Law Yuk Fong v. Man Chung Wai and Another
Read the full judgment text of HCA 2195/2015 on BabelCite. This High Court CFI judgment was delivered on 12 January 2017.
1. The 1 st defendant (“ D1 ”) is the registered owner of Lot 597 (“ Lot 597 ”) in DD105 (“ DD105 ”) at Shek Wu Wai, Yuen Long, New Territories. [1] The 2 nd defendant (“ D2 ”) is the registered owner of Lot 738 in DD105. [2]
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HCA 2195/2015 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE HIGH COURT ACTION NO 2195 OF 2015 ____________
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_________________________ REASONS FOR JUDGMENT _________________________ Introduction 1.The 1st defendant (“D1”) is the registered owner of Lot 597 (“Lot 597”) in DD105 (“DD105”) at Shek Wu Wai, Yuen Long, New Territories.[1] The 2nd defendant (“D2”) is the registered owner of Lot 738 in DD105.[2] 2.The plaintiff (“P”) claimed that since 1961 she and her family had been occupying various lots of land in DD105 (“Land”) to the extent shown as Areas 1-9 in the plan annexed to the statement of claim in the present action (“Plan”) that (a) included Lot 738[3] and Lot 597,[4] and (b) was separated from other adjoining land by fences/boards erected by P, her family and/or neighbours of the adjoining land and by puddles along the northwest boundary of the Land. According to the survey report by Mr Raymond John King of Digital Image Surveys Ltd dated 28 November 2011 (“Report”), the Land was about 9,818 sq m. Procedural history 3.On 18 September 2015, P commenced the present action against D1 for declarations that P was the owner in possession of Lot 597 and that D1’s title to Lot 597 was extinguished by virtue of section 17 of the Limitation Ordinance Cap 347 (“LO”), and against D2 for declarations that P was the owner in possession of Lot 738 and that D2’s title to Lot 738 was extinguished by virtue of section 17 of the LO. 4.On 25 September 2015, P’s solicitors served the writ of summons on D2 at his usual and last known address in Hong Kong by inserting the same through the letterbox. 5.D1’s usual and last known address was in the United Kingdom. By the order of Master M Wong dated 27 November 2015, leave was granted for P to issue a concurrent writ of summons against D1 and to serve such writ out of jurisdiction in the United Kingdom. 6.A concurrent writ of summons was issued on 20 January 2016. 7.On 9 November 2016, P filed the affirmation of P’s solicitor Ng Man Kin (“Ng”) that confirmed the following:
8.D1 and D2 did not file any acknowledgment of service and/or any defence. 9.On 15 November 2016, P filed a summons against D1 and D2 under Order 19 rule 7 of the RHC for the declarations in paragraph 3 above (“Summons”). On the same day, P filed her affidavit in support of the Summons (“P’s Aff”). 10.On 16 November 2015, P served the Summons and P’s Aff on D1 by airmail to his usual and last known address in the United Kingdom and on D2 by ordinary post to his usual and last known address in Hong Kong. 11.D1 and D2 did not file any affidavit evidence in opposition. 12.The Summons came before me for hearing on 12 January 2017 (“Hearing”). D1 and D2 did not appear at the Hearing. I am satisfied all appropriate steps had been taken to notify D1 and D2 of the present action and of the Hearing, and I am further satisfied there had been valid service of the relevant documents on D1 and D2. Declaratory relief and default judgment 13.In an application for default judgment under Order 19 rule 7 of the RHC, the court would give judgment according to the pleadings alone, so it is not necessary for the plaintiff to prove the case by evidence.[5] But Order 19 rule 7 of the RHC is not mandatory but discretionary, and the court retains its discretionary power whether to give judgment or to extend a party’s time to plead when it is just to do so.[6] Further, the statement of claim must show a case for the order the plaintiff seeks to obtain. Hong Kong Civil Procedure 2017 goes on to say:
14.In Top One International (China) Property Group Co Ltd v Top One Property Group Ltd, Fok J (as he then was) recognised the above principles, but declined to grant default judgment in favour of the plaintiff against the 1st and 3rd defendants on its claim for breach of share charge and dishonest assistance in breach of fiduciary duties. The learned judge said:[10]
15.But I note in that case both the 1st and 3rd defendants filed their respective defence in the action. The 3rd defendant was also formerly represented until he filed notice to act in person giving a PRC address (so his former solicitors remained as solicitors on the record). The 3rd defendant failed to participate in various interlocutory stages of the action due to ill health, and he failed to attend various hearings although papers had been served on his former solicitors who remained on the record. An unless order was made, and the 1st and 3rd defendants failed to comply with the unless order. Thus, their respective defence was automatically struck out, and whilst the plaintiffs sought default judgment against them, the 1st and 3rd defendants applied to reinstate their defence. The 3rd defendant explained he had been ill and he did not have “a permanent place of stay at all times” due to business commitments, so he did not receive various court documents. Further, he confirmed his and the 1st defendant’s intention to defend the action, and they had instructed new solicitors. 16.The factual circumstances in Top One International (China) Property Group Co Ltd were a far cry from the present situation. There the 1st and 3rd defendants did defend the action, had some reasons for inaction (eg ill health) and were willing to engage solicitors to further defend the action. But here D1 and D2 did not respond to and/or defend P’s claim at all. 17.As recognised by Fok J (as he then was), the general proposition that a declaration will not be granted when giving judgment without trial (eg judgment in default of defence) is a rule of practice and not of law, and will give way to the paramount duty of the court to do the fullest justice to the plaintiff to which he is entitled. 18.In Lam Shing Shou v Lam Hon Man & ors,[11] the plaintiff sought declarations to the effect that the approvals to successions of ownership in land in New Territories given by various District Officers in 1947, 1997 and 1998 should not have been given. Chu J (as she then was) noted that since the declaratory relief was the only and substantial relief sought by the plaintiff, the course suggested in Wallesteiner v Moir, ie to state the footing on which the relief is granted but not to give a declaration to the effect that that footing reflects the legal position, had no application, and justice could not be done in the case before her ladyship if the plaintiff was to be denied the declaratory relief sought. 19.In Lai Wai Kuen v Wong Shau Kwong,[12] a property was owned by tenants-in-common. One co-tenant passed away at age 91 years, and very little was known of the other co-tenant. A co-executrix of the estate of the deceased co-tenant wished to rebuild the house on the property, and sought an order from the court as to the extinction of the defendant’s interest in the property. The court was satisfied the co‑executrix (who applied for default judgment) had a genuine need for the declaratory relief “and the court could properly grant her such relief based on the merits of the case” (ie the court was satisfied there was ouster of the other co-tenant). 20.In Wu Chi Kwong v Estate of Cheung Man Yau,[13] the plaintiff claimed adverse possession of various lands in the New Territories against the defendant (who was at least aged 21 years in 1905 and was presumed dead as he had not been seen or heard of since 1934). The Official Solicitor accepted service of the proceedings on behalf of the estate of the defendant, but no defence was filed. Recorder Gerard McCoy SC held that P established a case of adverse possession, and the merits were overwhelmingly in his favour, so it would be wrong for the court not to purify the titles which had effectively been abandoned by the registered owner since 1934. 21.Here, P claimed to be the adverse possessor in occupation of Lots 597 and 738, and the sole relief she sought in the present action was declaratory relief. In the circumstances, the course suggested in Wallesteiner v Moir was not applicable. D1 and D2 did not participate in the proceedings, and P had filed P’s Aff to condescend upon the merits of her claim. By reason of the discussion on the merits of the claim below, I am satisfied justice could not be done if P was to be denied the declaratory relief sought. Legal principles on adverse possession 22.The starting point is sections 7(2), 8(1) and 13(1) of the LO which provide as follows:
23.Section 17 of the LO provides:
24.Before 1 July 1991 the period stipulated in section 17 of the LO was 20 instead of 12 years. Further, by reason of the transitional provisions in section 38A of the LO, the relevant period of P’s claim is 20 years.[14] 25.To establish possessory title based on adverse possession, the squatter must be shown to have both factual possession of the suit land and the requisite intention to possess (animus possidendi) for the whole of the 20-year limitation period. 26.In order to qualify for a claim in adverse possession, the relevant possession must be adverse (in the sense that the occupier has dispossessed the paper owner and has entered into possession without the consent of the paper owner) and continuous. 27.In Powell v McFarlane & Anor, Slade J said this:[15]
28.Further, possession must be single and exclusive, and the person in actual possession has effective control of the land.[16] Lord Hope in J A Pye (Oxford) Ltd & anor v Graham & anor said as follows:[17]
29.Possession is never adverse if it is enjoyed under lawful title, so if a person occupies/uses land under tenancy or licence of the paper title owner, he is not in “adverse possession” against the paper title owner.[18] In Moses v Lovegrove,[19] Romer LJ contrasted adverse possession with “permissive possession or possession as of right”, ie whether from the position of the occupier his right to occupation is derived from the owner in the form of permission, agreement or grant.[20] 30.However, section 12(2) of the LO provides as follows:
31.In Hayward & anor v Chaloner,[21] it was argued that the possession of a tenant under an oral yearly tenancy was not adverse so that even though rent was not paid time did not run against the landlord. The English Court of Appeal rejected such argument, and Russell LJ said as follows:
32.As to the requisite intention to possess, the principles can be found in Wong Tak Yue v Kung Kwok Wai & Another (No 2):[23]
33.This has several consequences. First, although the squatter must intend to exercise exclusive control for his own benefit, he need not have a conscious intention to exclude the true owner. It is enough that the squatter intends to exclude the owner “as best as he can” or “so far as reasonably practicable and so far as the process of the law allow”. Secondly, an intention to own the land or even an intention to acquire ownership is not required for establishing the animus possidendi. Thirdly, the animus possidendi can be established even if the squatter mistakenly believes himself to be the owner of the land. 34.The burden of proof is on the party claiming adverse possession, and the evidence he has to adduce must be compelling. However, this does not alter the standard of proof, which remains the balance of probabilities. All it means is that the evidence adduced must be of such a quality and nature that, if accepted on the balance of probabilities, it is sufficient to establish both factual possession as well as an intention to possess. P’s claim 35.P claimed that in May 1954, Choi Yim Mo (蔡炎武, “Choi”) rented Sections C, E & F of Lot No 736 (“Lot 736CEF”) at Shek Wu Wai for $100 per annum from an indigenous villager Man Hop Lai (文合禮, “Uncle Lai”). Pursuant to such tenancy agreement,[24] Choi started to live at a wooden house at Lot736CEF and reared chicken, ducks and pigs thereat. Choi also reared fish and ducks at the lake in the northwest portion of the Land in Lot 594 of DD105 (大湖水, “Big Lake”) and used the water from the Big Lake for rearing chicken, ducks and pigs. In 1961, Choi and P got married, and they lived at the wooden house at Lot736CEF. P washed clothes at a small lake near the puddles along the northwestern boundary of the Land every day until 1989 when there was potable water supply to Lot 736CEF. Between 1962 and 1974, P gave birth to 8 children who grew up on the Land and lived at the said wooden house and/or other huts at Lot 736CEF until they moved out of Shek Wu Wai for work and/or after they got married. P claimed Choi was a farmer, and after their marriage she helped Choi to grow various types of vegetables on the Land.[25] 36.In respect of Lot 597, P claimed that by a verbal agreement made in 1955 Choi rented Lot 597 from another indigenous villager in Shek Wu Wai Uncle For (伙伯, “Uncle For”) for $20 per annum. Choi and Uncle For did not discuss the term of the tenancy, but rent was paid yearly to Uncle For, so P understood such tenancy to be a periodic yearly tenancy. Between 1962 and 1988, P and Choi planted vegetable shoots and various vegetables (eg eggplant, leek, celery, broccoli, chili etc) in Lot 597. P was responsible for paying rent to Uncle For each year until Uncle For passed away in 1971. After Uncle For’s death, P paid rent to Uncle For’s widow (伙伯娘). A few years later, Uncle For’s widow lost her eyesight and was admitted to an elderly home. Despite this, P visited Uncle For’s widow and paid her rent of about $30-$50 yearly until she passed away in 1984. 37.In respect of Lot 738, P claimed that in 1955 Choi verbally rented Lot 738 from Uncle For, and agreed to pay rent of $100 per annum to Uncle For. But Uncle For knew Choi and P did not cultivate crops at Lot 738, so he did not demand rent from them every year. They were allowed to rent Lot 738 at $100 for several years. In 1968, Choi found he had too many pieces of land in Shek Wu Wai to cultivate and Lot 738 did not have enough water, so he decided not to rent Lot 738 anymore. Instead, Choi introduced his neighbor a Siu Biu (蕭標, “Siu”) to rent Lot 738 from Uncle For. Siu then started renting Lot 738, and paid rent directly to Uncle For. In/about 1972, Siu decided not to rent Lot 738 and determined his tenancy with Uncle For. In the same year, Uncle For told Choi he could use the land without paying any consideration to him. In/about 1980, someone fenced off Lot 738 with iron wire mesh with a view to occupy such land himself/themselves. Uncle For’s widow asked Choi and P to demolish the iron wire mesh, which they did, and those people did not occupy Lot 738 any more. 38.As referred to above, Uncle For’s widow passed away in 1984. Choi and P attended the funeral for Uncle For’s widow and met Uncle For’s son (who P said had emigrated to the United Kingdom years ago). P claimed neither Uncle For’s son nor any other descendent mentioned about Lot 597 and/or Lot 738 at the funeral. Since then, Choi and P had no further contact with Uncle For’s son or any other descendent, and they never paid rent to any person for their use and occupation of Lot 597 and/or Lot 738. 39.P claimed the tenancy for Lot 597 came to an end at/about 1984 or 1985, but Choi and P continued to use/occupy Lot 597 treating it as their own land with intention to exclude the whole world including the registered owner thereof:
40.P claimed that since Choi and P had sufficient farmland in Shek Wu Wai and the land in Lot 738 did not have enough water, they did not grow crops there except some banana trees and potato before 1990 although they treated Lot 738 as their own land ever since the funeral for Uncle For’s widow with the intention to exclude the whole world including the registered owner thereof. Since about 1990, Choi (who passed away in 2011) and/or P started to plant trees at Lot 738 including longan trees (龍眼樹), wampi trees (黃皮樹) and banana trees etc, and they continued to be in possession of Lot 738 with the intention to exclude the whole world including the registered owner thereof. 41.In/about August 2010, P’s eldest son Choi Wai Ming moved back to live at Lot 736CEF. In 2011, Choi passed away. Since then P continued to use/occupy the Land (including Lots 597 and 738) to grow fruit trees. So, P claimed that since 1985 she and Choi had been occupying Lots 597 and 738 as their own, and after Choi’s death she continued to be in possession of Lots 597 and 738 with the intention to exclude the whole world including the registered owners thereof. In February 2012, P made a record of the fruit trees found on the Land, including the following in relation to Areas 4 and 9:
42.P also disclosed a bundle of photographs which she claimed depicted her occupation of the Land (including Lots 597 and 738) from 1965 to 2010. However, as Mr Chiu, counsel for P submitted, there were only 2 photographs in the bundle with relevant annotations, one relating to banana trees grown on Lot 738 in 1983 and another relating to sugar cane grown on Lot 597 in 1986. Only the latter photograph related to the post-1984 period. Report 43.According to Table 1 of the Report, the development areas of Areas 4 and 9 of the Plan were as follows:
44.According to photographic and plan records as well as verbal recollections by P’s son, the Report described Areas 4 and 9 as follows:
Discussion 45.Here, neither D1 nor D2 gave any notice of intention to defend or adduced any affidavit evidence. On the matrials before the court, it was plain that Choi, P and their family and later P and her son had been in continuous and uninterrupted occupation of Lots 597 and 738 since 1985. There was no evidence of any claim to title by D1, D2 or any other person since then. 46.In respect of Lot 597, although Choi and P rented such land and paid rent to Uncle For and later to his widow, they ceased to do so after Uncle For’s widow passed away. By ceasing to pay rent, the oral yearly tenancy was deemed to be determined at the expiration of the 1st year pursuant to section 12(2) of the LO, and time started to run in 1985. Since then, there was evidence that Choi and P continued to use and occupy Lot 597 to grow vegetables and sugar cane, and after Choi passed away in 2011 P grew fruit trees on such land. 47.In respect of Lot 738, there was a break in occupation of such land by Choi and P in 1968 when Siu rented such land from Uncle For. However, when Siu ceased to rent Lot 738 in/about 1972, Uncle For permitted Choi to use such land free of consideration. In my view, Uncle For granted a licence for Choi and P to use and occupy Lot 738. Even after Uncle For passed away, there was evidence that Choi and P still occupied Lot 738 under licence because in/about 1980 Uncle For’s widow asked them to demolish the iron wire mesh erected by some person(s) at Lot 738 and they did as requested. But on the available evidence such licence ceased after Uncle For’s widow passed away as (a) Uncle For’s son and/or any other descendent ignored Lot 738 and did not make contact with Choi and P, (b) Choi and P never paid any licence fee or rent to any person for their use and occupation of Lot 738, and (c) neither D2 nor his predecessor(s)-in-title had sought possession or claimed title in respect of Lot 738 against Choi and/or P, and instead Choi and P made use of Lot 738 as their own by growing banana trees and potato before 1990, and grew fruit trees on such land thereafter. I bear in mind that a licence does not create any interest in land, and cannot therefore bind a successor-in-title of the licensor as a matter of property law.[26] 48.In the circumstances, I am satisfied P had established factual possession over Lots 597 and 738 for over 20 years before commencement of the present action. P’s case was also bolstered by the Report which showed (a) cultivation at Lot 597 from 1963 until 1984 (consistent with P’s case that she and Choi grew vegetables until about 1988) and scrubs and trees since 1990 (consistent with P’s case that sugar cane was grown between 1989 and 1992 and fruit trees since 1992), and (b) cultivation at Lot 738 in 1963 that turned to trees (since 1977), scrubs (since 1984), bushes (1994) and trees (since 2004) (consistent with P’s case that banana trees were grown before 1990 and various kinds of fruit trees were grown after 1990). 49.I am also persuaded that P and her family had occupied and used Lots 597 ad 738 exclusively, and that Choi and P had acquired the requisite intention to possess such land, and had established possessory title over such land against the paper owners, ie D1 and D2. Conclusion 50.Accordingly, at the Hearing, I granted the following order:
Mr Victor Chiu, instructed by Kwok, Ng and Chan, for the plaintiff The 1st and 2nd defendants, acting in person and absent [1] by an assignment dated 1 September 2006 (memorial no 06100300070182 registered at the Land Registry), Man Yun Shau also known as Man Ying Shau (who became the registered owner of Lot 597 since 23 November 1973) assigned Lot 579 to D1 [2] by an assignment dated 20 July 2006 (memorial no 06081500380013 registered at the Land Registry), Man Yun Shau also known as Man Ying Shau (who became the registered owner of Lot 738 since 23 November 1973) assigned Lot 738 to D2 [3] Area 4 of the Plan (519 sq m as shown in the Plan) encompassed the whole of Lot 597 (445.2 sq m as shown in the land boundary plan dated 28 November 2011 annexed to the Report) [4] Area 9 of the Plan (966 sq m as shown in the Plan) encompassed part of Lot 738 (1,052.2 sq m as shown in the land boundary plan dated 28 November 2011 annexed to the Report) [5] see Hong Kong Civil Procedure 2017 Vol 1 para 19/7/11 at p 482 [6] see Hong Kong Civil Procedure 2017 Vol 1 para 19/7/13 at p 482 [7] see also Top One International (China) Property Group Company Ltd v Top One Property Group Ltd [2011] 1 HKLRD 606, 627-629 [8] see also Lai Wai Kuen v Wong Shau Kwong HCA3424/2003, Lam J (as he then was) (unreported, 12 November 2004) para 6 and Lok Shu Wing & ors v Ng Kam Wing & anor DCCJ4694/2014, DDJ Lawrence Ng (unreported, 12 May 2016) para 11 [9] see Hong Kong Civil Procedure 2017 Vol 1 para 19/7/20 at p 483 [10] [2011] 1 HKLRD 606, 628 [11] HCA361/2001, Chu J (as she then was) (unreported, 15 January 2002) paras 1 and 16 [12] HCA3424/2003, Lam J (as he then was) (unreported, 12 November 2004) paras 6 and 11-12 [13] [2008] 3 HKLRD 503, 506-507 [14] see Yu Siu Cheuk v Realray Investments Ltd CACV181/2009 (unreported, 10 November 2009) paras 8-10 [15] (1979) 38 P&CR 452, 470-471 [16] see Jourdan and Radley-Gardner, Adverse Possession 2nd ed (2011) paras 7-37 – 7-39 at pp 125-126 [17] [2003] 1 AC 419, 445 [18] see Buckinghamshire County Council v Moran [1990] Ch 623, 643 (and also Incorporated Owners of Chungking Mansions v Shamdasani [1991] 2 HKC 342, 352) [19] [1952] 2 QB 533, 544 [20] see Adverse Possession para 6-16 at p 92 [21] [1968] 1 QB 107, 122 [22] English equivalent of section 12(2) of the LO [23] (1997-1998) 1 HKCFAR 55, 68 [24] P claimed there was no document in support of such tenancy agreement [25] P adduced (a) excerpts from Choi’s journal in respect of 榮華園 covering a period from 1954 to 1973 that described the relevant fields that were planted, the fertilisers used, the vegetables grown and their price, the weather and the farming status, (b) Choi’s letter to the Agricultural and Fisheries Department (“AFD”) dated 28 August 1982 that mentioned he had been a farmer at Shek Wu Wai for 20 odd years and that complained of damage to his crops and his compost store due to flooding, (c) documents issued by the AFD to Choi concerning soil testing service in 1989, (d) envelopes in respect of correspondence to Choi at Shek Wu Wai from Known You Seed Co, Ltd in Taiwan and from Known-You Seeds Co (S) Pte Ltd in Singapore (date chops were unclear), and (e) drawings (date was unclear) and photographs (which appeared to be taken in 2011) for “堆肥番糞棚” [26] see Megarry & Wade, The Law of Real Property 8th ed para 34-001 at p 1437 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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