龔林)

2003 - 2009 Tsang Ka Keung, Sammy (曾家強)

2010 - 2011 Yeung Chun Keung (楊振強)

2012 onwards Kwok Man Yau (郭萬有)

20.A written “代收租通告” dated 24 January 2014 and signed by the manager of the Tong has been produced by the plaintiff, in which the Tong authorized 郭萬有 (“Mr Kwok”) to collect rent from the tenants of the Lot.

21.Mr Kwok has made an affirmation, in which he said:-

(a) For the rental period of 2 years from 2012 to 2013, he went to the Lot to collect all the rent from the tenants, including the defendant, within 1 week from 26 January 2014.

(b) For the rental period of 2 years from 2014 to 2015, he went to the Lot and collect all the rent from the tenants, including the defendant, within 1 week from 18 January 2015.

(c) He had issued rental receipts to the tenants (copies of which have been produced in his affirmation), details of which are as follows:

The Lot (Section No) Tenants House No
Rental Receipts Nos

Years
2012 to 2013
(in exhibit “KMY-7”in Mr Kwok’s affirmation) Years
2014 to 2015
(in exhibit “KMY-8” in Mr Kwok’s affirmation)

Section A 戴鳳琴 27, 28 20 071436

Section B 周興 29 21 071439

Section C 李生 30 22 071440

Section D 梁根祥 26 19 071438

Section E 黃均培 25 18 071452

Section F 李碧光 24 17 071435

Section G 譚嘉麗 32 15 071437

Section H 詹明 31 23 071433

Section I 譚嘉麗 22 15 071437

Section J 黃一 23 16 071451

Section K 何向中 21 14 071450

Section L N/A N/A N/A N/A

Section M N/A N/A N/A N/A

Section N 胡愛蓮 20 13 071449

Section O 龔育泉 19 12 071457

Section P 李偉容 18 11 071448

Section Q 湯旭文 11 05 071442

Section R 周濃娣, ie, the defendant 10 04 071443

22.The plaintiff has also produced an affirmation of 戴鳳琴 (“Madam Tai”, tenant occupying section A of the Lot), in which Madam Tai confirmed what Mr. Kwok had said in his affirmation.

23.As to these rental receipts, in her reply affirmation, the defendant said “… I verily believe that exhibits “KMY-7” and “KMY-8” were created for the purpose of these proceedings.” The defendant denies that she has ever received the rental receipts and has ever paid rent to anyone. The defendant says that she would challenge the authenticity of the rental receipts. The defendant says that all the matters relating to the rental receipts in Mr Kwok’s affirmation are just fabrication.

24.With respect to the defendant, the defendant would not be able to show a real prospect of success by merely saying that matters relating to the rental receipts are fabrication. The plaintiff has adduced evidence to show that the defendant was a tenant of the Tong. The defendant has the burden to answer this point by cogent evidence.

25.If there is any truth in the defendant’s case, the defendant would have no difficulty in adducing evidence to refute the plaintiff’s case. The defendant may just simply produce evidence from one or two persons named by the plaintiff in the table as shown in paragraph 21(c) above to show that they have never paid any rent to the plaintiff (this should be the case if all the rental receipts are fabrication). However, the defendant has not done so, and the defendant has not provided any explanation as to why she did not so, let alone satisfactory explanation.

26.The defendant has produced an affirmation of 余素嫦 (“Madam U”, a neighbour of the defendant), in which Madam U said:

(a) She was the drafter of a letter dated 18 November 2015 (“the reply letter”) and the reply letter was signed by some occupiers of the Lot (including the defendant). That letter was a letter in reply to the plaintiff’s solicitors’ letter dated 13 November 2015 (“P’s letter”). In the reply letter, she just followed the description in P’s letter and addressed the plaintiff as the owner (業主). However, she did not consider the occupiers as the tenants of the plaintiff and hence she just described themselves as users (使用人).

(b) She had never paid rent to any person.

(c) She heard from Kung Lam’s daughter-in-law that Kung Lam and his son Kung Yuk Chuen had received monetary advantage from the plaintiff for giving evidence in the plaintiff’s favour.

27.In my view, Madam U’s affirmation does not add any substance to the defendant’s case.

(a) In P’s letter, the plaintiff proposed 3 options to the tenants of the Lot, namely, (i) entering into a new tenancy agreement with the plaintiff; (ii) purchasing the land occupied by them from the plaintiff; or (iii) delivering vacant possession of the land to the plaintiff. All the signatories of the reply letter (including the defendant) acknowledge that the plaintiff is the owner of the Lot and do not raise any dispute concerning the plaintiff’s title. In fact, the reply letter is evidence against the defendant’s case.

(b) The plaintiff does not say that Madam U herself has ever paid any rent to the Tong (see the table in paragraph 21(c) above). That Madam U herself has not paid any rent to anyone is neither here nor there. Madam U does not say whether anyone living together with her has ever paid any rent to the Tong.

(c) Madam U’s allegation against Kung Lam and Kung Yuk Chuen is extremely serious, and is solely based upon hearsay evidence with no corroboration. It is extremely inappropriate to put forward such a serious allegation without any concrete evidence. I attach no weight to this allegation.

28.I also observe that the subject matter of the SPA is the sale and purchase of a wooden hut, and no interest in land is mentioned therein. The terms of the SPA are as follows:

“茲有龔育泉，位于丙崗村村仔園19號F1木屋壹間、轉讓給李積深⋯⋯以后該屋一切事宜與龔育泉無関。” (underline supplied)

In the circumstances, it would not be surprising that the defendant had paid rent to the Tong for using the land.

29.While there should be no mini-trial on affidavit evidence, the defendant has to produce evidence which carries some degree of conviction to show that she has a real prospect of success in trial. In my judgment, apart from her bare denials, the defendant has not produced any satisfactory evidence showing that that she has never paid any rent to the Tong and the rental receipts are all wrong. The rental receipts show that the defendant paid rent to the Tong for 2012 and 2013 on 26 January 2014, and the defendant paid rent to the Tong for 2014 and 2015 on 18 January 2015. In my view, there is evidence with substance showing that the defendant was occupying the land as a tenant, and the defendant has not produced satisfactory evidence showing the contrary.

30.Further, Limitation Ordinance (“LO”), s 23(1) provides:

“Where there has accrued any right of action (including a foreclosure action) to recover land or any right of a mortgagee of personal property to bring a foreclosure action in respect of the property, and –

(a) the person in possession of the land or personal property acknowledges the title of the person to whom the right of action has accrued; ……

the right shall be deemed to have accrued on and not before the date of the acknowledgment or payment.”

31.I am also of the view that the reply letter dated 18 November 2015 constitutes an acknowledgment for the purpose of s 23(1) of the LO.

32.In my judgment, the defendant does not have a real prospect of success in trial. For this reason, the summons must be dismissed.

Extension of the limitation period by newborn members of the Tong

33.The above would be sufficient in disposing the summons. In deference to counsel’s submissions, I would briefly deal with the arguments concerning extension of the limitation period by newborn members of the Tong.

34.The leading authority on this topic is Leung Kuen Fai v Tang Kwong Yu Tso [2002] 2 HKLRD 705, the principle in which has been recently summarized by the Court of Appeal in Tang Kai Tung, the Manager of Tang Yuk Cho Tso v Tang Wai Lun [2016] 3 HKLRD 96, in which Yuen JA said:

“31.2 The judge adopted Deputy Judge Lam (now Lam VP)’s encapsulation of the law in Leung Kuen Fai v Tang Kwong Yu Tso [2002] 2 HKLRD 705 which was to the following effect. The concept of adverse possession and the LO applied to land in the New Territories. However under Chinese customary law, a male descendant of the Tso’s focal ancestor automatically becomes a member of the Tso at birth and is therefore entitled to an interest in the Tso’s land for his lifetime. As a beneficiary, each member has an interest in the land and can claim possession against a stranger. The legal consequence is that upon each member’s birth, the limitation period against a stranger is extended by virtue of s.22(1) LO to the 6th anniversary of his reaching the age of majority. Leung Kuen Fai was applied by this court (Cheung CJHC, Lam VP and Barma JA) in Tsang Kwong Kuen v Hau Wai Keung Gaius [2014] 5 HKLRD 622.”

35.Applying the aforesaid principle, and based upon the evidence produced by the plaintiff, we have the following:

Members of the Tong Years of birth Expiry of Limitation Period

黃景全 1982 2006

黃景力 1982 2006

黃明輝 1982 2006

黃皓駿 1982 2006

黃景偉 1985 2009

黃景鋒 1986 2010

黃健全 2013 2037

黃康全 2015 2039

黃宏全 2016 2040

36.For the sake of discussion, I assume that the defendant’s case is correct and the defendant has never made any acknowledgment as defined in s 23(1) of the LO. The adverse possession began in 1998. Therefore, notwithstanding the information in the aforesaid table, before the birth of 黃健全 in 2013, the Tong’s title to the land would have already been extinguished by the defendant’s adverse possession of the same.

37.Ms Wong, counsel for the defendant, submits that the plaintiff has produced an affirmation of Kung Lam, in which Kung Lam said he had collected rent on behalf of the Tong from Lee in respect of the occupation of the land in 1998 to 2001, and Kung Lam only stopped collecting rent from Lee when Lee moved out from the land in 2002. Ms Wong submits that the defendant could not be in adverse possession of the land at any time earlier than 2002. Accordingly, since 黃健全 was born in 2013, it would not be possible for the defendant to acquire a possessory title to the land.

38.In her reply affirmation, the defendant has denied what Kung Lam has said.

39.Either Kung Lam or the defendant is telling the truth.

(a) If the defendant’s case is true on all aspects and Kung Lam’s evidence is not true, the situation would be the one set out in paragraph 36 above. The principle in Leung Kuen Fai would not assist the plaintiff.

(b) If Kung Lam’s evidence is true, that would mean that the defendant has told a lie on an important aspect, ie whether she and Lee occupied the land as adverse possessors as from 1998. That being the case, it would be doubtful whether the defendant would be able to discharge the burden in proving adverse possession by credible evidence in trial. In this latter scenario, it would not be necessary for the plaintiff to rely upon the principle in Leung Kuen Fai.

40.I observe that on the basis of the evidence before this court, it would not be necessary for the plaintiff to rely upon the principle in Leung Kuen Fai in any event.

Dispositions

41.Since I have held that the defendant does not have a real prospect of success, her application for setting aside the judgment must fail. I dismiss the summons.

42.Having heard submissions on costs, I am of the view that the general rule of costs following the event should apply. I order that costs of the summons be to the plaintiff, with a certificate for counsel, to be taxed if not agreed. The defendant’s own costs are to be taxed in accordance with Legal Aid Regulations.

43.I thank Ms Wong and Mr Siu for the helpful assistance provided to the court.