Harbour Hero Enterprises Ltd v Chau Nung Tai
Court of Appeal
Civil Appeal No 162 of 2018
Kwan V-P, Yuen and Au JJA
10, 24 May 2019

Civil procedure — default judgment for vacant possession to be set aside —whether decision that defence of adverse possession had no real prospect of success plainly wrong

On 13 November 2015, P purchased from a t’ong a land lot (the “Lot”) which, in February 2016, it divided into 19 sections, including Section R (the “Land”). P alleged that houses on the Lot were occupied by tenants of the t’ong, including D, under oral tenancy agreements. P claimed vacant possession of the Land from D and obtained regular default judgment (the “Judgment”). D had denied having entered any tenancy agreement or paying rent and asserted that rental receipts produced by P were fabricated; her former husband had bought House No 10 (the “House”) on the Land from KYC for $120,000 in August 1998 (the “ASP”); she had lived in it since; and had acquired possessory title to the Land by adverse possession by August 2010. P adduced evidence from KYC’s father that KYC had told D’s husband that the sale price was for the House, and not the Land which was owned by the t’ong, and so he had to pay rent for using the Land. D’s application to set aside the Judgment was dismissed by the Judge, who found D’s defence of adverse possession had no real prospect of success because she had failed to adduce cogent evidence to refute P’s claims and evidence that she was a tenant of the t’ong; and the ASP concerned only the sale and purchase of House No 10, not any interest in the Land (the “Decision”). D appealed

Held, allowing the appeal by setting aside the Decision, that:

1) The Judge was plainly wrong in his provisional view that D’s case had no realistic prospect at trial. There were substantial factual disputes which should be resolved in a trial, not in a mini-trial on affidavit evidence (Premier Fashion Wears Ltd v Li Hing Chung [1994] 1 HKLR 377, Maryo Development Limited v Tsang Yau May (CACV 101/2015, [2016] HKEC 74) applied). (See paras. 16, 19, 21.)

2) There was no serious challenge to D’s evidence that she had been in exclusive and continuous occupation of the House since it was purchased in 1998. That the ASP did not mention the Land did not inexorably mean that the Land did not form part of the sale and purchase transaction. The Judge had not apparently considered that the terms alleged by KYC’s father were not written in the ASP and KYC, although available, did not himself provide an affirmation. (See para. 16.)

3) The Judge was also wrong to completely discount the evidence of the occupant of another house on the Land who clearly asserted that she was not a tenant as alleged and had never paid rent, despite rental receipts produced by P. (See paras. 17–18.)

Appeal

This was an appeal by the defendant against the decision of Judge Liu Man Kin dated 10 October 2017, dismissing her application to set aside a regular default judgment obtained by the plaintiff for vacant possession of land (see [2017] HKEC 2152). The facts are set out in the judgment.

Jurisdictions: