U PO CHU (otherwise known as YU MAN KI or YU MAN KIT) v. TSANG PUI LING AND OTHERS

DCMP 467/2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 467 OF 2013

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REASONS FOR DECISION

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1.  This is an application made by the 1^st defendant for leave to appeal against the judgement I had handed down in the case on 30 June 2016 (“the Judgment”).  The 1^st defendant also applied for stay of execution pending the appeal outcome.

2.  At the hearing on 4 October 2016, I have dismissed the 1^st  defendant’s application for leave to appeal with costs but gave the 1^st  defendant stay of execution until the determination of the leave to appeal to the Court of Appeal.  I said I would provide the reasons for my decision in due course.  Here are the reasons.

BACKGROUND

3.  For the background and the issues involved in this case, I would refer the parties to the Judgment.  I shall not repeat them here.

4.  The 1^st defendant’s counsel Mr Ernest Ng in his written submissions, which was supplemented by some very eloquent and forceful oral submissions at the hearing, submits that the 3 proposed grounds of appeal are arguable with a “realistic prospect of success” under section 63A(2)(a) of the District Court Ordinance, Cap 336 (“DCO”).  Mr Ng further submits that there are other reasons in the interests of justice why the appeal should be heard under section 63A(2)(b) of the DCO.

5.  On the stay of execution, the 1^st defendant submits that, balancing the prejudice to the 1^st defendant for refusing a grant and to the plaintiff for ordering a grant, the former outweighs the latter and the stay of execution of the judgment pending the outcome of the appeal should be ordered.

6.  The plaintiff on the other hand contends that there was nothing wrong with the Judgment and the 1^st defendant does not have any “reasonable prospect of success” in the proposed appeal.  Further, the plaintiff’s counsel Mr Ryan Law submits that there should not be any stay of execution according to the decided authorities if leave is refused by the court.

DISCUSSION

(A)  Application for Leave to Appeal

Legal principles involved

7.  It is not in dispute that in an application for leave to appeal it is for the applicant to show that the appeal has a reasonable prospect of success or that there is some other reason in the interests of justice that the appeal should be heard: see s 63A(2) of the DCO.

8.  A “reasonable prospect of success” means that there is an arguable case such that the chance of success is more than “fanciful” but without having to be “probable”: see Wing Tat Haberdashery Company Limited v Elegance Development & Industrial Co Limited [2011] 5 HKC 474, at 476 B-C; Ma Bik Yung v Ko Chuen [2009] 3 HKC 359 at 360H-I, 361A-C.

9.  As stated in Hong Kong Civil Procedure 2016, §59/2A/4:-

“Alternatively, the court can grant leave for the purpose of s 14AA(1), Cap 4 if it is satisfied that there is some other reason in the interest of justice why the appal should be heard (s 14AA(4)(b) of Cap 4). It is impossible to give an exhaustive list of circumstances in which the Court of Appeal would find that there is some other reason in the interest of justice that an appeal should be heard ...... The Court of Appeal may grant leave if the question is one of general principle, decided for the first time; or a question of importance upon which further argument and a decision of the Court of Appeal would be to the public advantage.”

10.  It has been said that when guidance on an issue or decision of a particular matter drew strength not only from authoritative judgment but also from a wealth of English case law, leave of appeal should not be granted under s 14AA(4)(b) of Cap 4: see Chinachem Financial Service Limited v Century Venture Holdings Limited (2015) unreported, (HCA 410.2013; 21.4.2015, DHCJ Marlene Ng) at §32.

The 1^st defendant’s grounds of appeal

11.  In the draft notice of appeal attached to the 1^st defendant’s skeleton submission, Mr Ng seeks to argue the following 3 grounds of appeal:-

(i) as a matter of law and fact the court had erred in holding that joint tenancy and/or unity of possession is/are necessary element(s) of joint possession in the context of a claim of adverse possession (see Judgment at §§42-49, in particular §49);

(ii) the court had erred in finding that, between 1985 and 1993, the persons who were residing in the Stone House (including the 1^st defendant/appellant) were independently and severally in possession of various parts of the Stone House (see Judgment §62) where the court ought to have found, on available evidence, that the allocation of rooms between those persons was mere exercise of separate rights under JA Pye (Oxford) Ltdv Graham & Another [2003] 1 AC 419 (see §73 of Judgment); and

(iii) the court had erred in failing to consider whether the appellant was entitled to a possessory title to a part or parts of the land being the “Middle Room” and the “Servant Quarter” on the basis of the court’s factual findings (including but not limited to §§62(c) and 79(g) of Judgment).

12.  It is significant to note here that the 1^st defendant is not seeking to challenge any of the factual findings made by the court in the Judgment.  Indeed, Mr Ng in his oral submission has made it very clear to the court that it would be difficult, if not impossible, to challenge any of those factual findings based on the very well established principles laid down by the appellate courts in previous decisions: see for example Ting Kwok Keung v Tam Dick Yuen & Others (2002) 5 HKCFAR 336 at §42. 

13.  Thus, Mr Ng submits that all the 3 grounds of appeal as contained in the draft notice of appeal are challenges based on law and the application of the law rather than based on the factual findings made by the court.   

The 1^st ground: unity of possession and joint possession

14.  The 1^st defendant’s main contention on this ground is that the court should not have imposed a legal hurdle as to when joint adverse possessors can establish joint possession for the purpose of a claim of adverse possession under ss 7 & 17 of the Limitation Ordinance, Cap 347.

15.  On this issue, the 1^st defendant’s argument is that joint tenancy arises out of a conveyance or other form of grant by way of the human act but notby way of operation of law [emphasis as originally supplied by counsel]. Mr Ng relied on Edward Coke, The First Part of the Institutes of the Laws of England or a Commentary Upon Littleton (16^th ed, 1809) Ch. 3, s. 277 at [180.b.] and The Commentaries of Sir William Blackstone, Knight, on the Laws and Constitution of England (ABA,ed., 2009), Bk. 2, Ch IX, pp. 131-132 as authorities for his contention. He also relied on Cheshires and Burn’s Modern Law of Real Property (18^th ed) pp 493-494.

16.  Without I hope being unfair to Mr Ng’s very forceful submissions made on this point, I simply cannot agree with his contention at all.  Under section 4 of the Conveyancing and Property Ordinance, Cap 219, a legal estate in land may be created, extinguished or dispose of only by deed: see section 4(1).  However, under section 4(2), it has been specifically stated that this section does not apply to:-

“(g) a vesting order or vesting declaration by a court or other competent authority;

(h) the creation, extinguishment or disposal of a legal estate in land by operation of law.”

17.  In making a declaration that the plaintiff is entitled to recover possession of the Land in this case, what the court had done was to acknowledge the legal right of the plaintiff by making a declaration that the Land’s title was to be vested in her despite the adverse possession claims made by the defendants.  Thus, by doing so, the court declared a legal title in land by operation of law, which is specifically endorsed by section 4 of the said Ordinance. Therefore, I disagree with Mr Ng’s proposition stated in ground 1 of the draft.

18.  Despite the very interesting analysis made by the 1^st  defendant’s counsel based on the following 4 authorities, viz. JA Pye (Oxford) Ltd v Graham & Another [2003] 1 AC 419, Ellis v Lambeth (1999) 32 HLR 596, Lambeth LBC v Bigden (2000) 22 HLR 478 and Allen v Matthew [2007] EWCA Civ 216, I am of the view that the findings and conclusion made by me at §49 of the Judgment (which incidentally was not made out of the vacuum but based on the authorities cited at §§43 to 48) remain sound and correct as a matter of law.

19.  The 1^st defendant further argues that the fact that none of the classic and binding authorises, including Powell v McFarlane (1979) 38 P & CR 452, Buckinghamshire County Council v Moran [1990] Ch 623 and Wong Tak Yue v Kung Kwok Wai & Another (No 2) (1997-98) 1 HKCFAR 55, impose the requirement of unity of possession demonstrates that it is a legal hurdle that should not be imposed when considering whether the joint adverse possessors can establish joint possession for the purpose of claiming adverse possession.

20.  To my mind, the fact that there was no mention of unity of possession as a requirement of possession in those cases was simply due to the fact in each of those cases the plaintiff alone was claiming adverse possession against the land owner instead of the two or more squatters claiming joint possession together.  Under those circumstances, it is my view that there is simply no such need for the courts to dealt with and/or mention the concept of unity of possession in those judgments.

21.  With respect to the 1^st defendant’s counsel, I do not find there was anything wrong with the findings I made in §49 of the Judgment.

2^nd ground: separate rights  

22.  The 1^st defendant submits that I had erred in finding that, between 1985 and 1993, the persons residing in the Stone House (including the 1^st defendant) were independently and severally in possession of the various parts of the Stone House when the court ought to have found, on the available evidence, that the allocation of rooms between those persons was merely exercise of separate rights under JA Pye (Oxford) Ltd., supra.

23.  As explained above, I do not think that I had erred in law by holding that:-

(a) to be able to adversely possess a property through joint possession by several squatters, it must be shown that all the squatters have unity of possession jointly over the whole property, rather than merely have possession over a particular part of the property severally and independently from the other squatter; and

(b) the concept of “separate rights to use and occupy land” held by different persons is very different from the concept of “several possession” held by different persons.

24.  To me, these are essentially factual findings based on the evidence transpired during the trial.  I do not think the Court of Appeal would likely interfere such finding of facts made by a trial judge unless it is plainly wrong: see Ting Kwok Keung, supra.

25.  Therefore, I consider that I am entitled to, relying on the matters stated in the Judgment, conclude that between 1985 and 1993, the persons residing in the Stone House (including the 1^st defendant) were independently and severally in possession of various parts of the Stone House.

26.  By reason of matters stated above, I concluded that the 2^nd Ground of Appeal has no reasonable prospect of success.

3^rd ground:  whether 1^st defendant entitled to part or parts of the Land

27.  Under this ground of appeal, the 1^st defendant submits that the court had erred in failing to consider whether the 1^st defendant was entitled to a possessory title to a part of parts of the Land being the “Middle Room” and the “Servant Quarter” on the basis of my factual findings made in the Judgment.

28.  With respect, I think the 1^st defendant has taken words out of context and makes it sounds as if I had made the factual findings that the 1^st defendant was entitled to possessory of the above 2 rooms independently and severally: See §§ 62(c) and 79(g) of the Judgment. 

29.  A closer look of the Judgment reveals that such were not the findings made by me.  In fact, I find it difficult to conceptualize how the Stone House could be divided into several different rooms for the purpose of the 1^st defendant’s claim for adversary possession title.  In my view, the Stone House must be viewed as a whole as it is a residential property and the rooms could not be partitioned individually in a legal sense without the usage of the corridor and common areas like the kitchen and bathrooms: see eg Powell at pp 470-471 per Slade J; also my judgment in Law Chun Wai v Chu Suk Har [2016] 1 HKLRD 224 in a legal partition context under the Partition Ordinance, Cap 352.

30.  More importantly, this point was never argued or addressed upon by the 1^st defendant’s counsel during the trial.  In my view, it would be grossly unfair to the plaintiff and to the court to allow the 1^st defendant to raise it now or at the appeal.

31.  Hence, I do not see how the 1^st defendant has any reasonable chance of success based on this ground also.

32.  Based on the above reasons, I had dismissed the 1^st defendant’s leave to appeal in this case at the hearing.

Section 63A(2)(b) of the DCO

33.  I also do not see there is any other reason in the interests of justice why the appeal should be heard under section 63A(2)(b) of the DCO.

(B)  Stay of Execution

34.  On the stay of execution, despite the plaintiff’s heavy reliance on the principles laid down in Star Play Development Ltd v Bess Fashion Management Co Ltd [2007] 5 HKC 84, I am of the view that given the special circumstances of this case, the balance should be tilted in favour of the 1^st defendant and a stay of execution should be granted, at least until the next stage in her application for leave to appeal at the Court of Appeal level is resolved.

35.  In this regard, I accept the following propositions made by Mr Ng on behalf of the 1^st defendant:-

(i) Whether or not to grant a stay is within the discretion of the court: see Star Play, supra., §6;

(ii) The burden is on the 1^st defendant to show good reasons which commonly consist of (a) whether the appeal would be rendered nugatory (thus relative prejudice); and (b) merits of the appeal: ibid.,§8;

(iii)   It is a matter of balancing exercise as to injustice to one or both parties if stay is granted or refused: Hammond Subbard Solicitors v Agrichem International Holdings [2001] EWCA Civ 2065 at §22

36.  In this case, having heard counsel’s submissions from both sides, I come to the conclusion that the appeal will be rendered nugatory if stay is not granted for the following reasons:-

(i) Under the very unique circumstances of this case, it is my view that the appeal against order for possession is likely to be rendered nugatory if stay is not granted: see Star Play, supra at §9(1);

(ii) I agree with Mr Ng that the word “nugatory” does not mean that the party seeking the stay should risk the loss of all his property. In the words of the late Roberts CJ, suffices that there would be “some loss of money paid out to those bond holders who could not subsequently be traced”, or that “the failure to grant a stay of execution might have a seriously deleterious effect on the defendants, if they were to succeed in the appeal and, subsequently, in the action...”: Caine Tai Investment Co Ltd & Ors v Ayala International Finance Ltd & Republic National Bank of New York [1983] 1 HKC 163, p 166D-G; Star Play, supra at§9(4).

(iii) The 1^st defendant has been living in the Stone House for over 40 years and has nowhere else to go if she is evicted now;

(iv) The lack of stay will mean that she has to spend a great deal of expenses to move out of the Land / Stone House  before her application for leave to appeal at the Court of Appeal is heard; and

(v) It will no doubt cause a great deal of psychological as well as personal distress to the 1^st defendant;

37.  On the other hand, I agree with Mr Ng that a grant of stay pending the 1^st defendant’s application to the Court of Appeal for leave will have minimal if not imaginary prejudice to the plaintiff for the following reasons:-

(i) The plaintiff’s main ground based on the claim that she could enjoy “the fruit of ... success after all these years of prolonged litigation” does not sound convincing as this action has been protracted since 2006 and a lot of the delay lies at the door of the plaintiff;

(ii) The plaintiff’s vague referral to the “undue hardship and prejudice” in her affirmation again sounds rather hollow when compared her financial position with that of the 1^st defendant.  If the only hardship and prejudice are that she intends to take the Land back while she is healthy so that she can “enjoy” the land, then this clearly does not outweigh the hardship the 1^st defendant will face if a stay is not granted;

(iii) There is no specific mention in the plaintiff’s affirmation of how she may make use of the Land / Stone House once she is able to obtain possession.  I note in particular that the plaintiff is not saying that she needs the Land / Stone House for her own accommodation use;

(iv) In this regard, I fail to see how her old age (she is 92 years old) and alleged poor health will have any direct bearing as to whether a stay of execution should be granted to the 1^st defendant (who incidentally is also of advanced age) or not. 

CONCLUSION

38.  For the above reasons, I had refused the 1^st defendant’s application for leave to appeal but allowed a stay of execution in this case pending the resolution of the 1^st defendant’s proposed application to the Court of Appeal for leave to appeal.

39.  Lastly, I would like to thank counsel on both sides for their very able assistance.