Kam Kan Cho and Another v. Kan Chiu Nam Raymond and Another

HCA 18217/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 18217 OF 1999

____________

BETWEEN

____________

Before: Deputy High Court Judge Saunders

Dates of Hearing: 18 – 21, 25 – 28 October 2004

Date of Judgment:  21 January 2005

_________________

J U D G M E N T

_________________

Introduction:

1.The plaintiffs are registered owners of a piece of land situate in Tai Tau Ling Village in Sheung Shui in the New Territories.  I will call the land Lot 3443.  The defendant, (a Tso), is the registered owner of the land directly adjacent, (to the east), of the plaintiffs’ land, in the same village.  I will call that land Lot 3590.  The plaintiffs say that the defendant has wrongfully erected a building on Lot 3590 which encroaches upon Lot 3443.

2.By solicitors’ letters dated 22 March 1999, and 14 June 1999, the plaintiffs demanded that the defendant cease to trespass on Lot 3443.  When there was no response a writ was issued on 25 November 1999.  The plaintiffs seek an injunction restraining the defendant from continuing the trespass and encroachment and an order for vacant possession of Lot 3443.  Damages for trespass of Lot 3443 are also sought.  By counterclaim the defendant asserts that the plaintiffs’ title to that part of Lot 3443, on which there is any encroachment was, prior to the commencement of the action, extinguished by virtue of the Limitation Ordinance, and other appropriate orders.

The issues:

3.There are three primary issues for decision in this matter.  First, whether or not the defendant’s house encroaches upon Lot 3443.  Second, if there is an encroachment, the date at which that encroachment first occurred.  This issue is relevant because in 1982-3, the defendant demolished an existing building on Lot 3590, and rebuilt a new house, the present house standing on Lot 3590.  Under the provisions of the Limitation Ordinance, as is well-known, a period of 20 years unchallenged occupancy is required to defeat a title.  If the encroachment did not commence until 1982, then the plaintiffs, having issued their writ in November 1999, have successfully challenged the defendant’s occupancy of the land prior to the expiration of the required 20 year period.

4.The third issue arises by reason of the provisions of the New Territories Leases (Extension) Ordinance, Cap 150, (the Extension Ordinance).  At the time the trial commenced there were conflicting decisions in the High Court as to the consequences of that Ordinance.  I propose to deal with that issue first, because a decision of the Court of Appeal was delivered on 19 November 2004, following the conclusion of the hearing, but prior to the completion of written submissions by counsel, which decision is conclusive of this matter.

The Extension Ordinance

5.Prior to the decision of the Court of Appeal in Chan Tin Shi v Li Tin Sung & Ors CACV 71/2003, there were conflicting decisions of the High Court as to whether the effect of the Extension Ordinance was to create a new estate by reason of the extension to all New Territories leases effected by that Ordinance.

6.In Unijet Ltd v Yui Kwai Hoi HCA 13637/1998, Sakhrani J held that the extension of a lease under the Extension Ordinance could only be achieved by a surrender and re-grant, or a “reversionary lease”.  In those circumstances, notwithstanding the possessory title vis-à-vis the original lease (as renewed), obtained by a squatter prior to April 1988, [or June 1997], when the re-grant, [or alternatively the reversionary lease] took effect, time began to run again upon the re-grant [all the reversionary lease] taking effect.  Consequently a squatter, who had not taken action to legitimise his title under the provisions of the Limitation Ordinance prior to the coming into force of the Extension Ordinance, would lose any rights that he had accrued.  He must achieve another 20 years unchallenged occupation should he wish to keep the land he occupied.

7.In Mutual Luck Investment Ltd v Yeung Chi Kuen HCMP 6047/1998 Lam DJ (as he then was), held that the source of the government’s lessee’s right to the extension was his pre-existing lease and, since the title of the government lessee had been extinguished as against the squatter under the pre-existing lease, the fact that he acquired a new legal estate could not assist him.  Consequently, notwithstanding the provisions of the Extension Ordinance the squatter maintained his rights and was able to resist removal, or obtain a declaration that he had acquired possessory title.

8.These two directly conflicting decisions were considered by the Court of Appeal in Chan Tin Shi.  There, by a majority, the court held that the effect of the Extension Ordinance was to create a new legal estate in government leaseholders in the New Territories by the statutory extension provided for in the Extension Ordinance.  The consequence of that holding is that upon the grant of a new legal estate any rights accrued by a squatter, which have not been crystallised by an appropriate declaration under the provisions of the Limitation Ordinance, are extinguished and time must begin to run again.

9.In a carefully worded argument, Mr Lee, for the defendant has attempted to persuade me that the decision in Chan Tin Shi is wrong and should not be followed.  That is a course which is not open to me.  I am bound by the decision in the Court of Appeal, and consequently must hold that in the present case, by reason of the Extension Ordinance, any squatter’s rights the defendant may have acquired under the Limitation Ordinance have been extinguished prior to the commencement of these proceedings and the defendant’s application for a declaration as to its rights under the Limitation Ordinance.

10.I understand however, that the decision in Chan Tin Shi is to go to the Court of Final Appeal, and accordingly it is appropriate that I should make the factual findings relevant to the first and second issues set out above.

Does the defendants building encroach upon the plaintiffs’ land?

11.By the time the trial concluded the defendant ceased to contend that there was no encroachment.  The surveying evidence adduced by the plaintiffs established that the building that had been erected on the Lot 3590 encroached upon the eastern part of Lot 3443 by 0.554 metres on the northern boundary, and 0.638 metres on the southern boundary.  I have considered that survey evidence, and the surveying evidence adduced by the defendant, and I am satisfied that it was a proper concession on the part of the defendant that there was such an encroachment.

12.I accordingly hold that the defendant’s building encroaches upon the eastern part of Lot 3443 in accordance with the dimensions set out in the preceding paragraph.

When did the encroachment begin?

13.Lot 3443 is adjoined on its west side by residential lot known as Lot 22.  The evidence established that a house had been erected on that Lot prior to the DD survey in 1898.  Lot 3443 is known as an “Old New Grant”, and was sold by auction in 1924.  The plaintiffs’ father purchased Lot 3443 in May 1958.  The precise date upon which a house was built on Lot 3590 was not established in the evidence, but appears to have been around 1950.  However, it is beyond argument that at the time that the plaintiffs’ father purchased Lot 3443 in May 1958, houses already existed on each side of  Lot 3443, on both Lot 22 and Lot 3590.  Later in 1958 the plaintiffs’ father built a single storey house on Lot 3443.  This house was constructed using the western wall of the defendant’s house on Lot 3590, and the eastern wall of the house on Lot 22 to form the east and west walls respectively of the middle dwelling.  It appears that posts were erected, parallel to and adjacent to the east wall on Lot 22 and the west wall on Lot 3590, to assist in supporting the roof of the plaintiffs’ father’s house on Lot 3443.

14.In 1982-83 the house on Lot 22 was redeveloped.  The old house was demolished and a new house was erected.  At about the same time the defendant demolished the old house on Lot 3590 and rebuilt.  Both of the houses on each side of Lot 3443 now became typical modern three-storey New Territories village houses.  An aerial photograph dated November 1983, shows that at about the time the construction of the defendant’s new house on Lot 3590 was being completed there was no roof on the dwelling on Lot 3443.  It appears that following the completion of the two new houses on each side of Lot 3443 the plaintiffs’ father must have erected a new roof for the dwelling on Lot 3443.  That dwelling then, and does to this day, utilise the walls of the two adjacent dwellings as walls to the dwelling in the centre, just as it had prior to the reconstruction of the two houses on Lot 3590 and Lot 22.

15.The determination of the issue as to when the dwelling on Lot 3590 encroached upon Lot 3443 fell to be determined, according to the plaintiffs, on the oral evidence to the circumstances of the dwelling, and according to the defendant on the interpretation of aerial photographs.  The possession of the plaintiffs was that prior to the reconstruction of the house on Lot 3590 there was no encroachment.  The defendant on the contrary position, asserting that the old dwelling on Lot 3590 prior to the building of the new house in 1982-3 encroached at least to the same extent as the present building.

16.The plaintiffs’ mother, the widow of the plaintiffs’ father who was the original builder of the house on Lot 3443, was called to give evidence.  Her evidence was that at that time the defendant was directing the new house on Lot 3590 she orally reminded the wife of the manager of the defendant that the new building should not encroach onto the plaintiffs’ land.  She said that she also orally complained to the village representative about the encroachment, but the complaint was ignored.  She said also that time her husband purchased Lot 3443 he measured the land.  She asserted that the width of the lot was 13’5”.  That is entirely consistent with calculations made by the surveyors advising parties to the litigation now.

17.The first plaintiff, and his sister were also called to give evidence.  Both asserted that prior to the construction of the defendant’s new house there was a sufficient gap between the poles supporting the roof of the house, and the adjacent walls, that, as children, they were able to walk through the gap.  They said that after the reconstruction the poles were directly adjacent to the walls and they could no longer pass through the gap.  The first plaintiff said also that he personally had as a child measured the front of his house and had ascertained that prior to the reconstruction of the defendant’s house the width of the house was 13’5”.  Neither he nor his mother had ever recorded those measurements.

18.Witnesses called for the defendant asserted that they had counted the number of rows of red tiles laid on the roof of the defendant’s first house prior to reconstruction.  By calculating the approximate width of tile it was asserted that the width of the original house was the same as that reconstructed by house.  Attempts were made to compare the construction of the plaintiffs’ house with another old house in the village in an attempt to say just what the width of each house was.  It was asserted that the tiles on the old house on Lot 3590 of the same as the tiles on the old house still in the village, and that accordingly a calculation of the width of the old house on Lot 3590 could be made by measurements of tiles and the multiplication of the width of tile by the number of rows of tiles as counted in the aerial photographs.

19.I am satisfied that it would be quite unsafe to rely upon any of the oral evidence, from either the plaintiffs or the defendant, to make a determination as to the width of either the house on Lot 3443, or on Lot 3590, prior to the reconstruction.  The evidence was of events many years ago, and none of the matters asserted to in the evidence had been recorded.  Each of the parties giving evidence as to various aspects plainly had a great deal of interest in the issues upon which they were giving evidence, and the unlikelihood of the various assertions they each made were well exposed in cross-examination.  In all the circumstances I am satisfied that I cannot rely upon that evidence.  I make this finding in respect of the oral evidence of both the plaintiffs’ and the defendant’s witnesses.  In reaching this conclusion I had full regard to all of the contemporary photographs that were produced and referred to by the witnesses.  As to the “tile” method of measurement, I cannot be sufficiently sure that the tiles on the old house on Lot 3590 with the same as those still in the village.

20.A number of aerial photographs of the area were available.  The oldest of these, taken in 1964, shows the three houses in their original form, as single storey traditional village houses.  A second photo, taken in 1972, and a third photo, taken in 1981, also show that configuration.  The next photograph in the sequence, taken in 1982, shows the house on Lot 22 having been reconstructed, but that on Lot 3590 still in its original form.  The next photograph, taken on 28 November 1983, shows the house on Lot 22 having been reconstructed, and that on Lot 3590 having also been reconstructed, but apparently still surrounded by scaffolding.  It can be seen from that photograph that there is no roof to the dwelling on Lot 3443.  Subsequent photographs did not assist in the resolution of the issue, and simply show the situation as it presently exists.

21.There being no doubt at all that the present dwelling on Lot 3590 encroaches onto Lot 3443, an analysis of the aerial photos was undertaken in an effort to determine whether the encroachment existed prior to the reconstruction of the dwelling on Lot 3590 in 1982-3.  Evidence was called by the defendant from Dr Bruce King, an Assistant Professor in the Department Land Surveying and Geo-Informatics at the Hong Kong Polytechnic University.  Dr King’s particular expertise is in the area of photogrammetry.  This is an area which involves the examination of aerial photographs and interpretation of those photographs.  It should be noted that aerial photographs are taken in pairs, and when examined and interpreted are viewed through a stereoscope which gives a more realistic, virtual 3-D image.  I am satisfied from Dr King’s experience that he is suitably qualified and experienced to give expert evidence as to the measurement of dimensions from aerial photographs.

22.For the plaintiff, expert evidence was called from Mr Thomas Lee, a Chartered Land and Hydrographic Surveyor.  The essence of Mr Lee’s evidence was to challenge the basis of Dr King’s conclusions on three particular points.  I am equally satisfied as to Mr Lee’s expertise.  First, he contended that the overall accuracy level of the measurement of any position by way of stereo photographs was subject to a root mean square error, (RMSE), which meant that any measurement would be unreliable.  Second, he contended that repeated observation would not improve the accuracy of a measurement, although he conceded that it would improve the precision of a measurement.  Third, he acknowledged that as it was legitimate for an operator to choose, on highly enlarged photographs, one particular pixel as representing the roof corner of a house, and another operator to pick an adjacent pixel, the difference in the pixel chosen, when regard was had to the small distances relevant in these proceedings, meant that any measurement undertaken was not reliable.

23.I have carefully weighed all the matters raised by the plaintiffs in their challenge to Dr King’s evidence.  I am satisfied having regard to the short distance being measured in this case no issue arises as to an RMSE error.  Such an error may be relevant where horizontal distances that are far apart on the photograph by being measured, but I am satisfied that that is not the case here.  I have given consideration to the issue of the overhang on buildings and am satisfied any overhang that there might have been on the two sides of the old houses on Lot 22 and Lot 3580 prior to demolition was sufficiently insignificant that it may be disregarded in the determination of the issue as to whether or not there was an encroachment prior to 1982.  They are still examples of the old style of village house in this village.  Photographs were produced of one of those old houses.  It can be seen from those photographs the extent of any overhang is not more than .06 of a metre.  Even if the measurements undertaken by Dr King reduced by .12 of a metre a significant encroachment still exists.

24.It is right, as Mr Lee suggested, that it can be variations in measurement depending upon which particular pixel is chosen for the measurement.  Having regard however to the extent of the encroachment and satisfied that the difference that might result from the various appropriate pixels which may be selected is so small that this issue may be put aside.

25.Having regard to the whole of the evidence I accept the conclusion of Dr King that the front dimension of the house on Lot 3590 prior to demolition in 1982, and as illustrated on the aerial photograph taken in 1964, was 4.4 metres.  I accept the conclusion of Dr King at the rear dimension of the house on Lot 3590, at the same time, was 4.5 metres.

26.Dr King has measured the front dimension of the old house at 4.4 metres.  The extent of the present encroachment is 0.554 metres.  The evidence of the surveyor, Helen Chan, which was not challenged, establishes that the north eastern corner of the defendant's dwelling is virtually exactly on the corner of the Lot. There is no evidence to suggest that the original dwelling on Lot 3590 did not also have its north eastern corner in the same place. By calculation it has been determined that the grant width of Lot 3590 was 3.722 metres. If that figure is added to the extent of the present encroachment, and a further 0.12 is allowed for overhang, the total width of the original building, if it encroached to the same extent would have been 4.396 metres.  That is within 4cm, (or 1.57 inches), of Dr King's measurement.

27.I accordingly conclude that prior to the reconstruction of the house on Lot 3590 in 1982 the dwelling then on Lot 3590 encroached upon Lot 3443.  The evidence establishes that the old dwelling on Lot 3590 had been there since prior to 1964.  The evidence does not establish that the encroachment of the new dwelling on Lot 3443 is greater than the encroachment prior to reconstruction.

28.I accordingly hold that the defendant's encroachment onto Lot 3443 began, and continued unchallenged, for a period well in excess of 20 years prior to the issue of the writ by the plaintiffs.  Were it not for the provisions of the Extension Ordinance, the defendant would be entitled to the declarations it seeks under the Limitation Ordinance.

Has there been a gap in the adverse possession?

29.At the conclusion of the evidence I raised with counsel the question as to whether or not there may have been a gap in the adverse possession between the time at which the first house on Lot 3590 was demolished, and the new house was constructed.  The law is that two periods of adverse possession cannot be added together if a squatter abandons possession before the full period has run.  The matter is dealt with in Megarry & Wade at para #21-023.

30.Here it is plain from the evidence, and the aerial photographs in particular, that the construction of the defendant’s new house began, if not immediately following the demolition of the old house, then certainly very soon after. A photograph taken in 1982 shows the old dwelling still extant.  The evidence does not establish the precise date on which that photograph was taken.  The photograph taken on 28 November 1983, shows the defendant’s new house virtually complete.  It is clear that the old house, with its encroachment, was built a good number of years before 1964, probably in the early 1950’s.  By the time of the demolition of that house, either in late 1982 or early 1983, the defendant had acquired possessory rights to the plaintiffs’ land over which the house encroached.  I am satisfied that at the time the defendant’s house was demolished, it was demolished with the intention of building a new house, an event that occurred virtually immediately thereafter.  In those circumstances it cannot be contended that the defendant abandoned the land and accordingly there was no gap in the period of adverse possession.

Proprietary estoppel:

31.The defendant raised a subsidiary argument based upon proprietary estoppel.  The defendant’s case on estoppel was that it was under the belief that the land encroached upon belonged to the Tso, and that the plaintiffs’ mother had stood by and allow all, and thereby encouraged the Tso to carry out the reconstruction of the house on Lot 3590, and the addition of the fourth story thereto in 1996.

32.The argument must fail.  There is clear evidence, unsuccessfully challenged, of the plaintiffs’ mother specifically objecting to any encroachment in the course of the reconstruction.  There is no evidence whatsoever of any reliance on the part of any member of the defendant Tso on any promise, representation or encouragement on the part of the plaintiffs or their parents.  Sensibly, Mr Lee did not find it necessary to address the matter in submissions.  In any event it is clear that a claim based upon an adverse possession is quite incompatible with a claim of a proprietary estoppel: see Chui Shui On v Tang Koon Yung [1992-3] CPR 7.

Conclusion:

33.Consequently, were it not for the provisions of the Extension Ordinance I would be obliged to hold that the defendant had occupied a portion of the plaintiffs’ land for a period in excess of 20 years without challenge, and that accordingly the defendant had obtained title to that portion of the plaintiffs’ land.

34.There must be judgement for the plaintiff.  The plaintiffs seek an injunction restraining the defendant from continuing to trespass or encroach upon the plaintiffs’ land.  The plaintiffs also seek an order that the defendant give up vacant possession of that part of the land upon which there is an encroachment.  That would require the demolition and reconstruction of a portion of the defendant’s house. That would undoubtedly be an expensive exercise. The cost involved may well be a factor which ought to be taken into account in the exercise of discretion to grant an injunction in terms sought.  It may be more appropriate to direct the defendant to acquire land upon which the building encroaches at an appropriate cost.  These were matters which were not at all addressed in the evidence or in submissions.  The plaintiffs seek also damages.  The evidence did not address the appropriate forms of relief should the plaintiffs succeed, neither were these matters addressed by counsel in their submissions.

35.Leave is accordingly reserved to apply in relation to the appropriate forms of relief.  It may well be that the parties consider that further evidence would be relevant should there be no agreement on the form that relief is to take.  In any event, if the plaintiffs seek damages for the period of encroachment prior to the commencement of the proceedings, some evidence will be required to establish the level of damages.  I will leave it to the parties to discuss this matter, and, if agreement cannot be reached, to make arrangements to resume the hearing following any further evidence that may be filed.  If agreement cannot be reached on the form or timing of any further evidence I will hear the parties and make appropriate directions.

36.There will be an order nisi that the plaintiffs will have the costs of the action, to be taxed on a party and party basis if not agreed.  I am grateful to counsel for their industry in the written submissions.

Mr. Francis Yip instructed by Messrs Ko & Chow for the Plaintiffs

Mr Lee Tung Ming instructed by Messrs David Y.Y. Fung & Co. for the Defendants