Pang Siu Lan Alias Fung Sau Lan v. The Personal Representatives of the Estate of Lau King Kwai Alias Lau Koung Kwai Alias 劉庚葵 Alias 劉更葵 Alias 劉均和, Deceased and Another

DCCJ 8/2018

[2022] HKDC 1211

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 8 OF 2018

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BETWEEN

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Before:  His Honour Judge MK Liu in Court

Dates of Hearing:  17 and 19 October 2022

Date of Judgment:  28 October 2022

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J U D G M E N T

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1.On 2 January 2018, the plaintiff (“P”)  commenced these proceedings to claim for a possessory title to a piece of land in Tsuen Wan (“the Land”). Part of the Land is owned by the 1^st defendant (“D1”), and part of the Land is owned by the 2^nd defendant (“D2”).

2.D1 has not taken any step in these proceedings.  On 5 October 2020, P has obtained an order that P may carry on these proceedings in the absence of any person representing the Estate of Lau King Kwai alias Lau Koung Kwai alias 劉庚葵 alias 劉更葵 alias 劉均和 (“LKK”), Deceased.

3.D2 is resisting P’s claim. Further, D2 had lodged a counterclaim against P for vacant possession of the part of the Land owned by D2.

4.In the Re-Amended Statement of Claim, P has pleaded that the rateable value of the Land does not exceed HK$320,000.  This is not denied by D1 and accepted by D2.  Accordingly, the issues in these proceedings are within the jurisdiction of this court.

5.Before the commencement of these proceedings, P was granted legal aid on 6 January 2017.  At the early stage of these proceedings, P was having legal aid.  However, the legal aid certificate was discharged on 9 November 2018.  Notwithstanding the discharge of the legal aid certificate, P has been continuously represented by lawyers in these proceedings.

6.In the trial, P is represented by Mr Felix H.F. Tsang, and D2 is represented by Mr Jerome Liu, both of counsel.

A. THE PARTIES’ RESPECTIVE CASES

A.1. P’s case

7.P’s case as pleaded in the Re-Amended Statement of Claim is as follows:-

“1. [P] was and is the occupier of No.3A, Wo Yi Hop Village, Sheng Mun Road, Tsuen Wan, New Territories (the “Land”).

2.  The Land comprises of a house and some nearby features, which fell on:-

(a)  part of the Remaining Portion of Lot No.18 in Demarcation District No 455 (“Lot 18 RP”)  coloured Pink (the “Pink Portion”); and

(b)  part of the Remaining Portion of Lot No.19 in Demarcation District No 455 (“Lot 19 RP”)  coloured Green (the “Green Portion”)

as identified in the Plan annexed to the Revised Schedule 1 hereof.

3.  [D1] is the personal representatives of the estate of Lau King Kwai alias Lau Koung Kwai alias 劉庚葵alias 劉更葵alias 劉均和, who was and is the paper owner of Lot 18 RP. Lau King Kwai passed away in 1995.

……

4.  (d)  [D2] has been the registered owner of Lot 19 RP … since 22 December 1995.

5.  In or around 1979, [P] and her family rented the Land from [D1] at a monthly rent at the initial rate of HK$250 per month, which was subsequently increased to HK$450 per month.

6.  In April 1982, [D1] offered to sell the Land to [P] for a consideration of HK$75,000. [P] agreed to purchase the Land and paid the agreed consideration in cash to [D1]. [P] and [D1] signed an agreement dated 9 April 1982 to record the sale and purchase of the Land (the “Agreement”).

7.  Since April 1982:-

(a)  the boundary of the Land remained the same;

(b)  [P] has been in full physical control and exclusive possession of the Land;

(c)  [P] never received any demand for rent from anyone; and

(d)  [P] has been responsible for all payments of rates and other outgoings of the Land.

8.  In May 2017, land surveyor Mr Chan Tat-wing and his team were engaged to prepare an expert report on the boundary of the Land occupied by [P]. The expert report dated 7 September 2017 revealed that the Land fell on portions of Lot 18 RP and Lot 19 RP.

9.  Pursuant to the Agreement, [P] has acquired beneficial ownership of the Pink Portion.

10.  Further or alternative to Paragraph 9 above, as [P] has been in exclusive possession of the Land since April 1982, by reason whereof:-

(a)  [P], having been in possession of the Pink Portion and the Green Portion for a period exceeding 12 years before the date hereof, has acquired and is entitled to a possessory title to the Pink Portion and the Green Portion;

(b)  [D1] and [D2] have lost the right to bring any action to recover the Pink Portion and the Green Portion respectively by virtue of section 7(2)  of the Limitation Ordinance, Cap. 347; and

(c)  [D1]’s and [D2]’s title to the Pink Portion and the Green Portion respectively has been extinguished by virtue of sections 7 and 17 of the Limitation Ordinance, Cap. 347.”

8.The plan in the Re-Amended Statement of Claim (“the Revised Plan”)  is annexed hereto as Annex 1.  Since Mr Liu has touched upon the original plan in the Statement of Claim (“the Original Plan”)  while he was cross-examining P, the Original Plan is also annexed hereto as Annex 2.

9.For ease of reference, unless otherwise indicated, the abbreviations used in the Re-Amended Statement of Claim are adopted herein.

10.Regarding the Agreement mentioned by P in the Re-Amended Statement of Claim, P has disclosed that document.  It is a one-page handwritten Chinese document dated 9 April 1982.  P’s case is that the sale and purchase agreement between LKK as vendor and P as purchaser of the Land is in fact an oral agreement, and “the Agreement” is just a written record of the oral agreement.  In my view, even if that is the case, the Agreement would still be regarded as an “agreement for sale” under the Stamp Duty Ordinance (“the SDO”)[1] and would be chargeable with stamp duty.[2]  However, the Agreement has not been stamped.  By the operation of SDO s.15(1), the Agreement shall not be received in evidence in these proceedings.

11.P has produced the Expert Report prepared by Mr Chan Tat Wing (“Mr Chan”, an authorized land surveyor)  dated 7 September 2017 (“the Expert Report”)  as evidence in this case.  By the order made by me in the pre-trial review held on 25 July 2022, the Expert Report is deemed to be evidence in the trial.  P has also given oral evidence in the trial in support of her case. 

A.2. D1’s case

12.As said in the above, D1 has not taken any step in these proceedings.  Nothing has been put forward by D1.

A.3. D2’s case

13.In the trial, Mr Liu has elected not to put forward any positive case.  D2 is merely relying upon the fact that it is the registered owner of the Green Portion and requires P to prove the alleged adverse possession against D2.  D2 is also relying upon the paper title in support of its counterclaim.

14.At the beginning of the trial, Mr Liu confirmed that if P is able to prove that she has been in adverse possession of the Green Portion for more than 12 years before the commencement of these proceedings, D2 would accept that P has established the adverse possession claim against D2.

15.D2 has filed one witness statement, i.e. the Witness Statement of Choi King Siu dated 19 February 2020. However, D2 has not called Mr Choi to give any oral evidence in the trial.  Mr Liu agrees that the Witness Statement of Choi King Siu should be excluded from the evidence.

16.D2 has not filed any expert report.

B. THE PRINCIPLES

17.The principles concerning adverse possession are well established.  A useful summary can be found in Tsang Foo Keung v Chu Jim Mi Jimmy[3], in which Harris J (Cheung JA and Yuen JA concurring)  said:-

“22. Before explaining the Judge’s reasons for rejecting the 1^st defendant’s case it will be helpful to summarise the basic principles of adverse possession:-

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

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

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

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

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

……”

18.In an adverse possession case, the registered owner is entitled to take the position of requiring the squatter to prove the adverse possession claimed by him.  The registered owner is entitled to rely upon the paper title.  The registered owner may test the squatter’s case and is entitled to judgment if the squatter fails to discharge the very high burden of proof required in establishing a possessory title.  See Birkenhead Properties and Investments Ltd v Lam Kai Man[4].

19.A person who mistakenly believes that he has good title and does not realize that he is a trespasser may still successfully claim adverse possession.  In Cheung Kwong Yuen v Sun Hui Fang[5], Kwan JA (as she then was)  said:-

“11. Whether a squatter could establish factual possession and the requisite intention for the purpose of adverse possession is a question of fact depending on the circumstances of the case. There is no rule of law that these elements cannot be established for a person who mistakenly believes that he has good title or that he is a lawful tenant and does not realise he is trespassing on another’s land. As stated by Lord Hope in JA Pye (Oxford)  Holdings Ltd v Graham [2000] Ch 676 at §69, the use of the term “adverse” in this context is a convenient label only, in recognition simply of the fact that the possession is adverse to the interests of the paper owner. The right of action of the paper owner is treated as accruing as soon as the land is in the possession of some other person in whose favour the limitation period can run. In that sense, and for that purpose, the other person’s possession is adverse to his. But the question whether that other person is in fact in possession of the land is a separate question on which the word “adverse” casts no light.”

See also Jourdan and Radley-Gardner, Adverse Possession (Second Edition), [9-38] to [9-43].

20.The possession periods by successive squatters can be added up for the purpose of showing adverse possession.  The Limitation Ordinance is not concerned with whether a squatter has acquired a title but with whether the paper owner’s right of action has been barred.  For this purpose, all that matters is that there should have been continuous adverse possession for the period of limitation.  The rights inter se of the successive persons who may have been in possession adversely to the paper owner since the paper owner was dispossessed are for this purpose irrelevant. In Sze To Chun Keung v Kung Kwok Wai David & Anor[6], Lord Hoffmann said in the Privy Council:-

“It therefore appears to their Lordships that, on the facts as pleaded, the land has been continuously in adverse possession since 1955 and that the plaintiffs’ title was extinguished in about 1975. … At the time when proceedings were commenced, the defendant had been in possession on his own account for only two years. But this does not matter: the Limitation Ordinance is not concerned with whether the defendant has acquired a title but with whether the plaintiffs’ right of action has been barred. For this purpose, all that matters is that there should have been continuous adverse possession for the period of limitation. The rights inter se of the successive persons who may have been in possession adversely to the plaintiffs since they were dispossessed are for this purpose irrelevant.”

21.The fact that the claimant for a possessory title has proved that he has exclusive possession of the land in question has significance in relation to both the requisite possession and the requisite intent to possession.  Having physical barriers to exclude others from entering the land is the classic way of establishing exclusive possession.  In Gotland Entreprises Ltd v Kwok Chi Yau and Others[7], Lam VP (as he then was)  said:-

“29. [counsel] referred us to Powell v McFarlane, supra, in particular what Slade J said on the factual aspect of possession:

“Everything must depend on the particular circumstances, but broadly, I think what must be shown as constituting factual possession is that the alleged possessor 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.”

……

31. …… [counsel] also referred us to the dicta of Lord Hutton in JA Pye (Oxford)  v Graham [2003] AC 419 at paragraph 76:-

“Where the evidence establishes that the person claiming title under the Limitation Act 1980 has occupied the land and made full use of it in the way in which an owner would, I consider that in the normal case he will not have to adduce additional evidence to establish that he had the intention to possess.  It is in cases where the acts in relation to the land of a person claiming title by adverse possession are equivocal and are open to more than one interpretation that those acts will be insufficient to establish the intention to possess.  But it is different if the actions of the occupier make it clear that he is using the land in the way in which a full owner would and in such a way that the owner is excluded.”

32. Though the issue that Lord Hutton addressed there was intention to possess (and Lord Browne Wilkinson did explain why it was necessary to have two elements in the concept of possession as a matter of common law in JA Pye (Oxford)  v Graham, supra at paragraph 40), it should also be recognized that the two elements are inter-related. Legal possession could only be established when both elements are present. In our judgment, the exclusion of other persons has significance both in relation to the character of the physical occupation and the requisite intent. Thus, in Powell, Slade J alluded at the end of the paragraph cited above to no-one else had done so. Likewise, Lord Hutton in JA Pye referred to using the land in a way in which the owner was excluded.

33. This is not to re-introduce the concept of ouster disavowed by Lord Browne-Wilkinson in JA Pye at paragraph 38. Rather it stems from the undoubted proposition that possession is single and exclusive. As said by His Lordship in that paragraph:-

“Except in the case of joint possessors, possession is single and exclusive.  Therefore if the squatter is in possession the paper owner cannot be.  If the paper owner was at one stage in possession of the land but the squatter’s subsequent occupation of it in law constitutes possession the squatter must have ‘dispossessed’ the true owner …”

34. After rejecting the notion that the squatter must have a positive intention to exclude the owner, at paragraph 43 of JA Pye Lord Browne-Wilkinson endorsed the formulation by Slade J in Powell:-

“… Slade J reformulated the requirement (to my mind correctly)  as requiring an ‘intention, in one’s own name and on one’s own behalf, to exclude the world at large, including the owner with the paper title if he be not himself the possessor, so far as is reasonably practicable and so far as the processes of the law will allow.’”

35. The significance of physical exclusion of the owner was further alluded to by His Lordship at paragraph 45, after rejecting the dicta of Bramwell LJ in Leigh v Jack 5 Ex D 264:-

“The highest it can be put is that, if the squatter is aware of a special purpose for which the paper owner uses or intends to use the land and the use made by the squatter does not conflict with that use, that may provide some support for a finding as a question of fact that the squatter had no intention to possess the land in the ordinary sense but only an intention to occupy it until needed by the paper owner. For myself I think there will be few occasions in which such inference could be properly drawn in cases where the true owner has been physically excluded from the land. But it remains a possible, if improbable, inference in some cases.” (our emphasis)

36. One must not lose sight of the exclusive character of the occupation in order to establish factual possession. Not every use or occupation of land can satisfy this requirement. The Judge gave the example of growing of fruits on a piece of open land. If a person only plants fruit trees without excluding others from entering the land, he is only using the land instead of occupying the same exclusively. It is akin to leaving some articles on some private property (where the owner is at liberty to take steps to remove the articles as abatement of trespass)  and no matter how long the articles were left there (and not removed by the owner of the land), it would not constitute adverse possession.

37. Though it is not absolutely essential to have the land fenced off in order to establish exclusive occupation, this is the classic way of doing so.  In the absence of any physical barriers set up to exclude others from entering the land, one must examine what steps were taken by the person claiming exclusive occupation to exclude others.”

22.In respect of evaluating the evidence given by witnesses, guidance can be found in Lee Fu Wing v Yau Po Ting Paul[8], in which DHCJ Au (as he then was)  said:-

“53. In assessing the credibility of a party’s case on a particular issue, I accept the submissions of [counsel] that the Court should take into considerations the following:-

(1)  Whether the party’s case is inherently plausible or implausible.

(2)  Whether the party’s case is, in a material way, contradicted by other evidence (documentary or otherwise)  which is undisputed or indisputable.

(3)  Where it is shown that a witness has been discredited over one or more matters to which he has given evidence using the above tests. This is relevant to the assessment of his overall credibility.

(4)  The demeanour of the witnesses.”

C. DISCUSSION

C.1. The expert evidence

23.Mr Chan have conducted a field survey in May 2017.  He has also studied some aerial photos and survey plans concerning the Land.  He made the following findings in the Expert Report dated 7 September 2017:-

(1)  As shown on the survey sheet produced in 1977, a L-shaped house (“the House”)  was outlined on the Land, most of the house was delineated on portion of Lot 19 RP whilst a small part fell within portion of Lot 18 RP.

(2)  A canopy/structure was seen attached to the south-eastern side of the House in 1986 and 1991.

(3)  The House was identified on the aerial photos between 1978-2006 and it was believed that vision to the House was obscured by the foliage of trees on aerial photos of 2011 and 2016.  In fact, the peripheral position, shape, size and orientation of the existing house surveyed on site were generally consistent with the House imaged on the aerial photos.

(4)  The House was outlined on all the studied survey sheets and the Land was enclosed by fences as outlined on the survey sheets produced in and after 1992 studied in the Expert Report.[9]

(5)  The House was seen erected on the Land between 1978 and 2016, most of the House was erected on portion of Lot 19 RP whilst a small portion was situated on portion of Lot 18 RP, which was found consistent in terms of size and its peripheral shape with the result of the field survey conducted in May 2017.

(6)  The Land, including the House, were enclosed by fences, based on the survey sheets from 1992 up until the day of the field survey.  The enclosed area mostly fell on portion of Lot 19 RP whilst small portions were found situated on portion of Lot 18 RP.

24.Mr Chan’s expertise and opinion as stated in the Expert Report have not been challenged by Mr Liu.  I accept Mr Chan’s opinion and attach weight to his findings.

C.2. The factual evidence

25.P is now about 80 years old.  In her evidence, she mentioned the following:-

(1)  She started to live in No. 3A, Wo Yi Hop Village, Sheng Mun Road, Tsuen Wan (“3A”)  in 1979.  In 3A, there is a stone house (石屋)  (“the Stone House”)  and an iron sheet house (鐵皮屋)  (“the Structure”).  There is an open space outside the houses.  3A is enclosed by some wire mesh.

(2)  Before moving to 3A, she was living with her husband and her 3 children in To Kwa Wan.  Through the introduction of a friend, the couple met LKK and knew that LKK had some properties in Wo Yi Hop Village (“the WYH Village”), including 3A.  Since 1979, P’s family rented 3A from LKK.  P has produced the rental receipts issued by LKK to her family.

(3)  After moving to 3A, her 3 children (the eldest daughter, the second daughter and the youngest son)  started to study in the schools in the vicinity.  P has produced some school records of her children in 1979 and 1980.  On all these records, the residential address of the children is 3A.

(4)  When P’s family moved to 3A, 3A had already been enclosed by wire mesh.  P has produced a photo (“Photo A”)  of her second daughter and P’s 3 young grandsons (the second daughter’s sons)  taken at the open space of 3A, with wire mesh behind them.  P has also produced a photo (“Photo B”)  of some of her friends taken at the open space of 3A, with mire mesh behind them.

(5)  The Stone House is a L-shaped house.  One would need to enter the Structure first, and then enter the Stone House.  Both the Structure and the Stone House have entrance doors. When P’s family was not in 3A, these entrance doors would be locked.

(6)  There is an entrance gate at the wire mesh.  When P’s family was out, the entrance gate would be locked.

(7)  P’s neighbour, Lau Yuk Pui (劉玉琣)  (“LYP”)  and his family, were living in No. 2A in the WYH Village.

(8)  After living in 3A for some time, in early 1982, LKK intended to sell 3A, for he needed money to pay the medical bills of his son.  After some negotiations, LKK agreed to sell 3A to P at HK$75,000.  LKK and P did not engage any lawyer to prepare any document, but just signed the Agreement to evidence the deal between them. From that time onwards, P stopped paying any rent to LKK.

(9)  After purchasing 3A, the government rent, rates and the utilities bills of 3A were all paid by P and her family.

(10)  Throughout the 80s, P’s whole family was living in 3A, and P’s 3 children were studying in the schools in the vicinity.  P has produced the scout membership record of the son issued on 9 February 1987.  The residential address as shown on this record is 3A.  P has also produced a mail from Indonesia to P in 1988.  The address as shown on the envelope is 3A.

(11)  In the 90s, P’s family was still living in 3A.  P has produced the following documents in support of her case.  The addresses of P’s family members as shown on these documents are 3A:

(a)  a letter from the Immigration Department to P’s husband, notifying P’s husband to attend an interview on 25 April 1991;

(b)  the marriage certificate of the eldest daughter evidencing the marriage between the eldest daughter and her husband held on 12 October 1995; and

(c)  a customer deposit advice from the Standard Chartered Bank to P’s second daughter dated 11 September 1997.

(12)  In 1994, after completing secondary education in Hong Kong, P’s son went to Canada to have further studies.  P continued to live in 3A with her husband and two daughters.

(13)  In early 1996, P rented a unit in a temporary house near Shing Mun Reservoir.  That was a very small unit.  P would meet some friends in that unit, but P did not live in that unit.  P was still living in 3A together with her family members.  P rented that unit with a hope that the Government might allocate a unit in a public housing estate to her when the Government decided to demolish the temporary house.

(14)  In 1996, the Government did demolish the temporary house.  A unit in a resettlement area was allocated to P.  However, that unit is very small.  It would not be possible for P’s family to live in that unit.  So P’s family was still living in 3A.

(15)  In 1996 or 1997, P’s mother came to Hong Kong from Indonesia and lived with P’s family.

(16)  In 1997, P’s son finished his studies in Canada and returned to Hong Kong.  In the same year, the Government closed the resettlement area and allocated a unit in a public housing estate (“the Unit”)  to P.  P’s husband and son moved to live in the Unit, for it would be more convenient for them to go to work from the location of that public housing estate.  P and P’s mother continued to live in 3A.

(17)  In 2001, there were some major renovations at 3A.

(18)  In 2015, P heard that someone was going to purchase 3A.  P was unwilling to sell 3A.  In order to avoid being disturbed, P moved to live in other places.  However, P would still come back to 3A during daytime.

(19)  P has repaired 3A in 2018 and 2019.

(20)  P has produced a statement signed by Lau Fung Shan (劉鳳珊)  (“LFS”)  dated 17 October 2016, in which LFS said that 3A was sold by LKK to P at HK$75,000.  LFS is the daughter of LYP.

26.Under cross-examination, P mentioned that LFS was born in 1973 and LFS did not have any personal knowledge of the sale and purchase of 3A between LYP and P.  LFS’s knowledge of the sale and purchase is based upon some hearsay information from LYP and P.  In the circumstances, plus the fact that LFS has not been cross-examined in this trial, I would not attach any weight to the matters stated in LFS’s statement.

27.Mr Liu submits that given P’s age, it is understandable that P’s memory may not serve her well. However, the evidence required for proving the adverse possession claimed by P would still be compelling evidence.  There cannot be any compromise on this requirement just because P is elderly.  Mr Liu is clearly right on this point.

28.Mr Liu submits that there is no compelling evidence proving P’s case.  Mr Liu’s position is as follows:-

(1)  Between 1979 and mid-1995[10] - no compelling evidence showing “3A和宜合村” referring to the Land.

(2)  Between mid-1995 and July 2004[11] – P may be in possession, but only for 9 years.

(3)  After July 2004 till now – the one in possession of the Land may be the eldest daughter.  No compelling evidence showing that P was in possession in this period of time.

29.Mr Liu’s theory is that the Land was fenced off at a time between 1987 and 1992.  Only after that, P moved onto the Land.  P abandoned the Land and allowed her eldest daughter to take possession of the same in early 2000.

30.With respect, I am not persuaded by Mr Liu’s submissions.

31.Mr Liu submits that there has not been any compelling evidence showing that 3A is indeed the Land. Mr Liu argues that:-

(1)  There is no documentary evidence showing that before mid-1995, 3A is indeed the Land. 

(2)  The subject matter in the Agreement is “自建之磚屋壹間坐落于和宜合村土名(沙梨園)”.  Accordingly, The Structure and the open space could not be the subject matters of the Agreement.  The description “3A和宜合村” has not been used in the Agreement.

(3)  LKK in fact had several properties in WYP Village.  The subject matter in the Agreement may not be the Land.

(4)  According to P, where she lived had already been fenced up in 1979.  However, as shown in the expert evidence, the Land was only surrounded by fence at a time between 1987 and 1992.

32.Notwithstanding Mr Liu’s submissions, I am of the view that based upon the contemporaneous documents produced by P and mentioned in [25] above, there is clear documentary evidence showing that P’s family has been in possession of 3A from 1979 onwards. As shown in those documents, 3A is certainly a place inside the WYH Village.

33.Mr Liu suggests that P only moved onto the Land at a time between 1987 and 1992, after the Land being fenced off.  This cannot be correct.  The documentary evidence produced by P shows that before, during and after this period, P’s family has been living at 3A.

34.There is no dispute that the Demands for Rates (from mid-1995 to late 1997)  produced by P have linked 3A with the Land.

35.In my view, 3A is the number given to the Stone House.  There is no evidence showing that another house inside the WYH Village bearing the number “3A” at any time.

36.As said in the above, the Agreement cannot be received in evidence because it has not been stamped. However, even if the contents of the Agreement can be considered, that would not affect the conclusion that 3A is the Stone House.  In fact, the contents of the Agreement support this view.

37.Having considered the expert evidence, it is unclear whether the Structure and the wire mesh surrounding the Land existed in 1979 when P’s family moved into the Stone House.  There cannot be a clear answer on this issue by looking at Photo A and Photo B.  Photo A was certainly not taken in 1979.  P’s second daughter was born in 1970.  Photo A is showing P’s second daughter and the second daughter’s 3 young sons.  That photo was probably taken in the 90s.  As to Photo B, there is no evidence showing when this photo was taken.  However, notwithstanding all these, based upon the undisputed expert evidence, the Structure appeared at a time not later than 1986, and the wire mesh surrounding the Land appeared at a time not later than 1992.

38.Assuming that the Structure and the wire mesh were not there in 1979, that would only mean that P’s evidence may not be accurate as to what existed on the Land in 1979.  However, that would not affect the conclusion that 3A is the Stone House.  As explained in [32] to [36] above, there is clear documentary evidence showing that 3A is the number given to the Stone House.

39.Mr Liu submits that P has failed to adduce compelling evidence showing that she was still in possession of the Land after mid-2004.  Mr Liu has put forward the following points in his submissions:-

(1)  In 1997, P has been given the Unit, and hence she has a proper residence.

(2)  There was nil or minimum electricity usage at the Land from September 2000 till March 2005 (save and except May 2002 to January 2003).

(3)  The “registered payer” on the demands for rates was changed to the eldest daughter in July 2004.

(4)  The “registered customer” on the electricity bills was changed to the eldest daughter in June 2005.

40.Under cross-examination, P explained that the names on the demands for rates and on the electricity bills were changed because the eldest daughter and her family were living in 3A, and the eldest daughter would be responsible for paying these fees.  Mr Liu submits that the explanation offered is incredible, for the eldest daughter could still pay those fees even if the names on those documents remain to be P’s name.  Mr Liu has illustrated the point by referring to the water bills concerning the Land.  The registered name on those water bills remained to be P’s name after 2004.  However, according to P, the eldest daughter was paying the water bills after 2004.

41.Mr Liu submits that possession of the Land was given to the eldest daughter in mid-2004, and since then P was no longer in possession of the Land.  There is no evidence showing that the eldest daughter is supporting P’s claim.  Accordingly, P’s claim must be dismissed.

42.With respect, I am unable to agree with Mr Liu.

43.Firstly, not the registered names on all the bills have been changed to the eldest daughter’s name after 2004.  As said in the above, the registered name on the water bills remained to be P’s name after 2004.  I would not regard the change of the registered names on some bills (not all bills)  leading to the conclusion as suggested by Mr Liu.

44.Secondly, in my view, the point as summarized in [41] above cannot be taken by Mr Liu, for D2 has not raised the point in its pleadings.

(1)  In Cheung Kwong Yuen v Sun Hui Fang[12], the plaintiff sought an order for vacant possession of a property against the defendant, but the defendant claimed that she had acquired a possessory title by adverse possession.  At the final submissions stage, the plaintiff’s counsel took a point which had not been pleaded by the plaintiff in the pleadings, i.e. the defendant was merely possessing the property as a licensee of her brother (“the brother”), and hence the defendant’s possession could not be the requisite possession for the purpose of establishing adverse possession (“the licensee point”).  I ruled that the licensee point would not be open to the plaintiff.[13]

(2)  The ruling was affirmed by the Court of Appeal.[14] In the Court of Appeal’s judgment (“the CA Judgment”), Yuen JA said (footnotes omitted):-

“15. In relation to ground (1), we respectfully agree with the judge that the licensee point should have been pleaded. ……

16.1. The plaintiff also submitted that it was not “necessary” to plead it because the burden of proving adverse possession was on the defendant. He relied on O.18 r.7(3)  RDC which provides:

“A party need not plead any fact if it is presumed by law to be true or the burden of disproving it lies on the other party, unless the other party has specifically denied it in his pleading”.

16.2. With respect, we do not see the relevance of this rule to the licensee point, as there is no fact that the defendant needed to disprove. What the defendant needed to prove affirmatively was factual possession and animus possidendi as a defence and for her counterclaim. And what the plaintiff needed to do was to plead the grounds by which he seeks to overcome the defendant’s case. Order 18 r.13(4)(a)  RDC provides:

“Where an allegation made in a ... counterclaim is traversed by a denial, the party who denies the allegation shall in his ... defence to counterclaim –

(a)  state his reasons for doing so ...”.

Thus, the plaintiff should have stated in his defence to counterclaim that the defendant’s allegation of adverse possession is denied for the reason that the defendant herself was merely a licensee of SMF.

16.3. In any event, the fact that one party has the burden of proving his case does not relieve the other party of the duty to draw the attention of the opponent and the court by way of pleadings to the specific issues he wishes to raise which the court has to resolve in order to arrive at a judgment in the proceedings.

17. However the plaintiff did not plead the point that the defendant was only the licensee of her brother SMF. ……

18. If the plaintiff had raised the point in his RDCC that the defendant was only a licensee of SMF and thus she could not have been in adverse possession, it would have had a significant impact on the way the case developed.

- It may well have resulted in SMF (who was an ally of the defendant)  applying to be joined as a party, to plead as an alternative scenario that he had been possessing the flat through his licensees viz. SHY and Lee and the defendant.

- At the very least, there would have been more evidence on how the family treated the flat vis-a-vis one another. As SMF had paid for the flat, one can understand why the defendant admitted in cross-examination that she had been permitted by him to live there, but there was no development of evidence as to how possession was transferred from one member of the family to another, because the licensee point had not been pleaded. It is well established that one of the functions of pleadings is to enable the other side (in this case, the defendant)  to know what evidence she should prepare for trial, so that the court could resolve the issue with the full benefit of all available evidence and properly prepared submissions.

19.  For these reasons, we do not think there is a reasonable prospect of the plaintiff succeeding in appeal on the argument that the licensee point did not have to be pleaded, and that the judge should have ruled in his favour on it.”

(3)  I am of the view the point now taken by Mr Liu is similar to the licensee point taken by the plaintiff in the Cheung Kwong Yuen case.  In my judgment, for the reasons set out in the CA Judgment, the point now being relied upon by Mr Liu ought to be pleaded by D2.  Had that point been pleaded, P would have had an opportunity to do preparation to meet that point in the trial.  For example, P may have arranged joining the eldest daughter as the 2^nd plaintiff in these proceedings.  In the absence of any pleading, allowing D2 to rely upon that point to defeat P’s claim would not be fair and just.

45.Thirdly, it is D2’s pleaded case that “[o]n certain dates unknown to [D2], [P] wrongfully and without consent of [D2] trespassed to the [Green Portion].”[15]  D2 is seeking an order for vacant possession of the Green Portion against P.  Mr Liu accepts that as the matter now stands, P is in possession of the Green Portion.  That being the case, whether the eldest daughter was in possession of the Green Portion for a certain period of time before the current possession by P would not have any impact on the claim now made by P.  See the law as stated by the Privy Council in the Sze To Chun Keung case, which has been summarized in [20] above.

46.In my view, P’s evidence is not without blemish.  As to when the Structure started to appear on the Land, and when the wire mesh surrounding the Land was erected, P’s memory on these matters may not be accurate.  Further, as to whether there were people living in 3A from September 2000 till March 2005, P’s evidence is that there were still people living in 3A in that period.  However, given the very low electricity usage during this period, P’s memory on this point may also not be accurate.

47.However, P’s evidence on the essential matters are clear and supported by contemporaneous documents. Save and except the matters set out in [46] above, I accept P’s evidence.

48.As to the matters set out in [46], those matters would not defeat P’s claim.

(1)  At the very least, based upon the undisputed expert evidence, the Structure appeared on the Land at a time before 1986.  Further, the Land was already surrounded by wire mesh at a time before 1992.

(2)  Both the Stone House and the Structure are enclosed buildings.  The wire mesh would exclude others from entering the Land.  Based upon the undisputed expert evidence, P would be having exclusive possession of the Land at least since 1992.

(3)  P purchased 3A from LKK in 1982.  She treated herself as the real owner of 3A from 1982 onwards.  The existence of the wire mesh also shows that she has the intention of excluding the whole world from the Land.

(4)  While the Land is in P’s exclusive possession, and P is having the requisite intention to possess at the same time, P would be having possession of the Land which is adverse to the registered owner.  It would not be necessary for P and/or her family members to live on the Land in order to constitute adverse possession.

49.During cross-examination, Mr Liu asked P why the area claimed by her in the Statement of Claim (i.e. the coloured area shown in the Original Plan)  is larger than the area now claimed by her in the Re-Amended Statement of Claim (i.e. the coloured area shown in the Revised Plan).  P said that she made a mistake in the Statement of Claim, and hence she made a correction in the Re-Amended Statement of Claim.  I do not see anything improper in P’s answer.

50.Mr Liu has also asked me to draw adverse inferences against P by reason of the following:

(1)  No enquiry to the utilities company and to the Rating and Valuation Department has been made.

(2)  P has not called LYP to give evidence in this case.  Mr Liu submits that LYP may reveal that P did not live on the Land between 1979 to mid 90s.

(3)  P has not called the eldest daughter to give evidence in the trial.  Mr Liu submits that the eldest daughter may reveal the fact that she, instead of P, has been in possession of the Land no later than mid-2014.

51.With respect, I do not see how these points can take D2’s case any further.  As said in the above, I am of the view that there is compelling evidence showing that P’s family began to live in the Stone House in 1979, and they continued to live in the house since then.  P started to have exclusive possession of the Land at a time not later than 1992.  Further, whether the eldest daughter was in possession of the Land for a period of time before the commencement of these proceedings would not defeat P’s claim.  In any event, this point is not open to D2 in these proceedings, for the point is unpleaded.

52.Mr Liu has also tried to argue the following:

(1)  There is no evidence showing that P, FUNG SAU LAN (馮秀蘭)  is also known as PANG SIU LAN.

(2)  There is no evidence proving that 劉庚葵/劉更葵 is also known as 劉均和.

53.During the trial, I have referred Mr Liu to a time estimation certificate signed by D2’s former solicitors on 30 June 2021, in which D2’s former solicitors have called P as “Pang Siu Lan”.  After seeing that description, Mr Liu conceded and abandoned the point that PANG SIU LAN is not FUNG SAU LAN (馮秀蘭).

54.As to whether 劉庚葵/劉更葵 is 劉均和, my view is that D2 cannot rely upon this point to defeat P’s claim.

(1)  It is undisputed that LKK has never been the registered owner of Lot 19 RP, and LKK has never had the title to the Green Portion.  Whether 劉庚葵/劉更葵 and劉均和 is the same person would not have any impact on P’s claim.  Provided that P can establish adverse possession of the Green Portion for more than 12 years before the commencement of these proceedings,[16] P would have acquired a possessory title to the Green Portion.

(2)  If the identity point taken by D2 (i.e. whether 劉庚葵/劉更葵 is 劉均和)  would have any bearing on P’s claim, that point must be pleaded so that P would have notice in advance that D2 is going to take that point in the trial, and P would have an opportunity to adduce evidence to meet that point before the trial.  In the absence of any pleading, D2 is not allowed to suddenly take that point in the trial.  See RDC, Order 18 rule 13(4)(a); see also the CA Judgment in Cheung Kwong Yuen v Sun Hui Fang, [16.2] and [16.3].

55.Notwithstanding Mr Liu’s submissions, in my view, P’s case stands.

C.3. My findings

56.Based upon the evidence accepted by this court, I make the following factual findings:-

(1)  P has exclusive possession of the Stone House since 1982.

(2)  P has exclusive possession of the Structure at least since 1986.

(3)  P has exclusive possession of the Land at least since 1992.

(4)  P has the requisite intention to possess the Land at least since 1992.

C.4. P’s case against D2

57.Based upon my findings as set out in the above, P has been in adverse possession of the Green Portion for more than 12 years before the commencement of these proceedings.  Accordingly, P’s claim against D2 is proved.  There would be judgment in favour of P.  D2’s counterclaim would be dismissed.

C.5. P’s case against D1

58.Regarding P’s claim against D1, P has pleaded that P has acquired beneficial ownership of the Pink Portion pursuant to the Agreement.  However, at the same time, P has pleaded an alternative case that P has acquired a possessory title to the Pink Portion by adverse possession.

59.Based upon the evidence accepted by this court, I am of the view that P’s alternative case against D1 can be allowed.  Even assuming that D1 would still have the right to recover possession of the Pink Portion after the Agreement, D1’s right would have been extinguished by reason of the adverse possession established by P.

D. DISPOSITION

60.For the reasons above, I give judgment to P and make the following declarations:-

(1)  that P, having in possession of the Pink Portion and the Green Portion for a period of exceeding 12 years before the commencement of these proceedings, has thereby acquired and is entitled to a possessory title to the Pink Portion and the Green Portion;

(2)  that no action shall be brought by D1 to recover possession of the Pink Portion, and no action shall be brought by D2 to recover possession of the Green Portion, by virtue of section 7(2)  of the Limitation Ordinance (Cap 347); and

(3)  that by virtue of section 17 of the Limitation Ordinance (Cap 347), D1’s title to the Pink Portion, and D2’s title to the Green Portion, have been extinguished.

61.I dismiss D2’s counterclaim.

62.Both Mr Tsang and Mr Liu have agreed that costs should follow the event, with a certificate for counsel. However, as to the percentage of time spent on P’s claim against D2 in these proceedings, counsel have different views.

63.Mr Tsang submits that 90% of the time in these proceedings has been spent on P’s claim against D2, while Mr Liu suggests that only 60% of the time has been spent on the claim against D2. With respect, I accept Mr Tsang’s submission and I am unable to agree with Mr Liu.  In my view, only a very small portion of the time has been spent on P’s claim against D1.  Taking a broad brush approach, I would assess that 10% of the time in these proceedings has been spent on the claim against D1, and the remaining 90% has been spent on the claim against D2.

64.With the aforesaid in mind, I order that:-

(1)  10% of the costs of these proceedings be paid by D1 to P, with a certificate for counsel, to be taxed if not agreed.

(2)  90% of the costs of these proceedings be paid by D2 to P, with a certificate for counsel, to be taxed if not agreed.

(3)  During the period while P was having legal aid, P’s own costs be taxed in accordance with the Legal Aid Regulations.

65.Lastly, it remains for me to thank counsel for their helpful assistance rendered to the court.

Mr Felix H.F. Tsang, instructed by Gallant, for the plaintiff

The 1^st defendant was not represented and did not appear

Mr Jerome Liu, instructed by WT Law Offices, for the 2^nd defendant

Annex 1

Revised Plan

Annex 2

Original Plan