Long Best Development Ltd and Others v. Sham Shun Tsing

HCA 1399/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1399 OF 2012

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D E C I S I O N
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Introduction

1.This is in gist an application for possessory title made pursuant to the provisions of the Limitation Ordinance (Cap 347).  Although it was made by way of an inter partes application, this application is in the nature of an ex parte application (as will be made clear below).

Background

2.The subject properties are 24 pieces and parcels of land in Yuen Long.  The 12 plaintiffs are their registered owners, each owning different pieces of the subject properties.  Besides the 5^th plaintiff, they became the registered owners during the period from February 2006 to May 2007; the 5^th plaintiff acquired title of his property in August 2007.

3.Since then and up to the time of this application (that is, for a period of about 7 to 8 years), the plaintiffs have enjoyed open, uninterrupted and exclusive possession and occupation of the subject properties.

4.It was deposed in an affirmation filed on the plaintiffs’ behalf that, since at least 11 August 1961 (that is, a period of:

(a) about 46 or 47 years up to 2007 or 2008;

(b) over half a century up to the hearing of this application),

likewise the plaintiffs’ predecessors-in-title have all enjoyed open, uninterrupted and exclusive possession and occupation of the subject properties.

5.The reason for the above reference to 11 August 1961 is as set out below (especially para 7(3) below).

6.According to the above affirmation on the plaintiffs, the defendant became the registered owner of the subject properties before July 1961.  By a power of attorney dated 27 July 1961, he appointed an attorney.  However, according to a judgment handed down by the court of appeal on 4 June 1997 (Lo Hung Biu v Lo Shea Chung and Another, Civ App No 258/1996) (“the 1997 appeal judgment”), the power of attorney was said to have been:

“… executed … on 25th April, 1961, in Djakarta in which his name is given as ‘Sim Joen Sen also named Sham Shuen Ching’. It gave powers over all his properties in Hong Kong to Sham Kwan Yiu whose address was given as being in a village in Yuen Long. It was registered in the Land Registry, the Memorial giving the donor’s name as being ‘Sham Shun-Tsing (or spelt as Sham Shuen-Ching)’ with an address in Djakarta and ‘of Yuen Kong’ and the donee as being ‘Sham Kwan-yiu of Yuen Kong’” (p 2 thereof).

7.Despite the difference in the dates, judging from:

(1) the respective names of (i) the defendant herein, and (ii) the donee pleaded in the statement of claim herein, being very similar to those of the said donor and the said donee referred to in the 1997 appeal judgment;

(2) the same respective names (and descriptions) of the said donors and donees appearing in the memorial exhibited to the plaintiffs’ affirmation herein and the memorial referred to in the 1997 appeal judgment;

(3) the donees referred to in the plaintiffs’ affirmation herein and in the 1997 appeal judgment both having executed an assignment in favour of the immediate successor-in-title on the same date, namely, 11 August 1961 (“the 1961 assignment”);

(4) the reference by the plaintiffs to the 1997 appeal judgment as having determined the subject properties’ title suffering from a defect by reason of the said power of attorney,

the only reasonable inference is that this application and the 1997 appeal judgment involve the same power of attorney and same donor and donee.

This application

8.The plank of the plaintiffs’ case is this: as has been determined by the 1997 appeal judgment, the 1961 assignment was “defective”. Such being the case, it can be (and should be) inferred that the plaintiffs have been in adverse possession of the suit properties (through their predecessors-in-title) since August 1961 up to now, which period far exceeds that laid down by Cap 347.

9.But this argument fails to consider at least three matters:

(a) the standard of proof for showing good title is vastly different from that for a claim in adverse possession.  The standard for the former is beyond reasonable doubt whereas that for the latter is balance of probabilities;

(b) good title is to be determined primarily by an examination of the title documents, but adverse possession is to be determined by facts and circumstances;

(c) accordingly, “paper” title to real properties may be relevant to the possession of the properties, but it may not; each case turns on its own facts.

10.In the historical context leading to this application, not only has the defendant (or anyone acting in his name) never interfered with the enjoyment, occupation and possession of the suit properties for over half a century (since August 1961), he:

(1) was last known to have resided in Indonesia, and there is no indication (let alone evidence) that he (or anyone acting in his name) has returned to Hong Kong since that time;

(2) could not be located, with the result that this application was served on him by delivering (and posting) it to the village chief(s) in the areas of Pasar Baru Village and Karang Anyar Village;

(3) is highly likely to be of relatively advanced age, if not already deceased.

As can be expected, the defendant has not entered an appearance herein (whether physically or by way of documents).

11.In such circumstances, and bearing in mind the standard of proof in this application is the balance of probabilities, I am not satisfied that the defendant has not consented to the 1961 assignment, or at least, to the said donee’s parting with the possession of the suit properties.  In fact, the overall circumstance suggests the contrary to be at least probable.  This being the case, I am not satisfied that the plaintiffs have established a possession adverse of the suit properties to the defendant’s.

12.The plaintiffs rely on the following authorities in support of the proposition that, where the title documents were void, the person in possession of the property would become a tenant at will, with the result the limitation period would run against the true owner and the occupiers would be in adverse possession thereof:

(1) The Low Moor Co and Others v The Stanley Coal Co (Ltd) (1876) 34 LT 186;

(2) Churcher v Martin (1889) 42 Ch D 312;

(3) London & South Western Railway Co v Gomm (1881) 20 Ch D 562.

13.None of the above authorities can advance this application.  This is because in all the authorities it was clear that, in each of those authorities, the true owner intended to assert its right of possession against the occupier from the time when the occupier entered into possession of the suit property.  Not only is there no such evidence in this application, the whole circumstance militates against such an inference (as explained in para 10 and 11 above).

14.Further, the grant of a declaration being a discretionary relief, the following ought to be borne in mind:

(1) in exercising its discretion the court will consider whether any useful purpose would be served by granting declaratory relief: Tsang Yuen Ling v Incorporated Owners of Siu Lung Court [2001] HKEC 1121;

(2) a declaration will not be made against a person who has asserted no right nor formulated any specific claim: Re Clay [1919] 1 Ch 66 CA;

(3) similarly, a declaration will not be granted where there is no breach and no threat or intention to commit a breach of agreement: Mellstrom v Garner [1970] 1 WLR 603.

15.By reason of the conclusion reached in para 11 and 13 above, it is strictly unnecessary to consider the matters set out in para 14 above.  In case such a need should somehow arise, that the plaintiffs are in effect claiming against a “shadow” opponent is a factor which weighs against the grant of declaratory relief herein. 

Conclusion

16.This application is refused with no order as to costs.

Other matters

17.The plaintiffs’ written submissions also mentioned various other points.  These have not been expressly set out or dealt with above.  This is so only because of the need to balance between the length of the decision and its comprehension.  It does not mean those other points are thought to be irrelevant (or have been overlooked).  To avoid doubt, those other points have also been considered.

Mr Enzo W H Chow, instructed by Jessica Wong & Co, for the plaintiffs