Fung Ka Wing v. The Kik Lok Tung Benevolent Society Ltd

DCCJ 2293/2015

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 2293 OF 2015

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JUDGMENT

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Introduction

1.The plaintiff claims for adverse possession of 8^th Floor, No 172 Shanghai Street, Kowloon, Hong Kong (the “Property”) which the defendant is the legal owner. 

2.At the first day of the trial, the defendant applied to introduce a supplemental witness statement and introduction of two additional documents.  The supplemental witness statement is to explain the significance of these documents.  The application was dismissed because I am not convinced that the additional documents are relevant and necessary to be introduced by the defendant and the introduction of these additional documents will only unnecessarily complicate the matter and prolong the trial.

The plaintiff’s case

3.It is not disputed that the plaintiff was a tenant initially and moved into the Property since February 1987, and has been living there since then.  There were five tenancies agreements between the plaintiff and the defendant, with the last one expired on 14 January 1999.  The plaintiff continued to pay rent by making monthly deposits into the defendant’s bank account until 5 January 2000, as he no longer received any rental receipt after about June 1999.

4.The plaintiff claims that he has been in continuous and exclusive use, occupation and adverse possession of the Property to the exclusion of the defendant as the registered owner for a period of more than 12 years prior to the commencement of this action.  The plaintiff relies on the following particulars of possession:-

(a)   the plaintiff dispossessed the Property in about July 1999, and in any event no later than January 2000;

(b)   the plaintiff has since continued to occupy and use the Property without the consent, permission or approval of the defendant;

(c)   the plaintiff has made no attempt to renew the tenancy and the defendant has never asked the plaintiff to do so;

(d)   the plaintiff has been in possession of the keys to the Property since he moved in in about February 1987;

(e)   the plaintiff has been responsible for paying all government rent and rates, electricity bills, and water bills of the Property.

(f)   the plaintiff applied to have the Demands for Rates changed to his name in about late 2006;

(g)   the plaintiff procured the change of the electricity bills and water bills to his own name in or about mid-2008;

(h)   the plaintiff has in essence taken up the management and control of the Property from at least July 1999, and has incurred expenses for internal decoration and improvements thereof;

(i)   the plaintiff’s personal properties and belongings are kept in the Property.

The defendant’s case

5.The defendant’s case is that the plaintiff was permitted to reside at the Property under a licence granted by the defendant, which was either terminated by the defendant’s solicitors’ letter dated 24 March 2015 or by the service of the Defence and Counterclaim.  The defendant further claims that the plaintiff has not been in continuous and exclusive possession of the Property to the exclusion of the defendant.  In particular, in or about 2005, the defendant has, at its own costs, replaced the metal gate at the entrance of the Property upon the request of the plaintiff and in or about 2007, the plaintiff similarly requested the defendant to replace a broken water pipe of the Property.  Hence, the Defendant counterclaims damages for the deprivation of the use of the Property at the market rental value from the date of the Defence and Counterclaim.

The issues

6.The parties agree that the most prominent issue to be determined at the trial is whether the plaintiff can establish that he has been in factual possession of the Property for a period of not less than 12 years with the requisite intention to possess (animus possidendi), the latter of which becomes the centre of dispute among the parties. 

7.Whilst the defendant sought to prove that the plaintiff’s occupation was permitted by the defendant, the only factual witness on this issue, namely Lam Chi Tin（藍慈鈿）, cannot testify at the trial due to health issue.  The defendant sought to admit his witness statement at the first day of the trial as evidence, but this application was also dismissed. 

The plaintiff’s intention to possess

8.The plaintiff is the only factual witness.  His testimony is crucial in establishing that he has the requisite intention to possess the Property.

9.When the plaintiff was cross-examined by the defendant’s counsel on whether he would have agreed to renew the tenancy with the defendant if he was approached by the defendant or its representative at that time, the plaintiff said he would.

10.The defendant contents that the plaintiff’s willingness to enter into a tenancy with the defendant is plainly and completely inconsistent with the animus possidendi and therefore fatal to the plaintiff’s claim, applying the Court of Final Appeal case of Wong Tak Yue v Kung Kwok Wai David (No 2) (1997-98) 1 HKCFAR 55.  The plaintiff’s counsel contests that the plaintiff was put a hypothetical question and his answer does not accurately reflect the intention of the witness in reality at the material times.  Evidence of subjective intent must be approached with great caution, and is better assessed by inference drawn from the acts of the adverse possessor in light of the nature of the land and its use.

11.The plaintiff relies on Tsang Foo Keung v Chu Jim Mi Jimmy (unrep, CACV 178/2015, 28.10.2016), which the Learned Harris J helpfully summarized the basic principles of adverse possession:-

(1)   If the law is to attribute possession of land to a person who can establish no paper title to it, he must be shown to have had both factual possession during the relevant period (in the present case 20 years as the alleged possession occurred prior to 1991) and the requisite intention to possess.

(2)   What constitutes a sufficient degree of exclusive physical control depends on the circumstances of the case and, in particular, the nature of the land and the manner in which land of that nature is commonly enjoyed.  What must be shown is that the alleged possessor has been dealing with the land as an occupying owner might expect to deal with it.

(3)   The requisite intention is to exclude the world at large, including the owner, from the land so far as is reasonably practicable and so far as the law allows.

(4)   The person claiming adverse possession has the burden of proving both exclusive physical control and the requisite intention.   Although the standard of proof is still the normal civil standard, ie on the balance of probabilities, commensurate with the serious consequences of finding that the holder of the paper title has been disposed the evidence of exclusive possession and intention must be compelling. It cannot be lightly assumed that the paper title holder has foregone his interest in land.

(5)   Evidence of subjective intent should be approached with caution.   Intention is normally better assessed by inference drawn from the acts of the possessor in the light of nature of the land and its use.

(6)   If a person takes possession by virtue of a licence granted by another, it is the licensor who is treated as being in possession.

12.In light of Tsang Foo Keung case, I am prepared to draw inference from the acts of the plaintiff to determine his intent.

13.Whilst the plaintiff testified that he has been responsible for paying all government rent and rates and utilities bills, and changed the Demand of Rates, electricity bills and water bills of the Property to his own name, and incurred expenses for decoration and improvements of the Property, he also confirmed that he did not contribute to the building maintenance work and pay for the replacement of the metal gate of the Property. 

14.According to the plaintiff, he had no idea who had made the arrangement and what kind of works were to be carried out when the building of the Property was under renovation in 2006/07.  He had never been notified or invited to attend any meeting to discuss about the maintenance. The plaintiff also did not know who was responsible for paying the building maintenance works and did not even know whether the works concerned the Property.  No one had approached him and asked for contribution to the building maintenance. 

15.In respect of the replacement of the metal gate of the Property, there is contrasting evidence on when it was replaced.  However, it does not change the fact that the plaintiff did not pay for the same.

16.In dealing with the plaintiff’s testimony, I am repeatedly reminded by Mr Hatten Kong, counsel of the defendant, the following paragraph in Wong Tak Yue (supra):-

“40. Where the occupier has made self-serving statements as to what was his intention, whether during the period of occupation or when challenged in legal proceedings, the courts should approach them with some scepticism. The courts would scrutinize the circumstances in which they were made and would give them such weight if any as they may deserve. Conversely, where the occupier has made statements as to what was his intention and such statements are against his interest, the courts would usually accord to them considerable weight.”

17.Whilst I am not prepared to accord considerable weight on the plaintiff’s answer to the hypothetical question that he would be willing to renew the tenancy with the defendant should he be asked to do so because that statement is against his interest, I am prepared to deal with his answer on his ignorance to the Building maintenance and metal gate replacement with skepticism. 

18.To put it in plain language, I find it hard to believe that the plaintiff was not at all aware at the relevant times the Property had to share the costs of the building maintenance works. If he treated the Property as his own, he would have actively enquired with the other owners of the building about the building maintenance work that affects the whole building in 2006.  He would also have paid for the replacement of the metal gate if he treated the Property as his own.  This is particularly the case when the plaintiff is a supervisor of a property management company.  He should know that the repair costs of building maintenance are normally to be shared by all the individual owners of the building in proportion to their respective undivided shares to the building.

19.The plaintiff admitted that he did contribute a small amount of around HK$100 per year to the illumination of the public area of the building, and paid the amount to Mr Chan, which is the only factual witness of the defendant.  When he was cross-examined by Mr Kong on why he did not enquire with the defendant or Mr Chan on the building maintenance and whether he was required to contribute, he said he did not know that Mr Chan represented the defendant.  He further said that he did not contact the defendant because his tenancy with the defendant was already terminated.  I find his answer unsatisfactory and incredible.  An ordinary owner of a unit in a residential building would not expect other people to contribute to his share of building maintenance costs for him, and the plaintiff’s action of turning a blind eye on his contribution to the building maintenance is contrary to his intention to dispossess the defendant from the Property.

20.Moreover, the plaintiff testified that he paid HK$7,000 to replace the water pipe in January 2007.  Upon being cross-examined by counsel for the defendant, the plaintiff agreed that he could have claimed the defendant for reimbursement, but he did not do so.  This is also contrary to the plaintiff’s intention to dispossess the Property from the defendant, because he would not have sought reimbursement from the Plaintiff if he treated himself as owner to the Property.

21.The only factual witness of the Defendant, Chan Moon Lam, testified that the Defendant contributed the Property’s share of the building maintenance.  This is also not challenged by the Plaintiff. 

22.To apply the principles in Powell v McFarlane [1979] 38 P & CR 452 at 472:-

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

23.In overall, I am not satisfied that the plaintiff has proved his intention to dispossess the Property from the defendant for his failure to contribute to the building maintenance work and pay for the metal gate replacement as owner of the Property. 

Conclusion

24.As the plaintiff failed to prove animus possidendi, the plaintiff’s claim for adverse possession must fail.  It is not necessary for me to deal with other collateral issues, such as whether the Defendant granted a license for the Plaintiff to stay in the Property, who paid for the maintenance of the building, and whether the Plaintiff made representation on paying rent through his wife.

25.The defendant’s counterclaim against the plaintiff for possession of the Property succeeds, and its claim for mense profits is also allowed from the date of the counterclaim, ie 2 September 2015, to the date of actual possession being delivered to the defendant by the plaintiff.

26.The defendant produced a valuation report prepared by Chris Tang of Allied Surveyors Limited dated 24 October 2016.  According to that report, the market rent is HK$6,800 per month.  The report is not challenged by the plaintiff and accordingly I order that the said amount shall be used to compute mense profits.

27.There is no reason why costs should not follow the event.  I therefore make an order nisi that the plaintiff shall have the costs of the action, on a party and party basis, with certificate for counsel.

28.Last but not least, I thank counsels for their helpful assistance. 

Mr Wong Cho Lik, instructed by Edmund Cheung & Co, for the plaintiff

Mr Hatter Kwong & Mr Marco Tse, instructed by TKC Lawyers, for the defendant