TSANG SIU TUNG v. THE INCORPORATED OWNERS OF ARGYLE HOUSE

HCA 166/2012

[2019] HKCFI 1187

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 166 OF 2012

____________

BETWEEN
	TSANG SIU TUNG	Plaintiff
	and
	THE INCORPORATED OWNERS OF ARGYLE HOUSE  (No. 43 Argyle Street) (sued on its own behalf and representing all owners of Argyle House, No. 43 Argyle Street erected on the remaining portion of Kowloon Inland Lot No. 2245)	Defendant

____________

Before: Deputy High Court Judge Keith Yeung SC in Court

Dates of Hearing: 10 and 11 April 2019

Date of Decision: 11 April 2019

______________________

D E C I S I O N

______________________

1.  This is meant to be the trial of an action commenced by the plaintiff (“P”) against the Incorporated Owners of Argyle House (No 43 Argyle Street) (“D” and “No. 43” respectively). The cause of action is adverse possession. P is seeking a declaration that he has acquired a good possessory title to a specific portion on the Ground Floor of No. 43 which has been referred to by parties as “Shop South”. Shop South occupies part of an area on the Ground Floor which has been called by the parties as “the Middle Portion”.

2.  On 24 January 2019, one day before the PTR of this trial was set to be heard, D made an application for leave to file an Amended Defence and Counterclaim.  That application was subsequently heard and dismissed by me on 1 February 2019.  I gave my decision and read out in court my reasons on the same day.  I expressed my dissatisfaction in which the application had been conducted.  I refer to my written Decision which I will not repeat.

3.  On 3 April 2019 when Mr Lam, counsel for D, filed his written Opening for the trial (scheduled to start on 10 April 2019 for five days), it was said on D’s behalf that:

“ 1. [D] posts a preliminary issue whether the dispute area, namely the Shop South, is a common area of the Building (No.43).

2. Notwithstanding it has been stated in the Agreed Facts and admitted under the Amended Defence, [D] may seek leave to withdraw such an admission and put [P] to strict proof of the same.”

4.  That the Shop South is situated on a common part of No. 43 has never been in issue.  That has been specifically admitted by D in its Amended Defence (the “Admission”).  There was no attempt to withdraw the Admission during the last application for amendment.  In the witness statement of Madam Chiu Sui Fong filed for the purpose of these proceedings, the Admission was for all practical purposes confirmed.  As recent as 25 March 2019 when the Agreed Statement of Facts was prepared pursuant to the direction I gave during the PTR, it remained admitted that “… the Middle Portion was not allotted of any share and remains at all material times a common part of No.43.”

5.  Between the date when Mr Lam filed his Opening and the commencement of the trial, nothing had been done to notify P or the Court that an application to withdraw the Admission would (as opposed to “may”) be made.  In fact, according to Mr Chan, counsel for P, a bundle of documents comprising land search and other title documents were served on him by D, with no covering letter or anything.  As things turned out, those were the documents which Mr Lam ultimately referred to in support of D’s application to withdraw the Admission, as I will explain below.

6.  On the morning of the first day of the trial, Mr Lam sought to raise as a preliminary issue as to whether Shop South is on a common part.  He moved to and fro as to whether he would be making an application for leave to withdraw the Admission.

7.  One point he took was that as P is seeking a declaration, even with the Admission that the Shop South is on a common part, “the Court would scrutinize, that the Shop South is within the definition of common area of the Building before any declaratory relief would be granted in respect of land.”  His point is that if Shop South is not on a common part, and the paper owner who should be joined and should be in court being not, the declaration sought ought not to be made.

8.  Ultimately, after lunch on the first day of the trial, Mr Lam produced a set of proposed Re-amended Defence and Counterclaim and sought leave to dispute the averment that the Shop South is on a common part.  The Counterclaim for possession remains (albeit inconsistent with D’s primary position that the Shop South is not on a common area), but becomes framed on an alternative basis, ie in the eventuality of the Court finding that the Shop South is indeed on a common part (which D denies).

9.  I allowed Mr Lam to proceed with the application to amend.  I heard Mr Lam’s submissions.  There was no attempt to justify the late application.  He originally did not even seek to address the strength of his amended case.  I drew to his attention the case of Sowerby v Charlton [2006] 1 WLR 568, which has been held to be applicable to Hong Kong by our Court of Appeal in Lo Li Li Lily v Lui Fung He [2016] 3 HKC 483.  In that case, Brooke LJ observed at paragraphs 35 and 36 that:

“ 35. … the unreported judgment of Sumner J in Braybrook v Basildon and Thurrock University NHS Trust [2004] EWHC 3436 (QB) at [45] appears to us to offer valuable guidance on the way in which a court should exercise its discretion when determiningwhether or not to permit the withdrawal of an admission that wasmade after an action was commenced. After referring to a number of earlier cases he said, at para 45:

‘ From these cases and the CPR I draw the following principles. (1) In exercising its discretion the court will consider all the circumstances of the case and seek to give effect to the overriding objective. (2) Amongst the matters to be considered will be: (a) the reasons and justification for the application which must be made in good faith; (b) the balance of prejudice to the parties; (c) whether any party has been the author of any prejudice they may suffer; (d) the prospects of success of any issue arising from the withdrawalof an admission; (e) the public interest, in avoiding where possible satellite litigation, disproportionate use of court resources and the impact of any strategic manoeuvring. (3) The nearer any application is to a final hearing the less chance of success it will have even if the party making the application can establish clear prejudice. This may be decisive if the application is shortly before the hearing.’

36. Above all, the exercise of any discretion will always depend on the facts of the particular case before the court.  The words ‘will consider all the circumstances of the case’ have particular resonance in this context.”

10.  I refer further to §18 of the decision of the Court of Appeal in Lo Li Li Lily, that when deciding whether leave should granted, the need of the applicant applying to withdraw an admission to put forward a convincing and credible explanation of the circumstances in which the admission was in fact made is, although not conclusive, a powerful factor.  That also goes to the issue of good faith on the part of the application.

11.  Mr Lam has made little effort in addressing those principles and matters which this Court is required to consider.  No explanation for the late application has been tendered, except perhaps that the point was only spotted late, which is hardly a reason.

12.  In the context of the application to amend, and on my invitation, Mr Lam subsequently addressed me, based on quite a number of title documents, on the issue as to whether the Shop South is on a common area.  A written submission on that point was produced on the morning of the second day of the trial.  I have considered those submissions.  I am of the view that on the materials before me, the point is arguable.  I say no more for reasons which will be obvious from what I am going to say below.

13.  Having heard Mr Lam’s submission, Mr Chan took a realistic approach and informed me that he would not resist the application to withdraw the Admission and to amend.  He told me that he however required an adjournment, so that P could, amongst other matters, engage an expert to deal with the issue.

14.  Mr Lam resisted any adjournment.

15.  The prejudice which P will suffer if I am to allow D leave to withdraw the Admission at the middle of the trial is obvious.  While it is true that P has the onus of proving its case, his case has been prepared on the basis of the Admission. If whether Shop South is on a common part had previously been raised as an issue, the case could have been prepared differently.  For example, other parties might have been joined.  P would lose this procedural option if the Admission were permitted to be withdrawn at this stage but without any adjournment.

16.  On the other hand, there is indeed the practice that a declaration will not be granted on admission — see Hong Kong Civil Procedure para 15/16/2.  I might indeed have to consider the issue as to whether Shop South is on a common area despite the Admission.  I am concerned about the prejudice which P would suffer if I were to dismiss the proposed amendment but nonetheless proceed to consider the issue despite the Admission.  In this regard, the Court does acknowledge Mr Lam’s (and Ms Mok’s) efforts in identifying the point and his fearlessness in raising it at this stage.

17.  At his stage, the wise words of Brooke LJ become particularly relevant.  Whilst the application was made late, and may not otherwise be justified on all fronts, I will have to consider all the circumstances of the case.  One decisive consideration in my mind is the fact that a declaration is being sought, that the Court might have to consider the point in question despite the Admission, but that if the Court were to do that without an adjournment, P would suffer serious prejudice.

18.  In the end, having balanced all considerations, and despite these trial dates being obviously milestone dates, I have decided to exercise my discretion and grant leave to amend (meaning necessarily that leave to withdraw the Admission is also granted), but adjourn the trial to a date to be fixed.

19.  I will hear counsel on costs and any direction on further conduct of the trial, and in particular any direction on expert evidence.

20.  On the issue of costs, Mr Chan submitted that the adjournment of the trial was occasioned by the late application for amendment of pleadings by D.  P was not at fault.  He and his client have been acting reasonably in, having heard Mr Lam, deciding not to oppose the application but accept the challenge to prove the issue.  P should not be penalized for being reasonable, and they surely do not accept that they cannot prove the issue.  He seeks an order that the costs occasioned by the adjournment be to P in any event (though not to be taxed or become payable until after the conclusion of the action).  

21.  Mr Lam repeated the point I have summarized above, that the relief sought being declaratory in nature, the Court in any event would have to consider the point even with the Admission. He submitted that to some extent, he has been doing the job which P should have been prepared to do.

22.  There can be no dispute that the adjournment was occasioned byD’s application for leave to withdraw an admission through the amendments. This is the starting point.

23.  On the other hand, there is some force in the argument that the overall burden remains on P to satisfy the Court that the facts and evidence justify the making of the declaration sought.

24.  Having looked at the matter in the round, it does appear to me that yesterday and today have not been totally wasted, though I cannot say the same about the three more days which the trial has been set down to run.  

25.  It the circumstances, and in exercise of my discretion, I am of the view that the appropriate costs order will be this, that ⅖of the costs wasted by the adjournment be P’s costs in the cause, and ⅗ of those same costs be to P.  All the costs are to be taxed if not agreed, but not to be taxed or become payable until after the conclusion of the action.

26.  I make no separate costs order in respect of the application for amendment, as the costs concerned have been subsumed into the costs wasted by the adjournment.

	(Keith Yeung SC)
	Deputy High Court Judge

 

Mr Danny Chan instructed by Francis Kong & Co, for the plaintiff

Mr George Lam and Ms Tina Mok, instructed by Peter C Pan & Co, for the defendant

 

HCA 166/2012

[2019] HKCFI 464

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 166 OF 2012

______________

BETWEEN
	TSANG SIU TUNG	Plaintiff
and
	THE INCORPORATED OWNERS OF	Defendant
	ARGYLE HOUSE (No. 43 Argyle Street)
	(sued on its own behalf and representing all owners
	of Argyle House, No. 43 Argyle Street erected on the
	remaining portion of Kowloon Inland Lot No. 2245)

______________

Before:

Deputy High Court Judge Keith Yeung SC in Chambers

Date of Hearing:	1 February 2019
Date of Decision:	1 February 2019

______________

DECISION

______________

1.  This is the adjourned Pre-trial Review (“PTR”) of the trial of the action commenced by the plaintiff (“P”) against the IO of Argyle House (“D”). The cause of action is adverse possession. An issue has arisen as to whether leave should be granted to D to amend its Defence and Counterclaim at this late stage.

The original PTR

2.  The PTR was originally fixed to be conducted on 25 January 2019.  One day before that on 24 January 2019, D filed two summonses for essentially the same Order, namely leave to file (1) an Amended Defence and Counterclaim; (2) a supplemental witness statement of Chiu Sui Fong, said to be the Chairlady of the defendant during the period relevant to the claim, and (3) a 2^ndSupplemental List of Documents.

3.  The Writ was issued on 2 February 2012 indorsed with a Statement of Claim dated 17 January 2012. 

4.  The Defence and Counterclaim was filed on 27 June 2012.

5.  As early as 14 February 2014, Master Au-yeung ordered that any application for amendment of D’s Defence and Counterclaim should be taken out within 28 days after the lift of stay for mediation on 16 June 2014.  None had been taken out.  On the same occasion, the learned Master further gave directions for the filing of List of Documents and witness statements.  It was ordered that “Any party who is unable to comply with any of the above directions shall take out an application for extension of time within 7 days after the due date for compliance.”  No such application for extension had been taken out.

6.  On 15 June 2017, having reviewed the Listing Questionnaires of the parties, Master Ho ordered and directed that the parties should on or before 31 October 2017 obtain Counsel’s advice on the matter, and that all interlocutory application as may be advised, including application for further amendment of pleadings and/or for leave to adduce supplemental witness statement, shall be taken out within 14 days thereafter.  No such application has been taken out by D.

7.  During the 2^nd Case Management Conference on 4 January 2018 before Master Ho, legal representatives for the parties confirmed that counsel advice had been obtained, and the case was ready for trial.  No application for amendment was taken out.

8.  Despite the history of the matter, less than 24 hours before the original PTR, those two summonses were taken out.

9.  Those summonses, I regret to observe, were poorly prepared.  There is no reason why two summonses need to be taken out for essentially the same Order.  One of them (“Summons 1”) has a paragraph 5 handwritten on it.  In respect of the other summons (“Summons 2”), the proposed Amended Defence and Counterclaim is attached thereto (“AD&C Draft 1”).  Pages 5 and 6 of the proposed draft are however missing.  Further, the contents of those pages that are attached are not the same as the contents of the version of the proposed Amended Defence and Counterclaim attached to the written submissions of Mr Lam (counsel for D) filed for the original PTR (“AD&C Draft 2”).  I note further that the proposed supplemental witness statement of Chiu Sui Fong or the proposed 2^ndSupplemental List of Documents are not attached to any of the two summonses.

10.  During the original PTR, I was told by Mr Lam that Summons 1 was filed by mistake.  No acceptable explanation was given as to why different versions of the proposed Amended Defence and Counterclaim had been placed before me.  Then, I was informed by Mr Tam, counsel for P, that service of the two Summonses, which was only attempted late the day before, was defective. 

11.  I formed the view that in those circumstances, and to do fairnessto P, I ought not proceed with the hearing of the PTR and the summonses that day.  I adjourned the matters.  Noting that trial was imminent, I directed parties to come back to me on 1 February 2019 at 9:15 am.  They now do.

Summons 3

12.  On 29 January 2019, D took out another summons (“Summons 3”).  It is meant to supersede Summonses 1 and 2.  The proposed supplemental witness statement of Chiu Sui Fong and the proposed 2^ndSupplemental List of Documents are attached.  A proposed amended Defence and Counterclaim is attached.  I call it AD&C Draft3, because it is different from the two earlier drafts.

Consideration of the application

13.  Paragraph 9(2) of AD&C Draft 3:

   (a)   D proposes to add the new defence of “imputed or constructive licence or consent”;

   (b)   Mr Lam refers me to Wallis’s Cayton Bay Holiday Camp Ltd v Shell-Mex and BP Ltd [1975] QB 94 which he submits supports his case in this regard.  He at the same time also refers me to Man Kam-tong v Man Lin-tai [1984] HKLR 181 in which Hunter J (as he then was) refused to apply Wallis’s;

   (c)   Mr Chan, counsel appearing for P this morning, has also submitted to me a number of authorities which suggest that Wallis’s has ceased to be good law in the UK, and that it has not been applied in Hong Kong;

   (d)   The reason why Wallis’s has ceased to be good law in the UK is statute-based.  In respect of its applicability in Hong Kong,I have not been cited any authority form our Court of Appeal relevant to the issue.  I am not prepared at this stage to shut D out purely on the basis that Wallis’s has no application in Hong Kong;

   (e)   D’s problem lies in the particulars ((a) to (e) under paragraph 9(2)) it seeks to rely on in support of that defence;

   (f)   I note first of all that the particulars now in AD&C Draft 3 are not in any of the earlier drafts.  They are newly inserted;

   (g)   It is proposed to be pleaded that “[P] knew or must have known that his occupation was subject to [D’s] and/or the owners of No. 43’s consent …” and “Ever since March 1989 at the timewhen [P] (and Tsui) came into possession, [D] had full knowledge that [P’s] occupation was illegal and without express consent given by [D].  Tacit permission was given by [D] to [P]”.  However, the bases of P’s or Tsui’s alleged knowledge have not been pleaded.  The meaning of “tacit permission”, or the reason for the implication of such “tacit permission”, has not been pleaded;

   (h)   It is the duty of D to provide proper particulars in support of its plea.  This is particularly important when an application for amendment is made late;

   (i)   In my view, given the lack of proper particulars at this stage, the proposed addition of the new plea will cause embarrassment to P.  These are important considerations against the exercise of my discretion to grant leave to amend at this late stage.

14.  Paragraph 12:

   (a)   D proposes thereunder to add a new line of defence, namely, theexistence of an agreement in the form of a specific permission granted by D to P (and/or Tat Cheong, a company beneficially owned and controlled by P) to occupy the shop in question (called the Shop South) as a bare licensee.  The agreement is alleged to be reached in about 2001 when D agreed to withdraw a legal action against Tat Cheong.  That has not been pleaded before, and no explanation has been tendered as to why that was so;

   (b)   I have read the proposed supplemental witness statement of Chiu Sui Fong.  I agree with Mr Chan’s written submission in this regard that there is nothing in it which supports this plea of express agreement;

   (c)   On this basis only, the proposed addition of this paragraph ought to be refused.

15.  Paragraph 12B:

   (a)   D proposes to add that “[D] contends that [P] has effectivelyacknowledged [D’s] and/or all the co-owners’ title or ownership of the Shop ….”;

   (b)   I agree with Mr Chan’s submissions that the meaning of the word of “effective” is vague and unspecified.

16.  Paragraphs 12C, 12D and 13C:

   (a)   I agree with Mr Chan’s submissions that those factual matters concerning management fees, applications for water and electricity supplies, cleaning fees etc have been in D’s knowledge for a long time.  They have not been pleaded until attempt to do so is made today.  As those matters relate to facts which spanned over 15 years, it would be arduous on P to now deal with them.  P will suffer prejudice if the proposed amendments were allowed;

   (b)   I note also that particulars are lacking, in that who from D did the acts alleged in paragraph 13C has not been pleaded.

17.  I have considered all the matters before me together with the authorities cited to me.  I have considered the underlying objectives.  I am of the view that the scheduled trial will most probably be delayed if I were togrant the application to amend.  I repeat the procedural history of the matterset out above.  There is no excuse for D not to have made these applications before.  In any event, no explanation has been placed before me in any attempt to explain that.  In all the circumstances, and also for the specific and additional reasons set out above, I refuse the application to amend paragraphs 9(2) (together with all particulars thereunder), 12, 12B, 12C, 12D and 13C.  I allow the rest, which Mr Chan does not seek to oppose (save the last sentence in paragraph 11, which I allow despite his objection.  His main objection in that regard is inconsistency with paragraph 9(2).  But as I have refused the addition of paragraph 9(2), that objection goes).

18.  The applications to file a supplemental witness statement of Chiu Sui Fong and a 2^nd Supplemental List of Documents go hand-in-hand with D’s application to amend.  They are accordingly also dismissed.

19.  I will proceed to hear parties on costs and directions on trial.

 
 

	(Keith Yeung SC)
	Deputy High Court Judge

  

Mr Danny Chan and Mr Tam Chung Hin Tasman, instructed by Francis Kong & Co, for the plaintiff

Mr George Lam and Ms Tina Mok, instructed by Peter C Pan & Co, for the defendant

HCA 166/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 166 OF 2012

________________

BETWEEN

	TSANG SIU TUNG	Plaintiff
	and
	THE INCORPORATED OWNERS OF ARGYLE HOUSE (No 43 Argyle Street)(sued on its own behalf and representing all owners of Argyle House, No 43 Argyle Street erected on the remaining portion of Kowloon Inland Lot No 2245)	Defendant

____________________

Before: Deputy High Court Judge Woo in Chambers

Date of Hearing: 5 November 2012

Date of Judgment: 9 November 2012

____________________

J U D G M E N T

____________________

 

1.  This is an appeal by the defendant against Master Lai’s decision dated 12 September 2012 that dismissed its application to strike out the statement of claim.

2.  The defendant’s application was made pursuant to Order 18, rule 19(1)(a) of the RHC that the statement of claim disclosed no reasonable cause of action.  As expressly provided by Order 18, rule 19(2), no evidence shall be admissible on the application.   It is thus imperative to examine the statement of claim closely to see if it has or has not disclosed any reasonable cause of action.

3.  The plaintiff claims against the defendant for a declaration that the title of all owners of the Remaining Portion of Kowloon Inland Lot No 2245 known as No. 43 Argyle Street to the premises called “Shop South” on the ground floor is extinguished, by virtue of section 17 of the Limitation Ordinance. 

4.  In the statement of claim, Shop South is described as in the middle portion of the common parts on the ground floor of No. 43 Argyle Street.  The genesis of the claim as pleaded started with an assignment dated 19 November 1980 whereby Wan Yiu Sun (“Wan”) and Ho Chau Yee (“Ho”) became the owners of the two shops at the front and rear portions on the ground floor of No. 43 Argyle Street.  The other relevant parts of the statement of claim are set out below.

“9. On a date unknown to the Plaintiff shortly after November 1980, Wan and Ho entered into and took possession of an area at the middle portion on the ground floor of No. 43 where the lavatories and the adjacent open area were situated as shown in Plan A annexed hereto coloured pink.

10. Wan and Ho demolished the lavatories and converted the area with the adjacent open area into a shop (hereinafter referred to as ‘The Shop’) and let or licensed it to one Sun Wah Medicine and Herb (‘Sun Wah’).

11. By an assignment dated 21^st December 1981, Wan and Ho sold the shop at the front portion (also known as Shop A) of ground floor of No. 43 to Lui Kwai Chiu (‘Lui’) who also with the consent of Wan and Ho began to collect rent/license fee for The Shop from Sun Wah.

12. When Sun Wah vacated The Shop, Lui recovered and took possession thereof.

13. Lui then let or licensed The Shop first to Mak Sui Kuen, and later to Tsui Wang Hing (‘Tsui’) who was let into possession in about 1985.

14 The Defendant is the Incorporated Owners of No.43 incorporated on 9^th January 1989.

15. By a written agreement in Chinese dated 16^th March 1989 when Tsui was still in possession, and in consideration of the amount of HK$620,000.00 paid by the Plaintiff and Tsui to Lui, Lui agreed to ‘sell’ The Shop to the Plaintiff and Tsui, both parties acknowledged that Lui had no title to The Shop.

16. By an agreement between the Plaintiff and Tsui, the Plaintiff agreed to buy out Tsui’s interest in The Shop, and Tsui delivered possession of The Shop to the Plaintiff in or about April 1989.

17. Since about April 1989, the Plaintiff has been in possession of The Shop to the exclusion of all the world including the Defendant and all owners of No.43, such possession being adverse to the Defendant and all owners of No.43.

18. The Plaintiff has since April 1989 been enjoying all incomes from letting or licensing The Shop to Tat Cheong Building Materials Company Limited (‘Tat Cheong’) which was at all material times a company beneficially owned and controlled by the Plaintiff, again to the exclusion of the Defendant and all owners of No.43.

19. The rights of the owners of No.43 in relation to The Shop are by virtue of s. 16 of the Building Management Ordinance, Cap.344 since its incorporation exercised by the Defendant to the exclusion of the owners.

20. On or about 16^th March 1990, the Defendant commenced proceedings in the Tsuen Wan District Court under Action No.1180 of 1990 against Tat Cheong to recover possession of The Shop.

21. In or about February 1991, in consideration of, inter alia, the Plaintiff agreeing to give up possession of part of The Shop to the Defendant for use as a caretakers office, the Defendant agreed to, and withdrew its claim against Tat Cheong.

22. The Plaintiff then partitioned off and delivered part of The Shop to the Defendant for use as a caretakers office, and Tat Cheong continues to remain in exclusive possession of the remaining part of The Shop as shown in Plan B annexed hereto coloured pink hatched black (hereinafter referred to as ‘Shop South’) adverse to the Defendant and all owners of No.43.

23. In or about 2002, Tat Cheong delivered possession of Shop South to the Plaintiff who continues to remain in exclusive possession thereof adverse to the Defendant and all owners of No.43.

24. More than 12 years has elapsed since the right of action first accrued to the Defendant or any other owners of No.43 to recover Shop South.”

5.  Mr Wang, for the defendant, presents a two-pronged argument.  First, the plaintiff was and has been a licensee, as opposed to an adverse possessor; and secondly, irrespective of whether the plaintiff is a licensee, he cannot be said to have the intention to possess Shop South to the exclusion of all others. 

6.  Mr Wang puts his case as that the plaintiff has admitted that he gained access to Shop South by paying Lui a sum of $620,000 together with another licensee Tsui in exchange of Lui’s permission (para 15 of the statement of claim).  No conveyance is ever alleged to have been made.  Therefore, the plaintiff can only be said to have taken occupation of Shop South as the licensee of Lui, in the same position as Tsui who has been expressly pleaded (in para 13 of the statement of claim) as a licensee of Lui. 

7.  Mr Wang further argues that it is clear from the statement of claim that the plaintiff is only a licensee who entered into Shop South upon voluntary payment of $620,000 and that having paid for his occupation, the plaintiff cannot now be heard to assert that he intended to exclude the whole world and hence he does not possess the requisite animus possidendi for claiming adverse possession.  It is a lack of the required intention, without which the plaintiff can never succeed in claiming adverse possession.

8.  Mr Wang relies on a number of authorities, notably Wong Tak Yue v Kung Kwok Wai David & Anor [1998] 1 HKLRD 241 (CFA).  He directs my attention to Litton PJ’s judgment where it was held that the burden was upon the trespasser “to establish his intention to exclude the whole world”.  The learned judge went on, at p251D:

“Here, the appellant has come nowhere near establishing adverse possession. He unequivocally declared that at all times he was ready willing and able to pay rent to the owners, and did not do so only because no one came along on behalf of the landlords to collect the rent. … the fact remains that he had no intention to exclude the owners.”

9.  Mr Wang stresses that since a willingness to pay rent (or licence fee, as the case may be) defeats adverse possession, a fortiori in the present case, the plaintiff (with Tsui) not only had the intention to make payment for his possession of the premises but had also actually paid a sum to Lui to obtain possession.  Thus, the plaintiff’s pleaded case is contrary to the intention of his having adverse possession, let alone having an unequivocal intention.

10.  I have earlier set out a major part of the statement of claim in order to show that Mr Wang’s argument that the plaintiff is clearly a licensee of Shop South is unsubstantiated.  It is not so specifically pleaded and indeed the plea in para 15 of the statement of claim that

“in consideration of the amount of HK$620,000.00 paid by the Plaintiff and Tsui to Lui, Lui agreed to ‘sell’ The Shop to the Plaintiff and Tsui, both parties acknowledged that Lui had no title to The Shop”

is obviously opposed to the idea that either Tsui or the plaintiff was merely a licensee vis-à-vis Lui subsequent to and consequent on the payment.

11.  The fact that there was no conveyance by Lui to the plaintiff and Tsui is also reflected by the plea is that the plaintiff and Tsui of the one part and Lui of the other acknowledged that Lui had no title to The Shop (that included Shop South).  Yet this does not in any way help the defendant’s case on this appeal.

12.  I have not been able to discern any material in the statement of claim, as properly understood, that contradicts the plaintiff’s intention of adverse possession, as Mr Wang has submitted.

13.  One does not need any reminder that it is only in plain and obvious cases that the court should exercise its summary powers to strike out a pleading under Order 18, rule 9 – see para 18/19/4 of Hong Kong Civil Procedure, 2012, Vol 1.  I am not persuaded that the plaintiff’s claim of adverse possession of Shop South is plainly unsustainable.  This is not a clear case that the statement of claim discloses no reasonable cause of action.  The Master was correct in dismissing the defendant’s application, and for me, there is no other alternative but to dismiss the defendant’s appeal.

14.  Counsel for the parties have agreed that costs should follow the event.  I therefore make an order that the defendant’s appeal be dismissed with costs.

(K H Woo) Deputy High Court Judge

Mr Clark Wang, instructed by Peter Pan & Co, for the defendant

Mr Benjamin Chain, instructed by Louis K Y Pau & Co, for the plaintiff