Wang Hanzhen v. The Personal Representative of Li Kuen, Alias Kwok Chun

DCMP 3269/2014

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 3269 OF 2014

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JUDGMENT

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INTRODUCTION

1.This is the trial of the Originating Summons taken out by the plaintiff on 9 December 2014, in which the plaintiff claims possessory title of Lot No1337 in S D 2, Sai Kung, New Territories (“the Land”).

2.The Originating Summons is supported by the plaintiff’s affirmation made on 5 December 2014 (“the Affirmation”).

3.The plaintiff is the administratrix of her late husband Chow Wah (周華), who passed away on 23 April 2012.

4.The defendant is the registered owner of the Land.

5.The late Li Kuen (李娟), alias Kwok Chun (覺真), passed away on 25 April 1979.  Her estate does not have a personal representative.  The plaintiff has obtained an order under Order 15 rule 15(1) that the hearing of the Originating Summons be proceeded in the absence of a person representing the estate of Li Kuen, alias Kwok Chun, deceased.

6.The court has previously given orders concerning the service of proceedings herein.  I am satisfied those orders have been complied with and there has been due service of these proceedings.

THE FACTS

7.I have perused the Affirmation and examined the documents exhibited thereto.  I am satisfied that the facts as stated therein are true and correct.  The facts as set out in the Affirmation are summarized in the paragraphs below.

8.Li Kuen alias Kwok Chun was a nun.  She bought the Land from Lau Lai Fuk and Lau Lai Luk in November 1951 at the consideration of HK$2,000.  Li Kuen signed the instrument of sale dated 20 November 1951 by putting a cross mark and her right thumb print on it.

9.After purchasing the Land, Kwok Chun established a nunnery called Sum Lok Yuen (心樂園) on the Land.

10.Chow Wah came to Hong Kong from Mainland China in the early 1950s and operated a shoe-mending stall in Ngau Chi Wan Village. Over the years, until Kwok Chun’s death in 1979, he frequently helped Kwok Chun in doing works for Sum Lok Yuen, such as laying the fence around the Land, dealing with dead bodies of nuns having passed away in the nunnery before burial.  Chow Wah and Kwok Chun had a close relationship.  Kwok Chun regarded Chow Wah as her informally adopted son.

11.Before Kwok Chun’s death, Kwok Chun passed her ring (“the Ring”) and the seal of Sum Lok Yuen (“the Seal”) to Chow Wah.  Kwok Chun told Chow Wah that by passing these to him, she wanted Chow Wah to take up Sum Lok Yuen.

12.Around 4 months before her death, Kwok Chun made a statutory declaration on 11 December 1978 (“the SD”) declaring that she was also known as Li Kuen.  She made a cross mark on the SD as her signature.

13.Kwok Chun was the last surviving nun in Sum Lok Yuen.

14.Kwok Chun passed away on 25 April 1979.  In the death certificate, it was mentioned that Lee Huen, nephew, of an address in Jordan (“the Jordan Address”), caused Li Kuen alias Kwok Chun’s body to be cremated.

15.After Kwok Chun’s death, Chow Wah occupied the Land as a gift given by Kwok Chun before her death.  No relative of Kwok Chun had ever come to claim the Land.  Chow Wah treated the Land as his own and lived thereon until his death on 23 April 2012.

16.The plaintiff married Chow Wah on 15 January 2007 in Mainland China.  Thereafter, the plaintiff came to Hong Kong to live with Chow Wah on the Land from time to time by using two-way entry permits. The plaintiff obtained a single-way entry permit in November 2011 and a Hong Kong ID card on 8 November 2011.  After that, the plaintiff stayed in Hong Kong lived with Chow Wah on the Land.

17.After the death of Chow Wah, the plaintiff continued to live on the Land.  On 29 May 2013, the plaintiff signed a tenancy agreement with Yeung Chi Keung and leased a room on the Land to him from 1 June 2013 to 31 May 2016 at the rent of HK$2,000 per month.

18.The annual ratable value of the Land in the assessment year 2014-2015 is HK$84,000.

19.The Land is fenced and there are entrance gates.  There are buildings on the Land.  The plaintiff said in the Affirmation that the fencing and the gates were already there before she came to Hong Kong in 2007.  The keys to the locks of those gates are kept by the plaintiff and the plaintiff’s tenant mentioned above.

20.The plaintiff’s solicitors have tried to contact Lee Huen, the nephew recorded on Kwok Chun’s death certificate.  Those efforts have been set out in the 2^nd Affirmation of Yeung Ho Shing Eric, who is a legal executive working in the plaintiff’s solicitors’ firm.  In that affirmation, Mr Yeung said:-

(a) On 15 January 2015, he tried to serve the Originating Summons by double registered post to Lee Huen by sending the same to the Jordan Address.  On 22 January 2015, the mail was returned to the plaintiff’s solicitors for the reason “Addressee Unknown 查無此人” marked on the returned envelope.

(b) On 5 February 2015, Mr Yeung visited the Jordan Address.  Mr Yeung saw a dried seafood shop at that address.  A Chinese man who called himself the boss of the shop told Mr Yeung that Lee Huen was under his employment for over 20 years, but Lee Huen retired in or around 1995.  That man said he did not have any idea as to the whereabouts of Lee Huen, since Lee Huen had retired a long time ago.

DONATIO MORTIS CAUSA

21.Before considering the claim of adverse possession made by the plaintiff, I would first consider whether the Land had been passed by Kwok Chun to Chow Wah under the doctrine donatio mortis causa. If the answer is yes, the Land would be an asset in Chow Wah’s estate, and the plaintiff’s claim herein would not succeed.

22.In order to constitute a donatio mortis causa,

(a) the donor must have made the gift in contemplation though not necessarily in expectation of death;

(b) the donor must have delivered to the donee the subject matter (in the case of a chose in possession) or the indicia of title (in the case of a chose in action) of the gift, or transferred to him the means of getting at that subject matter or indicia of title; and

(c) the gift must be such as to be absolute and complete only on the donor’s death so that it is revocable before then.

See Re Estate of Lung Nga Lai Eilly [2014] 4 HKLRD 829 at [7].

23.The doctrine of donatio mortis causa applies to landed property.  See Sen v Headley [1991] Ch 425.

24.As to the formality of property transfer under the doctrine, in Vallee v Birchwood (2013) 16 ITELR 305, Deputy Judge Jonathan Gaunt QC said at [12]:-

“A donatio mortis causa is a present gift which remains conditional until the donor dies. It can be revoked in the meantime. Until the death, the gift is inchoate. It gives rise to a constructive trust, which gets round the formal requirements for the transfer of land and the creation of trusts of land. If the donor effectively transfers title to the donee, the gift will become unconditional on the donor’s death; if, however, it is revoked in the meantime, the donee holds on trust for the donor. If title has not been effectively transferred, the donor’s personal representatives will hold the property on trust for the donee and can be compelled to transfer it to him”.

Cited with approval by the Court of Appeal in Re Estate of Lung Nga Lai Eilly at [18].

25.Hence, a landed property passed under the doctrine of donatio mortis causa would not be defeated by the formality requirements in s 6(1) of the Law Amendment and Reform (Consolidation) Ordinance (1979) which later became s 5(1) of the Conveyancing and Property Ordinance (Cap 219) – see s 6(2) of the LARCO 1979 and s 5(2) of the CPO.

26.Having considered the evidence carefully, I am not satisfied that the Land has been passed from Kwok Chun to Chow Wah as a donatio mortis causa.

27.Kwok Chun wanted Chow Wah to take up Sum Lok Yuen after Kwok Chun’s death.  Sum Lok Yuen was the nunnery.  So what exactly Kwok Chun wanted Chow Wah to do – to manage the nunnery, or to take the Land as a gift to him?  This is unclear.  It is questionable whether the subject matter in Kwok Chun’s statement was really the ownership of the Land.  There is no clear evidence showing that Kwok Chun intended to make the Land as a gift to Chow Wah.

28.Kwok Chun told Chow Wah these before her death – but how long before Kwok Chun’s death, and what was the heath condition of Kwok Chun at that time?  These are unknown.  There is no satisfactory evidence showing that the statement by Kwok Chun was made in contemplation of her death.

29.Further, I do not regard the Ring and the Seal as indicia of title to the Land.  The Ring was just a personal property of Kwok Chun.  The Seal was the seal of Sum Lok Yuen, which did not appear on any title document relating to the Land.  There is no evidence showing that Kwok Chun had passed the title deeds, or the key to the box containing the title deeds, to Chow Wah.  Had Kwok Chun really intended to pass the Land to Chow Wah as a gift, Kwok Chun would have had told Chow Wah the whereabouts of the title deeds.

30.For these reasons, the Land has not been passed by Kwok Chun to Chow Wah as a donatio mortis causa.

31.I proceed to consider whether the plaintiff has made out a claim of adverse possession of the Land.

ADVERSE POSSESSION

32.It is trite that the person claiming adverse possession has to show both possession and the requisite intention to possess. See Wong Tak Yue v Kung Kwok Wai & Another (No.2) (1997-98) 1 HKCFAR 55, at 68E.

33.I am aware of the fact that the plaintiff is claiming possessory title to the Land in her personal capacity and not on behalf of Chow Wah’s estate.  I am also aware that there is no evidence showing any assent passing any interest in the Land in Chow Wah’s estate to the plaintiff.  Notwithstanding these, the plaintiff is still entitled to make use of the period of possession by Chow Wah by adding that period to her own period of possession.  This point is supported by Willis v Earl Howe [1893] 2 Ch 545, per Kay LJ at 553:-

“a continuous adverse possession for the statutory period, though by a succession of persons not claiming under one another, does, in my opinion, bar the true owner.”

Applied in Ng Lai Sim v Lam Yip Shing and Another (HCA 2963/1998, 22 November 1999).

Factual possession

34.The evidence shows that while Kwok Chun was alive, Chow Wah would help Kwok Chun in doing works, including laying fence around the Land.  Accordingly, before Kwok Chun’s death, the Land was already fenced.

35.In respect of fencing, no evidence shows any change when Chow Wah came into possession of the Land after Kwok Chun’s death. I find that the Land was still fenced when Chow Wah was in possession of the Land.

36.Chow Wah lived thereon and treated the same as his own.  I find that the Land was in Chow Wah’s possession from Kwok Chun’s death on 25 April 1979 until Chow Wah’s death on 23 April 2012.

37.The plaintiff continued to live on the Land after Chow Wah’s death.  I find that the plaintiff has been in possession of the Land since Chow Wah’s death.

Intention to possess

38.I have found in the above that the Land had not been passed by Kwok Chun to Chow Wah as a gift.  However, Chow Wah subjectively believed that the Land was a gift from Kwok Chun to him.  This erroneous belief would not destroy the plaintiff’s claim of adverse possession, but in fact constitutes the necessary intention to possess.

39.In Adverse Possession, 2^nd Ed, 2011, Jourdan and Radley-Gardner, paras 9-38 to 9-42, the learned authors said:-

“9-38 If, however, the squatter does believe, erroneously, that he owns the property, that clearly constitutes the necessary animus. In a number of adverse possession cases, the true owner and squatter have both acted under the erroneous belief that the squatter owned the property. In such cases the effect of the expiry of the limitation period is to make good the mistaken belief of the parties. There is no requirement that the squatter intends to exercise exclusive physical control over the land wrongfully.

9-39 In JA Pye (Oxford) Ltd v Graham [2001] Ch 804 at para.41(5) [n.47: The correctness of that statement is not affected by the subsequent reversal of the Court of Appeal’s decision by the House of Lords on other grounds], Mummery LJ said: ‘I agree that dispossession can occur without any intention on the part of the squatter to possess the land wrongfully. A squatter may, for example, be held to have intended to possess land and to dispossess the true owner, even if he has acted in the honest, but mistaken, belief that the land was in fact his. This is often the case in boundary disputes’. …

9-40 In Palfrey v Palfrey (1974) 229 Estates Gazette 1593, a tenant, Lily, was told that the property in dispute was hers. Lord Denning MR said:

‘In a sense her possession was not hostile, but that was not necessary to make or constitute adverse possession. In addition her son did not know that he had this deed or title. But that did not make any difference. The position was that Lily thought she was the owner, and that state of mind was certainly one which gave rise to title by adverse possession’.

……

9-42 In Hughes v Cork [1994] EGCS 25, the squatters took possession of the disputed land in the erroneous belief that they owned it. The judge at first instance held that the squatters had not acquired possessory title, because they believed they owned the land, and therefore did not believe that they were acting adversely to the true owner. The Court of Appeal reversed that decision. An intention to possess was necessary, but not an intention to dispossess. Saville LJ said:

‘The leaned Judge appears to have held that it is impossible for someone who believes himself to be the true owner to acquire title by adverse possession since such a person cannot, ex hypothesi, have an intention to exclude or oust the true owner. If this were the law then only those who knew they were trespassing, that is to say doing something illegal, could acquire such a title, while those who did not realise that they were doing anything wrong would acquire no rights at all. I can see no reason why, as a matter of justice or common sense, the former but not the latter should be able to acquire title in this way. What the law requires is factual possession i.e. an exclusive dealing with the land as an occupying owner might be expected to deal with it, together with a manifested intention to treat the land as belonging to the possessor to the exclusion of everyone else. Obviously if the possessor knows or believes someone else has the paper title to the land he must intend to exclude that person along with everyone else. But in the absence of such knowledge or belief it is in my judgment sufficient for this part of the second requirement simply to establish a manifest intention to exclude everyone.’” (Emphasis added)

40.The English Court of Appeal’s decision in Hughes v Cork (supra) was followed and applied in Hong Kong.  See Wong Luen Chun v Secretary for Justice [1998] 4 HKC 122, Wong Kar Sue v Sun Hung Kai Properties Ltd [2006] 2 HKC 600, and Shing Luen Fat v Shing Chi Ping (DCCJ 3789/2010, 30 September 2013).  See also the recent decision of the Court of Appeal in Cheung Kwong Yuen v Sun Hui Fang [2016] 1 HKLRD 464, at [10] – [14].

41.I find that Chow Wah believing (albeit erroneously) that the Land was a gift to him and treating the Land as his own constitutes the requisite intention to possess.

42.Like Chow Wah, the plaintiff also believed that the Land was a gift from Kwok Chun to Chow Wah.  After Chow Wah’s death, the plaintiff took up possession of the Land and treated the Land as her own.  I find that the plaintiff also has the requisite intention to possess.

Judgment to the plaintiff

43.For the reasons above, the plaintiff has made out a case of adverse possession.

44.I am satisfied that this court has jurisdiction to give judgment to the plaintiff pursuant to s 35 of the District Court Ordinance (Cap 336) (“DCO”).

45.Sections 35 of the DCO provides:-

“35. Jurisdiction for recovery of land

The Court has jurisdiction to hear and determine any action for the recovery of land, where the annual rent or the rateable value of the land, determined in accordance with the Rating Ordinance (Cap 116), or the annual value of the land, whichever is the least, does not exceed $240000.” (Emphasis added)

46.As shown in the evidence, the annual ratable value of the Land is less than HK$240,000.

47.In Adverse Possession, 2^nd Ed, 2011, Jourdan and Radley-Gardner, the learned authors said at paras.1-14 to 1-20, pp.8-11:-

“1-14 An action can be one to ‘recover’ land provided that it asserts a claim to the title to or the possession of land. ‘Recover’ is a misleading expression, as it suggests that the action must be one to obtain something which the claimant once had, but has lost. This is not the case. An action will be one to recover land if the claimant seeks to obtain actual possession of land, or to claim possession or the right to possession, or to extinguish an actual or potential claim by another to possession or the right to possession. However, an action in which the claimant seeks to define the extent of his title is not one to ‘recover’ land.

……

1-20 It is considered that Vandeleur v Sloane [1919] 1 IR 116 and the Australian and Malaysian authorities are to be preferred to Gledhill v Hunter (1880) 14 Ch D 492, and the Canadian authorities. A different construction of the phrase ‘action to recover land’ may be appropriate in different contexts. In the context of the limitation of actions, it would be unfortunate if an action for a declaration as to title was not treated as one to recover land. It would mean that such an action would not stop time running against the owner. An owner might start proceedings seeking a declaration that he had good title to the disputed land, and the limitation period might expire even while the claim was in progress. Further, unless a claim for a declaration is an action to recover land, it is difficult to see what the owner of land used by a foreign state for the purposes of a diplomatic mission could do to prevent time running in favour of the state, if it was in adverse possession.” (Emphasis added)

48.In my judgment, claiming possessory title is an action for recovery of land.  I am of the view that this case falls within the ambit of s 35 of the DCO.

49.Whilst it is not the normal procedure of the court to make a declaration without a trial, this rule is not relevant here as the hearing before me is the trial of the Originating Summons.  Further, the rule is “only a rule of practice which should not be followed when the plaintiff had a genuine need for the declaratory relief and would not be done if such relief were denied.”  See Hong Kong Civil Procedure 2016, Volume 1, para 19/7/20.

50.I am satisfied that the plaintiff has obtained a possessory title to the Land and has a genuine need to have a declaratory relief to that effect.  Justice would not be done if such relief is denied.

51.I come to the reliefs sought by the plaintiff in the Originating Summons.  The plaintiff seeks the following in the Originating Summons:-

“1. A declaration that:

(a) the Defendant has lost the right to bring any action to recover All that piece of land registered in the Land Registry as Lot No.1337 in S.D.2, Sai Kung, New Territories, Hong Kong Special Administrative Region (“the Land”) by virtue of Section 7(2) of the Limitation Ordinance (Cap.347) and

(b) by virtue of Section 17 of the Limitation Ordinance (Cap.347), the Defendant’s title to the Land had been extinguished and the Plaintiff has acquired all the right, title and interest including the right to exclusive physical occupation of and on the Land;

2. An Order that all the estate, right, title and interest in the Land be vested in the Plaintiff”

52.I have no problem in making an order in terms of paragraph 1(a) and the first half of paragraph 1(b) of the Originating Summons, ie up to “… the Defendant’s title to the Land had been extinguished”. However, I would refuse to make an order in terms of the second half of paragraph 1(b) and paragraph 2 of the Originating Summons.

53.Notwithstanding the plaintiff’s success in adverse possession, the plaintiff would not take over the title of the defendant. The defendant’s title has only been extinguished vis-à-vis the plaintiff.  It remains as a title vested in the defendant and could be surrendered to the Government.  See Wong King Lim v The Incorporated Owners of Peony House (CACV 3/2012, 29 May 2013), per Yuen JA at [33.2] and per Lam JA (as he then was) at [37].  Applied by Recorder Jat SC in Tsang Cho Kiu v Lam Tsat Fuk (HCMP 1077/2-13, 10 December 2013). 

CONCLUSION

54.For these reasons, I give judgment to the plaintiff and make the following declaration:-

(a) that the defendant has lost the right to bring any action to recover All that piece of land registered in the Land Registry as Lot No 1337 in S D 2, Sai Kung, New Territories, Hong Kong Special Administrative Region (“the Land”) by virtue of section 7(2) of the Limitation Ordinance (Cap.347); and

(b) that by virtue of section 17 of the Limitation Ordinance (Cap.347), the Defendant’s title to the Land had been extinguished.

55.Costs should follow the event.  I make the following order on costs:-

(a) costs of these proceedings, including all costs reserved (if any), be paid by the defendant to the plaintiff, to be taxed if not agreed; and

(b) there be a certificate for counsel for the trial before me.

56.I thank counsel for the plaintiff, Mr Wallace Cheung, for the very helpful submissions.

Mr Wallace Cheung, instructed by Philip T F Wong, for the plaintiff

The defendant was not represented and did not appear