Lu Xiaohua, The Administratrix of the Estate of Wong Yiu Chung, Deceased v. Hau Shun Chi Nelson
Read the full judgment text of DCCJ 287/2016 on BabelCite. This District Court judgment was delivered on 27 March 2020.
1. This is the trial of an adverse possession claim in respect of land in Section A of Lot 214 in Demarcation District No 95, New Territories (“the Land” or “Lot 214A”). Annexed to this judgment is a plan attached to the amended statement of claim. The part shaded in red represents the Land. It is an open area of about 160 sq m in Kwu Tung (古洞), Ho Sheung Heung (河上鄉).
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DCCJ 287/2016 [2020] HKDC 153 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO 287 OF 2016 ---------------------------
--------------------------- Before: Her Honour Judge Winnie Tsui in Court Dates of Hearing: 4, 8-12, 15 July and 31 October 2019 Date of Judgment: 27 March 2020 -------------------- JUDGMENT -------------------- INTRODUCTION 1.This is the trial of an adverse possession claim in respect of land in Section A of Lot 214 in Demarcation District No 95, New Territories (“the Land” or “Lot 214A”). Annexed to this judgment is a plan attached to the amended statement of claim. The part shaded in red represents the Land. It is an open area of about 160 sq m in Kwu Tung (古洞), Ho Sheung Heung (河上鄉). 2.The claim is brought by the estate of Mr Wong Yiu Chung (黃耀宗) (“Wong”). Madam Lu Xiaohua, Wong’s widow, is suing in her capacity as the administratrix of the estate. 3.Mr Hau Shun Chi Nelson is the registered owner of the Land. 4.Lu commenced this action against Hau in January 2016, claiming adverse possession of the Land by the family of Wong. She contends, as her primary case, that the adverse possession took place from 1975 to the date of the writ. In March 2016, Hau filed a defence and counterclaim, opposing the claim and making a counterclaim against Lu, in her personal capacity, claiming vacant possession of the Land. 5.Lu, in her capacity of the administratrix of Wong’s estate, is the plaintiff in the original action and, in her personal capacity, the defendant in the counterclaim. I shall generally refer to her as “Lu”. I shall use the term “the defendant” to refer to Hau, who is the defendant in the original action and the plaintiff in the counterclaim. 6.To complete the procedural history, the defence and counterclaim was amended in June 2018, more than two years after the original pleading was filed. The defendant introduced a new averment that the use of the Land by the Wong family, if proved, was with the consent of the defendant’s predecessor. 7.Then, on the first day of the trial, both parties sought to disclose new documents and admit them into the evidence. This resulted in the early adjournment of the first day of the trial and the second day being spent on arguments on the proposed amendments to the pleadings. In the end, I gave leave to the parties to rely on the new documents and, consequentially, amend the pleadings and file further witness statements. As a result, the amended statement of claim, the re-amended defence and counterclaim, the re-amended reply and defence to counterclaim and three supplemental witness statements were filed. The trial proper commenced on the third scheduled day. 8.In the annexed plan, the areas shaded red and blue together formed what was formerly Lot 214. The registered owner of the entire lot had been the late Mr Hau Fook Shui (侯福瑞). In January 1975, the lot was sub-divided into Lot 214A and the remaining portion of Lot 214 (“Lot 214 RP”), the latter being the area shaded blue. Hau Fook Shui then assigned Lot 214A to Madam Hau Ho Pik Yee (侯何碧儀), the defendant’s mother. In September 1997, she gifted the lot to the defendant, who has remained the registered owner up to now. The family of Hau Fook Shui has remained the legal owner of Lot 214 RP. 9.In essence, Lu’s factual case is that the Wong family had been farming on both Lot 214A and Lot 214 RP as one single piece of land since the 1960’s and up to (at least) when the writ was issued in 2016. The underlying arrangement had however varied over the years.
10.The defendant puts forward a positive factual case, which is built on two broad planks. 11.First, the Land was not in the possession of the Wong family continuously from 1975 to 2016 as alleged. From the 1990’s onwards, the Land had been uncultivated. Local villagers could and can still walk over and go through the Land freely. 12.Second, upon the sub-division in 1975, as agreed between Hau Fook Shui and the defendant’s father, the latter would allow Wong’s father to use the Land until his family needed to develop or use the Land in the future. Hau Fook Shui in turn informed Wong’s father of the same. Wong’s father agreed that when the defendant’s family demanded the return of the Land in the future, Wong’s father and his successors would return it unconditionally. Hence, even if the Wong family had been in possession of the Land as alleged, it had done so with the consent of the legal owner. I shall refer to the arrangement as “the alleged licence arrangement concerning Lot 214A” below. 13.The evidence features three families.
14.As regards the geographical layout of the area, Lu highlights the following features:-
15.The outcome of the action turns on the factual disputes concerning the use of the Land and the intention behind such use during the period from 1975 to 2016. 16.At the trial, Lu called three witnesses. The crux of their evidence is outlined below:-
17.The defendant called five witnesses.
18.There are four land survey reports before the court.
19.At the opening stage, by consent, I gave leave to admit items (a) and (b) as expert evidence. Item (c) was compiled pursuant to earlier leave of the court. On the seventh day of the trial, by consent of the parties, leave was granted to admit item (d). I shall refer to the joint expert report, as supplemented by the supplemental joint statement, as “the joint surveying report” below. 20.The experts were able to agree on their findings on the condition of the Land from 1961 to 2015, based on their review of the aerial photographs and survey sheets of the area. The findings were set out in the joint surveying report. By consent of the parties, the experts were not called upon to testify at the trial. 21.There is also a valuation report made by the single joint expert on the market rental value of the Land dated 16 August 2017. The single expert opined that from 1 January 1990 to 16 August 2017, the total market rent in respect of the Land was $85,900, with the monthly market rent ranging from $150 to $340. LU’S CASE 22.The Wong family has started to farm on the Land since the 1960’s. However, the possession of the Land from that time to January 1975 was pursuant to the lease granted by Hau Fook Shui and hence would not give rise to any possessory claim. Lu instead relies on the period from January 1975 to January 2016. 23.In gist, her case is that the Wong family had been farming continuously on the Land between 1975 and 2016. But they changed what they grew there, starting from about 1990. Before that, they grew vegetables for commercial sale. In about 1990, they switched to less intensive farming and gradually transitioned to planting trees there for their own use. Further, from the 1970’s onwards, the family had put up short fences separating the Land from the footpath. It was until some time in the mid-2000’s when Wong and Chun Chung stopped maintaining the fences. Background information 24.During their lifetime, Wong’s parents lived in Wong’s hut and farmed on the Land. 25.Chun Lan had lived in Wong’s hut and helped her parents to farm after school. She studied in Taiwan from 1976 to 1981. After graduation, she worked as a teacher. In 1983, Wong’s father purchased a flat in Sheung Shui in his name. Chun Lan moved to live there from then onwards. She lived there alone. Wong’s father made the down payment of 10% for the flat. Chun Lan made all the mortgage payments. The Wong family knew that the Sheung Shui flat belongs to her. 26.Although Wong’s father did not live at the flat, he would use that address as his correspondence address for some of his mails. This is because it was more convenient to receive mail at the Sheung Shui flat than at Wong’s hut. 27.From late 2007 to April 2011, Chun Lan allowed Wong, Lu and their children to live in the Sheung Shui flat. This was so that Wong could have a better environment while he was ill and it was more convenient for him to travel from there to hospital for treatment. During that time, Chun Lan lived in Wong’s hut during weekdays. 28.At all times, Chun Lan continued to help out on the Land when free. 29.By his will dated 2 December 1995, Wong’s father bequeathed the legal title and 10% beneficial interest in the Sheung Shui flat to Chun Lan. This was to reflect the understanding that the flat belongs to Chun Lan. The residual estate of Wong’s father fell into intestacy. 30.As for Wong, he was a construction worker and lived in Wong’s hut until late 2007. After his father passed away, he farmed on the Land after work during the week. He spent his weekends in Shenzhen with Lu and their children. Although he lived in the Sheung Shui flat from 2007 until he passed away in 2011, he would go back to visit his mother at Wong’s hut during the weekends and would help out with the farming on the Land. 31.Chun Chung lived in Wong’s hut until he moved out with his own family to live in Tuen Mun in 1996. He had his own job. However, he would from time to time return to Wong’s hut to help out with the farming on the Land. 32.Sai Chung lived in Wong’s hut until he was imprisoned in the mainland in 2003. Upon his release in 2012, he moved back there. He has been serving a jail sentence in Hong Kong since 2015. 33.The children had always helped out with the farming on the Land since they were young. At that time, the Wong family was in fact farming on several other lots of lands, leased from the indigenous owners. As the parents grew old, the second generation continued the farming activities on the Land. Since 1975 to about 1990 34.From 1975 to about 1990, the Wong family grew different crops at the Land for sale. The variety depended on the season. During rainy season, crops which would thrive in waterlogged soil would be grown. These included tung choi and sweet potato leaves. For the rest of the year, root crops and other types of vegetables would be grown. They included cucumbers, winter melons, Chinese green beans, choi sum, corn, Chinese broccoli, eggplants, green onions, carrots and lettuce. 35.In fact, Tang, one of the defendant’s witnesses, accepted in cross-examination that from 1975 to 1988, Wong’s parents had been farming on the Land. 36.Wong’s father was diagnosed with kidney illness in about 1988 or 1989. He later needed to undergo dialysis treatment regularly. He would do so at home and would attend follow-up consultation at hospital every three months. 37.Furthermore, in support of the witnesses’ testimony, Lu relies on the joint surveying report and two photographs which she claims were taken in around 1985. 38.The experts observed that from 1961 to 1988, the Land was “under cultivation as conspicuous cultivation pattern could be observed in all aerial photographs” taken during this period except from 1982 to 1984. Mr Earl Deng, counsel for Lu, submitted that this shows that there was uninterrupted farming activity on the Land. 39.The photographs disclosed by Lu also show a clear cultivation pattern and a man was seen farming at the Land. Chun Lan gave evidence that the man was his father and the photographs were taken in about 1985. One can also see some fences which, Chun Lan says, marked the outer boundary of Lot 214 RP. From about 1990 to 2000 40.During this period, there was a change of the use of the Land by the Wong family. 41.In the early 1990’s, there was constant flooding in the area. At such times, the family would grow crops suitable for waterlogged soil. 42.As Wong’s parents grew older and Wong and his siblings started their own careers and families, coupled with the changing condition of the Land, the family switched to less intensive farming, such as growing sweet potato leaves and taro. They also planted fruit trees, eg, longan and lychee, which in the long run required less periodical pruning, fertilisation and de-weeding. From 2006 onwards, the trees started to bear fruits every year. 43.Because of his illness, Wong’s father ceased to farm in about 1995 and 1996. The farming activities were instead carried out by Wong’s mother, assisted by Wong and Chun Chung, and Chun Lan when she was free on the weekends. 44.There is a series of photographs which Lu says show the close-up situation of the Land in 2001. The photographs are undated. Lu deduces the year in which they were taken from a comparison with the aerial photographs which show some common features in red and blue. The photographs, Lu says, clearly show cultivation, not wild grass. 45.In the joint surveying report, the experts observed that from 1989 to 2001, the Land had been covered by “vegetation”. They subsequently clarified that the term “vegetation” was used to denote “plants which have no well-defined cultivation pattern” but “there is no indication/sign found to imply that the existence of the plants shown involved human activity or not”. Mr Deng therefore submitted that the experts were neutral about the use of the Land during the period from 1990 to 2001. 46.Notwithstanding this, Mr Deng pointed out that the aerial photographs taken during this period show that there was a change of the use of the Land. This, he submitted, corroborates Lu’s factual case. 47.Separately, after Hau Fook Shui passed away in the early 1990’s, Wong’s father tried to pay rent in respect of Lot 214 RP to Tang Kam, his widow. However, Tang Kam said that there was no need to pay rent but told Wong’s father that if the Hau Fook Shui family demanded the return of Lot 214 RP in the future, Wong’s father must return it. From 2001 to 2016 48.Wong’s father passed away in 2001. 49.After his death, the family continued to plant trees on the Land to minimise further maintenance. Wong’s mother continued to farm on the Land. Chun Lan, Wong and Chun Chung would help out whenever they could. 50.Mr Deng pointed out that the family scaled back the farming activities and changed the use of the Land to one akin to their private orchard, planting a variety of fruit trees and herbs, to be self-used or shared with relatives nearby. 51.Wong was diagnosed with cancer in April 2007. 52.The Wong family reached an agreement in around the late 2000’s. In view of Wong’s cancer and given that he was the first son, Wong’s mother decided, and the family agreed, that Wong would inherit Wong’s hut and the Land, which were the only valuable assets of the family. Sai Chung was not present when the family agreement was reached as he was in prison at that time. 53.Wong passed away in 2011. His estate vested in Lu. Lu continued to farm the Land and has continued to do until the present day. 54.Wong’s mother reduced her farming activities from 2011 and ceased to farm in October 2012 due to old age and health. She passed away in 2013. After that, Lu and her children moved back to live in Wong’s hut. In December 2016, they moved to a public housing estate. 55.There is a series of photographs taken in 2014. Lu can be seen harvesting what she alleged to be potato leaves. There was plastic tubing around tree trunks which suggests some form of protection. 56.In 2016, after the writ was served, the defendant visited the Land and took some photographs. They show that plants were grown in planters. There was black protective sheeting on the Land. In cross-examination, both Chun Lan and Lu identified the various plants grown, as shown in the photographs. They included sweet potato leaves, loquat, lucky bamboo, banana trees, longan trees, mulberry trees, mangos and garlic in a flower pot. 57.In support of the witnesses’ testimony, Lu also relies on the joint surveying report. The experts jointly observed that from 2002 to 2010, “cultivation pattern could be observed” over the northern part of the Land. Regarding the southern part, bare ground could be observed in 2002. In 2003, vegetation could be observed. Since 2004, trees could be observed. Mr Deng also highlighted that the aerial photographs taken between 2002 to 2014 show that there is constant change in the use of the land, namely the tiling, the removal of soil and the planting of trees. The fences 58.In the 1970’s, Wong’s father erected simple fences, built using wooden skates and roofing materials. The main purpose was to stop the soil from being washed away. 59.In the 1990’s, some bamboo fences were erected to keep out wild boars and dogs from entering the Land, and also to demarcate the Land and the footpath. 60.In cross-examination, Tang were shown photographs in which some fences can be seen. He agreed that the fences were to prevent dissipation of soil and to stop animals from entering. He also said that the fences were erected by Wong’s father. These fences were not used to prevent people from entering the Land. Tang accepted that farmers would not build such fences since they would impede their entry into their own farms. In any event, Tang said that it would be unnecessary to put up fences around the Land since everyone knew that the Land was farmed by Wong’s father. 61.In her cross-examination, Chun Lan said that if there were any strangers coming near the Land, the dogs kept by the Wong family would bark in any event, thus alerting them of visitors. 62.In 2004, there were simple wooden or bamboo fences connected with metal wires when Lu first visited the Land. But in the mid-2000’s it became too tiresome for the family to maintain the fences and they stopped doing so since then. 63.In the joint surveying report, the experts noted that no fences could be observed around the Land but they subsequently clarified that short fences, if existed, may not be discernible from the aerial photographs, due to shadows or other obstructions. The underlying arrangements in respect of Lot 214A and Lot 214 RP 64.While Lu’s case set out above concerns the use of Lot 214A, it will be recalled that it adjoins Lot 214 RP and the Wong family had been physically farming on the two lots as one contiguous piece of land without any earmarking in their day-to-day activities. There was no physical barrier erected between the two lots. But Chun Lan was able to say in cross-examination that Lot 214A takes up about four to five “laks” of land, one “lak” measuring about two to three feet in width. 65.This is to be contrasted with their actual knowledge that the family had been using the two lots over the years pursuant to entirely different arrangements. 66.In her witness statement, Chun Lan said that in the late 1960’s and early 1970’s, the Wong family found out that part of the land on which they were farming was divided from the rest and given in exchange to another villager, also a Hau, by Hau Fook Shui for another piece of land. According to Chun Lan, her father and Hau Fook Shui were good friends. Hence, Hau Fook Shui would know that the Wong family were continuing to occupy the Land even after the exchange. 67.Chun Lan said in her oral evidence that she knew that Lot 214A no longer belonged to Hau Fook Shui in or around 1975. She only knew that it was owned by a Hau villager. The Wong family continued to occupy Lot 214A for their own use, without paying any rent to anyone. In 2012, Wong’s mother was still telling Chun Lan that she did not know who the new owner was. 68.As regards Chun Chung’s knowledge regarding the legal ownership of Lot 214A, he said that in a casual chat with his father one summer between 1993 to 1996, his father told him that the Sheung Shui flat belongs to Chun Lan and the three brothers could share the land adversely possessed by the family. His father then told him about the assignment by Hau Fook Shui of Lot 214A to another villager and that since the Wong family had no relationship with the new owner, that lot of land was adversely possessed by the family. Also, his father mentioned that since Hau Fook Shui had treated the family well and his widow had stopped collecting rent since the 1990’s, if Hau Fook Shui’s successor wished to take back their land, ie Lot 214 RP, the Wong family should return it. 69.Chun Lan denied that she had any knowledge of the alleged licence arrangement concerning Lot 214A. She stressed that if there had been such an arrangement, she would have known about it, given that her father told them about the arrangement concerning Lot 214 RP. 70.The family of Hau Fook Shui approached Chun Lan in 2012 expressing their wish to take back Lot 214 RP. Wong’s mother told Chun Lan that it was her father’s instruction that the Wong family must return it, when requested by Hau Fook Shui or his successor. 71.In the negotiation which followed, the Wong family demanded that a survey be done so that only Lot 214 RP should be returned and Lot 214A should remain in the possession of the Wong family. Chun Lan also made clear to Hau Fook Shui’s successor that the latter should not claim any possessory title of Lot 214A. 72.On 28 June 2012, Chun Lan, acting on behalf of the Wong family, entered into a new lease agreement in respect of Lot 214 RP with Hau Fook Shui’s successor. Summary of Lu’s case 73.In summary, Mr Deng submitted that this is a straightforward case of possession by a single family. 74.Wong’s parents farmed the Land together with their children since 1975. They grew different vegetables, depending on the season. When Wong’s father became too sick to farm in the mid 1990’s, his wife continued to farm and their children, Chun Lan, Wong and Chun Chung, continued to assist their mother. It was around this time that the family started to switch to growing trees, which required much less work than growing vegetables. 75.Chun Lan, Wong and Chun Chung were farming on the Land as it belonged to the family. 76.Mr Deng placed strong reliance on the aerial photographs. They show that from 1975 to 1989, there was uninterrupted intensive cultivation. From 1989 to 2000, there was less intensive cultivation. And, from 2001 to 2014, the cultivation switched from vegetable to trees. 77.The Wong family is a closely-knit family. The family members did not fight over resources and were mutually supportive. After Wong was diagnosed with cancer in 2007, his mother made the decision that he should inherit the Land and Wong’s hut. That was agreed to by Chun Lan and Chung Chun, given his illness and the real possibility of his death and the need to make provision for Lu and the two young children who had just moved to Hong Kong. 78.On the above factual basis, Mr Deng submitted in closing that Lu’s claim for adverse possession satisfies the statutory timeframe by two alternative routes:-
THE DEFENDANT’S CASE 79.The defendant opposes the claim on a number of grounds.
80.Before turning to each of these grounds, some background information about the defendant’s family. 81.Hau Tai Hong was an indigenous villager. He owned a lot of land in the Sheung Shui area. Hau Tat Kin is an engineer by training. He took over the family business in 1985, taking care of the family portfolio of lands. At that time, his father had to his name (either legally or beneficially) around 100 to 200 lots of land and despite selling many of the lands to Cheung Kong and other developers from time to time, in 1995, the family still had around one million sq ft of land and, to this day, they hold over 100 lots of land. 82.Hau Tai Hong was well respected in the village. Most farmers would pay rent punctually and Hau Tai Hong would reduce or waive their rents at times of difficulties. There had never been an adverse possession claim again Hau Tai Hong. No continued farming from the 1990’s 83.The defendant says that since about 1988 or 1989, the Wong family had ceased farming at the Land. According to Tang, Wong’s parents farmed on the Land before the 1990’s only. Their children, including Wong, do not have any farming experience, save that Chun Lan and Sai Chung might help out when they were young. The defendant also relies on the following evidence. 84.In the 1980’s, Hau Tai Hong intended to develop the area. To do that, he needed to take back his lands from the farmers. In about 1988 or 1989, as instructed by Hau Tai Hong, Hau Tat Kin requested the farmers to return the lands. The farmers were compensated for their crops on the lands. This is known as “補青苗”. The defendant discloses a one-page document entitled “Journal of Property Compensation/Conveyance” (“the Journal”). 85.According to Hau Tat Kin’s recollection, Lot 214A was at that time vacant. 86.The Journal, the defendant says, showed that compensation was paid to a number of farmers, with their names, lot numbers, areas of lands and amounts paid listed in a table. One of the farmers was Wong’s father. According to the Journal, he received compensation for his crops in Lots 193, 194A and 197. These lots are close to Lot 214A, which he leased from Hau Tai Hong. Wong’s father also received compensation for crops grown on land located in the nearby government land. What is notable is that the Journal did not record any compensation in respect of Lot 214A. This shows, the defendant says, that there were no crops grown there at that time, as otherwise Wong’s father would certainly ask for compensation. 87.Chun Lan confirmed in cross-examination that she knew about the compensation. When asked why his father did not request compensation for crops grown on Lot 214A if they had indeed been farming there, Chun Lan replied that his father did not know at that time who the lot’s owner was. 88.In the 1990’s, Hau Tai Hong and other landowners intended to build a road in the village to facilitate his development in the area. Hau Tat Kin participated in the project. He prepared a design plan in which the proposed road would affect Lot 214A. The plan is disclosed in this action. In the end, the project did not proceed. However, in the process, Hau Tat Kin would visit the area and he observed that Lot 214A was “uncultivated land”. 89.Over the years, Hau Tat Kin would walk around and check the lands owned by his family, particularly, in the past 10 years, as the government has plans to develop the area and there were rumours that adverse possession claims were brought against the Cheung Kong group. During his visits, he observed that the Land was vacant. 90.The defendant’s family had been paying government rent in respect of the Land. Furthermore, the defendant included the Land in his tax return from 1997 to 2006, reporting that the Land was vacant. He only stopped to do so upon receiving accountant’s advice there was no need to report the same in his tax return. 91.Furthermore, Tang said that from the mid-1980’s onwards, the supply of vegetables (and all kinds of food) across the border from the mainland was on the rise. That drove down the price of the vegetables and due to the declining profits, fewer and fewer people in Kwu Tung carried on farming. In the 1990’s, the prices of fertilizers started to go up and no one in Kwu Tung carried on farming commercially. Local villagers could walk pass the Land freely 92.Over the years from the 1990’s and onwards, Hau Tai Hong had instructed local villagers and friends to inspect the lands he owned, including Lot 214A. 93.Hau Wing Cheung testified that he would help Hau Tai Hong to keep an eye on the latter’s lands and to watch out for anything unusual. He would walk pass Lot 214A at least five to six times a year. In 1991, he would pay visits to the area even more regularly as he was then assisting one developer called Hilder Company Ltd to recover land in the vicinity. He confirmed that Lot 214A was uncultivated in the 1990’s. There was only wild grass and there were no trees. In recent years, there are only two or three wild trees but they have been there for only six to seven years. 94.Tang lived nearby. He would from time to time go by Lot 214A and could see that it was uncultivated since the 1990’s. 95.After the commencement of this action, the defendant and Hau Tat Kin visited the Land on two occasions in June 2016. The defendant said that he only saw wild grass and two or three trees there. They took photographs of the Land. They could visit the Land freely without any interruption. The alleged licence arrangement concerning Lot 214A 96.Hau King Wai was the eldest grandson (長子嫡孫) of Hau Fook Shui. They had a very close relationship. In about February or March 1975, Hau Fook Shui told him directly about the alleged licence arrangement concerning Lot 214A. (Shortly afterwards, Hau King Wai moved to live in the UK.) Hau King Wai had accompanied Hau Fook Shui to visit Wong’s house several times. The two were very good friends. 97.Since the 1960’s, Wong’s father had leased Lot 214 from, and paid rent to, Hau Fook Shui. 98.In the 1970’s, Hau Tai Hong intended to acquire Lot 214 from Hau Fook Shui. The background was that Hau Tai Hong’s lands in the vicinity were not directly accessible to the main road but were cut off by Lot 214. It happened that Hau Fook Shui also wished to acquire land in the area to build some houses for his heirs. But since he had been leasing Lot 214 to Wong’s father for farming, he did not wish to sell the whole of Lot 214 to Hau Tai Hong. As a compromise, the two agreed as follows:
99.Pursuant to this agreement, Lot 214 was sub-divided and Lot 214A was assigned to Hau Tai Hong’s wife. 100.Hau Fook Shui in turn informed Wong’s father of the sub-division and the assignment of Lot 214A to Hau Tai Hong. Hau told Wong’s father that the latter needed not to worry about the transfer as it would not affect him. They agreed that Wong’s family could continue to lease Lot 214 RP and continue to use the whole of Lot 214 and that when Hau Tai Hong or his successor demanded the return of Lot 214A in the future, Wong’s father or his successor would have to return the same “unconditionally”. This would be “the alleged licence arrangement concerning Lot 214A”. Hau King Wai felt that it was a reasonable agreement. There was no written record of it as the villagers often honour their words. 101.Thereafter, the Wong family had continued to lease Lot 214 RP from Hau Fook Shui and had continued to use Lot 214A pursuant to such arrangement, that is to say, with the consent of Hau Tai Hong. 102.The Wong family had paid rent in respect of Lot 214 RP to Hau Fook Shui. 103.Hau Fook Shui passed away in 1990. Even after that, Wong’s parents would still visit Tang Kam, Hau’s widow. But later, in 1993, Tang Kam said that there was no need for the Wong family to continue to pay rent for Lot 214 RP. But Hau King Wai said his grandmother might have confused Lot 214 RP with Lot 214A and she therefore told Wong’s family that there was no need to continue to pay rent. Intention of Wong’s father to pay rent 104.In cross-examination, Chun Chung said that his father did not know who owned Lot 214A and that if he had known that it was Hau Tai Hong, he would have asked him for a lease of the lot. 105.Mr Billy Ma, counsel for the defendant, submitted that Chun Chung’s evidence shows an intention to pay rent on the part of Wong’s father in respect of Lot 214A. As such, applying Wong Tak Yue v Kung Kwok Wai (1997-98) 1 HKCFAR 55, this would negative the Wong family’s intention to possess the land to the exclusion of the owner at least from 1975 to 2001 (when Wong’s father passed away). Given Lu’s case hinges on the commencement of the adverse possession from 1975 or, alternatively, 1997, by the Wong family as a whole or, alternatively, by Wong’s father passing on the possessory title to his family members, Lu’s case must fail. Presumption of encroachment 106.The defendant contends that the presumption of encroachment applies such that even if Lu succeeds in claiming adverse possession of Lot 214A, the possessory title would enure to the benefit of the Hau Fook Shui family. As such, Lu’s claim must fail. The presumption arises based on the following factual premise. First, Lot 214 RP adjoins Lot 214A. Secondly, the Wong family had been a tenant or a licensee of the Hau Fook Shui family in respect of Lot 214 RP. THE EVIDENCE 107.There are two major factual disputes in this action. First, the physical condition of the Land from the early 1990’s. (It is not disputed that before then, Wong’s father had been growing vegetables there.) The other major factual dispute concerns whether the Wong family was occupying the Land from 1975 with the consent of Hau Tai Hong. The court’s task is to decide whose account is more likely than not to be true. 108.My task is to evaluate the witnesses’ credibility against the backdrop of undisputed and indisputable facts. I am to weigh the inherent probabilities of the parties’ cases. The internal consistency (or inconsistency) of the witnesses’ evidence would have a bearing on whether the evidence is credible and reliable on the whole. In doing so, I should however bear in mind that the events related by the witnesses span over a long period of time, dating as far back as a few decades ago. Naturally, memories would fade over time. The court would also be guided by its overall impression of the characters and motivations of the witnesses. 109.On the whole, I prefer the evidence of Lu’s witnesses to that of the defendant’s when they are in conflict. 110.In coming to this conclusion, I have taken into account the following material considerations. First, Lu’s factual case is coherent, inherently plausible and generally consistent 111.As regards the use of the Land over the years, Lu’s factual case is coherent, inherently plausible and generally consistent. The change for the use of the Land in the 1990’s, she says, was brought about by a host of different reasons. On their face, these reasons all make sense and are credible reasons for the Wong family to stop growing vegetables commercially but to switch to crops which would require less work and maintenance. 112.Some time was devoted in cross-examination to explore where the members of the Wong family lived. Mr Ma pointed to various documents in which members of the Wong family put in the address of the Sheung Shui flat as their address. For example, the deed of mortgage signed by Wong’s father in 1983, his will signed in 1995, and the grant of probate of his estate issued in 2014 all stated the Sheung Shui address as the address of Wong’s father. Also, in his death certificate issued in 2001, the address of Wong, being the informant, was stated to be the Sheung Shui address. These contemporaneous documents show, Mr Ma argued, that the Wong family were in fact residing at the Sheung Shui flat. This would therefore go to contradict Lu’s pleaded case that the Wong family had been living in Wong’s hut in Kwu Tung. 113.In my view, Chun Lan’s explanation that the Sheung Shui address was only used as the correspondence address for members of the Wong family is credible, given the remote location of Wong’s hut. In support, she was indeed able to produce a water bill issued in 1995 stating that the Sheung Shui address was the correspondence address of Wong’s father whereas the “service address” was the address of Wong’s hut. 114.In any event, Lu’s case is that since the 1990’s, the farming activities of the Wong family on the Land was much less intensive than before, since the growing of fruit trees required much less work and maintenance. Because of that, the time spent by the Wong family on the farm was much reduced. Insofar as the defendant is suggesting that since the Wong family were living in Sheung Shui and therefore would not be able to spend time to farm there daily, the contention is not exactly relevant to the dispute in issue. This is because even on Lu’s own case, the work and time required on the farm from the 1990’s would be far less than before. 115.I should also add that the evidence of Lu’s witnesses is generally consistent, with no material discrepancies found, whether in their oral or written evidence. In his closing submissions, Mr Ma made a number of criticisms attacking the consistency of Lu’s evidence. I am of the view that the inaccuracies or inconsistencies identified by Mr Ma are minor in nature, eg, mistakes over exactly which year a particular incident happened. They do not on the whole affect the reliability of the evidence. Secondly, Lu’s case is generally borne out by aerial and other photographs 116.Lu’s case concerning the use of the Land from 2002 to 2014 is supported by the aerial photographs taken during the period. More specifically, the experts referred to the “cultivation pattern” found on the northern part of the land. They also observed that since 2004, trees could be observed. These are agreed observations made by the experts. They go to corroborate Lu’s case on farming during that period. I acknowledge, however, that the experts’ observations concerning the period from 1989 to 2001 are equivocal. They were only able to observe “vegetation”. 117.The joint observations in respect of the period from 2012 to 2014, by contrast, go to contradict the observations of Hau Tat Kin, Hau Wing Cheung and Tang that the Land had been and has remained to this day uncultivated. 118.Furthermore, both Chun Lan and Lu were able to point out with ease and confidence the various crops grown on the Land and Lot 214 RP in the photographs disclosed in this action. They appeared to show familiarity with the physical condition of the Land. Thirdly, the evidence relied on by the defendant is equivocal 119.The Journal is relied on by the defendant to show that no crops were grown on the Land in about 1988 or 1989. I accept that the defendant’s interpretation of the Journal is possible. However, on the other hand, there was an entry in the Journal in respect of a farmer called Tang Yung. Against his name, a “0” entry was made for compensation. It therefore begs the question why a “0” entry was not similarly made for Wong’s father in Lot 214A. 120.In that sense, the Journal seems to be equivocal on this issue. Fourthly, one must be cautious about the weight to be given to the evidence in support of the alleged licence arrangement concerning Lot 214A 121.The alleged licence arrangement concerning Lot 214A, if proved, would negative the requisite intention to possess by the Wong family. As noted at the outset, however, it was not raised until more than two years after the defence and counterclaim was originally filed. One naturally wonders – why had it not been raised at the beginning? The defendant has so far not put forward any good explanation for that. 122.There is also a complete lack of documentary evidence which corroborates the alleged arrangement. The only evidence which the defendant has adduced in support was the testimony of Hau King Wai. 123.Mr Deng submitted that the lack of documentary evidence is extremely telling. The circumstances would suggest that had there been such an arrangement, there should have been some documents in relation to the same. I agree. 124.According to the defendant’s own evidence, Hau Tai Hong owned a lot of land in Sheung Shui. The family should have kept records of their substantial landholding. But there was no document which reflected or at least corroborated the existence of the alleged licence arrangement concerning Lot 214A. 125.The only evidence is Hau King Wai’s testimony. The witness recalled one conversation which allegedly took place in 1975 between him and his grandfather. That was more than 40 years ago. Further, strictly speaking, the arrangement between Wong’s father and Hau Tai Hong over Lot 214A no longer concerned the Hau Fook Shui family, as Lot 214A had ceased to belong to the family. All these factors cast significant doubt on the weight which can safely be given to Hau King Wai’s account. In my view, its accuracy and reliability is doubtful. FACTUAL FINDINGS 126.On the balance of probabilities, I find that Lu’s factual case is more likely than not to be true. I accept Lu’s factual case on the whole and where it conflicts or is inconsistent with the defendant’s, I reject the latter. In particular, the defendant has failed to prove that the alleged licence arrangement concerning Lot 214A existed. DISCUSSION 127.In order to claim adverse possession, a squatter must prove factual possession of the land and the intention to possess it. To establish factual possession, there must be a degree of physical custody and control. Possession must be single and exclusive, though there can be single possession exercised by or on behalf of several persons jointly. Whether there is a sufficient degree must depend on the circumstances, including the nature of the land and the manner in which land of that nature is commonly used or enjoyed. What must be shown as constituting factual possession is that the squatter has been dealing with the land in question as an occupying owner might have been expected to deal with it and that no one else has done so. To establish the requisite intention to possess, the squatter should show that he intends, in his own name and on his own behalf, to exclude the world at large, so far as is reasonably practicable and so far as the processes of the law will allow. Such intention may be, and frequently is, deduced from the physical acts of possession themselves: see J A Pye (Oxford) Ltd v Graham [2003] 1 AC 419 at paras 42-43, approving Slade J’s analysis in Powell v McFarlane (1977) 38 P&CR 452; Wong Tak Yue at 68E; Incorporated Owners of San Po Kong Mansion v Shine Empire Ltd (2007) 10 HKCFAR 588 at para 7. 128.Adverse possession is a question of fact to be established by cogent and sufficient evidence. The burden of proof is on the squatter. There is no place for any presumption, whether legal or evidential, in favour of the squatter. Everything must naturally depend on the facts of each case: On Yip Property Development Ltd v Kwok Tai Kuen Alan HCMP 3192/2013, 15 April 2014, para 8. 129.When a claim is made over a piece of open or agricultural land, the issue of fences invariably becomes a material issue. Generally speaking, the fencing off of the land would often be sufficient proof of factual possession. While enclosure must be the strongest possible evidence of adverse possession, it is not indispensable and there may be evidence of adverse possession without any enclosure: Seddon v Smith [1877] 36 LTR 168, cited in Lam Sai Wan v Minloy Ltd [2018] HKCFI 1710 at para 29. 130.As a matter of analysis, the existence of fences goes to make out the essential character of possession, namely exclusiveness. 131.In Gotland Enterprises Ltd v Kwok Chi Yau CACV 260/2014, 19 January 2016, Lam VP highlighted the importance of establishing the exclusive character of the occupation:-
132.In other words, in order to establish exclusive occupation, either the squatter shows that there existed physical barriers to the land, or he must identify the special factors in his case, which would have the similar effect of keeping other people off from the land. 133.In the latter scenario, the special factors may take the form of the geographical nature and location of the land in question. Winpo Development Ltd v Wong Kar Fu HCA 3541/1993, 26 May 2017 is a case directly in point. The land in question was located in a remote and isolated area and had some clear natural physical boundaries in the form of steep slopes. There was only one access path in and out of the land. It was held that the absence of fencing did not detract from the claim in adverse possession. Against these particular circumstances, fencing would be unnecessary and in large part impractical. See paras 10, 64 to 65. Factual possession 134.In the present case, I have found as facts that, contrary to the defendant’s allegation, the Wong family had been farming on the Land continuously. But there was indeed a change of its use in the 1990’s. From 1975 to the early 1990’s, the family farmed commercially, growing different types of crops for sale. From the 1990’s onwards, the family switched to farming of crops which required less intensive work. The crops were for self-use, instead for sale. 135.On the issue of factual possession, the material question is whether by occupying and using the Land in this way over the years, the Wong family had throughout exercised a sufficient degree of control over the Land and dealt with the Land as an occupying owner might have been expected to do. The answer is, in my view, yes – both in respect of the early period of commercial farming and the subsequent period of less intensive farming. 136.The earlier aerial photographs show self-evident farming pattern, in the form of parallel rows, on the Land. That plainly demonstrates a sufficient degree of control and custody. There was then a notable reduction in the intensity of the farming activities. But the material fact is that fruit trees and other crops were grown on the Land and this use continued up to (at least) 2016. It is true that the crops were no longer grown in rows and there was no self-evident farming pattern as before. Nonetheless, there were clear signs that the trees and crops were grown by farmers. One can see from the photographs that there were plants grown in pots and planters, and there were tubing and protective covers on the ground. All these objectively show that there were farming activities going on at the Land. It should be recognised that a legal owner may use his own land in a variety of ways and may change its use from time to time. This is what had happened in the present case. 137.I now turn to the issue of fences. 138.I have found that since the 1970’s, the Wong family had put up simple fences to keep off wild animals and to stop soil from dissipating. From the mid-2000’s, they had stopped maintaining these fences. But they were still found as late as in 2016, as shown in some of the photographs. The physical act of putting up the fences clearly shows that the Land was occupied for farming. However, it is common ground that these fences would not be able to prevent individuals from entering the Land. That being the case, does that mean that the Wong family had failed to take the requisite step to exclude others for the purpose of establishing exclusive occupation? 139.I am satisfied that the keeping of these short and simple fences is sufficient to establish exclusive occupation, when the geographical layout of the Land is taken into account. Like Winpo, the Land is located in a remote and isolated area in New Territories. The footpath running next to it is the only access way to the Land. Nearby in the cul-de-sac lived only two households. The area was therefore not expected to be visited by anyone other than the two households and their visitors. Wong’s hut is only a few footsteps from the Land. If there were any strangers approaching the Land, the Wong family would be alerted by their dogs’ barking and they could take action accordingly. In my view, all these factors combined have the practical effect of keeping people off from the Land. It would be unnecessary to put up some higher fences for that purpose. 140.It would also be impracticable to do so. The keeping of short fences was in line with the general practice in the area. Tang’s evidence was to the effect that no farmer would erect those fences which could stop people entering the land since they would also impede the farmer’s own access and make it inconvenient him to farm on the land. Hence what the Wong family had been doing was also consistent with what a reasonable occupying owner would have done. 141.Lastly, the above conclusion on the issue of fences is supported by Tang’s testimony. Tang said that it would indeed be unnecessary to put up fences to stop people from entering the Land since everyone in the area knew that the Land was farmed by Wong’s father. This testimony speaks volumes for the exclusive nature of the occupation exercised by the Wong family over the Land. 142.I am therefore satisfied that from 1975 to 2016, the Wong family had been in exclusive factual possession of the Land. The possession was single and exclusive, exercised jointly by the Wong family. I accept Mr Deng’s submission that on the facts as found, the Wong family should be treated as a single family on the issue of possession. This is a case in which, as against the outside world, the family stand in the position of a single owner: J A Pye at para 70. Relevantly, Wong’s parents, Chun Lan, Wong, Chun Chung and Lu were farming on the Land not as individuals with a view to excluding each other. The unequivocal understanding among them must have been that the Land belonged to the family as a whole. Intention to possess 143.Lu also has to satisfy the court that the Wong family had the intention to possess the Land. Subject to the issue raised by Chun Chung’s evidence which will be addressed shortly, I am satisfied that such intention is established. The intention can be deduced from the physical act of their exclusive possession of the Land throughout the years and their doing so without paying any rent, notwithstanding that they knew all the time that the Land legally belongs to someone else. The Wong family had dealt with the Land in ways which accorded with and reflected the practical circumstances which they faced over the years. How they had dealt with the Land shows that they intended to exclude the world at large, including the registered owner, so far as was reasonably practicable. 144.In this regard, Tang’s testimony set out in para 141 above fully corroborates the intention of the Wong family to possess the Land when it was farmed commercially. This speaks plainly and unequivocally to the objective perception held by the villagers that the Land was being exclusively occupied and used by the Wong family during that period. Does Chun Chung’s evidence negative such intention to possess? 145.Where the squatter had been willing to pay rent to the legal owner if the latter had requested payment and that the former was ready and able to do so, this intention is plainly and completely inconsistent with the intention to possess. This is because the squatter was not intending to exclude the owner and was treating himself as enjoying possession under a lawful title from the owner: Wong Tak Yue at 69D-F. 146.Chun Chung said in cross-examination that if his father had known that Hau Tai Hong was the legal owner of the Land, his father would have approached Hau for a lease of the Land. Mr Ma submitted that this testimony brings Lu’s case squarely within Wong Tak Yue. In light of Chun Chung’s evidence, Mr Ma contended that the intention of the Wong family in relation to the Land would be plainly and wholly consistent with the requisite intention to possess. 147.In my view, it is important that the evidence shedding light on the intention to possess must be considered on an overall basis. There are a number of fundamental facts which Lu has succeeded in establishing. First, since 1975, the Wong family had been farming on the Land. Secondly, they had never paid any rent for the Land. Thirdly, Wong’s father knew at that time that the Land was no longer owned by Hau Fook Shui and the new owner was a Hau villager. 148.One would think that it would not have been too difficult for the Wong family to find out the identity of the new owner if they had wanted to. The overall impression conveyed by Tang’s testimony was that the village was a small community and enquiries could have been made. Yet, there is no suggestion that the Wong family had at any time taken any serious step to find out who the new owner was. Meanwhile, they continued to farm on the Land in a way which excluded everyone else from using it and never paid any rent. 149.All these show a clear intention of the Wong family to adversely possess the land. 150.Chun Chung’s statement is a statement against self-interest and should be given considerable weight. However, at the same time, it must be viewed against the above fundamental facts established by Lu thus far. It is plain that his evidence goes against the general thrust of these facts. Furthermore, what Chun Chung said was his own speculation of what his father would have done. This speculation goes against the objective fact that the Wong family had been occupying the Land for a few decades without paying any rent or attempting to pay any rent. 151.In the circumstances, when the above fundamental facts are considered together with Chun Chung’s statement, I am unable to find as fact that the Wong family were willing and ready to pay rent to Hau Tai Hong. Hence, Wong Tak Yue is not engaged. The Wong family’s intention to adversely possess the Land is established. Presumption of encroachment 152.The doctrine of encroachment applies where a tenant who encroaches upon adjoining or adjacent land beyond the boundaries of the land demised to him under his lease. Where the land encroached upon belongs to a third party and the tenant has by adverse possession barred the third party’s right of action and extinguished his title to the land, a presumption arises that the encroached upon land has been occupied as an addition to the landlord’s land and the right to possession vests in the landlord at the end of the tenancy. The effect is that the possessory title vests in the landlord instead of in the tenant. However, the presumption is a rebuttable one and can be rebutted by evidence that the tenant intended to occupy the encroached upon land not simply as tenant but as owner: Secretary for Justice v Chau Ka Chik Tso (2011) 14 HKCFAR 889 at paras 17, 20, 108. 153.Mr Ma relied on the following facts to submit that the presumption arises here. First, the Land adjoined Lot 214 RP. Second, Hau Fook Shui and his successor had been the landlord of Lot 214 RP. It is therefore presumed that even if Lu successfully makes out an adverse possession claim against the defendant, the possessory title would not vest in Wong’s estate but would vest in Hau Fook Shui’s successor. As such, the claim made by Wong’s estate against the defendant must fail. 154.This submission can be dealt with quickly. 155.Parties disagree on the application of the presumption in the first place. Mr Deng argued that when Hau Fook Shui died in 1993, the lease in respect of Lot 214 RP lapsed and since then the Wong family had been occupying that lot as a licensee. Mr Deng then submitted that the presumption of encroachment does not apply to licensed land. Mr Ma disagreed. 156.It is not necessary to resolve this legal issue. Even assuming that the presumption arises on the facts of this case, it is clear that the presumption is rebutted by the special facts here. Hence, the doctrine would not operate to vest the possessory title in Hau Fook Shui’s successor. 157.Here, the special fact is that the Wong family had initially leased the whole of Lot 214 from Hau Fook Shui. When the lot was sub-divided in 1975, it was clear in the minds of Wong’s father and Hau Fook Shui that Lot 214A no longer formed part of the lease. In fact, the whole point of the sub-division exercise was to carve out Lot 214A from the lease between Wong’s father and Hau Fook Shui. From then onwards, the Wong family paid rent to Hau Fook Shui in respect of Lot 214 RP only. All the time, Hau Fook Shui was aware that the Wong family had carried on farming on the Land. Given the history relating to the Land, it would be clear to him that the Wong family were occupying the Land independently of the lease in respect of Lot 214 RP and that they were not occupying it as an addition to Lot 214 RP. 158.Hence, even though Lot 214A and Lot 214 RP adjoins each other and the Wong family had been farming on the two lots as one contiguous piece of land without any earmarking, the intention of both the Wong family and Hau Fook Shui was that the Wong family was not occupying the Land in their capacity as a tenant, but on their own terms. Hence, the presumption (if applicable) is rebutted. 159.This conclusion is consistent with what happened in 2012. The Wong family signed a new lease agreement with Hau Fook Shui’s successor at the latter’s request. The agreement covered Lot 214 RP only. It did not concern Lot 214A at all. There is also no suggestion that Hau Fook Shui’s successor has to date taken any step to assert a possessory title in respect of Lot 214A, by relying on the possession exercised by the Wong family over the years. Conclusion 160.I hold that, from 1975 to 2016, the Wong family as a whole, including Wong’s parents, Chun Lan, Wong, Chun Chung and Lu had been in exclusive possession of the Land. Further, they had evinced the requisite intention to possess the Land. They should be entitled to adverse possession of the claim. (As confirmed by Mr Deng in his oral closing submissions, in this scenario, Lu’s case does not turn on the family agreement under which Wong was to inherit the Land. It is therefore unnecessary for me to deal with Mr Ma’s submissions concerning the validity and legal effect of the agreement.) Both Chun Lan and Chun Chung have agreed not to claim the Land. I hold that, as against the defendant, Wong’s estate is entitled to adverse possession of the Land. ORDERS 161.In respect of the original action, I grant the declarations that the defendant’s title in respect of the Land has been extinguished pursuant to section 17 of the Limitation Ordinance; and, the estate of Wong has acquired a possessory title to the Land. 162.In the original action, Lu also seeks an order that the defendant do within 14 days assign the title of the Land to the estate. It is well-established that the fact that a squatter has successfully made out a case of adverse possession does not by itself entitle him to be registered as the owner of the land. Nor does it operate as a statutory conveyance of the legal title to him: Tsang Cho Kiu v Lam Tsat Fuk HCMP 1077/2013, 10 December 2013 at paras 16-17. For these reasons, the order now sought by Lu is not appropriate and is refused. 163.The counterclaim is dismissed. 164.On costs, I make an order nisi that the defendant do pay Lu’s costs of the original action and the counterclaim, to be taxed if not agreed, with certificate for counsel and that Lu’s own costs be taxed in accordance with the Legal Aid Regulations.
Mr Earl Deng, instructed by Yiu & Associates, assigned by the Director of Legal Aid, for the plaintiff by original action and the defendant by counterclaim Mr Billy NP Ma, instructed by Huen & Cheung, for the defendant by original action and the plaintiff by counterclaim
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Cases cited in this judgment
Further hearings and rulings under DCCJ 287/2016