Siu Shu Ching and Others v. Siu Kwok Cheung and Another

CACV 109/2022, [2024] HKCA 1123

On Appeal From [2022] HKCFI 594

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 109 OF 2022

(ON APPEAL FROM HCA NO. 1641 OF 2013)

________________________

________________________

________________________

JUDGMENT

________________________

Hon Cheung JA (giving the Judgment of the Court) :

I.  The appeal

1.This is an appeal by the defendants against the judgment of Recorder William Wong SC (‘the Recorder’) who gave judgment for the plaintiffs for vacant possession of certain pieces of land (‘the plaintiffs’ properties’) belonging to them and occupied by the defendants in the District Demarcation 130 (‘DD 130’) in the New Territories. The Recorder further dismissed the defendants’ counterclaim which claimed that the plaintiffs’ title to the properties had been extinguished by reason of their adverse possession.

II.  Background

1)  Location of the properties

2.The plaintiffs’ properties are situated in Sun Hing Tsuen in DD 130 (‘the Village’), a village established by the Siu Clan. The plaintiffs and the 1^st defendant have a common ancestor by the surname Siu. The 1^st and 2^nd plaintiffs are natural brothers. They are cousins to the 3^rd and 4^th plaintiffs who are natural brothers. The respective fathers of the plaintiffs were natural brothers. 　The plaintiffs and the 1^st defendant’s late father belonged to the same generation. Hence the 1^st defendant is their nephew. The 1^st and 2^nd defendants are husband and wife.

3.The houses in the Village are set out in three rows. The plaintiffs’ properties are situated on the first row. The 1^st and 2^nd defendants are also landowners. The location of the parties’ properties in sequence are as follows :

(1)  The defendants are the registered owners of Lot 453E in which there are two houses known as House 38 and House 39.

(2)  Next to Lot 453E is Lot 453B belonging to the 2^nd, 3^rd and 4^th plaintiffs. A house known as House 40 is partly built on this lot and partly on Lot 453F RP which also belongs to the defendants.

(3)  Next to Lot 453B (and separated by a strip of land belonging to Lot 453F RP) are Lot 453A and Lot 453C. They belong to the 1^st plaintiff. These lots had been left vacant since the 1980s.

(4)  Next to these two lots (and also further separated by a strip of land belonging to Lot 453F RP) is Lot 454A which belongs to the 2^nd, 3^rd and 4^th plaintiffs.

2)  The plaintiffs’ case

(1)  Lot 453B

4.In 1993, the 2^nd, 3^rd and 4^th plaintiffs granted a gratuitous licence to the 1^st defendant’s late parents for them to use Lot 453B where House 40 is situated as their residence during their joint lives.

5.On 11 December 2006, the 1^st defendant’s late father passed away and on 13 July 2011, his wife delivered vacant possession of House 40 to the 2^nd, 3^rd and 4^th plaintiffs by surrendering the keys to them. The 2^nd, 3^rd and 4^th plaintiffs took possession of Lot 453B. The defendants, however, re‑took possession of House 40 and had since December 2006 installed an iron grill to its door, opened the walls of House 40 and House 39 and used these two houses as a single unit.

(2)  Lot 453A and Lot 453C

6.The 1^st plaintiff in 1996 granted a gratuitous licence to the 1^st defendant’s late parents for them to use Lot 453A and Lot 453C. The 1^st defendant’s late father and the 1^st defendant had previously trespassed into these two lots which were left vacant and extended their warehouse into these two lots. The licence was granted as a result of discussion between the 1^st plaintiff together with the other plaintiffs on the one hand, and the 1^st defendant’s late father on the other hand, after the plaintiffs issued two warning letters dated 29 March 1996 and 2 April 1996 from the plaintiffs’ solicitors to the 1^st defendant about the trespass.

(3)  Lot 454A

7.It is the plaintiffs’ case that in the 1980s the late father of 2^nd, 3^rd and 4^th plaintiffs granted a gratuitous licence to the 1^st defendant’s late parents. A further licence of this lot was granted in 1996 by the 2^nd, 3^rd and 4^th plaintiffs to the 1^st defendant’s late father and the 1^st defendant.

8.The plaintiffs commenced proceedings in 2013 to recover possession of these properties.

3)  The defendants’ case

9.The defendants’ case is that they have been in adverse possession of the plaintiffs’ properties for more than 20 years since sometime before 1 July 1991 or for more than 12 years since on or sometime after 1 July 1991, with the physical exclusion possession as well as the requisite intention to exclusive possession. They contended that the plaintiffs’ title to the plaintiffs’ properties had been extinguished in 1993 by reason of their adverse possession of the properties.

10.The Recorder summarised the defendants’ case as follows :

(1)  The 1^st defendant’s great grandfather came to and settled in the Village in the 18^th century, living in House 39.

(2)  The 1^st defendant’s late father was adopted into the Siu family. The Siu family lived in House 38. The 1^st defendant’s late aunt was the eldest of the family and she took charge of the whole family and was the family head or matriarch. The 1^st defendant and his sister both lived in House 38 and House 39 since birth and House 40 was then used by the 1^st defendant’s family as a cow shed and a storage space for foodstuff. In the late 1980s, the 1^st defendant came to take charge of the household in place of the 1^st defendant’s late aunt.

(3)  In 1973, the 1^st defendant’s late father and the 1^st defendant’s late aunt made alteration to House 38 and House 39 to turn them into 2-storey houses. House 40 was also changed to be a habitable house. There was also an extension of the structures as erected on the southeastern side which were used for storage, pigsty and keeping poultry and they were there before 1973. The southeastern side land covers Lot 453A, Lot 453C, Lot 453F and Lot 454A. The 1^st defendant’s family (the 1^st defendant’s late father, the 1^st defendant’s late aunt, the 1^st defendant and his sister) continued to live in House 38 and House 39 and had let out House 40 to others.

(4)  In 1982, the 1^st defendant’s stepmother came to Hong Kong and lived on the 1^st floor of House 39.

(5)  In April 1982, the defendants got married, and they lived in House 38 and House 39 which were renovated to become interconnected.

(6)  In about 1986, the 1^st defendant’s late father and the 1^st defendant’s stepmother moved to live in House 40.

(7)  In mid-1995, after being damaged by a typhoon, House 38 and House 39 were reconstructed as a 4‑storey house and House 40 was changed to become a 2‑storey house.

(8)  The 1^st defendant’s late father and stepmother lived in House 40 until the 1^st defendant’s late father passed away on 11 December 2006.

(9)  In respect of House 40, it was partly situated on Lot 453B and partly on Lot 453F (which also belonged to the defendants) and was used by the 1^st defendant’s family. In the mid‑1970s to 1980s, the 1^st defendant’s late aunt let out House 40 to a Mr Ko and a Mr Li and his family.

(10)  On 8 July 1996, the 2^nd to the 4^th plaintiffs sent a draft agreement to the 1^st defendant’s late father by fax (‘the 1996 Fax’) which stated that Lot 453B had been occupied by the 1^st defendant’s late father and stepmother under the permission of the 2^nd to the 4^th plaintiffs and that the parties had agreed that the 1^st defendant’s late father and stepmother could continue to stay there by paying $1 annually. The draft agreement was not signed by the 1^st defendant’s late father.

(11)  On 11 July 2011, the defendants instructed their lawyers, Messrs Yeung Law & Co (‘YL’) to issue a notice to terminate the 1^st defendant’s stepmother’s licence to occupy House 40 (‘the Notice of Termination’). The Notice of Termination was posted on the door of House 40 and given to the 3^rd plaintiff to be forwarded to the 1^st defendant’s stepmother as the 3^rd plaintiff was in contact with her.

(12)  Following the issuance of the Notice of Termination, there were correspondence between Messrs Liu Chan & Lam, solicitors for the 2^nd, 3^rd and 4^th plaintiffs and YL on the defendants’ claim of ownership of House 40.

(13)  On 13 July 2011, the 1^st defendant’s stepmother signed an agreement (‘the Return of Land Agreement’) to return House 40 to the 2^nd to 4^th plaintiffs.

(14)  After 13 July 2011, the plaintiffs demanded the defendants to deliver up vacation possession of the said lot of land but the defendants refused. Hence, the plaintiffs’ claim for vacant possession of the said lot of land and damages.

(15)  In respect of Lot 453A, Lot 453C and Lot 454A, before 1973, there were structures at the southeastern side including the pigsty used by the 1^st defendant’s family. In 1973, the 1^st defendant’s late aunt and the 1^st defendant’s late father altered the structures on the land to be used as temporary residential houses. Subsequently, they were extended and used for rearing pigs and other poultry as well as other farming purposes. From the end of the 1970s, having ceased to rear pigs, the 1^st defendant’s late aunt let some of the structures to a tenant. The 1^st defendant’s late aunt altered the pigsty and let it out to a car company. The garage was subsequently altered and let to a metal and toy company. It was subsequently let out to the 2^nd defendant’s sister. In 1993 and 1994, the defendants demolished the remaining pigsty and placed some containers there as warehouse.

(16)  The defendants did not receive the letters dated 29 March 1996 and 2 April 1996 to them demanding delivery of vacant possession of Lot 453A, Lot 453C and Lot 454A. Instead, they received a letter dated 4 May 1996 addressed to the 1^st defendant demanding delivery of possession of Lot 453A, Lot 453C and Lot 454A.

(17)  By a letter dated 30 May 1996 issued by the 1^st defendant’s then solicitors, Messrs George YC Mok & Co, the 1^st defendant raised adverse possession by his ancestor and subsequently by him of the properties.

(18)  The 1^st defendant denied that his late father had told him that a gratuitous licence was granted by the plaintiffs. His evidence is that if such gratuitous licence had been granted, his late father would have told him but he did not.

III.  The judgment

1)  The issues

11.The Judge identified two issues for his determination :

(1)  The 1^st issue

‘ 30. …. the central and determinative issue is whether the Defendants and the 1^st Defendant’s late father and stepmother at all material times occupied the Plaintiffs’ land lots pursuant to the latter’s and their predecessors-in-title’s express gratuitous consent or not. If it is, then it is hard for the Defendants to maintain that they have had adversely possessed the Plaintiffs’ land lots. If it is not, then it is quite clear that the Defendants have had been in possession of the said land lots for the relevant period to maintain their counterclaim of adverse possession. This is essentially a factual issue.’

(2)  The 2^nd issue

‘ 31. ……namely, whether the Defendants’ occupation of the Disputed Land Lots was pursuant to the consent of the 1^st Defendant’s aunt or not. If so, the Defendants submitted that the Plaintiffs’ consent to the 1^st Defendant’s late father and stepmother is irrelevant.’

2)  The findings

12.On the first issue, the Judge held the plaintiffs’ case is credible and the defendants’ occupation and use of the plaintiffs’ properties was pursuant to the express gratuitous licence granted by the plaintiffs and their predecessors‑in‑title.

13.The Judge made the following findings of fact :

‘ 60. …(1) As for Lot No.454A,

(a) In the 1980s, the 4^th Plaintiff’s late father allowed the use of part of Lot No.454A to the 1^st Defendant’s late father for agricultural use.

(b) The 1^st Defendant’s late father later built and erected a pigsty on that part of Lot No.454A for the purpose of raising pigs.

(c) Sometime in the 1990s, the said pigsty was demolished and turned into a temporary structure used as a warehouse.

(d) Lot No.454A is also a subject matter of the express oral licence in 1996 by the 2^nd to the 4^th Plaintiffs.

(2) As for Lot Nos.453A and 453C,

(a) In 1991, the 1^st Defendant’s late father acknowledged that the 1^st Plaintiff was the legal owner of the said lots and did not evince any intention to exclude the 1^st Plaintiff as the legal and registered owner.

(b) In 1996, it was discovered that the 1^st Defendant had extended the warehouse into Lot No. 453A and 453C. Two solicitors’ letters were issued to the 1^st Defendant. After the issuance of the said two letters, the 1^st Defendant’s late father and stepmother came to visit the Plaintiffs. They sought permission to continue to use the said warehouse as extended during the joint lives of the 1^st Defendant’s late father and stepmother.

(c) After discussion, the Plaintiffs agreed to continue to allow the 1^st Defendant’s late father and stepmother to use the said warehouse as extended for their joint lives rent free.

(d) In 1997, the 1^st Defendant’s late father and stepmother requested the 1^st Plaintiff to help them in their attempt to renovate the said warehouse as extended by making an application, in his capacity as the owner of Lots No.453A and Lots No.453C. The 1^st Plaintiff acceded to their request and, on 26 November 1997, he made a written application to the District Officer, Tuen Mun for such purpose.

(e) The said application was withdrawn in 1999 as the 1^st Plaintiff was informed that before obtaining the consent of the District Officer, Tuen Mun, they had started the renovation works and no measurement or survey were permitted.

(3) As for Lot No.453B (House 40)

(a) The 2^nd to the 4^th Plaintiffs allowed the 1^st Defendant’s late father and stepmother to use the same as their residence.

(b) On 11 December 2006, the 1^st Defendant’s late father passed away and since then, House 40 which stands on Lot No.453B has been occupied by the 1^st Defendant’s stepmother until 13 July 2011.

(c) On 13 July 2011, the 1^st Defendant’s stepmother signed the Return of Land Agreement and delivered the keys of House 40 to the 2^nd to 4^th Plaintiffs.

(4) The termination of the express license is set out, at the latest, in the pre-action letters in November and December of 2011.

(5) In relation to Lot No.454A, Mr Li for the Defendants submitted that even if a licence was granted by the 4^th Plaintiff’s late father, the same would have been terminated at the time of his death in 1987. However, in 1996, there was an oral express licence granted by, inter alia, the 4^th Plaintiff. As such, I am of the view that the Defendants cannot make out a case of adverse possession of Lot No.454A vis-à-vis the 4^th Plaintiff.’

14.On the second issue, the Judge held :

‘ 61. As a result of my findings above, I find it incredible that the 1^st Defendant as son and the 2^nd Defendant as daughter-in-law did grant permission to the 1^st Defendant’s late father and stepmother to occupy and use the disputed land lots given the finding of this Court that the 1^st Defendant’s late father and stepmother obtained their consent from the Plaintiffs and their predecessors-in-title. …’

3)  The reasons

15.The Recorder gave seven reasons for reaching his findings :

(1)  In respect of Lot 453A and Lot 453C, the 1^st defendant’s late father ‘had acknowledged the 1^st plaintiff is the legal owner of these lots and this is an anti-thesis to any suggested intention to exclude their rightful and lawful owner, namely, the 1^st plaintiff. There could not be any animus possidendi by the 1^st defendant’s late father in 1991 or 1992’. The Recorder referred to the contemporaneous documentary evidence that on 21 April 1992, the District Officer of Tuen Mun approved a succession of these lots to the 1^st plaintiff. In the Appendix to the Letter of Approval dated 4 November 1991, the 1^st defendant’s late father, served and signed as witness.

(2)  Also in respect of these two lots, on 26 November 1997, the 1^st plaintiff (as registered owner of Lot 453A and Lot 453C) at the request of the 1^st defendant’s late parents applied to the Lands Department, Tuen Mun for reconstruction of the old house erected therein. Although the application was withdrawn in 1999, there is no conceivable reason for the 1^st plaintiff to make such an application had the defendants’ family, including the 1^st defendant’s late father, stepmother and aunt, had been wrongly occupying the said land lots without his consent as asserted by the defendants.

(3)  As a result of the 1996 Fax, there was a discussion between the parties ‘precipitating in the 1^st plaintiff granting the 1^st defendant’s late father and stepmother a gratuitous licence to the latter for the use of Lot 453A, Lot 453C and Lot 454A for their joint lives’. The 1^st defendant’s own case supported this when he said that there was a dispute in 1996 and it was handled without litigation.

(4)  In respect of Lot 453B, the 1^st defendant’s stepmother had signed the Return of Land Agreement on 13 July 2011 returning House 40 to the 2^nd, 3^rd and 4^th plaintiffs and she also through another person returned the keys of House 40 to the 2^nd, 3^rd and 4^th plaintiffs. This proves that she knew that Lot 453B belonged to the 2^nd, 3^rd and 4^th plaintiffs and her occupation was by way of the gratuitous licence granted to her and her late husband.

(5)  Also in respect of Lot 453B, the Recorder held that the defendants could not have thought that they were the lawful owners of the lot. When the 2^nd, 3^rd and 4^th plaintiffs received the Notice of Termination issued by the defendants claiming to be the owner of House 40 and demanding the stepmother to leave House 40, they wrote to the defendants asserting that they were the owners and questioning the defendants’ claim of ownership. The defendants’ response, by letter dated 8 September 2011, showed that they knew Lot 453B belonged to the 2^nd, 3^rd and 4^th plaintiffs and the only challenge by them was the basis on which the 2^nd, 3^rd and 4^th plaintiffs claim that House 40 was within the boundary of Lot 453B.

(6)  In view of the close proximity of the parties and the small population of the Village, it is virtually impossible for the plaintiffs not to be aware of the defendants’ use and occupation of the Disputed Land. It is more probable that the absence of complaint (apart from the one in 1996) was due to the presence of consent or licence granted by the plaintiffs.

(7)  The Recorder held that the plaintiffs’ evidence is more credible in comparison to the defendants’. He found that the 1^st plaintiff’s evidence is unhelpful as he could not recall many events. He found that the 2^nd, 3^rd and 4^th plaintiffs’ evidence, in particular, the 4^th plaintiff’s evidence very credible. He found the defendants’ evidence less believable.

V.  Grounds of appeal

1)  Overview

16.Before we deal with the individual grounds of appeal, it will be helpful to take an overview of the judgment below. In order to establish adverse possession the burden is on the defendants and it is a heavy one. It is apparent from the judgment below that the result of this case depends on the Recorder’s findings of fact, weighing of evidence and inference drawn from the facts. The trial below lasted eight days. The defence team was led by senior counsel (not the defendants’ current team of counsel). There was extensive cross‑examination of witnesses and, as apparent from the judgment, every possible argument in support of the defendants’ case was canvassed. The Recorder had stated clearly that the case depends heavily on the credibility of the parties’ testimony and evidence. Further the context of the case is important. The Village housed the Siu Clan of which, as found by the Recorder, the plaintiffs and the 1^st defendant’s late father belonged to the same generation. The plaintiffs frequently discussed things with the 1^st defendant’s late father rather than with the 1^st defendant. The 1^st defendant was clearly disadvantaged in terms of the knowledge of the matters discussed by his seniors. He was also at one time working overseas and the Recorder noted that he got married in 1982 and lived in House 39. Further the Recorder expressly found that if a member of the Siu Clan would like to use or occupy lots of land which belong to other members, it was only normal that, as a matter of courtesy, he or she would ask for permission first. The 1^st defendant’s late father was at one time the head of the village and it was only natural that when being asked permission would be given. His position would also provide him with the knowledge of succession of properties in the Village and how members of the same clan dealt with each other. Mr Chan SC (together with Ms Cheung) for the defendants submitted that the plaintiffs also carried the evidential burden of proving that an express licence had been granted. This is correct but in order to challenge findings of facts by the Recorder, the defendants must show that the findings are plainly wrong which is a heavy burden indeed.

2)  Ground 1

(1)  The defendants’ argument

17.Ground 1 of the appeal is related to the first issue decided by the Recorder. The defendants referred to the pleadings of the parties and argued that the plaintiffs had admitted in their Re‑Amended Reply that the defendants’ family have been occupying the plaintiffs’ properties since 1973 to the exclusion of others (including the plaintiffs) with the requisite intention to possess. Hence the Recorder should have held, as a starting point, that the plaintiffs’ title was extinguished at least by 1993 which is the 20 year period required to constitute adverse possession before 1 July 1991.

(2)  Our view

18.Li CJ in Wong Tak Yue v Kung Kwok Wai & Another (No 2) (1997-98) 1 HKCFAR 55, after reviewing the well‑established principles on adverse possession restated them as follows :

‘ A person claiming to be in adverse possession must be shown to have both possession and the requisite intention to possess [i.e. animus possidendi] (page 68) …. .

The question of intention to possess, as with any other question of intention, is one of fact. (page 69)’

19.As can be seen from the judgment below, the issue of the defendants’ intention to possess was very much a contested issue that we will address when we deal with Ground 2. Hence the defendants’ claim of adverse possession beginning from 1973 must be subject to this important caveat.

3)  Ground 2

20.Ground 2 is related to the first issue identified by the Recorder and the focus is on the seven reasons given by him. The defendants argued that none of the seven reasons support the finding of an ‘express gratuitous licence’ granted by the plaintiffs and their predecessors.

(1)  Reason 1 (knowledge and acknowledgment of ownership)

i)  The defendants’ argument

21.The defendants argued that the 1^st defendant’s late father could not have seen the Letter of Approval confirming the 1^st plaintiff’s succession to the lots. The Letter of Approval was dated 21 April 1992, being after the Appendix dated 4 November 1991. It was therefore not possible for the Court to draw the inference that the 1^st defendant’s late father knew and acknowledged that 1^st plaintiff was the legal owner of the lots without having seen the Letter of Approval. This is reinforced by the fact that the Appendix was written in English, with no evidence to suggest that 1^st defendant’s late father understood English. Even if 1^st defendant’s late father ‘knew and acknowledged’ that the 1^st plaintiff would succeed to the lots in question, the Recorder failed to appreciate that a squatter’s knowledge of the paper owner’s ownership is not inconsistent with adverse possession. On the contrary, this is the essence of adverse possession. The continued occupation of the plaintiffs’ properties by 1^st defendant’s late father and his family (even with knowledge that they were owned by the plaintiffs) is clear evidence of the defendants’ animus possidendi to exclude the world at large, including the paper owner (J A Pye (Oxford) Ltd v Graham [2003] 1 AC 419 at [43] per Lord Browne‑Wilkinson; Roberts v Swangrove Estates Ltd [2008] Ch. 439 at [87] per Mummery LJ; J Alston & Sons Ltd v BOCM Pauls Ltd [2009] 1 EGLR 93 at [99], [104] per Marshall QC). It does not follow from the mere knowledge that the 1^st plaintiff would succeed the lots in question that 1^st defendant’s late father (let alone the defendants) had acknowledged that they occupied the lots pursuant to a licence granted by the plaintiffs. In any event the signature of the 1^st defendant’s late father on the Appendix has no relevance to the defendants’ claim of adverse possession of Lots 453B and 454A. Mr Chan further submitted that the Recorder was also wrong factually because these two documents did not show the 1^st plaintiff is the owner of these lots.

ii)  Our view

22.In respect of the argument on the mistake of the Recorder, the Appendix was dated 4 November 1991 and was entitled ‘Appendix to Letter of Approval’ which indicated that two documents were involved, namely, the Appendix and the Letter of Approval. The Appendix stated that :

‘ We hereby accept succession to the estate of Siu Kam‑Lun deceased trustee under and in accordance with the provision of section 17 of the New Territories Ordinance (Cap 97).’

23.Siu Kam‑lun was the father of the 1^st and 2^nd plaintiffs. Siu Yip-chi and Siu Tai-tai signed as the successors and the 1^st defendant’s late father signed as a witness. The Approval Letter by the District Office of Tuen Mun to the succession was granted on 21 April 1992. However the documents that were before the Recorder included not only these two documents but also a Memorial dated 23 June 1992 in which it was recorded that the two successors as donors donated Lot 453A and Lot 453C together with other properties to the 1^st plaintiff. Accordingly the complaint about the mistake on the part of the Recorder has to be considered against the fact that when the Recorder held that the 1^st defendant’s late father had the knowledge and acknowledged the 1^st plaintiff was the owner he would have all these three documents in mind. Further, as the 1^st defendant’s late father was at one time the Village Head of the Village which is a significant post in a traditional village, the Recorder was clearly entitled to draw the inference that the 1^st defendant’s late father knew the operation of section 17 of the New Territories Ordinance succession and knew Lot 453A and Lot 453C belonged to the 1^st plaintiff.

24.In J A Pye (Oxford) Ltd Lord Brown‑Wilkinson at [42] emphasised that the necessary intention in adverse possession is not an intention to own or an intention to acquire ownership but an intention to possess. In our view the Recorder did not confuse the concept of ownership with that of possession. He held the 1^st defendant’s late father knew of the 1^st plaintiff’s ownership of these two lots and also held that ‘he did not evince any intention to exclude the 1^st plaintiff as the legal and registered owner’. What the Recorder was saying is that as the 1^st defendant’s late father or his family had in fact been in physical possession of these lots, his act in signing as witness showed that he did not have the ‘intention to possess’ necessary to turn the possession into an adverse possession. In our view while Reason 1 by itself may not give such an indication, it should not be looked at in isolation and must be considered together with the rest of the reasons that the Recorder had taken into account in holding that the intention to possess was lacking. The context of the case is important to consider whether the Recorder was right to hold that the 1^st defendant’s late father did not have the intention to exclude the owner who he knew to be the 1^st plaintiff, his cousin and a neighbour living nearby in the same village belonging to the same clan.

(2)  Reason 2 (The 1997 application by the 1^st plaintiff)

i)  The defendants’ argument

25.The defendants argued that the Recorder’s acceptance of the 1^st plaintiff’s evidence that his application was made pursuant to the request of 1^st defendant’s late parents is wholly inconsistent with the Court’s finding that the 1^st plaintiff’s evidence was unhelpful. The intention and reasons why the 1^st plaintiff made such an application cannot provide any support for the finding of licence. It is well established that the intention of the paper owner is generally irrelevant for the purposes of adverse possession (Jourdan, Adverse Possession (2^nd edn) at [9‑134]); and that a licence cannot be implied from the paper owner’s acquiescence (Jourdan, Adverse Possession (2^nd edn) at [35‑17] to [35-19]; J Alston & Sons Ltd v BOCM Pauls Ltd [2009] 1 EGLR 93 at [129], [136], [138] per Marshall QC). None of these principles were referred to in the judgment. The 1^st plaintiff’s application has no relevance to Lots 453B and 454A.

ii)  Our view

26.The Recorder had indeed held that the 1^st plaintiff’s evidence was unhelpful but he also explained that it was probably due to his senior age or pressure that he faced to give evidence in Court. In our view it does not mean that the Recorder could not accept certain aspects of his evidence particularly when the objective fact shows that the 1^st plaintiff had in fact made such an application. Furthermore the 2^nd, 3^rd and 4^th plaintiffs also dealt with this issue in their witness statements. Their evidence was accepted by the Recorder. The Recorder held :

‘ 43. ….I accept that, on balance, it is more probable that the 1^st Plaintiff’s application was made at the request of the 1^st Defendant’s late father. It is hardly imaginable that the 1^st Plaintiff would have made the application on his own volition when he himself was not using or occupying the said land lots. It is more likely that the 1^st Defendant’s late father made certain structural changes to the structures erected in Lot Nos.453A and 453C and thereafter requested the 1^st Plaintiff to make an application to the Lands Department, Tuen Mun to rectify the same. The 1^st Plaintiff’s evidence is that his application was made pursuant to the request of the 1^st Defendant’s late parents. I accept. This tends to show that the 1^st Defendant’s parents’ continued use and occupation of the land lots was the result of a gratuitous licence granted by the 1^st Plaintiff. I accept the Plaintiffs’ evidence that it was natural and normal for them to give consent to their relative, namely, the 1^st Defendant’s late father to use and occupy the said land lots. Their request to the 1^st Plaintiff to make the application is anything but a clear intention to exclude the owner as best he can.’

27.The Recorder had heard evidence on how the 1997 application came about, he was entitled to hold that was the reason for the 1^st plaintiff’s application. On this basis he held that the defendants’ request showed that they did not have the necessary intention to possess. This is an inference that the Recorder was entitled to draw from the circumstances of the case. In particular this episode must be considered in the light of the 1996 event which we shall come to when we deal with Reason 3.

(3)  Reason 3 (1996 licence)

i)  The defendants’ argument

28.The defendants argued that the evidence does not support the inference that a licence had been granted to the 1^st defendant’s parents by reference to the 1996 Fax and discussion. The Recorder had confused House 40 on Lot 453B and other lots. The 1996 Fax was a document purporting to grant the 1^st defendant’s late father and stepmother the right to occupy Lot 453B and not Lots 453A, 453C and 454A. But crucially, the very existence of the 1996 Fax should be seen as concrete evidence supporting an inference that the plaintiffs had never granted a licence to the defendants’ family prior to 1996. The 1996 Fax therefore supports rather than damages the defendants’ case. Even if the Court considered that there were discussions ‘precipitating’ from the 1996 Fax, the Recorder failed to give proper weight to the stark fact that the 1996 Fax was not even signed by the 1^st defendant’s late father in the end. The Court failed to consider the obvious conclusion that the 1^st defendant’s late father did not sign the same precisely because he did not agree to its contents. That the 1^st defendant’s late father had said the ‘dispute had been handled’ (even if true) does not detract from the aforesaid point. The Court failed to appreciate the significance of the 1996 Letters, which must be read together with the 1996 Fax. The 1996 Letters stated in unequivocal terms that the plaintiffs have never granted any tenancy or licence or permit whatsoever to the defendants. This squarely contradicts any suggestion that there was any licence given by the plaintiffs ‘precipitating’ from the 1996 Fax. Even if (which is denied) there was a grant of licence in 1996, this does nothing to the defendants’ case as the plaintiffs’ title would have already been extinguished in 1993.

ii)  Our view

29.The 4^th plaintiff’s witness statement on the events that took place in 1996 is as follows :

‘ Licence for use of Lot Nos.453A and 453C

29. In early 1996, it was discovered that the said warehouse had been extended into Lot No.453A and Lot No.453C which was, at that time, then left vacant and unoccupied. As result of the extension of the said warehouse, Lot No.453A and Lot No.453C were enclosed as part of the said warehouse.

30. When we became aware of the extension of the said warehouse into Lot Nos.453A and 453C, the 1^st Plaintiff, as the owner of these lots, reasoned with the 1^st Defendant’s father and his step mother and, from them, we discovered that it was the 1^st Defendant who had been responsible for the extension of the said warehouse into Lot Nos.453A and 453C.

31. The 1^st Plaintiff then tried to contact the 1^st Defendant but he avoided me and, as a result, I and the 1^st, 2^nd and 3^rd Plaintiffs then instructed a firm of solicitors, Messrs. Pang, Kung & Co., to issue the following letters before action to the 1^st Defendant:‑

(a) a letter of 29.3.1996 in English to the 1^st Defendant (see Annexure 2); and

(b) a letter of 2.4.1996 in Chinese to the 1^st Defendant (see Annexure 3).

32. After the issue of these 2 letters, the 1^st Defendant’s father and his step mother came to visit us. They sought permission from us to continue allowing them (and the 1^st Defendant) to use the said warehouse as extended during the joint lives of the 1^st Defendant’s father and his step mother.

33. After the discussion, we agreed to continue to allow the 1^st Defendant’s father and his step mother to use the said warehouse as extended for their joint lives rent free and this was done in accordance to the custom of the Siu Clan.

34. In 1997, the 1^st Defendant’s father and his step mother requested the 1^st Plaintiff to help them in their attempt to renovate the said warehouse as extended by making an application, in my capacity as the owners of Lot Nos.453A and 453C, the 1^st Plaintiff acceded to their request and, on 26.11.1997, he made a written application to the District Officer, Tuen Mun for such purpose. Annexure 4 is a true copy of his application.

35. In the course of the District Officer, Tuen Mun processing his application, the 1^st Defendant’s father and his step mother informed that, before obtaining the consent of the District Officer, Tuen Mun, they had started the renovation works and no measurement or survey were permitted. Therefore, 1^st Plaintiff’s application had to be discarded.

36. Therefore, on 8.1.1999, the 1^st Plaintiff wrote to the District Officer, Tuen Mun withdrawing his application and on 18.1.1999, the District Officer, Tuen Mun notified that his application has been cancelled. Annexure 5 is a true copy of the letter from the Tuen Mun District Officer.’

30.The warehouse that the 4^th plaintiff referred to was in Lot 454A which he said his late father had granted a licence to the 1^st defendant’s late father in the 1980s for agricultural use, which was later left vacant. Afterwards a pigsty and later a warehouse were built there.

31.The 1^st defendant denied that he had received the letters referred to by the 4^th plaintiff and asserted that he had instead received a letter addressed to him dated 4 May 1996. This letter in fact is identical in content to the letter dated 29 March 1996 :

‘ Re: All Those pieces or parcels of land known

As D.D. 130 Lot No.453A, 453C and 454A,

San Hing Tsuen, Lam Tei, Tuen Mun, New

Territories, Hong Kong

We act for Mr. Siu Shu Ching (the registered owner of Lot No.453A & 453C), Mr. Siu Shui Fat, Mr. Siu Hing Fong and Mr. Siu Chun Fat (the registered owners of Lot No.454A).

We are instructed that you have, without the prior written consent and permission of our clients, been in wrongful occupation of the said pieces of land and erected a single‑storey godown on the above pieces of land and have used the piece of land known as DD130 Lot No.454A as open storage space placing a great number of containers.

We are instructed that our clients have never granted any tenancy or licence or permit whatsoever to you to use the said pieces of land and you are a trespasser thereto.

We are further instructed that unless you demolish all the erected and unauthorised structure and deliver vacant possession of those pieces of land at your own cost and expenses to our client within 30 days from the date hereof, we have standing instruction to institute legal proceedings to claim against you for recovery of the said pieces of land plus our costs and the loss and damage our clients are entitled to during your wrongful occupation of the said pieces of land without further notice or warning.’

32.The 1^st defendant’s then lawyer George Y. C. Mok & Co responded to this letter on 30 May 1996 in which adverse possession was raised. This was followed by the receipt of the 1996 Fax (Draft Agreement).

33.It is clear from the content of the plaintiffs’ demand letters and the evidence of the 4^th plaintiff that it was the 1^st defendant’s extension of the warehouse into Lot 453A and Lot 453C that caused the demand letters to be issued. We do not see the statement in the letters that the occupation by the 1^st defendant of these two lots were without the consent and permission of the plaintiffs is contrary to the plaintiffs’ own case. This is because the plaintiffs’ evidence did not say that there was any licence granted for Lot 453A and Lot 453C prior to 1996. They maintained that the occupation of these lots were wrongful. The letter, of course, also stated that the plaintiffs did not grant any tenancy, licence or permission to the 1^st defendant to occupy Lot 454A. But what weight to be attached to this latter statement was clearly a matter for the Recorder. As to the contention by the defendants that their lawyer’s response dated 30 May 1996 had expressly stated that the defendants had acquired title by adversary possession, again this is a matter of weight for the Recorder to consider. As Li CJ in Wong Tak Yue at page 69 had cautioned :

‘ Where the occupier has made self-serving statements as to what was his intention, whether during the period of occupation or when challenged in legal proceedings, the courts should approach them with some scepticism. The courts would scrutinize the circumstances in which they were made and would give them such weight if any as they may deserve. Conversely, where the occupier has made statements as to what was his intention and such statements are against his interest, the courts would usually accord to them considerable weight.’

34.The Recorder recognised that the 1996 Fax (Draft Agreement) referred only to Lot 454B and was not signed by the 1^st defendant’s late father. But he also referred to the 1^st defendant’s evidence that he passed the 1996 Fax (Draft Agreement) to his late father, later on his late father told him that the dispute had been handled and the 1^st defendant did not make further enquiry as to how it was handled. This is quite an extraordinary response for someone who had asserted possessory title to the property which was unlikely to escape the Recorder’s attention when he held that the 1^st defendant’s own evidence on this issue supported the existence of the oral express gratuitous licence granted to the 1^st defendant’s late parents, namely, there was a dispute in 1996 and it was handled without litigation. The Recorder held that between, on the one hand, the acceptance by the plaintiffs of adverse possession by the defendants’ family, and, on the other hand, the plaintiffs granting a licence to the 1^st defendant’s late parents to use and occupy these lots of land until their demise, the latter is inherently more probable. In our view the findings that the settlement of the dispute between the plaintiffs and the 1^st defendant’s late father by way of the plaintiffs’ granting of a licence in respect of Lot 453A and Lot 453C which were intruded upon and in respect of Lot 454A, was a finding that the Recorder was entitled to make based on the inference he drew from the evidence. The defendants have not been able to show that the finding is plainly wrong which is the threshold for challenging findings of fact. As mentioned earlier, the 1997 application (Reason 2) must also be considered together with the 1996 settlement. The existence of the 1996 settlement which the Recorder was entitled to find and so found further strengthened his finding that the 1997 application further showed that the defendants and his predecessor did not have the intention to possess.

(4)  Reason 4 (Return of Land Agreement)

i)  The defendants’ arguments

35.The Recorder wrongly placed heavy reliance on the Return of Land Agreement to support his finding that the defendants’ occupation of the disputed lots was pursuant to a licence granted by the plaintiffs. The Return of Land Agreement is a document purporting to hand over House 40 to the 2^nd, 3^rd and 4^th plaintiffs and stating that the 1^st defendant’s stepmother knew that the lot belonged to the 1^st plaintiff. It is not a document acknowledging that there was any licence granted by the plaintiffs prior to that agreement. Nor is it an acknowledgement of title pursuant to sections 23, 24 of the Limitation Ordinance, Cap. 347 (which in any event is not pleaded by the plaintiffs). All that can be said of the Return of Land Agreement is that the 1^st defendant’s stepmother knew of the 2^nd, 3^rd and 4^th plaintiffs’ ownership, which is not inconsistent with adverse possession. The Return of Land Agreement cannot support any finding of licence, given that the plaintiffs admitted that the 1^st defendant’s late father and stepmother occupied House 40 and Lot 453B with the permission of the defendants. Any contrary analysis would be inconsistent with the Recorder’s acceptance that the defendants could rely on admitted facts. The Return of Land Agreement only relates to Lot 453B. It does not provide any support for the finding of licence in respect of Lots 453A, 453C and 454A as none of those lots were even mentioned in the Agreement.

ii)  Our view

36.There is the direct evidence of the 4^th plaintiff that in 1993, the 2^nd，3^rd and 4^th plaintiffs allowed the 1^st defendant’s late parents to use Lot 453B (House 40). The 1996 Fax (Draft Agreement) also referred to the owners allowing the 1^st defendant’s late parents to use Lot 453B as their residence. The Recorder was entitled to find that a licence was so granted. Although he did not specify when the licence was granted, based on the evidence of the 4^th plaintiff on this point on the Recorder’s finding could only cover the 1993 licence.

37.In our view, even if the Return of Land Agreement was not an acknowledgment of title pursuant to sections 23 and 24 of the Limitation Ordinance, it was clearly a document upon which the Recorder was further entitled to infer that the occupation of House 40 on Lot 453B by the 1^st defendant’s late parents were pursuant to a licence granted by the plaintiffs. As the Recorder held ‘it is inexplicable as to why [the stepmother] would have done so’ if she and late husband were not in possession pursuant to the licence granted by the plaintiffs.

38.The Recorder was well aware of the reliance by the defendants of the admissions contained in the pleadings. He had explained why he was entitled to make findings on the contested issues notwithstanding the admissions of the plaintiffs. As we will discuss later, the so‑called admissions in [2] of the Re‑Amended Reply to the matters pleaded in [5(5)]‑[5(6)] of the Re‑Re‑Amended Defence and Counterclaim (such as the defendants’ occupation of the plaintiffs’ properties since 1993, the letting of some of these properties to others, the consent given by the defendants to their parents to live in House 40 etc) are equivocal in nature. They are subjected to the plea that these acts are subject to the consent and permission of the plaintiffs. It is pertinent to refer to the following holding of the Recorder :

‘ 69. In Wing Hang Bank Ltd v Crystal Jet International [2005] 2 HKLRD 795, at §7, Ma CJHC (as Ma CJ then was) insightfully said:

“[P]leadings are only a means to an end, and if the parties in fighting their legal battles choose to restrict them, or to enlarge them, or to disregard them and meet each other on issues fairly throughout, it is impossible for them to hark back to the pleadings and treat them as governing the area of contest.”

70. In the present case, the Defendants framed the issues as (1) whether the Plaintiffs had granted licences to the 1^st Defendant’s late father and stepmother to use and occupy the Disputed Land Lots and (2) even if the answer to (1) is affirmative, would that defeat the Defendants’ claim of adverse possession of the Disputed Land Lots and entitled the Plaintiffs to recover the Disputed Land. Battle lines were drawn along these two issues. Hence, I am of the view that the admissions relied upon by the Defendant have to be analyzed according to the factual findings of the Court on the two issues.’

39.Mr Chan pointed out that the Recorder was wrong to find the 1^st defendant’s late father was the holder of the utilities account. We do not consider that this mistake is sufficient to overturn the Recorder’s overall assessment of the case as Reason 4 must also be considered together with all the other reasons which provide the proper basis for the Recorder to find that the defendants had failed to establish the intention to possess.

(5)  Reason 5 (Notice of Termination 2011)

i)  The defendants’ arguments

40.The Recorder was wrong to rely on the letter from the defendants’ solicitors to the plaintiffs’ solicitors dated 8 September 2011. The letter is against a finding of licence as the letter is precisely the defendants asserting ownership over House 40 (which is consistent with the defendants’ claim for adverse possession). Even if the Recorder was right in saying that the defendants were not aware that they had occupied Lot 453B and that the defendants did not think they were the owners of Lot 453B, this is not inconsistent with the defendants’ case of adverse possession. It is well established that a squatter in possession does not have to know or understand that he is a squatter or trespasser (Roberts at [87] per Mummery LJ). What is required for animus possidendi is not an intention to own or even an intention to acquire ownership but an intention to possess (J A Pye (Oxford) Ltd at [42] per Lord Browne‑Wilkinson). This is demonstrated precisely by the letter asserting rights over House 40.

ii)  Our view

41.The letter of 8 September 2011 from the plaintiffs’ lawyers stated that :

‘ As shown by public record, our clients are the registered owners of the Property. A copy of land search record is enclosed for your reference.

We are instructed that you issued a notice of eviction (a copy enclosed) on behalf of your clients and put it on the door of the Property claiming that your clients are registered owners of the Property. This justifies our clients’ concern and demands from you for reply on what basis you claim (a) that your clients are the owners of the Property and (b) that you issue the notice of eviction.’

42.The response from the defendants’ lawyers was :

‘ Please let me know, apart from perusing the public land search record (and probably also the Lot Index Plan) of Lot 453B in DD130, any other prudent measures have you taken to ascertain the boundary of the aforesaid lot so as to convinced yourself that the Property situates on your clients’ land as you asserted before you made your unreasonable and unwarranted demand to us on behalf of your clients, given the fact that you are not legally qualify in determination of land boundary.’

43.We do not consider the Recorder’s view was in conflict with the principles stated in J A Pye (Oxford) Ltd and Roberts. Reading the judgment as a whole, when the Recorder held that ‘it cannot be right that the defendants could have ever thought that they were the rightful owners of Lot No 453B’, he was simply addressing the issue whether the defendants had obtained possessory title to Lot 453B.

44.In any event, even without this reason, the Recorder’s finding that the intention to possess was lacking could not be faulted in light of the other reasons he gave. Further the defendants’ assertion of ownership must be subject to the same degree of scepticism as stated in Wong Tak Yue.

(6)  Reason 6 (Close proximity of the parties)

i)  The defendants’ arguments

45.The Recorder wrongly inferred the existence of a licence from the plaintiffs’ apparent acquiescence and lack of complaint to the defendants’ occupation of the Disputed Land Lots despite living in close proximity. The inference of a licence from the plaintiffs’ acquiescence is wholly contrary to the well‑established principle that a licence cannot be implied from a landowner’s acquiescence (Jourdan, Adverse Possession (2^nd edn) at [35‑17] to [35‑19]; J Alston & Sons Ltd v BOCM Pauls Ltd [2009] 1 EGLR 93 at [129], [136], [138] per Marshall QC). Likewise, the judgment failed to consider the principle that possession in which the landowner acquiesces may be adverse (Hicks Developments Ltd v Chaplin [2007] EWHC 141 (Ch) at [33] per Briggs J). The inference drawn by the Recorder is wrong as a matter of fact. The 1996 letters stating unequivocally that no licence had ever been granted by the plaintiffs to the defendants is fatal to any suggestion that the plaintiffs’ lack of complaint prior to 1996 was because of the existence of consent and licence. Indeed, if the plaintiffs’ acquiescence and lack of complaint was due to any licence previously given by the plaintiffs, there would be no reason for the plaintiffs to even send the 1996 letters or even the 1996 Fax. The plaintiffs’ total silence as regards the defendants’ occupation of the plaintiffs’ properties prior to 1996 is strong support for the fact that the defendants had factually possessed these properties to the exclusion of others (including the plaintiffs).

ii)  Our view

46.The close proximity of the parties is clearly a relevant factor for the Recorder’s consideration. The plaintiffs’ own residences are just situated on the second and third row of houses in the Village. This is not the usual adverse possession cases where the paper title owner left the land unattended in some remote or uninhibited areas of the New Territories. We do not consider that the Recorder had ignored the principle that acquiescence on the part of the paper title owner does not constitute granting a licence or permission to the trespasser to use the land. The Recorder was simply adopting a common sense approach, by reference to the context of the case, that it is more likely that permission had been by way of an express licence for the defendants to occupy the disputed lots. This is clearly a finding that the Recorder is entitled to make.

47.As to the further argument that possession in which the landowner’s acquiescences may be adverse, we were not shown that this was an issue that the Recorder was required to consider. In any event, this is not a relevant issue on the facts of case.

48.We have already addressed the arguments on 1996 documents.

(7)  Reason 7 (Credibility of the witnesses)

i)  The defendants’ arguments

49.The Recorder had no grounds to consider that the plaintiffs’ evidence was more credible in comparison to the defendants. The factual findings made in the judgment [60] fly against the pleadings and evidence. In respect of Lot 454A, the Recorder made the factual finding that the 4^th plaintiff’s father had allowed the 1^st defendant’s late father to use part of Lot 454A for agricultural use. Such finding is wholly contradicted by the plaintiffs’ pleaded case that the 4^th plaintiff himself had granted a licence to the 1^st defendant’s late father and stepmother to use Lot 454A. In respect of Lots 453A and 453C, the Recorder made the factual finding that the ‘Plaintiffs’ agreed to allow the 1^st defendant’s late father and stepmother to use the warehouse erected on Lots 453A and 453C. Such finding is again wholly contradicted by the plaintiffs’ pleaded case that the 1^st plaintiff was the one who allegedly granted the aforesaid licence. The Recorder’s further finding that the 1^st defendant’s late father and stepmother had requested the 1^st plaintiff to apply to the Lands Department is also inconsistent with the Recorder’s comment that the 1^st plaintiff’s evidence was unreliable. In respect of Lot 453B, the Recorder made the factual finding that the 2^nd, 3^rd and 4^th plaintiffs allowed the 1^st defendant’s late father and stepmother to use Lot 453B as their residence without stating any timeframe. If this finding relates to any alleged licence granted prior to 1993, the same would be inconsistent with the plaintiffs’ pleaded case that the licence was allegedly granted in or about 1993. By the time of 1993, the plaintiffs’ title had already been extinguished by adverse possession of the defendants. Insofar as this finding relates to an alleged licence granted by the 2^nd, 3^rd and 4^th plaintiffs only to the 1^st defendant’s late father and stepmother, such finding would, again, be inconsistent with the plaintiffs’ pleaded case that the 1^st defendant, the 2^nd defendant, the 1^st defendant’s late father, the 1^st defendant’s stepmother and the 1^st defendant’s sister all resided at House 40 pursuant to the 2^nd, 3^rd and 4^th plaintiffs’ licence. This finding is also inconsistent with the plaintiffs’ admission that the defendants were the ones who gave permission to the 1^st defendant’s late father and stepmother to reside at House 40. The factual findings made by the Recorder despite the many blatant inconsistencies with the plaintiffs’ pleaded case, were plainly wrong. These inconsistencies cannot simply be brushed aside as a ‘mistake’ or a ‘slip’ on the plaintiffs’ part or blamed on the plaintiffs’ lack of education. These inconsistencies go to the essential features and terms of the express licence allegedly granted and whether the alleged licence even existed.

ii)  Our view

50.We disagree with the defendants’ contention that the Recorder’s findings were plainly wrong due to the inconsistencies. He had given proper reasons why he chose to accept the plaintiffs’ evidence despite what appeared to be inconsistencies (for example, who granted the licence for Lot 454A) in the pleadings and their witness statements. As stated earlier he had also addressed the issue of admissions. The assessment of evidence in terms of the credibility of witness and the weight to be attached to the evidence are matters entirely within the province of a trial judge. Many of the arguments advanced under this head had been covered by us earlier.

4)  Ground 3

(1)  The defendants’ argument

51.Ground 3 relates to the second issue decided by the Recorder. The defendants argued that any finding by the Court that the 1^st defendant’s late father and stepmother occupied the lots pursuant to the plaintiffs’ licence would not, in any event, defeat the defendants’ claim for adverse possession. In order for an owner to re-take possession of land, one must find that the true owner took possession in the ordinary sense of the word to the exclusion of the wrongful occupier. This has not been made out on the facts. It is undisputed that the defendants and the defendants’ family have at all material times been occupying the plaintiffs’ properties to the exclusion of others since 1973. The plaintiffs did not grant any licence to the defendants to occupy their properties and the 1^st defendant’s late father and stepmother had occupied House 40 and Lot 453B under the permission of the defendants. Thus, even if the plaintiffs granted a licence to the 1^st defendant’s late father and stepmother, such act would not be enough for the plaintiffs to re‑take possession of their properties to the exclusion of the defendants (who would still be in possession of Lot 453B through the permission that the defendants gave to the 1^st defendant’s late father and stepmother). Even if the plaintiffs granted a licence to the 1^st defendant’s late father and stepmother, such licence could not have been ‘conveyed’ to the defendants for the simple reason that the defendants were the ones who gave permission to 1^st defendant’s late father and stepmother to occupy Lot 453B and House 40. Thus, the defendants were not in occupation of the plaintiffs’ properties pursuant to any licence but as a squatter in factual possession of the same for over 20 years. The Recorder’s remark that it is not clear whether the defendants had acquired any possessory title to the plaintiffs’ properties by 1986 is beside the point. The undisputed fact is that the defendants had granted permission to the 1^st defendant’s late father and stepmother to occupy the lots. Even if there was no formal conveyance or assignment of possessory title from the defendants to the 1^st defendant’s late father and stepmother, because the former had allowed the latter into possession, the successive possessions of the defendants and 1^st defendant’s late father and stepmother should be treated as one continuous adverse possession against the plaintiffs (Young Ivy Shui Heung v Yau Koon Sum & Ors [2019] HKCA 221 at [13] per Lam VP (as he then was); Jourdan, Adverse Possession (2^nd edn) at [6-51], [6-52]). The defendants should be allowed to rely on facts admitted by the plaintiffs. The plaintiffs are bound by what they admit in pleadings, which were affirmed by a statement of truth. The effect of an admission as to facts is that there will no longer be any issue between the parties on that part of the case which is concerned with those matters of fact and therefore no evidence is admissible in reference to those facts: Pioneer Plastic Containers Ltd v Commissioners of Customs and Excise [1967] Ch 597 at p.601 B-E per Buckley J; Hong Kong Civil Procedure 2024 Volume 1 at [18/13/2]). The plaintiffs’ admission that the 1^st defendant’s late father and stepmother occupied Lot 453B under the permission of the defendants completely negates the Court’s finding of licence, in that the former admission by the plaintiffs negates any possible inference that the 1^st defendant’s late father and stepmother occupied the lots pursuant to the plaintiffs’ consent.

(2)  Our view

52.The Recorder’s finding is that the defendants’ occupation of the House 40 on Lot 453B was pursuant to the licence granted by the 2^nd, 3^rd and 4^th plaintiffs to the 1^st defendant’s late parents in 1993 which was continued by them. The Recorder accepted the 4^th plaintiff’s evidence that they further allowed the defendants to occupy because the 1^st defendant is the son of the late father and the 2^nd defendant is the 1^st defendant’s wife. In other words the 4^th plaintiff had treated the licence was granted to the 1^st defendant’s family as a whole. These are findings that the Recorder was entitled to make from the evidence. The premise of the defendants’ argument is that they had acquired a possessory title by 1993. However, if upon reviewing the evidence the Recorder came to the view that the possession by the defendants’ and the 1^st defendant’s late parents prior to 1993 was without the necessary intention to possess, then the defendants’ occupation by 1993 was not an adverse possession against that of the 2^nd, 3^rd and 4^th plaintiffs.

53.Furthermore the Recorder had expressly found that the 1^st defendant’s evidence was not believable. He held that :

i)  It is unlikely the 1^st defendant’s late father would have no say on ‘whether and how the landed properties of the family were to be used.’

ii)  The 1^st defendant’s late father was the head of the Village, belonged to the same generation of the plaintiffs and it was hard to believe that they would not discuss the use of the plaintiffs’ properties. On the contrary, the plaintiffs hardly discussed matters of substance with the 1^st defendant which he accepted.

iii)  In a traditional village, it is difficult to fathom the idea why the 1^st defendant’s late father would seek consent from the defendants to occupy a house not owned by them. He and his wife moved to House 40 because of the breakdown of relationship between his wife and the 1^st defendant’s late aunt.

iv)  The defendants’ evidence that the late aunt told the 1^st defendant and they genuinely believed that Lots 454A, 453B and 453C initially belonged to his late aunt and the 3^rd and 4^th plaintiffs’ father later wrongly obtained the land title documents and that he only discovered in 1996 the title had been transferred to the plaintiffs when he received the 1996 demand letters was incredible and is contrary to the conveyancing history of the relevant lots. If they really believed that they were the legal or legitimate owners and in 1996 they were told that the land titles had in fact been transferred to the plaintiffs, it is hard to believe that the defendants would have sit there and done nothing.

54.The Recorder further held in respect of the letting of the plaintiffs’ properties that :

‘ 67. Any letting of the Disputed Land Lots by the Defendants and/or the 1^st Defendant’s late aunt between 1984 to 2013, has to be viewed against, inter alia, the acknowledgment of the 1^st Plaintiff’s legal right by the 1^st Defendant’s late father in 1991, the express licence agreed in 1996, the 1^st Plaintiff’s application in 1997 and the delivery of vacant possession of House 40 and Lot No.453B by the 1^st Defendant’s stepmother in 2011 and the 2^nd to 4^th Plaintiffs’ taking physical possession of the same in 2011.’

55.Mr Chan criticised the matters referred to above were irrelevant. We disagree that the Recorders had taken irrelevant matters into account in assessing the case. The principle on the effect of an admission on pleading is not disputed by the plaintiffs. In respect of the admission on pleadings by the plaintiffs in [2] of the Re‑Amended Reply and Defence to Counterclaim to the defendants’ averment in their Re‑Re‑Amended Defence that the defendants had given consent to the late parents to occupy House 40, our view is that the admission is at least equivocal because the plaintiffs in the same paragraph, after stating that [5(5)] and [5(6)] of the Re‑Re‑Amended Defence are admitted, further pleaded that at all material times the 1^st defendant, his late parents and his sister all resided at House 40 pursuant to a gratuitous licence granted by the 2^nd, 3^rd and 4^th plaintiffs and pleaded their consent to the 1^st defendant’s late parents to renovate House 40, its later demolition and reconstruction. The Re‑Amended Reply expressly pleaded ‘And, in the premises, the acts pleaded by the 1^st and 2^nd defendants were done pursuant to the licence or permission of the plaintiffs or one or more of them.’ In our view, having considered the whole of the case particularly equivocal nature of the admissions the Recorder was entitled not to rely on the admissions on the pleadings.

56.Again this ground fails.

5)  Ground 4 (Revocation of licence)

57.In the course of his submission, Mr Chan sought leave to amend the Notice of Appeal to include the following ground of appeal which was not included in the Notice of Appeal :

‘ If, which is denied, the Recorder is right in holding that the licence to occupy the Dispute Land Lots were granted by the plaintiffs’ late fathers, the plaintiffs’ claim must still be dismissed on the ground that such licence must have been revoked by the plaintiffs’ fathers’ deaths by 1988 and thereafter, the plaintiffs had not granted any fresh licence, but had merely acquiesced in the defendants’ occupation of the Dispute Land Lots, so that the plaintiffs’ claim was equally statutory barred by the date of the Writ.’

58.We will allow the amendment. This argument was raised below in respect of Lot 454A and the Recorder addressed this in [60(3)(5)] of the judgment below (see [13] above) by saying that the possession was further subject to the 1996 licence.

59.In our view the defendants’ Ground 4 does not assist them because as Mr Chong (together with Mr Li) for the plaintiffs submitted, even if the adverse possession started in 1988, time for the purpose of the Limitation Ordinance (20 years for this period of time) would have stopped running in respect of Lot 453B (House 40) by reason of the 1993 licence and in respect of Lots 453A, 453C and 454A by reason of the 1996 licence.

V.  Conclusion

60.This is a classic case that a trial judge had the advantage of hearing and seeing the testimony of the witnesses aided by contemporaneous documents and the benefit of having the whole of the evidence unfolded before him in a long trial. From this spectrum of evidence he had to evaluate, weigh, consider the inherent probability of matters, draw inference and make findings. It is worth repeating the often quoted words of Lord Hoffmann in Biogen Inc v. Medeva plc [1997] RPC 1 at 45, Piglowska v Piglowska [1999] 1 WLR at 1360, 1372 D‑F and adopted by Bokhary PJ in Ting Kwok Keung v Tam Dick Yuen [2002] 1 HKC 601 at 613, that findings of facts by a judge

‘ are inherently an incomplete statement of the impression which was made upon him by the primary evidence. The expressed findings are always surrounded by a penumbra of imprecision as to emphasis, relative weight, minor qualification and nuance … of which time and language do not permit exact expression, but which may play an important part in the judge’s overall evaluation.’

61.These words are most appropriate to refute the challenges levelled against the judgment below. The defendants are not able to demonstrate that the findings are plainly wrong and none of the grounds of appeal is able to show that the Recorder’s judgment is incorrect.

VI.  Respondent’s Notice

62.Having reached the above conclusion, it is not necessary for us to address the Respondent’s Notice in respect of implied licence that this Court recently considered in Tsang Woon Ming v Tsan Hing Tat Heidi [2024] 1 HKLRD 316 and attornment.

VII.  Disposition

63.The appeal is dismissed with an order nisi that costs of the appeal be to the plaintiffs with a certificate for two counsel.

Mr Edward Chan and Ms Prisca Cheung, instructed by Kwok Hei Law Office, for the 1^st and 2^nd Defendants

Mr K. M. Chong and Mr Philip S. Y. Li, instructed by Arthur Au & Co., for the 1^st to 4^th Plaintiffs