Hong Kong Housing Society and Another v. Wong Nai Chung t/a Sun Chung Flower Shop

DCCJ 3620/2007

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 3620 OF 2007

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BETWEEN

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Coram:  Deputy District Judge Richard Khaw in Chambers  (open to public)

Date of Hearing:  14 April 2009

Date of Handing Down of Decision:  24 April 2009

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DECISION

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The applications

1.On 30 January 2009, I granted summary judgment (“the Judgment”) against the Defendant in respect of, amongst others, delivery of vacant possession of a property known as cockloft and other common areas therein, No. 494 Fuk Wing Street, Sham Shui Po, Kowloon (“the Property”).  I do not intend to repeat the factual background and also the relevant statutory provisions which have been set out in paragraphs 1-29 of my judgment.

2.By Summons dated 20 February 2009, the Defendant applied for (1) leave to appeal against the judgment and (2) a stay of execution of the judgment until further order of the Court.  In fact, another application for an interim stay of execution was taken out by the Defendant on 23 March 2009 and heard on 30 March 2009.  In the hearing, the Plaintiff offered an undertaking not to obtain actual possession of the Property until the determination of the application for leave to appeal.  Upon such an undertaking (which was accepted by the Defendant), I ordered that the application for a stay be adjourned to be heard together with the application for leave to appeal on 14 April 2009.

Application for leave to appeal

3.The principles on an application for leave to appeal under s. 63 of the District Court Ordinance (Cap. 336) are, I believe, well-established.  The Plaintiff has submitted that no appeal should be granted unless the applicant can demonstrate some “realistic prospect of succeeding on the appeal”.  However, the Defendant, during submissions in the hearing, took issue with the Plaintiff in this regard and emphasised that the correct test should be simply whether the applicant has an “arguable case”.

4.I do not think that such difference in phraseology gives rise to any material distinction in substance (insofar as the applicable test is concerned).  As expressed by Lord Woolf in Smith v Cosworth Casting Processes Limited [1997] WLR 1538 (which was cited in Ma Bik Yung v Ko Chuen, HCMP 4303/1999):-

“(1)  The Court will only refuse leave if satisfied that the applicant has no realistic prospect of succeeding on the appeal.  The test is not meant to be any different from that which is sometimes used which is that the applicant has no arguable case.  Why, however, this court has decided to adopt the former phrase is because of the use of the word “realistic” makes it clear that a fanciful prospect or an unrealistic argument is not sufficient.” 

5.I should also mention that according to the new s. 63 of the District Court Ordinance (which has been recently amended as a result of the implementation of the Civil Justice Reform (“CJR”)), the words “reasonable prospect of success” are now used.  However, I believe that such change of terminology does not result in any change in substance for the test.

6.Another preliminary issue is whether the Court should give any particular consideration to an application for leave to appeal against a summary judgment.  Obviously, a judge, in granting summary judgment, has already taken the view that there is no arguable defence.  In the circumstances, will the judge hearing the application for leave to appeal (normally the same judge who has granted summary judgment) be contradicting himself if he then gives leave to appeal (on the basis that there is an arguable appeal)?

7.I think that the above question should be answered in the negative.  The fact that a judge has granted summary judgment by ruling that there is no arguable defence should not in any way debar him from granting leave to appeal.  Otherwise, it would be tantamount to laying down a principle or even a presumption that an application for leave against a summary judgment should be refused.  Even after a judge has ruled that no arguable defence can be demonstrated in an application for summary judgment, he may still accept, after a preliminary assessment of the grounds of appeal submitted for the application for leave, that there are reasonable grounds to challenge the accuracy of the decision.  Hence, each application for leave should be determined on its own merits, regardless of the nature of the order that the applicant intends to appeal against.

8.In passing, I note that pursuant to the new Rules of the District Court which have been in force after the implementation of CJR (but do not apply to the present application which was taken out before 2 April 2009), no leave is required for an appeal against a summary judgment under O.14 (see O. 58 rr. 2(4), 4(1) and 4(2)).

Grounds of appeal

9.To recap, this case concerns a notice of resumption (“the Notice of Resumption”) which was issued in July 2005 in respect of the implementation of development proposal K21 (“K21”).  K21 was prepared in 1997 by the Land Development Corporation (“the Corporation”) (already defunct) pursuant to the Land Development Corporation Ordinance (“LDCO”) (which has been repealed).

10.In 2001, a new ordinance, namely, the Urban Renewal Authority Ordinance (Cap. 563) (“URAO”) came into operation.  According to URAO, the Urban Renewal Authority (“the Authority”) was established to replace the Corporation.  As a result, LDCO has been repealed.

11.The contentions made by the Defendant in the hearing of an application for summary judgment (which have been set out in paragraph 29 of my judgment) can be summarised as follows:-

(1)  According to ss. 21(1)(b), 21(3)(a) & (b) and 22(4) of URAO, the Authority is required to follow the guidelines set out in the urban renewal strategy (“the Strategy”) in implementing K21 (even though K21 had been prepared by the Corporation before URAO came into effect).

(2)  By virtue of s.36(4) of URAO, the Authority is required to continue and complete K21 (an inherited proposal as described by both parties) as if LDCO had not been repealed.  In view of s.15(4)(b)(ii) of LDCO, the Authority was required to apply to the Secretary for Housing, Planning and Lands (“the Secretary”) requesting him to recommend to the Chief Executive the resumption of the land involved.  In making such an application, as submitted by the Defendant, the Authority should comply with the Strategy.

(3)  When the Secretary was asked to make a recommendation for land resumption in respect of K21, the assessment provided to the Secretary did not follow the guidelines contained in the Strategy.  The Secretary’s subsequent recommendation was in breach of s.15(4)(b)(ii) of the repealed Ordinance.  In the circumstances, the Notice of Resumption (which was issued as a result of the recommendation) is unlawful and invalid.

12.Apart from the above, the Defendant also argued that even on the assumption that the Strategy did not apply, the assessment provided to the Secretary as shown in the letter dated 30 November 2004, in any event, failed to comply with s.15(4)(b)(ii) of the repealed Ordinance.

13.The principal grounds of appeal have been provided in the Defendant’s draft Notice of Appeal and they are as follows:-

(1)  The Court erred in deciding difficult points of law without the benefit of all relevant facts, in particular, the corporate plan) (paragraph 1 of the draft Notice of Appeal) (“Ground 1”).

(2)  The Court erred in holding that the Strategy did not apply to the Authority’s implementation of K21 and also the Secretary’s recommendation of resumption of the land involved (paragraphs 2 to 5 of the draft Notice of Appeal) (“Ground 2”).

(3)  The Court erred in holding that the information provided in the letter dated 30 November 2004 contained, prima facie, an assessment required under s.15(4)(b)(ii) of LDCO (paragraph 6 of the draft Notice of Appeal) (“Ground 3”).

(4)  The Court erred in finding that the delay in challenging the validity of the Notice of Resumption shortly after it was published in July 2005 would be a factor against the Defendant (paragraph 8 of the draft Notice of Appeal) (“Ground 4”).

(5)  The Court erred in failing to find that there ought, for some other reasons, be a trial (paragraph 7 of the draft Notice of Appeal) (“Ground 5”).

Ground 1

14.In view of the relevant strategy provisions and the contents of the Strategy, it is clear that the Authority was not required to follow the guidelines set out in the Strategy while making the recommendation for land resumption.  My analysis has been set out in paragraphs 32 to 44 of my Judgment.  I only wish to highlight the following points:

(1)  Section 21 of URAO refers to what the Authority needs to do “when preparing its programme of proposals and its programme of implementation for projects” for the purpose of submitting the draft corporate plan.  Section 21 simply does not touch upon what the Authority or the Secretary would need to do for the purpose of making the recommendation for land resumption.

(2)  Section 36(4) of URAO makes it clear that an inherited development proposal (such as K21) may be “continued and completed” by the Authority as if LDCO had not been repealed.  In that case, one has to go back to s.15(4) of LDCO to see what the Authority and the Secretary would need to do for the purpose of making a recommendation for land resumption.  Obviously, the Strategy was not referred to in s. 15(4) of LDCO as it simply did not exist at that time.

(3)  It is plain from the contents of the Strategy that it is only intended to apply to proposed projects which need to be published.  According to s. 23 of URAO, only the development projects and schemes made under ss. 25 and 26 of URAO (but not the inherited proposals made under LDCO) need to be published.

15.Ground 1, in my opinion, does not have a realistic prospect of success.

Ground 2

16.In the hearing of the Plaintiffs’ application for summary judgment, the Defendant never complained that they experienced any difficulty in obtaining any relevant information or he was in any way inhibited from advancing his case fully due to any lack of information.  In particular, there was no complaint about the contents of the corporate plan.  It appeared from the Defendant’s evidence (paragraph 14 of his “Supplemental Affirmation in reply” dated 28 July 2008 that there was no dispute that the development proposal had been covered in a corporate plan.  Even up till now, I have no evidence as to how and why the corporate plan, if shown to the Court, would support the Defendant’s case.  I see no substance in this ground.

Ground 3

17.According to s.15(4)(b)(ii) of LDCO, the Secretary shall not make a recommendation for land resumption unless an application for resumption is accompanied by a statement “containing an assessment … as to the likely effect of the implementation of the proposal including an assessment as to whether re-housing arrangements can be made.

18.From the information provided in the letter dated 30 November 2004 (and its attachments), one can find particulars of the target properties, the estimated re-housing demand and the reserved re-housing units from Hong Kong Housing Authority and Hong Kong Housing Society.  I fail to see how it can be said that such information did not contain an assessment for the purpose of s.15(4)(b)(ii) of LDCO.  I find nothing arguable in this regard.

Ground 4

19.As stated in paragraphs 52 to 57 of my judgment, I accept that public law issues can be raised as defences to a “private law” claim.  However, I have taken the view that the delay in challenging an administrative decision (which is the subject matter of the defence to a “private law” action) is relevant to the merits of such a defence.

20.Clearly, the English Court of Appeal’s decision in Rhondda Cynon Taff County BC v Watkins [2003] 1 WLR 1864 is distinguishable.  I wish to reiterate that the defendant in Rhondda was claiming adverse possession of a property and he enjoyed possession without any interruption by the council for 34 years.   These peculiar features (which do not exist in the present case) provided the reason why the Court of Appeal held that the delay in challenging the deed poll issued by the council did not bar him from running its defence.

21.In the present case, there is simply no explanation for the delay on the part of the Defendant.

22.Ground 4 therefore has no merits.

Ground 5

23.I accept that the nature of the case may sometimes warrant a trial (notwithstanding that the defendant may not be able to pin-point any precise issue or question in dispute) (see Miles v Bull [1969] 1 QB 258).  However, in the present case, the Defendant has specifically identified the so-called “public law issues” as its defence.   Further, as mentioned above, there was no complaint whatsoever that the Defendant was unable to put forward his case due to any lack of information.  I find it rather inappropriate for the Defendant to now allege that discovery of documents in the proceedings may support his case (without identifying what those documents are and how they may assist the Defendant’s case).

24.I am of the view that Ground 5 will not assist the Defendant’s appeal.

Fresh evidence

25.Shortly before the hearing started on 14 April 2009, the Defendant submitted a Supplemental Skeleton Submissions in which it was argued that new evidence would be adduced on appeal.  The Defendant referred me to a questionnaire in Chinese (“the questionnaire”) entitled “市區重建局社區影響評估”), apparently in respect of another inherited proposal called H16.  According to the Defendant’s submissions, the questionnaire shows that the Authority followed the guidelines set out in the Strategy.

26.However, the Defendant has only attached a copy of the questionnaire to his Supplemental Skeleton Submissions.  The Defendant did not file any affirmation to explain why he is entitled to adduce such new evidence on appeal.  In the circumstances, there is simply no evidence from the Defendant on the following:-

(1)  the circumstances in which the questionnaire was issued;

(2)  to whom the questionnaire was sent;

(3)  the reason why such questionnaire is directly relevant to the question on the actual implementation of the land resumption by the Authority and the Secretary;

(4)  the reason why this document could not have been made available earlier.

27.I therefore fail to see how the Defendant could even start to argue that he will be able to satisfy the requirements laid down in Ladd v Marshall [1954] 1 WLR 1489.  I see no substance in this argument based on the so-called new evidence.

No leave should be granted

28.By reason of the above matters, I conclude that the Defendant has failed to demonstrate that he has an arguable appeal (in the sense that it has a realistic prospect of success).  Further, this is a dispute between the Plaintiffs and the Defendant (which is the only occupier who has refused to move out from the building notwithstanding the notice of resumption).  I do not think that this case has any element of “public interest” for which leave to appeal should be granted.

Stay of execution

29.I understand that where the relevant order is one for the possession of premises, it can be appreciated that without a stay of execution, more often than not, it is likely that an appeal would be rendered nugatory (see Star Play Development Ltd v Bess Fashion Management Co Ltd, HCA 4726/2001, 28 May 2002, Ma J (as he then was)).  However, even in the case of an order for possession of premises, a stay is only granted if the court is satisfied that there is at least an arguable appeal.

30.Having ruled that the Defendant does not have an arguable appeal, I conclude that no stay of execution should be granted.

31.Further, in this case, even if a stay of execution, for some reasons, were to be granted, I tend to think that it should only be granted with conditions imposed on the Defendant. 

32.The Property was assigned to the 1^st Plaintiff in October 2005.  There is no dispute that the Defendant has not paid any sum for his occupation in the Property since October 2005.  In his 2^nd Affirmation filed on 9 April 2009, the Defendant alleged that he had no financial means to make any payment.  However, there is no evidence on why he was unable to raise finance elsewhere for that purpose.  I really cannot see any reason why the Defendant could have stayed and also continue to stay in the Property for free.  Hence, for the sake of completeness, I wish to say that even if a stay of execution were granted, such an order should be made conditional upon the Defendant’s payment of HK$189,000 (HK$4,500 per month x 42 months) either forthwith or within 14 days and (ii) payment of HK$4,500 per month starting from 1 May 2009 pending the outcome of the appeal.

Conclusion

33.In conclusion, I dismiss the Defendant’s two Summonses dated 20 February 2009 and 23 March 2009.  I order that costs of and occasioned by the two Summonses (including costs reserved on 30 March 2009 and also costs of the hearing on 14 April 2009) be paid by the Defendant to the Plaintiffs with certificate for two counsel, to be taxed if not agreed.  I also order that the Defendant’s own costs be taxed in accordance with Legal Aid Regulations.

Mr. Anderson Chow, SC and Miss Queenie Ng, instructed by Messrs. Kao, Lee & Yip, for the 1^st and 2^nd Plaintiffs

Mr. Martin Lee, SC and Mr. Lee Siu Him, instructed by Messrs. K.M. Cheung & Co. (assigned by D.L.A.), for the Defendant

Defendant's application for a stay of excution refused by Court of Appeal. Please refer to HCMP880/2009 dated 22 July 2009