Yu King Chau Alias Yue King Chow v. The Personal Representatives of the Estate of Fong Fu Foon Alias Fong Foo Fon

HCA 1438/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1438 of 2011

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(By Original Action)

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JUDGMENT

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Introduction

1.These proceedings are in relation to 3 landed properties in Hong Kong (“the properties”):

(1)   Section C of Kowloon Inland Lot No 1091 at No 23 Temple Street, Kowloon and a four-storey building erected thereon known as the Ground Floor, 1^st Floor, 2^nd Floor, 3^rd Floor and the Roof, No 23 Temple Street, Kowloon (“the Building”);

(2)   Flat 7, Block B, Cheung Yuen Mansion, 23 – 25 Healthy Street East and 195 – 199 Tsat Tsz Mui Road, Hong Kong (“Flat 7B”); and

(3)   Flat 7, Block C, Cheung Yuen Mansion, 23 – 25 Healthy Street East and 195 – 199 Tsat Tsz Mui Road, Hong Kong (“Flat 7C”).

2.Fong Fu Foon alias Fong Foo Fon alias Fong Gay (“the deceased”) was the registered owner of the properties until his death in Hong Kong on 14 April 1958.  The deceased died intestate.

3.By letters of administration dated 10 September 1959, the deceased’s widow Fong Ho Soon Yee (“Madam Ho”) and the deceased’s daughter Fong Fay Jane alias Fong Wai Jing alias Fong Wai Ching (“Madam Fong”) became the co-administratrices (“the co-administratrices”) of the estate of the deceased. Thereafter, the properties were registered in the name of Madam Ho and Madam Fong as the co-administratrices.

4.The deceased was married twice in his lifetime. He was first married to his lawful “kit fat” wife Fong Der Shee who predeceased him on 25 June 1928 in San Francisco, California, USA.  They had 5 children namely, Helen Wong, Nancy Jung (“Nancy”), Fay Wong, James Fong alias Fong James Theln and Henry Fong alias Fong Henry Dar.  At all material times, they were living in the USA.

5.After the death of Fong Der Shee, the deceased married Madam Ho as his lawful “tin fong” wife.  They had 4 children namely, Madam Fong, Fong Kam Cho alias Fong Him Shing (“Fong Kam Cho”), Fong Fay Ling, and Fong Keon Fan Ken.

6.Flat 7B was used as the deceased and his family’s residence before his death whereas Flat 7C and the Building were rented out to collect rental income.  

7.Fong Kam Cho and his elder brother Fong Keon Fan Ken emigrated to Canada in about 1954.

8.After the death of the deceased in 1958, Madam Ho, Madam Fong and Fong Fay Ling continued to live at Flat 7B as their residence.  Flat 7C and the Building continued to be rented out to collect rental income.

9.The plaintiff (“P”) was married to Madam Fong in Hong Kong in 1961 and she moved out of Flat 7B to live with her husband.

10.The above facts are undisputed.

11.Madam Ho and Fong Fay Ling emigrated from Hong Kong to Canada to join the other family members there.  Fong Kam Cho had emigrated to Canada with his brother Fong Keon Fan Ken in about 1954.

12.Madam Ho asked her daughter Madam Fong to move into Flat 7B and to look after the properties forming part of the estate of the deceased.  Madam Fong agreed and she moved into Flat 7B with P and their son where they lived.  This is undisputed although there is a dispute of fact as to whether Madam Ho and Fong Fay Ling emigrated to Canada in 1964 or in 1968.  There is also a dispute of fact as to whether Madam Ho and P moved into Flat 7B before Madam Ho emigrated to Canada.  I shall deal with these factual disputes below.

13.It is also undisputed that Madam Fong passed away in Hong Kong in May 1981.  Her mother Madam Ho passed away in Canada on 18 November 1981.

14.By the time of the deaths of Madam Fong and Madam Ho in 1981, the estate of the deceased was left unadministered.  The estate of the deceased is still unadministered. 

15.P’s case is that since about 1981 he has been in adverse possession of the properties.  He claims that the deceased’s title to the properties was extinguished under the Limitation Ordinance (Cap 347) prior to the commencement of these proceedings.  He seeks the relief as set out in the statement of claim.

16.The defendants deny that P was in adverse possession of the properties as alleged.  By the counterclaim they seek the declaration as set out in the counterclaim and an order for vacant possession of the Building, Flat 7B and Flat 7C.  They also seek an order for an account of all the rent collected by P from the tenants of the Building since 1981.

The proceedings

17.The writ was issued on 24 August 2011 against “The Personal Representatives of the estate of [the deceased]” as the defendants. The personal representatives of the estate of the deceased were Madam Ho and Madam Fong.  Both of them had died in 1981 as P well knew.  Clearly, the action could not properly proceed unless an order were made appointing a person to represent the deceased’s estate and that the proceedings be carried on against the person appointed under Order 15, rule 6A of the Rules of the High Court. 

18.By the amended consent order dated 18 March 2013 made by Master de Souza, leave was given to Fong Kam Cho to join in the action as the 2^nd defendant with directions given for the filing of pleadings.

19.As he said in his affirmation filed on 7 December 2012 in support of his application for leave to join in the action as the 2^nd defendant, Fong Kam Cho has a beneficial interest and entitled to a share in the deceased’s estate.  He, therefore, has a legitimate interest in the outcome of the action.

20.Pursuant to the said amended consent order of Master de Souza, Fong Kam Cho as the 2^nd defendant filed and served his defence and counterclaim and thereafter P filed and served his reply and defence to counterclaim. 

21.It was only much later on that an application was made for an order that a person be appointed to represent the estate of the deceased. 

22.By a consent order made by Master Hui dated 29 June 2015, it was ordered that Fong Kam Cho be appointed to represent the estate of the deceased for the purpose of the action and that the action be carried on between P and Fong Kam Cho appointed to represent the estate of the deceased as the 1^st defendant and the 2^nd defendant.

23.Thereafter, the 1^st defendant’s defence and counterclaim dated 15 January 2016 was filed and served.  The reply and defence to the 1^st defendant’s counterclaim dated 25 February 2016 was then filed and served.

24.The 2^nd defendant’s defence and counterclaim was in effect thesame as the 1^st defendant’s defence and counterclaim.  With the consent order made by Master Hui dated 29 June 2015, there was no longer any need for Fong Kam Cho as the 2^nd defendant to personally continue to defend the action and to proceed with his counterclaim.  

25.In the course of his closing submissions on 18 October 2017, Mr Yuen, for the defendants, applied for leave to withdraw the 2^nd defendant’s defence and counterclaim which application I granted, subject to the question of costs, which I shall deal with below.

The issues

26.(1) The main issue is whether P has been in adverse possession of the properties since about 1981 for the requisite period under the Limitation Ordinance (Cap 347).

(2) If issue (1) is resolved in favour of P, what is the appropriate relief for P?

(3) If issue (1) is resolved against P, was P an executor de son tort and/or a constructive trustee of the properties for thedeceased’s estate?

(4) If issue (3) is resolved against P, what is the appropriate relief for the 1^st defendant?

The applicable principles

27.The applicable principles on adverse possession are well settled and not in dispute. 

28.Section 17 of the Limitation Ordinance (Cap 347) provides that at the expiration of the period prescribed by the Limitation Ordinance for any person to bring an action to recover the land, the title of that person to the land shall be extinguished.

29.Section 7(2) provides that the period of limitation to bring an action to recover land is 12 years.  The period of limitation was reduced by reason of the Limitation (Amendment) Ordinance 1991.  Prior to that, the period of limitation was 20 years. 

30.It seems to me that the relevant period of limitation for the purpose of P’s claims is 20 years.

31.The burden is on the person claiming adverse possession to prove it on a balance of probabilities. 

32.A person claiming to be in adverse possession must be shown to have both possession and the requisite intention to possess (Wong Tak Yue v Kung Kwok Wai & another (No 2) (1997–98) 1 HKCFAR 55).

33.Whether a squatter could establish factual possession and the requisite intention to possess for the purpose of adverse possession is a question of fact depending on the circumstances of the case (per Kwan JA in Cheung Kwong Yuen v Sun Hui Fang [2016] 1 HKLRD 464 at para 11). 

34.In considering the question of intention to possess, it is the intention of the squatter that matters.

35.I would refer to what Li CJ said in Wong Tak Yue at pp 68–69:

“ As Nourse LJ pointed out in Buckinghamshire County Council v Moran [1990] Ch 623 at p.644, adverse possession can be describedas ‘possession as of wrong’ and with limitation it is the intention of the squatter that is essential.

The requisite intention to possess has been referred in various authorities under its Latin tag ‘animus possidendi’. I shall refer to it simply as the intention to possess. As Slade J observed in Powell v McFarlane (1979) 38 P & CR 452 at pp.471–472, the intention to possess requisite for adverse possession:

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

The question of intention to possess, as with any other question ofintention, is one of fact.  Whether it can be established depends on an assessment of all the circumstances in a particular case.”

36.Where the person claiming adverse possession has made self-serving statements as to what his intention was, such self-serving statements should be viewed with scepticism unlike statements which are made against his interest which would be accorded considerable weight.  As to this, Li CJ said in Wong Tak Yue at p 69:

“ Where the occupier has made self-serving statements as to whatwas 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.”

37.It is trite that the evidence necessary to establish adverse possession must be compelling (see Chan PJ in Wu Yee Pak v Un Fong Leung & others (2004) 7 HKCFAR 498 at para 5).

38.The requisite intention of the adverse possessor to possess must be manifested and proved.  He must show that he had a plain and unequivocal intention to exclude the world at large including the paper title owner.

39.In Tsang Foo Keung v Chu Jim Mi Jimmy [2015] 6 HKC 200 Chow J said at para 44:

“ In relation to the element of ‘intention to possess’, the adversepossessor must show that he had a ‘plain and unequivocal intention to exclude the world at large’ (Bolton Metropolitan Borough Council v Musa Ali Qasmi (1999) 77 P & CR D36, at 37 per Peter Gibson LJ). In that case, it was also pointed out that it is not necessary for the adverse possessor to give evidence of his subjective intention. ‘Such self-serving evidence is hardly everlikely to be of assistance. The ordinary way in which the relevant intention is ascertained is by inference from the actions of the adverse possessor in the light of all the circumstances affecting the land.’”

40.Slade J (as he then was) in Powell at p 472 emphasized that there should 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.  Slade J went on to say at p 472:

“ If his acts are open to more than one interpretation and he has notmade it perfectly plain to the world at large by his actions or wordsthat he has intended to exclude the owner as best he can, the courts will treat him as not having the requisite animus possidendi and consequently as not having dispossessed the owner.”

41.In Mayor & Burgesses of the London Borough of Lambeth v Blackburn (2001) 82 P & CR 494 it was held that the trespasser’s acts must be unequivocal, such as to make it clear to the owner, if he was present at the land, that the trespasser intended to exclude him as best he can.  It is because of the need for the trespasser’s acts to be unequivocal and manifested to the true owner that the question of whether the trespasser had the necessary intention is to be inferred from the acts themselves.  Clarke LJ said at para 21:

“ It is I think because of the need for the acts of the trespasser to be unequivocal and manifested to the true owner that the courts have tended to say that whether the trespasser had the necessary intention is to be inferred from the acts themselves.”

The witnesses

42.I heard evidence from P and his son Yu Wai Hang (“Wai Hang”).  I also heard evidence from Fong Kam Cho and his sister Fong Fay Ling. 

43.P is 79 years old whereas Fong Kam Cho is 85 years old.  I have taken their ages into account when considering their evidence.  I have also taken into account the fact that the witnesses were giving evidence of matters that took place many years ago.

44.I found P and Wai Hang to be evasive witnesses.  I accepted parts of their evidence and rejected other parts which I found to be neither credible nor reliable.

45.In my view, Fong Kam Cho and Fong Fay Ling were credible and reliable witnesses.  Where their evidence is at variance with the evidence of P and Wai Hang, I prefer the evidence of Fong Kam Cho and Fong Fay Ling.

The evidence and findings

46.As I have said, P’s case is that he has been in adverse possession of the properties since the time Madam Fong passed away in 1981. Mr Chiu, for P, submitted that P was a squatter since that time.

47.On the evidence of Fong Fay Ling and Fong Kam Cho, whose evidence I accept and prefer to the evidence of P on this matter, I find that Madam Ho and Fong Fay Ling emigrated to Canada from Hong Kong in 1968 and not in1964.

48.P gave evidence that he went to live at Flat 7B with Madam Fong and their son Wai Hang before Madam Ho emigrated to Canada.  Fong Fay Ling said that P and her elder sister Madam Fong only went to live at Flat 7B after they emigrated.  I find that P and Madam Fong only moved into Flat 7B to live there after Madam Ho and Fong Fay Ling emigrated to Canada and not while they were still living in Hong Kong.  I also prefer the evidence of Fong Fay Ling to the evidence of P on this matter.

49.It appears that their mother Madam Ho asked Madam Fong to move into Flat 7B with her family and to continue to look after the properties for the estate of the deceased as she and Madam Ho had been doing before then.

50.It is undisputed that after Madam Ho emigrated to Canada, Madam Fong continued to collect rent from the tenants of the Building and from the tenant of Flat 7C and to pay for the expenses.  Flat 7B was at that time used as the residence of Madam Fong and her family.

51.P gave evidence that he knew that the properties were registered in the names of Madam Ho and Madam Fong as co-administratices of the estate of the deceased.  He said that he went with Madam Fong to collectthe rent from the tenants and that, at times, he also went alone to collect rent.

52.Madam Fong continued to collect rent from the tenants of the Building until she passed away in 1981. I accept P’s evidence that Flat 7C was vacant and used as a godown by Madam Fong and P after July 1972 when vacant possession was delivered by the then tenant.

53.P must have known that Madam Fong was collecting rent on behalf of the estate of the deceased and he was clearly assisting her in the collection of rent and the payment of expenses for the properties.  It is clear on P’s evidence that he also recorded the rental income and expenses incurred for the properties that were rented out.  The documents at B231 – 280 are the written records in Chinese (and English translations thereof) made by P in his handwriting of the rental income and expenses for the period from December 1968 to June 1972.  These documents show that after Madam Ho emigrated to Canada in 1968 right up to June 1972, P knew that Madam Fong was collecting rental income and incurring expenses on behalf of the estate of the deceased and he was assisting her in so doing.  I so find.

54.Fong Fay Ling gave evidence that after she emigrated to Canada she occasionally returned to Hong Kong to visit her sister Madam Fong before she passed away.  She recalled that she visited Hong Kong in or around 1976 and 1979 and that during her visits Madam Fong told her that she would deposit the rents collected from the tenants into her safety deposit box. She said that Madam Fong also gave her the monies and asked her to take them back to their mother Madam Ho.  I believe Fong Fay Ling and accept her evidence.

55.After the death of Madam Fong in 1981 it is undisputed that Fong Fay Ling came to Hong Kong to attend her funeral.  During that visit, it is also undisputed that she and P both went to open and examine Madam Fong’s safety deposit box at the Hang Seng Bank.  Fong Fay Ling said, and I accept, that they found the title deeds of Flat 7B, Flat 7C and the Building in the safety deposit box together with some monies there.  The items were removed from the safety deposit box.

56.Fong Fay Ling was adamant that all the title deeds for the properties were retrieved from the safety deposit box and taken back to Flat 7B where she was staying at the time.  She and P were examining the documents at Flat 7B and she said that she put all the title deeds into her luggage intending to bring them back to Canada.  However, she found the title deeds for the Building missing from her luggage about two days before she was due to return to Canada and confronted P about it.  He denied taking away the title deeds for the Building.

57.There is no dispute that the title deeds for Flat 7B and 7C were taken back to Canada by Fong Fay Ling. 

58.As regards the title deeds for the Building, P said in his witness statement (at para 17) that the title deeds for the Building are and were in his possession since the death of Madam Fong.  In evidence, P did not accept that all the title deeds for the properties were retrieved from the safety deposit box.  He also said in evidence that he found the title deeds for the Building under his bed long after Fong Fay Ling went back to Canada.  This was never mentioned in his witness statement.  There is no satisfactory explanation as to how the title deeds for the Building mysteriously appeared under his bed.  I accept Fong Fay Ling’s evidence and reject P’s evidence on this matter. I find that P took away the title deeds for the Building from the luggage of Fong Fay Ling where she had placed them intending to take all the title deeds to Canada.

59.There is no dispute that after the death of Madam Fong, P continued to collect rent from the tenants of the Building and incurred expenses.  P and his family continued to live at Flat 7B and continued to use Flat 7C as before.  P said that Flat 7C was vacant and used as a godown where he kept miscellaneous items including old furniture and appliances. 

60.P’s evidence was that after the death of Madam Fong he demanded and received rent from some of the tenants of the Building in the capacity of the landlord and owner of the Building.  I place no weight on his self-serving statement that he received rent in the capacity as the owner of the Building.

61.He said that he received and continues to receive rent from the tenant on the Ground Floor of the Building.  It appears that he enteredinto a new tenancy agreement with the tenant dated 21 March 2011 (at B228) whereby the Ground Floor was let at the monthly rent of $800 per month from 20 March 2011 to 20 March 2019 on the terms contained therein. 

62.P also said that he received rent from the tenant of the 2^nd Floor of the Building until about 2004 when the tenant passed away.  He said that despite demands and requests, the tenant’s son who used and still uses the 2^nd Floor refused to pay rent to him after that.

63.As regards the tenants of the 1^st and 3^rd Floors of the Building,P said that he received rent from them up to 1990 but that, despite demands, they have refused to pay rent to him after 1990 despite occupying the 1^st and 3^rd Floors up to now. 

64.As regards the Roof of the Building, P said that the tenant on the Roof initially refused to pay him rent but that later on, he did agree and did pay rent to him.

65.On P’s evidence, he has collected and is still collecting rent in respect of the Ground Floor and the Roof but not in respect of the 1^st , 2^nd and 3^rd Floors of the Building. 

66.P emphasized that he collected the rent and treated the properties as his own.  When he was asked when he started considering himself as the owner, he said it was one or two years after his wife passed away.  He said that he paid for all the expenses of the properties and considered himself to be the owner.

67.There is no dispute that P settled all the expenses for the properties.  I accept that P paid for all the expenses of the properties including rates, management fees, contributions for repairs to the Building and to Cheung Yuen Mansion where Flat 7B and 7C were situated but I place no weight on his self-serving statement that he did so as the owner of the properties.

68.I would observe that at B419, being the demand for payment issued by the Buildings and Lands Department in 1990 for apportioned cost of repair work at the Building, the demand was issued in the name of the co-administratrices and not in P’s name.

69.The demands for rates at B424 – 425 in 1997 for Flat 7B and Flat 7C were issued in the name of the deceased. The demand for rates at B426 – 429 in 1997 for the Building were issued in the name of Madam Fong. There was no demand for rates for the properties issued in the name of P.  There is no evidence that P ever applied to change the ratepayer’s name to his name.

70.There is also a dispute of fact as to whether P and Fong Kam Cho had a telephone conversation in about 1990.

71.Fong Kam Cho said that after the death of his sister Madam Fong, P did not inform them about the properties.  He telephoned P in about 1990 and asked him about the properties. P told him that the situation was not good as the repair costs were expensive and the income was low.  Fong Kam Cho also said that P told him that it was difficult for him to collect rent from some of the tenants of the Building as he was not the owner.

72.P denied that he had the telephone conversation with Fong Kam Cho in about 1990.

73.On this dispute of fact, I believe Fong Kam Cho and accept his evidence.  I disbelieve P and reject his evidence.  I find that Fong Kam Cho did telephone P in about 1990.  I find that P told Fong Kam Cho that it was difficult for him to collect rent from some of the tenants at the Building as he was not the owner.  This is a statement made by P against his interest in respect of which I would accord considerable weight.

74.Wai Hang gave evidence that his understanding was that his father P was the registered owner of the properties.  I do not believe him.  He was evasive when cross-examined about the letters he wrote to Fong Kam Cho and to Nancy in April 2000.  It is clear from what Wai Hang said in the letters that he knew that P was not the owner of the properties.

75.Significantly, the letter at B281 dated 20 April 2000 addressed to Fong Kam Cho and the undated letter at B284 written to Nancy were written by Wai Hang in reply to letters that were sent by Fong Kam Cho and Nancy.  Fong Kam Cho gave evidence, which I believe and accept, that he and Nancy, who is and was living in the USA, had discussed how the properties should be dealt with by P in Hong Kong and they came up with the proposal to recover possession of the same and to sell them. 

76.The letters at B281 and B284 from Wai Hang stated, inter alia, that:

“ Regarding your plan as mentioned in the letter to recover the possession of the properties left by maternal grandpa and sell them off. We are basically quite agreeable to this idea. In fact,in recent years due to the problems with the titles of the properties,my father has been deeply troubled with the management of theseproperties. … The expenses for managing these properties, such asrates, property tax, government rents, and various maintenance fees which are payable annually, are all personally pre-paid by my father as an agent, one could say that such expenses have exceeded the income. …” [Emphasis added]

77.What Wai Hang wrote in the said letters clearly shows that he never regarded the properties as being his father’s properties and contradicts his evidence that his understanding was that his father was the registered owner of the properties.

78.In the said letters Wai Hang also said that “we” are basically quite agreeable to the plan to recover possession of the properties.  In evidence he said that “we” referred to his family and that his family was quite agreeable to the plan to recover possession.  P was obviously the head of his family.  He also mentioned in the said letters that the expenses for managing the properties were pre-paid by his father “as an agent”.

79.Also mentioned by Wai Hang in the said letters to Fong Kam Cho and Nancy was the claim by the Incorporated Owners of Cheung Yuen Mansion (“the IO”) for the outstanding management fees for Flat 7C.  Wai Hang stated that:

“ After our discussion with the Incorporated Owners, we were able to come to a settlement out of court, and the claimed sum was reduced to sixty thousand odd dollars to be paid before 15 Marchthis year, or else the matter will be dealt with by the court. Pleasetherefore let us know how we should handle this matter in uncle’s (your) reply letter.”

80.Wai Hang was clearly asking for instructions on how to deal with the claim by the IO for outstanding management fees.

81.Wai Hang also asked for compassion from the family membersin Canada and the USA regarding their plan to recover possession of Flat 7B where he and his father were residing in. 

82.Wai Hang at first said in evidence that he did not mention the contents of the letters he received from Fong Kam Cho and Nancy to his father.  However, later on in his evidence, he said that he did mention to his father that the family wanted to recover possession of the properties but that his father ignored it.  This shows that P clearly knew in about April 2000 that the beneficiaries of the estate of the deceased wanted to recover possession of the properties. 

83.Wai Hang also said that he had not sought his father’s prior permission before he wrote the said letters in April 2000 and that his father did not know that he had written the same.  He said that he was trying to help his father as he was facing financial difficulties at the time. I do not believe him.

84.P also said, unconvincingly, that he did not know that his son had written those letters and only became aware of the said letters when he received them from his solicitors.  I do not believe him.  Although in evidence P tried to distance himself away from the letters that Fong Kam Cho and Nancy wrote and the replies from Wai Hang in April 2000, it seems to me that it is inconceivable that P would not have known of the letters that Fong Kam Cho and Nancy wrote in about April 2000 and would not have discussed them with Wai Hang before Wai Hang replied. 

85.In about October 2000, Fong Kam Cho visited Hong Kong with his wife and went to Flat 7B where he met up with Wai Hang.  P was not there at that time.

86.There is no dispute that Fong Kam Cho asked Wai Hang about the rentals collected from the properties.

87.Fong Kam Cho said that he told Wai Hang to tell his father to account for the rents collected from the tenants of the Building.

88.In evidence, Wai Hang said that he told Fong Kam Cho that P had difficulties in collecting rent from the tenants of the Building and that his father had been paying repair and maintenance expenses in relation to the properties.

89.The next day Fong Kam Cho and his wife had lunch with P and his family.  Fong Kam Cho said that also attending the lunch was P’s then girlfriend or partner and he did not want to discuss the estate matters and the properties in the presence of a stranger.  I believe Fong Kam Cho and accept his evidence.  It is undisputed that nothing was discussed about the properties at the lunch.

90.Fong Kam Cho also gave evidence, which I accept, that in or around January 2003 he knew that the IO had brought an action in the Small Claims Tribunal against the co-administratrices for outstanding management fees for Flat 7C. 

91.Wai Hang wrote a letter dated 20 June 2003 to Fong Kam Cho (at B287) in respect of the outstanding management fees for Flat 7C which he described as “the property of maternal grandfather.”  He informed Fong Kam Cho that the IO would make a claim for the entire amount of outstanding management fees in the sum of $129,754 with interest, if the matter could not be settled.  He also referred to a notice from the Government regarding maintenance works to be carried out at the Building.  Wai Hang pointed out that the matters he raised in the letter had to be dealt with as soon as possible and said:

“ As we are hindered by the problem of titles in the properties, we are unable to help despite our wish to give assistance.”

He asked Fong Kam Cho to contact him after discussion with “the other aunts”.

92.Fong Fay Ling said that in or around 2003 it had come to their knowledge that the management fees for Flat 7C were outstanding and that there were some building orders issued by the Government against the Building.  She said that she had spoken to the other family members and they agreed that P could pay the expenses from the rents collected by him.

93.Fong Kam Cho also said that the family members had a discussion and agreed that with the rents collected by P he should be able to pay the expenses.

94.It is clear from the evidence of Fong Fay Ling and Fong Kam Cho, which I accept, that they were of the view that since P had beencollecting rent from the tenants of the Building for so many years he should be able to settle all the expenses from the income that he had received. 

95.The undisputed evidence is that P did not settle the outstandingmanagement fees for Flat 7C until much later.  In DCMP 2133/2009 the IOobtained an order (at B398 – 402) in the District Court dated 17 September2009 against the co-administratrices which provided, inter alia, that unlesspayment was made in the sum set out therein with interest, Flat 7C be sold.  It was only on 5 March 2010 that payment of the long outstanding maintenance fees of Flat 7C was made to the IO by P through his solicitors as evidenced by the letter at B423.

96.It is also important to bear in mind that P was the registered owner of two landed properties:

(i) Shop No 7, G/F, Yick Fat Building in Quarry Bay which is presently rented out at the monthly rent of $20,000; and

(ii) Flat B, 2/F, Kut Shing Building in Chai Wan which is presently rented out at $15,000.

97.P said that in respect of those properties he has been adjusting the rent upwards or downwards after the tenancies came to an end.  Quite clearly, he dealt with those properties which were registered in his own name in a manner differently from how he dealt with the properties.  Specifically, he left Flat 7C vacant since about 1972 without letting the same out.  And in respect of the Building, since 1990 he has not been collecting rent in respect of the 1^st and 3^rd Floors, and since 2004 he has not been collecting rent in respect of the 2^nd Floor. And for the Ground Floor, he has been collecting the same rent of $800 per month since 1990 which P agreed was far below the market rent.

98.In all the circumstances of the case, I am not satisfied that P had a plain and unequivocal intention to exclude the world at large including the beneficiaries of the estate of the deceased and the paper title owner from the properties. 

99.I have no hesitation in rejecting P’s case that he has been in adverse possession of the properties since 1981 as he has claimed.  P has failed to establish on a balance of probabilities that he has been in adverse possession as alleged.

100.Issue (1) is resolved against P.  Issue (2) does not arise.

Issue (3)

101.Was P an executor de son tort and/or a constructive trustee of the properties for the deceased’s estate? 

102.At para 7-01 in Williams, Mortimer and Sunnucks on Executors, Administrators and Probate 20^th edn it is stated:

“ A person not lawfully appointed executor or administrator and without title to a grant may by reason of his own intrusion upon the affairs of the deceased be treated for some purposes as having assumed the executorship.¹ Such an intermeddler is called a tort executor or an executor de son tort (i.e. of his own wrong).² The concept is derived from the principle that a person who has assumed authority where he has none is accountable as if he had that authority.”

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¹   This passage was quoted by Lord Collins in Revenue and Customs Commissioners v Holland [2010] UKSC 51; [2010] W.L.R. 2793 at [73].

²   Similar definitions are found in Swinb., Pt 4, s.23, Pl. 1; Godolph., Pt 2, Ch.8, s.1; Wentworth’s Office of Executor, 14th edn, Ch.14, p.320.  See also Degazon v Barclays Bank [1988] 1 F.T.L.R. 17.

103.It seems to me that P has by his conduct intermeddled with theproperties belonging to the estate of the deceased.  Without being appointedan administrator, P has continued doing what the co-administratrices were doing with the properties before they passed away in 1981.  He has collected rental income from tenants of the Building and kept the same without accounting for the same to the beneficiaries of the estate of the deceased.  He has also been using Flat 7B and Flat 7C without paying any rent.

104.It seems to me, and I so find, that by his conduct P was an executor de son tort of the estate of the deceased. 

105.Mr Chiu submitted that an executor de son tort is not always necessarily a constructive trustee. 

106.Mr Yuen relied on Pettit’s Equity and the Law of Trusts 11^th edn where at p 167 it is stated:

“ An executor de son tortis one who, without due authority, takes possession of, or intermeddles with, the property of a deceased person.  Such a person may be, but is not necessarily, a constructivetrustee.¹⁹⁶  There would appear to be no justification for imposing a constructive trust where the executor de son tort is a complete stranger, save in the most exceptional circumstances.”

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¹⁹⁶   See the full discussion in [1974] Conv 176 (F Hinks).

107.Each case, of course, depends on its own facts.

108.In James v Williams [2000] Ch 1 it was held that even though he was not a personal representative, where an executor de son tort knew that he was not solely entitled to inherited property and that there were others entitled to a share in the estate, he was under an equitable duty to hold the property for the benefit of those others and was therefore a constructive trustee.

109.In this case, P is not even a beneficiary to the estate of the deceased.  He well knew that the properties were registered in the name of the co-administratrices for the benefit of the estate of the deceased.  He was no stranger to the beneficiaries as he was related to them through Madam Fong.  He has been collecting rent from the tenants of the Building since 1981 without accounting to the beneficiaries for all the rent that he received.  He has been in physical possession and control of Flat 7B and Flat 7C since 1981 and, in my view, he was also a constructive trustee of Flat 7B and Flat 7C for the benefit of the estate of the deceased.

Issue (4)

110.As to the relief to be granted, the 1^st defendant is entitled to an order for vacant possession of Flat 7B and Flat 7C.  The 1^st defendant in the course of the trial abandoned the claim for mesne profits.

111.P is not in a position to deliver vacant possession of the Building.  As pleaded in the 1^st defendant’s defence and counterclaim, Fong Kam Cho has instructed his solicitors to apply for a grant of letters of administration de bonis non to the estate of the deceased.  It seems to me that after this has been obtained, he will be in a position to claim vacant possession against the occupiers of the Building.

112.The 1^st defendant is also entitled to an order for an account to be taken from P of the profits received by him in respect of the Building since 1981.

113.P has admitted that he has in his possession of the title deeds for the Building.  He has no right to retain these.  The 1^st defendant is entitled to an order for the delivery up of these title deeds by P under the prayer for further and/or other relief in the counterclaim.

The orders

114.I dismiss P’s claims.  I give judgment to the 1^st defendant on his counterclaim and make the following orders:

(1) P do deliver vacant possession of Flat 7B and Flat 7C to the 1^st defendant;

(2) an account be taken before a Master of the profits made by P in respect of the Building since 1981;

(3) P do pay to the 1^st defendant such sums as may be found due upon taking the said account;

(4) P do deliver the title deeds of the Building to the 1^st defendant.

Costs

115.As between P and the 1^st defendant, costs should follow the event.  I make an order that P do pay the 1^st defendant his costs of the action and the counterclaim, such costs to be taxed, if not agreed.

116.Mr Yuen submitted that indemnity costs should be ordered against P.  I have considered the written submissions but I am not persuaded that indemnity costs should be ordered in this case.  I would also bear in mind that the 1^st defendant and the other beneficiaries of the estate of the deceased have been dilatory in taking steps to protect their interests in the estate of the deceased.  In my view, the usual party and party basis of taxation of costs should apply and I so order.

117.As to costs between P and the 2^nd defendant, as I have said, it was pursuant to the said amended consent of Master de Souza that the 2^nd defendant was given leave to join in the action as the 2^nd defendant.  Fong Kam Cho has a beneficial interest and entitled to a share in the deceased’s estate.  He, therefore, has a legitimate interest in the outcome of the action.  He was entitled to apply for leave to join in the action and leave was given pursuant to a consent order.

118.As I have said, after the consent order was made by Master Hui on 29 June 2015, there was no longer any need for the 2^nd defendant to personally defend the action and pursue the counterclaim.  On 18 October 2017, I gave leave to the 2^nd defendant to withdraw his defence and counterclaim, as I have said.  It seems to me that the 2^nd defendant is entitled to his costs up to 29 June 2015.  As for the costs thereafter, in my view, there should be no order as to costs.

119.I also make an order that P do pay the 2^nd defendant his costs of the action and counterclaim until 29 June 2015, such costs to be taxed on a party and party basis, if not agreed and that there be no order as to costs from 29 June 2015 until 18 October 2017.

Mr Victor K H Chiu, instructed by Darin Leung & Partners, for the plaintiff

Mr Ross M Y Yuen, instructed by Hastings & Co, for the 1^st and 2^nd defendants