Fong Ping Kit v. Tsang Hin Wai, The Administrator of the Estate of Lee Chiu Tai, Deceased and Another

CACV 23/2025, [2026] HKCA 1732

On Appeal From [2024] HKCFI 3585

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 23 OF 2025

(ON APPEAL FROM HCA NO 2200 OF 2017)

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JUDGMENT

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Hon Chow JA (giving the Judgment on behalf of the Court):

INTRODUCTION

1.This is the 1^st Defendant’s appeal against the judgment of Deputy High Court Judge Kent Yee (“the Judge”) dated 19 December 2024, whereby the Judge (i) set aside an order (“the 2007 Order”) made by H H Judge Mimmie Chan (as she then was) dated 7 September 2007 in DCMP 3485/2000 (“the 2000 Action”), and (ii) rescinded a consent summons (“the Consent Summons”) signed by the Plaintiff and the 1^st Defendant’s former solicitors dated 14 April 2009 in DCCJ 1670/2009 (“the 2009 Action”), on the ground that the 2007 Order and Consent Summons were obtained or procured by fraud, and (iii) ordered the 1^st Defendant to repay the sum of HK$20,000 paid by the Plaintiff pursuant to the Consent Summons together with interest thereon at the prime rate plus 1% per annum from 14 April 2009 to the date of judgment.

BACKGROUND FACTS

(i)  The Disputed Lands

2.This action concerns 5 lots of land in the New Territories known as Lot Nos 1384, 1487, 1488 and 1489 and Section E of Lot No 1606 in Demarcation District No 114 (“Lot 1384”, “Lot 1487”, “Lot 1488”, “Lot 1489”, and “Lot 1606E” respectively) in San Tsuen, Kam Sheung Road, Pat Heung, New Territories (collectively “the Disputed Lands”[1]).

3.The Disputed Lands became registered in the name of the late Mr Tsang Loi Ki, deceased (“LK Tsang”) on 4 November 1910.  It is not clear on the evidence as to when LK Tsang passed away.

4.On 1 December 2000, the late Madam Lee Chiu Tai, deceased (“Madam Lee”) commenced the 2000 Action against LK Tsang by originating summons in the District Court.  She claimed to be entitled to the Disputed Lands on the ground of adverse possession.  The case that was put forward by Madam Lee, in an affirmation made by her and 2 affirmations made by her son (the 1^st Defendant), was that she had been in continuous adverse possession of the Disputed Lands for 50 years since 1950, and her possession and quiet enjoyment of the same had never been interfered with by anyone during that period.  The papers in the 2000 Action were apparently “served” on LK Tsang by way of substituted service by, inter alia, affixing a copy of the originating summons and supporting affirmation at a conspicuous place at the entrance to the Disputed Lands and advertising in Sing Tao Daily pursuant to an order made by Acting Registrar S Kwang dated 13 September 2001[2].

5.Madam Lee passed away on 22 March 2006.  On 23 May 2006, the 1^st Defendant obtained an order from the court to continue and carry on the 2000 Action as the representative of the Madam Lee.

6.On 7 September 2007, the originating summons in the 2000 Action came before H H Judge Mimmie Chan, who made the following order (ie the 2007 Order) in the absence of LK Tsang:

(1)  LK Tsang’s title to the Disputed Lands had been extinguished pursuant to s 17 of the Limitation Ordinance, Cap 347; and

(2)  the Personal Representative of the Estate of Madam Lee had established a possessory title to the Disputed Lands and was entitled to be registered as the holder of the Disputed Lands in the Yuen Long New Territories Land Registry.

(ii)  The Plaintiff’s case in respect of his occupation of the Lands

7.The Plaintiff’s case is that prior to 1970, the late Madam So Yuen, deceased (“Madam So”), whom the Plaintiff says was the wife of LK Tsang, was in occupation of the Disputed Lands.

8.On 26 July 1970, the Plaintiff entered into a ten-year rental agreement (“the Rental Agreement”) with Madam So in respect of a portion of the Disputed Lands, namely, Lot 1384 and a part of Lot 1488 (“the Rented Lands”).  This agreement was recorded in a booklet (“Rent Book”).  Madam So retained a small part of Lot 1488 for her own use (“the Retained Part”).

9.Madam So passed away on 14 August 1976.  After the death of Madam So, the Plaintiff took over the Retained Part and also Lot 1487 (the Rented Lands, the Retained Part and Lot 1487 will hereinafter collectively be referred to as the “Lands”).

10.In or about late 1976, Mr Tsang Kwai Chuen, deceased (“KC Tsang”)[3], who was the brother-in-law of Madam So, and husband and father of Madam Lee and the 1^st Defendant respectively, approached the Plaintiff to collect rent from him.  KC Tsang claimed to be a distant relative of LK Tsang and said that he was in the course of applying for administration of the estate of LK Tsang, and asked the Plaintiff to pay rent to him as the “agent” of Madam So.  KC Tsang signed various rental receipts in the Rent Book from 1976 to the end of 1980.

11.In or about 1980, KC Tsang told the Plaintiff that he had not been able to obtain a grant to administer the estate of LK Tsang.  Thereafter, the Plaintiff stopped paying rent to KC Tsang, or anyone else.

12.Between 1970 and 2007, the Plaintiff occupied the Rented Lands/Lands, and operated thereon a duck farm until 1974, and thereafter a pig farm under the trade name of 惠園 (Wai Yuen) from about 1975 to 2007.  After the closure of his pig farm in 2007, he rented out different parts of the Lands to tenants for storage use.

13.According to the Plaintiff, from 1981 onwards, he treated the Lands as his own property.

(iii)  The 1^st Defendant’s case in respect of the Alleged Lease

14.According to the 1^st Defendant, the Plaintiff occupied Lot 1384, Lot 1488 and a portion of Lot 1489 (“the Alleged Rented Lands”) as the 1^st Defendant’s family tenant.  There was a verbal agreement made between KC Tsang on behalf of Madam Lee and the Plaintiff in or about 1979 for a lease of the Alleged Rented Lands, and the rent in 2005 was HK$5,000 per annum (“the Alleged Lease”).

15.The 1^st Defendant denies that KC Tsang ever collected rent from the Plaintiff as agent of Madam So, pointing out that KC Tsang collected rent from the Plaintiff only after the death of Madam So in 1976.  The 1^st Defendant also says that there is no evidence that Madam So was the wife of LK Tsang.

(iv)  The Consent Summons

16.On 21 February 2008, letters of administration of the estate of Madam Lee were granted to the 1^st Defendant.

17.On 31 March 2009, the 1^st Defendant, as administrator of the estate of Madam Lee, commenced the 2009 Action in the District Court against the Plaintiff for vacant possession of the Alleged Rented Lands and payment of arrears of rent and/or mesne profits since 1 January 2006.  In the statement of claim filed in that action, the 1^st Defendant alleged, inter alia, that:

(1)  Madam Lee and her family had since 1950 been in continuous, uninterrupted and exclusive possession of the Disputed Lands.

(2)  LK Tsang had been the registered owner of the Disputed Lands since about 4 November 1910 until 7 September 2007 when his registered title to the Disputed Lands was declared to have been extinguished by the 2007 Order.

(3)  The 2007 Order was registered at the Land Registry against the Disputed Lands on or about 25 September 2007.

(4)  Since about 3 March 2008, the 1^st Defendant had been registered as the owner of the Disputed Lands by virtue of the grant of letters of administration of the estate of Madam Lee to him.

(5)  Since about 1979, KC Tsang (with the consent or permission of Madam Lee) as landlord let the Alleged Rented Lands to the Plaintiff, and the lease of the Alleged Rented Lands to the Plaintiff had continued on a yearly basis after the expiry of the original lease.  The rent was payable in advance on the 1^st day of each calendar year, and the annual rental in 2005 was HK$5,000.

(6)  The Plaintiff had wrongfully failed and/or refused to pay the annual rent to the 1^st Defendant since 1 January 2006.

(7)  The 1^st Defendant’s solicitors, Messrs Simon C W Yung & Co (“SYC”), demanded the Plaintiff to pay the arrears of rent in the sum of HK$20,000 by a letter dated 24 February 2009 (“the Demand Letter”), but the Plaintiff failed and/or refused to do so.

(8)  The 1^st Defendant was entitled to recover vacant possession of the Alleged Rented Lands and arrears of rent and/or mesne profits at the annual rate of HK$5,000 from 1 January 2006.

18.In around April 2009, SYC, on behalf of the 1^st Defendant, contacted the Plaintiff.  On or about 14 April 2009, the Plaintiff went to the office of SYC in person and had a meeting with Mr Tam Wai Leung (“Ricky Tam”), a legal executive of SYC (“the 2009 Meeting”).  There, the Plaintiff signed the Consent Summons, and paid the 1^st Defendant through SYC a sum of HK$20,000 being the alleged arrears of rent.  SYC issued a Chinese receipt (“the Receipt”) to the Plaintiff for this payment.  The Receipt was also signed by the Plaintiff.

19.The Consent Summons sought, upon the joint application of the 1^st Defendant and the Plaintiff, the following order by consent:

“1. The [Plaintiff] do pay to the [1^st Defendant] … the sum of HK$20,000.00 being arrears of rent for the subject property for the period from 1^st January 2006 to 31^st December 2009; and

2.  There be no order as to costs of this action.”

The Consent Summons was signed by SYC as solicitors for the 1^st Defendant and the Plaintiff acting in person.

20.On 15 April 2009, SYC gave notice of discontinuance of the 2009 Action.

(v)  The present action

21.On 21 September 2017, the Plaintiff commenced the present action against (i) the 1^st Defendant, and (ii) the estate of LK Tsang (as the 2^nd Defendant).  In the Re-Amended Statement of Claim, the Plaintiff alleges that (i) he has since about 1981 at the latest been in adverse possession of the Lands, (ii) the 2007 Order was obtained by fraud, (iii) the “2009 Order” (defined to mean “the Consent Summons and any Order obtained thereby”[4]) was obtained by fraud and/or mistake of fact, and (iv) the 2000 Action and 2009 Action “were part of the 1^st Defendant’s scheme designed to unlawfully obtain the possessory title to oust the Plaintiff from the [Lands] and/or annihilate the Plaintiff’s right from obtaining possessory title to the [Lands]”.  The Plaintiff seeks the following relief: (i) the setting aside of the 2007 Order, (ii) the setting aside of the 2009 Order, and (iii) repayment of the sum of HK$20,000.

22.The Plaintiff’s basis for claiming that the 2007 Order was obtained by fraud is that he, and not Madam Lee, has since about 1981 at the latest been in adverse possession of Lands, and the 2007 Order was obtained by false evidence adduced by Madam Lee.  As for the Consent Summons, the Plaintiff says that it was procured by the 1^st Defendant’s fraudulent misrepresentation based on the 2007 Order, and the Consent Summons was signed by him under a mistake.

23.The 1^st Defendant denies the Plaintiff’s allegations of fraud and mistake, and also his claim of adverse possession of the Lands.  The 1^st Defendant counterclaims for a declaration that (i) the Plaintiff was and is at all material times a tenant of the Alleged Rented Lands, and (ii) the Plaintiff is estopped from denying the possessory title of the estate of Madam Lee and/or the 1^st Defendant to the Alleged Rented Lands, and has no locus standi to claim for possessory title to the Alleged Rented Lands.

24.The 2^nd Defendant neither responded to the Plaintiff’s action, nor took any part in the trial of the action.

THE JUDGMENT

25.At the trial of the action, the Plaintiff, the 1^st Defendant and Ricky Tam (amongst others) gave oral evidence.  The Judge gave a written judgment dated 19 December 2024 (“the Judgment”) after an 8-day trial.  In the Judgment, the Judge dealt with, inter alia, the following issues: (i) the 1^st Defendant’s objection to the Plaintiff’s locus standi to challenge the 2007 Order, (ii) whether the 2007 Order was obtained by fraud, and should be set aside, and (iii) whether the Consent Summons was obtained by fraud and/or mistake, and should be set aside.

26.In respect of the first issue, the 1^st Defendant objected to the Plaintiff’s standing to challenge the 2007 Order on the grounds that (i) the Plaintiff was not a party to the 2000 Action, (ii) the 2007 Order, not being a judgment in rem, did not bind him, and (iii) the Plaintiff did not seek any declaratory relief against the 2^nd Defendant in respect of his alleged possessory title to the Lands.  The Judge rejected the 1^st Defendant’s objection, for the following reasons:

(1)  The 1^st Defendant only raised the issue of the Plaintiff’s locus for the first time in the closing submissions of his former leading counsel (although the point had been forewarned in her opening submissions).  Relying on the judgment of Cheung JA in Liquidation Committee of Foshan Hongda Development Ltd v East Legend Investment Ltd [2009] 1 HKLRD 169, the Judge held that the locus point ought to have been raised at the outset or when it came to the attention of the defence in the course of the proceedings so that it could be ruled upon prior to the trial.  There were ample opportunities for the 1^st Defendant to challenge the standing of the Plaintiff and it was far too late for the 1^st Defendant to mount the challenge by way of closing submissions.  The Plaintiff had no chance to show any prejudice at that late stage (see §§63-67 of the Judgment).

(2)  In any event, there was no merit in the 1^st Defendant’s challenge.  The Plaintiff had locus to challenge the validity of the 2007 Order because –

(a)  The Plaintiff was seeking to show his possessory interest in the Lands, and wished to make his adverse possession claim against the 2^nd Defendant in the 2000 Action after the 2007 Order had been set aside.  It was in the interest of justice and procedural economy that both his claim and the competing claim of Madam Lee should be determined together by the same judge.  Thus, regardless of whether he could succeed in establishing his adverse possession claim against the 2^nd Defendant in the 2000 Action[5], the Plaintiff should be entitled to set aside the 2007 Order.

(b)  §2 of the 2007 Order contained a declaration to the effect that Madam Lee had established a possessory title to the Disputed Lands and was accordingly entitled to be registered as the holder of the Disputed Lands in Yuen Long New Territories Land Registry.  Such registrations would harm the possessory interest of the Plaintiff and there could be a blot on his possessory title to the Lands if established.  The Plaintiff should be allowed to protect his interest by removing the 2007 Order.

(c)  Even before the expiry of the limitation period and even if the possessory title of the Plaintiff had not yet matured, the Plaintiff might still sell and assign his inchoate interests to date.  The 2007 Order having been registered would affect such interest, and the Plaintiff had valid grounds to seek the removal of the registration of the 2007 Order (see §§68-73 of the Judgment).

27.In respect of the second issue, the Judge held that the 2007 Order was obtained by Madam Lee/the 1^st Defendant by fraud, for the following reasons:

(1)  The 2007 Order was obtained on the basis of affirmation evidence filed by or on behalf of Madam Lee/the 1^st Defendant only.  There was no affirmation in opposition filed.

(2)  The Plaintiff complained that the 2007 Order was obtained by fraud in two aspects.  First, contrary to the evidence filed by Madam Lee/the 1^st Defendant, Madam Lee and her family members had never been in possession of or in any way occupied the Lands since at least 26 July 1970.  After August 1976, the Retained Part was not possessed or occupied by Madam Lee and her family members.  They had never used the Lands for agricultural purposes and never fenced off the Lands as alleged.  Second, contrary to various affirmations of service filed by or on behalf of Madam Lee/the 1^st Defendant, no legal document relating to the 2000 Action was ever affixed at a conspicuous place of the Lands at all.  This explained the Plaintiff’s ignorance of and hence his inaction in the 2000 Action.

(3)  In respect of the first complaint, the Judge held that the overall picture painted by the evidence of Madam Lee and the 1^st Defendant before H H Judge Mimmie Chan in the 2000 Action was that Madam Lee and her family members (including the 1^st Defendant after his birth in 1966) were in actual physical and continuous occupation of the Disputed Lands since 1950.  This formed the bedrock of her claim of adverse possession, which was accepted by H H Judge Mimmie Chan resulting in the grant of the 2007 Order (see §85 of the Judgment).

(4)  The Judge next analysed the evidence before him.  He took the view that the Plaintiff had adduced a wealth of documentary evidence in addition to his oral evidence to prove his actual physical occupation of the Rented Lands commencing in or about 1970 pursuant to the Rental Agreement.  He accepted the documentary evidence, and also found that the Plaintiff was a forthcoming and reliable witness as far as his evidence concerning his activities on the Lands was concerned (see §§87, 110 and 111 of the Judgment).

(5)  The Judge did not accept the 1^st Defendant’s evidence relating to the Alleged Lease, and concluded that it did not exist and the 1^st Defendant only came up with idea of the Alleged Lease after the grant of the 2007 Order (see §133 of the Judgment).

(6)  The Judge held that the Plaintiff’s evidence relating to his dealings with KC Tsang was far more convincing and was not shaken under cross-examination (see §134 of the Judgment).

(7)  The Judge accepted the Plaintiff’s evidence relating to the Rental Agreement, and found that from 1970 to 1980 he occupied the Rented Lands/Lands, was the tenant of Madam So (the wife of LK Tsang), and operated his pig farm business on the Lands until 2007.  Such evidence was completely concealed from H H Judge Mimmie Chan and was at odds with the evidence adduced by Madam Lee and the 1^st Defendant in the 2000 Action.  The Judge considered that H H Judge Mimmie Chan would no doubt have approached the application of Madam Lee differently if she had been made aware of the Rental Agreement, and would have raised requisitions on whether Madam Lee was indeed in exclusive possession of the Disputed Lands since 1950s (see §161 of the Judgment).

(8)  The Judge held that H H Judge Mimmie Chan, in granting the 1^st Defendant’s application, accepted the false picture painted by Madam Lee and the 1^st Defendant.  They must both have known of the falsity of their evidence filed in the 2000 Action, and did not have any honest belief in the repeated allegations of their continuous occupation of the Lands for decades in their affirmations (see §§162 and 168 of the Judgment).

(9)  In respect of the second complaint, the Judge held that the Plaintiff had failed to show a prima facie case that the service processors made a false statement in their affirmations, because they could have affixed documents at a conspicuous place of the Disputed Lands and such documents could still have escaped the attention of the Plaintiff (see §174 of the Judgment).

(10)  Nevertheless, the Judge was critical of Madam Lee’s approach in obtaining an order for substituted service of documents on LK Tsang –

“[183] Though there was seemingly no service issue in the [2000 Action], in my view, Madam Lee was less than frank in her approach in securing the 2007 Order. It must be apparent to her that Mr LK Tsang had passed away long before the commencement of the [2000 Action]. Mr LK Tsang became the registered owner of the Disputed Lands in 1910. I do not think that Madam Lee could have genuinely believed that Mr LK Tsang remained alive, residing on the Disputed Lands or at his last known address and reading local newspapers in Hong Kong.

[184] Moreover, Mr KC Tsang was related to the wife of Mr LK Tsang and he even applied for her death certificate. They should be close and Mr KC Tsang should have some idea of the whereabouts or the status of Mr LK Tsang when the [2000 Action] were commenced. I do not believe that Madam Lee instituted a legal action concerning the Disputed Lands without any involvement of and discussion with Mr KC Tsang beforehand.

[185] I have made the factual findings as a result of my acceptance of the evidence of [the Plaintiff] that there was not any tenancy between [the Plaintiff] and Madam Lee or Mr KC Tsang in or about 1979 and Mr KC Tsang ceased collecting rent from [the Plaintiff] on behalf of Madam So Yuen in 1980 because of his failure to apply for administration of the estate of Mr LK Tsang. Given their full knowledge of [the Plaintiff’s] occupation of the Lands throughout the years, when Madam Lee decided to commence the [2000 Action] with legal advice, Madam Lee and Mr KC Tsang should know that [the Plaintiff] might stake a claim for an interest in the Lands, which should be adverse to their claim.

[186]  Against this background, there is no good reason why Madam Lee sued Mr LK Tsang as the sole defendant and represented to the court that service of documents pursuant to the substituted service orders could bring the [2000 Action] to the attention of Mr LK Tsang. Madam Lee and her legal advisors should know very well Mr LK Tsang could not possibly respond to the [2000 Action]. The Judge could have their evidence only and a fortiori, they should fully disclose to the Judge all the relevant matters with full candour. Obviously, Madam Lee and [the 1^st Defendant] did not so and they opted to cut corners. Regrettably the 2007 Order was obtained on false premises.”

(11)  In short, the Judge concluded that the 2007 Order was obtained by fraud on the part of Madam Lee/the 1^st Defendant.

28.In respect of the third issue, the Judge found that the Consent Summons was procured by the 1^st Defendant by fraud, and the Plaintiff signed it under a mistake, for the following reasons:

(1)  The Plaintiff complained that the Consent Summons was obtained by fraud and/or mistake of fact.  The pleaded false representations included the representation made by the 1^st Defendant through his solicitors SYC that the 1^st Defendant was the registered owner of the Alleged Rented Lands and the Plaintiff was liable to pay rents to the 1^st Defendant as pleaded in the statement of claim filed in the 2009 Action, and/or orally in a phone conversation between an unidentified staff member of SYC and the Plaintiff and/or orally at the 2009 Meeting between an unidentified staff member of SYC and the Plaintiff.

(2)  The Judge heard the evidence of the Plaintiff and Ricky Tam, preferred the evidence of the latter concerning the Demand Letter, the telephone call and what transpired at the 2009 Meeting.  He did not believe that Ricky Tam used threats to pressurise the Plaintiff into paying the sum of HK$20,000 and signing the Consent Summons, and took the view that the Plaintiff was prepared to pay the demanded sum for the purpose of settling the 2009 Action (see §196 of the Judgment).

(3)  Nevertheless, the Judge held that the agreement embodied in the Consent Summons must be set aside on the ground that it was procured by fraud and the Plaintiff agreed to sign the Consent Summons and perform his obligations therein under a mistake (see §198 of the Judgment), because –

“[200] … the 2007 Order was obtained by fraud. [The 1^st Defendant] relied on the 2007 Order to make his demand by the Demand Letter and later to form the basis of the [2009 Action]. I have also concluded that there was never any tenancy agreement between [the Plaintiff] and Madam Lee and/or Mr KC Tsang and/or [the 1^st Defendant]. The Purported Lease is a sheer fabrication. There is simply no basis for [the 1^st Defendant] to make any demand for rent.

[201] [The 1^st Defendant] made a false representation to [the Plaintiff] that he had an interest in the Lands by virtue of the 2007 Order and [the 1^st Defendant] as the administrator of the estate of Madam Lee became the registered owner of the Lands. On that basis, [the 1^st Defendant] represented to [the Plaintiff] that he was liable to pay to [the 1^st Defendant] for his occupation of the Lands. I am satisfied that on balance of probabilities, when Ricky Tam made demands for the alleged arrears of rent, he too made the similar representations to [the Plaintiff].

[202] The allegations in the Statement of Claim in the [2009 Action] and the alleged tenancy are fictions. [The Plaintiff] should know very well that he had never occupied any portion of Lot No. 1489. [The 1^st Defendant] himself commenced another action in the District Court under DCCJ 379/2010 against one Mr Mak Fai claiming that Mr KC Tsang leased a portion of Lot No. 1489 to Mr Mak Fai in or about 1979.

[203]  [The Plaintiff] clearly relied on the false representations based on and arising from the 2007 Order and signed the Consent Summons. I do not believe that [the Plaintiff] genuinely accepted that he was a tenant of the estate of Madam Lee and/or [the 1^st Defendant] and he owed them any arrears of rent. He could not have not paid due attention or any at all to the Consent Summons. The Consent Summons in fact could not serve the purpose of [the Plaintiff]. It even did not provide that [the 1^st Defendant] would discontinue the [2009 Action] upon receipt of the payment of HK$20,000 by [the Plaintiff]. Nor did it contain any agreement to allow the [Alleged Lease] to be continued and so [the Plaintiff] could remain on the Alleged Rented Lands.”

(4)  The Judge held that the Consent Summons could have no legal effect and the Plaintiff must be entitled to rescission of the Consent Summons and a refund of HK$20,000 by the 1^st Defendant (see §205 of the Judgment).

29.Accordingly, the Judge set aside the 2007 Order and the Consent Summons, and ordered the 1^st Defendant to repay the sum of HK$20,000 to the Plaintiff with interest.  The Judge also dismissed the 1^st Defendant’s counterclaim.

THE APPEAL

30.In his Re-Amended Notice of Appeal dated 19 June 2025, the 1^st Defendant does not challenge the Judge’s finding that he obtained the 2007 Order by fraud.  Instead, he raises 5 grounds of appeal mainly concerning the Plaintiff’s locus to challenge the 2007 Order and the Judge’s decision to set aside the Consent Summons.  The 5 grounds of appeal are:

(1)  the Judge erred in disallowing the locus challenge raised by the 1^st Defendant;

(2)  the Judge erred in law and in fact in holding that the Plaintiff did not have to prove his adverse possession claim to have locus to challenge the 2007 Order;

(3)  the Judge erred in law and in fact in holding that the Plaintiff was entitled to rescind the Consent Summons based on the 1^st Defendant’s false representations (if any);

(4)  the Judge was wrong to find that the Plaintiff had shown a sufficient interest to set aside the 2007 Order; and

(5)  the Judge was wrong in law in holding that there were no inexcusable laches, acquiescence, and delay which could justifiably deprive the Plaintiff of the relief sought.

31.As stated in the skeleton submissions of Mr Ernest Koo (and with him, Mr Rex Yam) on behalf of the 1^st Defendant dated 30 June 2026, the 1^st Defendant abandons Ground 5 of the Re-Amended Notice of Appeal.

GROUNDS 1, 2 AND 4 – THE PLAINTIFF’S LOCUS

32.These 3 grounds of appeal can be dealt with together.

33.Under Ground 1, Mr Koo argues that where a person who was not a party to the original proceedings seeks to set aside an order made in those proceedings, he must demonstrate a sufficient interest in the subject matter to establish the requisite “standing” to invoke the exceptional jurisdiction of the court.  In the present case, the Plaintiff claims that he has acquired a possessory title to the Lands by 2001, which serves as the sole and exclusive basis upon which he asserts standing to challenge the 2007 Order.  In order to establish a sufficient interest to do so, the Plaintiff must prove his possessory title to the Lands.  The Judge was wrong to find that the 1^st Defendant’s locus challenge came too late because:

(1)  The present case involved a specific locus predicated upon a claimant’s sufficient interest in the subject matter, and the burden of proof rests squarely upon the claimant.

(2)  The 1^st Defendant’s challenge to the Plaintiff’s alleged possessory title, which forms the sole basis of the Plaintiff’s locus, had been raised in his Defence dated 23 November 2017.

(3)  As held in East Legend, ante, at §18, once the issue of locus has been raised, it must be decided.

(4)  The Judge’s refusal to adjudicate upon this issue effectively permits the Plaintiff (a non-party) to challenge the 2007 Order without first establishing his foundational interest to justify his entitlement to do so.

34.Mr Koo further argues, under Ground 2, that since the Plaintiff’s alleged possessory title was actively and specifically contested by the 1^st Defendant and the same had not been established, the unproven claim could not without more constitute a “legitimate interest” or a “substantive right” such as to give the Plaintiff a sufficient interest to challenge the 2007 Order.

35.In our view, the short answer to the 1^st Defendant’s arguments is that they are based on the false premise that only a proven claim of adverse possession of the Lands would be sufficient to give the Plaintiff’s locus to challenge the 2007 Order.  This underlying premise fails to take into account the undisputed fact that the Plaintiff is, and has for many years been, in actual possession of the Lands.  It is trite law that the concept of title is relative, and possession itself is a good title against the whole world except those who can show a better title.  In Chan Hau Ling v 劉西 and Another (HCA 1286/2012, unreported, 22 April 2015), Ng J correctly stated at §30 that: “Under the common law principle of relativity of title, the person in possession of land acquires important rights which are good against all the world, except those who are able to claim a better title”.  This principle is amply supported by Asher v Whitlock (1865) LR 1 QB 1, at p 5; Ocean Estates Ltd v Pinder [1969] 2 AC 19, at p 25A-B; and Mabo v Queensland (No. 2) (1992) 175 CLR 1, at pp 210-211, cited by Ng J at §§31-34 of his judgment.  The Plaintiff’s possession of the Lands vests in him a title to the Lands good against the whole world except someone who can show a better title.

36.There is no fixed rule for determining what constitutes a “sufficient interest” to maintain an action to set aside a judgment in an earlier action by a person who was not a party to that action.  In Chan Kin Yuen v Chan Kin Yip (HCA 17878/1999, unreported, 1 August 2000), Deputy High Court Judge S Kwan (as she then was) quoted with approval the following commentary at §13/9/5 of The Supreme Court Practice 1999 relating to applications to set aside a default judgment by a non-party: “A third party who desires to apply to set aside a judgment must show he has a direct interest in so doing and must either do so in the name of the defendant with his leave or he must make both the plaintiff and the defendant parties to the application and ask for leave to intervene”.  It was pointed out that there were many examples in which the court had allowed a third party to set aside a default judgment and thereafter to be joined as a defendant to defend the action.  In that case, it was held that the applicant (who was the former wife of the defendant) should be joined as a party for the purpose of applying to set aside a declaratory judgment (which was obtained by the plaintiff against the defendant by default) that the defendant held a half share and interest in a property on trust for the plaintiff, on the ground that the applicant had a claim for ancillary relief in respect of the property against the defendant under the Matrimonial Proceedings and Property Ordinance, Cap 192.  The applicant was permitted to intervene even though the claim for ancillary relief had yet to be adjudicated upon, because her claim for a property transfer order would be injuriously affected if the default judgment was allowed to stand.  It was held that the applicant clearly had locus standi to apply to set aside the default judgment.

37.We can see no reason in principle why a stricter rule should be applied in the case of a judgment which was obtained by fraud in the absence of a defendant (as in the present case).  Whether a non-party has locus to challenge such a judgment depends on the circumstances of the case, and involves an exercise of discretion.

38.In the present case, the Plaintiff has a legally recognised interest in the Lands based on possession alone.  As pointed out by the Judge, the registration of the 2007 Order would harm the Plaintiff’s possessory interest in the Lands, and there could be a blot on his possessory title to the Lands if established.  In our view, it is plain that the Plaintiff has sufficient interest in the Lands to give him locus standi to commence the present action to set aside the 2007 Order.

39.We do not accept Mr Koo’s submission that the Plaintiff’s standing to challenge the 2007 Order rested solely and exclusively on his claim to the Lands on the ground of adverse possession.  Whilst it is correct that in the Plaintiff’s Re-Amended Statement of Claim, the Plaintiff claimed to be entitled to the Lands by way of adverse possession, the relief sought by the Plaintiff did not include any declaration of his entitlement to the Lands.  The only substantive relief sought by the Plaintiff related to the setting aside of the 2007 Order and 2009 Order, and repayment of the sum of HK$20,000.  On the other hand, the 1^st Defendant did not raise the issue of the Plaintiff’s locus to challenge the 2007 Order in his Re-Amended Defence, and thus the issue of locus was not addressed in the Plaintiff’s pleadings, including his Re-Re-Amended Reply.

40.We do not accept Mr Koo’s argument that the Judge erred in holding that the 1^st Defendant should not be permitted to raise the issue of the Plaintiff’s locus standi at the trial of the action.  In the parties’ “Agreed List of Issues” dated 29 May 2024 before the Judge, there was no issue raised concerning the Plaintiff’s locus to challenge the 2007 Order.  In the Re-Amended Notice of Appeal, the 1^st Defendant asserts that the issue of the Plaintiff’s locus was raised at §§7 and 8 of the Agreed List of Issues.  This assertion is incorrect.  The issue that was raised was whether the Plaintiff had been in adverse possession of Lot 1487 since 14 August 1976, and whether the Plaintiff had locus to claim for possessory title to the Alleged Rented Lands, not whether he had locus to challenge the 2007 Order.  It lies ill in the 1^st Defendant’s mouth to complain that the Judge found that it was too late for him to raise the locus objection by way of submissions at the trial.  The 1^st Defendant’s reliance on East Legend is misplaced.  In that case, the issue of the plaintiff’s standing to sue was raised at the commencement of the trial.  Deputy High Court Judge To (the trial judge) held that the defendant could raise the issue of the Plaintiff’s standing, but found that the Plaintiff had the necessary standing and gave judgment for the Plaintiff accordingly.  On appeal, the defendant challenged the trial judge’s ruling, and the plaintiff filed a respondent’s notice seeking to affirm the decision on standing on the ground that the trial judge should not have allowed the defendant to raise that issue, because the defendant had earlier on in the proceedings sought to strike out the plaintiff’s action for lack of standing, but later withdrew the application after having considered conflicting expert evidence on Mainland law.  Mr Koo relies on what Cheung JA (with whom the other member of the Court of Appeal agreed) said at §18 of his judgment (in particular sub-paragraph (3) thereof):

“1) The challenge cannot be raised by way of defence.

2) It must be raised at the outset or when it comes to the attention of the court or of the defence in the course of the proceedings.

3) Once the issue has been raised it must be decided.

4) It would be wrong to allow the action to go on without deciding the issue of standing: this is because the defendant will not have a further chance to challenge the issue.

5)  Once it is clear that the action was improperly constituted it must be brought to an end either by way of dismissal, striking out or stay.”

41.As we see it, what Cheung JA held in the above passage was that, if the issue of standing had been properly raised before the court, it should be determined.  The above passage cannot sensibly be read to mean that where the issue had not been properly raised, the court must nevertheless make a determination.  As a matter of fact, Cheung JA held that it was wrong for the trial judge to allow the defendant to raise the issue of standing again, having withdrawn a previous application to challenge the Plaintiff’ standing to sue.  Thus, at §§19-21 of his judgment, Cheung JA stated as follows:

“[19] In the present case the defendant obviously had notice of the issue of the Company’s standing at the outset of the case, namely in the same month when it received the writ. It then issued the striking out application.  That, however, was not the only issue that it had noticed because the plaintiff in response to the striking out, applied to substitute the Liquidation Committee as the new plaintiff.  The standing of the Liquidation Committee was then extensively canvassed by the Mainland legal experts who put forward opposite views on the matter.  Faced with such evidence the defendant then chose to abandon the striking out and allowed the Liquidation Committee to be substituted as the plaintiff.  In such circumstances, in the absence of other evidence, the only reasonable conclusion one may draw is that the defendant had accepted the standing of the plaintiff to sue.  There was no other evidence to contradict this conclusion.  This being the case it clearly was an abuse by the defendant to raise this issue again at the beginning of the trial in the guise of a preliminary issue when as a matter of law it could not have raised this issue by way of defence.

[20] … In my view the Judge was plainly wrong to allow the matter to be raised again. He had overlooked the fact that when the defendant agreed to the amendment it was fully apprised of the contentions of the parties on the issue of standing and had taken a considered position on this issue.  If it was wrong not to decide the issue after it had been raised, it would be even worse to allow this issue to be reopened after the parties had agreed to the substitution of the plaintiff.

[21]  The crux of the principles on the challenge of the plaintiff’s standing to sue is the requirement of an early determination of the issue.  This makes perfect sense because otherwise the plaintiff would be incurring substantial costs in the preparation of the case for trial which may be totally wasted if the issue was decided against him.  If, as in this case, the contest is to be decided only at the beginning of the trial the rationale behind these principles would be defeated.  In my view, the importance of the rationale had not been properly recognized in the present case when the Judge decided to deal with the issue at the trial.”

42.It is clear that the 1^st Defendant ought to have raised the issue of the Plaintiff’s standing to sue as soon as it came to his attention, and it was wrong for him to raise it only at the trial.  There is no absolute rule that a challenge to standing must be determined by the court once it is raised, regardless of the circumstances in which it comes before the court.  In East Legend, it was held that the defendant should not have been allowed to raise the issue of the plaintiff’s standing to sue because it was an abuse of process for the defendant to do so.  In the present case, the Judge took the view that the Plaintiff lost the chance to show any prejudice arising from the 1^st Defendant’s late challenge to his locus standi (see §67 of the Judgment).  We consider that the Judge was entitled to take the view that the 1^st Defendant should not be permitted to make the late challenge to the Plaintiff’s locus standi.  In any event, for reasons mentioned above, the challenge has no merit.

43.Mr Koo argues, under Ground 4, that only a proven possessory title acquired upon the expiry of the relevant limitation period is capable of constituting a sufficient interest on the part of the Plaintiff to challenge the 2007 Order.  Mr Koo cites no authority in support of this proposition.  We consider Mr Koo’s proposition to be incorrect as a matter of principle.

44.In Ground 4 of the Re-Amended Notice of Appeal, the 1^st Defendant also argues that, by signing the Consent Summons and the Receipt, the Plaintiff is bound by the contents of those documents, and/or is estopped from denying the 1^st Defendant’s title and the fact that his occupation of the Lands was pursuant to a tenancy obtained from the 1^st Defendant.  Hence, the Judge was wrong to find that the Plaintiff had shown a sufficient interest in the Lands to give him locus to apply to set aside the 2007 Order.  We do not see how the 1^st Defendant can rely on the Consent Summons in view of the Judge’s finding that the Consent Summons was procured by the 1^st Defendant’s fraud.  For reasons which we shall explain under Ground 3 below, the 1^st Defendant has no valid basis to challenge that finding.  The Consent Summons is vitiated by fraud and liable to be set aside.  The Receipt relates to a payment made pursuant to the Consent Summons, and adds nothing to the 1^st Defendant’s argument.

45.The 1^st Defendant’s further argument that the Plaintiff has failed to prove the requisite animus possidendi in support of his claim of adverse possession of the Lands is beside the point.  The Judge did not make any finding on that issue, because it was not necessary for him to do so.  In our view, the issue of the Plaintiff’s animus possidendi should be determined either in the 2000 Action (should the Plaintiff succeed in his appeal against the order of Deputy District Judge N Hui dated 31 October 2025 refusing his joinder application[6]), or in a fresh action to be commenced against the 1^st and 2^nd Defendants.

46.In all, Grounds 1, 2 and 4 of appeal are rejected.

GROUND 3 – RESCISSION OF THE CONSENT SUMMONS

47.Under Ground 3, the 1^st Defendant contends that, given the Judge’s finding at §196 of the Judgment that Ricky Tam’s evidence concerning the Demand Letter, the telephone call and what transpired at the 2009 Meeting was to be preferred to that of the Plaintiff, as well as the Plaintiff’s contention that he had been occupying the Lands as his own property without paying any rent to the owner or anyone since 1981, it is inherently implausible, and/or there is no factual and evidential basis for the Judge to find, that the Plaintiff’s signing of the Consent Summons was induced by and/or in reliance on the 1^st Defendant’s false representations, if any, regarding the 2007 Order or otherwise.

48.This ground can be disposed of shortly.  The Judge found that the Consent Summons was procured by the 1^st Defendant by fraud, not because of the circumstances which led to the signing of the Consent Summons or the Plaintiff’s payment of the sum of HK$20,000 to the 1^st Defendant, but because the 1^st Defendant’s demands contained in the Demand Letter and the 2009 Action were based on the 1^st Defendant’s false representations that (i) there was an alleged tenancy agreement between Madam Lee/KC Tsang and the Plaintiff, which the judge found to be a “sheer fabrication”, (ii) the 1^st Defendant had an interest in the Lands by virtue of the 2007 Order, which the Judge found was obtained by fraud, and (iii) the Plaintiff was liable to pay rent for his occupation of the Lands (see §§200-201 of the Judgment).  The Judge also found that when Ricky Tam made demands for the alleged arrears of rent, he too made similar (false) representations to the Plaintiff (see §201 of the Judgment).  The Judge concluded that the allegations in the 1^st Defendant’s statement of claim in the 2009 Action and the alleged tenancy were “fictions” (see §202 of the Judgment).  It seems to us to be clear, on these findings, that the whole claim underlying the 2009 Action was fraudulent, and the 1^st Defendant never had any honest basis to make the claims in that action or to receive the sum of HK$20,000 from the Plaintiff.  The Consent Summons which the 1^st Defendant procured from the Plaintiff in the 2009 Action cannot possibly stand.

49.As for the issue of inducement or reliance, the Judge made the following findings at §197 of the Judgment:

“[The Plaintiff] must be under a lot of pressure when he received the Demand Letter and faced the [2009 Action]. He did not seek legal advice. Nor did he ask for Mr YC Fong’s assistance. He dealt with the difficult situation on his own. It is understandable that he readily succumbed to such pressure and was willing to pay the amount to get rid of the legal problems besetting him. It was, after all, not a huge sum in comparison with the rental income the Lands yielded. He was probably embarrassed to admit his weakness. And I believe that he did not know the legal implication of his acceptance that [the 1^st Defendant] was his landlord in the Consent Summons and the Receipt.”

50.The Judge went on to find the following at §203 of the Judgment:

“[The Plaintiff] clearly relied on the false representations based on and arising from the 2007 Order and signed the Consent Summons. I do not believe that [the Plaintiff] genuinely accepted that he was a tenant of the estate of Madam Lee and/or [the 1^st Defendant] and he owed them any arrears of rent. He could not have not paid due attention or any at all to the Consent Summons.  The Consent Summons in fact could not serve the purpose of [the Plaintiff]. It even did not provide that [the 1^st Defendant] would discontinue the [2009] Action upon receipt of the payment of HK$20,000 by [the Plaintiff]. Nor did it contain any agreement to allow the [Alleged] Lease to be continued and so [the Plaintiff] could remain on the Alleged Rented Lands.”

51.In our view, it was open to the Judge to make the above findings.  The 1^st Defendant’s argument that there was no factual or evidential basis for the Judge to find that the Plaintiff’s signing of the Consent Summons was induced by and/or in reliance on the 1^st Defendant’s false representations[7] is an impermissible attempt to challenge the Judge’s findings of fact by seeking to re-argue his case in the Court of Appeal, and is rejected.

52.Mr Koo also argues that, in view of the Judge’s preference for the evidence of Ricky Tam to that of the Plaintiff, it follows that the Plaintiff gave false evidence.  We do not accept this argument.  In a civil action, the evidence of witnesses is generally assessed based on the standard of balance of probabilities.  The mere fact that the court prefers the evidence of one witness and rejects the conflicting evidence of another witness does not mean that the latter gave false evidence.  The Judge did not find the Plaintiff to be an untruthful witness, or that the Plaintiff gave false evidence in court.  On the contrary, the Judge considered the Plaintiff to be “a forthcoming and reliable witness”, at least in relation to the central issue of the Plaintiff’s occupation and use of the Lands since 1970.  We see no basis for this Court to find that the Plaintiff gave false evidence at the trial.

53.In short, Ground 3 has no merit and is rejected.

54.Having reached the above conclusions, it is not necessary for us to consider the Plaintiff’s argument raised in the Respondent’s Notice dated 8 July 2025 that the 1^st Defendant’s appeal ought to be struck out or dismissed as being an abuse of the process of the court, on the ground that he has not challenged the Judge’s finding that the 2007 Order was obtained by the fraud of Madam Lee/the 1^st Defendant, and it would bring the administration of justice into disrepute to allow the 1^st Defendant to pursue the present appeal.

DISPOSITION

55.The 1^st Defendant’s appeal is dismissed.

56.The parties are agreed that costs should follow the event.  We make an order that the 1^st Defendant shall pay the Plaintiff’s costs of the appeal.  Mr Chong applies for the Plaintiff’s costs to be assessed on an indemnity basis, relying on the finding of fraud by the Judge against the 1^st Defendant as well as the lack of merits of the appeal.  Mr Chong points out that the Plaintiff also obtained an order of indemnity costs in his favour in the court below.  Mr Koo opposes the application, arguing that the 1^st Defendant essentially only challenges the Plaintiff’s locus in the appeal, and there is no abuse of process.  Looking at the overall circumstances of this case, we are not satisfied that this is an appropriate case to order the 1^st Defendant to pay indemnity costs to the Plaintiff.

57.The Plaintiff’s costs shall be assessed summarily.  The 1^st Defendant shall have leave to file and serve a statement of objections (limited to 2 pages) to the Plaintiff’s Statement of Costs for Summary Assessment (on Party and Party Basis) dated 21 July 2026 within 7 days from the date of this judgment.

Mr Patrick Chong and Mr Terrence Tai, instructed by Sit, Fung, Kwong & Shum, for the Plaintiff

Mr Ernest Koo, Mr Rex Yam and Mr Cheung Kai Yin, instructed by Stanley K.Y. Ng & Co., for the 1^st Defendant