Wong Chun Hung and Another v. Yu Leung Chiu

DCCJ 7008/2019

[2023] HKDC 911

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 7008 OF 2019

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JUDGMENT

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Introduction

1.In this action, the plaintiffs claim against the defendant for a possessory title to a piece of land known as Lot 1619 (“Land”) in Demarcation District No 100, North, New Territories.

2.The 1^st plaintiff (“Wong”) and the 2^nd plaintiff (“Madam To”) are husband and wife. They jointly purchased Lot 1618 (“Lot 1618”) and Lot 1620 (“Lot 1620”) in Demarcation District No 100, North, New Territories on 19 September 1990 and 4 January 1991 respectively and became the joint registered owners of Lot 1618 and Lot 1620 (collectively “Two Lots”).

3.The defendant is the registered owner of the Land, which is a small piece of land located in the middle between Lot 1618 and Lot 1620.

Plaintiffs’ Case

4.It is the plaintiffs’ case that after their purchase of Lot 1620 in 1991, they put up iron fence around the Two Lots which in fact also enclosed the Land. They had not realized that the Land which was located in the middle between the Two Lots and was fenced up by them did not actually belong to them until 1992. They had not known the registered owner of it was the defendant. Nor had they ever met the defendant or anyone who claimed to be the owner of the Land.

5.Notwithstanding their discovery of the defendant’s ownership of the Land, the plaintiffs continued to keep the fencing of the Two Lots together with the Land (collectively, the “Whole Land”) and leased the Whole Land out to various tenants from 1992 until present. They also settled the payments of the rates and rents for the Land. On such basis, they claim that they have been in adverse possession of the Land since 1992 and they now seek a declaration that the defendant’s title to the Land has been extinguished.

Procedural History

6.On 30 December 2019, the plaintiffs issued the Writ of Summons endorsed with the Statement of Claim to commence the present proceedings. On 12 August 2020, the Writ and the Statement of Clam were amended.

7.All attempts to serve the Writ and the relevant documents on the defendant at his last known address as well as to locate him met with no success. The search of record of death with the Births and Deaths Registry in the name of the defendant was proven to be futile. Leave was accordingly granted for substituted service of the Writ and the relevant documents on the defendant.

8.At the Case Management Conference hearing, the plaintiffs obtained leave from the Master to adduce expert evidence on the delineation of the Land as well as the history of the use of the Land.

9.On 28 December 2022, the Master set this case down for trial. The expert report compiled by Tang Sze Kiu Eric, the expert for the plaintiffs, which was filed by the plaintiffs on 21 October 2022 (“Expert Report”) was ordered to be adduced without oral evidence.

10.The defendant did not participate in these proceedings. Neither notice of intention to defend nor defence was filed. He did not appear at this trial.

11.According to the affidavits of service filed by the plaintiffs, I am satisfied that the Writ of Summons and the relevant documents had been effectively served on the defendant. I directed the trial to be proceeded in the absence of the defendant. Madam To was the only witness who gave evidence at trial.

Legal Principles

12.Sections 7(2) of the Limitation Ordinance stipulates that no action shall be brought by any person to recover land after the expiration of 12 years from the date on which the right of action first accrued to him. The right of action accrues on the date of dispossession and when such dispossession is adverse.

13.Section 8(1) provides that where the person bringing an action to recover land, or some person through whom he claims, has been in possession thereof, and has while entitled thereto been dispossessed or discontinued his possession, the right of action shall be deemed to have accrued on the date of the dispossession or discontinuance.

14.Section 13(1) provides that no right of action to recover land shall be deemed to accrue unless the land is in the possession of some person in whose favour the period of limitation can run.

15.Section 17 provides that, subject to the provisions in case of land held on trust under section 10, the title of that person to the land shall be extinguished at the expiration of the period prescribed by the ordinance for any person to bring an action to recover land.

16.The limitation period shall be 20 years if a cause of action accrued before 1 July 1991 and 12 years if accrued after that date pursuant to s 38A of ordinance.

17.The legal principles applicable to adverse possession are well settled which have been summarized by the Court of Appeal in Tsang Foo Keung v Chu Jim Mi Jimmy [2017] 3 HKC 527 as follows:

(a)  To establish possessory title based on adverse possession, the claimant must be shown to have both factual possession of the suit land and the requisite intention to possess (animus possidendi) for the whole of the period as required under the Limitation Ordinance.

(b)  The requisite factual possession is a sufficient degree of exclusive physical control, which 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. It must be a single and conclusive possession.

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

(d)  The person claiming adverse possession has the burden of proving both exclusive physical control and the requisite intention by compelling evidence. It cannot be lightly assumed that the paper title holder has foregone his interest in land.

(e)  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.The act of enclosure was considered to be unequivocal demonstration of the occupier’s intention to possess the land in the case of Buckinghamshire County Council v Moran [1990] Ch 623.

19.Adverse possessor can acquire an adverse possessory title to the land by leasing out the land and through occupation by his licensee or his tenant, which is an exercise of an act of ownership by the possessor and inconsistent with the title of the paper owner: Cheung Yat Fuk v Tang Tak Hong & Others [2004] 7 HKCFAR 70 §§16-20.

Discussion

20.With these legal principles in mind, I now turn to consider the evidence before me.

21.Madam To who is aged 79 gave evidence that when she and Wong purchased Lot 1620 in early 1991, there was no fence around the Two Lots other than a fence enclosing a small part of Lot 1618 only. After their purchase of Lot 1620, they caused to have a new iron fence erected around the Two Lots which in fact also enclosed the Land in 1991. Since then, the three pieces of land have been enclosed by iron fence up until present.

22.Even though Madam To could not recall exactly when such new iron fence was built in 1991, she gave evidence in court and in her witness statement that she and Wong only realized the fact that the new iron fence had enclosed not only the Two Lots as they originally intended but together with the Land as well when a surveyor found this out in 1992.

23.Madam To explained that after she had put up fence around the Two Lots, she appointed a surveyor to ascertain the boundary and the actual size of the Two Lots ending up with the discovery of the Land, which was enclosed together with the Two Lots, did not belong to them by the surveyor. The finding of the surveyor was further confirmed by an officer of the Lands Department.

24.Despite the finding of the fact that the Land did not belong to them, the plaintiffs continued to enclose it by iron fence until now. They further leased the Whole Land out to various tenants from 1992 up to present. Premised on such allegations, they contend that they have obtained the possessory title of the Land.

25.For the reasons set out below, I am satisfied that Madam To has successfully proved her case.

26.First, Madam To was able to account for the enclosure of the Land, the discovery of the paper owner of the Land as well as the leasing out of the Whole Land since 1992 in details. Her evidence is logical and consistent with the background facts. I have no reason not to believe her.

27.Second, Madam To’s allegations are well supported by the Expert Report. According to the site plan and the survey sheets of the Expert Report, the Land was a small piece of land located in the middle between Lot 1618 and Lot 1620. Further, the fact that the Land has been enclosed together with the Two Lots by iron fence since 1991 and the Whole Land was occupied for storage purpose thereafter are evidenced by a series of the aerial photos produced in the Expert Report.

28.In the Expert Report, the expert gave opinion that: -

(1)  As indicated in the aerial photos of 1990, the major part of the Land was still covered by vegetation. Only a small portion at the north-eastern of the Land together with part of Lot 1620 had been converted into a cultivation field. Temporary structures were observed over Lot 1618. A linear feature, probably a fence enclosed Lot 1618 solely.

(2)  As indicated in the aerial photos of 1991 and 1992, the fence enclosing Lot 1618 was no longer observed. A hoarding was newly erected which enclosing the periphery of the Land, Lot 1618 and 1620. A gate could be firstly observed at the south-western corner of Lot 1618 in 1991.

(3)  As indicated in the aerial photos of 1995, 1999 and 2005, 2011, 2015, and 2021, the hoarding could still be observed to enclose the Land together with the Two Lots. The gate was still maintained at the south-western corner of Lot 1618.

(4)  In conclusion, the expert opined that the Whole Land was enclosed by a hoarding with a main gate in 1991 which was later on paved as an open storage with some structures built thereon. Such hoarding could be observed from the subsequent aerial photographs until 2021. The gate and hoarding were tallied with the findings of the expert’s site visit to the Whole Land in 2022.

29.Third, the plaintiffs also produced a series of leasing agreements signed between the plaintiffs with various tenants in support of their allegations that they had leased the Whole Land out continuously since 1992. The lease periods as stated in those leasing agreements were from 15 September 1992 to 25 March 2021 with only brief interruptions.

30.Amongst those leasing agreements, the earliest leasing agreement which specified the Whole Land as the land for leasing, being “Lot 1618-1620”, was the one signed on 24 August 1992. The lease period was stipulated from 15 September 1992 to 14 September 1995.

31.Fourth, the plaintiffs also produced documents showing their applications to the Government for change of the use of the Whole Land for open storage as well as their payments of the Government rents and rates of the Land for proof of their occupation and use of the Land.

32.On the issue of the requisite intention to possess, I am persuaded that such intention can be deducted from the plaintiffs’ exclusive possession of the Land by their fencing of the Land, payments of the rates and rents of it and leasing it out as aforesaid.

33.Madam To reiterated that even after they had been informed of the defendant’s ownership of the Land in early 1992, they decided to continue to enclose the Land by iron fence for their own use and purpose without removing or altering any part of the iron fence. Further, they leased the Land out together with the Two Lots as if they were the owners of the Land from 24 August 1992 onwards.

34.Having observed Madam To giving evidence in court, I find her to be an honest witness. Her evidence is striaghtward which is consistent with the contemporaneous documents and the Expert Report. I believe her evidence.

35.I also accept the expert evidence of the plaintiffs’ expert which is logical and well-justified by the aerial photos and the survey sheets. The expert opinion lends full support to the plaintiffs’ case. No doubt the plaintiffs’ enclosure of the Land together with the Two Lots by a fence and a gate effectively excluding the defendant and all others from the Land. They leased the Land out and paid rents and rates for it in the manner as if they were the owner of it.

36.The decision and the actual acts of keeping the iron fence of the Land and the leasing out of it notwithstanding that it had been brought to their knowledge that the Land was not theirs in 1992 is strong evidence of the plaintiffs’ exclusive and adverse possession of the Land with intention to adversely possess in 1992. I am persuaded that the plaintiffs’ adverse possession of the Land, with the requisition intention to adversely possess, began in 1992 as contended by Mr Sham, Counsel for the plaintiffs.

37.Coupled with Madam To’s unchallenged evidence that the plaintiffs did not know the defendant and had never paid rent to or sought permission from anyone for their possession or use of the Land, I am convinced that the plaintiffs’ possession of the Land is adverse to the defendant.

38.On the facts as pleaded in the Amended Statement of claim and the evidence before me, I accept the submission of Mr Sham that the date of accrual of the cause of action is in 1992. Given the cause of action accrued after 1 July 1991, the limitation period in this case shall be 12 years.

Conclusion

39.By reason of matters set out above, I am satisfied that the plaintiffs had been in continuous and uninterrupted exclusive possession of the Land with the requisite intention to adversely possess it since 1992. They have established adverse possession of the Land for a period exceeding 12 years before the commencement of the present action as required under the Limitation Ordinance.

40.I should add that even if the cause of action accrued before 1 July 1991 (which I do not so find), the plaintiffs would have established adverse possession of the Land for a period exceeding 20 years before the commencement of the present action as required under the Limitation Ordinance.

41.Thus analyzed, a clear case of adverse possession is made out, the defendant’s title to and interest in the Land has therefore been extinguished. The plaintiffs have established possessory title over the Land against the defendant, the paper owner.

42.That said, the common law does not provide a squatter with a right to succeed to or take over the title of the paper owner whom he has dispossessed. Nor does the Limitation Ordinance operate as a statutory conveyance of that title to the squatter.

43.Hence, the plaintiffs only acquired a possessory title through adverse possession which does not entitle them to be registered as owner in substitution of the paper owner. This is particularly so since the Hong Kong land registration system is based upon the registration of instruments, and not that of title: Wong King Lim v The Incorporated Owners of Peony House [2013] 4 HKC 295 at §§33.2 and 37.

Conclusion

44.Having considered the submissions for the plaintiffs and all the evidence before me, I find the plaintiffs had established factual possession over the Land with requisite intention to adversely possess it for not less than 12 years before the commencement of the present proceedings. They had established possessory title over the Property against the registered owner.

Order

45.In the circumstances, I make an order that: -

(1)  a declaration that the defendant’s title, rights and interest of and in the Land have been extinguished by virtue of section 17 of the Limitation Ordinance (Cap 347).

(2)  a declaration that the plaintiffs had been in adverse possession of the Land for a period of no less than 12 years prior to the commencement of the present proceedings, and have thereby acquired and are entitled to an indefeasible possessory title, interest and/or rights in and of the Land.

(3)  there be no order as to costs of the present proceedings.

46.I thank Counsel for his assistance.

Mr Richard Sham, instructed by Leung Kin & Co, for the plaintiffs

The defendant was not represented and did not appear