Gotland Enterprises Ltd v. Kwok Chi Yau and Others

CACV 260/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 260 OF 2014

(ON APPEAL FROM HCMP NO. 4550 of 2003)

________________________

(By original writ and order to carry on)

________________________

______________

JUDGMENT

______________

Hon Lam VP (giving the Judgment of the Court):

1.On 25 November 2014, after a trial which lasted for 8 days, Anthony Chan J [“the Judge”] handed down a judgment upholding the Plaintiff’s claim for possession of a piece of land in Mai Po at Lot 76 in Demarcation District No 101 [“the Land”]. In so holding, the judge rejected the claim for adverse possession by the 1^st and 5^th Defendants. The judge also held in the alternative that (assuming there was adverse possession contrary to his primary holding), the adverse possessory title should be held jointly by the 1^st and 5^th Defendants in equal shares.

2.The registered owner of the Land had been a company called Gotland Enterprises Ltd since August 1981.  Prior to that the registered owner was a person called Fung Kau.  The judge recited the history of this piece of litigation at paragraphs 3 to 10 of his judgment.  It suffices for our purposes to note that due to a settlement reached between Gotland and the 1^st to 3^rd Defendants in 2014, Gotland assigned the Land to the current Plaintiff, an alter ego of the 1^st Defendant.  Since then, Gotland played no further part in the proceedings.  In substance, the action became a dispute between the 1^st Defendant and his father, the 5^th Defendant. 

3.In terms of the real dynamics in the litigation, it can be said that the 1^st Defendant adopted a belt and braces approach.  On the one hand, through the Plaintiff, he contested the adverse possession claim of the 5^th Defendant.  By way of a fallback position, if the court were to find that there was adverse possession for the requisite number of years to bar the title of the Plaintiff, the 1^st Defendant also claimed that he had an interest in the adverse possessory title.  He actually claimed before the Judge that he should be regarded as the owner of the whole of the possessory title.  As mentioned, the Judge found in favour of the Plaintiff in rejecting the claim of adverse possession.  

4.In this appeal by the 5^th Defendant, by the time when the matter was argued before us, he confined the appeal to the two ponds together with the bunds surrounding the same in the Land.  Adopting the nomenclature of the parties, we shall call them Pond 1 and Pond 2 respectively. 

5.The factual background has been fully set out in the judgment of the Judge of 25 November 2015.  For the purpose of this appeal, it can be summarized briefly as follows.

6.The Land had a total area of 759,250.80 square feet.  There were two large ponds separated by a strip of land in between.  On the northern part of the Land, there was an area which was identified as the Reclaimed Area in the judgment below.  On the eastern part of the Land, there was another small pond (referred to in the judgment below as the Amenity Pond) and a small area wedged between this small pond and Pond 2 (referred to as the Triangular Area).  Gotland was originally a subsidiary of Asia Television Limited.  The Land was mainly used by the television company for shooting TV drama.  According to counsel, the shooting of films mostly took place at the vicinity of the Amenity Pond and the Triangular Area.  It was common ground that the shooting of film ceased in 1989, see paragraph 63 of the judgment.

7.The 5^th Defendant carried on activities as a fish and duck farmer.  At around the end of 1979, through the introduction of others, he learnt that there were ponds in the Land at what is now identified as Pond 1 which were abandoned. A local bully Fung Ngau suggested to him to use the ponds for fish farming and Fung Ngau would take some of the profit from such farming.  Later, he also used the Land for rearing ducks.  He said he did so with the assistance of his whole family.  He had 5 sons and 3 daughters.

8.The 1^st Defendant was the second son of the 5^th Defendant.  He was married in January 1977.  They gave birth to 2 children, one in 1977 and another one in 1979.  His case was that the operations of the fish farming at Pond 1 were run by him and the 5^th Defendant in equal share. 

9.The findings by the Judge in respect of the use of Pond 1 were set out at paragraphs 53 and 54 of his judgment:

“53. It should be pointed out that none of D5’s family had resided on the Land at any time. It was and is only used for business activities. The evidence is that fish farming and duck rearing required limited attention. Further, there is no evidence that there was any fencing on the Land. Nor is there any suggestion that dogs were kept on the Land to deter intruders. The only evidence about keeping the Land from unwelcome visitors is that when people were seen fishing at the ponds they would be stopped.

54. Insofar as Pond 1 is concerned, the unchallenged factual evidence is that it has been continuously used for fish farming since it fell into the possession of D1 and/or D5.  I am satisfied that given the nature of the land and its use there is a sufficient degree of exclusive physical control by D1 and/or D5 over the same.  I have considered the fact that the land has not been fenced off at any time.  There is no evidence whether that is normally done for fishponds.  However, Mr Li has identified an authority the facts of which show that link fence was erected around some fishponds from time to time (Mutual Luck Investment Ltd v Yeung Chi Kuen & Ors (No 2) [2003] 1 HKC 90).  I do not know how substantial a structure was that link fence.  I also bear in mind that Pond 1 is very large and I do not know if it is practical to fence off an area of such size.” 

10.As regards Pond 2, it was initially occupied by someone from the Tam family (Tam Fuk Hung according to the 1^st Defendant; Tam Kwong and Tam Fuk Wing according to the 5^th Defendant).  The 1^st Defendant said he acquired the interest of Tam Fuk Hung in 1990 whilst the 5^th Defendant said he through the 1^st Defendant acquired the interest of Tam Fuk Wing in 1994 after Tam Kwong passed away.

11.The findings by the Judge concerning the use of Pond 2 were set out at paragraphs 61 and 62 of the judgment:

“ 61. The 2^nd Area is largely made up of Pond 2.  There is no serious dispute that Pond 2 had been used for fish farming by Tam Fuk Hung (“Tam”) and Tam Fuk Kwong from about 1981.  In the XX of Tam (1 of D1’s witnesses) on behalf of CML, there was a suggestion that rent might have been paid for the use of the 2^nd Area.  Tam’s evidence is that he did pay HK$10,000 per annum to a man named Yeung who asked him for rent.  Such payment continued until 1987.  However, Tam does not know Yeung’s full name, where he lived, whether he had any relationship with the owner of the 2^nd Area or whether he represented the same.  The payment was made because Yeung demanded that if Tam was to be allowed to carry out fish farming at the pond, he would have to pay rent.  I do believe that the payment in question was for renting the 2^nd Area.  It is reasonably clear that it was made to pay off a local bully.

62. Notwithstanding the lack of any details concerning what the Tams had done with Pond 2 over the years save for the fact that it was used for fish farming, I am prepared to accept that there was sufficient exclusive control of Pond 2 by the Tams prior to its transfer to D1 and/or D5. In particular, I bear in mind the uncontradicted evidence that in 1983 D1 was permitted by Tam to rear duck in the vicinity of Pond 2.”

12.Given that the Reclaimed Area was adjacent to Ponds 1 and 2, it is also relevant to bear in mind the Judge’s findings on the use of that area over the years at paragraphs 55 to 60.  In particular, he found that the Reclaimed Area was covered by water prior to 1979.  Reclamation started in 1979 and it was completed in 1981.  He found that as there was no evidence that the reclamation work was carried out by the 1^st or 5^th Defendants, he was not satisfied that they had control or occupation of the Reclaimed Area in 1983.  The significance of 1983 is that the present proceedings were commenced in October 2003 and occupation and control must start from October 1983 in order to constitute a sufficient period of adverse possession to bar the Plaintiff’s claim under the Limitation Ordinance. 

13.Coming back to the claims of adverse possession in respect of Pond 1, though the Judge found there was sufficient physical control, he was not satisfied on the requisite intention for adverse possession, see paragraphs 68 to 87 of the judgment.  He also came to the same conclusion regarding Pond 2.  Thus, the claims of adverse possession on the 2 ponds failed.

Exclusive physical control

14.It is common ground that we can take the law on adverse possession from Powell v McFarlane (1977) 38 P&CR 452, cited by the Judge at paragraph 41 of the judgment:

“The question what acts constitute a sufficient degree of exclusive physical control must depend on the circumstances, in particular the nature of the land and the manner in which land of that nature is commonly used or enjoyed.

The animus possidendi involves the intention, in one’s own name and on one’s own behalf, to exclude the world at large, including the owner with the paper title if he be not himself the possessor, so far as is reasonably practicable and so far as the process of the law will allow.”

15.By a Respondent’s Notice, the Plaintiff challenged the findings of the Judge on the first element: exclusive physical control.  On the other hand, the 5^th Defendant challenged the findings of the Judge on the second element: the requisite intention to exclude the world at large.

16.Following the sequence in which we heard the parties at the appeal, we shall first consider the first element.  Mr Chan SC (appearing with Mr Tang for the Plaintiff) submitted that the Judge erred in concluding that the 1^st and 5^th Defendants had established sufficient exclusive control.  In respect of Pond 2, counsel submitted that there was no evidence at all to support the Judge’s finding that Mr Yeung (to whom the Tams paid for the occupation of Pond 2) was a local bully.  As a matter of pleadings, there was no plea in the pleadings of the 1^st or 5^th Defendants that Tams’ possession of Pond 2 was without the permission or consent of the registered owner.  Due to such lacuna in the case of the 1^st and 5^th Defendants, counsel submitted that the finding of exclusive control without the consent of the owner could not be upheld. 

17.Mr Mok, on behalf of the 5^th Defendant, submitted that as there was no evidence from the Plaintiff to show that Mr Yeung was authorized by the then registered owner to collect payment, the Judge was justified in finding that he was a local bully.

18.With respect, we cannot accept the submission of Mr Mok.  Mr Tam’s evidence did not shed light on the capacity in which Mr Yeung collected the payment.  We agree with Mr Chan that there was no evidential basis for the Judge’s finding that Mr Yeung was simply a local bully. 

19.The burden of proof on adverse possession rests squarely on the 5^th Defendant, not the Plaintiff.  In order to establish the full 20-year’s adverse possession, the 5^th Defendant had to include the occupation of Pond 2 by the Tams from 1983 to 1990 and he had to establish that such occupation by the Tams was without the permission of the registered owner.  However, he did not even plead such a case.  Without such a plea, we cannot see how one could argue that adverse inference should be drawn from the failure of the Plaintiff to call Yeung to give evidence. 

20.Further, in light of the change of registered ownership, it is doubtful if such adverse inference could have been drawn.

21.In the circumstances, the finding by the Judge at paragraph 61 that Tam paid the sum to Yeung by way of payment to a local bully cannot be supported.  Because of this lacuna, we accept the submission of Mr Chan that in any event the 5^th Defendant must fail in establishing a case of adverse possession in respect of Pond 2.

22.Turning to Pond 1, Mr Chan challenged the finding of exclusive occupation and control by contending that the evidence of the 5^th Defendant and his witnesses did not establish such exclusive control as early as 1979 or 1980.  Counsel took us to the relevant paragraphs in the witness statement of the 5^th Defendant and the transcript of his oral evidence.

23.It appeared from such evidence that at the early years of occupation, the activities conducted by the 1^st and/or 5^th Defendants at Pond 1 was the draining of the pond (once a year) and the keeping of fish in it.  There was no physical barrier to the pond and no segregation of the pond from the adjoining areas within the Land. 

24.Mr Mok placed great emphasis on the evidence as to the building of platforms and the dredging of the ponds.  He showed us the photographs of such dredging.  However, as Mr Chan rightly submitted, there was no evidence as to the timing of such dredging.  One cannot assume the dredging took place prior to 1983.  As regards the platforms, again there was no evidence on when and where they were built.

25.The Judge was aware of the lack of fencing for the pond.  However, the Judge did not refer to the inspection of the pond by surveyor appointed by the registered owner in 1987.  Though it was only an inspection by a valuation surveyor as opposed to a survey for the delineation of the land, the report did show that the surveyor had conducted physical inspection in order to assess the physical state of the Land, including the uses of the 2 ponds. 

26.In his discussion on the second element, intent, the Judge made these observations regarding the physical state of the occupation of Pond 1:

(a) It was used for fish farming and the works carried out by them at the pond were confined to what was needed for fish farming, paragraph 70;

(b) No-one resided on the Land and it was not fenced off, the extent of the use was analogous to the growing of fruits over a vacant field, paragraph 72;

(c) There was no indication of intention to possess on the part of the defendants, no clear and unequivocal act to indicate a sufficient manifestation of such intention, paragraphs 72 and 74;

(d) There was no sign at Pond 1 indicating that it was private property, paragraph 74; and

(e) The Land was not protected from unwelcome visitors, paragraph 75.

27.Further, as mentioned above, the Judge found that the Defendants did not have exclusive control and occupation of the Reclaimed Area, an area adjoining Pond 1 without any physical barrier on which adverse possession was claimed before the Judge on the basis that it had been used by the 1^st and 5^th Defendants for fish farming purposes.  Bearing in mind the claim for adverse possession of the Land was advanced based on the same activities carried on by the 1^st and 5^th Defendants, this should be relevant in the overall assessment on the character of the occupation of Pond 1.

28.In addition, the registered owner through its authorized agent (the television station) did use the Land up to 1989 for shooting film.  Though the activities concentrated on the Amenity Pond and the Triangular Area, there was no suggestion that the film crew was excluded from approaching Pond 1 and 2 or their vicinity.  On the contrary, there was evidence from the 1^st Defendant that the television station (in its former name as Rediffusion Television Limited) had made a film at his duck farm in about 1981, see paragraph 5 of his witness statement of 23 July 2004.  The Judge did not refer to this episode in the judgment. 

29.Mr Mok referred us to Powell v McFarlane, supra, in particular what Slade J said on the factual aspect of possession:

“ Everything must depend on the particular circumstances, but broadly, I think what must be shown as constituting factual possession is that the alleged possessor has been dealing with the land in question as an occupying owner might have been expected to deal with it and that no-one else has done so.”

30.Counsel laid emphasis on the manner in which the 1^st and 5^th Defendants used the ponds for fish farming, which he contended was in the same way as an owner would had he conducted fish farming there. 

31.In this connection, Mr Mok also referred us to the dicta of Lord Hutton in JA Pye (Oxford) v Graham [2003] AC 419 at paragraph 76:

“ Where the evidence establishes that the person claiming title under the Limitation Act 1980 has occupied the land and made full use of it in the way in which an owner would, I consider that in the normal case he will not have to adduce additional evidence to establish that he had the intention to possess. It is in cases where the acts in relation to the land of a person claiming title by adverse possession are equivocal and are open to more than one interpretation that those acts will be insufficient to establish the intention to possess. But it is different if the actions of the occupier make it clear that he is using the land in the way in which a full owner would and in such a way that the owner is excluded.”

32.Though the issue that Lord Hutton addressed there was intention to possess (and Lord Browne Wilkinson did explain why it was necessary to have two elements in the concept of possession as a matter of common law in JA Pye (Oxford) v Graham, supra at paragraph 40), it should also be recognized that the two elements are inter-related.  Legal possession could only be established when both elements are present.  In our judgment, the exclusion of other persons has significance both in relation to the character of the physical occupation and the requisite intent.  Thus, in Powell, Slade J alluded at the end of the paragraph cited above to no-one else had done so.  Likewise, Lord Hutton in JA Pye referred to using the land in a way in which the owner was excluded. 

33.This is not to re-introduce the concept of ouster disavowed by Lord Browne-Wilkinson in JA Pye at paragraph 38. Rather it stems from the undoubted proposition that possession is single and exclusive.  As said by His Lordship in that paragraph:

“ Except in the case of joint possessors, possession is single and exclusive. Therefore if the squatter is in possession the paper owner cannot be. If the paper owner was at one stage in possession of the land but the squatter’s subsequent occupation of it in law constitutes possession the squatter must have ‘dispossessed’ the true owner …”

34.After rejecting the notion that the squatter must have a positive intention to exclude the owner, at paragraph 43 of JA Pye Lord Browne-Wilkinson endorsed the formulation by Slade J in Powell:

“ … Slade J reformulated the requirement (to my mind correctly) as requiring an ‘intention, in one’s own name and on one’s own behalf, to exclude the world at large, including the owner with the paper title if he be not himself the possessor, so far as is reasonably practicable and so far as the processes of the law will allow.”

35.The significance of physical exclusion of the owner was further alluded to by His Lordship at paragraph 45, after rejecting the dicta of Bramwell LJ in Leigh v Jack  5 Ex D 264:

“ The highest it can be put is that, if the squatter is aware of a special purpose for which the paper owner uses or intends to use the land and the use made by the squatter does not conflict with that use, that may provide some support for a finding as a question of fact that the squatter had no intention to possess the land in the ordinary sense but only an intention to occupy it until needed by the paper owner. For myself I think there will be few occasions in which such inference could be properly drawn in cases where the true owner has been physically excluded from the land. But it remains a possible, if improbable, inference in some cases.” (our emphasis)

36.One must not lose sight of the exclusive character of the occupation in order to establish factual possession.  Not every use or occupation of land can satisfy this requirement.  The Judge gave the example of growing of fruits on a piece of open land.  If a person only plants fruit trees without excluding others from entering the land, he is only using the land instead of occupying the same exclusively.  It is akin to leaving some articles on some private property (where the owner is at liberty to take steps to remove the articles as abatement of trespass) and no matter how long the articles were left there (and not removed by the owner of the land), it would not constitute adverse possession. 

37.Though it is not absolutely essential to have the land fenced off in order to establish exclusive occupation, this is the classic way of doing so.  In the absence of any physical barriers set up to exclude others from entering the land, one must examine what steps were taken by the person claiming exclusive occupation to exclude others. 

38.In the present case, apart from the evidence on some earlier instances of stopping unwelcome visitors to fish at the ponds, there was no other measure adopted to secure exclusive occupation.  On the other hand, there was evidence of others gaining access to the Land to carry out reclamation works over the Reclaimed Area.  There was also evidence of persons authorized by the registered owner entering the Land to produce films and to conduct a survey  of the Land.  Since the 5^th Defendant advanced his claim on adverse possession in respect of the whole area of the Land at the court below and did not put forward specific measures for exclusive occupation of the ponds which were not applicable to other parts of the Land, the character of the occupation of the ponds should be considered together in tandem with the character of the occupation of the Land. 

39.At paragraph 54 of the judgment, the Judge did not examine the exclusive occupation of Pond 1 at length.  He dismissed the significance of lack of fencing in the absence of evidence that this was normally done for fishponds.  With respect, this is not the correct approach.  What should be considered is whether the 5^th Defendant had established exclusive occupation of Pond 1 when there was no fencing and other people, including agents or people authorized by the registered owner were free to roam around the pond and carried out various activities as described above.

40.Had that question been asked, taking account of the matters set out at paragraphs 22 to 28 above, we agree with Mr Chan that the answer should be that the 5^th Defendant failed to establish exclusive occupation of Pond 1 from at least 1983.

The intent to possess

41.The Judge arrived at the same outcome in the rejection of the claims of adverse possession over Ponds 1 and 2 by holding that the 1^st and 5^th Defendant did not have the requisite intent.  After referring to the continuous use of Pond 1, he observed at paragraph 74 that the use could not be regarded as clear and unequivocal such as to constitute a sufficient manifestation of the intention to possess.  In view of our above discussion on the lack of exclusive character in the occupation of Pond 1, the Judge’s holding in this regard must be correct.

42.The Judge then examined whether there was further evidence from which intention to possess could be inferred.  At paragraphs 77 to 79, he referred to the answer given by the 5^th Defendant under cross-examination on payment to the owner for the use of the Land.  Quite rightly, he did not regard the answer as a clear admission of willingness to pay rent as the question was not satisfactorily framed.  He therefore did not regard that answer as fatal to the case of the 5^th Defendant.  But he was also correct in observing that such answer did not assist the 5^th Defendant in establishing the requisite intent. 

43.The Judge referred next to the evidence of the 1^st Defendant that he was mindful of his lack of tenancy in the use of the Land.  The Judge took the view that this was unfavourable to the claim for adverse possession, see paragraph 82 of the judgment.

44.At the court below, counsel for the 5^th Defendant (not Mr Mok) relied on three matters to support the requisite intent and they were correctly rejected by the Judge at paragraphs 83 to 85.

45.In the end, the Judge reminded himself of the following dictum of Slade J in Powell v McFarlane, supra at p.480 before he concluded that the requisite intent had not been proved:

“ In view of the drastic results of a change of possession, however, a person seeking to dispossess an owner must, in my judgment, at least make his intentions sufficiently clear so that the owner, if present at the land, would clearly appreciate that the claimant is not merely a persistent trespasser, but is actually seeking to dispossess him.”

46.In addition, we also remind ourselves what Slade J said in the same judgment at p.472:

“ An owner or other person with the right to possession of land will be readily assumed to have the requisite intention to possess, unless the contrary is clearly proved. This, in my judgment is why the slightest acts done by or on behalf of an owner in possession will be found to negative discontinuance of possession. The position, however, is quite different from a case where the question is whether a trespasser has acquired possession. In such a situation the courts will, in my judgment require clear and affirmative evidence that the trespasser, claiming that he has acquired possession, not only had the requisite intention to possess, but made such intention clear to the world. If his acts are open to more than one interpretation and he has not made it perfectly plain to the world at large by his actions or words that he has intended to exclude the owner as best he can, the courts will treat him as not having had the requisite animus possidendi and consequently as not having dispossessed the owner.”

47.To the same effect is the judgment of Slade LJ in Buckinghamshire County Council v Moran [1990] Ch 623 at p.639H to 640B.

48.In light of the submissions of Mr Mok, we should also bear in mind the following proposition adumbrated by Slade LJ in Moran at p.643E:

“ …I agree with the judge that ‘what is required for this purpose is not an intention to own or even an intention to acquire ownership but an intention to possess’ --- that is to say, an intention for the time being to possess the land to the exclusion of all other persons, including the owner with the paper title.”

This was endorsed by Lord Browne-Wilkinson in JA Pye at paragraph 42.

49.Mr Mok submitted that the Judge erred in requiring the 1^st and 5^th Defendants to have the intent to own the Land as opposed to the intent to possess the Land for the time being.  Counsel referred to paragraphs 74 and 80 to 82 of the judgment as demonstrating that the Judge misdirected himself to the intent to own as opposed to the intent to possess for the time being. 

50.At paragraph 74, the Judge was explaining why the acts of physical possession of the 1^st and 5^th Defendants were equivocal.  He asked rhetorically:

“ What is there to suggest that the Kwoks were not merely making use of the pond for profits as opposed to occupying and using the land as their own?”

51.In making that observation, the Judge plainly echoed  paragraph 59 of the closing submission of counsel for the Plaintiff that an equivocal act in terms of using a land for profit did not manifest the requisite intent to possess. This is well-supported by authority, see Jourdan & Gardner, Adverse Possession, 2^nd Edn, paragraphs 13-60 and 13-61.

52.We do not accept that the Judge had misdirected himself on the law on requisite intent when he referred to the use of the land “as their own”.  The Judge was only paraphrasing the test laid down by Slade J where His Lordship referred to the intention to exclude the world at large “in one’s own name and on one’s own behalf”.  It should be noted that the Judge in that sentence referred to occupying and using of the land instead of the ownership of the land.

53.In respect of paragraphs 80 to 82 of the judgment, Mr Mok is on firmer ground.  We agree that it would be sufficient if the intent was to possess from time to time and with respect to the Judge, the evidence at paragraph 5 of the witness statement of the 1^st Defendant is not inconsistent with the 1^st Defendant having the requisite intent.

54.However, this does not undermine the Judge’s earlier conclusion that the acts of fish farming and duck rearing were equivocal.  The crucial question remains: what objective acts could the 5^th Defendant pinpoint as unequivocal manifestation of the intention to possess?

55.In his oral submissions, Mr Mok referred at some length to the evidence regarding the activities of the Defendants concerning the fish farming operation, including the draining of the ponds, the dredging and counsel was keen to show us photos demonstrating the scale of the latter.  With respect, for the reasons already canvassed above, we are not persuaded that the dredging had taken place before 1983.  Further, notwithstanding the scale of such dredging (which only took place once every several years), in light of the activities on the Land by other persons discussed above, we are of the view that the Judge was correct in holding that on the whole there was no unequivocal act to manifest the intent to possess Pond 1.

56.Mr Mok cited several authorities for the proposition that a trespasser needs not adduce additional evidence to establish the intention to possess after he has established factual occupation and use of the land in the manner as an owner would: Lord Hutton in JA Pye at paragraph 76 and Lord Hope at paragraph 71; Lambeth London Borough v Blackburn (2001) 82 P & CR 494; Topplan Estates Ltd v Townley [2005] 1 EGLR 89.  We do not quarrel with that proposition if the acts of physical occupation were unequivocal.  However, we do not read any of these authorities as departing from the well settled principle to be applied in cases where the physical acts were equivocal as mentioned at paragraphs 45 to 47 above.

57.As submitted by Mr Chan, in all the cases where adverse possession was established, there were unequivocal acts of exclusive physical occupation.  Exclusive occupation can readily be shown in the case of occupation of a council flat, even if it was in a dilapidated state as in Lambeth. When the squatter moved in, he replaced the council’s padlock with his own lock.  Purbrick v Hackney London Borough [2004] 1 P & CR 553 was another case cited by Mr Mok concerning an abandoned council building.  In that case, the squatter put a sheet of corrugated iron across the doorway (the door had gone) and secured it with a chain and two padlocks.  In Topplan Estates, supra, the defendant was the only person who had the keys to the padlocks at the gates of the boundary fence, see paragraph 21 of the judgment.  In JA Pye, supra, the situation was similar, see paragraph 8.  Likewise, in Moran, supra, the defendant used a new lock and chain to fasten the gate guarding the access to the land and kept the key.  In none of the cases cited by Mr Mok the registered owner had unrestricted access to the land or property in question and exercised such access as Gotland did in the present case.  

58.In our judgment, ultimately the crucial issue is whether the Judge was correct in holding that the acts of fish farming and duck rearing carried on at Pond 1 was equivocal.  For reasons we have already given, we are of the view that the Judge had come to the correct conclusion.

59.In light of this finding, the appeal of the 5^th Defendant must fail.

The joint occupation by the 1^st and 5^th Defendants

60.Having reached the conclusion that the claims of adverse possession failed, it is unnecessary to consider whether the Judge’s finding on joint occupation should be upheld.  The 5^th Defendant challenged that finding and the 1^st Defendant resisted that challenge.  We shall discuss this challenge briefly.

61.The Judge’s finding on this issue was based on his assessment of the evidence.  He explained clearly at paragraphs 91 to 102 of his judgment.  He rejected the claim of the 1^st Defendant that he was the sole possessor, and he also rejected a similar claim by the 5^th Defendant.  Though it is not a finding on primary fact, it is very much a finding based on the assessment of all the evidence of the case and the primary findings on the conduct of the operation between the 1^st and 5^th Defendants.  As explained in a line of judgments of this court culminating in the recent judgments in China Gold Finance Ltd v CIL Holdings Ltd CACV 11 of 2015, 27 Nov 2015 and Hoptai Sharkfins Co Ltd v Productos Pesqueros Gallegos SL CACV 240 of 2014, 7 Dec 2015, the scope for intervention by the court of appeal on findings of such nature is very limited.  In line with the approach discussed in those cases, we have not allowed Mr Mok to conduct the appeal as if it was a second round of closing submissions.  As had been said repeatedly, this court would concentrate on what can properly be put forward as errors of the primary judge in the assessment of the materials before him.  

62.In his oral submissions on this part of the case, Mr Mok focused on the fact that the 5^th Defendant was the patriarch of the family and the 1^st Defendant only worked under him.  With respect, this submission does not take account of the fact that by the time the fish farming operation was started at Pond 1, the 1^st Defendant already had his own family and he and his wife had made monetary contribution to finance the operation as well as working at the pond.  The submission does not begin to upset the cogent reasons given by the Judge for coming to his conclusion that the 5^th Defendant could not be the sole possessor at paragraph 98 of the judgment. 

63.Mr Mok also made other points on this issue in his skeleton submissions.  We have considered them but we do not find any of those points providing a sound basis for interference with the Judge’s finding.  The lynchpin of those submissions was that the evidence and inherent probability pointed strongly to the conclusion that the 5^th Defendant was the sole possessor when the operation started at Pond 1.  We do not share that view.  The Judge did not make such a finding.  On the contrary, the Judge noted at paragraph 98 of the judgment that it was common ground that the fish farming and duck rearing businesses were conducted as an equal joint venture between the 1^st and the 5^th Defendants.  Mr Mok did not appear at the court below.  However, we see no good reason for allowing the 5^th Defendant to retract from that common position, particularly in light of the evidence on sharing of profit and sharing of compensation.

Disposition

64.For these reasons, we dismiss the appeal of the 5^th Defendant.  We also order the 5^th Defendant to pay the costs of the Plaintiff and the 1^st Defendant, with certificate for 2 counsel in the case of the Plaintiff.  Such costs are to be taxed if not agreed.

The preparation of appeal bundles

65.As indicated at the hearing, we are minded to consider imposing costs sanction on the solicitor responsible for preparing the appeal bundles.  It is clear that the bundles were prepared without proper regard to PD 4.1 paragraph 21.  There are 2 Core Bundles.  In addition, there are 21 bundles.  Most of them were not referred to at the hearing or in the skeleton submissions.  Those bundles are reproduction of all the materials placed before the Judge including submissions, witness statements, expert report, affirmations, documentary evidence and transcripts.

66.In light of the submissions advanced before us, we cannot understand why the appeal bundles could not be reduced to 2 bundles of essential documents.  Actually, a large quantity of documents in Core Bundle 2 was not even referred to in the course of the appeal. 

67.Paragraph 21 of PD 4.1 emphasizes that only documents necessary for the appeal are to be included in appeal bundles.  This is certainly not the first case which came before us where this rule was disregarded.  But it is a blatant example.

68.With regret, we believe such wastage is a manifestation of those preparing bundles not addressing their mind to the purpose of the exercise.  Solicitors are paid at professional rates for their works in relation to an appeal, including the perusal of the notice of appeal and conferring with their clients and counsel on matters related to the appeal.  Thus, it is not unreasonable to expect a solicitor to have a proper understanding as to the issues involved in an appeal when he prepares the appeal bundles.  It is no excuse for a solicitor to say that he did not have any idea as to how counsel would conduct the appeal.  A reasonably competent solicitor should be able to gather from the grounds set out in a notice of appeal and his discussion with counsel as to what documents should be included in appeal bundles.

69.There is another not infrequent phenomenon of counsel being brought into an appeal at a relatively late stage.  We do not know whether this is the case here but that may account for the improper preparation of bundles in some cases.  We must say emphatically such a practice is wholly inconsistent with the underlying objectives in Order 1A and a party engaging in such practice is in breach of the duty under Order 1A Rule 3. 

70.By the time of the lodging of an appeal, the appellant should have read the judgment below and considered with counsel and solicitor the merits of the appeal.  A notice of appeal should only set out grounds which in counsel’s view are reasonably arguable.  The practice of lodging an appeal with ill-considered and unsatisfactory grounds of appeal, particularly those that provide no more than a lengthy critique of the judgment rather identify a justifiable basis for the Court of Appeal interfering in the decision of the judge below, is not acceptable.  In future, the court will exercise tighter case management of the appeal process and the Registrar may bring such illegitimate notices of appeal to the attention of a judge for striking out consideration.  In modern litigation ethos, appeals brought without proper grounds are regarded as abuses of process.  

71.Further, there are opportunities for a litigant (with the advice of solicitor and counsel) to revise or fine tune the grounds of appeal before the date of the hearing of an appeal is fixed.  After consideration of a respondent’s notice (if any) and transcript of the evidence (if relevant), a solicitor should seek counsel’s view on the prospect of the appeal and assess (together with counsel if necessary) whether it is necessary to amend the grounds of appeal.  There is absolutely no justification for leaving that exercise to one month or so before the hearing of the appeal.  The issues in an appeal should be crystallized as soon as practicable after transcripts are available and the filing of a respondent’s notice (if any).  The necessary documents should already be available. 

72.Hence, a solicitor should be able to prepare the appeal bundles well before an application is made for fixing the date of hearing.  Under current practice, in usual cases appeal bundles are required to be lodged 21 days or 14 days before hearing.  In more complicated cases, the court may give directions for earlier lodging of bundles.  To facilitate proper case management and good preparation for an appeal by the judges, such time-table should be revised to require earlier lodging of bundles.  In any event, bearing in mind what is said above, there is ample time for proper bundles to be prepared before the court fixes the dates for the hearing of an appeal. 

73.The proper preparation of an appeal bundle should not be a difficult task.  One should start with the identification of the issues raised in the appeal.  Broadly speaking, there could be appeal on points of law and appeal on facts.  In an appeal on points of law, the documents to be included should only be those which have bearing on the points to be argued.  In most cases, the judgments below should have referred to those documents.  Occasionally, some additional documents might have been referred to in the closing submissions.  A solicitor who has the conduct of the case below, or in case of change of solicitor, who has read the papers properly should have no difficulty in identifying the relevant documents.

74.In an appeal on facts, one should bear in mind the proper scope of challenge in an appeal as discussed in the authorities.  In a properly prepared notice of appeal, the grounds should be focused and concise.  If the challenge is based on the lack of evidence to support a finding, insofar the judgment referred to some evidence in relation to such finding, the documents or relevant part of the witness statement or transcript should be included in the bundle.  If the challenge is based on misunderstanding of evidence or failure to take account of relevant evidence, such documents or relevant witness statement or transcript should be included. If the challenge is that a particular finding is one which no reasonable tribunal could make, all evidence relevant to that finding should be included. Again, a reasonably competent solicitor who had followed the case properly (either by personal involvement in the court below or by reading into the papers in case of change of solicitor) should be able to tell what documents are essential for the consideration of these grounds of appeal.

75.The same approach should be adopted in respect of issues raised in a respondent’s notice.

76.In case of doubts, a solicitor can always consult the counsel retained to argue the appeal before deciding whether a document should be included in an appeal bundle.

77.Unless there is an issue on whether a point had been argued below or whether a party adopted a particular stance below, generally submissions placed before the judge below should not be included in appeal bundles.

78.Sometimes lawyers try to explain the inclusion of materials by way of background.  Whilst we would not completely exclude the need for doing so, generally the judgment below would have set out all the background which the court of appeal needs to know.  Save in very exceptional circumstances, it is not necessary to include materials in the appeal bundles for background information.  If counsel considers in the exceptional circumstances of a particular appeal that some additional background information or material should be placed before the court of appeal, he should liaise with his opponent to see whether such material is uncontroversial and the extent to which it is necessary to place such material before the court by way of supplemental bundle.

79.As we have said, even if there were a change of solicitor, the new solicitor should have read the papers properly before he takes on the conduct of an appeal.  He is remunerated for reading into the case and he owes a duty to his client as well as the court to be familiar with the case.  It is no excuse that he failed in the discharge of that duty. 

80.Change of counsel is equally not an excuse.  For the reasons given above, a solicitor handling an appeal owes a duty under Order 1A Rule 3 to engage counsel to properly advise his client on the merit of an appeal and to prepare proper grounds of appeal from the very beginning.  Whilst there may be occasions where it is justifiable to change counsel (or to engage a more senior leader to argue an appeal), a solicitor should ensure that such a change does not occur at a late stage when it would generate problems in the preparation of appeal bundles.  Further, the new or additional counsel would still be bound by the existing grounds of appeal unless new grounds are put forward.  In several judgments, we have already explained why late amendments of the grounds of appeal are not acceptable in light of the underlying objectives in Order 1A.

81.The wholesale indiscriminate reproduction of the materials placed before the primary judge in the appeal bundles cannot be justified in any circumstances.  It is a sign of failure to exercise care and professional competence in the preparation of appeal bundles.

82.Regrettably in the present appeal the solicitor for the Appellant had not made any real effort in preparing the appeal bundles properly.  Enough has been said in the past to remind the profession to take the task of preparation of bundles seriously.  Unless there is a satisfactory offer from the solicitor concerned within 7 days, we shall give directions pursuant to Order 62 Rule 8 for hearing arguments on whether a wasted costs order should be made against the solicitor concerned.

Mr Edward Chan SC and Mr David W K Tang, instructed by Lee Chan Cheng, for the plaintiff

Mr C Y Li SC, instructed by Tony Kan & Co, for the 1^st defendant

Mr Mok Yeuk Chi, instructed by Wong, Hui & Co for the 5^th defendant