Ng Sew Hoi and Another v. Chong Yin Sing and Another
Read the full judgment text of HCA 15070/1998 on BabelCite. This High Court CFI judgment was delivered on 8 February 2024.
1. This is the trial of D1’s counterclaim against P2 over the ownership (or alternatively adverse possession) of Flat 5, 8 th Floor, Block G, Luk Yeung Sun Chuen, Nos. 22-66 Wai Tsuen Road, Tsuen Wan, New Territories (“ the Property ”).
Cited by 6 cases · Cites 19 cases
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HCA 15070/1998 [2024] HKCFI 414 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO. 15070 OF 1998 ________________________ BETWEEN
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________________________ J U D G M E N T ________________________ A. INTRODUCTION 1.This is the trial of D1’s counterclaim against P2 over the ownership (or alternatively adverse possession) of Flat 5, 8th Floor, Block G, Luk Yeung Sun Chuen, Nos. 22-66 Wai Tsuen Road, Tsuen Wan, New Territories (“the Property”). B. CORE BACKGROUND AND PROCEDURAL HISTORY 2.The core background of this case has been set out in D1’s Opening Submissions. The bulk of it is not in dispute and may be briefly summarised below (with the relevant parts in dispute also identified):
3.The procedural history of these proceedings has also been set out in D1’s Opening Submissions. It is not in dispute and may be summarised as follows:
4.Accordingly, a peculiar feature of these proceedings is that, whilst Ps had pursued a claim to recover possession of the Property, such claim was subsequently struck out or dismissed, with the effect that this trial is concerned only with D1’s counterclaim. Another peculiar feature is that, apart from advancing a counterclaim over the Property based on common intention constructive trust (“CICT”) or proprietary estoppel, D1 also pursues an alternative counterclaim of adverse possession against P2. These features give rise to interesting arguments on adverse possession which I will address at the latter part of this Judgment, after dealing with the claims of CICT and proprietary estoppel. C. PARTIES’ CASES C1. D1’s case of the Mutual Promise 5.In a nutshell, D1’s case is that the Mutual Promise was made and pursuant to it, D1 searched for a suitable flat in the market through estate agents and in end of August 1983, D1 found and decided to buy the Property by entering into the preliminary sale and purchase agreement in his own name and paid the initial deposit of HK$6,000 by his own money. The intention is that CH Chong would then complete the purchase of the Property in favour of D1 in consideration for the Mutual Promise. 6.When CH Chong and P1 went with D1 to the solicitors’ office on 5 October 1983 for completion, D1 allegedly asked CH Chong there and then why the Property was not assigned to D1’s name, to which CH Chong replied that he was worrying that troubles might have been caused by the gambling habit of D1 but reassured that the Property was D1’s. 7.D1’s pleaded case is that it was the common intention of all parties concerned that both CH Chong and P1 purchased and held the Property as trustees for the sole benefit of D1 in accordance with the Mutual Promise. In particular, in reliance on the Mutual Promise and as consideration, D1 was encouraged to act and indeed acted upon it, including (a) paying the initial deposit of HK$6,000, (b) taking vacant possession of the Property and causing it to be decorated and furnished, (c) moving into the Property with his family and abandoning the Wooden Hut, (d) living in the Property as their home without paying any rent or licence fee, and (e) taking good care of the Father and paying for all living and medical expenses and the funeral and burial costs of the Father since 2 July 1984. As a result, D1 incurred monetary loss and expense in the total sum of HK$316,000 comprising (a) initial deposit for the Property in the sum of HK$6,000, (b) living and medical expenses of the Father in the sum of about HK$20,000, (c) funeral and burial costs of the Father in the sum of about HK$170,000, (d) decoration and furnishing costs of the Property in the sum of about HK$80,000; and (e) value of the abandoned Wooden Hut in the sum of about HK$40,000. 8.It is D1’s case that the whole course of the aforesaid dealings between the parties indicates a common intention that CH Chong and P1 (and later P2) held or hold the Property on constructive trust for the benefit of D1 wholly and solely, i.e. the claim of CICT. 9.Further or alternatively, D1 contends that (a) the Mutual Promise and subsequent conducts of the parties constituted an unequivocal representation by CH Chong and P1 to D1 that the Property would be conveyed to D1 in consideration for D1’s looking after the Father during the last stage of his life and be responsible and pay for all his living and medical expenses and funeral and burial costs; (b) D1 relied and indeed acted upon the representation; and (c) it is inequitable for CH Chong and P1 (and P2) to go back on the representation, i.e. the claim of proprietary estoppel. C2. D1’s alternative case of adverse possession 10.It would appear that D1’s case of adverse possession was introduced by way of amendment on 5 July 2016 in D1’s Re-Amended Defence and Counterclaim (“RADC”). This is because the RADC contains a revamped version of D1’s defence and counterclaim with green lines in the margin indicating that it was introduced by way of re-amendments on 5 July 2016. This was almost 18 years after the commencement of these proceedings on 4 September 1998. 11.As pleaded by D1, if, contrary to D1’s contention that he is the beneficial owner of the Property (i.e. in the event the Court rejects D1’s claims of CICT and proprietary estoppel), D1 would contend that he has exclusively possessed the Property since 5 October 1983 with the intention to so possess the Property as owner and/or under the mistaken belief that he is the owner of the Property, without the consent of CH Chong, P1 and P2 and without paying any rent or other sum for such possession or otherwise acknowledging any title of CH Chong, P1 and P2, and has dispossessed CH Chong, P1 and P2 as paper title owners for over 20 years (or 12 years as the case may be), and the right of action of CH Chong, P1 and P2 to recover possession of the Property is time-barred under s. 7(2) of the Limitation Ordinance (Cap. 347) (“LO”). C3. P2’s case 12.As mentioned, Ps sought vacant possession of the Property but such claim was struck out or dismissed by reason of the procedural defaults on the part of Ps. Therefore, what is left for trial is D1’s counterclaim against P2. 13.That said, in order to understand P2’s position, it remains necessary to consider Ps’ Re-Amended Statement of Claim (“RASC”) and Ps’ Amended Reply and Amended Defence to D1’s RADC (“AR”). 14.In the RASC, it is pleaded that CH Chong and P1 acquired the Property by paying the entire consideration of HK$385,440; they purchased the Property for the sole purpose of investment; they entrusted the control and possession of the Property to D1 so as to facilitate the management of the Property and searching for potential tenant for CH Chong and P1 (“the Arrangement”). Moreover, D1 was allowed as a licensee to possess and control the Property for the purposes of carrying out the Arrangement (“the 1st Licence”). 15.It is further pleaded in the RASC that CH Chong and P1 subsequently were aware of and confirmed the unauthorised use of the Property by Ds and their family but they tolerated the said breach until about 12 May 1994 when they decided they would no longer tolerate and they had informed Ds of the determination of the 1st Licence. Nevertheless, in about 1996, Ds asked for indulgence to remain in the Property on the ground that they have made an application for public housing and CH Chong and P1 agreed not to vacate Ds immediately, and this constituted a licence to Ds in that they were allowed to stay in the Property for the time being pending allocation of public housing (“the 2nd Licence”). To the best of Ps’ knowledge, Ds have been allocated public housing in 1998 and hence the 2nd Licence has been determined automatically, and CH Chong and P1 had in any case instructed their solicitors to issue a letter to Ds dated 9 June 1998 to determine and withdraw the 2nd Licence. 16.In the AR, Ps deny the Mutual Promise and aver that, at the time of the purchase of the Property, it was not yet discovered that the Father had suffered from any form of illness which was fatal in nature. The purchase of the Property was jointly funded by CH Chong and P1. It was their common intention to retain half share of the Property. As a result, the Property was registered in the joint names of CH Chong and P1. 17.It is further denied that D1 was responsible for paying the living, medical or funeral expenses for the Mother and the Father. Instead, they were settled partly by the savings of the Mother and partly by CH Chong who gave his parents a fair sum of money and jewellery to use in Mainland China. In particular, CH Chong was the person responsible for paying all living and medical expenses of the Father. 18.Ps in any event deny that the Mutual Promise or any subsequent conduct of CH Chong and/or P1 constituted an unequivocal representation that the Property would be conveyed to D1. 19.As regards D1’s alternative case of adverse possession, Ps simply deny that any of their claim is time-barred. 20.In P2’s Opening and Closing Submissions, P2 has advanced two main grounds as to why D1’s alternative case of adverse possession must fail. First of all, P2 contends that there can at most be 15 years of factual possession prior to the issuance of the Writ in 1998 and D1 could not rely on post-writ cause of action. Secondly, P2 contends that D1 did not have the requisite intention to possess. P2 relies on (i) the fact that D1 relied on the Mutual Promise to claim a derivative title from Ps and (ii) other statements or conduct of D1 which negated his intention to possess. D. RELEVANT PRINCIPLES D1. CICT (Common intention constructive trust) 21.The law on common intention constructive trust is well settled. The parties do not dispute that the relevant principles have been set out by the Court of Appeal in Mo Ying v Brillex Development Ltd [2015] 2 HKLRD 985. I have summarised the relevant principles in another decision of mine in Tang Hin Fai & Anor v Tang Hin Lung & Anor [2023] HKCFI 2637, [94]. The relevant parts are reproduced below for ease of reference:
22.Further, it would appear that the parties are in agreement that if D1 successfully establishes CICT, it would be appropriate to grant an order that all legal and beneficial title right and interest in or over the Property shall vest in D1. D2. Proprietary estoppel 23.The relevant principles on proprietary estoppel are trite. The doctrine can generally be described as having three main elements:
24.D1’s reliance on proprietary estoppel is based on similar factual matrix as his CICT claim, namely the Mutual Promise, i.e. an estoppel by representation. 25.In D1’s Opening, Mr Chong contends that the modern development of the law seems to have made proprietary estoppel by representation subsumed into CICT as they both share the same elements. He relies on the observations of Mr Recorder Coleman, SC (as he then was) in Chum Mei Diu v Sum Fan Hung, HCA 946/2013 (unreported, 4 June 2015), [27]-[28]. This is the foundation of Mr Chong’s further argument that the relief for proprietary estoppel by representation should be similar to that of CICT, by relying on the majority opinion of UK Supreme Court in Guest v Guest [2022] UKSC 27 adopting the expectation-based model for relief, and seeking a vesting order of the Property in favour of D1. 26.In response, Mr Poon for P2 disagrees with the above contentions. He argues that more recent authorities have showed a clear judicial recognition that CICT and proprietary estoppel are separate equitable principles with their own distinctive practical significances. In particular, he relies on the observations made by Lam VP (as he then was) in Cheung Lai Mui v Cheung Wai Shing[2020] 2 HKLRD 15, [1.4], quoting Stack v Dowden[2007] 2 WLR 831, [37]:
27.Mr Poon submits that the Court has slightly different tasks when handling a CICT claim and proprietary estoppel claim. In a CICT claim, the Court has to ascertain whether the whole course of conduct is capable of pointing to a common intention as to the identity of the owner, and if so the size of interest. This includes considering any relevant representation found to be made by the promisor. When it comes to the question of remedy the Court has little room to exercise any discretion but to award the claimant what was commonly intended. 28.On the other hand, in a claim for proprietary estoppel, the Court’s focus would be whether the relevant representation found to be made by a promisor, if any, is clear enough to be relied upon. When it comes to deciding the remedy the Court has to exercise discretion and order what is equitable. This needs not be the same as the promise made in the relevant representation. 29.For such reason, he contends that the majority’s approach in Guest v Guestshould have no application either way, namely that (i) if the Court finds in D1’s favour in CICT, the only appropriate remedy would be in accordance with what is found to be commonly intended (hence it is not necessary to resort to Guest v Guest); and (ii) if D1 has established a valid claim in proprietary estoppel, this Court is bound by Cheung Lai Muito order the minimum necessary award to do justice. 30.For present purposes, I am inclined to agree with Mr Poon’s submissions. In particular, I agree with the observations of Lam VP (as he then was) regarding the different nature and rationale of the claims of CICT and proprietary estoppel. That said, it is not strictly necessary for me to express any conclusive view, unless I am satisfied that D1 has established a valid claim in proprietary estoppel but not CICT. D3. Adverse Possession 31.The relevant principles on adverse possession are also trite. The burden is on a party claiming adverse possession to establish (a) factual possession for the requisite period of time (being 20 years or 12 years) and (b) the requisite intention to possess or animus possidendi. 32.In D1’s Opening, Mr Chong refers to the summary of the relevant principles by To J in Birkenhead Properties and Investments Ltd v Lam Kai-man & Another, HCMP 1588/2012 (unreported, 12 January 2016), at [9]-[13]:
33.On behalf of P2, Mr Poon does not dispute the general principle as set out by To J in the above judgment. 34.In the present case, in order to succeed in adverse possession, D2 must establish over 20 years of possession (from 1983 to at least 2003), or alternatively over 12 years of possession (from 1991 to at least 2003). As CH Chong and P1 had commenced proceedings to recover possession of the Property in 1998, ordinarily the period of limitation should have stopped from running upon the institution of such proceedings. Therefore, if such claim for possession remains extant, D2 would have no case of adverse possession at all. Nevertheless, after P2 substituted CH Chong as a plaintiff, the claim for possession by P1 and P2 was eventually struck out. On behalf of D1, Mr Chong submits that such a struck-out claim would not stop the period of limitation from running. He relies on the obiter opinion of the Court of Appeal in Grand Wayfair Investment Co Ltd v Chan Yung Kan & Others, CACV 238/2013 (unreported, 26 September 2014) at [26]-[29] that an unenforced default judgment for possession would not break the continuity of possession or stop time from running. As a matter of logic, I agree that a struck-out claim could do no better than an unenforced default judgment in stopping time from running. On behalf of P2, Mr Poon does not seem to dispute that, as a result of the striking out of Ps’ claim for possession, time will continue to run notwithstanding the commencement of the present proceedings in 1998. 35.Notwithstanding the foregoing, Mr Poon argues that D1 cannot succeed in his claim of adverse possession on two major grounds. 36.First of all, Mr Poon argues that D1’s claim of adverse possession would fail because, by the doctrine of relation back, D1’s claim should be adjudicated by reference to the date of the writ, i.e., 4 September 1998. As such, D1’s claim is bound to fail because on D1’s own case he had at most stayed in the Property for only 15 years at the date of the writ, which falls short of the requisite 20 years’ limitation period (or he had at most stayed in the Property for only 7 years counting from 1991, which again falls short of 12 years’ limitation period counting from 1991). 37.Secondly, Mr Poon argues that D1 did not have the requisite intention to possess or animus possidendi. He contends that D1’s claim of the Mutual Promise would be incompatible with the required possession being an adverse one. He further argues that, even if the Court rejects the Mutual Promise, D1’s adverse possession claim would still fail because of the insistence of the Mutual Promise by D1. As D1’s intention has all long been to rightfully derive his title from CH Chong and to become the paper title owner himself, his intention has never been adverse to the paper title owner. I should mention that Mr Poon also relies on other statements or conduct of D1 to contend that D1 has no animus possidendi. 38.On behalf of D1, Mr Chong disagrees with the above submissions. I will deal with these arguments as may be necessary or appropriate in the latter part of this Judgment. D4. Witness credibility 39.The general principles regarding assessment of credibility are trite and have been helpfully summarised in Hui Cheung Fai v Daiwa Development Ltd, HCA 1734/2009 (unreported, 8 April 2014) at [77]-[83]. In short:
E. WITNESSES 40.D1 has called two witnesses, namely D1 and D2, whilst P2 has called two witnesses, namely Madam Ng and P2 (i.e. Ernest). 41.Among the witnesses, the evidence of D2 and Ernest are of less relevance. D2 was a teenager at the time of the alleged Mutual Promise in 1983. In his witness statement, he mentioned that he moved into the Property in 1983 at the arrangement of his father D1 without mentioning the Mutual Promise or the details thereof at the same juncture. Whilst he did refer to the Mutual Promise in the subsequent part of his witness statement, it would appear that he was not privy to the making of the alleged Mutual Promise and he was merely recounting D1’s case in response to P2’s case. I should however mention that, during cross-examination, D2 suggested that he had overheard a telephone conversation and D1 later told him that CH Chong said he would purchase a property for D1. I will deal with such evidence in the analysis below but, subject to that, D2 did not profess to have much knowledge of the Mutual Promise or its details. 42.As regards Ernest, he was still a child at the time of the alleged Mutual Promise in 1983. He confirmed in his witness statement that, other than the fact that the Property was assigned to him in 2002 by his late father CH Chong and his mother P1, he was not involved in any other matters relating to the Property. All that he knew was that CH Chong and P1 had purchased the Property as an investment, and he never heard that the Property was beneficially owned by somebody including D1 and/or D2 or that it was purchased as a gift to D1 and/or D2 in exchange of anything. 43.Indeed, the only witness who was privy to the alleged Mutual Promise is D1. Even on D1’s case, the Mutual Promise was reached between CH Chong and D1 in the absence of Madam Ng. Of course, this does not mean that Madam Ng’s evidence is irrelevant because, as CH Chong’s wife and the other co-owner of the Property, Madam Ng’s evidence would no doubt have implications on the credibility of D1’s case of the Mutual Promise. 44.In terms of the demeanour of the witnesses, I do not find any of them to be particularly forthcoming or evasive in the course of giving evidence. I also remind myself of the principles in Hui Cheung Fai, particularly that care should be taken in drawing conclusions about truthfulness and reliability solely or mainly from the appearance of a witness or from the assessment of a witness’ character. Instead, I would place more emphasis in any contemporaneous documents, the inherent probabilities of a witness’ account, the consistency of the witness’ evidence with the undisputed or indisputable evidence, and the internal consistency of the witness’ evidence. F. ANALYSIS F1. Mutual Promise 45.The crux of the dispute in the present case turns on whether the alleged Mutual Promise was made and, if so, the precise terms thereof. As it is P2’s case that D1’s family resided in the Property pursuant to the Arrangement, the credibility of D1’s case also depends, to some extent, on the credibility of P2’s case. Nevertheless, it is not necessarily the case that the truth is confined to either party’s version. In other words, even if I am not convinced that the Arrangement existed, that does not necessarily mean that the Mutual Promise must have been entered into (albeit being a relevant factor); and vice versa. Further, if I am not satisfied that either the Mutual Promise or the Arrangement was entered into, and yet the evidence suggests that D1’s family resided in the Property with the permission of CH Chong and Madam Ng, then it may simply mean that CH Chong and Madam Ng had somehow allowed D1’s family to stay in the Property. 46.Without prejudice to the foregoing, it would be convenient for me to deal with the Mutual Promise first. Having considered the relevant evidence and the overall probabilities, I am of the view that there are a number of factors which militate against D1’s case. 47.First of all, on D1’s evidence, the Mutual Promise was made or confirmed on five occasions, namely:
48.Yet, despite the above, D1 is unable to proffer any written document in support of any of the above oral exchange. To be fair to D1, I fully acknowledge that the alleged Mutual Promise is by nature an oral agreement, and it was entered into between close family members (i.e. brothers), which may explain why the parties did not see fit to reduce things into writing. That said, one is concerned after all with a real property of substantial value, and the Property was not purchased in the sole name of CH Chong, but in the joint names of CH Chong and P1 as joint tenants. This means that P1 was prima facie entitled to a half interest in the Property and, in the event CH Chong passed away before her, she would acquire all interest in the Property through survivorship. There is, however, no suggestion that D1 had a close relationship with P1 (being his sister-in-law). As such, it seems a bit surprising that D1 did not seek to have any written record of the Mutual Promise, particularly when its terms are in conflict with the terms of written legal documents including, in particular, the Assignment. Notably:
49.Secondly, the genesis of the Mutual Promise is that, when CH Chong requested D1 to look after the Father in Hong Kong during his dying period, D1 expressed difficulty on his part as D1’s family was living in the Wooden Hut with about 300 square feet. According to D1, CH Chong then promised to buy D1 a flat in Hong Kong in exchange for D1’s promise to look after the Father in Hong Kong during the last stage of his life and be responsible and pay for all his living and medical expenses and funeral and burial costs. With respect, I find such allegation inherently improbable, having regard in particular to the following:
50.Thirdly, the Property was purchased in 1983 in the joint names of CH Chong and P1. At that time, CH Chong and P1 had been married for 11 years, and they were running the business of a jewellery shop together in Singapore. Whilst there is no direct evidence as to how the purchase price of the Property was paid, it seems fair to say that, even assuming that the purchase money were paid by CH Chong, the source of such money would likely originate from the common pool of the family assets and/or business, and should properly be regarded as equal financial contributions by CH Chong and P1 as husband and wife and/or business partners of the jewellery shop. On the premise that P1 did have a 50% financial contribution towards the purchase of the Property, it seems incredible to suggest that P1 would forgo such 50% financial contribution in exchange for a promise by her brother-in-law (D1) to take care of her father-in-law during his last days, when they were not related by blood. 51.Fourthly, D1 claims that CH Chong promises to purchase the Property for D1. Yet, according to D1, it was not until he went to the solicitors’ office on 5 October 1983 that he realised the Property was to be purchased in the names of CH Chong and P1. According to D1, CH Chong explained that this was due to the concern over D1’s gambling habits, but CH Chong and P1 would hold the Property on trust for him. It seems rather incredible that D1 would readily accept such explanation (if not excuse) from CH Chong without question or query. Moreover, during cross-examination, D1 said that although he agreed to such trust arrangement at the time, the so-called gambling habits was only CH Chong’s own belief and D1 did not accept that there was indeed such concern or risk, as he never borrowed money from moneylenders. If so, it is strange that D1 did not object at the time. Further, if there were a trust arrangement, it is inexplicable why D1 never requested or demanded CH Chong and P1 to transfer the title of the Property to him at any point in time subsequently (e.g. when the gambling habits should no longer be a real concern), until well after the commencement of these proceedings by CH Chong and P1. 52.Fifthly, D1’s case of the Mutual Promise has not been consistent in the present proceedings. On various occasions, D1 seems to suggest that CH Chong promised to purchase the Property for D1 (and/or his family) to live there (for life), as distinct from purchasing the Property for D1. Without being exhaustive and by way of illustration:
53.D1 has been cross-examined as to some of the documents above, including in particular references to CH Chong and P1 purchasing the Property for D1 to live, and he responded by saying that, in his understanding, purchasing a flat for him (買房子給我) and purchasing a flat for him to live (買房子給我住) are the same thing, although he now realises the difference after being questioned by Mr Poon. D1 further claimed that he could not recall saying that the Property was for him to live there for a long term (長期居住) due to a long lapse of time, and explained that he initially sought a relief for his family to live in the Property until being allotted public housing as he did not have lawyers then and was ignorant of the law. 54.In my view, there is indeed inconsistency in D1’s position. Whilst I accept that a layman may not have full or proper knowledge of the law, one cannot hide behind such pretext when it comes to what precisely was the oral agreement (if any) allegedly entered into by the parties. There is an obvious difference between being offered a flat for D1’s family to live in (whether for a long term or for life), and being gifted the title or ownership of a flat. The former is a licence, whilst the latter is a gift of property. These are concepts which a layman could fairly understand. 55.Importantly, in his Affirmation dated 28 October 1998, D1 surely understood such difference, because he drew a distinction between (i) CH Chong and P1’s promise to purchase the Property for D1’s family to live in the Property for the duration of D1’s life (購入上址單位只答應給我家人長期居住到我一輩子), i.e. a claim of licence; and (ii) D1’s claim that he had one-fifth title in the Property as a result of his contribution to decoration costs (我幫他全面內裝修房子費用八萬多元，等於我佔有上址單位五分之一房產權), i.e. a claim over part of the title or ownership of the Property. Echoing that, it is significant that D1 did not seek any relief over the title or ownership of the Property at the time, but he only sought a temporary relief for his family to live in the Property until being allotted public housing. 56.The reality is that, in the affirmations and defences made by D1 (and D2) initially, D1 merely alleged to be granted a licence (albeit for a long term or for D1’s life) to live in the Property, and it was only in subsequent documents that D1 started to claim proprietary interest in the Property. Nevertheless, even in those subsequent instances, D1’s version is far from clear or unequivocal because, whilst D1 did refer to the concept of a gift, he mentioned at the same time that the Property was purchased for him and/or his family to live there (買給我住 / 買給我家人住). 57.With respect, had the Mutual Promise been made and had D1 been promised a gift of the Property as alleged, he would have no difficulty putting forward such stance and refusing to vacate the Property on a permanent basis at the outset, instead of claiming a right to live in the Property on a long-term basis or for life, and merely asking for indulgence to stay until being allotted public housing. Therefore, the inconsistency identified above militates against the credibility of D1’s case. This is not only because D1’s case is inconsistent, but also because D1’s case has evolved and changed materially over time, which suggests that D1 tends to tailor his case as time goes by to substantiate his claim over the Property. 58.Further or alternatively, even putting aside the foregoing, the evolution of D1’s case suggests that, even assuming that an oral agreement were indeed reached as between CH Chong and D1, the terms of such oral agreement are not the same as the terms now pleaded by D1 under the Mutual Promise. Instead, it would appear that, at the most, all that D1 was promised is that CH Chong and P1 would purchase the Property for D1’s family to live there during the duration of D1’s lifetime, i.e. a licence. The initial stance of D1 (and D2) is critical (if not fatal) to D1’s case. Whilst it may be argued that D1’s subsequent stance is clearer, it appears to me that the Court should attach more weight to D1’s initial stance (right in 1998) which is against his own interest, as opposed to D1’s subsequent stance in this litigation (which may be said to be self-serving). The consequence is that D1 was at most given a licence; alternatively any oral agreement is not unequivocal, as it is not even D1’s initial stance that the objective effect of such oral agreement, or his subjective understanding of the same, is to confer the title or ownership of the Property on D1. As such, D1 could hardly rely on it as the basis of his claims of CICT or proprietary estoppel. 59.In this regard, I also take note of Mr Poon’s further submissions that, when questioned as to whether D1 thought he had the rights to let and sell the Property, D1 could not confirm positively and said it was for the Court to decide. To some extent, this reinforces my observations above that D1 had difficulty demonstrating the objective effect or his subjective understanding of any oral agreement allegedly entered into with CH Chong, although as a matter of fairness, it may be suggested that D1’s answer is open to a different interpretation – D1 could have meant that whether he has the rights to let and sell the Property would turn on the outcome of this litigation which is for the Court to decide. 60.Pausing here, as I would elaborate further below, the above also has a bearing on D1’s alternative case of adverse possession. In short, D1’s stance amounts to an acknowledgment that he was granted a licence by CH Chong and P1 to live in the Property during his lifetime, which is indeed fatal to a claim of adverse possession. 61.Sixthly, D1 claims that he incurred monetary loss and expense in the total sum of HK$316,000, comprising (a) initial deposit for the Property in the sum of HK$6,000, (b) living and medical expenses of the Father in the sum of about HK$20,000, (c) funeral and burial costs of the Father in the sum of about HK$170,000, (d) decoration and furnishing costs of the Property in the sum of about HK$80,000; and (e) value of the abandoned Wooden Hut in the sum of about HK$40,000. The apparent effect of such assertion is to convey the impression that D1 has incurred a very substantial amount of money, which is comparable to the full purchase price of the Property in the sum of HK$385,440, so as to answer any criticism that the terms of the alleged Mutual Promise are disproportionate. Putting aside the fact that the Court should not consider this with the benefit of hindsight, it is again a bit surprising that D1 is unable to proffer any documentary evidence in support. Whilst I fully appreciate that the events took place a long time ago, if as alleged D1 did promise to pay for all these expenses in exchange for ownership of the Property, one would naturally expect D1 to keep the records of payment as proof that he had duly performed the Mutual Promise, in case there may be dispute in future. 62.The failure by D1 to produce any documentary evidence in support is exacerbated by the contrary evidence given by Madam Ng (at §15 of her witness statement) that CH Chong and herself had prepared a sum of money which was more than $10,000 Singapore dollars for the Father’s trip from Singapore to China (via Hong Kong) in 1984. There is nothing concrete from D1 (other than D1’s oral evidence, which may well be self-serving) to refute the account given by Madam Ng. Indeed, given the fact that the Father had been living with CH Chong and Madam Ng for a long time in Singapore and they were responsible for everything for the Father, Madam Ng’s version has the ring of truth. 63.Moreover, I note that under D1’s case, he was not supposed to pay for the initial deposit of HK$6,000. Instead, such sum should be paid or reimbursed by CH Chong. Whilst there is no direct evidence as to who paid the said HK$6,000, the fact that D1 claims to have paid such sum seems to militate against his case of the Mutual Promise too. 64.Seventhly, D1 claims that CH Chong gave him a long-distance phone call on 3 January 2000, telling D1 that CH Chong did not issue the writ or seek to recover the Property, and it was Madam Ng who unilaterally commenced the present proceedings in Hong Kong in CH Chong’s name without his consent. Moreover, D2 also made such allegation in his witness statement. In my view, such allegation is incredible and would, in turn, undermine the credibility of D1 and D2.
65.Eighthly, as mentioned in Section E above, it would appear from D2’s witness statement that he was not privy to the making of the alleged Mutual Promise, and he merely sought to recount D1’s case in his witness statement. Nevertheless, during cross-examination, D2 suggested for the first time that there was an occasion when his grandfather (i.e. the Father) called and asked D1 for money, after which D1 called CH Chong saying that the Father asked for the money. D2 further claimed that D1 told him afterwards that CH Chong told D1 that CH Chong would purchase a property for him. D2 also added that during the time when he was at the Wooden Hut at the age of 16 to 17 in 1983, CH Chong and P1 also visited them and asked D2 (in the presence of D1) if he was happy if they purchased a flat for them. Yet, when asked why he did not mention all these in his witness statement, D2 merely said there are too many things and he omitted to mention them. In my view, if what D2 said were the truth, it is rather extraordinary that he mentioned none of them in his witness statement. He was unable to offer any credible explanation as to why he did not mention them in his witness statement. It is not an excuse to suggest that there are many things and he simply omitted to mention them. The Mutual Promise is the crux of D1’s case, and D2 ought to have realised the importance of his evidence at the outset. His failure to mention them in his witness statement tends to undermine D2’s credibility. 66.Ninthly, it is Madam Ng’s evidence that after the purchase of the Property and in around 1984, the Father was diagnosed with cancer in the terminal stage and, at that time, he indicated that after his death, he wished to be buried in Mainland China with the Mother and he therefore decided to go back to Mainland China. Madam Ng is adamant that CH Chong and herself were not aware that the Father was terminally ill when the Property was purchased in 1983. In this regard, neither side has provided any documentary evidence to demonstrate the time when the Father was diagnosed with cancer. Nevertheless, it may be said that given that it is up to D1 to prove the Mutual Promise, the onus is on D1 to prove that the Father was already diagnosed with cancer in mid-August 1983 when the Mutual Promise was allegedly entered into. Moreover, on D1’s case, the Mutual Promise was entered into in mid-August 1983, more than 1 year before the Father’s death on 26 August 1984. It seems rather extraordinary that the Father would have survived over 1 year, if he was indeed diagnosed with terminal cancer by mid-August 1983. 67.Tenthly, it is P2’s evidence (at §9 of his witness statement) that P2 had a discussion with D1 and D2 about the Property in about May 2002 in which D1 suggested to sell the Property and share half of the proceeds. Upon being cross-examined, D1 suggested that there was no such discussion or meeting. 68.Although there is no documentary evidence of such meeting, it is notable that, in a Chinese handwritten defence dated 13 November 2003 by D1, it was stated by D1 (at §13) that D1 suggested to P2 last year (i.e. in 2002) to sell the Property and share half of the proceeds because P2 told him that CH Chong was seriously ill and needed money for medical treatment. Such document appears to affirm P2’s version (and undermine D1’s testimony) that there was indeed a discussion between D1 and P2 during which D1 suggested selling the Property and sharing half of the proceeds. This also militates against the credibility of D1. 69.All in all, the totality of evidence militates against D1’s case of the alleged Mutual Promise. F2. The Arrangement 70.Having dealt with the Mutual Promise, I now turn to deal with P2’s case of the Arrangement. In my view, having regard to the evidence, it does not appear to me that P2 can establish the Arrangement on a balance of probabilities. For the avoidance of doubt and as explained earlier, this does not mean that the Mutual Promise must have been entered into (equally, even though I am not convinced that the Mutual Promise was entered into, that does not mean that the Arrangement must have been entered into). Indeed, for the reasons I have set out in Section F1 above, I am of the view that the Mutual Promise was not entered into. 71.First of all, the Arrangement was not pleaded by CH Chong and P1 at the outset. In the original Statement of Claim dated 4 September 1998 which was included in the Writ of the same date, it was pleaded that CH Chong and P1 purchased the Property for the sole purpose of investment. It was further pleaded that sometime in January 1984, they orally permitted D1 and D2 to occupy the Property but on 12 May 1994, they informed D1 and D2 that they would determine the said licence for the reason that they intended to sell the Property. Other than the above, there was no plea of the Arrangement. This casts doubt on the credibility of the alleged Arrangement. 72.Secondly, according to the terms of the alleged Arrangement pleaded in §2 of the RASC, CH Chong and P1 entrusted the control and possession of the Property to D1 so as to facilitate the management of the Property and searching for potential tenant. As pleaded further at §2A of the RASC, a licence was granted to D1 to possess and control the Property for carrying out the Arrangement (i.e. the 1st Licence). However, the reality is that, ever since the Property was purchased in October 1983, it was occupied by D1’s family without any attempt to rent out or market the Property for sale. The suggestion that CH Chong and P1 nevertheless tolerated the inaction (or indeed breach) on the part of D1 for 15 years and only issued a Writ in 1998 is rather extraordinary and incredible. 73.Madam Ng has not been able to provide any satisfactory explanation as to why CH Chong and herself tolerated D1’s breach for such a long period. In §12 of her witness statement, Madam Ng attempts to explain this by reference to their busy business in Singapore, the relatively insignificant rental vale of the Property, the distance between Hong Kong and Singapore, and that in early 1980s it was not easy to keep in close touch internationally. In my view, they are not convincing explanation of the inaction on the part of CH Chong and P1 for such a long time. 74.Thirdly, it is P2’s case as pleaded in §3 of the RASC that, sometime in January 1984, CH Chong and P1 received an oral proposal from D1 to let D1’s family stay in the Property instead of renting out the Property for income, but they refused and insisted on the Arrangement. It is further pleaded that no tenant has been arranged by D1 and, instead, D1 allowed himself and his family including D2 to occupy the Property for their own benefits in breach of the 1st Licence, and yet CH Chong and P1 simply tolerated such breach for over 10 years, until they decided not to tolerate further as they intended to sell the Property and informed D1 and D2 of the determination of the 1st Licence on 12 May 1994. 75.In my view, the suggestion that CH Chong and P1 tolerated the breach for 10 years is, again, rather incredible. If CH Chong and P1 had already refused D1’s oral proposal in January 1984 and yet D1 nevertheless went ahead in breach of the Arrangement and the 1st Licence, there is little reason why CH Chong and P1 would simply do nothing and tolerate such breach for such a long time. Indeed, if the Arrangement was entered into and the true intent of CH Chong and P1 was to rent out the Property for income, there is little reason why they did not revoke the Arrangement, ask for return of the keys and demand D1’s family to move out in 1984, after which they can simply entrust an estate agent to rent out or market the Property for sale. 76.Fourthly, it is Madam Ng’s evidence that CH Chong and herself intended to do investment in Hong Kong in around 1982 to 1983, and D1 introduced to them a toy factory and they went to Hong Kong to visit the same, but abandoned such idea as they felt that it would be difficult for them to maintain close management and control over a manufacturing business in Hong Kong remotely. However, Madam Ng has not provided any documentary support of such trip to Hong Kong or the visit to the toy factory (such as name cards or photos). Indeed, if there were concern over the difficulty of maintaining close management and control such that CH Chong and P1 decided to invest in the property market instead, it seems inexplicable why CH Chong and P1 did not see fit to maintain close management and control by entrusting estate agent to deal with the Property, or to revoke the Arrangement with D1 when they realise they could not maintain close management and control of the Property via D1. 77.Fifthly, as submitted by Mr Chong, P1 confirmed under cross-examination that neither CH Chong nor P1 sought to have a set of spare keys to the Property, which would have facilitated their renting out or selling the same, or would have enabled them to pass such spare keys to an estate agent to follow up. The fact that they did not do so casts doubts on the credibility of the alleged Arrangement. 78.Sixthly, the alleged Arrangement is silent as to the arrangement on decoration and furnishing of the Property, and yet it is not disputed that D1 had incurred some costs in decorating the Property. If the Arrangement was indeed entered into, it would be strange that the parties did not discuss or apply their mind to the arrangement of decoration and, if so, how the costs are to be paid for. 79.In the premises, I am not satisfied, on a balance of probabilities, that the Arrangement was entered into. Nor am I satisfied that the Mutual Promise was entered into. The evidence does suggest, however, that CH Chong and P1 were aware of the occupation of the Property by D1’s family, and they had also allowed them to stay in the Property until shortly before the issuance of the Writ in 1998 (albeit for different reasons according to the respective cases of P2 and D1). It may well be the case that CH Chong and P1 did intend to purchase the Property for investment purpose, but they were aiming at profit at a sale and not bothering that much about rental income, and somehow allowed and tolerated D1’s stay. It is however not necessary for me to form any conclusive view as to why CH Chong and P1 allowed D1’s family to stay in the Property. Suffice it to say that I am not satisfied that they did so pursuant to the alleged Mutual Promise. Alternatively, if I were wrong and an oral agreement was entered into between CH Chong and D1, it would at most be the grant of a licence along the lines of D1’s initial stance. In any event, taking into account D1’s previous stance, the terms of any alleged Mutual Promise are far from clear or unequivocal, and it is at least open to a construction that the Property was purchased for D1 and his family to live there during D1’s lifetime. For the avoidance of doubt, this is never D1’s pleaded case (not even by way of fallback) and hence, once the Court is not satisfied that D1 has made out his case of the alleged Mutual Promise, that is the end of D1’s case on CICT or proprietary estoppel. F3. Conclusion on D1’s claims of CICT or proprietary estoppel 80.For all these reasons, I am not satisfied that D1 could prove, on a balance of probabilities, that the Mutual Promise was entered into. Further or alternatively, even assuming that an oral agreement were entered into, D1 was at most granted an oral licence (as suggested by D1 initially in his affirmation back in 1998). In any case, the terms of any alleged oral agreement or representation are far from clear or unequivocal, and could not give rise to and substantiate D1’s claims of CICT or proprietary estoppel. D1 therefore fails in such counterclaim. F4. D1’s alternative claim of adverse possession 81.Based on the evidence, there is no dispute that D1 and his family have been in factual possession of the Property since late 1983 until the present. It is also not in dispute that, notwithstanding the institution of these proceedings by CH Chong (substituted later by P2) and P1 in 1998, the period of limitation would not stop from running as Ps’ claim was subsequently struck out. On the face of it, it seems open to D1 to make a claim of adverse possession, subject of course to establishing the requisite intention to possess or animus possidendi. 82.As mentioned before, P2 opposes D1’s claim of adverse possession on two major grounds. I will deal with them in turn. 83.In relation to the first ground, P2 contends that, by the doctrine of relation back, D1’s claim should be adjudicated by reference to the date of the writ, i.e., 4 September 1998. As such, D1’s claim is bound to fail because the period of possession up to 1998 falls short of the requisite limitation period. On behalf of P2, Mr Poon relies on the Court of Appeal’s decision in Wing Siu Co Ltd v Goldquest International Ltd [2003] 2 HKC 64 at [10], [17]. In essence, he argues that D1’s claim of adverse possession is incurably bad because the cause of action did not exist at the date of the original claim on 4 September 1998. 84.On behalf of D1, Mr Chong disagrees with such submissions. He stresses that D1’s adverse possession claim is not an action to recover land, as D1 has all along been in exclusive physical possession of the Property. He submits that the running of limitation period does not stop so long as D1 is in continuous and exclusive physical adverse possession of the Property, and there is no basis to say that D1’s claim for a possessory title to the Property is restricted to or adjudicated at 4 September 1998 (date of the Writ), because a declaration by the Court of D1’s acquisition of a possessory title of the Property is an adjudication of the state of affairs as at the time of adjudication. He further submits that a declaratory judgment does not provide for any enforcement or order a party to take any action or pay damages, and the rule of relation back has no direct application to a declaratory judgment; indeed the jurisdiction of the Court to make a declaration of right is wide and flexible. 85.However, Mr Chong has not cited any direct authority in support of his proposition that the doctrine of relation back has no application to a claim for a possessory title. With respect, I am unable to accept his submissions. In my view, whilst D1 is seeking a declaration that he has acquired a possessory title of the Property, this remains a cause of action advanced on behalf of D1 in this litigation. The essence of D1’s cause of action is that, as at the date of making his claim (which is deemed to be the date of the Writ in 1998 by reason of the doctrine of relation back):- (i) the right of action of CH Chong and Ps to recover possession of the Property is time-barred under s. 7(2) of the LO, and (ii) the title of CH Chong and Ps to the Property shall be extinguished under s. 17 of the LO. Therefore, the relief sought by D1 (if granted) does carry legal consequence within the meaning of the LO. 86.In Grand Wayfair Investment Co Ltd v Chan Yung Kan and Others,CACV 238/2013 (unreported, 26 September 2014), which Mr Chong relies on, Lam VP (as he then was) has explained the effect of an unenforced default judgment (which should apply similarly to a struck-out claim for possession by analogy) at [26]-[29]:
87.Therefore, the timing of the bringing of proceedings is of critical importance. If a paper title owner has issued a writ within time, he needs not worry about the accumulation of time after he has issued a writ, and that must equally be applicable to a plaintiff who has obtained a judgment for possession. That is apparently the result of the application of the doctrine of relation back. However, if for some reason, the plaintiff could not enforce the judgment, “the defendant is entitled to the accumulated period of possession in a fresh action by the same plaintiff notwithstanding the entry of the earlier judgment which has since become ineffective”. It would appear that the same should be equally applicable to a squatter’s claim for a possessory title. Assuming that a paper title owner has failed to enforce a judgment for possession or, like the present instance, his claim for possession is struck out, the squatter is entitled to claim a possessory title based on the accumulated period of possession in a fresh action commenced by the paper title owner. Logically, the squatter should also be entitled to claim the same in a fresh action commenced by the squatter. The issues as to whether the squatter is indeed entitled to the accumulated period of possession and whether the squatter has established the essential elements of adverse possession during such accumulated period are properly matters to be ventilated and determined in a fresh action brought either by the paper title owner or the squatter (or both). Indeed, the same facts are often relied upon by a squatter, both as a defence to such action brought by the paper title owner, and as a counterclaim against the same paper title owner. 88.Further, there are also considerations of fairness which tilt in favour of the above approach. In a usual action where the paper title owner claims recovery of land and a squatter counterclaims a possessory title, there is no dispute that such claims are to be determined as at the date of the writ. This would rightly be the focus of the pleadings, discovery of documents and the exchange of witness statements. If, at any stage during the proceedings, the paper title owner’s claim is struck out or dismissed, and the effect is that the squatter may rely on post-writ conduct in his counterclaim, then there is a plain risk that the relevant issue and evidence pertaining to such post-writ conduct are not properly articulated and adduced in the existing action. To allow the squatter to pursue such an expanded scope of claim could result in unfairness. Indeed, in the present case, the latest amended pleadings were filed in 2016, and the witness statements were made between August 2017 to February 2018, prior to the dismissal or striking out of Ps’ claim (since July 2018). Hence, the concern of unfairness is a real one. 89.For these reasons, I accept Mr Poon’s submissions that D1’s counterclaim is bound to fail. 90.Turning to the second ground, as mentioned above, Mr Poon submits that D1 did not have the requisite intention to possess or animus possidendi. A crucial aspect of the argument turns on the effect or implications of D1 making a claim based on the alleged Mutual Promise. On behalf of P2, Mr Poon submits that D1’s primary case under the alleged Mutual Promise is based on the promise or the permission of CH Chong as D1 alleges, and such possession would be incompatible with the required possession being an adverse one. He relies on the dicta of Cheung JA in Cheung Lai Mui at [6.64]-[6.66]:
91.Mr Poon further argues that, even if the Court rejects the Mutual Promise, D1’s adverse possession claim would still fail because of the insistence of the Mutual Promise by D1, which shows that his possession was not adverse, or that there was no animus possidendi. He argues that it does not matter that P2 denies D1’s case of the Mutual Promise, because it is the intention of the squatter (not the paper title owner) that is essential. As contended by Mr Poon, the title of land can either be derivative or freshly created (but not both). In the present case, D1 is not seeking to establish a freshly created title (as in adverse possession) in his primary case, as he has all along tried to hold CH Chong to the Mutual Promise. As D1’s intention has all long been to rightfully derive his title from CH Chong, and to become the paper title owner himself, his intention has never been adverse to the paper title owner. 92.On behalf of D1, Mr Chong disagrees with the above submissions. He submits that, regardless of whether at the end of the day D1 is held to be the beneficial owner of the Property under the Mutual Promise, D1 would not be precluded from invoking adverse possession because of the simple fact that D1’s possession of the Property is “adverse” to the title and interest of the paper owners. He relies on the dicta of Kwan JA (as she then was) in the Court of Appeal’s decision in Cheung Kwong Yuen v Sun Hui Fang [2016] 1 HKLRD 464 at [11]-[14] that there was not a principle of law by which a person who mistakenly believes that he has good title or claims to be the lawful tenant or purchaser of property would be precluded from invoking adverse possession: “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.
93.Moreover, Mr Chong seeks to distinguish Cheung Lai Mui on the basis that, in that case, there was finding that the use and occupation of the disputed land by the 3rd defendant was with the permission of the legal owners. 94.That said, putting aside the facts of the case, on the face of it, there is indeed apparent inconsistency in the reasoning of the two Court of Appeal’s decisions. On the one hand, in Cheung Lai Mui, Cheung JA was of the view that a case of adverse possession is factually inconsistent with a case based on CICT and proprietary estoppel where possession of land was not adverse to the registered owners but by virtue of a promise of a gift, licence and permission by the registered owners. On the other hand, in Cheung Kwong Yuen, Kwan JA (as she then was) held that there is no principle of law that it is impossible for someone who believes himself to be the true owner to acquire title by adverse possession. As a matter of logic, this would seem to apply to a person who mistakenly believes himself to be the true or beneficial owner of a property by reason of gift of property and invoking CICT or proprietary estoppel. 95.In my view, despite the apparent inconsistency, the two decisions may be reconciled to some extent, although much would depend on the specific facts of a case. For instance, if the thrust of a claim of CICT or proprietary estoppel is based on the promise of a licence or permission to stay in a property permanently, then this is unlikely to be compatible with an intention to possess. In contrast, if the claim of CICT or proprietary estoppel goes so far to suggest that the paper title owner has made an outright gift and retains no beneficial interest in the property at all, there is apparently no reason why the claimant cannot make an alternative claim of adverse possession. Since the claimant believes himself to be the true or beneficial owner to the exclusion of the paper title owner (who holds the property on trust), logically the claimant can still contend on the one hand that the title of the property should be transferred to the claimant under a claim of CICT or proprietary estoppel, whilst advancing an alternative claim of adverse possession on the basis that he has exerted factual possession of a property as an occupying owner might be expected to deal with it, together with a manifested intention to treat the land as belonging to the possessor to the exclusion of everyone else (and also the paper title owner who, on the claimant’s case, retains no beneficial interest). 96.My view is reinforced by two other decisions relied on by Mr Chong, namely Pang Yiu Chor v Wong Wai Leung [2017] 4 HKLRD 761 and Ng Yuk Pui Kelly v Dung Wai Man [2019] HKCFI 210. In the first case, the Government mistakenly believed itself to be the owner of land in Fanling and granted permits to occupy the land to licensees, when such land belonged to the plaintiffs. An issue in dispute is whether the Government had defeated the plaintiffs’ title by adverse possession. The plaintiffs contended that the Government had no intention to possess due to its belief that it was the owner of the paper title. Such argument was rejected by Anthony Chan J who pointed to a number of Hong Kong and English authorities showing that believing oneself to be the true owner does not prevent a squatter from having the intention to possess. In the latter case, the plaintiff relied on part performance, CICT, proprietary estoppel and adverse possession. L Chan J held that the plaintiff’s alternative adverse possession claim also succeeded and rejected the defendant’s submissions that the plaintiff’s possession of the flats was with the continuous knowledge and consent of the defendant’s husband, because it is the plaintiff’s belief that the defendant was wrong in not transferring the title of the flats to the plaintiff, and the plaintiff did not occupy the flats under consent or licence (at [477]). 97.Of course, depending on the facts, it may not be strictly necessary to go into the above in further details in an attempt to reconcile the two decisions of the Court of Appeal in Cheung Lai Mui and Cheung Kwong Yuen. 98.As I have found in the present case, I am not satisfied that D1 can establish, on a balance of probabilities, that the Mutual Promise was entered into. Importantly, I have referred to the Chinese handwritten affirmation, defence and counterclaim made by D1 (and D2), where D1 suggested that the Property was purchased for his family to live there. In particular, in the Chinese handwritten affirmation dated 28 October 1998 by D1, D1’s case then was that CH Chong and P1 promised to purchase the Property for D1’s family to live there for D1’s lifetime:- “而水興夫婦當時購入上址單位只答應給我家人長期居住到我一輩子” (at p.1); “83年水興夫婦來港買樓，並親自到我木屋看過，並答應上址給我住一輩子” (at p.1). Consistent with the foregoing, D1 merely sought a temporary relief for his family to live in the Property until being allotted public housing:- “要求法院對下址單位判給我家人繼續居住到分配公屋為止” (at p.1). Notably, not only did D1 make no mention of any gift of property, he contended that he had a one-fifth interest in the Property on account of his contribution towards the decoration costs:- “1983年他投資四十萬元購入上址剛入伙，對裝修他要我們住的人出錢，所以我幫他全面內裝修房子費用八萬多元，等於我佔有上址單位五分之一房產權” (at p.1). In substance, this amounts to an acknowledgment that CH Chong and P1 were the true owner of the Property, subject only to (i) D1’s claim of a life interest in the Property and (ii) D1’s allegation to have a one-fifth interest on account of the decoration costs paid by him. 99.Accordingly, based on D1’s own evidence and statement and unlike the facts in the decisions cited by Mr Chong (such as Ng Yuk Pui Kelly), D1 merely claimed a life interest in the Property, or a licence to occupy the Property during his lifetime. Far from excluding the paper title owners, D1 was seeking to derive his interest (as a licensee for life) from them, with their consent or licence. 100.Given such factual findings, it is not strictly necessary to reconcile the two Court of Appeal’s decisions in Cheung Lai Mui and Cheung Kwong Yuen. Instead, the following principles, as authoritatively laid down by the Court of Final Appeal in Wong Tak Yue v Kung Kwok Wai (1997-98) 1 HKCFAR 55 at 69A-F per Li CJ, 70D-G per Litton PJ and 71E, are pertinent:
101.In a similar vein, the Court should accord considerable weight to a statement made by D1 which is against his interest, namely that he regarded his occupation of the Property as being attributable to a promise or a licence by CH Chong and P1 for D1 and his family to live in the Property for D1’s lifetime, and hence not “adverse” to the interest of CH Chong and P1 as paper title owners. It follows that D1 fails to prove his intention to possess or animus possidendi. 102.For completeness, Mr Poon also relies on other statements and conduct of D1, namely that:
103.I agree with Mr Chong’s submissions that the above, on their own, do not necessarily negate any intention to possess on D1’s part. Insofar as the authorization letter is concerned, this shows how D1 managed to enter into possession of the Property in October 1983, which is a matter of course as D1 was not the paper title owner. If, after gaining entry to the Property, D1 continued to possess the Property as his home excluding from it the whole world at large including the paper title owners, there is no reason why D1 cannot establish animus possidendi in an appropriate case. 104.Equally, I do not think that much can be made out of the incident where D1 allowed P1 to pay a visit to the Property in 1997. Indeed, as submitted by Mr Chong, this begs the question as to why P1 had to seek permission from D1 for paying the visit to the Property. It does not, therefore, negate D1’s alleged intention to possess. 105.That said, I consider the above two aspects to be consistent and compatible with my finding that D1 regarded his occupation of the Property as being attributable to a promise or a licence by CH Chong and P1 for D1 and his family to live in the Property for D1’s lifetime, and hence not “adverse” to the interest of CH Chong and P1 as paper title owners. G. CONCLUSION 106.For the above reasons, I dismiss D1’s counterclaim. 107.I also make a costs order nisi that the costs of these proceedings be paid by D1 to P2, with certificate for counsel, to be taxed if not agreed; and that P2’s own costs be taxed in accordance with Legal Aid Regulations. 108.It remains for this Court to thank Mr Poon for P2 and Mr Chong for D1 for their submissions and assistance rendered to the Court.
Mr Kevin Poon, instructed by Tsang, Chan & Woo Solicitors & Notaries, for the 2nd Plaintiff Mr Matthew CS Chong, instructed by Charles Chan & Co, for the 1st Defendant |
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