Ng Tung v. Grand Wayfair Investment Co Ltd

CAMP 143/2019

and CAMP 144/2019

(Heard together)

[2019] HKCA 969

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 143 OF 2019

(ON AN INTENDED APPEAL FROM HCA 1682/2017)

________________

________________

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 144OF 2019

(ON AN INTENDED APPEAL FROM HCA 2531/2017)

________________

______________

(Heard together)

___________________

REASONS FOR JUDGMENT
& DECISION ON COSTS

___________________

Hon Lam VP (giving the Reasons for Judgment and Decision on Costs of the Court):

1.We are not persuaded that there is any merit in the intended appeal and we refused to grant leave after hearing counsel.

2.The intended appeal is in respect of the decision of Chu J of 22 February 2019 refusing to strike out the claims of the Plaintiff in the two actions.  In the actions, the Plaintiff claimed declaratory relief regarding his adverse possessory title over several parts of several lots of land at Demarcation District 133 in the New Territories against the registered owners who are the respective Defendants.  The Defendants applied for the striking out of the Plaintiff’s claims.

3.Striking out should only be granted in plain and obvious case.  In many cases, it is a matter of evaluation for a judge.  If a first instance judge considered the claims are not plainly and obviously liable to be dismissed on any of the grounds under Order 18 Rule 19, an applicant has to overcome a very high threshold in asking this Court to intervene with such assessment.  The situation is, to an extent, akin to an appeal against a refusal to grant summary judgment.

4.In the present case, the application for strike out was based on the principle of issue estoppel in the wider sense as discussed in Henderson v Henderson (1843) 3 Hare 100.  Whilst the scope of such estoppel is not confined to re-litigation of issues between the same parties, it has been emphasised that the essence of such estoppel is abuse of process, see Ko Hon Yue v Chiu Pik Yuk (2012) 15 HKCFAR 72.  It involves a broad merits-based evaluation instead of a mechanistic application of a rule: see Ho Kin Man v Commissioner of Police [2014] 3 HKLRD 478; Yifung Properties Ltd v James Nicholas Barrie Smith [2019] 1 HKLRD 36. 

5.The appellate approach to such broad merits-based assessment was set out by the Chief Justice in Ko Hon Yue v Chiu Pik Yuk, supra, at [83(5)]:

“ (5) In examining aspects such as abuse, the court is concerned with balancing interests: not just those of the litigants before it, but also taking into account the other interests involved in the administration of justice. It is important therefore here to emphasise that when the court is dealing with the Henderson v Henderson type of abuse, it is not looking at an absolute bar to litigation such as issue estoppel or cause of action estoppel. On the contrary, in considering this type of abuse, the court is required to assess a number of factors and balance competing interests. See here, Bradford and Bingley Building Society at 1490F-H. It is also worth making the following observations at this juncture:-

(a) There is conceptually an important distinction between absolute bars such as issue estoppel and the type of abuse with which we are concerned. In the former situation, the party who seeks to re-litigate an issue or cause of action has already had his day in court, whereas in the latter situation, that party has not: cf Johnson v Gore Wood at 59D (“It is one thing to refuse to allow a party to re-litigate a question which already been decided; it is quite another to deny him the opportunity of litigating for the first time a question which is not previously being adjudicated upon” per Lord Millett).

(b) The assessment of different factors and balancing competing interests can be said to be an exercise of a discretion. A number of decisions of the English Court of Appeal have cast doubt on whether the court does indeed exercise a discretion as such: see Aldi Stores Ltd. v WSP Group Plc. [2008] 1 WLR 748, at 762C-D (para 16) and Stuart v Goldberg Linde (a firm) [2008] 1 WLR 823, at 845E-846C (para 81). It is unnecessary for present purposes to decide whether or not a discretion is actually being exercised. The more important point to bear in mind is that an appellate court is obliged to pay sufficient regard to the decision of the court below and should be reluctant to interfere where the decision is based on the assessment or balancing of a number of factors. Nothing in the two said cases suggests otherwise; in fact, quite the contrary.” (our emphasis)

6.It is all the more so in a striking out context.

7.The alleged abuse, according to the Defendants, is that the Plaintiff could and should have raised the claims for declaration for possessory title in a previous action[1] when right to possession of a different plot of land was being litigated.  It is said that the evidence adduced in that action covered the Plaintiff’s occupation of the various parts of land which form the subject matters of the current actions.

8.We fail to see how that allegation could stand in light of the fact that the Defendants as registered owners of the other plots of land[2] (which formed the subject matters of the present actions) did not bother to sue for possession for these plots in the previous action.  Before us, Mr Chan said the evidence only spilled into those other plots in the examination in chief of Mr Ng.  There is not entirely correct.  As demonstrated by Ms Gwilt, the then counsel for GWIC had led evidence from its own witness on the lots in the vicinity of Lot 78.

9.In any event, it is quite plain that the references to the occupation and use of the other lots were by way of background.  The only subject matter that the trial of HCA 558/2007 was concerned with was Lot 78.  The judge also found that the focus of the evidence (including the cross-examination of the witnesses) was on Lot 78 only.  Throughout the trial, in the first instance judgment and in the appeal, the courts only concerned with Lot 78.  The references to the occupation of the other lots at different times in the previous action were only by way of background.

10.If the registered owners were not minded to disturb a squatter’s possession, it is not an abuse for a squatter to be contented with his possession for the time being.  There is no duty on the part of a squatter to come to seek a declaration based on his adverse possessory title.  Until the running of the full limitation period under the Limitation Ordinance, his possession is not perfect as it could be defeated by a claim for possession by the registered owner.  However, his possession is still good against the whole world except the registered owner.  Upon expiry of the limitation period, his possession cannot be defeated by the registered owner as the latter’s title is extinguished vis-à-vis the squatter.  The possessory title of the squatter becomes indefeasible in that sense.  A squatter does not need to seek a declaration to perfect his possessory title though such a declaration may serve as a proof of his possessory title for conveyancing purposes.   

11.As canvassed at the hearing, Mr Chan said it is not an abuse of process for the registered owners to claim for possession of the other lots even though no such claim was advanced in HCA 558/2007.  If such claims were brought, we did not see any reason why Mr Ng cannot advance a defence of adverse possession to resist the claims.  Mr Chan submitted that such a line of defence would be an abuse of process on the basis that Mr Ng did not raise a counterclaim for declaratory relief on his adverse possessory title for those other lots in HCA 558/2007.  Such proposition only needed to be stated to demonstrate its absurdity.

12.This analysis also shows the absurdity of the suggestion that the bringing of the present actions by Mr Ng is an abuse of process.   

13.Further, as found by the judge, there is no evidence that the Plaintiff was aware that the two FIL Lots were owned by a company connected or related to GWIC, the plaintiff in the previous action.

14.Mr Chan relied on the observations of Sir Anthony Clark MR in Stuart v Goldberg Linde [2008] 1 WLR 823 at [96] concerning the duty of a party not to keep quiet in the hope of improving their position in respect of a claim arising out of similar facts or evidence in the future.  We do not read those observations as pre-empting how the court would apply the broad merits-based assessment in a striking out application.  In this connection, see the observations by this Court in Yang foo-Oi v Wai Wai Chen [2019] HKCA 49 on Aldi Stores Ltd v WSP Group plc [2008] 1 WLR 748.

15.In our view, it is rather untenable to suggest that in the application of the board merits-based assessment, one should only examine Mr Ng’s omission to raise a counterclaim for declaratory relief concerning those lots in HCA 558/2007 without regard to the inaction on the parts of the registered owners regarding those lots.  Further, the lack of counterclaim on the other lots cannot be properly regarded as omission on the part of Mr Ng if one pays proper regard to the above analysis on the relative position between a squatter enjoying possession and a registered owner who has been dispossessed.  We cannot see how the stance taken by Mr Ng could tantamount to an abuse of process in these circumstances.

16.The so-called prejudice suffered by the Defendants were the consequences of their own failure to take steps to enforce their rights as registered owners in a timely manner, either in the context of HCA 558/2007 or otherwise.  Mr Ng had not kept them in the dark as to his case on adverse possession.

17.In respect of the alleged change of case on the part of Mr Ng, the judge rightly observed at [40] of the judgment below that it is a matter for the trial.

18.For these reasons, the threshold for leave to be granted under Section 14AA(4) of the High Court Ordinance is not met and we dismissed the summonses of 26 June 2019 in CAMP 143 and 144/2019 accordingly.

19.In light of the judgment below and our above analysis, we are of the view that this renewed application for leave to appeal is hopeless and should not have been brought.  In the circumstances, in line with the approach of this court as set out in Compania sud Americana de Vapores SA v Hin-Pro International Logistics Ltd HCMP 1932/2014, 16 October 2014; Good Form Co Ltd v Cheung Wai Han HCMP 3153/2014, 16 January 2015; Ricoh Hong Kong Ltd v Wallbanck Brothers Securities (Hong Kong) Ltd HCMP 2228/2015, 13 May 2016, we would order the Defendants to pay the costs of the Plaintiff in these applications on indemnity basis.

20.Having considered the statement of costs of the Plaintiff and the submissions of Mr Chan, we would fix the total costs at $145,000, to be split into two sums, viz $72,500 for CAMP 143/2019 and $72,500 for CAMP 144/2019.

Ms Angela Gwilt, instructed by Y.C. Chow & Co, for the plaintiff in both cases

Mr Kenneth CL Chan and Mr Ross MY Yuen, instructed by Hastings & Co, for the defendant in both cases