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Cheung Chui Kwan Event v Hebei Investment Ltd And Another

Judgment Cited authorities 7 Cited in Precedent Map Related
Vincent
Judgment Date10 March 2017
Year2017
Citation[2017] 2 HKLRD 406
Judgement NumberHCA3104/2015
Subject MatterCivil Action
CourtHigh Court (Hong Kong)
HCMP1084A/2008 YU FUNG CO LTD v. OLYMPIC CITY PROPERTIES LTD AND ANOTHER

HCMP 1084/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1084 OF 2008

______________________

BETWEEN
YU FUNG COMPANY LIMITED Plaintiff

and
(1) OLYMPIC CITY PROPERTIES LIMITED Defendants
(2) LAI MING TAK TOMMY ALEXANDER

and
CHEUNG CHUI KWAN EVENT Interested Party

______________________

AND

HCA 3104/2015

ACTION NO 3104 OF 2015

____________________

BETWEEN
CHEUNG CHUI KWAN EVENT Plaintiff

and
(1) HEBEI INVESTMENT LIMITED Defendants
(2) YU FUNG COMPANY LIMITED

____________________

(Heard Together)
Before: Deputy Judge Keith in Chambers (open to the public)
Date of Hearing: 26 January 2017
Date of Handing Down Judgment: 9 March 2017

_______________

J U D G M E N T

_______________

Introduction

1. This case concerns a flat in Kowloon. The flat has had a chequered history. The redevelopment of the building in which the flat is has been described in a judgment of the Court of First Instance as “scandalous”. The current issue is whether someone who claims to have been living in the flat for some time, Event Cheung, has acquired the right to occupy it. Litigation over who has an interest in, or a right to occupy, the flat has already taken place. Madam Cheung was not a party to that litigation. She now applies to be joined as a party to that action, and for the enforcement proceedings giving effect to the judgment in that action to be stayed while her right to occupy the flat can be determined in new proceedings which she has commenced. For its part, the company which was successful in the previous litigation, Yu Fung Co Ltd (“Yu Fung”), now applies for the Statement of Claim in Madam Cheung’s action to be struck out and the action dismissed on the basis that the issues which the action raises could and should have been litigated in the earlier proceedings. Both Madam Cheung’s summons and Yu Fung’s summons were heard together, and this is the court’s judgment following the hearing of both summonses.

The previous litigation (HCMP 1084/2008)

2. The plaintiff in the previous litigation was Yu Fung. There was originally only one defendant. That was Olympic City Properties Ltd (“Olympic”). By that action, which was begun by originating summons dated 10 June 2008, Yu Fung, a registered moneylender, sought the recovery of sums lent to Olympic and secured by a legal charge dated 18 September 1997 over Flat D, 20th Floor, Profit Mansion, 23 Fei Fung Street, Kowloon (“the Flat”) and delivery‑up of vacant possession of the Flat. The loan had originally been made to Olympic to enable it to purchase the Flat. Olympic became the registered owner of the Flat, but on 2 January 1998 it assigned the Flat to Hebei Investment Ltd (“HIL”), the current registered owner of the Flat. Yu Fung had no knowledge of that assignment and had not consented to it.

3. Shortly after the commencement of those proceedings, someone else claimed to have an interest in the Flat. That was Tommy Lai. He claimed to have been living in the Flat for some time — indeed, since before Olympic had become the registered owner of the Flat. At his request, he was joined as a second defendant to Yu Fung’s claim on 10 July 2008. As we shall see, that will become a significant date in this case. His claim to have a beneficial interest in the Flat was on the basis of a redevelopment agreement he had executed in 1992 with the developers of an earlier building which had been on the site of the building in which the Flat was.

4. By that development agreement, Mr Lai had agreed to give up his flat in the previous building on the site. That building would be demolished by the developers who would then erect the present building on the site. Mr Lai would be provided with a flat in the new building. The new flat had not been identified at the time of the redevelopment agreement, but when the present building was completed, Mr Lai was given the keys to one of the flats in that building. That was the Flat, ie the flat to which this action relates.

5. It is here that the springs became polluted. The redevelopment agreement was never registered at the Land Registry, and no assignment of the Flat was ever executed in Mr Lai’s favour. Mr Lai’s case was that he had simply been allowed into the Flat after the building had been completed, and that after the Flat had been redecorated he and his family had moved into the Flat. That had been in May or June 1997. He had not known that the developers had assigned the Flat to Olympic’s predecessors in title in June 1997 or that the Flat had subsequently been assigned to Olympic.

6. It subsequently transpired that Mr Lai had been just one of about 60 occupants of flats in the new building who had come to occupy their flats pursuant to arrangements similar to those which Mr Lai had made with the developers. The judgment in this litigation described all this as a “scam”, which had “sparked off” a number of cases involving the occupiers, the developers and other parties.

7. In November 2011, judgment was entered in favour of Yu Fung against Olympic for the amount outstanding under the loan together with interest. Yu Fung proceeded with its claim for vacant possession of the Flat, and the proceedings were ordered to continue as if begun by writ. At the trial, only Yu Fung and Mr Lai appeared and were represented. Olympic took no part in it. In the course of the trial, Mr Lai’s counsel effectively abandoned the claim that Mr Lai had an interest in the Flat arising out of the redevelopment agreement, and the real issue in the case related to an alternative argument deployed on Mr Lai’s behalf, which was that he had been in adverse possession of the Flat for so long that Yu Fung could no longer claim possession of it.

8. On that issue, Deputy Judge Leung held that Mr Lai had indeed been in adverse possession of the Flat, but not for long enough to defeat Yu Fung’s claim by reason of the Limitation Ordinance (Cap 347). That was because Deputy Judge Leung held that, if Mr Lai was to be able to rely on the Limitation Ordinance to defeat Yu Fung’s claim, he had to have been in adverse possession of the Flat for the 12 years immediately before 10 July 2008 when he became a defendant to Yu Fung’s claim. Since the judge also held that Mr Lai’s adverse possession of the Flat had only begun in June 1997 when the developers had assigned the Flat without Mr Lai’s knowledge to Olympic’s predecessors in title, the 12 years necessary to afford Mr Lai a defence under the Limitation Ordinance had not elapsed. Judgment was therefore entered in favour of Yu Fung against Mr Lai on 30 July 2015. He was required, among other things, to give Yu Fung vacant possession of the Flat within 60 days. There was no appeal from that judgment. Mr Lai did not give up possession of the Flat within those 60 days, and on 26 October 2015 a writ of possession was issued.

The action brought by Madam Cheung (HCA 3104/2015)

9. This is where Madam Cheung came into the picture. On 30 December 2015 she commenced an action of her own. The defendants were HIL, the current registered owner of the Flat, and Yu Fung. In those proceedings, she claims that she is entitled to occupy the Flat because of her adverse possession of it. That is based on her claim that she is, and has at all material times been, Mr Lai’s “common law wife”, and that she has been “in successive, continuous and exclusive control and possession” of the Flat with Mr Lai and her family since about June 1997. This assertion is not consistent with a witness statement she made on 31 March 2013 for the purpose of the previous litigation. In that witness statement, she had given as her address an address in Hung Hom, and had claimed to be Mr Lai’s assistant in his work as a fortune teller. She had said that she had helped him to move into the Flat and had supervised the redecoration of the Flat, but she had said nothing about being his “common law wife” or about living in the Flat herself. However, when she gave oral evidence at the trial of the action, she said that she had been living with Mr Lai at the Flat, and that the reason why she had not disclosed that in her witness statement had been because she had been too embarrassed to admit that they had lived together without being married.

10. In his judgment, Deputy Judge Leung mentioned that she had given evidence in the trial, and that her evidence had not been challenged, but since he said that her evidence related to Mr Lai’s redecoration of, and his moving into, the Flat, it may be that the judge was only saying that that part of her evidence had not been challenged. In other words, it could be that the judge was not saying that her claim to have moved into the Flat with him had not been challenged. Having said that, it may be unlikely that Yu Fung will assert that Madam Cheung did not move into the Flat when she claims that she did. However, even if she had moved into the Flat then, Yu Fung claims that she deliberately concealed that fact from Yu Fung even on her own case.

11. The significance of Madam Cheung’s claim that she had been living in the Flat for as long as Mr Lai is that the cut‑off date for the purposes of Mr Lai’s defence — 10 July 2008 — may not apply in an action brought by her. So even though Mr Lai’s limitation defence did not succeed, it is argued that any claim in an action brought by her would not be defeated by an assertion that her adverse possession of...

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