Tsang Woon Ming v. Tsan Hing Tat Heidi and Others

DCCJ 3791/2016

[2021] HKDC 482

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 3791 OF 2016

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Before: His Honour Judge Leung in Court

Date of Hearing: 22-24, 27-28 & 30 July and 11 August 2020

Date of Judgment: 27 April 2021

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JUDGMENT

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1.The plaintiff claims for interest in the lot of land in question on the ground of adverse possession or alternatively proprietary estoppel. The defendants, registered owners of the lot, resist the claim and counterclaim for possession and other consequential relief.

THE PARTIES AND THE LOT

2.The plaintiff says that the parties were the descendants of Tsan Hei, deceased.  The two branches of the Tsan family are shown as follows (in which “(d)” denotes that the individual was deceased)^[1].

3.According to the plaintiff, his father and Tsan Yung were sons of Tsan Hei.  Tsan Yung was therefore his uncle.  Tsan Luk Yuk Yin (“Madam Luk”) was the wife of Tsan Yung’s son, Tsan Wah.  Madam Luk was the mother of the 1^st defendant, the 2^nd defendant and the wife of the 3^rd defendant.  The 4^th, the 5^th and the 6^th defendants are the children of the 3^rd defendant, thus grandchildren of Madam Luk.

4.The lot of land in question is No 141 in Demarcation District (DD) 313 in Tai O, Lantau Island, New Territories (“the Lot”), also known as Nos 158 and 160 of Tai Ping Street, Tai O.  According to the title documents, Tsan Yung acquired title to the Lot by way of a transfer of mortgage in 1916.

5.In January 1969, Tsan Yung transferred the Lot to Yung Hing Investment Company Limited (“Yung Hing”).  The Companies’ Registry records show that Yung Hing was essentially a family company, of which members of the Tsan family including Tsan Yung himself, his wife (Tsan Wong How Yuk) and Madam Luk were shareholders.

6.Tsan Yung passed away in about 1970.  So did his son, Tsan Wah, just years later and thus leaving Madam Luk as the widow.

7.In September 1981, Yung Hing assigned the Lot, together with various other lots of land in Tai O, to Madam Luk, who simultaneously declared a trust to hold the same for her three children (ie the wife of the 3^rd defendant, 1^st defendant and the 2^nd defendant).

8.In June 2014, Madam Luk passed away.

9.By an assignment in September 2015, the 1^st, the 2^nd and the 3^rd defendants^[2] became co-owners of the Lot.  By an assent in December 2015, the 3^rd defendant’s share in the Lot was formally assigned to himself and their children, the 4^th to the 6^th defendants.

10.The defendants surveyed the various lots of land in Madam Luk’s estate in late 2015, and discovered occupation of the Lot by third parties.  By their solicitors’ letter dated 2 September 2015, the defendants demanded the occupiers of the Lot to deliver up vacant possession.  This apparently triggered the plaintiff’s action.

11.On 29 July 2016, the plaintiff commenced the present action with the assistance of legal aid.

THE CLAIM

12.According to the plaintiff, his family has been living in the Lot well before his birth.  He and his siblings were all born and raised there.  Whilst his mother brought the children, including him, to Kowloon for her work and their education in mid-1950s after the death of their father, she returned to live at the Lot in mid-1960s.  In about 1984, the plaintiff also moved back to the Lot to join his mother.  The two of them have since continued to live there.  Throughout the years, the occupation of the Lot by his family has been without interruption or interference by anyone until 2015.

13.According to the plaintiff, his family has all along treated the Lot as their own property.  Since his return to live with his mother in 1984, the plaintiff has treated the Lot as his own.  He has been paying for the government rent and rates as well as the utility expenses.  He has also caused works to be done to repair, maintain and improve the building structures on the Lot as well as to guard the Lot against outsiders.  The works carried out between 1984 and 2014 consisted of:-

(1)  changing the wooden door at the main entrance to iron gates;

(2)  erecting fences and gates at the backyard;

(3)  keeping the building structures in good repair, including fixing the ceiling, replacing the water pipes, repairing the walls, gates and window frames, installing roof tiles, restoring flood damage, replacing the electrical wiring and renovating the interior; and

(4)  erecting a mail box for Nos 158 and 160 at the wall of their main entrances.

14.The plaintiff claims that by way of adverse possession since 1984, he in his own name has acquired possessory title of the Lot.  By virtue of sections 7 and 17 of the Limitation Ordinance, Cap 347 (“LO”), the title of the defendants in the Lot has thus been extinguished.

15.Alternatively, the plaintiff claims that the defendants had or ought to have knowledge about the occupation of the Lot by the plaintiff and his family as such occupation was open and notorious for a substantial period of time.  The defendants or their predecessors in title had never visited the Lot or exercised any control over the Lot throughout the past decades.  By reason of the detriment the plaintiff has suffered in expending on the works and improvement on the Lot on the belief that he owned the Lot, the defendants are estopped from claiming the Lot from him^[3].

THE DEFENCE

16.The defendants put the plaintiff to proof of the alleged continuous and exclusive possession of the Lot by his family and then him over the relevant period.  Insofar as the family history and relationship between the parties are as alleged, the defendants contend that the plaintiff and his family would have occupied the Lot under an implied licence from the defendants’ predecessors in title.

17.The defendants also contend that the plaintiff and his family occupied the Lot pursuant to the licence of the Lands Department under the squatter control policy.

18.The defendants also raise the issue of illegality on the ground that the building structures on the Lot are said to have been erected in breach of the user restriction of the government lease and without approval and thus contrary to the Building Ordinance, Cap 123 (“BO”).

WITNESSES

19.The plaintiff gave evidence.  His mother has made a witness statement back in January 2019.  However, the plaintiff decided not to call her to testify at the trial, on the ground of her advance age and recent frail physical and mental condition.  In support, the plaintiff produced a hospital certificate from his mother’s treating doctor and a psychiatrist’s report.

20.The treating doctor stated in his certificate that as at May 2020, the plaintiff’s mother, 96 years old then, was bedbound and had to rely on tube-feeding.  She was inadequately responsive.  To the extent that they were findings and observations of the treating doctor, I am prepared to accept them for explaining the decision of the plaintiff not to call her as a witness.

21.The plaintiff also engaged a psychiatrist to examine his mother in June 2020.  According to the report, the condition of the plaintiff’s mother has deteriorated and been repeatedly hospitalised since late 2019^[4]. He gave his opinion on her mental state, which in essence confirmed that she was incapable of testifying in court.  However, in the absence of prior leave and directions, a party should not assume that the court would readily receive expert evidence merely for apparent relevance.

22.That said, acknowledging that he could not rely on his mother’s witness statement as evidence of its content when she was not called, the plaintiff volunteered that the statement should be expunged.  This met with the expectation of the solicitors for the defendants as expressed in their letter dated 23 June 2020.  However, a week before the trial, the defendants changed their stance and sought to rely on the witness statement of the plaintiff’s mother or, to be precise, the specific part that Mr Chan for the defendants referred to as what should be taken as evidence against herself.

23.What Mr Chan had in mind was what the Court of Final Appeal said in respect of intention to possess in the context of adverse possession in Wong Tak Yue v Kung Kwok Wai David & Anor (No 2) (1997-98) 1 HKCFAR 55 at 69A-C:-

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

Where the occupier has made self-serving statements as to what was his intention, whether during the period of occupation or when challenged in legal proceedings, the courts should approach them with some skepticism.  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.”

24.Insofar as admissibility is concerned, there is no question of segregating the content of the statement into what is self-serving or against the maker of the statement.  Admissibility relates to its entire content.  Insofar the weight to be given to the statement as evidence of its content is concerned, this will have to be assessed as any hearsay evidence in the absence of verification by its maker.  When it comes to the part of the statement concerning the issue of intention to possess, the assessment should further adhere to the principle explained in Wong Tak Yue (above).

25.The decision not to call the plaintiff’s mother to testify was not unexplained.  Mr Chan asks this court to draw adverse inference for the alleged unexplained failure of the plaintiff to make a prompt application to take deposition evidence from his mother earlier. In the circumstances as explained above, I decline to do so.  That said, the plaintiff must bear the consequence of giving verbatim evidence solo for the purpose of discharging his burden of proof.

26.All the defendants gave evidence.

27.Surveyor’s expert evidence was adduced in respect of (i) the demarcation and identification of the location and boundary of the Lot as well as the structures, features and objects therein; and (ii) interpretation of the relevant historical aerial photographs of the Lot between 1940s and 2016 regarding (i).  The experts differed mainly in respect of the western boundary of the Lot.  For that, they were called to testify.

ADVERSE POSSESSION

28.The alleged adverse possession occurring prior to 1991, the relevant limitation period is 20 years.  The applicable section 7(2) of the LO provides that:-

“No action shall be brought by any other person to recover any land after the expiration of 20 years from the date on which the right of action accrued to him or, if it first accrued to some person through whom he claims, to that person.”

Section 17 provides that:-

“… at expiration of the period prescribed by this Ordinance for any person to bring an action to recover land (including a redemption action), the title of that person to the land shall be extinguished.”

29.The plaintiff must have had factual possession and the requisite intention to possess the Lot continuously for not less than 20 years prior to the commencement of the present action.  It is the plaintiff’s burden to prove these pre-requisites of adverse possession, and the defendants have no burden of proving or disproving anything other than any positive assertions actually made: see Powell v McFarlane (1979) 38 P&CR 452; Wong Tak Yu (above); Cheng Ka Shing v Bonus Plus Company Limited [2020] HKCFI 277; Tang Moon Lam v Tang Ying Yeung [2019] 5 HKLRD 556.

30.Factual possession of land must be single and conclusive, though there can be a single possession exercised jointly or vicariously (ie on behalf of others): see Powell v McFarlane (above); Chan Mei Lin & Ors v Lee Hong [2018] HKCFI 2441 at §§76-77.  Intention to possess refers to that of the squatter in his own name and on his own behalf to exclude the world at large, including paper title owner, so far as is reasonably practicable and so far as the process of the law will allow.

31.Against the background of alleged occupation of the Lot by the plaintiff’s family, including that by his mother and him since his return to the Lot in 1984, the plaintiff is now claiming adverse possession in his own name and on his own behalf, and not jointly with his mother (who is in any event not a plaintiff).  It is his burden to prove precisely such factual possession with the unequivocal manifestation of such intention vis-à-vis his mother and the world at large.

The evidence

32.The plaintiff gave what was essentially a hearsay account from his mother of how his family first came to occupy the Lot.  This started with his father, Tsang Tung.

33.As the plaintiff understood from his parents, the Lot was originally owned by his grandfather, Tsan Hei, but was said to have been swindled out of him at one stage.  It was not until after the passing of Tsan Hei when Tsan Yung, his son, managed to regain title to the Lot.  The transfer of mortgage dated 1916 mentioned above refers.  Such understanding is actually accurate.

34.Tsan Yung then caused the building structures to be erected on the Lot, which then housed his mother, ie the plaintiff’s grandmother, Madam Tsan Wu (“the Grandmother”), the plaintiff’s father and another uncle of the plaintiff.  At that time, Tsan Yung apparently lived in the same street in Tai O^[5]. That other uncle of the plaintiff is said to have moved out and emigrated to Malaysia subsequently in the 1940s.

35.The plaintiff’s parents were married in 1943.  That was when and how the plaintiff’s mother moved into the household at the Lot.  The plaintiff’s father worked in Kowloon.  The plaintiff’s mother looked after the Grandmother at home.

36.There was in fact one more member of the household, Madam Cheung Sui Fan (“Cheung”), who was then adopted by the Grandmother.  However, the plaintiff regarded Cheung as his adopted elder sister.

37.The plaintiff understood from his mother that the Grandmother was very fond of her.  The Grandmother had also expressed that the plaintiff’s family could continue to live at the Lot without any consideration.  Such alleged expression would be made during the few years before the Grandmother passed away soon after the war ended in 1945.  In the coming years when the plaintiff and his siblings were growing up, the plaintiff’s mother is said to have mentioned to them the Grandmother’s such express intention every now and then.

38.After the death of the Grandmother as mentioned above, the plaintiff’s parents and Cheung continued to live at the Lot.  The plaintiff and his four siblings were born there as well.  The plaintiff ranked the third in seniority, and was born in 1949.  The children were all raised at the Lot.

39.What happened since childhood were matters that the plaintiff should gradually be able to tell from his own knowledge.  That included the passing of his father in 1955 when he was 6 years old.  For work and the education of the children, the plaintiff’s mother and her children moved out of Tai O to Kowloon in 1957.  This happened when the plaintiff was 8 years old.  Cheung continued to live at the Lot and, according to the plaintiff, had seldom left Tai O.  The plaintiff’s family would return to Tai O during holidays and festive occasions when they would also stay at the Lot overnight.

40.Upon graduation from secondary school, the plaintiff joined the civil service in 1966.  The plaintiff’s mother then decided to move back to Tai O.  She did so, and rejoined Cheung at the Lot.  By the 1980s, the plaintiff’s siblings had also emigrated to the USA and Australia.  Only his youngest sister, Tsang Yuet Ho, and her family still live in another street in Tai O.

41.In 1984, Cheung passed away.  The plaintiff was then in his mid-30s.  The plaintiff decided to move back to Tai O to take care of his then 60-year-old mother.  For that, he succeeded in securing his transfer to the Agricultural and Fisheries Department for work at the Lantau Country Park, so that he could work close to home.  He continued to work as such until his early retirement in 2001.  He has also been living with his mother at the Lot since 1984.

42.According to the plaintiff, House 158 is now used for storage, the structure behind it had collapsed and the debris was cleared by him when he returned there.  House 160 contains the sitting room and its cockloft houses the bedrooms of his and his mother.  The tile-roof structure behind House 160 houses the kitchen and bathroom.  The plaintiff gave a description of the state and use of the structures as well as their transition over the years.

The documentary evidence

43.The first available aerial photograph of the Lot was dated 1956.  The parties’ surveyors are basically ad idem in their reading of the photographs and the historical use of the Lot depicted.  The photographs show the already existence of the building structures in the Lot, including what are known as Houses 158 and 160, and the changes in their aerial appearance since 1956.  The Lot was enclosed by freestanding walls, houses and structures since 1956.

44.The plaintiff produced photographs of the recent state of the Lot and the exterior and interior of the building structures.  According to him, the photographs were taken after the first attempt by the defendants’ surveyor to carry out site survey and the letter from the defendants’ solicitors in September 2015.  The reliability of the photographs is questioned.  They are said to have failed to depict every corner of the interior, in particular the bedrooms on the upper floor of House 160. The installation of a single air-conditioner unit on the upper floor of House 160 for two bedrooms also raised suspicion.  The plaintiff was also admittedly unable to produce any photograph at all depicting the life of his family at the Lot in the early years.  According to the plaintiff, all the old photographs had been lost in floods at Tai O, including the serious flood caused by the typhoon in 2010 which caused serious damage to the houses and the properties inside.

45.The plaintiff claimed that he had maintained and improved the building structures over the years as pleaded.  In support, he produced some invoices and receipts.  Those invoices and receipts were addressed to “師爺“ which, according to the plaintiff, was one of his nicknames in the neighbourhood or addressed to his brother-in-law (husband of Tsang Yuet Ho) or the Tsang family or simply no named addressee.  They were according to the plaintiff for works done to the Lot.

46.The plaintiff also produced various utility bills, including government rent and rates demand notes, electricity bills, and telephone bills as evidence of occupation of the Lot. None of them shows that the plaintiff was the registered account holder.  The government rent and rates demand notes prior to 1984 in respect of House 158 were addressed to Tsang Woon Chuen, the plaintiff’s younger brother.  Whilst, according to the plaintiff, his brother has emigrated to Australia in the early 1980s, the demand notes were still addressed to his brother “c/o” the plaintiff at the then Birth & Death Registry located in Central, Hong Kong. According to the plaintiff, that was when he was temporarily posted at the then Birth & Death Registry.  Three months later, the plaintiff returned to his original office at the Immigration Department.  The correspondence address was not updated, but the mail had since been redirected to the plaintiff.  Change had apparently been effected prior to 1993, as a demand note dated that year was addressed to the plaintiff personally at the Lot’s address.  All the government rent and rate demand notes in respect of House 160 were addressed to the plaintiff’s mother.

47.The electricity bills produced up to late 2015 in respect of House 158 and House 160 were respectively addressed to the plaintiff’s mother and his brother-in-law.  The water bills produced in respect of House 158 and House 160 were addressed to the plaintiff’s brother-in-law and his wife, the plaintiff’s sister, respectively.  As mentioned, the couple lived in another street in Tai O.

48.Notwithstanding the apparently random arrangement of the registered account holders of the various utilities, the plaintiff was adamant that it was he who made the payments since his return to Tai O in 1984.  According to him, the arrangements involving various members of the family happened to be so made because of the circumstances and convenience at the particular points of time, and no one cared to put the record right so long as the utilities were paid.  Notwithstanding the various account holders, these demand notes and utility bills were all addressed to the Lot.  They must have been received at the Lot and kept, before they could be produced by the plaintiff.

49.Mr Chan is right in saying that the above documents per se do not prove the exclusive possession or intention to possess.  Nor does the fact of payment of the utility expenses: see Chan Wai Yee v Kwong Wai Pui, the Administrator of the Estate of Wong Chiu aka Kwong Wong Chung (or Gine), Deceased [2020] HKCFI 1680 (31 July 2020).

50.Further, these documents alone could not serve the plaintiff’s purpose unless they are explained as, except for the pension documents that will be discussed below, these documents on their face did not readily connect him in his own name to the Lot.  As to the explanation, there was only the plaintiff’s words.  He adduced no evidence from his neighbours in the same street or his sister or brother-in-law mentioned above who live in Tai O.

51.The pension payment advices and the return of pension of the plaintiff mentioned above were disclosed in the middle of the trial.  Such move was no doubt exceptional.  First, late discovery of documents must be explained.  Second, the documents had to be relevant to and necessary for the fair resolution of the dispute between the parties.  Third, the court would consider the prejudice to the receiving end of the lately disclosed documents.  The consideration in each case depends on its own circumstances: see for instance Hong Lok School Limited & Anor v Chow Sai Yiu & Anor [2003] 2 HKLRD 782; Winpo Development Limited v Wong Kar Fu & Ors, HCA 3541/1993; HCA 2228/2011 (20 September 2017); CAMP 32/2017 (16 November 2017); Lee Bing Cheung v Secretary for Justice, HCA 1092/2010 (21 February 2013).

52.Apparently, the plaintiff had no intention of relying on the pension payment advices, and his legal advisors had no idea about their existence beforehand.  The plaintiff explained that by way of affirmation.  The fact was that it was Mr Chan who brought about the issue of existence of such documents, amongst other documents, in his cross examination of the plaintiff.  Indeed, as a pensioner of the civil service since 2001, one would have expected the existence of such documents.  The plaintiff confirmed that during cross examination, and hence his immediate search for them.  This in essence explained the lateness of the discovery of these documents.

53.The surprise caused by such application to the defendants should therefore be viewed in the light of how this issue came about.  If this issue were left at that after cross examination, I would not be surprised that Mr Chan would have submitted that all the plaintiff said in this respect was not supported by documents that would have been expected to exist, and should therefore be disregarded.  It could also have been argued that adverse inference might be drawn against the plaintiff on the basis that such documents, if not in fact contrary to his assertions, would have been disclosed.  The relevance of them to the fair resolution of the dispute, in my judgment, should be obvious.

54.It therefore boiled down to the question of prejudice in terms of whether the defendants had a fair opportunity to deal with them.  It depends on various considerations, including the nature of the documents and whether or not they are self-explanatory.  Any possibility of derailing of the trial would add to the prejudice.

55.Apart from objection, the defendants were not expected to be in a position to contribute materially in terms of their instruction regarding these newly disclosed documents.  The documents were apparently issued in standard forms by the Treasury.  The originals were made available for inspection.  Clarification, if so advised, could fairly be sought by way of recalling the plaintiff for cross examination.  On the face of the documents, the only apparent query would seem to relate to the spelling of the plaintiff’s address stated in those documents.  The address of the plaintiff on the documents was invariably written as “Tai Pins Street” as opposed to “Tai Ping Street”.

56.On balance, I came to the view that the plaintiff should be allowed to rely on those documents on condition that the plaintiff could be recalled and would bear the incidental costs.  The plaintiff was therefore recalled.  Not unexpectedly, the obvious typographical error in the address on these documents hardly cast doubt on their integrity as documentary evidence.  One cannot ignore the very fact that notwithstanding the misspelt address, the documents have indeed reached the plaintiff at his address at the Lot.

57.In the same application, the plaintiff also sought to adduce his China Return Permit.  Completely unlike the circumstances surrounding the pension payment advices explained above, this was rather an attempt out of the blue.  The document was not self-explanatory of what about it that the plaintiff might intend to rely on.  The document was also not issued by Hong Kong authority.  It was impossible for the defendants to properly consider how to deal with such new evidence.  I therefore refused leave to adduce this document.

Possession with the requisite intention?

58.Insofar as the history of occupation of the Lot is concerned, I am prepared to accept what the plaintiff said was true.  I also find that the plaintiff did make such work arrangement with the civil service for his transfer to Tai O in 1984 so that he could return to live with his mother.  On the available evidence, I have no basis for suspecting that the plaintiff might have any residence in or out of Tai O other than the Lot, since his transfer there in 1984.

59.However, the above finding per se does not suffice for the plaintiff’s purpose, as he is claiming possession of the Lot since 1984 in his own name and on his own behalf without permission or consent from anyone.

60.The objective fact was that the household occupying the Lot after mid-1910 and even after the 1940s comprised various members.  The plaintiff was away from the Lot at his tender age in 1957.  Since then until 1966, the Lot continued to be occupied by Cheung and her alone.  In 1966, the plaintiff’s mother returned to join Cheung at the Lot.  That continued until 1984 when Cheung passed away and the plaintiff returned to join his mother at the Lot.  Since then, the plaintiff and his mother have been occupying the Lot for three decades.  The occupation of the Lot until 1984 had been always been joint.  So has the occupation been since 1984.

61.The plaintiff must therefore assert and prove how it was against such occupation history that he came to have possession of the Lot in his own name and on his own behalf to the exclusion of the world at least since 1984.  Mr Chan is correct in pointing out that no assertion of such basis was actually made in the plaintiff’s pleading. The plaintiff sought to make such assertion only by way of evidence.

62.In both witness statements of the plaintiff and his mother, it was asserted that when the plaintiff moved back to the Lot in 1984, his mother, considering her age, decided to “pass” the Lot to the plaintiff to continue the adverse possession which she had had of the Lot by then.  Hence the commencement of the plaintiff’s adverse possession of the Lot on his own behalf.

63.Such assertion gives rise to two issues:  first, whether and, if yes, how the plaintiff’s mother came to consider herself to be in a position to “pass” the Lot to the plaintiff for the purpose of continuing her alleged adverse possession; and second, whether and, if yes, how the plaintiff manifested that he began to possess the Lot in his own name and on his own behalf to the exclusion of the world at large in 1984.

64.In line with the applicable principles, there must be compelling evidence of the plaintiff’s assertions. Existence of the requisite understanding is judged not only by evidence of the subjective intention of the occupier but also objective scrutiny in the circumstances: see Albert Smith v Peter Waterman [2003] EWHC 1266; Wong Tak Yue (above).

65.It is against the history of the joint occupation by the family of the Lot in the present case that the understanding of the members of the family at the relevant time must be considered.  Hence Mr Chan’s reference to the approaches adopted in authorities such as Bannerman Town v Eleuthera Properties Ltd [2018] UKPC 27 and Re Faulkner [2003] NICA 5 (7 February 2003).  Each case of course still depends on its own facts.

66.The defendants claim no knowledge about the plaintiff or his family.  His alleged relationship with their family came to be known only because of the present litigation.

67.The plaintiff managed to tell that Tsan Yung had a property at Kut Hing Street in Tai O.  The Tsang family ancestors were buried near Tai O Ling Yan Monastery.  Every year, Tsan Yung would lead the ancestral worship during Ching Ming and Chung Yeung Festivals, which he would sometimes ask the plaintiff to assist in arranging.  After Tsan Yung passed away in 1970, the plaintiff reckoned that Tsan Yung’s descendants had not carried out such ancestral worship in Tai O anymore.

68.The plaintiff also managed to tell that Tsan Yung lived near Tai Ping Road and Waterloo Road^[6], and later Kadoorie Hill, in Kowloon.  Because of the generous financial assistance provided by Tsan Yung to the plaintiff’s family after the passing of the plaintiff’s father in mid-1950s, the plaintiff’s mother and the children respected this uncle.  The mother would also take the plaintiff and his siblings to visit Tsan Yung at his Kowloon residence during Lunar New Year and birthday occasions.  The plaintiff recalled having met and talked to the first two defendants in this action on those occasions.   That must be when the 1^st and the 2^nd defendants were quite young.  This kind of visits continued until after the passing of Tsan Yung’s wife a few years after the death of her husband.

69.Whether the 1^st and the 2^nd defendant genuinely could not recall the interaction between the families of the plaintiff and theirs, I find it to be most unlikely that the plaintiff managed to fabricate the above evidence if he and his family were indeed strangers to Tsan Yung’s branch of the family.  The 4^th to the 6^th defendants, which belong to the generation further down, might genuinely have no personal knowledge in this respect though.

70.It is apparent that Mr Chan does not labour on the stance of his clients of denying the alleged family relationship between the two branches of the Tsan family.  His argument is that the family relationship and history between the parties alleged by the plaintiff would work against the plaintiff’s own case of the requisite intention of adverse possession.  The reason is that if established, such family background and relationship between the parties would suggest that the occupation of the Lot by the plaintiff’s family was always pursuant to the permission or licence by the owners from the defendant’s branch.  Implied licence is the indeed the pleaded alternative contention of the defendants.

71.The defendants’ contention in respect of consent by their branch of the Tsan family is not without basis. Whilst the plaintiff claims no actual knowledge about the title to the Lot and its devolution, one thing that the plaintiff’s parents, and he, have learned about in this respect was factually accurate.  That was the fact that Tsan Yung acquired the title to the Lot in mid-1910 (or 1916 to be precise).  That was precisely when and how the Grandmother (ie mother of Tsan Yung), the plaintiff’s father and the plaintiff’s another uncle came to be able to occupy the Lot by residing in the building structures erected there.  Such arrangement for the occupation of the Lot by the Grandmother’s household must be known and approved by Tsan Yung, her son.  Further, with the then address of Tsan Yung was also in the same street, it will be unrealistic to suggest otherwise.

72.The plaintiff’s mother moved into the household on the Lot in 1943 as the wife of the plaintiff’s father.  That must have happened with the blessing of the family, if not the Grandmother as the household head and the mother of the plaintiff’s father.  It will also be unrealistic to suggest that Tsan Yung was not aware of that or had objection about that.

73.According to the plaintiff (and his mother), the Grandmother expressed to his mother that the plaintiff’s family could continue to live at the Lot without any consideration.  Such representation of the Grandmother could only be made, if at all, during the few years between 1943 and the death of the Grandmother soon after mid-1940s.  Even assuming the representation was intended to be the Grandmother’s declared wish to be honoured after her death, the fact then known to all was that besides the plaintiff’s parents, at least Cheung was also living in the same household.  It follows that the representation about the continuation of occupation of the Lot could only be intended to apply to the household instead of the plaintiff’s parents to the exclusion of Cheung.

74.Cheung became a member of the family because she was adopted by the Grandmother.  In other words, both the plaintiff’s parents and Cheung came to live in the Grandmother’s household because of the latter’s blessing.  In the circumstances, any suggestion of understanding that Cheung’s well-being, including her right to remain in the household, would somehow change to become subject to the blessing of the plaintiff’s parents after the Grandmother’s death would be artificial, if not inherently incredible.

75.When it came to his evidence in court, the plaintiff said that what he understood from his mother was that the Grandmother actually “gave” the Lot to his mother.  This materially differs from the understanding of the plaintiff’s mother, and thus the plaintiff, discussed above.

76.There is no question that the Grandmother, albeit assumed to have acted like the head of the household at the Lot, was not in a position to give away the Lot at the time, when the fact understood by the members of the family, including the plaintiff’s parents, was that it was Tsan Yung who regained the title to the Lot.  That aside, that the Grandmother would represent that she “gave” the Lot to the plaintiff’s mother, when her son, husband of the plaintiff’s mother, was very much alive and living in the same household, per se was most unusual in those days.

77.It is argued on behalf of the plaintiff that it matters not whether the plaintiff’s mother might have acted on her mistaken belief as a result of the Grandmother’s representation.  What matters, it is argued, is that she did act on such belief and occupied the Lot as if she were the owner.  But did she indeed act on such belief?  Again, this must be scrutinized objectively.

78.The fact was that after the death of the Grandmother, the plaintiff’s father continued to live in the Lot until he passed away prematurely years later.  The fact was also that Cheung and the plaintiff’s parents, together with their family growing with the new born children, including the plaintiff, in the following years, continued to occupy the Lot.  While the plaintiff’s mother moved out of Tai O with her children in 1957, Cheung, who came to reside in the household at the Lot pursuant to the blessing of the Grandmother who adopted her, continued to live in the Lot as before.  It was after nearly a decade (in 1966) when the plaintiff’s mother moved back to the Lot.  She and Cheung then continued to live together in the Lot for another 18 years before Cheung passed away in 1984.

79.There is no assertion or evidence of any manifestation of the understanding (or misunderstanding) on the part of the plaintiff’s mother in terms of the effect of such alleged representation of “giving” of the Lot by the Grandmother to her throughout this period of four decades starting from the death of the Grandmother in the 1940s in the circumstances mentioned in the preceding paragraph.  Nor is there assertion or evidence of such understanding amongst the surviving members of the household. The fact was that these members of the household simply continued to occupy the Lot as they did before the death of the Grandmother until 1984.  That they would return to gather at the Lot, where Cheung was occupying, during holidays and festive occasions between the mid-1950s and the 1980s might be manifestation of their regarding the Lot as their old family home but not the requisite intention on the part of the plaintiff’s mother to possess the Lot in her own name and on her own behalf to the exclusion of the others.

80.In the circumstances, it is not mere misunderstanding on the part of the plaintiff’s mother of the Grandmother’s representation or its effect.  The very assertion of the understanding that the Lot was “given” by the Grandmother to the plaintiff’s mother is inherently and objectively incredible.

81.When at no stage before 1984 could the plaintiff’s mother be viewed as having been possessing the Lot with the requisite intention on her own behalf to the exclusion of the world, the self-serving assertion that she had adverse possession of the Lot by then as well as conceived and articulated the “passing” the Lot to the plaintiff for the purpose of continuing her adverse possession with effect from 1984, in my judgment, is artificial and equally incredible.

82.When his purported reliance on the alleged right of his family or specifically his mother in the Lot by then does not align with the historical facts, the plaintiff’s case on adverse possession of the Lot since his return there in 1984, as advanced, becomes weak, if not impossible.  That said, has he in any event commenced possession of the Lot with the requisite intention in his own name and on his own behalf to exclude the world including the paper title owner since his return there in 1984?

83.If anything, the plaintiff, in my judgment, returned to join his mother in occupation of the Lot, which the mother has been occupying together Cheung for the last 18 years since her return there in 1966.  Any assertion that the plaintiff did so with the intention to possess the Lot on his own behalf to the exclusion of the others, and not jointly with his mother, would require much objective evidence of manifestation.

84.Even between the plaintiff and his mother, there is insufficient, if any, evidence of manifestation of such understanding that upon his return in 1984, his mother became occupying the Lot either pursuant to his blessing or on his behalf as if he became the person with whom the right to possession began to lie.  Clearly, the admittedly random arrangement of the registrations of utility account holders in respect of the building structures on the Lot other than him does not help to advance the plaintiff’s case.  The fact that he settled the utilities charges in respect of the Lot does not either.  Nor does the fact that he caused the repair and maintenance works to the building structures on the Lot.  These were by nature daily financial obligations incidental to occupation of the Lot, which the family has been doing over the past decades.  There is no assertion or evidence that the mother used to undertake such obligations, which were taken over by the plaintiff upon and because of his return to the Lot in 1984 (and not before).  Nor is there assertion or evidence that any part of such repair and maintenance work done to the building structures on the Lot as well as the incidental expenses materially exceeded what would have been expected for maintaining the basic habitable condition of the Lot for the joint occupation by the plaintiff and his mother.  This is somehow borne out by the evidence in respect of the current state of the building structures on the Lot.

85.In the circumstances, whilst the plaintiff has been one of the two occupiers of the Lot since 1984, he fails to establish by compelling evidence that he has been possessing, with the requisite intention to possess, the Lot in his own name and on his own behalf to the exclusion of the world at large since 1984.

Implied licence

86.As mentioned, the defendants have a further contention in displacing the plaintiff’s alleged intention of adverse possession of the Lot.  This is their alternative contention of implied licence, which is based on the family background and relationship between the parties’ respective branches of the Tsan family, if so found by the court.  The law is clear in that possession pursuant to the consent or licence of the paper title owner is not adverse: see Cheung Chung Yan v Chan Man Kwong, CACV 268/2003 (12 February 2004) at §17.  Here the defendants contend that the plaintiff and his family have occupied the Lot with the implied consent of the owners until they became aware of their property rights in the Lot in about 2014.

87.To reiterate, Tsan Yung acquired the title to the Lot in 1916.  In 1969, Tsan Yung assigned the Lot to their family company, Yung Hing, of which the members of the Tsan family including Tsan Yung, his wife and Madam Luk were shareholders.  In 1981, Yung Hing assigned the Lot (with other lots) to Madam Luk to hold on trust for her children.  The defendants contend that it can be inferred from the circumstances that at all material times, the occupation of the Lot by the plaintiff’s family, including lastly the plaintiff and his mother, was always with the consent or implied licence of Tsan Yung and his successors in title. This continued to be the case until after the passing of Madam Luk, and stopped only after the defendants became aware of their property rights in the Lot in the latter half of 2014.

88.The law does not imply the grant of licence by the landowner by mere silence or passive acquiescence.  There must be overt acts on the part of the licensor referable to a licence having been granted to give rise to an implication by conduct: see Hong Kong Kam Lan Koon Ltd v Realray Investment Ltd, HCA 15824/1999 (11 October 2007) at §127; Poon Chi Hang v Lai Ho Sun [2019] HKCA 734 at §31.  See also Sarah Sally Chan Kent v Chim Sau Ching [2019] HKCFI 3066 at §§28-29.  It is a matter of finding or inference as the facts of the case permits the court to make: see for instance Kam Lan Koon (above) at §132; Cheung Chung Yan v Chan Man Kwong & Ors, CACV 268/2003 (12 February 2004) at §§16-17.

89.As mentioned, the Grandmother (and later Cheung as well) and the plaintiff’s father must realize that they came to reside at the Lot, which was a family property (re)acquired by or through Tsan Yung after the mid-1910s.  Tsan Yung must therefore have knowledge and consent about the occupation of the Lot by his mother’s household.  He must also know the entry of the plaintiff’s mother, by virtue of her marriage with the plaintiff’s father, into the household on the Lot in 1943.  There is no reason for believing that that was anything but an extension of the pre-existing basis on which plaintiff’s father managed to reside there.  This is reinforced by what happened after the passing of the plaintiff’s father in mid-1950s.

90.Therefore, that the occupation of the Lot by the members of this household had never been interfered with was only consistent in the circumstances from the outset.  That the occupation of the Lot by the plaintiff’s family (and Cheung) after the passing of the plaintiff’s father in the 1950s never came about as a topic during the interactions between the plaintiff’s mother and Tsan Yung’s family, as it was confirmed by the evidence in court, was also consistent in the circumstances.

91.Insofar as the property right to the Lot is concerned, Madam Luk entered into the picture as a shareholder of the family company of Yung Hing upon the assignment in 1969.  Such assignment did not alter the nature of the Lot as a family property.  Tsan Yung himself remained a shareholder.  Madam Luk remained a shareholder of Yung Hing until the latter assigned the Lot, together with other properties in Tai O, to Madam Luk in 1981 to hold on trust for her children.  All those happened when the Lot was still occupied by Cheung and, since 1966, the plaintiff’s mother as well.

92.According to both the plaintiff and the defendants, Madam Luk had not been seen visiting the Lot or even Tai O.  According to the defendants, Madam Luk did not even mention to them the family wealth including the lots of land in Tai O.  However, the circumstances suggest that she should be aware of the Lot and its occupation by the plaintiff and his mother.

93.Madam Luk was the daughter-in-law of Tsan Yung.  As a member of Tsan Yung’s family, she had social interactions with the plaintiff’s mother throughout the years.  As the plaintiff’s mother claimed (in her statement), she would mention to Madam Luk her joy of witnessing the plaintiff becoming a civil servant in the 1960s.  Madam Luk maintained telephone contact whereby the plaintiff’s mother would inform Madam Luk of the life of the plaintiff’s family in the Lot and Tai O.  The plaintiff also clearly recalled one episode in 1986-1987 when Madam Luk telephoned him at Tai O, and asked for his assistance to address the request by the Tai O rural committee to remove a problem tree at a lot that she held at Shatin Village, Tai O.  The plaintiff reckoned that she thought that he could be of assistance, being both a resident at Tai O and a civil servant at the Agricultural and Fisheries Department there.  Indeed, the plaintiff deployed his connection and arranged workers to remove the tree, and thus satisfactorily resolved the matter for Madam Luk then.  All those interactions sufficed to bring the plaintiff’s mother to say in her witness statement that her family was closely related to the family of Tsan Yung, who acquiesced her family’s occupation of the Lot.

94.That said, the plaintiff in the same statement of his somehow suggested the (alternative) understanding that Madam Luk had abandoned the Lot.  There is really no place for the contention of abandonment.  From the perspective of Madam Luk, abandonment of right to any of the lots transferred to her in 1981 for the benefit of her children under the trust would be a non-starter as a matter of fact.  From the perspective of the plaintiff and his mother, it is also unlikely that either of them would have obtained the impression that the Lot was abandoned when the plaintiff’s mother and Madam Luk, who knew of their occupation of the Lot, had maintained all those telephone contacts throughout the years.  Insofar as what might appear to be inaction on the part of Madam Luk is concerned, it is trite that an owner of land is not required to do anything to assert her property right: see Wong Tak Yue (above).

95.In line with the principles, as suggestion of understanding contrary to an intention of adverse possession, such statement of the plaintiff and his mother should be given due weight. That would suffice for the purpose of the defendants.  Insofar as this is necessary, the circumstances, in my judgment, also afford the basis for implying a licence from the title owner of the Lot, starting from Tsan Yung, for the occupation of the Lot by the members of the family household known to them.  Such consent or licence has since continued, notwithstanding the subsequent transfers of the Lot that never left the defendants’ branch of the Tsan family.

96.To assert adverse possession of the Lot against the above background, it would be up to the plaintiff to assert and to establish what he or his mother has done that unequivocally manifested to the world, including the paper title owner, an unilateral change in the understanding on their part from before ie occupation with consent or licence: see Hong Kong Kam Lan Kook Limited (above); Cheung Chung Yan (above) at §22; Cheung Leung Tak v Cheung Chi Hung & Anor [2018] 5 HKLRD 579 at §74.

97.The fact, as mentioned, was that the plaintiff’s mother (since 1966) and the plaintiff (since 1984) simply continued to occupy the Lot as before.  They continued to pay the incidental utility expenses as before.  The works that the plaintiff has caused to be done to the building structures, as mentioned, did not appear to exceed what would have been basic upkeep and maintenance necessitated by the passage of time to enable reasonable habitation by him and his mother.  In the circumstances, the plaintiff fails to discharge such burden of proof.

Squatter control registration

98.The defendants refer to the fact that certain structure on the Lot has once been subject of registration under the squatter control policy of the government.  The nature of the registration was explained by the court in Chong Hing Bank Limited v Fairview City Limited & Anor, HCMP 3225/2014:-

“50. … the Squatter Control Policy was established to deal with the problem posed by illegal squatter structures rather than the land itself. After the registration of these structures, any alteration to the location, dimensions, materials and usages would result in the demolition and removal of the structures, and not the vacation of the land in question. In other words, the registration of an illegal structure should at most be construed as an implied licence to maintain the illegal structure on a piece of land.

51. … the registration under the Squatter Control Policy applied to illegal structures both in Government and private leased agricultural lands. The Government’s tolerance of “unauthorized building structures” in private land, which is the case here, did not constitute any licence, consent or even tolerance of the squatters’ occupation of such land.”

99.Insofar as the defendants suggest that the plaintiff and his family came or continued to occupy the Lot pursuant to a licence implied by the squatter registration by the government, that could at most relate to the building structure but not the land itself.  The contention that the government granted a licence for the plaintiff or his family to occupy the Lot, which is not government land, is also not appealing.  This contention was not pressed ahead with in the closing submission on behalf of the defendants.

Illegality

100.The defendants contend that the illegality arises out of these circumstances: (i) use and erection of building structures on the Lot for purposes other than the restricted user of agriculture and garden under the government lease such as human habitation; and (ii) the building structures were erected on the Lot without approval pursuant to the BO (though it is unclear which version of the BO is said to be applicable in the circumstances of the present case).

101.The block government lease covering the Lot provided that the lessee or any person should not erect or construct any building or structure on the Lot without first obtaining approval.  However, the schedule to the lease contained remarks of “House” erected on the Lot and “Superstructure allowed”.  Mr Yuen submits that these are signs of approval or acquiescence on the part of the government to the house or structure on the Lot then.  This interpretation is possible.

102.Even assuming that the building structures on the Lot were erected in prima facie breach as contended by the defendants, the precise effect of that must still be considered in the context of the present contest as one in respect of the possessory title of the Lot between the parties only.

103.Similar issue of illegality was raised and considered in my earlier judgment in the Court of First Instance case Choy Kuen Chi v Tat Fung Enterprises Company Limited, HCA 915/2011 (20 July 2015).  In that case, I (sitting as DHCJ) proceeded on the basis that the structures in question were erected without compliance with the applicable BO.  Considering the authorities, I suggested various legal propositions (at §69).  I also said (at §70):-

“As mentioned, the courts have expressed reservation about the authoritative value of Wan Hoi Taoist Association (above). However DHCJ Carlson was acutely conscious of the relevance of illegality to the claim for adverse possession in that case. He reckoned that where the act of possession itself is illegal, then the policy of the law is that possession and time cannot run against the legal owner. One may say the learned judge’s formulation lacked detailed explanation (which, as the learned judge explained, was not called for in that case). Nevertheless, this is not to say that such conclusion on the requirements of public policy behind the criminality of the very act of possession is not likely. More importantly, the learned judge did consider the pertinent question, namely whether there was any impediment in terms of public policy, given the nature of possession, which would prevent the court from saying that the plaintiff there is entitled to the orders sought. If I may say so with respect, the learned judge and I are on the same page in terms of approach.”

104.For the purpose of the plaintiff’s claim, which is primarily based on what happened after he returned to live with his mother at the Lot in 1984, he took advantage of the structures already erected there by his former generation.  Assuming that the structures were erected without approval, what the plaintiff did was to keep and maintain them.

105.Insofar as the building restriction under BO is concerned, the government, through BA, retains the position and authority to demand the demolition of any illegal structures at any time in line with the public policy of protecting the safety of the persons affected by such structures, whoever the rightful owner is.  The recognition of the adverse right of the squatter, as a matter vis-à-vis the paper title owner, is not an obvious affront to the public policy behind the building restriction.

106.Insofar as the land user restriction under the government lease is concerned, the defendants, being the registered owners, make no suggestion or adduce evidence of any enforcement action against them on the ground of such breach at any time.  Recognition of the possessory title of the plaintiff, and thus extinguishment of the paper title of the defendants, as a matter between them would have no effect as estopping the government from taking enforcement action in the future.  In other words, such adjudication will not be an affront to the public policy behind the land user restriction either.

107.As I explained in Choy Kuen Chi (at §76-78), that the squatter is able to defeat the paper title of the owner of the land, as an issue of the possessory title, between them, will not be held against the government in any event.

108.Again, this contention was not pressed ahead with in the closing submission on behalf of the defendants.  Mr Chan indicates that he would preserve his clients’ position in respect of this issue in case this case needs to go further.  Insofar as resolving the dispute before this court is concerned, this is neither here nor there.

Conclusion

109.All matters considered, I find that the plaintiff has failed to establish his possession of the Lot with the requisite intention to do so in his own name and on his own behalf to the exclusion of the world since 1984.

PROPRIETARY ESTOPPEL

110.This is the plaintiff’s alternative contention.

111.Broadly, the elements of proprietary estoppel are assurance or encouragement, reliance and detriment: see Megarry and Wade at §§16-001; 16-018.  The key is to ascertain whether in the circumstances of a given case, it would be unconscionable for a party to be permitted to deny that which he has knowingly or unknowingly allowed or encouraged another to assume to his detriment: see Taylors Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133 at 151H.  A holistic view of the circumstances of the case is necessary for coming to a conclusion: see Gillett v Holt [2001] Ch 210 at 225C; 232D.

112.As discussed above, the plaintiff cannot escape from the fact that his family commenced, and then continued, to occupy the Lot pursuant to the consent or, if necessary, implied licence of Tsan Yung, the title holder, and perhaps the Grandmother as well in practical terms.  The evidence does not show that the situation and understanding subsequently changed upon and after the transfers of the Lot in 1969 and 1981 effectively within the defendants’ branch of the Tsan family.  The plaintiff himself stated that Madam Luk, who held the Lot since 1981 until her death had acquiesced and stood by the continuation of the occupation of the Lot by his family.  The plaintiff now says that it has become unconscionable for the defendants, as successors in title, to recover possession of the Lot from him as he has been allowed to occupy the Lot believing that he is the owner for all these years.

113.In case of passive encouragement, before concluding that it will be unconscionable for the landowner to deny the right of the occupier, the court will ascertain if the landowner was aware of (i) his own proprietary rights; (ii) the occupier’s detrimental acts; and (iii) the occupier’s mistaken belief that he had or would acquire an interest in the land: see Megarry and Wade at §16-009.

114.Insofar as the defendants are concerned, the evidence shows that notwithstanding the 1981 transfer of the Lot to Madam Luk who held the same on trust for her children, her children did not get to realise their family wealth including the Lot or their interest until after the death of Madam Luk in 2014.  Madam Luk became the family head after the death of her husband just one year after his father-in-law, Tsan Yung, passed away as well as the subsequent passing of her mother-in-law in 1970s. Madam Luk kept the extent of the family wealth, including the trust in respect of the lots of land in Tai O, from her children.  She handled family assets by herself.

115.In mid-2000s, Madam Luk enlisted the help of the 2^nd defendant in handling land resumption proceedings in LDMR 3/2005, which concerned three other lots of land in DD 313^[7].  It was amongst his preparation work that the 2^nd defendant came to learn about the existence of the declaration of trust in the early 2000s.  Both he and the 1^st defendant had also signed authorisation letters for Madam Luk to receive the land resumption compensation.  However, those was about all that they came across about the existence of landed properties in their family wealth.

116.It was only in about 2010 when the elder sister of the 1^st and the 2^nd defendants (ie wife of the 3^rd defendant) passed away, and Madam Luk intended to make a will, that the 1^st defendant came to know Madam Luk held lots of land in Tai O on trust for them.  Still the 1^st defendant did not get to know the details.  Nor did she know the terms of the will of Madam Luk. The 3^rd defendant also recalled that he had been asked to sign additional schedule of assets and liabilities of his late wife then, and even such document was prepared by the solicitors engaged by Madam Luk.  Consistent with his understanding with his wife, the couple never discussed the Tsan family wealth.  They therefore had no actual idea about the same until after the passing of Madam Luk.  The 4^th to the 6^th defendants, children of the 3^rd defendant, claim no better knowledge in this respect.

117.I am convinced that the defendants told the truth about their state of knowledge, or their lack of it, about the family wealth, in particular, their interest in the Lot, until after the passing of Madam Luk in 2014.  They engaged surveyor to conduct site survey and attended to matters concerning the lots of land in Tai Po within the estate of Madam Luk only in 2015.

118.Where the defendants did not even have knowledge about their interest in the Lot prior to the passing of Madam Luk, there would be no basis for them to be concerned about the possession of and operation on the Lot, let alone the scale of it.  Mr Yuen acknowledges the difficulty in suggesting that the defendants had actual knowledge about the plaintiff’s occupation of the Lot at any time before 2014.  The fact, as mentioned above, was also that they acted once they have become aware of their interests in the Lot, and came to discover the occupation of the Lot by others.  None of them could be said to have stood by and encouraged the plaintiff to act to his detriment upon mistaken belief.  The detriment that the plaintiff relies on were conduct well before the defendants came to realise their interest in the Lot.

119.Mr Yuen has to attribute the elements of proprietary estoppel to the defendants’ predecessor in title, Madam Luk, which, he argues, are binding on the defendants whether or not there was knowledge or acquiescence on their parts.  He relies on Fielden v Christie-Miller [2015] EWHC 87.  There the court was not prepared to accept the argument that estoppel against the trustees arising out of their representation would not bind the beneficiaries under the trust.  The court found it to be unfair to deny relief to whoever that had acted to his detriment on the faith of the representation of the trustee simply because he dealt with a trustee whose such capacity might not even be known to that person.  However, all that the court there was required to consider was an application to strike out, and he decided to refuse the application on the basis that the law he discussed was developing and should be left to be decided on the facts to be found after trial.

120.Mr Chan relies on Preedy v Dunne [2015] EWHC 2713, a judgment handed down half a year after Fielden, and argues that proprietary estoppel against the trustee does not bind beneficiaries of the trust unless they have at least acquiesced in them. However, the context in which the court in Preedy came to his ruling on this trustee-beneficiary point was essentially the interpretation and application of the provisions of the Trusts and Land and Appointment of Trustees Act 1996.  It does not appear that there are equivalent provisions in Hong Kong.

121.In my view, there is no real need to resolve the difference in the parties’ views of the law in this respect. Even assuming proprietary estoppel against Madam Luk as trustee could in principle be binding on the defendants as beneficiaries, the hurdle on the facts constituting such estoppel against Madam Luk is still not crossed by the plaintiff.  Before the issue of unconscionability arises against Madam Luk, the plaintiff will need to establish that he has acted to his detriment upon the (mistaken) belief that he owns or has interest in the Lot, which was encouraged or acquiesced by Madam Luk when she knew or ought to have known about that.

122.As discussed above, since 1981, Madam Luk has not acted differently from her predecessors in title (Tsan Hing and Yung Hing) in acquiescing the continued occupation of the Lot by the plaintiff’s family, then consisting of the plaintiff’s mother and Cheung. Equally, there is no evidence that anything had been done by or on behalf of the plaintiff’s mother by then that would have exceeded the nature of maintenance of the building structures and the Lot for the reasonable habitation of her family.  The plaintiff’s evidence suggests that it was really him who attended to the repair and maintenance after his return to the Lot in 1984.

123.The repair and maintenance, and even so called improvement, of the Lot caused to be done by the plaintiff after his return to the Lot in 1984 still did not exceed what would have been necessary for the reasonable habitation of the building structures and the Lot by him and his mother.  Those were consistent with the continued occupation of the Lot as that by the family during the past decades.  The plaintiff never runs his case on the basis of detriment in the form of forgoing any alternative or opportunity open to him in order to return to live with his mother at the Lot as a result of any (mistaken) belief encouraged by Madam Luk that he had or would thereby become entitled to an interest in the Lot.  He decided to return to the Lot in order to take care of his mother upon the death of Cheung in the same year.  Further, his case, which I reject, is that the mother “passed” the Lot to him after his return in 1984.

124.According to the parties, Madam Luk had not been seen visiting the Lot.  She could not be held to have actual knowledge about what the plaintiff has done at and to the Lot since 1984. Indeed, knowledge about the circumstances requisite for the estoppel could include where one turned a blind eye to the obvious: see Hoyl Group Ltd v Cromer Town Council [2016] 1 P&CR 45 at §37.  This differs from constructive knowledge in the sense of simply what one should have known or reasonably known.  Knowledge on the basis of shutting the eye to the obvious or what is known as “Nelsonian Blindness” is a relatively higher standard of knowledge: see Shun Lung Investment Limited v The Incorporated Owners of Lee On Building, DCCJ 4806/2011 (16 June 2013) at §§19-20.  Amongst other circumstances, the scale of the possession and operation is relevant to determining whether or not the same should be obvious to the eyes of the landowner: see Lau Kwai Ping Joyce v Fulland International Limited [2020] HKCFI 1501 at §§40-41.

125.As what the plaintiff has done to the building structures and the Lot by 2014, as I find, has not exceeded what was necessitated by the basic and reasonable habitation requirements of him and his mother, there was nothing about the nature or scale of that about which that would have caused an objective bystander with Madam Luk’s knowledge about the background of the plaintiff’s occupation to come to the view that the plaintiff obviously conducted himself upon any belief that he was occupying the Lot other than as before.  The circumstances were not such that Madam Luk should be held to have shut her eyes to the obvious.

126.The evidence does not indicate that the acquiescence of Madam Luk after becoming interested in the Lot, as mentioned above, had any material causal relevance to such belief that the plaintiff’s mother and then the plaintiff had already possessed by then.  The reality was that the detrimental acts of the plaintiff in relation to the Lot were not referable to the alleged acquiescence on the part of Madam Luk or the defendants.  All the circumstances considered, I am not convinced that the alternative case of proprietary estoppel against the defendants (or their predecessors in title) is made out.

127.In principle, an equity could arise in the form of a life interest, such as the right to occupy the land in question for the life, even where the occupation has admittedly been pursuant to a licence.  However, the plaintiff never runs such a case.  He denies any licence and has pleaded no alternative case of a licence coupled with an equity in his favour.  Nor has he pleaded any claim for relief that is said to be appropriate to the extent of such equity such as the right to continue to live at the Lot for life.

THE BOUNDARY DISPUTE

128.The boundary dispute is peculiar. The dispute is not about the boundary between the Lot and any adjoining lot. Nor is the dispute about the extent of possession by the plaintiff within the Lot.  The evidence shows that the land actually fenced up by the plaintiff exceeds the Lot and encroached upon government land.

129.There is admittedly a freestanding wall on the west side of the Lot.  That wall could be seen from the aerial photograph of the Lot in 1956.  An iron gate has been erected to that wall to enclose the backyard on the west side of Houses 158 and 160.  The plaintiff has also enclosed an area of land by mesh wire fence and another iron gate further to the west of that freestanding wall.  It is common ground that this further enclosed area is government land.

130.The plaintiff says that the west of the Lot ends at the freestanding wall enclosing the backyard whereas the defendants say that the western boundary of the Lot does not reach the freestanding wall, and thus suggesting that part of the backyard now enclosed by the freestanding wall should also be government land.  The stretch of land between the disputed western boundary according to the parties’ experts is about 2.8 metres.

131.Notwithstanding the dispute, the defendants, being the registered owners, have not engaged the relevant departments for the purpose of clarification or verification.  Whichever way I find about the location of this part of the boundary of the Lot, such finding will not bind the government in any event as it has not been heard as a potentially interested party.

132.The plaintiff’s surveyor tendered his report dated 13 December 2018 while the defendants’ surveyor tendered his dated 15 January 2019.  The surveyors compiled their joint report dated 3 April 2019.  The plaintiff’s surveyor took the view that the freestanding wall observed from the first available aerial photograph dated 1956 provided a reliable marking of that section of the boundary whereas the defendant’s surveyor based his demarcation on the to-scale enlargement of the dimension as drawn on the DD Sheet.

133.The plaintiff’s surveyor did not deny the reference value of the DD Sheet.  However, he had the following reasons for being skeptical about its accuracy when adopted and applied in the manner that the defendant’s surveyor did:-

(1)  The DD Sheet was prepared by surveyors back in 1899-1905.  The scale was 1:1980, ie 1 mm on the sheet means 1.98 metres on the ground.  Compared to modern survey techniques, the site survey and measurement were conducted by primitive equipment.  Therefore, cross checking with extrinsic evidence such as the ground features including those depicted in the historical aerial photographs was important.

(2)  The DD Sheet shows the survey control stations marked along Tai Ping Street, which was the eastern bound of the Lot.  No survey control station was marked on the western bound, which is the seaside that the backyard of Houses 158 and 160 face.

(3)  Compared with the extrinsic evidence, the western bound of the Lot and its adjoining lots did not align with the historical occupation since 1956.  In fact, the entire orientation and position of the Lot drawn on the DD Sheet deviated from actual ground and boundary features.  Relative to that, the freestanding wall marking the western bound of the backyard roughly aligned with the western end of the nearby houses until the site survey in 2018.  This roughly tallied with the appearance depicted on the DD Sheet.

(4)  Reference was also made to the squatter control registration of the structure situated on the government land outside the freestanding wall in 1981, though, as mentioned, also enclosed by the plaintiff.  No similar registration was made of the extension structure in the backyard that, according to the defendants, would have also straddled on government land.

134.The defendant’s surveyor acknowledged that the DD Sheet commonly contained errors, but the errors were confined to orientation and position of the lots.  He opined that the lengths and dimensions of the lots as drawn on the DD Sheet constituted the primary survey data that should still be respected as boundary evidence.  He had the following explanations:-

(1)  No assumption should be made as to whether or not the west side of the Lot was surveyed, even though no survey posts was recorded as opposed to the east side.  The apparently irregular shapes and different lengths of the adjacent lots as well as the outline of the block of stilt houses outside the Lot at the west indicated that measurement had been taken in that part.

(2)  It was accepted that the freestanding wall was a feature that might be adopted as boundary, but its reliability was doubtful when there was no evidence that it existed when the survey was done at the beginning of the 1900s.  Further, the location of the wall was not within what he considered to be the acceptable graphical accuracy margin of 1.98 metres on ground (1mm on the sheet).  As mentioned, the freestanding wall was located 2.8 metres away from what the defendants’s surveyor drew as the west boundary.

(3)  There could be reason for no assignment in 1981 of squatter control registration number to the structure on the stretch of land in dispute, which should be government land.  It might either be that no entry could be gained into that part or that the squatter control staff simply made a mistake.

135.According to the further evidence tendered by the surveyors at the trial, the lots in the demarcation district in question, including the Lot, were government lease of house lots.  When the survey was done in 1899-1905, the lots had houses erected on them.  Therefore, the concept of general boundary rule was adopted to identify the general boundary of the physical features on site in verification of the actual boundary.  One also got to know the follows from the surveyors’ evidence in court:-

(1)  The tool that the surveyors used in those days would be a 66-foot long iron chain with 100 segments to measure the length of the block from entrance to the end of the backyard.  Effectively, any measurement less than one segment of the chain entailed estimation within a 0.66-foot range.

(2)  Measurement in the above manner could be affected by variation in ground level and existence of dividing walls on site.  This compounded the potential for inaccuracy.

(3)  When the measurement was transferred into the DD Sheet, it was drawn by hand using pencil so than human error could not be ruled out.  When the scale was 1mm on the sheet to 1.98 metres on ground, any failure or difficulty in drawing less than 1 mm on the sheet would entail failure to depict approximate length of 1.98 metres on ground.

(4)  The plaintiff’s surveyor added that had survey control points been put in place with proper survey, chance of inaccuracy in orientation and position of lots, such as the Lot in the present case, should have been avoided.  As mentioned, there was no indication of any such points on the west side of the Lot on the DD Sheet, whilst others were indicated on the east side.  As to this, the explanation tendered by the defendant’s surveyor sounded no more than sheer speculation.

136.It has been accepted by the court that the DD Sheet is subject to interpretation and does not serve as a conclusive boundary record: see for instance, Ho Man Lap v Ho King Kiu & Ors, HCMP 1684/2013 (11 October 2013) at §18.  The difficulties in this respect have been acknowledged by the court: see for instance Lam Pak Kau v Yu Yuet Fat, HCA 2020/1996 (20 May 1999); on appeal CACV 205/1999 (24 November 1999).  It is also noted that the appellate court in Lam Pak Kau did express reservation about the reliability of the geographical feature on the ground, a bund in that case, in verifying the accuracy of the DD sheet in the circumstances of that case when there was no evidence that the bund in fact existed and was used as a reference in the survey.

137.In the present case, it is proven that the entire orientation and position of the Lot according to the DD Sheet were wrong.  The degree is not negligible.  Further, the defendants’ surveyor accepted a margin of graphical error of 1 mm on the DD Sheet or 1.98 metres on the ground.  That differs from the result of the observation of the plaintiff’s surveyor, by reference to the free standing wall, by 0.82 metres (2.8 metres – 1.98 metres) on the ground.  I am not impressed that the extent of such difference, when all the extrinsic evidence is duly considered in the correlation exercise in the circumstances of this case, must be rejected as exceeding the acceptable accurate range.  In his evidence in court, the defendants’ surveyor actually acknowledged from his own experience the existence of graphical discrepancies in excess of his suggested 1.98-metre margin.

138.All evidence in this respect considered, I find as a matter between the parties to this action that the westbound boundary of the Lot is that as suggested by the plaintiff.  The boundary of the Lot is now delineated in red and the Lot coloured in pink in the appended encroachment plan prepared by the plaintiff’s surveyor for easy reference.

ORDER

139.On the basis of the above findings, the claim is dismissed.  Judgment is entered on the counterclaim in that an order for possession of the Lot is hereby made against the plaintiff. With the order for possession made on the basis of the current occupation of the Lot by the plaintiff, I do not see basis for the injunctive relief against his entering, remaining and trespassing the Lot.  In the absence of proper pleading and evidence, I also make no order in respect of the claim for damages.

140.As requested, I make an incidental order against the plaintiff directing the vacating of the registration of the lis penden (the amended writ of summons) entered by the plaintiff against the Lot.

141.Following the event, I make a nisi order that the defendants shall have their costs of the action, including any costs reserved, to be taxed if not agreed.  To avoid doubt, I certify the engagement of (one) counsel.  The plaintiff’s own costs shall be taxed in accordance with legal aid regulations.

Mr Ross MY Yuen, instructed by Zebra H Y Kwan & Partners, assigned by the Director of Legal Aid, for the plaintiff

Mr Frederick HF Chan and Mr Dexter Leung, instructed by Keith Lam Lau & Chan, for the 1^st to 6^th defendants