Kung Wong Sau Hin and Another v. Sze To Chun Keung and Others
Read the full judgment text of HCMP 1614/1990 on BabelCite. This High Court CFI judgment was delivered on 15 March 1996.
1. The Plaintiffs are the registered owners of various lots of land in Demarcation District 124 in the New Territories. The Defendants to this action are occupiers of various parts of the land in question. It is the Plaintiffs' case that such occupation is without their licence or consent and they accordingly seek possession. The Summonses before me relate to 19 of the Defendants, namely all the Defendants other than D5, D11 and D22.
Cited by 2 cases · Cites 7 cases
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HCMP001614/1990
IN THE SUPREME COURT OF HONG KONG HIGH COURT MISCELLANEOUS PROCEEDINGS ----------------- IN THE MATTER of All Those pieces or parcels of ground registered in Yuen Long District Land office as The R.P. of Lot No.2000, Lots Nos.2001, 2002, 2003, 2004, 2005, 2006, The R.P. of Lot. No. 2007, The R.P. of Lot No. 2009, Lots Nos. 2032, 2204, The R.P. of Lot No. 2212, Lots Nos. 2213, 2214 and The R.P. of Lot No. 2217 in D.D. No. 124 in the New Territories, Hong Kong. IN THE MATTER of All Those pieces or parcels of ground registered in Tuen Mun District Land Office as Lots Nos. 2205, 2206, The R.P. of S.A. of Lot No. 2209, The R.P. of Ss.1 of S.B. of Lot No. 2209 and Lot No. 2210 in D.D. No. 124 in the New Territories, Hong Kong. -----------------
----------------- Coram: The Hon Mrs Justice Le Pichon in Chambers Dates of hearing: 5, 11 & 12 January and 9 March 1996 Date of delivery of decision: 15 March 1996 ----------------- DECISION ----------------- Introduction 1. The Plaintiffs are the registered owners of various lots of land in Demarcation District 124 in the New Territories. The Defendants to this action are occupiers of various parts of the land in question. It is the Plaintiffs' case that such occupation is without their licence or consent and they accordingly seek possession. The Summonses before me relate to 19 of the Defendants, namely all the Defendants other than D5, D11 and D22. Ownership of the Land 2. The land which is the subject-matter of this action was held under a Block Crown Lease and was expressly demised as agricultural or garden ground. It expressly prohibited any use or building other than for agricultural or garden purposes. The land was acquired by Kwan Mui and Lam Chak Man, the predecessors-in-title of the Plaintiffs, as tenants in common in 1960. Part of the land was acquired by them on 23 June 1960 from Wong Tze Tseung. The rest of the land was acquired on 18 July 1960 from Wong Ng Shi, the wife of Wong Tse Tseung. Lam Chak Man died in 1961 and after his death, his half share was vested in the four executors of his estate. On 26 February 1973, Kwan Mui assigned her half share in the land to Kung Yeuk Man. These matters appear from four Memorials registered at the District Office New Territories, one dated 25 July 1960 and the remaining three all dated 5 August 1960. By virtue of the New Territories (Renewable Crown Leases) Ordinance, Cap.152 there was a deemed regrant of the land as from 1 July 1973. The 1980 proceedings 3. In 1980, Kung Yeuk Man and the executors of the estate of Lam Chak Man issued an originating summons under Order 113 seeking possession of the various lots against 11 Defendants. Twenty-five other persons who claimed to be occupiers of the lots were subsequently joined, making 36 Defendants in all. Kung Yeuk Man died in October 1981. Following his death, it was ordered that the 1st Plaintiff be appointed to represent his estate for the purposes of carrying on the action subject to her agreeing to do so. The Court also ordered that in default of such consent, the executors of the estate of Lam Chak Man were at liberty to proceed with the action in the absence of anyone representing the estate of Kung Yeuk Man. On 14 October 1982, the court made various orders. Thereafter the 1980 action went to sleep. The present action 4. The present action commenced by way of originating summons issued under Order 113 in 1990. It was heard by Keith J. who after ordering that the summons proceed as if issued by writ and that pleadings be filed, dismissed the application to strike out the originating summons and/or for a stay of the proceedings. Pleadings were accordingly filed by the Plaintiffs and the Defendants pursuant to that order, except for D15, D17, D18 and D20, who did not file Defences until October 1995. Meanwhile, on 11 December 1993, D5 appealed against the order of Keith J. Pending this appeal, the Plaintiffs issued summons on 23 May 1994 to discontinue the 1980 proceedings. D5's appeal came before the Court of Appeal on 24 May 1994. The Court of Appeal ordered, inter alia, that -
5. By an order dated 5 July 1994, the Plaintiffs were granted leave to discontinue the 1980 proceedings against all Defendants except D5 and by order dated 6 December 1994, the Plaintiffs were granted leave to discontinue the 1980 action against D5. By a consent order dated 17 February 1995, D5's appeal was dismissed with no order as to costs. 6. On 18 August 1995, the Plaintiffs took out a number of summonses against the Defendants. The summonses were identical and sought (1) to strike out the Defences filed by the Defendants in that they -
pursuant to O.18, r.19 and/or the inherent jurisdiction of the Court and for final judgment in default of defences; and/or (2) that final judgment be entered for the Plaintiffs for possession of the land pursuant to O.14, r.1. The summonses were issued against different groups of Defendants, each group having defences that are similar. These summonses came before Master Jennings on 2 October 1995. At that hearing, some of the Defendants took a preliminary point that the summonses ought to be dismissed as the Plaintiffs had not served any notice under O.3, r.6 prior to the summonses of 18 August 1995 being taken out. All the Plaintiffs' summonses were dismissed by the learned Master on this point and this point alone without hearing submissions on the substantive points. 7. Notices of appeal against the order of Master Jennings were filed on 7 October 1995. For convenience, the appeals were set down to be heard on three separate days, each appeal affecting different Defendants or groups of Defendants. Preliminary issues (a) Order 3, rule 6 8. This rule provides:
9. The Plaintiffs submitted that O.3, r.6 has no application because the last proceeding in the cause or matter was D5's appeal against the order of Keith J. and that appeal was not concluded until February 1995, six months prior to the issuance of the summonses. The Defendants who were legally represented contended that as they were not parties to that appeal, no step had been taken as between them and the Plaintiffs since pleadings were filed in December 1993. Although the unrepresented Defendants did not take this point, they should have the benefit of it should the point be valid. Accordingly, for present purposes, I will consider the preliminary point on that basis. 10. The question for determination is whether where there are a number of defendants to an action, the step must have been taken in relation to all of them or whether it is sufficient so long as the step involved one of them. This turns on the proper interpretation of O.3, r.6. In other words, is it sufficient that the last proceeding was against some but not all the Defendants? 11. Counsel for D2, D3 and D4 submitted that the rationale of the rule is to protect a defendant from prejudice due to the plaintiff's inaction. However, no authority was cited for that proposition. The rationale of the rule appears in Austin Securities Limited v. Northgate & English Stores Limited [1969] 1 WLR 529 where it was stated (at pp.532-533) that the month given by the rules is to enable the defendants to consider their position and to apply, if so advised, to dismiss the action for want of prosecution. That, of course, is not the position of any of the Defendants here; dismissal for want of prosecution is not a relevant consideration in the present case. 12. Counsel for D1, D2, D3, D4, D13, D14 and D19 submitted that a notice under O.3, r.6 ought to have been served on their clients. That submission would require the rule to be interpreted in one of two ways: viz, either
were added at the end of the first clause. The first alternative would require further emendations to the rule as it would not make much sense for notice to be then given to "every other party". Rather, one would expect notice to be given to "such other party". As to the second alternative, if the wording of the second part of r.6 is left intact, it would result in notice having to be given to parties against whom the last proceeding was within the preceding 12 months. Logically, that is not tenable. Either alternative would require the rule to be substantially rewritten. 13. The Plaintiffs' construction of O.3, r.6 would not require the rule to be rewritten. Therefore, as a matter of construction, it is to be preferred. In my judgment, the summonses ought not to have been dismissed by the learned Master on this preliminary point. I will allow the appeal. 14. If I am wrong on the construction of O.3, r.6, I would nevertheless waive this technical irregularity because I cannot see that the Defendants were prejudiced as a result. Should it be necessary, I would exercise my discretion to grant relief under O.2, r.1. (b) Issue estoppel 15. Whilst this point was only argued by counsel for D2, D3 and D4, if it is valid, the other defendants ought to have the benefit of it. Accordingly, I will treat this also as a preliminary issue affecting all the defendants. 16. Counsel for D2, D3 and D4 submitted that the Plaintiffs are precluded from seeking judgment by summary procedure because of the decision made by Keith J. in 1993 as a result of the Plaintiffs' application under O.113 for possession. As appears from page 5 of his Decision, two issues were before the learned Judge, namely
It was his decision in relation to the second question that is the basis of the submission on issue estoppel. It was submitted that in reaching his decision that the originating summons should be treated as a writ, the learned Judge had concluded that the issues raised were "not amenable to decision on a summary procedure" and that therefore the court should not entertain the present application. 17. Issue estoppel does not arise unless the question which has been decided is the same and is final in the sense of being "final and conclusive on the merits" and "... the cause of action must be extinguished by the decision which is said to create the estoppel": see per Lord Guest in Carl Zeiss Stiftung v. Rayner & Keeler Ltd. [1967] AC 853 at p.935C-D. I do not see how the decision of Keith J. can be said to be "final and conclusive on the merits" of the Plaintiffs' claim. What was before him was a procedural issue - how the action ought to proceed. There was no final adjudication on the merits in the Carl Zeiss sense and the contention put forward by these defendants is wholly misconceived. The questions before me were not before Keith J, namely whether pursuant to O.18, r.19 or under the inherent jurisdiction of the court, the defences filed ought to be struck out as disclosing no reasonable defence, are frivolous or vexatious or otherwise an abuse of process. 18. If the contention of D2, D3 and D4 is sound, then whenever an originating summons is treated as a writ, it would have the effect of precluding an application under O.18, r.19. That cannot be right as a matter of principle. A determination as to the appropriate procedure for continuing an action is not a final determination of the merits of the action for possession; it is an interlocutory order relating to the procedure to be applied. That has been adhered to in that pleadings have been filed. If the facts that have been pleaded do not amount to a defence in law, or is frivolous or vexatious or an abuse of process there is no discernible reason why the Plaintiffs cannot apply to have that defence struck out. 19. The learned Judge did not proceed to address the merits of the defences raised on the basis of facts most favourable to the defendants. Rather, he was reluctant to proceed to a decision on the facts as filed because a number of defendants were not represented and there were many loose ends in the evidence which had been filed on behalf of those who were represented. So he gave the defendants the opportunity to spell out the facts upon which they rely. They have now had ample opportunity to do so. Meanwhile, the law has not stood still. Certainly in the context of adverse possession, the Court of Appeal has rendered its decision on the effect of the New Territories (Renewable Crown Leases) Ordinance. Cap.152 which has a significant impact on the availability of adverse possession as an arguable defence for many of the defendants. This point highlights the interlocutory nature of the 1993 Order since it cannot be argued that the Plaintiffs are precluded from relying on the Court of Appeal ruling. Had the 1993 Order been final and conclusive on the merits, the Court of Appeal ruling would have been irrelevant on that issue as between the parties which it is not. 20. Accordingly, I will proceed to consider the merits of the summonses before me. I propose to take a view of the facts most favourable to the defendants. I will deal with the summonses in the order in which they were argued. D2, D3 and D4 21. D2, D3 and D4 have raised similar defences. It would be convenient to deal with their cases together. These Defendants claimed to be in possession of Lot Nos. 2000RP, 2213, 2214, 2200 and 2214RP in DD124. As the Plaintiffs are not the registered owners of Lot No.2200, and do not claim to have been entitled to possession of this lot, for the purposes of these proceedings, the occupation of Lot No.2200 is not a matter about which I need be concerned. 22. A Modification of Tenancy, Permit No.20664, was granted to Kung Yeuk Man and Lam Chak Man on 1 March 1974. D2 was the permittee who signed on behalf of the registered land owner. This permit covered Lot Nos.2000RP, 2212RP, 2213, 2214 and 2217RP, In so far as any reliance is placed on this Modification Letter, so much of the land not mentioned by these Defendants in their respective Defences but which was subject to the Letter and are now registered in the names of the Plaintiffs, namely Lot Nos.2212RP and 2217RP will be treated as being in the occupation of these Defendants. 23. Lot No.2000RP was sold by D2's mother (Wong Ng Shi) to the Plaintiffs' predecessors-in-title on 18 July 1960. Lot Nos.2212RP, 2213, 2214 and 2217RP were sold by D2's father (Wong Tze Tseung) to the Plaintiffs' predecessors-in-title on 23 June 1960. The house in which D2 is living was built by D2's father in or about 1925. D2 has been residing on the land since 1947. D3 who is D2's brother-in-law and D4 who is the mother-in-law of one of D2's younger brothers, have been residing on the properties since 1947. No rent or fee has ever been paid to the Plaintiffs by any of D2, D3 or D4. In this connection, I note that whilst an affirmation has been filed by Chu Chik, the son and lawful attorney of D3, alleging that D3 and his family including Chu Chik have been residing on the land in question since 1947, Chu Chik stating his address as Lot Nos.2213, 2214 and 2217RP etc. in DD124, it is interesting to note that the Power of Attorney, dated 19 February 1993, which is exhibited to D3's first affirmation made on 14 April 1993, D3 in fact resides in California. Moreover Chu Chik's address as shown in the Power of Attorney was in Mei Foo Sun Chuen, Kowloon rather than the land in question. 24. I now turn to consider the various defences raised by these Defendants. Some of these have been raised by some of the other Defendants and what is set out below is thus equally relevant to those other Defendants. (a) Licence 25. Each of D2 and D3 and their respective families occupy half of the house built in 1925. Given that D2 was the son of the registered owners in 1960, and the fact that D2, D3 and D4 are related in some way, it is reasonable to suppose that prior to the conveyances of 1960, they were occupying the land with the licence or permission of the registered owners. 26. A licence is automatically terminated by the death of, or an assignment by, the registered owner. See Ho Hang-wan v. Ma Ting-cheung [1990] 1 HKLR 649 and Woodfall on Landlord and Tenant, Vol.I at para.1.033. The principle of law as stated by Pollock, CB in Coleman and Foster (1865) 1 H & N 37 is that:
A purchaser who buys land with notice of a licence is not bound by it unless the circumstances are such that his conscience is affected. In such cases, he may be compelled to give effect to the licence through the mechanism of a constructive trust. 27. No constructive trust has been raised and no facts have been pleaded to suggest that such special circumstances exist in the present case. In this connection, I respectfully adopt the approach of Browne-Wilkinson, V-C in IDC Group v. Clark (1992) 08 EG 108 which is that it is of the greatest importance that the title to land should be capable of being ascertained in accordance with well-known procedures. To raise constructive trusts which do not fit into the conveyancing machinery currently operating, thereby giving rise to liabilities of which purchasers might otherwise not be aware, is a dangerous course to pursue. For a constructive trust to arise, there must be "very special circumstances showing that the transferee of the property undertook a new liability to give effect to provisions for the benefit of third parties. It is the conscience of the transferee which has to be affected and it has to be affected in a way which gives rise to an obligation to meet the legitimate expectations of the third parties." I am satisfied that on the material I have before me, no question of a constructive trust arises. The defence of a licence is unsustainable as any licence would have come to an end upon the sale of the land in question in 1960. (b) Tenancy 28. According to their evidence, no rent has ever been paid to the Plaintiffs or their predecessors-in-title by these Defendants. The only payments made by them were payments of Crown rent, rates and Modification of Tenancy fees. 29. A Modification of Tenancy cannot create in the person named as permittee under the Modification any tenancy in respect of the land. A typical Modification of Tenancy has the effect of modifying the tenancy to the extent that the registered owner, i.e. the tenant, was permitted during the period specified to maintain temporary structures as specified upon payment of a fee. In the case of D2, the owner of the land i.e. the tenant under the Crown lease was stated to be Kung Yeuk Man and Lam Chak Man rather than D2. D2 signed the Modification as Permittee "on behalf of registered land owner". It was not a grant by the Crown to D2; it simply modified the terms upon which the original grant was held. Nor could it be construed as a grant by the registered owner to the permittee who on the face of the Modification of Tenancy was simply his agent. 30. As a general rule, the relationship of landlord and tenant does not arise unless there is a grant by the landlord to the tenant of a right to the exclusive possession of land for a term that is less than that which the landlord has in the land. Whilst the reservation of a rent is not essential to the creation of a lease, (see Ashburn Anstalt v. Arnold [1989] 1 Ch 1 at 9E - 10C where Fox LJ explained the dicta of Lord Templeman in Street v. Mountford [1985] AC 809 at 825, overruled on other grounds by Prudential Assurance Co. Ltd. v. London Residuary Body [1992] 2 AC 286) a grant of a legal right of exclusive possession of the land for a term or from year to year is essential. Here, there is no evidence of any grant. There was certainly no express grant and so far as an implied grant is concerned, there was no evidence of the acceptance by the registered owners of any periodical payments from the occupiers. The only payments that had been made by the occupiers have been for Crown rent and rates and Modification of Tenancy fees. Such payments were not made to the registered owner but to third parties. Payment by the occupier of gas and electricity bills was held not to constitute the payment of rent: see Bostock v. Brian [1990] 2 EGLR 101, CA. Similarly, payment of rates and taxes on a property was also held not to constitute a payment of rent: see In re Richmond Justices (1893) 10 TLR 68. There is no evidence from which an implied grant could be inferred in the present case. That being so, there is no basis for the argument based on a tenancy and it must fail. (c) Proprietary estoppel 31. D2, D3 and D4 all assert that they have made many improvements to the land. D2 further relies on the fact that his father had erected the family home in which D2 and his family has resided and continues to reside. Pausing there, D2's father was in fact a predecessor-in-title of the present registered owners. The house was erected by him at the time when he was owner of the land. That fact cannot assist D2 to found any argument based on proprietary estoppel. D2's reliance on that fact is misconceived. 32. Under Permit No.8020 executed on 2 May 1966, the Crown Lease was modified to the extent that during the period 1 January 1961 to 31 December 1966, the registered owners were permitted to maintain "domestic structures 3448 sq.ft.". Under Permit No.20664 dated 1 March 1974, the Crown Lease was modified to the extent that the registered owners were permitted during the period 1 January 1971 to 31 December 1974 to "maintain temporary structures as list attached". The list was very extensive and appeared to permit the erection of structures described as "private residential, porch, store-room, kitchen and store-room, latrine, pigeon shed, agricultural stall". As D2 was one of the permittees under Permit No.8020 and the permittee under Permit No.20664, it is reasonable to conclude that the structures which he said he caused to be erected on the land corresponded with those permitted under the Modifications of Tenancy. In the defences filed in respect of D3 and D4, it is asserted that each of them has made many improvements to the land. No particulars were given either in the pleadings or in the affirmations. D2, D3 and D4 averred that the "improvements were made either with the knowledge or consent or without objection from the Plaintiffs or their predecessor-in-title". D2 particularised the improvements made by him as including structures erected in or about March 1974 recorded in the District Office, Yuen Long. This appears to be a reference to the structures specifically authorised under Permit No.20664 referred to above. 33. In order to succeed in a plea of proprietary estoppel, five points must be established, namely:
See per Fry J in Willmott v. Barber (1880) 15 Ch.D.96 at 105-6. 34. Miss Eu, leading counsel for the Plaintiffs relied on the English Court of Appeal's decision in Brinnand v. Ewens (1987)2 EGLR 67 which adopted the elements necessary for establishing proprietary estoppel as formulated in Snell's Principles of Equity. The principles, though differently worded, are in essence the same. Further, I do not regard the nomenclature of "equitable estoppel" preferred by counsel for D2, D3 and D4 as making any difference in substance in the defence advanced. 35. Miss Eu submitted that the claim for proprietary estoppel must fail because there was no averment that the owner knew, much less encouraged, the expenditure said to have been incurred. Whilst there was no averment of encouragement, there was an averment of knowledge, viz. that the improvements were made "with the knowledge or consent or without objection" from the Plaintiffs or their predecessors-in-title. However, no particulars were given of such knowledge on the part of the Plaintiffs either in the pleadings or in the affirmations. 36. What then constitutes "encouragement" for the purposes of proprietary estoppel? Encouragement may be done actively but an equity will also arise where the owner encourages the claimant's mistaken belief passively, by refraining from asserting his right even though he has knowledge that the claimant was incurring expenditure in the mistaken belief that he has an interest in the property. 37. The question that I have to determine is whether, for the purposes of an application under O.14, r.1, a party who has made a bald assertion of knowledge on the part of the registered owner in relation to the requirement of encouragement in the context of a proprietary estoppel claim has sufficiently established an arguable defence so as to preclude summary judgment. Counsel for D2, D3 and D4 submitted that it was sufficient. The allegation is that at the time the structures were being erected and expenditure incurred, the then owners knew what was going on but remained silent and refrained from exercising their rights. It is the passive form of encouragement that is being alleged. 38. Have issues of fact been raised to preclude summary judgment? 39. As to "knowledge" or "consent", there is nothing other than a bald assertion that the owners had "knowledge" or consented. No facts and matters have been pleaded to support that allegation. In my judgment, such a bald assertion is insufficient to mount an arguable defence of proprietary estoppel. 40. Counsel for D2, D3, and D4 relied on Taylors Fashions Ltd. v. Liverpool Trustees Co. [1982] 1 QB 133 and at 151H-152A where Oliver J was said to favour a very much broader approach directed at ascertaining whether in particular individual circumstances, "it would be unconscionable for a party to be permitted to deny that which, knowingly, or unknowingly, he has allowed or encouraged another to assume to his detriment than to enquiring whether the circumstances can be fitted within the confines of some preconceived formula serving as a universal yardstick for every form of unconscionable behaviour". At p.154F the learned Judge referred to "the broad test of whether in the circumstances the conduct complained of is unconscionable without the necessity of forcing those encumbrances into a Procrustean bed constructed from some unalterable criteria". 41. What, therefore, amounts to unconscionable conduct? Taylors Fashions is not authority for the proposition that an owner who abandons land is guilty of unconscionable conduct so as to impose on him a positive duty to act to prevent anyone else from incurring expenditure on the land. Whilst a person who stands by watching money being expended on his land may in appropriate circumstances be estopped from asserting his rights, I do not accept that he is or can be under any duty to act when he has no such knowledge before or at the time such expenditure is incurred. It is to be noted that in Taylors Fashions itself, the presence of the owner's representative when the expenditure was incurred was insufficient as both parties were labouring under the assumption which turned out to be false, that the claimant had a valid option to renew the lease. The Defendants have failed to plead acts which in their view amounted to unconscionable conduct. Where particulars of knowledge have not been pleaded nor acts that constitute unconscionable conduct, a plea based on proprietary estoppel is bound to fail. For these reasons, proprietary estoppel does not constitute a valid defence. (d) Adverse possession 42. Possession by these Defendants prior to 1960 cannot amount to adverse possession because it would have been with the licence or permission of the then registered owners who were the parents of D2. In Lai Moon Hung v. Lam Island Development Co. Ltd. [1994] 2 HKC 11, the Court of Appeal held that the effect of the New Territories (Renewable Crown Leases) Ordinance, Cap.152 was that the 20 year period must either have accrued in total prior to 1 July 1973 or the entire period accrued after that date. In other words, periods falling on either side of that date could not be added together to constitute the 20 year period for the purposes of the Limitation Ordinance. Therefore on the law as it stands, D2, D3 and D4's occupation falls short of the requisite 20 year period. As there is an appeal pending to the Privy Council, Miss Eu submitted that the appropriate order is that made in the Hong Kong Ferry (Holdings) Co. Ltd. v. Chan Kwan Fat [1995] 1 HKC 542 which is to stay execution until after the determination of that appeal. (e) Conclusion 43. As the defences of these Defendants are bound to fail even if the facts are as asserted by them, the Plaintiffs' application to strike out the Defences filed by D2, D3 and D4 is granted. I also order that final judgment be entered for the Plaintiffs for possession save that the execution of the order for possession is stayed until after the determination of the appeal in the Lam Island case to the Privy Council ("the Lam Island appeal"). D1 44. On 31 May 1990, the Plaintiffs took out a summons under Order 113 for possession of various parts of land including land that is occupied by D1. In response to that summons, D1 filed two affirmations, on 11 June and 4 July 1991 respectively alleging adverse possession since 1955. Pursuant to the order of Keith J, on 22 November 1993, the Plaintiffs filed their Statement of Claim. On 18 December 1993, D1 filed his Defence. 45. The only defence pleaded by D1 was based on a Crown Land Permit No.YO2819, granted by the Crown in 1961. This was a permit granted by the Crown directly to D1 as "permittee" to maintain various temporary structures on the land. The Permit was valid for a period of 12 months and was renewable at the Crown's pleasure. It was a condition of the Permit that neither the issuance of the Permit nor occupation of the land nor payment of the fees in respect thereof should be construed as creating the relationship of landlord and tenant. The Permit was renewed every year until 18 March 1988 when it was cancelled by the District Lands Officer with effect from 15 March 1988. The reason given was that the licence given was in fact on private property. 46. The Plaintiffs seek to strike out this Defence under O.18, r.19 of the Rules of the Supreme Court and/or under its inherent jurisdiction and for final judgment against D1 for possession. 47. Suffice to say that the Defence filed by D1 has no merit and does not disclose a reasonable defence. The Permit relied on could not have conferred on him any interest or right to occupy the land beyond the date of validity of the Permit. Since the Permit has been cancelled, D1 has not shown or established that he has acquired any right by reason of the Permit that entitles him to remain in occupation. 48. There is before me a summons by D1 for leave to amend his Defence. It is apparent from the proposed amended defence that D1 wishes, inter alia, to resuscitate the adverse possession defence which he had raised in his 1991 affirmations but inexplicably abandoned when he filed his Defence on 18 December 1993. However there is a significant difference. In his 1991 affirmations, D1 stated on oath that he commenced residing on the land since 1955. Both affirmations are consistent on this aspect. In the proposed amended Defence, it is alleged that D1 has been in possession since February 1953. It is a significant difference because, if true, he would be in a position to establish 20 years possession prior to the coming into force on 1 July 1973 of the New Territories (Renewable Crown Leases) Ordinance. Cap.152. 49. On 26 September 1995, D1 filed an affirmation in opposition to the present application. In that affirmation he made the assertion that he had been in occupation since February 1953, that prior to that he lived in rented accommodation for several months. There is an affirmation from Chung Chi Fei who is the brother of his alleged landlord in 1952 to early 1953, to the effect that D1 lived in his brother's house which was in the next village during that period and built a wooden hut on the land in question in early 1953, prior to April or May. D1's explanation for the inconsistency with his 1991 affirmations was simply that he was told at the time by his legal adviser that the date when he commenced occupation of the land was not important as he had been there for more than 30 years. He said that he was not too sure when he entered into possession of the land and "to be safe" he wrote down the year 1955. He said that he had only checked his permit and consulted his friend Mr Chung as to the date when he commenced occupation of the land after receipt of the Plaintiffs' summons dated 18 August 1995. (a) Adverse possession 50. Miss Eu submitted that the new defence put forward has been tailored to meet the law and that leave to amend ought not be granted. There is the further point that in any event D1 could not have had the necessary intention to dispossess the true land owner until 1988 when the Crown Land Permit was cancelled. Prior to that date, his occupation was pursuant to the Crown Land Permit rather than as a squatter with an intention to dispossess. 51. Whilst D1's recent affirmation is inconsistent (and conveniently so) with his 1991 affirmations and his explanation for the discrepancy is somewhat feeble, there is independent (though not documentary) support for the new version in the form of an affirmation from Mr Chung. As the test is not whether D1's assertions are to be believed but whether those assertions are believable, in view of the affirmation of Mr Chung, but not without hesitation, I am minded to allow the application to amend. Ng Shou Chun v. Hung Chun Sau [1994] 1 HKC 155 at 158. 52. However, there appears to be an insurmountable obstacle to D1's defence of adverse possession. D1's occupation of the land until 1988 was not qua squatter but as licensee of the Crown under a Crown Land Permit which was renewed annually until 1988. D1 entered as the Crown's licensee and during the period up to 1988, he could not have had any intention to dispossess the true owner who, as far as he was concerned, must have been the Crown against whom D1 could not acquire title by adverse possession. That fact negatives the necessary intention to dispossess the true owner, which is an essential ingredient in establishing adverse possession. As licensee, he was not a person in whose favour the limitation period could run. See Hughes v. Griffin [1969] 1 WLR 23 and Megarry and Wade, The Law of Real Property, 5th Ed. at pp.1034-5. That being the case, D1 is not in a position to establish the necessary intention to dispossess. Accordingly, any defence based on adverse possession is bound to fail. (b) Proprietary estoppel 53. This is an alternative defence raised in the proposed Amended Defence. D1's case is that he had expended monies in or about 1961 building a store, a kitchen, a pigsty and accommodation pursuant to permission obtained from the Crown. In 1970, he began to operate a store from the premises. He has produced four rent receipts issued to a Mr Yu of Tin Sum Village by Kung Yeuk Man one of the registered owners in December 1959, 1960, 1961 and 1962. These annual rental receipts were written and signed by Kung. D1 alleged that Kung collected the rent himself and in so doing had to pass the lane adjoining the premises occupied by D1 to get to Tin Sum Village, that therefore Kung must have been aware of D1's occupation and expenditure between December 1958 to 1962. 54. I have already referred to the essential ingredients to a claim based on proprietary estoppel in relation to D2, D3 and D4. Assuming that Kung was aware of D1's presence on the land, D1's expenditure was not incurred as a result of any mistake as to his legal rights : they were incurred pursuant to permission he sought from the Crown. That, of itself, is fatal to a proprietary estoppel claim. In addition, there is nothing to suggest that Kung was aware at that point in time that the land belonged to him. Indeed, in granting the Crown Land Permit, the Crown obviously did not consider that it had been the subject of a grant. For these reasons, the proprietary estoppel defence is also bound to fail. (c) Conclusion 55. In the circumstances, the application to amend is dismissed. The Defence filed should also be struck out and final judgment entered for the Plaintiffs for possession in default of defence. D13 56. The adoptive parents of D13 purchased a stone house and an adjoining yard on 10 October 1968 from one Madam Lai Oi under a Chinese Agreement of that date. Madam Lai Oi herself had purchased the premises from one Madam Chiu Fung Ling on 23 July 1967 under a Chinese Memorandum of Sale and Purchase. At the time D13's adoptive parents purchased the premises, they had understood from Madam Lai that Madam Chiu Fung Ling was the tenant under a Tenancy Agreement with one Wong Sai Man dated 13 April 1957. Under a Modification of Tenancy, Permit No.284, affecting Lot Nos.2001 and 2002, the registered owner Wong Ng Shi was permitted for the period from 1 April 1958 to 31 March 1959 to maintain certain temporary structures. Madam Chiu signed as permittee. Although her name appears next to "owner's name", it is not alleged that Madam Chiu rather than Madam Wong Ng Shi was the registered owner. 57. In her defence filed on 17 December 1993, D13 raised two defences, namely that she is a tenant entitled to the protection of Part V of the Landlord and Tenant (Consolidation) Ordinance, Cap.7. In the alternative, she relies on the defence of adverse possession. Pausing here, it is to be noted that these two pleas are inconsistent. Indeed, a tenant is estopped from disputing his landlord's title by setting up an adverse title whilst retaining possession. See Woodfall Vol.1 at para.1.037. If she were a tenant as she claims, her possession could not possibly have been "adverse". 58. D13 issued a summons dated 29 December 1995 for leave to amend her Defence. It is apparent from the proposed Amended Defence that D13 wishes to abandon both defences raised, i.e. based on Part V of the Landlord and Tenant Ordinance and adverse possession. Instead, these defences are to be replaced by a defence of proprietary estoppel. Before deciding whether leave should be granted, I will first consider the merits of such a defence. (a) Proprietary estoppel 59. Her affirmation of 25 September 1995 set forth the matters relied on as constituting the defence of proprietary estoppel. The facts relied on by her are that no one came to collect rent from her adoptive father who believed that the land had been abandoned by its owner. He therefore believed that the land would become his property and relying on this belief, he incurred expense in effecting various improvements to the premises. These included installing an iron grille at the front of the premises, replacing the old windows, resurfacing the ground with cement and rebuilding the roof. 60. As is apparent from the discussion above of proprietary estoppel and the necessary elements of such a defence, these facts do not satisfy the requirement of "encouragement" which is essential in making out a claim to proprietary estoppel. At best, the land had merely been abandoned by its owner. The non-collection of rent is consistent with abandonment. However, the law does not impose any duty on an owner to do positive acts to prevent third parties from incurring expenditure on his land. Abandonment is not to be equated with "knowledge" on the part of the owner. The matters pleaded in the Amended Defence and elaborated on in the affirmation do not amount to "knowledge" or "unconscionable conduct" on the part of the owner. Since this defence is bound to fail, the application to amend is dismissed. (b) Part V of Cap.7 61. I will now consider the existing defences raised in the pleadings filed. Taking the tenancy first, it was for a term of 10 years at an annual rent of $200. The land was to be used as a farm and there were provisions regarding the ownership of fruits and timber. The tenant Madam Chiu remained in occupation throughout the 10 year period. That would seem to follow from a transfer of one brick house and two wooden huts which she effected to Madam Lai on 23 July 1967, a few months after the 10 year term had expired by effluxion of time. It seems that what was sold was simply a structure that had been erected on the land rather than the land itself for the agreement contemplated that any rent payable whether in respect of the period before 1967 or post-1967 would be paid by Madam Lai. There is no evidence that any rent was paid after April 1961. 62. Was the tenancy to Madam Chiu subject to Part V of Cap.7? It was not because it was not only a tenancy for a term of more than three years (s.121(2)(a) of Cap.7) it was also a tenancy of agricultural land (s.121(2)(f) of Cap.7), both of which take the tenancy out of Part V. Moreover, the term expired in 1967 by effluxion of time. A tenant for years who holds over becomes a tenant on sufferance by operation of law if his occupation is without the assent or dissent of the landlord. As a tenant on sufferance has no demisable estate, Madam Chiu could not have assigned any interest in the land to Madam Lai and in turn, Madam Lai could not have passed any interest in the land to D13's adoptive mother. See Woodfall, Landlord and Tenant, Vol I at 6.075 and 6.077. (c) Adverse possession 63. As regards adverse possession, this claim can only be entertained if the tenancy defence is abandoned. Even on this assumption, in view of Lam Island and Hong Kong Ferry, the claim must fail. However, execution of the order for possession would be stayed until the determination of the appeal of Lam Island to the Privy Council. Accordingly, I will assume in D13's favour that an election is made for adverse possession. (d) Conclusion 64. The Plaintiffs' application that the Defence filed by D13 be struck out is granted. I order that final judgment be ordered for the Plaintiffs for possession save that the execution of the order be stayed until the determination of the appeal of Lam Island. D14 65. According to D14, his uncle Wong Wan Po, as agent for the family, entered into a tenancy agreement with Wong Sai Man on 9 April 1957 for a term of seven years at an annual rent of $325. The lease itself is not available because it has allegedly been lost by D14's former solicitors. 66. D14 alleged that Wong Sai Man was in fact a son of Wong Ng Shi, one of the registered owners. In his affirmation filed on 9 July 1990, D14 stated that he and his family moved into the premises together with his uncle in 1957 and occupied the same "partly for domestic purposes and partly for the use as a farm". D14's uncle signed a Modification of Tenancy dated 24 July 1957 as permittee. The Modification authorized the maintenance of various structures on the land including accommodation, chicken sheds, pigsty and stores etc. Rent had been collected by and paid to Wong Sai Man until 1960 when the land was transferred to Kwan Mui and Lam Chak Man. In 1960, Wong Sai Man had taken a person whom D14 believed to be Kwan Mui to the premises and had asked him to pay rent to Kwan Mui from then on. However Kwan Mui never appeared again. A rent receipt dated 19 May 1963 from Hop Yick Company to D14's uncle in respect of Lot No.2003 for rent paid for the period from 12 March 1961 to 11 March 1962 was produced. 67. I note that the receipt produced does not appear to have anything to do with the premises currently occupied by D14 : first, the rental was $200 per annum and not $325; and secondly, the period of tenancy ran from 12 March and not from 9 April. 68. As with the case of D13, two defences have been raised, namely Part V of Cap.7 and adverse possession. A summons was taken out on 29 December 1995 for leave to amend the Defence by deleting the existing defences and replacing them by a defence based on Part II of Cap.7. As with the case of D13, I will first consider the merits of the proposed amendment. (a) Part II of Cap.7 69. In an affirmation filed by D14's daughter on 25 September 1995, it was stated that since the "late 1960s", the premises have not been used "for the breeding of livestock and the chicken sheds and pigsty were rebuilt as dwelling house". 70. It was contended that this tenancy is or has been converted into a domestic tenancy which has the protection of Part II of Cap.7. Counsel for D14 submitted that:
71. Whilst all available documentary evidence adduced in evidence such as the Modification of Tenancy, the block Crown lease point to a tenancy of agricultural land, counsel for D14 did not wish to concede that the land was originally the subject matter of an agricultural tenancy. That was perhaps the reason why there was no evidence from D14's former solicitors who have allegedly mislaid the original tenancy agreement but who must have knowledge of the nature of the lease and its contents. Be that as it may, there is the evidence of D14 himself that the land was originally used at least, in part, as a farm. The fact that there was on the land a dwelling-house occupied by persons working the land does not prevent the tenancy from being one of agricultural land : see s.36 of the Rating Ordinance, Cap.116. Part II does not apply to a tenancy of "agricultural land" which is defined by reference to s.36 of the Rating Ordinance : see s.50(6)(c) of Cap.7. Having regard to the alleged parties to the lease and the surrounding circumstances, and more particularly, the total absence of evidence of the grant of a domestic tenancy to D14 or persons through whom he claims, the overwhelming likelihood must be that the lease between Wong Sai Man and D14's uncle was similar to those granted by Wong Sai Man of the various lots to D13, D16, D19 and D21 in 1957. 72. The submissions of counsel for D14 may be summarized as follows : (1) there was undoubtedly a tenancy which existed between Wong Sai Man and Wong Wan Po as agent for D14 although the original lease cannot be found; (2) therefore, it is a question of fact whether or not primary user is domestic, which must be an issue for trial; (3) primary user falls to be considered and is relevant under s.51(2)(b) in determining the nature of the tenancy regardless of the purposes for which the premises were originally let: Orleans Estates Ltd. v. Robert Jordan Inc. (a firm) [1981] HKLR 331; (4) the relevant date for determining primary user is the date on which the landlord seeks to obtain possession, i.e. in this case, the date of the writ: Leung Sau-han v. Chan Loy-fat [1980] HKLR 508; and (5) there is accordingly a valid defence raising issues which can only be determined at trial. 73. In the cases cited by counsel for D14, there was, subsisting, a landlord and tenant relationship. Here, such a relationship ceased to exist, at the latest, by 9 April 1964. D14 has never attorned to the Plaintiffs or their predecessors-in-title and no landlord and tenant relationship existed, at any rate, after the expiration of the original lease. These cases do not support the proposition that in the absence of a subsisting relationship of landlord and tenant, a unilateral change of user to a domestic user by a tenant at sufferance i.e. a squatter, of itself, can cause a domestic tenancy to spring into existence which has the protection of Part II. 74. On D14's own evidence, the lease was for a fixed term of seven years which expired in 1964. Again on D14's evidence, no rent has been paid since 1963 if the rent receipt of Hop Yick related to the tenancy in question and since 1960 if that receipt related to different premises. After the expiration of the lease on 8 April 1964, D14's uncle became a tenant on sufferance. That state of affairs continued until 1970 when Wong Wan Po moved out and D14 continued to reside at the premises. Unless, as it is now alleged, that Wong Wan Po entered into the original lease as "agent", D14 would not even be a tenant on sufferance. For present purposes, it will be assumed in D14's favour that he was a tenant on sufferance. But on D14's own evidence any change in user by Wong Wan Po occurred in "late 1960s" i.e. after the expiration of the lease. In any event, the fact of itself could not have altered the nature of Wong Wan Po's occupation which was as tenant on sufferance. 75. Does Part II of Cap.7 apply to a tenancy on sufferance? The only authority appears to be the decision of Mr Commissioner Yang (as he then was) in Wong Chang-sung v. Tse [1974] HKLR 350. That case concerned a domestic tenancy which expired two days before the Domestic Premises (Tenure and Rent) (Temporary Provisions) Ordinance came into effect. It was held (at p.355) that protection was available to those "in possession of domestic premises the subject matter of a tenancy to which the Ordinance applies". It was further stated that "a tenant whose contractual tenancy has expired but continues to hold over without the assent or dissent of the landlord is nonetheless a tenant at common law". Prima facie, this proposition would appear to support the view that a tenancy on sufferance is caught by Part II. As this case had not been cited by either side, leading counsel for the Plaintiffs and counsel for D14 were invited to make further oral submissions which were heard on 9 March 1996. 76. Miss Eu for the Plaintiffs submitted that there was never any agreement for a domestic tenancy: the land was not originally let as a dwelling but as agricultural land. It was therefore submitted that the decision is of no assistance to a tenant on sufferance unless there was initially a tenancy which was a domestic tenancy. Even if that were the case here, it can be of limited assistance because that decision concerned the Temporary Provisions Ordinance rather than Part II of Cap.7. Further, in so far as the Court held that a tenancy at sufferance is a "tenancy", I was referred to a commentary by Professor Willoughby in (1975) Hong Kong Law Journal at 245 which cited a passage in Megarry and Wade, The Law of Real Property. The same passage appears in the 5th edition at pp.655-6:
The learned authors expressed the view that a tenancy on sufferance ought not to be classified as a tenancy at all. 77. I agree that if the original tenancy was a tenancy of agricultural land, the Wong Chang-sung case can be of no assistance to D14. But, assuming against all odds and in D14's favour, that the original tenancy was a domestic tenancy, the question would arise whether as a matter of law, a tenancy on sufferance is a tenancy at common law, that being the basis of the holding that such a tenant is entitled to protection. It would appear that Megarry and Wade was not cited to the learned Commissioner in Wong Chang-sung. Therefore with the greatest respect, since "privity", i.e. tenure between the tenant on sufferance and the owner of the land, is fundamental to a landlord and tenant relationship, the position at common law must be that a tenant on sufferance is not a "tenant" at all. 78. Counsel for D14 does not rely on Wong Chang-Sung. I agree that the decision does not assist him because the position at common law is as set out in Megarry and Wade. As there is no legal basis upon which D14 could claim that there was a tenancy to which Part II could apply, the application for leave to amend D14's defence is, accordingly, dismissed. (b) Part V of Cap.7 and adverse possession 79. So far as the Defence filed is concerned, the defences raised are the same as those raised by D13 and for the reasons already stated, it discloses no reasonable defence and ought to be struck out. Nevertheless as in the case of D13, I will assume an election for adverse possession in D14's favour. (c) Conclusion 80. Accordingly, the Plaintiffs' application for summary judgment is granted as against D14 save that execution is stayed pending the determination of the Lam Island appeal. D16 81. There is a tenancy agreement in Chinese entered into between Wong Sai Man and Yu Po Shiu on 28 March 1957 in respect of Lots 2003 and 2004. It was a seven year lease similar to the lease granted to D13's adoptive mother. Rent was paid for the first four years but after 1960, nobody came to collect the rent. Yu Po Shiu was the permittee under a Modification of Tenancy, Permit No.1911 granted on 9 November 1960. 82. By a Chinese agreement dated 5 September 1974, a stone hut and two chicken sheds were transferred from one Yu Po Shiu to D16. The rear portion of the stone house, rooftop and chicken shed were transferred by Yu to D16 and Mr Lee jointly. The assignment was not stated to be for any consideration. Rather, the assignment itself and an accompanying document suggest that the reason for the assignment was the departure of Yu Po Shiu for America and he was simply handing over a right of management to D16 and in respect of the rear portion to D16 and a Mr Lee. 83. D16 was not legally represented at the hearing. (a) Part II or Part V of Cap.7 84. These have been considered at length in relation to D14 as to Part II and D13 as to Part V. D16 is in no better position and for the reasons already stated, neither Part II nor Part V affords any arguable defence. (b) Adverse possession 85. Although D16's occupation only commenced in 1974, Yu had occupied the land as tenant on sufferance from the expiration of the lease in 1964. As a person taking a squatter's interest can add the squatter's interest to his own, Yu's possession after the expiration of the lease in 1964 can be added to D16's possession since 1974 : see Asher v. Whitlock (1865) LR 1 QB 1; Megarry and Wade, op.cit. at pp.106 and 1036. Even so, the requisite period of 20 years is still not satisfied because of the effect of the New Territories (Renewable Crown Leases) Ordinance, Cap.152 considered above. Therefore this defence must also fail even if it is assumed in D16's favour that he elects to raise this defence rather than the one based on Cap.7. 86. Accordingly, final judgment for possession is to be entered for the Plaintiffs as against D16 save that execution is to be stayed pending the determination of the Lam Island appeal. D19 87. D19 emigrated to Hong Kong from mainland China with his parents in 1957 and has been living at Lot No.2003 since then. There is a tenancy agreement entered into between Wong Sai Man and Ng Sau Ping dated 12 March 1957 for a term of seven years at the annual rent of $325. The land was expressed to be let for the running of a farm. In his affirmation filed on 9 December 1993, D19 stated that Ng Sau Ping was his sister-in-law who signed the lease as agent for herself and D19's father who was illiterate. D19 also gave a different version, which was that Lot No.2003 was originally leased to Wong Wan Po by Wong Sai Man and that Wong Wan Po subsequently sub-let the land to D19's father Lee Kam Kwan and Ng Sau Ping. Whether there was an assignment by Wong Wan Po to Lee Kam Kwan or whether the lease was entered into by Ng Sau Ping with Wong Sai Man as agent for herself and Lee Kam Kwan, it is assumed, for present purposes, that Lee Kam Kwan was entitled to the benefit of a lease of Lot No.2003. 88. D19 asserted that the land was let as a dwelling and for breeding livestock, that rent was paid every year since the date of the agreement until 11 March 1961, that thereafter neither his father nor Ng were able to contact the landlord although they were able, willing and ready to tender the rental payments. It is also asserted that since about 1965, the land ceased to be used for breeding livestock and the chicken sheds and pigsty were rebuilt as a dwelling house. There is a Letter of Approval relating to Lot No.2003. This was addressed to Mr Wong Wan Po and authorised the maintenance of various structures, namely chicken sheds, pigsty and store to be used only for agricultural purposes. The approval was valid from 1 January 1963 until 31 December 1963. The Letter of Approval bears a Permit No.246. Although in the Letter of Approval the annual fee was stated to be nil, D19 has produced two receipts for the years 1992 and 1993 where a modification fee of $10 had been paid by Wong Wan Po in respect of Permit No.246. Part II of Cap.7 89. The only defence proposed to be relied on by D19 is that he is entitled to protection under Part II of Cap.7. Factually, his position is no better than that of D14. The original tenancy vested in D19's father was a tenancy of agricultural land. When that expired by effluxion of time, D19's father became a tenant on sufferance. D19, not himself being the original tenant, was not even in the position of a tenant on sufferance. Unless there was a domestic tenancy vested in D19's father, no question of D19 being entitled to such a tenancy could arise. 90. The proposed defence of D19 discloses no reasonable defence : there are no facts that support an inference that the original tenancy vested in D19's father was a domestic tenancy for the purposes of Part II. As a tenant on sufferance, D19's father could not, through a subsequent unilateral change of user, cause a domestic tenancy to arise which has the protection of Part II. Accordingly his application for leave to file the defence is dismissed. The Plaintiffs are entitled to final judgment against D19 for possession of the land. D21 91. A lease of a farm on Lot Nos.2002 and 2003 was granted by Wong Sai Man to one Lai Yuk Lam on 13 April 1957 at an annual rent of $200. The last payment of rent was made on 19 May 1963. D21 was the permittee under a Modification of Tenancy, Permit No.5709, granted on 7 January 1964. On 27 October 1963, Lai Yuk Lam "transferred" the farm together with the Government Temporary Housing Licence No.2332 to D21 for a premium of $4,400. The transferor Lai undertook to move out of the farm on or before 10 November 1963 and D21 has been operating the farm since then. Adverse possession 92. The only defence that could conceivably be raised, based on these facts, is one of adverse possession. In this respect, as explained above, the defence cannot succeed because of the effect of the New Territories (Renewable Crown Leases) Ordinance, Cap.152. Accordingly the defence filed by D21 by way of affirmation dated 8 September 1993 should be struck out on the ground that it discloses no reasonable defence. 93. The Plaintiffs are entitled to final judgment for possession save that execution is stayed pending the determination of the appeal in Lam Island. D6 94. D6 claims to be entitled to occupy a part of Lot Nos.2001 and 2002. By a tenancy agreement made between Wong Sai Man on the one part and Lui Kam Keung and Lee Cheung Tat of the second part, the land was let to Lui and Lee for seven years from 1 June 1959 to 31 May 1966 at an annual rent of $650. The lease was similar to other leases executed by Wong Sai Man at the time and pertained to a farm. By a transfer dated 1 April 1966, it was recited that the land occupied by Lui Kam Keung had been sold by Wong Sai Man to Kwan Mui but that the management and leasing department had not yet changed the name to that of Kwan Mui. The transferor, Lui Kam Keung, purported to sell at the price of HK$4,300 "the said half piece of land including one domestic house, three chicken ranches," etc. to Szeto Wing, the father of D6. $1,000 was to be withheld pending the transfer of the licence relating to chicken farming to Szeto Wing at the District Lands Office. 95. Lui Kam Keung was the permittee under a Modification of Tenancy, Permit No.1026, dated 23 July 1959. It is apparent from this Modification Letter that the authorisation related, inter alia, to the erection and maintenance of chicken sheds. D6 claims to have lived on the land in question since 1962. 96. A defence was filed by D6 on 18 December 1993. At the time, she was legally represented but the Legal Aid Certificate in her favour was discharged some time in 1994 when she ceased to have legal representation. (a) Part II of Cap.7 97. The lease in favour of Lui Kam Keung provided that the prior consent of the landlord had to be obtained before any assignment of the tenancy. It further provided that for the assignment to be valid, a fresh tenancy agreement would have to be prepared and signed in duplicate. Prima facie, therefore, the assignment from Lui Kam Keung to Szeto Wing was invalid because of the absence of any fresh tenancy agreement between the landlord (who by this time would appear to have been Kwan Mui) and the proposed new tenant Szeto Wing. Assuming for present purposes that the assignment was valid, so that the original lease vested in Szeto Wing, this lease expired by effluxion of time on 31 May 1966. Thereafter, Szeto Wing became a tenant on sufferance only. The Block Crown Lease, the Tenancy Agreement, the Modification of Tenancy and the transfer from Lui Kam Keung to Szeto Wing all point to a tenancy of agricultural land rather than of domestic premises. D6's bald assertion in her defence that at all material times the land has been used as domestic premises is not supported by any evidence. 98. The reasons why Part II could not have applied to this tenancy were fully canvassed under D14's defence. Suffice to say that D6's position is similar to that of D14 and for the reasons already set forth, this defence is bound to fail and ought to be struck out. (b) Part V of Cap.7 99. This alternative defence has been considered in relation to D13 and D14. Part V has no application. Even if Lui had effectively assigned the residue of the term under the original grant to Szeto Wing, that term expired on 31 May 1966 when, at most, Szeto Wing became a tenant on sufferance. As explained above, Part V has no application: see s.121(2)(a) and (f) of Cap.7. Therefore, no notice to quit was necessary. (c) Adverse possession 100. As this defence is inconsistent with a defence based on either Part II or Part V of Cap.7, D6 must elect. Even if she were to elect in favour of adverse possession, that possession could not have begun until 1962 or 1966. On the law as it now stands, the 20 year requirement cannot be satisfied even if occupation commenced in 1962. Accordingly this defence discloses no reasonable cause of action and ought to be struck out. The Plaintiffs are to be granted final judgment for possession save that the order is stayed until the determination of the appeal in Lam Island. D9 101. D9 has lived on part of Lot Nos.2005 to 2009 since 17 October 1970. On that day, her deceased husband Lai Yiu bought the superstructure built on the land from a Madam Au Chui King. This is evidenced by a Chinese Agreement entered into between Au Chui King expressed to be the vendor and Lai Yiu expressed to be the purchaser, for the transfer of one brick house and two wooden houses. The Chinese Agreement also provided that Lai Yiu was to be responsible for rent for the land, the house and the front and rear portions. It is D9's understanding that Madam Au held under a tenancy from Wong Ng Shi, the landlord. However, no rent has been paid by D9 or her husband since they moved in in October 1970. Nor has rent been collected from them. D9 also stated that she has made a lot of improvements to the land since her occupation. 102. There is a Modification of Tenancy, Permit No.1088, relating to the land in which Madam Au was permittee. This Modification is dated 25 September 1959. (a) Part II of Cap.7 103. D9 has not been able to produce any lease in respect of the premises. The Chinese Agreement was not an assignment of any leasehold interest that had then been vested in Madam Au. Nor are the terms of the tenancy under which Madam Au is alleged to have held known. No rent has ever been paid to anyone and in those circumstances, there are no facts that could conceivably support an argument that the husband of D9 held the land as tenant, irrespective of whether or not, as D9 now asserts, the land has been used for domestic purposes. Moreover, even if Madam Au was entitled to protection under Part II, D9 is not within the class of persons entitled to claim a transmission of that tenancy : see s.50(4) of Cap.7. (b) Part V of Cap.7 104. In the alternative, D9 claims to be protected under Part V and is therefore entitled to a Notice of Termination under s.122. D9 faces the same difficulty here as with Part II because there is no evidence of any tenancy, whether of domestic premises or agricultural land. The absence of any evidence of any subsisting tenancy of agricultural land when these proceedings were issued in 1990 is fatal to any claim based on Part V. (c) Adverse possession 105. As this defence is inconsistent with the tenancy defences, it must be struck out if the tenancy defences are to be pursued. Even assuming that the tenancy defences were to be abandoned, D9's defence based on adverse possession is also bound to fail. But D9 is also in a different position from the other Defendants because her occupation only commenced in October 1970. Even if Lam Island were to be reversed by the Privy Council, that would not assist D9 because these proceedings were first issued on 31 May 1990. The requisite period of 20 years from the date of D9's occupation is therefore not satisfied. (d) Proprietary estoppel 106. In her affirmation, D9 simply asserts that she has made various improvements to the land. For the reasons already discussed in relation to the defence of proprietary estoppel raised by D2, D3 and D4, D9's defence is also bound to fail because there are no facts that could establish the necessary elements of that defence. (e) Conclusion 107. Having considered the various defences available to D9, I come to the conclusion that none of them is arguable. In the circumstances, the defence is struck out and I order that final judgment be entered for the Plaintiffs. D7, D12, D10 and D8 108. In 1993, these Defendants were legally aided and each of them filed affirmations in July 1993 asserting the defence of adverse possession. In December 1993, they filed Defences that asserted that they were tenants under domestic tenancies entitled to the protection of Part II of Cap.7 or alternatively that Part V applied entitling each of them to a notice of termination under s.122. There was an alternative claim based on adverse possession. For reasons already explained above, the defences based on a tenancy and adverse possession are inconsistent pleas and the defendant must elect between them. The Legal Aid certificates were discharged in July 1994 and these Defendants now act in person. D7, D12 and D10 109. D7 claims to have resided on parts of Lot Nos.2005, 2007RP and 2009RP since 1960. He claims to be the assignee of Wong Chow who was tenant of the land. D7 was unable to produce either the original tenancy agreement to Wong Chow or the assignment to him of the residue of the term. It would appear that the assignment was made orally. Four rental receipts have been produced relating to February 1975, 1-20 August 1976, October 1976 and June 1977. The receipts were issued by one Cheung Hing to Tsang Choi Shing. D7 has not given any explanation as to who Tsang Choi Shing was. Although these receipts appear to relate to the land occupied by D7, it is wholly unclear to whom, by whom and on what basis rent was being paid. They offer no assistance in determining the existence and nature of any tenancy affecting the land. 110. D12 claims to have resided on parts of Lot Nos.2005, 2007RP and 2009RP since 1961. It is alleged that the land was let to one Wong Chow by the Plaintiffs' predecessors-in-title and Wong Chow assigned his interest therein to D12's deceased husband in or about 1961. At the hearing on 12 January 1996, D12 informed the Court that she did not have a copy of the original lease to Wong Chow but that she had letters from Wong Chow's wife acknowledging receipt of rent paid. According to D12, her late husband paid rent and remitted the money to China to Wong Chow's wife. No rent was remitted after his death in 1991. 111. D10 claims to have resided on Lot No.2002 since 1970. In her affirmation filed in June 1993, she asserted a claim of adverse possession against the Plaintiffs and their predecessors-in-title. In her defence filed in December 1993, D10 claimed to be entitled to protection under Part II of Cap.7. She claims to be the assignee under a tenancy that had originally been granted to Lee Shiu Tong by the Plaintiffs' predecessors-in-title. D10 has not been able to produce any tenancy agreement or any written assignment despite a written request from the Plaintiffs' solicitors. At the hearing on 12 January 1996, D10 informed the Court that she did not have a copy of the tenancy agreement, that the assignment was in writing, that it was a "group" assignment which has now been lost. She also stated that she has never paid rent to anyone and the only payments had been in respect of the annual permit fee. (a) Parts II and V of Cap.7 112. There are no facts before the Court that can support any inference of a landlord and tenant relationship between either D7, D12 or D10 and the Plaintiffs or their predecessors-in-title. There is nothing to show that Wong Chow or Lee Shiu Tong had any interest in the land as a tenant of the Plaintiffs or their predecessors-in-title which could be transferred to these defendants. Their claim to a tenancy is inconsistent with the evidence filed by them in July 1993 asserting adverse possession. No lease has been produced and no rent has been shown to have been paid. There are no facts that could conceivably support a case that D7, D12 and D10 are tenants whether under Part II or Part V of Cap.7. (b) Adverse possession 113. As stated earlier, each of D7, D12 and D10 must elect between the tenancy and adverse possession defences he has raised. As I have taken the view that there is no arguable defence under Cap.7, I will assume in their favour that they elect in favour of the adverse possession defence. Because of the Lam Island decision, their occupation of the land since 1960 by D7 and D12 and since 1970 by D10 is insufficient to satisfy the 20 year period which would sustain the defence. Accordingly this defence should also be struck out and final judgment entered for the Plaintiffs save that execution of the order for possession be stayed until the determination of the appeal in Lam Island. 114. In this connection, unless D10's occupation commenced prior to 31 May 1970, a stay would not be necessary. As there is no clear evidence on the commencement date of her occupation, I will give her the benefit of the doubt and allow the stay of execution pending the determination of the appeal in Lam Island. D8 115. D8 claims to have resided on Lot 2003 since 1991. D8 filed an affirmation in June 1993 claiming adverse possession of the land. D8 in fact acquired the superstructures on the land from Lee Woon on 28 July 1991 paying $40,000 for the same. The Chinese Agreement specifically referred to future disputes regarding the tenancy and ownership of the land and provided that the transferor Lee Woon would not be responsible. There is a Modification of Tenancy, Permit No.452, relating to Lot Nos 2003 and 2004 dated 4 March 1958. The Permit authorised the erection of a pigsty and chicken sheds, the permittee being Chu Kar Kiu. There is also a letter from the District Lands Office addressed to Chu Kar Kiu which permitted the erection of certain structures for the period of one year from 1 January 1963. (a) Parts II and V of Cap.7 116. It is also clear that D8 acquired the superstructures with notice of the dispute regarding the ownership of the land. Like D7 and D12, there is nothing to support the creation of any landlord and tenant relationship between D8 and the Plaintiffs or their predecessors-in-title and in these circumstances, the defences raised under Parts II and V of Cap.7 are wholly misconceived. The Plaintiffs are entitled to final judgment for possession. (b) Adverse possession 117. Although D8's own occupation only commenced in 1991, (i.e. after these proceedings had commenced,) the land had previously been occupied by Lee Woon and before him by Chu Kar Kiu. There is evidence to suggest that Chu had been in occupation of the land since 1958 and Lee since 1968. Assuming that both Chu and Lee were squatters and their "rights" transferred to D8, the defence of adverse possession will still fail because of the effect of the New Territories (Renewable Crown Leases) Ordinance. 118. Accordingly, the defence of adverse possession must be struck out and final judgment for possession be entered for the Plaintiffs save that execution of the order is stayed until after the determination of the Lam Island appeal. D15, D17, D18 and D20 119. The defences of these Defendants were filed some two to three weeks after the hearing before Master Jennings. The Plaintiffs issued their summons to strike out the defences and for summary judgment on 2 December 1995. D15 and D18 had filed affirmations on 19 August 1993. D17, who was legally represented in 1990, had filed an affirmation on 15 July 1990. These Defendants act in person. D15 120. In 1970, D15 rented a structure that had been erected by the permittee Lau Yoak Kun under a Modification of Tenancy initially granted on 20 July 1961. The registered owner of the land was Wong Ng Shi. On 21 November 1973, D15 purchased the superstructure but not the land from the permittee. The superstructure in question consisted of a stone house and a wooden hut. Since the date of that assignment, D15 has paid the licence fee to the Hong Kong Government and has never paid any rent nor has any been collected from him. D17 121. According to D17, he was "given" Lot Nos.2212, 2214 and 2217 by his friend Lam Shek Bun in 1964. He moved into the premises in September 1966 and carried on the business of manufacturing garments there. There is no evidence as to Lam Shek Bun's title to the premises nor is there evidence of his relationship, if any, with the Plaintiffs or their predecessors-in-title, including Lam Chak Man. D17 claims to have expended substantial sums of money in the improvement of the premises by building a new stone house, resurfacing the gravel cement, fencing, building an iron grille at the front of the premises and reconstructing two old stone houses. Part of the premises are apparently occupied by him for domestic purposes. D18 122. D18 claims to have rented a house erected on Lot No.2003 in July 1973. There is a so-called "rent" book which D18 claimed to be evidence of the tenancy agreement of 1973. This was made between the wife of Wong Woon Sun who was the son of Wong Tao Pui and D18's father. The relevant part reads as follows:
123. Wong Tao Pui was the permittee under a Modification of Tenancy relating to Lot No.2009 owned by Wong Ng Shi. 124. D18 also produced two assignments, one dated 12 May 1977 which purported to transfer the superstructure erected under Modification of Tenancy No.10474 to D18's father. The other, dated 17 April 1980, related to the structure on Lot Nos.2009 and 2005. These assignments were executed by one Ngai Chin Hung who took an assignment of the ownership of the superstructures from the permittee. D20 125. D20 rented the premises in question from 1971/72 which was erected on land known as Lot Nos.2003 and 2004. By a Chinese agreement dated 26 June 1989, D20 took an assignment of the superstructure from Tse Wing. The assignment described the right being transferred as the right to manage the property. Tse Wing in turn acquired the structure by an assignment dated 2 May 1983 from Lee Muk Wan who in turn acquired the right to manage the house above the ground at Lot Nos.2003 and 2004 from Yu Po Shiu in September 1974. (a) Acquisition of superstructures 126. The provision of consideration for the acquisition of superstructures built on land where the land was not owned by the assignor cannot vest in the assignee any rights or interest to the land itself. There is no evidence that the assignors of the structures had any title to the land. The various modifications of tenancy relied on merely established that the structures were possibly erected pursuant to an authorisation contained in the modifications. The modifications or permits themselves could confer no right or interest in the land in the permittee. Assignees from such permittees could not have acquired greater or better rights. (b) Parts II and V of Cap.7 127. Insofar as it is suggested that there was any tenancy, no evidence has been adduced by any of these Defendants to support any inference that a landlord and tenant relationship existed between the Defendant in question and the Plaintiffs or their predecessors-in-title. (c) Proprietary estoppel 128. This defence is only relevant to D17. However, there is no evidence that the alleged improvements made by him to the land were made with the consent and/or encouragement of the owners. For the reasons already explained above in relation to D13, no case for proprietary estoppel arises. (d) Adverse possession 129. D18 and D20 have not been in possession sufficiently long to acquire title by adverse possession irrespective of the effect of the New Territories (Renewable Crown Leases) Ordinance. Cap.152. 130. D15 and D17 do not satisfy the requisite period because of the effect of Cap.152 which does not allow periods of occupation pre- and post-1 July 1973 to be aggregated in computing the 20 year period. (e) Conclusion 131. The defences raised by D15, D17, D18 and D20 are bound to fail. Accordingly they are struck out and it is ordered that final judgment for possession of the land be granted to the Plaintiffs save in the case of D15 and D17, execution is stayed until after the determination of the appeal in Lam Island. Damages 132. The Plaintiffs seek damages for trespass as from 22 November 1993, the date the Statement of Claim was filed against the Defendants. Where proceedings under O.113 are converted into a writ action pursuant to O.28, r.8, damages may be claimed: see The Board of Trustees of Chung Chi College and Anr. v. Chanway Investment Co. Ltd., 1992 Civ.App.No.61. 133. Whilst damages may be awarded, no evidence has been adduced to enable such damages to be assessed. Should the Plaintiffs wish to pursue this remedy, the matter will have to be restored for hearing and evidence filed to that end. Of course, as against such of the Defendants against whom execution is stayed pending the determination of the Lam Island appeal, it would be premature for any application to be made for an award of damages for trespass until that determination is known. Compensation 134. Understandably, many of the Defendants who are not legally represented feel aggrieved that they face eviction after having resided on the land for many years without interference or objection from anyone. They have asked for appropriate compensation. Regrettably, the Court has no jurisdiction to order compensation in such cases and the question whether it should do so in any particular case therefore does not arise. It is entirely a matter for the Plaintiffs whether or not they wish to make any ex gratia payments to alleviate any hardship that is likely to arise. Orders 135. I therefore make the following orders:
Representation: Miss Audrey Eu, Q.C. and Mr Nelson Miu, inst'd by M/s Liu, Choi, Chan, solicitors for 2nd Plaintiff and agent for M/s T.L. Ip & Co. (solicitors for 1st Plaintiff) Mr Wong Po Wing, inst'd by M/s S.T. Poon & Co., for D2, D3 and D4 Mr Chan Pak Kong, inst'd by M/s Chan & Cheng, for D1, D13, D14 and D19 D6 to D10, D12, D15 to D18 and D20 to D21 in person |
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