Kam To Pui v. The Incorporated Owners of Lux Theatre Building and Others

HCA000646/1996

HCA 646/1996

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 646 OF 1996

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Coram: Deputy High Court Judge Longley in Court

Dates of Hearing: 26-30 June 2000

Date of Judgment: 20 September 2000

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J U D G M E N T

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1. In this action the Plaintiff, Mr Kam To Pui, claims title to certain land in Hunghom, by virtue of 20 years adverse possession in accordance with the provisions of the Limitation Ordinance Cap. 347.

2. The land in question forms part of a private side lane known as Wu Kwong Street which runs alongside the Lux Theatre Building from Baker Street to Bulkely Street. The land claimed by the Plaintiff adjoins the Lux Theatre Building and extends about a third of the way across the lane. The Plaintiff does not claim the full length of the this strip of land but only the majority of its length namely from the Baker Street end to a point which corresponds to the back of Shop A at the Bulkely Street end.

3. There is no dispute that the 1st Defendant, the incorporated owners of Lux Theatre Building, which is the only Defendant now remaining in this action, is the registered owner of the common parts of the Lux Theatre Building which include the land in question.

The case for the Plaintiff

4. It is the Plaintiff's case that in 1970 he was running a garage business, known as Chung On Garage at 63 Bulkely Street. He lived in a cockloft of those premises with his family. The premises were opposite to the Bulkely Street end of Wu Kwong Street.

5. In the autumn of that year just after the Mid-Autumn festival, the Lux Theatre Building had recently been built but it was still unoccupied and scaffolding still surrounded the building. The occupation permit had not been issued and would not be issued until the following March.

6. Without asking permission of anyone he pushed a vehicle onto the strip of land adjoining the building in order to repair it. He was not able to use that part of the strip of land immediately opposite his shop in Bulkely Street because it was obstructed by scaffolding but used a part towards the Baker Street end but on the Bulkely Street side of the fire exit door.

7. After 2 to 3 days he erected a wire fence running from the Baker Street end.

8. Initially this fence extended only part of the way down the lane and was open at each end. After he erected this fence he pushed an abandoned PLB onto the land in which he and his eldest son slept.

9. In 1971, he erected 6 huts in the lane and at the end of the year extended the fencing all the way down the lane to a point which corresponds to the back of Shop A at the Bulkely Street end. The reason he did not utilise or fence the land at the Bulkely Street end of the lane was because a Mr Fung was operating a business in Shop A and wanted to occupy that land. The Plaintiff's family moved from 63 Bulkely Street into the huts and ceased to occupy those premises. The fenced off portion of side lane became the premises of Chung On Garage. It was at this stage (the end of 1971) that he installed 3 gates. There was a half fence at the Baker Street end, a chain extending across the other half of the entrance. There was a second gate across the area about 34 feet into the lane just after the fire exit of the Lux Theatre Building and a further gate at the end of the fenced area near Bulkely Street.

10. In March 1974, he received a letter from the solicitors acting for the manager of the Lux Theatre Building demanding that he vacate the space he was occupying. He ignored the letter but nothing was done to evict him. He operated his garage business there until 1980 when he closed it down.

11. In about 1975 he had rented a shop in the Lux Theatre Building at No. 105 Baker Street from which he sold motor vehicle accessories. He had continued with this business for several years.

12. After the closure of the garage in 1980, he ran an illegal cooked food stall at night between the first and the second gates at the Baker Street end of the land in question. I will refer to this as the "outer area". When the stall was not doing business, he would take his tables and chairs and equipment out of that area and put them on the other side of the gate in the area in which he and his family lived. I will refer to this as the "inner area".

13. During this latter period apart from operating the cooked food stall he also stored cars on the land. He ceased the cooked food business in 1989.

14. In December 1990 both the Plaintiff and Mr Fung received letters from the Plaintiff telling them that they intended to clear the area. Initially they were told they had to remove their belongings by 30 December 1990 but this was extended to 10 January 1991. The Plaintiff consulted solicitors who replied to the 1st Defendant. In a letter of 31 December 1990 his solicitors described the Plaintiff as "licencee and legal occupier of the land since 1970" and said that he would not vacate the land. The Plaintiff said in evidence that the term "licencee" did not represent what he meant. He meant that he had been occupying the land for a long time without objection and had not paid any rent.

15. After this exchange of correspondence the 1st Defendant took no further action.

16. In December 1995 renovation work was commenced in the ground floor of Lux Theatre Building. This resulted in the Plaintiff's occupation of the land being disturbed, inter alia by the construction of air-conditioning vents protruding into the area occupied by the Plaintiff and the construction of a new door leading into the same area.

17. As a result on 28 December 1995 the Plaintiff locked the area up and moved out, having posted up a letter from his solicitors maintaining that he was the lawful owner and occupier of the land.

The defence case

18. The oral evidence for the defence came from two witnesses, Mr To Shui Kan a resident of the Lux Theatre Building and current member of the management committee who claimed that he had moved into the building on 11 February 1971 and Mr Low Hon Keung who has been secretary of the management committee since September 1982.

19. Mr To's evidence was that when he first moved into the Lux Theatre Building, the Luen Shing Building (which was on the opposite side of Wu Kwong Street) had been erected but work was still continuing on it. There was no fencing in Wu Kwong Street and vehicles parked on either side of the lane either on the pavement or on the carriageway. He agreed that in 1971 to 1972 a garage business was being run on the pavement on the Lux Theatre side because he said he saw some damaged vehicles parked there.

20. He said that it was not until 1975 that a wire fence was erected in the lane. It was erected after a Chinese products emporium had opened in Luen Shing Building but he did not know who erected it. It ran midway down the lane. He could remember it because it was used by the emporium to display flowers for its Chinese New Year flower market. He maintained that at this stage vehicles could still be driven down the lane but only small vehicles could do so on the Lux Theatre side of the lane and they would have to mount the pavement.

21. He said that it was only in 1977 or 1978 that that fence was removed and a wire fence erected to enclose the pavement on the Lux Theatre side of the building. This was not done by the Plaintiff as the Plaintiff now alleges but by the management of Luen Shing Building. The management had put up a notice saying that they wanted to make Wu Kwong Street green for the benefit of the children and the elderly. Gates were put at each end of Wu Kwong Street to prevent traffic entering.

22. It was not until 1980 that he first noticed huts behind the wire on the Lux Theatre Building side. He said he did not see anyone occupying the land but presumed that there was someone there.

23. The second defence witness Mr Low Hon Keung has been the secretary of the 1st Defendant since 1982. He gave evidence that on 3 occasions between 1982 and 1988 during which time he was responsible for the drainage, he had accompanied workers to clear manholes on the land in question. On none of these occasions had he sought permission to do the work and there had been no one present. Indeed, he claimed that he was unaware that anyone lived on the land although he had seen a dog or dogs chained there. One of the manholes was on the Baker Street side of the second gate. (ie in the "outer area") The others were beyond that second gate. (ie in the "inner area") On two occasions he had gained access to the "inner area" by opening the unlocked gate. On the third occasion he gained access through a gap in the fence. These three visits were the only evidence adduced by the 1st Defendant of any user by the 1st Defendant of the "inner area".

24. In so far as the "outer area" between Baker Street and the second gate is concerned, he gave evidence of more extensive activities. At least twice a day he would visually check that there was nothing obstructing the fire exit to the building which led into this area. He could do this visually from Baker Street without entering the "outer area". Several times a month he would go out of the building through the fire exit into this "outer area" in order to ensure there were no obstructions to this exit and then pass the chain into Baker Street. Sometimes the chain extended across the entrance. Sometimes it lay on the ground. He never asked permission to do this. He had seen the Plaintiff occasionally drive a taxi onto the land, clean it and then drive away.

Adverse Possession

25. In order to succeed in his application for possession the Plaintiff must show uninterrupted adverse possession of the land claimed for any period of 20 years prior to the commencement of these proceedings on 16 January 1996. If the Plaintiff is to obtain title to the whole of the land in question, he must show adverse possession of the whole of the land for the required period. He must show that he occupied the land and had an intention to exclude the whole world including the rightful owners so far as practicable throughout the requisite 20 year period.

26. Simply using the land as a place to repair vehicles as a trespasser would for instance not be sufficient unless the Plaintiff could show that he not only had possession but that he had an intention to exclude the whole world from the land including the rightful owner.

27. Because of the nature of the land in question in this action, the question when and to what extent the land was fenced by the Plaintiff is likely to be a considerable significance. For this reason, it is necessary to look initially at the Plaintiff's evidence of the start of his alleged occupation and the extent and nature of that occupation.

The start of the Plaintiff's occupation

28. An unusual feature of this case is the paucity of evidence of these matters in the early years. Despite the fact that the land is within a traditional neighbourhood, albeit with some new buildings, and despite the density of the population in this part of Hunghom and the fact that the Lux Theatre Building was only completed in 1971 less than 30 years ago, I only heard the oral and conflicting evidence of the Plaintiff and Mr To about the early period in particular between 1970 and 1973.

29. I have been shown no photograph of the area during this period. Despite the fact that the Plaintiff says he moved his business from Bulkely Street onto the land in question in 1971, I have been shown no business registration certificate to support this. I have seen no correspondence dated before 1973 that could provide any assistance as to these matters.

30. Having considered the evidence, I am left in considerable uncertainty as to the date of the commencement of the Plaintiff's occupation of the land and its extent at that stage. He now maintains that his occupation started in the Autumn of 1970 after mid Autumn festival. That conflicts with his affirmation of 16 January 1996 in ancillary proceedings and his original Statement of Claim which put the date in 1971. He has explained the difference by reference to his learning of the date of the occupation permit for the building which was granted on 1 March 1971. If that evidence had stood alone, I would have accepted his explanation for the difference in date but there are other features of the evidence which indicate that the Plaintiff's recollection as to when things happened may be hazy.

31. Initially in evidence the Plaintiff said that within 2-3 days of first parking a vehicle on the land he had fenced it off from Baker Street to a point corresponding to the rear of Shop A at the Bulkely Street end and erected gates and started to live in a PLB on the land. That was the same impression given by his witness statement of 30 October 1999. However later in evidence it transpired he was alleging that he had initially fenced off a more limited area and had not erected the gates until a year later. I found it unlikely that he and his son would have started to live in an old PLB without any utilities at that stage. I found it also unlikely that the remainder of the family would move into the land as early as 1971 in the absence of any utilities.

32. There were obvious shortcomings in the evidence of Mr To, in particular as to when he first moved into the Lux Theatre Building, but I find that there may be some accuracy in his recollection that when he first moved into the building, which I find cannot have been until the very end of 1971, a garage business was being operated on the lane but that it was not fenced at that stage.

33. I find that it may be possible that the Plaintiff first repaired a vehicle on part of the land as early as 1970. Whenever he first used the land, it is probable that the Plaintiff continued to use the land as a place he could repair vehicles which he could not accommodate on his own premises in Bulkely Street and that at some later stage he erected the fencing and the gates which he described in evidence. I find it probable that by the time he had ceased to use 63 Bulkely Street as a garage and had transferred his business to the land in question, he would have erected gates and fencing from the Baker Street end to the back of Shop A at the Bulkely Street end.

34. I do not consider it likely that the Plaintiff would have installed a telephone and extension on the land unless it had been fenced off. A bill of 10 July 1973 from the Hong Kong Telephone Company shows that such a line and extension was being provided at least from 1 June 1973. By 30 November 1973 it is apparent from the Bank Statement of Kwong On Bank Ltd that Chung On Motors was operating from the land in question.

35. I consider that Mr To's recollection as to when the fencing was first erected enclosing the paved area on the Lux Theatre side of the street is probably incorrect. He was not at that stage on the management committee of the Lux Theatre Building and probably had no reason particularly to remember the dates. I consider that he is probably mistaken in thinking that it was the management of Luen Shing Building which erected the fencing in question.

36. The evidence therefore satisfies me that from the middle of 1973 the Plaintiff had probably fenced the land in question from the Baker Street end to the rear of Shop A at the Bulkely Street end, and that he had erected a half gate at the Baker Street end and used the chain from time to time to enclose the remainder of the entrance, that he had erected a second gate just beyond the fire exit to the Lux Theatre Building and a further gate at the rear of Shop A.

Did the Plaintiff's user of the land amount to adverse possession?

37. In order to establish title, the Plaintiff must show both factual possession of the land claimed and an intention to possess so as to amount to adverse possession (animus possidendi).

38. In so far as the concept of factual possession is concerned, as Slade LJ said in Powell v. McFarlane 1977 38 P and CR 462

"Factual possession signifies an appropriate degree of physical control. It must be single and (exclusive) possession though there can be single possession exercised by or on behalf of several persons jointly. Thus an owner and a person intruding on that land without his consent cannot both be in possession of the land at the same time. The question what acts constitute a sufficient degree of exclusive physical control must depend on the circumstances, in particular of the nature of the land and the manner in which land of that nature is commonly used or enjoyed. Whether or not acts of possession done on parts of an area establish title of the whole area must, however, be a matter of degree. Everything must depend on the particular circumstances but broadly I think what must be shown as constituting factual possession is that the alleged possessor has been dealing with the land in question as an occupying owner might have been expected to deal with it and that no one else has done so".

39. In the same judgment, Slade LJ said this of the necessary "animus possidendi"

"The animus possidendi involves the intention, in one's own name and on one's own behalf to exclude the world at large including the owner with paper title, if he be not himself the possessor, so far as reasonably practicable and so far as the process of the law will allow."

40. I propose to deal with whether the Plaintiff has established these two requirements in relation to the land in question in two parts, firstly in relation to the "outer area" between Baker Street and the second gate and secondly, in relation to the "inner area" beyond the second gate extending to the point corresponding to the rear of Shop A. My comments are subject to the question of licence to which I shall refer later.

"The outer area"

41. I find that the Plaintiff has failed to establish either requirement in relation to the outer area.

42. In so far as factual possession is concerned, the Plaintiff has failed to show that he was dealing with the land in question as the occupying owner might have been expected to deal with it and that no one else has done so. I accepted the evidence of Mr Low Hon Keung of his regular visits to this area between 1982 and 1988 in order to ensure that nothing obstructed the fire exit to the building and his clearing of the manhole within this area. I am satisfied that these visits were in his capacity as representative of the owner of the land exercising its rights of ownership of the land.

43. Furthermore, I consider that the evidence is at its highest equivocal as to whether the Plaintiff intended to exclude the owners as opposed to other persons from this area.

44. There is no suggestion that the Plaintiff ever attempted to prevent Mr Low using this area. I consider it improbable that the Plaintiff would have attempted to prevent any other resident of the building using the fire exit as a means of normal egress from the building if he or she had wished to do so. The use of a chain rather than a second proper gate at the Baker Street end of the land is as consistent with a desire to discourage members of the public from, for instance, using the "outer area" as a rubbish tip or a carpark as with an attempt to exclude the real owners from the land. The fact that he only temporarily erected tables and chairs and other equipment at night in this area and took it within the "inner area" at other times is consistent with a recognition on his part of the rights of the owners over the land which gave access to the transformer room of the building as well as the fire exit.

45. I find therefore that the Plaintiff has failed to establish 20 years adverse possession to this outer area.

"The inner area"

46. In so far as the inner area is concerned the situation is different.

47. It is hard to see what more the Plaintiff could have done to acquire complete physical control over the area. Gates which could be locked had been installed at each end of the area, structures had been erected thereon, cars were parked within its confines and a dog or dogs were kept there. While I accept Mr Low's evidence of three visits to clear the manhole between 1982 and 1988, those visits were only possible because by chance the gates were left unlocked on two of the occasions and because there was a gap in the fence on the third occasion. I find that the reality is that these visits were made by Mr Low onto land not occupied by the 1st Defendant jointly with the Plaintiff but occupied by the Plaintiff alone. On these visits Mr Low could not obtain access to all the manholes but only those which had not been covered by the Plaintiff's structures and equipment. I find therefore that the Plaintiff has established factual possession for a period of 20 years of this area prior to the issue of proceedings.

48. I also find that he had the necessary animus possidendi during this period namely to exclude the world at large including the owners from this land.

Licence

49. It has been argued on behalf of the 1st Defendant that for the period prior to the incorporation of the 1st Defendant on 24 April 1974, the Plaintiff must establish adverse possession against each and every holder of undivided shares in the land and building. It is suggested that the evidence points to a licence granted to the Plaintiff to occupy the land by either Mr Fung, the owner of Shop A, or by the owner of Shop 105A who allowed him to take electricity from the shop onto the land.

50. There is nothing in the evidence to suggest that either the owner of Shop 105A or Mr Fung did anything more than acquiesce in the Plaintiff's occupation of the land. I think it improbable that either gave any thought to whether they had any rights to the land in question. Indeed there is no evidence that Mr Fung was an owner.

51. In so far as the owner of Shop 105A is concerned the 1st Defendant had in any event already been incorporated before she came into the picture.

52. A letter dated 11 March 1974 from the manager of the building suggests that even before the incorporation of the 1st Defendant, no licence had be granted to the Plaintiff to occupy any of the land.

53. In any event, I am satisfied that the Plaintiff has established 20 years adverse possession to the inner area even after the incorporation of the 1st Defendant.

54. It has also been argued that the Plaintiff himself acknowledged that he occupied the land by virtue of a licence in the letter of his solicitors, Messrs Boase and Cohen dated 31 December 1990. I find that the use of the word "licence" by Boase and Cohen was ill-advised and did not represent the legal position alleged by the Plaintiff at that time. The terms of the letter itself in particular the statement that the Plaintiff would not vacate the land "in any event" are inconsistent with him having been granted a licence.

55. A final submission on the question of licence was based upon two letters dated 27 December 1990 and 29 December 1990 from the 1st Defendant. In the first of these letters the 1st Defendant ordered the Plaintiff to remove his structures by 30 December 1990. In the second the deadline was extended to 10 January 1991. These letters, it is argued, interrupt the Plaintiff's adverse possession because they amount to a licence by the 1st Defendant to occupy the land for this limited period.

56. I do not find any force in this submission. The effect of these letters is the same as letters dated 31 January 1981 sent by the Plaintiff's solicitors to the Defendants in the case of Mt Carmel Ltd v. Peter Furlow Ltd 1988 1 WLR 1078 requiring him to vacate the property in question by 28 February 1981. I have borne in mind that in that case the point which was taken was that the Defendant ceased to be in possession upon receipt of that letter and that the Plaintiff became in constructive possession. The Court of Appeal in that case however was in particular impressed by the point that nothing had changed upon receipt of this letter. That point has similar force in relation to the suggestion that a licence arose. In this case the Plaintiff was in adverse occupation at the time of the receipt of the letter. He did nothing to indicate that he was accepting to a licence to occupy the land for this short period. It appears that he just ignored the letter and continued his occupation.

57. I accordingly find that the Plaintiff has acquired title to the "inner area" of the land in question namely between the second gate and the point representing the rear of Shop A by virtue 20 years adverse possession under the Limitation Ordinance.

58. This finding is without prejudice to the 1st Defendant's rights in respect of drainage and utilities beneath the surface of the land and access thereto and the erection and maintenance of structures above the surface of the land. In accordance with the suggestion of the counsel, I invite counsel to consider, prepare and submit a draft order to reflect the court's findings and the residual rights of the Plaintiff, for the court's consideration.

59. I make the following order nisi as to costs which is to take effect unless within 21 days application is made to be heard on the question of costs, namely that the Plaintiff's costs be taxed and paid by the 1st Defendant. I order that there be legal aid taxation of the Plaintiff's costs.

Representation:

Mr Malcolm Merry, instructed by Messrs Clarke & Kong (assigned by DLA), for the Plaintiff

Mr Lam Shun-chiu, instructed by Messrs Wong, Poon, Chan, Law & Co., for the 1st Defendant