Pang Moon Wan and Another v. Yu Chi Foon and Others
Read the full judgment text of DCMP 2331/2015 on BabelCite. This District Court judgment was delivered on 23 June 2016.
1. This action (an Order 113 proceeding taken as if begun by way of writ and transferred from the Court of First Instance by Master S Kwang’s Order of 10 August 2015 in HCMP No 2604 of 2012) concerns the land lots known as Lots Nos 2287, 2296, 2299 and 2302 all in Demarcation District No 91, North, New Territories (respectively “Lot 2287”, “Lot 2296”, “Lot 2299”, and “Lot 2302”, and collectively, the “Lands”) in Ping Kong Village. The defendants are the registered owners of the Lots. The 1 st an
Cited by 4 cases · Cites 7 cases
|
DCMP 2331/2015 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MISCELLANEOUS PROCEEDINGS NO 2331 OF 2015 --------------------------------
--------------------------------
----------------------- JUDGMENT ----------------------- 1.This action (an Order 113 proceeding taken as if begun by way of writ and transferred from the Court of First Instance by Master S Kwang’s Order of 10 August 2015 in HCMP No 2604 of 2012) concerns the land lots known as Lots Nos 2287, 2296, 2299 and 2302 all in Demarcation District No 91, North, New Territories (respectively “Lot 2287”, “Lot 2296”, “Lot 2299”, and “Lot 2302”, and collectively, the “Lands”) in Ping Kong Village. The defendants are the registered owners of the Lots. The 1st and 2nd plaintiffs, son and mother, claim that they or either of them has since 1961 been in adverse possession of (1) the whole Lot 2302; (2) the whole 2299; (3) most of Lot 2296 limited by a footpath in the north; and (4) most of Lot 2287 limited by the bunds in the south (the “Lots”) (more particularly defined at [Bundle III/513]), either successively from their father and husband, or in their own rights, and thus the plaintiff’s title has been extinguished by section 7 and 17 of the Limitation Ordinance (Cap 347). As usual in an adverse possession claim, the registered owner, the defendants here, counterclaim for mesne profit. Background generally not in dispute Parties and documents concerning the Lots 2.On 24 July 1954, the 1st plaintiff was born out of the marriage between Mr Pang Kong Wan (“Pang Senior”) and the 2nd plaintiff Madam Ho Oi Fung. The 1st plaintiff is the eldest child, and Pang Senior and the 2nd plaintiff had 4 other children. 3.On 21 December 1955, one Madam Yu Wong Lai Hing (“Madam Yu”), also known as Yu Wong Shi, acquired the Lots. About 4 years later, on 22 October 1959, Madam Yu assigned the Lots to her sons, the defendants. Shortly thereafter, on 9 December 1959, a Power of Attorney was executed by the defendants in favuor of Madam Yu. 4.On 11 June 1961, Pang Senior entered into an agreement with one Leung Tsz Choi (“Leung Senior”) (the “Agreement”), which provided:-
I must say I have difficulty understanding the entire Agreement. Fortunately, there is no dispute that under this Agreement, Leung Senior was to make payments in kind, viz, crops, to Pang Senior. However, there is dispute between the parties over for what the payments were made in exchange. According to the plaintiff’s interpretation, the exchange was Leung Senior’s grant of tenancy in respect of the Lots and sale of the crops and the house. According to the defendants’ interpretation, it was for assignment of interests in the Lots. I shall return to this later at paragraphs 51-52 below. 5.In 1969, Leung Senior passed away. 6.In 1975, Madam Yu passed away. 7.In 1999, Pang Senior passed away. 8.On 7 November 2012, shortly before the commencement of the present action in the High Court in HCMP No 2604 of 2012 on 14 November 2012, the 2nd plaintiff signed a confirmation letter (the “Confirmation”), providing that:-
Use of the Lots 9.The above are merely background concerning the parties and documents in relation to the Lots. More important is of course how the Lots were used. Expert reports from each side were ordered to interpret the relevant aerial photos and survey sheets. The interpretations are largely the same, save for the function of a footpath mentioned in paragraph 14 below. 10.In respect of Lot 2287, since 1954, it was cultivated as three numbers of fields separated by distinctive bunds. In 1963, a small square pond appeared in the centre of the Lot. Further, a small circular object was observed at the south-eastern corner of this area. The overall cultivation situation remained unchanged up to 2014. 11.In respect of Lot 2296, since 1954, it was cultivated and enclosed by distinctive bunds. A small temporary structure, looked like a hut, was found at its northern portion. By 1961, the hut was expanded, and in 1972, was further expanded, with a new small square temporary structured added at the northwest of the hut. In 1980, a further small square temporary structure was added, this time, at the west of the hut. Again, the overall cultivation situation remained unchanged up to 2014. 12.In respect of Lot 2299, since 1954, it was cultivated and enclosed by distinctive bunds. In 1987, a square pond was observed near the middle of the Lot. Again, the overall cultivation situation remained unchanged up to 2014. 13.In respect of Lot 2302, since 1954, it was cultivated as two fields separated by a distinctive bund. The bund became a footpath by 1963 (the “Footpath”). It led north-westward, through Lots Nos 2301, 2312 and 2298 (not the subject lands in question and owned by others), to reach the hut in Lot 2296. By 1972, the Footpath became more prominent and extended further westward by about 65 metres to reach the other temporary structures. Except this bund which later became the Footpath, the overall cultivation situation remained unchanged up to 2014. 14.It is the Footpath which the expert for the plaintiffs and that for the defendants differ on as to who may use. However, at the beginning of the trial, I raised with the parties whether the experts would be necessary, or whether their expertise would be, for giving evidence on who may use the Footpath. Their expertise is interpreting the features shown in aerial photos and survey sheets. Their expertise informs that the Footpath developed and remains there. However, as to who may use the Footpath, I do not think that their expertise can assist. Thus, I told the parties at the beginning of the trial that I did not require the parties to call their experts to assist the court. Mr Patrick Chong, acting for the plaintiffs, and Mr Kenneth CL Chan leading Mr Fung Pak Kay, acting for the defendants, sensibly agreed. Plaintiffs’ pleaded case 15.According to the Re-Re-Re-Amended Statement of Claim, Pang Senior had occupied the Lots since about 1959. He farmed on the Lots with exclusive occupation and possession from 1959 to 1961 without consent from any person, including the registered owners of the Lots. Since 1961, when Pang Senior became a full-time Fung Shui master, by the Agreement which was, according to the plaintiffs, a tenancy agreement, he rented, but did not assign, the Lots to Leung Senior for farming for an annual rent of 1,400 catties of grains. This continued to be the case even after Leung Senior passed away in 1969, after which Leung Senior’s son, Leung Kam Due resumed Leung Senior’s role to pay the annual rent to Pang Senior. After Pang Senior passed away in 1999, in 2000 the 2nd plaintiff took up his role to collect the rents (which became by way of cash at some stage) from Leung Kam Due, and later when the 2nd plaintiff was found to be mentally incapable towards the end of 2015, the 1st plaintiff collected the rents. According to the plaintiffs, throughout the period since 1959, there has been neither disturbance nor interference with how Pang Senior and the 1st and 2nd plaintiffs have been using the Lots, nor demands for payment from any of them for use of the Lots. 16.The plaintiffs claim that Pang Senior told the 1st plaintiff that he should take over his interests in the Lots upon his death, and this arrangement was agreed to by the 2nd plaintiff prior to Pang Senior’s death, and now as confirmed by the Confirmation. The plaintiffs further claim that the 1st and/or 2nd plaintiffs are the successive possessors or in any event, adverse possessors in their own rights by 2012 (12 years after 2000 when the 2nd plaintiff started to collect rents). 17.There is a dispute between the parties over whether from the pleas that (1) the 2nd plaintiff took up the role of collecting rent and (2) the 2nd plaintiff agreed to the 1st plaintiff inheriting Pang Senior’s interests upon the latter’s death, it follows that the plaintiffs are running a case that the 2nd plaintiff was collecting rent for and on behalf of the 1st plaintiff. Mr Chan contends not, while Mr Chong contends in the affirmative. I agree with Mr Chong: the 2nd plaintiff collected the rent, both the 1st and 2nd plaintiffs however agreed that the 1st plaintiff “inherited” the Lots, and it must logically follow that the 2nd plaintiff was collecting rent for and on behalf of the 1st plaintiff. This agency relationship is a legal consequence from the facts pleaded and is not necessary to be pleaded explicitly. Defendants’ pleaded case 18.The Amended Defence and Counterclaim is in general a bare denial of the occupation and/or cultivation of the Lots by Leung Senior, the 1st and/or 2nd plaintiffs. They specifically referred to Pang Senior’s admission in his affirmation filed on 14 November 2012 that he “thought it was unreasonable to make use of the Lots without the permission of the owner”. The defendants also plead that in any event, any use and occupation of the Lots by Leung Senior, the 1st and/or 2nd plaintiffs have not covered the Footpath. 19.The Amended Defence and Counterclaim raises two points about the Agreement between Pang Senior and Leung Senior. First, the defendants contend that the Agreement was not a tenancy agreement as alleged by the plaintiffs, but an assignment of interest in certain unidentified land from Pang Senior to Leung Senior. The defendants’ such contention relies on the description of Pang Senior as “頂讓人”in the Agreement and that the Agreement did not specify which lots were in question. 20.The second point is a legal one. The Amended Defence and Counterclaim plead that since the Agreement, even assumed to be a tenancy agreement, is not one for a rent of not less than HK$20, by virtue of sections 12(3) and 13(3) of the Limitation Ordinance, the tenancy thereunder should not count for the purpose of adverse possession. In support of this contention, Mr Chan also referred me to Burrell J’s obiter dicta in his decision in Hilder Company Limited v Occupier(s) of Premises & anor, unreported, 17 December 2001, HCMP 1543/2001 at §§20-25. I shall deal with this contention at paragraphs 60-67 below. Issues 21.The issues are:-
Factual evidence For the plaintiffs 22.For the plaintiffs, the 1st plaintiff himself and Leung Kam Due gave evidence. 23.The 1st plaintiff, consistent with the plaintiffs’ pleaded case, testified that Pang Senior had occupied the Lots since about 1959 upon his friend’s suggestion, although before he entered the Lots, he “thought that it was unreasonable to make use of the Lots without the permission of the owner”, but his friend told him that “as the Lots were vacant, there was no harm for [him] to make use of the Lots”. Pang Senior thus farmed on the Lots from 1959 to 1961 without consent from any person, including the registered owners of the Lots. Since 1961, when Pang Senior became a full-time Fung Shui master, by the Agreement which the 1st plaintiff said was a tenancy agreement, he rented, but did not assign, the Lots to Leung Senior for farming for an annual rent of 1,400 catties of grains. This continued to be the case even after Leung Senior passed away in 1969, after which Leung Senior’s son, Leung Kam Due resumed Leung Senior’s role to pay the annual rent to Pang Senior. After Pang Senior passed away in 1999, in 2000 the 2nd plaintiff took up his role to collect the rents (which became by way of cash at some stage) from Leung Kam Due, and later when the 2nd plaintiff was found to be mentally incapable towards the end of 2015, the 1st plaintiff collected the rents. Throughout the period since 1959, the 1st plaintiff testified, there has been neither disturbance nor interference with how Pang Senior and the 1st and 2nd plaintiffs have been using the Lots, nor demands for payment from any of them for use of the Lots. Inevitably, his recounts of what happened decades ago cannot be expected to be detailed and perfectly accurate. Inevitably, he could not be expected always to satisfactorily explain why certain documents were prepared in certain ways. But the general big picture of his testimony has consistently been that he paid the rents after Leung Senior died in 1969. 24.In the cross-examination, the 1st plaintiff alleged that he had no idea of what the defendants’ case and evidence was. He also alleged that his legal advisers did not explain to him what the defendants’ case and evidence was. I must say such answers are very troubling. The 1st plaintiff signed the Reply and Defence to Counterclaim on 12 February 2014 upon solicitor’s interpretation. He must have been explained about the Defence and Counterclaim, and should have at least some idea of what the defence is about. In the cross-examination, Mr Chan suggested, but the 1st plaintiff disagreed, that the reason for the 1st plaintiff’s such allegation was that the 1st plaintiff would like to avoid mentioning Pang Tim Luk, the presence of whom would suggest that Pang Senior was actually collecting rents for Pang Tim Luk or Madam Yu. Mr Chong did not re-examine the 1st plaintiff in this respect. 25.Further, in the cross-examination, the 1st plaintiff confirmed that in 1959, when Pang Senior entered the Lots, the Lots were barren and vacant. This is contrary to the expert evidence that since 1954, the Lots had been cultivated. 26.Before I leave the 1st plaintiff’s evidence, I should add that in the examination-in-chief, Mr Chong attempted to ask the 1st plaintiff to testify to the details of the adjacent lands which he alleged Pang Senior had farmed. In his Witness Statement, he merely said that he cultivated the Lots and the adjacent lands, without more. This obviously is unsatisfactory; however, this does not mean that the 1st plaintiff could be free to supplement. If he were allowed to do so, the defendants would be put into a difficult position to verify what he would have said for the first time. This is the very reason why I disallowed Mr Chong’s such line of questions under Order 38 rule 2A(7A), which required good reasons before the Court would allow any supplement. Relevance alone is not a good reason, as relevant evidence should have been put in the witness statement long time ago, unless, for example, the relevant evidence is about updating the Court with what has happened recently. 27.Leung Kam Due’s evidence is the 1st plaintiff’s evidence concerning the grant of tenancy under the Agreement to Leung Senior and what has since then happened. Inevitably, his evidence is largely hearsay or even multiple hearsay (from his father to his brother Leung Fuk Due and then to him) in respect of the circumstances leading to the execution of the Agreement. Inevitably, similar to the 1st plaintiff’s action, his recounts of what happened decades ago cannot be expected to be detailed and perfectly accurate. Inevitably, he could not be expected always to satisfactorily explain why certain documents were prepared in certain way. But again, similar to the 1st plaintiff’s evidence, the general big picture of his testimony has consistently been that he did pay the rents after Leung Senior died in 1969 . This is in fact consistent with what he said during a conversation covertly recorded by the 4th defendants – where Leung Kam Due repeatedly said that he and Leung Senior paid rents to Pang Senior and the 2nd plaintiff. 28.In respect of the Lots, he also explained, without challenge, how the 4 Lots in question constituted 7 cultivation fields. The Agreement referred to 7 cultivation fields in Ping Kong. 29.Further, in relation to the Footpath, Leung Kam Due said in his Supplemental Witness Statement that:-
30.In the normal course of things, the 2nd plaintiff would be expected to give evidence. However, in the unchallenged medical report prepared by Dr Leung Lam Ming Jess on 31 March 2016 (based on an examination conducted on 7 May 2015) in support of the application by Summons dated 6 April 2016 to join the 2nd plaintiff (which was allowed by DDJ Eric Tam on 26May 2016), the 2nd plaintiff was diagnosed of dementia of mild severity based on that examination on 7 May 2015. This certainly is a good reason for not producing the 2nd plaintiff as a witness. For the defendants 31.For the defendants was one witness only, namely, Ms Yue Chi Yan Miranda (“Miranda Yue”), daughter of the 4th defendant. In gist, she testified that Madam Yu was a shrewd woman; she had spent much time to acquire many lands in the New Territories and actively managed and dealt with the lands but did not leave the lands unattended and vacant without renting. Thus, Miranda Yue said that it was impossible for Madam Yu to leave the Lots squatted by strangers. Her such evidence is not specific to the Lots, but at best only an educated guess as to what happened. 32.Further, in her Witness Statement filed on 25 June 2014, relying on (1) the fact that the witness to the Agreement was one Pang Tim Luk; (2) his belief that that Pang Tim Luk was the same Pang Luk within the Pang clan according to a book borrowed from the public library entitled “寶安縣粉嶺鄉彭氏桂公祖族譜” published in 1989; and (3) his understanding that “in the New Territories in the old days, when a land lot changed ownership, it was quite usual that the new and old landlord would ask the existing tenant or licensee of the land lot to sign as a witness in the conveyancing document”, she “would not preclude the possibility that Pang Luk introduced [Pang Senior] as a new tenant or licensee to [Madam Yu] back in 1959”. 33.In addition, her Supplemental Witness Statement filed on 12 August 2015, Miranda Yue said that she and her family members walked along the Footpath freely without any interference. 34.It is immediately clear from the above that her evidence (or more accurately surmises, if not speculations,) in her Witness Statement filed on 25 June 2014 goes far beyond the facts pleaded in the defendants’ defence filed thereafter on 17 May 2016, which did not in any way suggest that Pang Senior was a tenant or a licensee under Madam Yu. When asked how I should deal with such evidence in the light of the pleaded defence, Mr Chan responded that such evidence was to show that there was no physical possession and/or animus possidendi, which have always been the issues. I do not think that Mr Chan can take such an approach. It is trite that the function of the pleadings is, inter alia, to avoid any surprise and to afford the opposite party fair opportunity to respond. Miranda Yue’s evidence in her Witness Statement in effect suggests that there was an agreement or understanding between Pang Senior and Madam Yu. Facts in support of such suggestion should have been pleaded rather than thrown out in evidence. One cannot, like what I did in paragraph 17 above in respect of the plaintiffs’ Re-Re-Re-Amended Statement of Claim for working out logically the legal consequence of agency, rely on any pleaded facts to work out any such suggestion. Although such evidence was put forward on 25 June 2014, almost 2 years ago, however, no such facts being pleaded, the plaintiffs are perfectly entitled not to take this as an issue for trial. Indeed, this issue was not put in the statement of issues proposed by the defendants’ solicitors under their cover letter of 30 March 2016. I should add that I am in no way criticising the pleader for not pleading any such facts or any such suggestion; on the contrary, on such evidence, the pleader deserves respect for not pleading any facts or suggestions without proper basis. 35.Lastly, in the cross-examination, when asked why Yue Kai Chiu and Vincent Yue, who even according to Miranda Yue herself have more personal knowledge of the matters relevant to the present action, did not testify. Miranda Yue explained that his father has been staying in Australia and is in his old age, and thus chose not to give evidence to assist the court. As regards Vincent Yue, Miranda Yue explained that she already was the authorised person to deal with the matter and her evidence was sufficient. Analysis 36.Putting the pleading issue aside, I have no difficulty rejecting Miranda Yue’s evidence in her Supplemental Witness Statement. She has explained neither the basis of her belief that that Pang Tim Luk was the same Pang Luk within the Pang clan according to a book borrowed from the public library entitled “寶安縣粉嶺鄉彭氏桂公祖族譜” published in 1989; nor the basis for his understanding that “in the New Territories in the old days, when a land lot changed ownership, it was quite usual that the new and old landlord would ask the existing tenant or licensee of the land lot to sign as a witness in the conveyancing document”. In any event, even based on such belief and understanding, she can at best say that she “could not preclude the possibility” that Pang Senior was a tenant or licensee of Madam Yu. In cross-examination, she said that she could not find any rent receipts or tenancy agreements for the Lots, although she could find some rent receipts for Madam Yu’s other lands. While I accept that one cannot expect satisfactory documentation of evidence of matters that took place decades ago, that she was able to find some but not others does call for explanation of how she or her family have been keeping the documentation, which explanation is however absent. 37.I also considered Mr Chan’s submissions that it could not be a mere coincidence that in 1959 when Madam Yu caused the Lots to be held on trust for her who still retained the management thereof by the Power of Attorney executed in favour of Madam Yu, Pang Senior squatted all the Lots, which were not adjacent to each other and were 30 minutes’ walk away from his home in Fanling Wai. However, one may also interpret this “coincidence” to mean that the 4 Lots had been abandoned by 1959 and thus Pang Senior chose these Lots. Thus, I do not think that Mr Chan’s submissions advance the defendants’ case much further. Considering the totality of the evidence, what Miranda Yue said in respect of the Lots is so tenuous to be worth the court’s reliance. 38.Insofar as Miranda’s evidence that Madam Yu would not have left her lands unattended and vacant, such evidence was not specific towards the Lots. I have no doubt that the registered owner of a land would certainly not like any squatters and would try her best to manage the land. However, such general evidence alone is not very helpful, as in most adverse possession cases, the owners would not wish their lands to be adversely possessed, but for some reasons, the lands were still left unattended. Therefore, such general evidence has still to be assessed in the light of all the evidence especially that from the purported squatters, who, as explained below, bear the heavy burden of proof in adverse possession cases. 39.On the face of it, Leung Kam Due is not a completely disinterested witness – according to himself, he has been an occupant of the Lots for many years, and he may well have the incentive that the 1st and/or 2nd plaintiffs remain the landlords so that he would feel more secured in respect of the tenancy. However, given what Miranda Yue told Leung Kam Due during the conversation on 2 June 2013, which was recorded covertly by her and have been transcribed, that if the defendants could obtain possession of the Lots, they would not be difficult with Leung Kam Due, I find that Leung Kam Due is by and large a disinterested witness. While I am aware that Lam Kam Due would like to protect his interests in the Lots, he would do so regardless of who would have the possession of the Lots. Thus, I do not think this factor would be for or against either party. 40.More importantly, as pointed out above, during the conversation, the recording of which was not known to Leung Kam Due, he still repeatedly said that both he and Leung Senior paid rents. In other words, his evidence that he and Leung Senior rented the Lots has remained unchanged throughout. Thus, I shall accord more weight to his evidence insofar as he spoke from his personal knowledge, namely, in relation to the matters that took place after 1969 when he himself started to pay the rents. 41.The defendants also referred to the recording where Leung Kam Due said that the 2nd plaintiff had told him that she was collecting rents for others. The conversation was that:-
42.However, it was actually the first time he himself said “佢話幫人收”. When asked where he had said similar things, Mr Chan for the defendants referred me to the following conversation:-
43.(1) above is quite different from saying that the 2nd plaintiff collected the rents for others. In (2), Leung Kam Due’s brother Leung Fuk Due initially said “yes” after Mr Chui said that Pang Senior left the lands and then rents were collected for others. When asked once again, he just said “唔” to a suggestion that Pang Senior was collecting rents for others. Whether this “唔” meant “yes” or “I heard that” is unclear. 44.Further, when considering the following line of conversation, the suggestion that the 2nd plaintiff was collecting rents for others would be inherently contradictory, as according to Leung Kam Due, the 2nd plaintiff had told him that she did not know who the owner was and had not seen the owner:
45.I think the conversation as relied on by the defendants (set out in paragraph 41 above) is a typical example where a covert recording was made and the party making the covert recording was eager, deliberately or not, to cross-examine and put his case forward, knowing that the recording would well be adduced as evidence to the court. Understanding the recording in this light, I would not read much into this line of conversation alone. In context, this conversation was, like the others, mentioning the 2nd plaintiff’s acknowledgement that the 2nd plaintiff was not the owner of the Lots. 46.In any event, putting the pleading issue aside, the defendants have to establish that Pang Senior was collecting rents for Madam Yu. There is however no evidence but just speculation to that effect. 47.The 1st plaintiff’s evidence is not satisfactory concerning his allegation that he had no idea about what the defendants’ case and evidence was, which allegation I reject. Absent any or any better explanation, I also agree with Mr Chan’s submissions that the reason for the 1st plaintiff to allege that he had no idea about what the defendants’ case and evidence was that he was worried about alluding to his knowledge of Pang Tim Luk, which would be used in support of the defendants’ speculation mentioned above. While this and his allegation that in 1959, the Lots were barren and vacant adversely affect his credibility, his evidence concerning the use and occupation by Pang Senior and his family is in general consistent with Leung Kam Due’s and more importantly, the undisputed experts’ evidence in this aspect. Thus, I still accept his evidence concerning the use and occupation of the Lots, save and except his evidence that the Lots were barren and vacant in 1959. The Lots might have been cultivated before 1959, but the fact is that in 1959, Pang Senior used and occupied the Lots as recounted by the plaintiffs’ witnesses thereafter. 48.The failure of the defendants to produce Yue Kai Chiu and Vincent Yue, who even according to Miranda Yue have more personal knowledge of the matters relevant to the present action, constitutes a basis for me to draw adverse inferences, as the plaintiffs have at least a prima facie case that Pang Senior and 1st and 2nd plaintiffs as well as Leung Senior and Leung Kam Due have been occupying and using the Lots. Miranda Yue’s explanation that his father has been staying in Australia and is in his old age is not acceptable; not even an application for taking evidence video-linked conference has been made. As regards Vincent Yue, Miranda Yue explanation that she already was the authorised person to deal with the matter and her evidence was sufficient is equally unacceptable. Thus, I draw an adverse inference that Yue Kai Chiu and Vincent Yue could not explain away the plaintiffs’ prima facie case even though they have the best knowledge of the matters: see Pacific Electric Wire & Cable Co Ltd v Texan Management Ltd, unreported, CACV 90-96/2012, 17 September 2013 at §§106-107 per Kwan JA. Findings of fact 49.On the above analysis, I accept the plaintiffs’ evidence and find that Pang Senior had occupied and farmed the Lots from 1959 to 1961 without consent from any person, including the registered owners of the Lots. 50.As mentioned above, in 1961, Pang Senior and Leung Senior entered into the Agreement. As foreshadowed, I shall discuss Issue (1), that is, the nature of the Agreement. 51.In order to determine the nature of an agreement, the court looks at the substance. While conduct subsequent is generally inadmissible for the purpose of construing an agreement, it is admissible for the purpose of showing whether the parties did intend the agreement to be as alleged. Having considered the following evidence, I find that the Agreement was a tenancy agreement as contended by the plaintiffs, but not an assignment of interest as alleged by the defendants.
52.Thus, I answer Issue (1) in favour of the plaintiffs that since 1961, by the Agreement which was a tenancy agreement, Pang Senior rented, but did not assign, the Lots to Leung Senior for farming for an annual rent of 1,400 catties of grains. I further find that this continued to be the case even after Leung Senior passed away in 1969, after which Leung Senior’s son, Leung Kam Due resumed Leung Senior’s role to pay the annual rent to Pang Senior, and that naturally, in 2000, after Pang Senior passed away in 1999, the 2nd Plaintiff took up his role to collect the rents from Leung Kam Due. This still is the case today, though the rents have become cash. 53.It remains for me to say that the defendants contend that the Agreement was not concerning any of the Lots but some other lands. However, Leung Kam Due explained how the Lots consist of 7 cultivation fields, “7 cultivation fields” also being mentioned in the Agreement. As I have accepted the plaintiffs’ evidence, I reject any such suggestion. 54.Finally, I also accept the plaintiffs’ evidence that throughout the period since 1959, there has been neither disturbance nor interference with how Pang Senior and the 1st and 2nd plaintiffs have been using the Lots, nor demands for payment from any of them for use of the Lots. 55.As regards the Footpath, while Leung Kam Due testified that he would expel any strangers from the Footpath, the fact is that he would only do so if he saw such strangers, but he did not set up any mechanism or warning signs whereby his intention to expel strangers would really be put into practice. On such evidence, I find that the Footpath has in effect been open to and accessible by the public. This is reinforced by the fact that the Footpath passed through others’ lands, namely, Lots Nos 2301, 2312 and 2298. General legal principles in relation to adverse possession 56.JA Pye (Oxford) Ltd & anor v Graham & anor [2003] 1 AC 419, decided by the House of Lords, is the oft-starting point for discussion of the legal principles in relation to adverse possession. Lord Browne-Wilkinson, delivering the lead judgment, revisited and largely approved the principles expounded by Slade J in Powell v McFarlane (1977) 38 P&CR 452. I shall set out the salient passages from Pye, supra, below:-
57.Proposition (4) above has to be understood subject to a decision decided by the Court of Final Appeal in 1998 (5 years before the Pye’s case) in Wong Tak Yue v Kung Kwok Wai & anor (1997-98) 1 HKCFAR 55 at 69C-E, where Li CJ, giving the lead judgment, said categorically that:-
58.I am not in a position to say that the Court of Final Appeal is wrong. That said, I note Anthony Chan J’s reference in footnote 24 in Gotland Enterprises Ltd v Kwok Chi Yau, HCMP 4450/2003, 25 November 2014 to the Report on Adverse Possession by the Law Reform Commission which suggested that Wong Tak Yue was wrongly decided. I also note that Pye’s case was decided after Wong Tak Yue, and Pye’s case contained a more comprehensive analysis of the concept of possession in English law. If I were free to choose, I would not hesitate to follow Pye’s case. In any event, the ratio of Wong Tak Yue is only limited to the willingness to pay rent. I do not read any ratio from that case to the effect that acknowledgement of the owners’ title would be taken to mean absence of the requisite intention to possess. As a matter of logic, acknowledgment of the owner’s title can co-exist with the squatter’s intention to exclude the owner, and it is the latter that counts for the purpose of adverse possession. 59.Lastly, the onus of proof of each and every requisite element of adverse possession lies on the plaintiffs and is a heavy onus: see Wealth Hill International Investment Ltd v Wong Kwan Siu [2013] 3 HKLRD 300 at §63, as while “the slightest acts done by or on behalf of an owner in possession would be found to negative discontinuance of possession”, “the courts will...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 has can, the courts will treat him as not having had the requisite animus possidendi...”: see Powell v McFarlane (1977) 38 P&CR 452 at 472. Sections 12(3) and 13(3) of the Limitation Ordinance 60.It is convenient here to deal with Issue (2), namely, whether the tenanted period under the Agreement commencing in 1961 counted for the purpose of adverse possession by virtue of sections 12(3) and 13(3) of the Limitation Ordinance. 61.The proposition is well established that the squatter may be in adverse possession through a tenant, since granting a lease or receipt of rent is certainly an act of ownership: see Cheung Yat Fuk v Tang Tak Hong & ors (2004) 7 HKCFAR 70 at §§9-18 per Bokhary PJ delivering the judgment on behalf of the Court of Final Appeal. However, the defendants contend that this proposition should be glossed by sections 12(3) and 13(3) of the Limitation Ordinance, such that a squatter may be in adverse possession through a tenant only under a written tenancy agreement for a rent of not less than HK$20. Mr Chan submits that if the tenancy agreement is not in writing or not for a rent of not less than HK$20, then the squatter cannot be in adverse possession through the tenant. I disagree. 62.Section 12(3) of the Limitation Ordinance provides:-
63.Section 13(3) of the Limitation Ordinance provides:-
64.In Hilder Company Ltd v Occupiers of Oremises, supra, a case relied upon by the defendants, Burrell J, having referred to a judgment by Barnett J in Wong Luen Chun & anor v Secretary for Justice [1998] 4 HKC 122 and without much discussion, held at §§20-24 that the tenanted period under a tenancy agreement other than that in section 12(3) did not count. It must be noted that having agreed at §§16-17 with the Master’s reasoning that there was no contention as to the intention to possess the lands in question to the exclusion of the whole world, and thus upholding the Master’s decision that there was no adverse possession, Burrell J’s holding at §§20-24 in this respect was an obiter only. 65.However, what Barnett J said in respect of sections 12(3) and 13(3) in Wong Luen Chun, supra, is a ratio decidendi. The question is whether it is binding on me. My answer is in the negative for the following reasons:-
66.Hence, not only that I am not bound by Barnett J’s ruling and Burrell J’s dicta, I am bound to follow (and I agree with if I have to choose) Tang Kwan Tai v Tang Koon Lam, supra and Cheung Yat Fuk v Tang Tak Hong, supra, that sections 12(3) and 13(3) apply to a situation where the squatter wrongly receives, or intercepts, rent from a tenant who was granted a lease by the owner of the land and not by the squatter. This interpretation accords with the text of section 12(3). This is also consistent with the comments by the learned authors in Jourdan QC and Radley-Gardner, Adverse Possession (2nd ed), §§24-90 – 24-97. In particular, in §24-93, it quoted the following passage from the First Report of the Commissioners on the Law of Real Property in 1829, recommended the equivalent of section 12(3):
The purpose of section 12(3) as set out in the above passage is clear that it is to address situations where the rightful landlord has already granted a lease and the rents have been intercepted by some others. 67.In the circumstances, I answer Issue (2) in favour of the plaintiffs, that the tenanted period under the Agreement could amount to sufficient possession for the purpose of adverse possession. Granting tenancy 68.As discussed above, granting a tenancy and receipt of rent are acts of ownership. This amounts to exercising sufficient degree of possession. However, as I mentioned above, whether there has been sufficient degree of possession is a question of fact depending on the circumstances of each particular case. That said, there is no evidence what other matters in the present case the owner of the Lots (which were agricultural lands) would be expected to do in order to exercise his right of possession when the Lots had been leased out. The same applies to the farming of the Lots by Pang Senior himself prior to the Agreement commencing in 1961. There is no evidence what other matters in the present case the owner of the Lots would be expected to do than farming in order to exercise his right of possession of the Lots which were agricultural lands. 69.The defendants’ submission that there has been a lack of the requisite intention to possess because even according to the 1st plaintiff, Pang Senior himself “thought it was unreasonable to make use of the Lots without the permission of the owner” and he himself or the plaintiffs acknowledged that the Lots were owned by some others should be rejected. As mentioned in paragraphs 57-58 above, as explained by Lord Browne-Wilkinson in Pye, supra approving Slade J’s judgment in Powell, supra, an admission of the paper title owner’s title “is not inconsistent with the squatter being in possession in the meantime”. As I concluded above, this is not contrary to the ratio of Wong Tak Yue’s ratio, which is limited only to the willingness to pay rents. 70.Further and in any event, despite what Pang Senior and the plaintiffs thought to themselves, Pang Senior (and later the 2nd plaintiff) still chose to farm the Lots himself and subsequently they even leased the Lots to Leung Senior and later Leung Kam Due by the Agreement, which did not mention that Pang Senior was holding or leasing the Lots for any others. Absent any pleaded case or any facts proved by any accepted evidence that the rents were collected for and on behalf of Madam Yu or her successors-in-title, these farming and leasing clearly are acts of exclusive possession of the Lots. These are also clear evidence of his change of mind, whatever Pang Senior thought prior to occupying and using the Lots. 71.For the sake of completeness, I would reject any invitation to infer that Pang Senior and the 1st and 2nd plaintiffs would be willing to pay rent if requested by the owner, because thoughts immediately before taking up others’ land that it would be unreasonable to do so does not necessarily mean (1) that after he eventually chose to take up, he would pay rent if requested by the owners; and (2) that Pang Senior would not act in such unreasonable manner, when considering that taking the lands for farming was about his family’s living. The fact that Pang Senior leased the Lots by the Agreement where he in all aspect represented himself as the owner speaks for itself. 72.Therefore, I find that Pang Senior was from 1956 – 1999 and since 2000 the 1st and/or 2nd plaintiffs have been in adverse possession of the Lots. Issue (3) is answered in favour of the plaintiffs. Footpath 73.As the grant of tenancy and receipt of rents themselves are acts of ownership, in respect of the squatter granting the tenancy, this must usually be sufficient to constitute sufficient degree of control over the land. It is hardly relevant how the tenant is occupying and using the land. The tenant, insofar as the tenancy agreement permits, may well open the land for third parties, but ultimately, it is the squatter who granted the tenancy and receives the rents as acts of ownership vis-à-vis the paper title owner. Put another way, how the squatter tenant exercised the right of exclusive possession as a tenant cannot affect the squatter landlord’s assumption of the exclusive possession of the land in question by granting the tenancy. Thus, while the Footpath has been opened to other people, the Footpath still has been part of the Lots being rented to Leung Senior and later Leung Kam Due by Pang Senior and later the 2nd plaintiff. Such renting as well as receipt of rents are acts of ownership, and therefore, Pang Senior was from 1956 – 1999, and since 1999 the 2nd plaintiffs, has also been in exclusive possession of the Footpath in the Lots. 74.Thus, Issue (4) is also answered in favour of the plaintiffs. 75.For the sake of completeness, if I have to find whether or not opening the Footpath to the public per se would mean lack of animus possidendi, I would find in the positive. As mentioned above, “the courts will...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 has can, the courts will treat him as not having had the requisite animus possidendi...”: see Powell v McFarlane, supra at 472. There were no fence and no warning signs in respect of the Footpath, and any person may walk along the Footpath. I do not think that in such circumstances, any purported intention to possess is “perfectly plain to the world at large”. Gayadeen v AG of Tinidad and Tobago [2014] UKPC 16 (where there was a warning sign in the land in question) and Laing v Morgan [1952] 2 DLR 468 (where the passage in question apparently served the garage possessed by the squatter only as opposed to the Footpath here running through other lands), cited by Mr Chong, were decided on their own particular facts and context. I do not think that they add to any relevant legal principles. Who has the possessory title 76.In respect of the adverse possession after 2000, I have been using the phrase “1st and/or 2nd plaintiffs” loosely. There is a question, in terms of Issue (5), of who exactly adversely possessed the Lots. As I base my finding of adverse possession on letting of the Lots and receipt of rents thereof, it is logical that the adverse possessor should be the squatter landlord. The question is who is the squatter landlord. 77.One would think that it would be the 2nd plaintiff, because she had been collecting rents since 2000 after Pang’s Senior’s death. However, she also signed the Confirmation, agreeing that the Lots have fully passed to the 1st plaintiff. While this Confirmation must be invalid in passing the Lots to the 1st plaintiff, as Pang Senior had 5 children in total, this Confirmation would logically mean that the 2nd plaintiff did not think herself as the landlord, and any arrangement made in respect of the Lots must be made for and on behalf of the 1st plaintiff, who thought that he had been owning the Lots by inheritance and thus had the animus possidendi. It follows that the 1st plaintiff has been the adverse possessor in his own right since 2000. 78.As between Pang Senior and the 1st plaintiff both as successive adverse possessors, the court is not concerned with their rights inter se: see Sze To Chun Keung v Kung Kwok Wai David & anor [1997] 2 HKC 231 at 235A – C per Lord Hoffmann delivering the unanimous judgment of the Privy Council. For the purpose of the present proceeding, as I have above found that the 1st plaintiff has been an adverse possessor, it must follow that as against the defendants, the 1st plaintiff has the possessory title to the Lots. Forms of relief 79.As fairly conceded by Mr Chong, since Wong King Lim v Incorporated Owners of Peony House [2013] 4 HKC, the courts have not ordered in adverse possession cases that the paper title owner do take any necessary steps to transfer the title to the adverse possessors. The reason is that what an adverse possessor acquires is the extinguishment of a title adverse to his own and nothing else, while the land in question is still subject to covenants and the covenantee’s right to enforce the covenants to which the land is subject is not time-barred or extinguished: see Wong King Lim, supra at §33.2 per Yuen JA with whom Lam JA and Au J agreed. Conclusion 80.In the circumstances, I allow the plaintiffs’ claim (except part of Relief (2) and (3) relating to transfer of title), and dismiss the defendants’ counterclaim. I thus order that:-
81.Counsel for each side sensibly agrees that costs should follow the event and with certificate for one counsel. As regards the scale for taxation, Mr Chong fairly proposed the scale of District Court costs for the whole action even though it was commenced initially in the Court of First Instance. Thus, I order that the defendants do jointly and severally pay the costs of the action to the plaintiffs, to be taxed if not agreed on the scale of District Court costs, with certificate for one counsel.
Mr Patrick Chong, instructed by Hui & Lam, for the 1st and 2nd plaintiffs Mr Kenneth C L Chan and Mr Fung Pak Kay, instructed by W K To & Co, for the 1st, 2nd, 3rd and 4th defendants |
Cases cited in this judgment
Other judgments that cite this case
Further hearings and rulings under DCMP 2331/2015