Lau Wing Hong and Others v. Wong Wor Hung and Another
Read the full judgment text of HCA 1454/2003 on BabelCite. This High Court CFI judgment was delivered on 20 September 2006.
1. About 800 metres east of the venerated Ten Thousand Buddhas Monastery ( 萬 佛 寺 ), as the crow flies, lies what used to be the rustic village of Sheung Wo Che ( 上 和 輋 ). It is now separated from Shatin by Tai Po Road ( 大 埔 道 ) and lies just immediately west of the KCRC East Rail line. A footbridge from Lek Yuen Estate ( 瀝 源 邨 ), just north-east of Shatin New Town Plaza ( 沙 田 新 城 市 廣 場 ), spans Tai Po Road and connects the village, allowing easy access to it and to the famous Lung Wah ( 龍 華 )
Cited by 25 cases · Cites 7 cases
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HCA 1454/2003 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO. 1454 OF 2003 ____________ BETWEEN
____________ Before: Mr Recorder McCoy, SC in Court Dates of Hearing: 22, 23, 24, 25, 28 & 29 August 2006 Date of Judgment: 20 September 2006 _______________ J U D G M E N T _______________ 1.About 800 metres east of the venerated Ten Thousand Buddhas Monastery ( 萬 佛 寺 ), as the crow flies, lies what used to be the rustic village of Sheung Wo Che ( 上 和 輋 ). It is now separated from Shatin by Tai Po Road ( 大 埔 道 ) and lies just immediately west of the KCRC East Rail line. A footbridge from Lek Yuen Estate ( 瀝 源 邨 ), just north-east of Shatin New Town Plaza ( 沙 田 新 城 市 廣 場 ), spans Tai Po Road and connects the village, allowing easy access to it and to the famous Lung Wah ( 龍 華 ) pigeon restaurant located a few hundred metres nearby. 2.For many generations the village was unaffected by modernity. Now all that has changed. What used to be a picturesque, arboreal setting for a few village-style houses has now become a patchwork of scorched earth, thrusting modern villas and one little crooked tin hut fully enclosed by a vegetation-laden fence. In that hut still lives Mr. Li Wai Kin (“Mr. Li”) and his wife. In an even smaller similar structure within the fence lives Madam Wong Wor Hung (“Madam Wong”). Madam Wong aged almost 80 is the 1st Defendant in this proceeding and her son Mr. Li is the 2nd Defendant. 3.On the other side of this case are the 5 plaintiffs, who are indigenous New Territories villagers. The family of the 4th plaintiff Mr. Nam Chi Cheung, Raymond (“Mr. Nam”), have lived in the village for at least 10 generations. The plaintiffs are the various registered owners of 5 small Lots of land and claim that the Defendants have, by remaining in possession behind the fence, erecting the 2 structures and growing a few fruit trees, have trespassed and continue to trespass over their respective Lots. 4.The entire area of land within that fence and in the current possession of the Defendants is about 160m² in size and is irregularly rectangular in shape. The land within the fence straddles: Lot 137 SA ss3, Lot 137 SA ss 4, Lot 137 SA ss 5, and Lot 137 SA RP. (“the disputed land”). Each piece of land has a different owner. Government land is also within the fence. 5.The Defendants have, however, also been, in general terms, on the other material piece of land in this case within the fence, Lot 136 SB ss1, since 10 February 1974, when the first of 3 successive 10-year agreements to lease it was made. That Lot is a small and very narrow, triangular sliver of land about 22m² (“the rented property”).
The area A-B-C-Q-M-J-Z-I-A is 138.3m². The area A-B-C-Q-D-E-F-G-H-I-A is 91.7m². Lot 137 SA RP being D-E-F-G-H-I-Z-Q-D is about 25m². Lot 136 SB ss1 (the rented land) being Q-M-J-Z-Q is only about 22m². The area of the disputed land is A-B-C-Q-Z-I-A. The Defendants claim all of it and, alternatively, several lesser versions of it. The larger temporary structure is the 2nd Defendant's hut and the smaller one is occupied by the 1st Defendant. Lot 137 7.The 1st Plaintiff is the registered owner of Section A sub-section 3 of Lot 137 (“Lot 137 SA ss3”). The 2nd Plaintiff and 3rd Plaintiffs respectively own Lot 137 SA ss4 and Lot 137 SA ss5. Since 5 June 1998 the 4th and 5th Plaintiffs have been the registered owners of the Remaining Portion of Section A in Lot 137 (“Lot 137 ssA RP”), having purchased it from the Church Body of the Chinese Anglican Church in Hong Kong (“the Church”): see s4 Chinese Anglican Church Body Incorporation Ord. Cap 1012 (repealed), now s4 Church Body of the Hong Kong Sheng Kung Hui Ord Cap 1158. On the same day, 5 June 1998, the Church had also sold Lot 137 SA ss3, 4 and 5 to the 4th and 5th Plaintiffs; they had in turn respectively on-sold on 22 September 1998, ss3, 4 and 5 to the 1st, 2nd and 3rd Plaintiffs. The Church had been the registered owner of: ss3, 4, 5 and RP for years, well before 10 February 1974, the day when Madam Wong entered the tenancy agreement with Mr. Lam Cheung Sing in relation to Lot 136 SB ss1. Lot 136 8.Mr. Lam Cheung Sing on 10 February 1974 rented a part of this Lot (“the rented property”) to Madam Wong for 10 years at $300 a year. It is common ground that the leased land did not include 136 SB RP. In 1983 Mr. Lam Ping Hing inherited this land from Mr. Lam Cheung Sing. On 10 February 1984 (“the second tenancy agreement”) Mr. Lam Ping Hing (the uncle of the 4th and 5th Plaintiffs) rented the land to Mr. Li, the 2nd Defendant. All terms, descriptions and conditions were otherwise identical to the first tenancy agreement, save that the annual rental was now $500. 9.The third tenancy agreement was identical to the second, except that the period commenced on 10 February 1994 and the annual rental was now $1,175 and the tenancy would expire on 9 February 2004. The Defendants, however, still remain in occupation, despite the determination of that tenancy. The 4th and 5th Plaintiffs became the registered owners of the land under the third tenancy agreement on 10 June 2002. 10.The Plaintiffs' solicitors first sent a letter addressed to the Defendants, demanding redress for trespass, on 17 January 2002. That letter was itself a response to a letter 5 days earlier from the Defendants' solicitors, claiming the land by adverse possession. The Plaintiffs issued the writ in this action on 25 April 2003. 11.The Defendants deny they are trespassing and by defence and counterclaim seek a Declaration that by adverse possession they are now the rightful owners of the disputed land. The original pleaded counterclaim even sought title to Lot 136 SB ss1 (the rented land) as well as to the Government land. Both these scenarios were absurd – the former, because by actually paying rent the Defendants necessarily negatived any intention to themselves possess it adverse to the landlord; the second because it specially requires 60 years of adverse possession against Government land and the Defendants had only entered upon the land in 1974. By successive amendments during the trial, the Defendants have eventually reduced their claim to the area A-B-C-Q-Z-I-A, as well as lesser included alternatives to that area. 12.The Plaintiffs' case accepts that the Defendants did build in 1974 the tin hut in which Mr Li and his wife still live, just after the first agreement to lease had been entered. Mr Li said in evidence it took him about 2 months to build the hut. The case for the Plaintiffs is that the hut is presently larger than it was after it was initially constructed. Mr. Li accepted that he had over the last 30 years modified and extended it from its original specifications. 13.The case for the Plaintiffs continues that the tin hut was not just built on the rented portion in Lot 136 sB ss1 but right from 1974 it had extended into the land then owned by the Church; that the erection of the structure on the Church land was without any consent or approval from the Church; that the Defendants had therefore trespassed into that land; and that as Mr. Lam Cheung Sing was the landlord of the Defendants in relation to the contiguous rented land (from which the Defendants had trespassed forth), by 1995 the Defendants' 20 years of encroachment into the Church land amounted to adverse possession of it, not for them – the Defendants – but by them, for and on behalf of the then owners of the rented land, and now for the benefit of the present successors-in-title, the 4th and 5th Plaintiffs. For the Plaintiffs' reliance was particularly placed on the doctrine of encroachment and its presumption that any encroachment (even over the land of a third party) which occurs during the term of a lease is presumptively held for the landlord and not the tenant. This doctrine was articulated in Kingsmill v Millard (1855) 11 Exch 313, 318-9 per Parke B and Whitmore v Humphries (1871) LR 7 CP 1, 4 per Willes J. The Defendants submit that this doctrine does not represent Hong Kong law and that in any event the conduct and communications between landlord and tenant successfully rebutted the presumption so that the encroached lands were held for the tenants and not the landlord. 14.The Plaintiffs' case is that it was not until about 1990 that the Defendants first enclosed the lands with a fence currently occupied by them and planted trees and plants within it. That case, at first blush appears internally inconsistent with the Plaintiffs' claim to adverse possession via the encroachment presumption, which is explicitly based on adverse possession by the tenants having occurred by 1995. The Plaintiffs' Counterclaim to the Defendants' Counterclaim 15.The Plaintiffs have also pleaded a counterclaim to the Defendants' counterclaim, stating that if, which is denied, that the Defendants are found to be in adverse possession of the Plaintiffs' registered land, then basing themselves on the jurisprudence of the recent majority judgment of the European Court of Human Rights in J A Pye(Oxford) Ltd. v United Kingdom application 44302/02, 15 November 2005, they claim compensation from the Defendants for the value of the land. In JA Pye (Oxford) Ltd. v United Kingdom by a majority of 4:3 the Court concluded that where the registered owner of freehold land was successfully dispossessed by a trespasser's adverse possession then compensation was payable to the dispossessed former registered owner. 16.In J A Pye (Oxford) Ltd. v Graham [2003] 1 AC 419 (HL), the precursor to the decision of the European Court of Human Rights, Lord Bingham of Cornhill at 426G querried whether it was intrinsically fair and just for the registered owner of land, to lose title to his land without the party gaining title being “required to pay some compensation at least to the party losing it”. By comparison, in the case of unregistered land, Lord Bingham accepted that the windfall to the squatter “could no doubt be justified as avoiding protracted uncertainty where the title to land lay”. But Lord Hope at 447A thought the unfairness did not lie in the lack of compensation, “but in the lack of safeguards against oversight or inadvertence on the part of the registered owner”. 17.The need to adjudicate upon the counterclaim to the counterclaim only arises upon a finding of adverse possession. By consent that counterclaim has been contingently split from the trial pending this judgment. 18.As that counterclaim would involve close consideration of Articles 6 and 105 Basic Law (does A 105 apply at all between private persons?), the constitutionality of sections 7(2) and 17 Limitation Ord Cap 347 (expressly challenged by the Plaintiffs) and the correctness for Hong Kong of the decision in J A Pye (Oxford) Ltd. v United Kingdom, it was sensibly agreed by counsel that an amicus curiae should be appointed, if the issues become live. In Beaulane Properties Ltd. v Palmer [2006] Ch 79, 136 it was held that as proved adverse possession had the result of a deprivation of registered property, limitation provisions provided by statute should be interpreted in the light of human rights legislation. In Hong Kong, there is no Torrens system; there is a system of the priority of registration of land documents, but no system of indefeasible registration of land title: Kwok Siu Lau v Kan Yang Che (1913) 8 HKLR 52 (FC), Keep Point Development Ltd v Chan Chi Yim [2000] 2 HKLRD 145, 150G-151H and s3 Land Registration Ord Cap 128. 19.Further because Article 7 Basic Law expressly provides that all land in Hong Kong is owned by the State, there being no freehold land in this jurisdiction at all (except the anomalous single Lot 1 occupied by the Anglican Cathedral in Central: see s6(1) proviso (a) Church of England Trust Ord Cap 1014), the Secretary for Justice would be invited to consider to appear in the counterclaim to counterclaim as an Intervener. The potential implications of JA Pye (Oxford) Ltd. v United Kingdom for Hong Kong are far-reaching. Government land too may be adversely possessed although the necessary period is 60 years of possession: s7(1) Limitation Ord Cap 347. The limitation period between private parties was 20 years at the material time, but is for cases arising since 1 July 1991 now 12 years: s38A Limitation Ord. First Tenancy Agreement 20.Mr. Li and his mother have occupied the rented land and some of the disputed land since 10 February 1974, when Madam Wong leased the rented land from the then owner, Mr Lam Cheung Sing. The terms of that agreement to lease are handwritten in Chinese characters, witnessed and signed by the parties. It is a very simple, homely document, reflecting the uncomplicated nature of landlord and tenant relations in the village at the time.
Tenancy Agreement (Translation) The Lessor, Lam Cheung Sing, hereby agrees to lease to Wong Wor Hung a self-owned bare land at Lot No. 136B in D.D. 185, Sheung Wo Che Village, Shatin located near the railway and ‘beside' the footbridge leading to Lung Wah. The Lot leased consists of 2 portions. One portion is located in front of the entrance of the golden house. The other portion is situated in the vicinity of the lamp pole but excluding the refuse station. The term is 10 years commencing from 10th February 1974 to 9th February 1984 at a yearly rent of HK$300.00 payable in advance without delay. The landlord is entitled to increase the rent within the 5 years period commencing from 10th February 1974 to 1979 with amount of increase to be determined but not exceeding 20% (addition). At the expiry of the 10 years' term, the lease can be renewed upon mutual consent of the parties at the rent to be determined. If the landlord disagrees to the renewal, the tenant shall unconditionally surrender the land to the landlord for his disposal. Upon mutual consent of the parties, the lease shall not be revoked. For the avoidance of doubt, each party shall keep this as evidence. Lessee: Wong Wor Hung 21.No issue exists on the pleadings that the agreement to lease was void for uncertainty. But an issue arises as to whether the area actually intended by the parties to be let was that delineated by the reference to Lot 136B in DD185 as the Defendants submit, or the much looser area partially described by local features, as the Plaintiffs submit. The precise area of that Lot legally defined, had at the material times never been pegged or marked out on the ground. Do the descriptors such as “near the door of the golden house”, “in the vicinity of the lamp pole” but “excluding the refuse station” show that the original landlord erroneously let to Madam Wong, as the Plaintiffs submit, more land than he owned? 22.On all the evidence I find that the original landlord was clearly aware that what he owned was Lot 136 SB ss1 in DD185. That was all he let. He did not intend to let what he did not own. But he did not know, by examining the “bare land” the physical boundaries of what he owned. He knew it ran from about the door of the golden house (which still exists) to the vicinity of the lamp post (one still exists, but may not be in the same place as in 1974), but did not go so far as to include the refuse station (which no longer exists). The inadequacy of these references to 3 local features is obvious as they do not demonstrate the complete shape or size of the area. They formed a casual, yet practical, geographical guide to the general location and were not intended to be definitive in any way. They are themselves expressly conditioned by non-empirical words, like “near” and “in the vicinity”. Even if there had been an initial common mistake as to the real size of the rented land, a few months later in August 1974 any such issue was resolved after a discussion between the parties. This resolution is noted later in this judgment at paras [66], [79], [80], [83] and [84]. 23.The literacy standard of Madam Wong (who did not give evidence) was probably akin to that of the 2 other elderly witnesses from the village who did give oral evidence. (Mr Yeung Sui Sang, who signed the 1974 agreement as a witness, could not read what the agreement said, and Madam Yau who signed her witness statement with a cross, could neither read nor write.) All in all, I find that Mr Lam Cheung Sing only intended to let to Madam Wong what he owned, but that he was understandably unsure by mere visual reference to the bare land exactly the boundaries of that land. The annual rent of only $300 only underlines the intended informal nature of the contested descriptors in the agreement to lease. Essential Factual Issues 24.It is agreed that the essential factual issues at trial are whether, when and where the Defendants erected the fence that currently encircles the property. The erection of a fence “is strong evidence of discontinuance of possession by the true owner”: The Mayor and Burgesses of the LondonBorough of Hounslow v Minchinton (1997) 74 P&CR 221, 230 per MillettLJ. In Seddon v Smith (1877) 36 LT 168, 169 (applied in Sinton DamerellProperties Ltd v King Trounson Trustees Ltd [2004] 2 NZLR 66, 77), Cockburn CJ said “Enclosure is the strongest possible evidence of adverse possession.” Adverse Possession 25.The burden of proof is on the party claiming a possessory title against the registered owner: Marshall v Robertson (1905) 50 SJ 75, 76, Pflug and Pflug v Collins [1952] 3 DLR 681, 688, Cotton v Keogh [1996] 3 NZLR 1, 7 (CA), Wong Tak Tue v Kung Kwok Wai (No 2) (1997-8) 1 HKCFAR 55, at 70E per Litton PJ (Lord Cooke of Thorndon NPJ concurring). 26.In Cheung Yat Fuk v Tang Tat Hong (2004) 7 HKCFAR 70, 74B Bokhary PJ delivering the judgment of the Court of Final Appeal said
27.See too: Wilson v Martin's Exors [1993] 1 EGLR 178, 181 C (CA) where Ralph Gibson LJ emphasised that
Analysis of Adverse Possession Requirements 28.Slade J in Powell v McFarlane (1977) 38 P & CR 452, 472, which was approved in Buckinghamshire County Council v Moran [1990] Ch 623, 240 (CA) and in turn endorsed by the House of Lords in JA Pye(Oxford) Ltd. v Graham [2003] 1 AC 419 (HL) said
29.Lord Browne-Wilkinson at 434G remarked that continued reference to “adverse possession” may obscure focus on the real issue which he restated as:
30.There are now 2 elements for the legal possession of land: (1) a sufficient degree of physical custody and control (“factual possession”) and (2) an intention to exercise such custody and control on one's own behalf and for one's own benefit (“intention to possess”). Without the requisite intention, which is usually a matter of inference, in law there can be no possession. That intention will be usually deduced from the physical acts themselves, although there must be the 2 separate but conjunctive elements to constitute legal possession. 31.The House of Lords held that the necessary intention is only an intention to possess the land; an intention to own the land is not required: Ocean Estates Ltd v Pinder [1969] 2 AC 19, 24 (PC); J A Pye (Oxford) Ltd v Graham [2003] 1 AC 419, 438 per Lord Browne-Wilkinson, 446 per Lord Hope of Craighead, 448 per Lord Hutton. 32.Lord Hope emphasised at 446C
Divergence Between Hong Kong and English Law 33.In para [46] of J A Pye (Oxford) Ltd v Graham, the House of Lords expressly overruled the decision in R v Secretary of State for theEnvironment ex p Davies (1990) 61 P&CR 487, whereas the Court of Final Appeal (Li CJ, Litton and Ching PJJ, Mortimer and Lord Cooke of Thorndon NPJJ) in Wong Tak Yue v Kung Kwok Wai (No 2) (1997-98) 1 HKCFAR 55, 69F had expressly approved of that decision. The separation point in the jurisprudence is structurally important in this area of the law, as the law in Hong Kong now is, that if a squatter in possession of land had the “intention to pay rent if the owners had requested payment” (at 69E), that demonstrates that the squatter “was not intending to exclude the owner with the paper title, but showed that he was treating himself as enjoying possession under a lawful title from the owners”. See also the short concurring judgments of Litton and Ching PJJ who each also held that the intention of the occupier to pay rent, if asked, was an express declaration against the claimant's interest and fatal to his case. This reasoning is now fundamentally irreconcilable with the position of the House of Lords, which adopted the decision of the Privy Council in Ocean Estates Ltd v Pinder [1969] 2 AC 19, which held that as a matter of principle, the willingness of a squatter to pay for occupation of the disputed land, if asked, did not in law indicate an absence of an intention to possess the land by the squatter. In J A Pye (Oxford) Ltd v Graham Lord Browne-Wilkinson at para [46], Lord Hope of Craighead at para [71] and Lord Hutton at para [78] all explicitly held that a willingness to pay rent, if asked, was completely compatible with a subsisting intention to possess the land to oust the owner. 34.The concentration on conduct not excluding the owner of the land (at 60F per Li CJ, 70F per Litton PJ, 71E per Ching PJ), rather than a concentration on possession to exercise exclusive control, now clearly differentiates Hong Kong law from the more recent English position. Aggregating Adverse Possession 35.In Cheung Yat Fuk v Tang Tat Hong (2004) 7 HKCFAR 70, 73G the Court of Final Appeal, approved the approach of Brooking J in Shelmerdine v Ringen Pty Ltd [1993] 1 VR 315, 341 that
Here it has been by a mother and son. Adverse Possession: Fact and Degree 36.Therefore, the aggregated possession of the squatter-landlord, both personally and through his own tenant or licencee, counts towards the necessary time requirement under the Limitation Ord to trump the registered title owner. See to the same effect: Smith v Stocks (1869) 17 WR 1135, 1137 per Mellor and Hannen JJ and Des Barres v Shey (1874) 29 LT 592, 593-595 (PC) per Sir Montague Smith - in the latter case the unsuccessful appellant, was himself a Judge of the Nova Scotia Supreme Court. 37.The late Sir Robin Cooke, delivering the judgment of the Privy Council, reversing a decision of the Court of Appeal of Brunei, in Hajjah Tampoi bte Haji Mutusin v Haji Matussin bin Pengarah Rahman (1984) 4 PCC 345, 355; Privy Council Appeal 51/1983, 31 July 1984, emphasised that the issue in adverse possession cases “…was essentially one of fact and degree” which involved “clear evidence of denial of the plaintiffs' title and some positive action by the defendant” to manifest the intention to possess the land. 38.Lord Robertson for the Privy Council had earlier on appeal from the High Court of Bengal, emphasised that the possession required “must be adequate in continuity, in publicity, and in extent to shew that it is possession adverse to the competitor”: Radhamoni Debi v Collector of Khulna (1900) 27 LR IA 136, 140 (PC). 39.In every case, the evidence required to establish the necessary intention to possess will depend on the nature and size of the land. Occupation of land is not synonymous with its possession: that is too neutral. An intention to possess, which is not put into effect by action, is equally insufficient: J A Pye (Oxford) Ltd. v Graham [2003] 1 AC 419, 446 A per Lord Hope of Craighead. Witnesses for the Plaintiffs 40.Madam Yau King Ying, aged 71, the wife of Mr Lam Ping Hing (who signed the 2nd and 3rd tenancy agreements with the 2nd Defendant) gave oral evidence. She confirmed that her father-in-law had passed away in 1983, when her husband inherited the property. Her husband, who had filed a witness statement, did not give oral evidence. She had lived in the village for 55 years. Her husband, on 10 June 2002, sold Lot 136 SB ss1 (the rented land) to the 4th and 5th Plaintiffs for HK$30,000. That is the land now thrice let to the Defendants. 41.In 1970, Madam Yau began renovating her own house, which was to the south of the “golden house”. At that time, Madam Wong occupied a small house near the garden of Madam Yau's place. In 1973, Madam Wong was asked to move by Madam Yau, and for this reason, the 1st tenancy agreement was entered into, in which Madam Wong would rent a piece of bare land further to the north of the piece of land she was then occupying. Madam Yau and her husband paid Madam Wong HK$1,500 as compensation, so that Madam Wong and her son, Mr Li, could build a new house on that rented land. 42.Madam Yau confirmed that after the Defendants had built the house on the property leased by her father-in-law, that they had installed a wire fence along the front of their house, parallel to the pavement under the footbridge. However, Madam Yau stated that no fence had been installed at the rear of the property, as she said that another family in the village, surnamed Wong (who reared pigeons), had already installed a wire fence some distance from the rear of the Defendants' house, so that there was no need for Madam Wong to install a fence at the back of the property. Madam Yau said that that fence had been erected in 1965 and that it existed until 2001, when it was pulled down by the 4th Plaintiff as he had purchased the land over which that fence was built. It was put to Madam Yau that the 2nd Defendant had erected another fence, parallel to the fence put up by the other Wong family, and very close to it. Her reply was that because of the trees and vegetation she simply could not tell whether that was so or not. 43.Her evidence was that Madam Wong worked as a stay-in domestic helper, and only returned on the weekend to the rented property where Mr Li, his wife, and their 2 children lived. She stated that Madam Wong retired in 1992 and only lived full-time on the site from that time. 44.Madam Yau denied that there was any oral agreement between her husband and the Defendants that they could live in the tenanted premises for life. 45.In the course of the Court's invaluable site visit to the property, Madam Yau gave further sworn evidence. She stated that the refuse area, in the 1974 agreement to lease (and its 2 successors), had been right in the middle of the property now occupied by the Defendants. She demonstrated its dimensions and was insistent that it was so situated. (All the other witnesses in the case who gave evidence on this aspect were insistent that the refuse area was in fact not on the rented property at all, but was the small piece of land in front of the building called the Fire Prevention Committee Building.) 46.In addition, the witness confirmed that from as early as 1974, the 2nd Defendant had kept a dog at the rented premises and that throughout “the area was cordoned off, as the dog was not fixed to a rope within the garden”. 47.The next witness was Mr Nam Chi Cheung, Raymond, the 4th Plaintiff. He and the 5th Plaintiff purchased all the land in Lot 137 Section A for HK$3,300,000 on 5 June 1998 from the Church. This entire Lot comprised 15 subsections as well as the Remaining Portion and totaled 2106.4m². Their intention was, in conjunction with a development company, to develop small village houses (each house consisting of 3 storeys of 700ft²). 48.In April 2000, notice of the proposed development had been placed at conspicuous locations around the village. No one objected. As a result, the 4th Plaintiff incurred the necessary costs of Building Licence fees prescribed by the District Lands Office (Shatin) under the small village homes policy. It was only in January 2002 that the Plaintiffs were ever aware that the Defendants alleged adverse possession and because of that unresolved issue, the development could not proceed at least in relation to the land which the Defendants were occupying. The 4th Plaintiff's evidence was that the loss of profit from the inability to construct 4 houses (as only 3 can be built if the land is held to be adversely possessed) was in the order of HK$3,300,000 – coincidentally, the same amount paid for the entire Lot 137 – 15 subsections. 49.After he and his brother had purchased the property, Mr Nam said that on one occasion he saw Madam Wong planting ginger just outside the fence enclosing the Defendants' property, and he told her to desist as he was the owner of that land. He also told her that she would have to return the rented property to him at the end of the tenancy in February 2004, as it was required for development purposes. 50.Mr Henry Chan, a qualified surveyor was called as an expert witness by the Plaintiffs. He had prepared the plan incorporated in this judgment (although the Court has itself modified it, by removing certain irrelevant matters and introducing 4 new co-ordinates (L, M, Q and Z), for the purposes of clarity). In addition, he gave expert evidence in relation to the set of aerial photographs produced by both sets of parties to the action. He stated that the examination of aerial photographs (which was part of his usual professional requirements), depended on a number of factors including the height from which the photograph was taken, the time of day, the angle of the camera to the object, the effects of shadows and the size of objects apparently within the photograph. He stated that an elevated structure generally will cast a shadow and that there can be relief displacement if the gradient of the underlying land is undulating. He accepted that it would be very difficult to identify from aerial photographs thin metallic posts supporting wire fencing from several thousand feet above. If there was vegetation over that fence, the task became even more improbable, he fairly added. 51.In addition, Mr Chan stated that the location of the disputed fence, as it is now in 2006, is in a slightly wider position than disclosed by the Defendants' own surveyor in 2002. Mr Henry Chan accepted that the fence shown in DD5 (in 1998) was substantially in the place as the fence shown in C134 (in 2002), although at the points on the fenceline B-C, it was different and wider in the more recent survey. The obtuse angle between A-B in C134 was also missing from DD5. 52.Mr Chan accepted that because the parties' different surveyors would have used Mr Li's hut as a measuring reference, it followed that different surveyors may have used different parts of the hut as the reference point. This was exacerbated by the fact that a temporary structure, such as the hut, did not have well-defined regular angles. All of those facts he agreed, could affect the precision of any measurements. 53.While there is some difference between plan DD5 and C143, it is material to recall that even the Plaintiffs, who commissioned Plan DD5 in 1998, did not believe it to be reliable. The scale is 1:400 and the Plan was designed as Mr Nam, the 4th Plaintiff stated, as only a “provisional draft”, as the division of the whole of Lot 137 into the 15 sub-Lots had not even been made. I agree that this Plan is of little utility as it was much less detailed as it covered a much wider area; it also saw the fenceline as a straight line whereas it never has been. The Plan C143 prepared in 2002 and the Plan in para [6] herein prepared in 2006, are very substantially similar. Any difference is truly de minimis. The survey in 2006 by Mr Henry Chan of Henry Chan Surveyors Ltd on behalf of the Plaintiffs, is therefore fairly comparable to the Plan by Andrew Lau and Associates (China) Ltd prepared for the Defendants in 2002. The Plan prepared by Mr Henry Chan is more valuable being at a scale of 1:100; that by Mr Lau of 1:150. 54.Professor C Y Jim, who is the Chair Professor of the Department of Geography at the University of Hong Kong gave expert evidence, called by the Plaintiffs. Prof Jim was clearly an eminent scholar at the top of his field, well qualified to give expert evidence on the age of the trees found within the Defendants' fence. After an exacting scientific survey and using statistical Pearson correlation coefficients, he concluded that the jackfruit and wampi trees on the property were no older than 14.7 years. His evidence was impressive and ultimately unchallenged. He did not give evidence about the age of the single longan tree referred to in the evidence of Mr Sammy Au, the expert called for the Defendants, as there were no comparator longan trees available in the surrounding areas which could be both measured by girth and for which reliable evidence of age was available. Dendrochronology – An Unavailable Scientific Method for Trees in Hong Kong 55.Prof Jim stated that the dendrochronological method, the science of tree growth rings, was not available because in Asia trees grow continuously throughout the year without respite and without a marked difference in growth rate between the seasons, so that without a clear distinction between wide rings (warm season with fast growth) and narrow rings (cold season with hardly any growth) within an annual cycle, it is not possible to safely determine the age of trees, based on tree rings. Mr Sammy Au 56.Mr Sammy Au, a practising arborist, gave expert evidence, called by the Defendants . His original report had given evidence of the age of the same trees as considered by Prof Jim. Whereas Prof Jim found the oldest of those trees to be 14.7 years, Mr Au said that they were “30 years old or even more” – this is a huge difference and well outside the range of expected opinions between 2 experts in such a matter. I distinctly prefer the evidence of Prof Jim. 57.Mr Au was eventually asked only to give oral evidence about the single longan tree situated just northeast of the 2nd Defendant's house (and not on the rented property). This, in itself, was unsatisfactory as Prof Jim, for good reason, had not examined this tree. One expert therefore was giving evidence about one tree which the other expert had deliberately excluded from consideration. In relation to this longan tree, Mr Au said it was also over 30 years old. He had grown longan trees himself for much of his life and kept a nursery of some 60,000 different types of trees. 58.He said that particularlongan tree had poor drainage and growing space and that the soil was compacted around its roots restricting its development. He accepted that his opinion was simply based on recognising the ages of trees as a function of his own day to day experience. He emphasised that a tree is not necessarily columnar in shape that as the longan had a girth of about 0.5m measured 1.5m from the ground, the age of 30 years plus was assured. 59.Despite Mr Au's zeal for his own conclusion as to the age of this tree, I am unable to find it established that it is more than 30 years old; although it is, by its dimensions and proximity to the hut, obviously a tree though that had been there for some very significant time. In the end, little turns on the age of this tree, as by itself it proves nothing. The real issue in this case is the fencing and the intention of the Defendants as deduced from the totality of their various actions in relation to the disputed land. Aerial Photographs, Photographs and Plans 60.A large number of aerial photographs are in evidence dealing with views of the locality, from various heights. The photographs were taken from 1973 and are generally in black and white and are inconclusive. The disputed land in each of these photographs covers less than 1/2% of the total area shown, so detail is difficult. The photographs have been relied upon to suggest or alternatively not suggest, the existence of a fence surrounding the property. In almost every photograph the alleged fenceline is obscured by the massive overhanging crown of huge long-established trees (in the earlier photographs not being trees within the disputed property). 61.The earliest fence on the property that can detected from any photograph is shown in photograph 2 on D6 – a photograph taken in May 1998 from ground level, looking east southeast toward Shatin. 62.The Plaintiffs' pleaded case is that the Fire Prevention Committee had built the fence L-A-B-C, not the Defendants. The Defendants have never claimed to have built the alleged fence between L-A. But Madam Yau, who on this point was reliable, stated that a fence that existed near the line A-B had been built by the other Wong family; not the Fire Prevention Committee. However, she would not exclude the fact that the Defendants had built A-B etc themselves, as thick vegetation prevented any person passing by from seeing whether the Defendants had built a fence there or not. 63.A number of Government Plans are in evidence. They were designed for planning the neighbouring Lek Yuen Estate and generally concentrate on features over there. None of the Government plans ever show the fence built by the other Wong family or the fence said to have been built by the Fire Prevention Committee. It is not until 1998 that the Government plans ever identified a fence in the area. This is not surprising as the existence or otherwise of a fence in that area is of very little relevance indeed to the Lek Yuen Estate, situated completely on the other side of Tai Po Road. A surveyor's plan commissioned by the Plaintiffs does show a fence around the Defendants' property in 1998. Mr Li Wai Kin 64.The 2nd Defendant, Mr Li, gave evidence. He stated that shortly after his mother had taken up the 1st tenancy in February 1974, he built the hut and then a fence around it. At that time he started rearing dogs. The smaller hut was built in 1976-1977 and has been occupied throughout since then by his mother, Madam Wong. His children grew up in his hut, with the son being born in July 1979 and the daughter a few years later. He was 23 years old when his mother entered into the 1st tenancy agreement. 65.No copy of the formal legal surveyed dimensions of the Lot referred to in the tenancy agreement had every been provided to the Defendants by any landlord and only the general description in the tenancy agreement enabled him and his mother to loosely infer the area covered by the tenancy, as it was all bare ground without markings or boundaries. Mr Li and his mother built the hut, over a 2 month period. It was originally a very small hut, only designed to house himself and his mother. Immediately after building the hut, his mother and himself built a wire-mesh fence to enclose the hut. A gate with a lock was installed at the only entrance to the property; which is still there. They grew flowers, plants and trees within the fenced area. They made the area within the fence their home. It was partially paved with bricks and a little chicken coop was later built. 66.About 6 months after taking up the tenancy, a building, known as the Fire Prevention Committee Building, was constructed just at the southern end of the place occupied by the Defendants. When that building was being constructed, one of the committee members, Mr Chan Kwan Lam, told Mr Li that the actual size of the area that his mother had rented from Mr Lam Cheung Shing was really rather small. In the course of building that Committee Building, some attention had been paid to the formal boundaries on which that building would sit, therefore, the size and shape of the land tenanted by the Defendants immediately north of it, came into consideration. Mr Chan stated to Mr Li that the bulk of the Defendants' hut had been built, not on the tenanted land, but was actually built on some other party's land. In the result, Mr Li, Madam Wong and Mr Yeung Sui Sang (who had been the witness to the 1st tenancy agreement) approached or confronted Mr Lam Cheung Sing, seeking to obtain a reduction in their rent, in the realisation that the actual area they had rented was tiny. Mr Lam Cheung Sing, in the presence of his son Mr Lam Ping Hing (who had given a witness statement in these proceedings, which did not deal with this issue at all and who did not give oral evidence at the trial), acknowledged that he had only rented to Madam Wong the area he actually owned, which was very small indeed. He refused to reduce the rent. Because he was aware that the hut had been built over land owned by another party, he expressly stated that it was entirely the responsibility of the Defendants to deal with any dispute that may occur or action that may be required because of their expansion into that land. He disclaimed any interest in or responsibility for the expansion and made it clear that he would be completely uninvolved in any matter that may transpire in relation to that expansion. Mr Lam emphasised that the agreed rental was not high, no matter how small the land actually owned by him was, and that the tenant had to continue to pay the original rent. After further bargaining, it was agreed that instead of the Defendants paying annually the rent would now only be paid half-yearly. This was to show the dissatisfaction caused by the non-disclosure by the landlord of the real size of the very small piece of land that he actually owned. The Plaintiffs did not cross-examine Mr Li to deny this incident. Mr Yeung Sui Sang also gave evidence confirming that the conversation happened, in the full terms set out above. He was not cross-examined about this matter. 67.Mr Li stated that from 1974 until an incident on 4 January 2002, when an excavator pulled down the fence surrounding the property, no one had ever challenged the right of himself, his mother, and family, to occupy and possess all the land within the enclosed fence. Mr Li stated that it was the 4th Plaintiff who had directed that the fence be smashed by the excavator. Mr Li reported this to the Police and instituted proceedings against the 4th Plaintiff in the Small Claims Tribunal seeking the cost of the damaged fence, the replacement of an electricity pole, TV antenna and cultivated plants and trees. Those proceedings have been adjourned sine die by the Adjudicator pending a decision as to this adverse possession claim. In this case, there is no need for the Court to make any finding as to whether the 4th Plaintiff was so involved or not – it is irrelevant for present purposes. 68.Upon completing the hut and the fence, Mr Li then began altering and expanding the hut by erecting a storeroom. A cultivated garden was grown within the fence in 1976. In 1984, Mr Li signed the 2nd tenancy which, as to the area rented, was identical to the 1st tenancy, ie the landlord made no claim to rent in relation to the area of land into the other Lots where the Defendants had trespassed. 69.Mr Li signed a 3rd tenancy agreement which on its face ended on 9 February 2004, although the Defendants have remained in occupation and possession of that area. No claim to the encroachment is made by the then landlord in the third tenancy agreement. 70.Mr Li stated that Mr Lam Ping Hing had orally agreed that he and his mother could stay and rent that area for life. To my mind, that suggested conversation was unreal, and I need say no more about it, although I have certainly taken this into account in evaluating the rest of Mr Li's evidence. 71.The first challenge to the Defendants' possession of the fenced area was when the excavator destroyed the fence in early 2002. Mr Li re-erected the fence, but as the land had been badly cut up by the excavator, the metal poles would no longer support the fence at their original position so the new fence line A-B-C was erected about 1 metre inwards of the former fence line. 72.Under cross examination, Mr Li stated that he had not received the notice of the intention of small village home development dated 17 April 2000. He said, however, that even if he had ever received it, by looking at it he would be unable to identify from it that the property he had been living in since 1974 was to be affected by the development. He was aware of the general development intention, but did not know until 4 January 2002 when his fence was smashed down by the excavator, that his land was involved. 73.The hut in which he and his family have lived in was erected in 1974 before the Fire Committee Building was constructed. During the construction of the Committee Building, Mr Li permitted the builders to use the water but not the electricity at his home. He had built the fence around his hut and that this was completed before the Fire Committee Building was constructed. No fence had ever been constructed by the Committee. 74.His mother, Madam Wong, had been a domestic helper, even before the 1970s. She had baby-sitted for the So family in the village. On some occasions she stayed with her employers and on other occasions the So child stayed with her. Madam Wong had retired in 1981. She had applied for public housing and did move in for 1 month with her younger son to a housing estate, in the winter of 1981, before returning to live in the village. Otherwise, she has continuously lived, apart from that month, in the rented premises. 75.Mr Li denied in cross-examination that the purpose of erecting the fence was to prevent his cats and dogs leaving the property. He reiterated that the main purpose of building the fence was to prevent other people coming in and to demonstrate the boundary of his property – basic security of possession. Plants and trees were grown inside the fence, but some were also grown outside the fence. 76.Mr Li said in 1976-1977, a longan tree was grown in front of the storeroom on the house. At that time, he was expanding the house. A number of trees had been grown, but only that one from that era was left. This was the tree examined by Mr Sammy Au. The others had been victims of typhoons and general decay. Trees he had planted close together survived, but singletons had not. I am unable to accept the age of this tree as being about 30 years of age or even more. It has undoubtedly though been there for a large proportion of the time that the Defendants have been there. 77.Mr Li rejected the Plaintiffs' suggestion that he only expanded the fence line in the 1990s. He said that A-J-K was there from 1974 and had never been altered. That the extension was in relation to A-B-C-K which had occurred in 1977. 78.Mr Li did not own any other land. His 2 children have gone on to complete post-graduate tertiary education in Australia - one an accountant, the other a mechanical engineer. He and his wife had supported their education and living expenses throughout their education. 79.He accepted that in August 1974 he learned that the land rented to his mother was very small. Mr Li, who was paying the rent for his mother, had stopped paying the rent for a short while in 1976 as a protest about the size of the land and the misrepresentation. He reiterated that Mr Lam Cheung Sing, on being confronted in August 1974 about the tininess of the land he actually owned, stated that Mr Lam wanted nothing whatever to do with the other land into which the Defendants had trespassed. Mr Lam's sole concern was to obtain his money for his land. That is all he wanted. Mr Lam stated that even if it was only 1 square foot in size, that the Defendants still had to pay, otherwise they had to return that square foot of land back to him. Mr Li said there had been 2 or 3 separate discussions with Mr Lam before he finally did not dispute that the actual area of land he owned which they had rented, was very small indeed. Mr Lam said he would not pay any attention to what had happened on the other land as, although the Defendants were using it, it was nothing to do with him (Mr Lam), so if anyone claimed the land, in any dispute, Mr Lam would entirely disassociate himself now, in relation to it. 80.After this resolution, Mr Li had the incentive to further expand both the hut and to widen the area enclosed by the fence. The 2nd hut was also then built in 1976-1977 for his mother to live in, as he was getting married. 81.Mr Li said it was absurd for the Plaintiffs to suggest that he had between 1974 – 1990 only enclosed the front of his hut with a fence J-K leaving the back and sides completely open. He stated that in 1990 he had replaced and upgraded the original fence as it was falling into disrepair. Mr Yeung Sui Sang 82.Mr Yeung Sui Sang, aged 75, gave evidence. He lived in the village from 1953-1998. He confirmed that the refuse collection point in 1974 was at the place eventually built as the Fire Prevention Building. He had done the leveling and formation work for the site of that building. He stated that after the Defendants had built their house, they then immediately built the fence enclosing it. He said the fence was expanded in about 1977 and in 2006 surrounds about the same area as it did in 1998, when he was previously last in the village. He was a friend of Mr Lam Cheung Sing and of the 2nd Defendant. He witnessed the 1st tenancy agreement, although he was unable to read Chinese. 83.Mr Yeung was present when the Defendants challenged Mr Lam about the area and size of the property he had rented to them. Because Mr Yeung had witnessed the 1st tenancy agreement, he believed he owed a duty to uphold the fairness of the agreement, therefore, he was present when Mr Lam admitted that Lot 136 SB ss1 was very small. Mr Lam acknowledged that the Defendants had built much of their hut and garden on land owned by other people, but he declined to reduce the rent, even though the piece of land he had really rented them was very small. The Defendants made it clear to Mr Lam that the rent was only for his land. Mr Lam made it clear to the Defendants that his only interest was getting the rent for his land. In response, the Defendants said they would occupy the other land. Mr Lam disclaimed any intention to be involved in any way with that other land. 84.As the matter had been settled by this conclusion, the Defendants thereafter extended their home boundary by erecting a wider fence encompassing more land. Mr Chim Yun Kwai 85.Mr Chim Yun Kwai, aged 59, gave evidence. He now lives in New York. He lived in the village in 1974 and saw the existence of the Defendants' hut then. He stated that the area currently enclosed by the fence is larger than it was in 1974. In 1977 (on a day which was his son's 2nd birthday), he took his son to play at the Defendants' house and the property was then enclosed by a fence. He was adamant that the refuse area was at the Fire Precaution Building and said it was “impossible” that the refuse area was within Mr Li's property as Madam Yau had claimed. The smaller hut of Madam Wong was present in 1977. Findings of Fact 86.While Madam Yau was honest in giving her evidence, her reliability was generally very poor. She was an amiable, elderly witness, who had only scant knowledge of the tenancy agreements – being completely illiterate. Her contact with Madam Wong was virtually nil after 1974 and her recollection as to the siting of the refuse area cannot be accepted. She was emphatic that no oral agreement had been reached with the Defendants that they could live on the site for life, although she did not give evidence that she was present at the suggested conversation. Her evidence as to whether Madam Wong did or did not live on the site, cannot be preferred to the other evidence, especially the 2nd Defendant's evidence on this point. Also, her evidence that the 2nd hut erected on the site, in which Madam Wong lived, was only built in 1994-1995, after the 3rd tenancy agreement was signed, cannot be accepted. 87.Mr Nam's evidence was straightforward and there is no reason to disbelieve him in relation to the matters on which he gave evidence. The potential loss figure he referred to was general and globalised; even though he was oddly not cross-examined in relation to it. He gave no sufficient oral evidence to make out the basis on which the case was opened, namely for a claim for aggravated or exemplary damages for trespass. His witness statement did not deal with this issue either. 88.Mr Henry Chan's evidence was clear and given in a balanced way, completely consistent with an expert's duty to the Court. 89.I believe the evidence of Mr Li that after February 1974 he spent the next 2 months or so building the house. He immediately first put up the fence along the line J-K to prevent any person entering the property, from the concrete footpath, as otherwise any passerby could walk on to the land and avail themselves of anything there. He then built up the sides of the fence and enclosed the property with a fence in the first few months after his mother entered the tenancy in 1974. The original house was smaller than it now is and he expanded it over time. He did so after Mr Lam Cheung Sing had unequivocally disclaimed any interest in or responsibility for the expansion on to the then Church land. Mr Lam accepted that he let only the land he owned in Lot 136 and had no wish to be involved in any way in relation to any consequences of the Defendants' expansion, therefore Mr Li also expanded the fence in 1976-1977 to approximately the position it is now in. That fenceline position has changed for a number of reasons. Firstly, the original fence was falling into disrepair and was replaced in the 1990s. It was gradually overwhelmed by the weight of the vegetation growing up, over and on it. Secondly, the fence was knocked down by the excavator in January 2002 and had to be re-erected at a line about a metre inside the original boundary. That line was later widened back to about where the line had been. It is now essentially in the same place as it was in 1997. 90.It is inherently probable that a family would wish to build a fence to surround their property, which would otherwise be open to all predations. A locked gate in the fence yet with open sides or ends to the fence, is unreal. Madam Yau, for the Plaintiffs, accepted that the Defendants' dogs were “cordoned off” as early as 1974. The evidence of Mr Yeung and Mr Tsim support Mr Li and I also believe their evidence. I believe Mr Li's evidence as to the erection of the 1974 fence, the widening of it in 1976-7 and the fact that the fenceline was generally maintained until the fence was destroyed by the excavator. The necessary 20 year adverse possession period of the widened area was surpassed, at the very latest, by 1997. I find that the fence line in 1997 and therefore the boundary for the prior 20 years to then at least, is that shown by the plan at para [6] herein. See para [53] earlier. 91.The history of the aerial photographs is hardly conclusive but they do tend to reinforce the fact that the shape and location of the Defendants' perimeter has been broadly similar from 1977-2000. In photograph D23, there is no trace of either the other Wong fence or the purported Fire Prevention Committee fence so it is not unreasonable to be unable to also identify the existence of the Defendants' fence, for all the balanced reasons given by Mr Chan the expert for the Plaintiffs. 92.Even if I were wrong as to this finding of fact and the other Wong fence did somehow partially mark the western boundary of the area occupied by the Defendants at L-A-B, this would not alter my conclusion that the 2nd Defendant's hut and the disputed land was from 1974 always enclosed by some fence. On that alternative view, the Defendants' own exertions in erecting the remainder of the fence would have ‘completed the circle' for the purpose of demonstrating possession of the land. 93.To be an adverse possessor a person does not have to construct the entire fence enclosure creating a defined boundary of control and possession; where the existence of a fence is in issue. True, merely repairing an existing fence (see: Wilson v Executors of the Will of Martin, Deceased [1993] 1 EGLR 178) or joining up a few missing parts may be, in many circumstances, too neutral a factor by itself to show a wider intention to possess. But here, the Defendants, as a finding of fact, clearly manifested, through all their conduct of occupation, the intention to dispossess the paper owners on the disputed land. I apply the Court of Final Appeal's endorsement of Buckinghamshire County Council v Moran [1990] Ch 623 (CA) as being the authoritative approach. I also find, that Madam Wong was continuously present from 1974 until the present on the disputed land, notwithstanding her 1 month absence in 1981 and her occasional absences for domestic help employment. Containing Animals by Enclosure 94.In The Mayor and Burgesses of the London Borough ofHounslow v Minchinton (1997) 74 P&CR 221 (CA) (Butler-Sloss, Millett and Thorpe LJJ) the Court quickly dealt with an argument by the registered owner that a fence erected by a squatter to keep his dogs in, rather than other persons out, was not evidence of an intention to possess the land. The Plaintiffs in the present case had taken the same approach in cross-examination. In Minchinton at p233, Millett LJ (as he then was) said of the squatters:
95.In the present case Mr. Li erected the fence not just to keep his dogs in, but to keep the world out. (He accepted that the family cats did not consider themselves obliged to remain within the fenceline – a feline verity.) Doctrine of Encroachments by Tenants 96.In the excellent monograph by Stephen Jourdan, ‘Adverse Possession' at p471 this doctrine, which has been described as arcane is clearly introduced.
At p 484 the author also stated:
The third party situation is this case. Neither of the 2 lessors of the rented land occupied by the Defendants since 1974, have ever owned the other land encroached upon and enclosed within the fence built by Mr Li. The issue is whether the Defendants as tenants or the current owners of the rented land, have become, by adverse possession, the owners of the encroached upon disputed land. Because the Defendants challenge both the validity and applicability of the encroachment doctrine, it is necessary to decide whether it represents the common law in Hong Kong. If it does, the next question is whether the presumption at common law has been rebutted so that the encroached lands have been held by adverse possession for the tenants, as opposed to their landlord. 97.In Whitmore v Humphries (1871) LR 7 CP 1, 4-5 Willes J said
Genesis of the Presumption of Encroachment 98.The encroachment presumption that any encroachment by a tenant is for the benefit of the landlord “appears to be of considerable antiquity”: Earl of Lisburne v Davies (1866) LR 1 CP 259, 266 per Willes J; yet in 1795, both Lord Kenyon in Doe d Colclough v Mulliner (1795) 1 Esp 460 and Thomson B in Doe d Challiner v Davies (1795) 1 Est 461, 462 did not accept that the presumption existed. However, 13 years later, the existence of the presumption (at least where a tenant had encroached on other land, also owned by the landlord) was confidently stated by Graham B in Bryan d Child v Winwood (1808) 1 Taunt 208, 209. 99.Serjeant John Adams in his 1830 ‘Treatise on the principles and practice of the action of ejectment: and the resulting action for mesne profits' stated that the existence and operation of the presumption was very unsettled – a passage noted in the early Canadian decision Doe d Smyth v Leavens (1846) 3 UCQB 411, 415. (In City of Toronto v Ward (1909) 18 OLR 214 (Ontario Court of Appeal), Stackhouse v Wade (1950) 26 MPR 312 (New Brunswick Supreme Court) and Piercey v Connors (1983) 43 Nfld & PEIR 352 (Newfoundland Court of Appeal) the presumption was held to exist in Canadian law. Those judgments though did not deal with the third party scenario.) 100.Despite the textbook view of 1830, Parke B in Doe d Lewis v Rees (1834) 6 C&P 610 said
101.Two years later, Coleridge J in Doe d Earl of Dunraven v Williams (1836) 7 C&P 332, 333 summing up to a jury in proceedings for ejectment by the lessor to recover a piece of waste land enclosed by his tenant, stated that “Prima facie, the law presumes that every inclosure made by a tenant adjoining the demised premises was made by him for the benefit of his landlord…”. Then in 1846, in Doe d Lloyd v Jones (1846) 15 M&W 580, 584 Alderson B, arguendo stated “…that the presumption may be rebutted by the repudiation of the landlord, as well as by the acts of the tenant.” 102.The complexities of the doctrine became over-extended in Doe d Buck v Moyes (1849) 13 LTOS 325. There a tenant, who held 2 different properties from 2 different landlords, encroached beyond their properties. How did the presumption operate? Parke B held that the encroachment was “…for the benefit of the adjoining close…” to the encroachment, and if the presumption was rebutted in relation to that landlord, then the encroachment would be successively presumed to be held for the benefit of the second landlord, whose land was more separated from the encroachment. 103.In Doe d Baddeley v Massey (1851) 17 QB 373, the Court of Queen's Bench (Lord Campbell CJ, Patteson, Coleridge and Erle JJ), held that the presumption had been rebutted. The owner leased a piece of land to the Defendant, Massey. The tenant then asked the landlord to also lease to him another piece of land, which was adjacent to the first piece, in order that he could build a house over both pieces of land. The landlord refused to let the other piece of land as he had already granted a right of way over it. The landlord told Massey, that “…if he built there, he must do it on his own responsibility”: at p375. Lord Campbell CJ, delivering the judgment of the Court found that “the conduct of both parties”, (p381), showed that the presumption was rebutted. Encroachment Over Land of a Third Party 104.In Andrews v Hailes (1853) 2 E&B 349 a decision of the Court of Queen's Bench (Lord Campbell CJ, Coleridge, Erle and Crompton JJ), a tenant had encroached on waste land, not belonging to his landlord and separated from the holding by a road. At the termination of the tenancy, the tenant gave up the holding but sought to maintain possession of the encroachment. The Court held that the mere fact of the intervention of the road between the holding and the encroachment did not rebut the presumption. 105.At p353 Coleridge J, arguendo, referred to several earlier cases where the Courts had had to consider the position where, there had been an encroachment on land not owned by the landlord, but added “…I do not know that they have been discussed in banc, or got into the books of reports.” The Court then took the opportunity to analyse the doctrine. Lord Campbell CJ at 353, concluded that the rationale for the presumption was an estoppel, where the tenant is unable by evidence to rebut the appearance that he has held the encroachment on behalf of the landlord. 106.Coleridge J at 354, said that “the presumption is one depending on the inference to be drawn from the facts.” Erle J at 355, took the quite separate view that the tenant ought not to be able to retain the encroachment as the tenant was “a wrong-doer…it is morally a theft; and it ought not to enure to the benefit of the thief.” Crompton J at 356, held that the presumption was rebuttable “by some act done at the time of the making of the encroachments.” 107.Lord Campbell CJ, in a supplementary judgment at 356 added
The approach of Lord Campbell CJ in Andrews v Hailes was cited with approval by the High Court of Australia in the joint judgment of Mason CJ, Brennan, Dawson, Gaudron and McHugh JJ in Amatek Ltd v GoogoorewonPty Ltd (1993) 176 CLR 471, 475-476 (HCA). 108.In Doe d Croft v Tidbury (1854) 14 CB 304, 324-325 Jervis CJ in the Court of Common Pleas (also delivering the judgment of Maule, Williams and Talfourd JJ) stated that Andrews v Hailes was a clear decision showing that the encroachment presumption operated so that “the tenant takes it for the aggrandizement of the estate of which he is tenant, and not for an estate of his own; in otherwords, for the benefit of his landlord, and not for himself.” Kingsmill v Millard : An Exposition of the Encroachment Presumption 109.In 1855, the Court of Exchequer (Parke, Alderson and Platt BB), decided Kingsmill v Millard (1855) 11 Exch 313 a case, which together with Whitmore v Humphries (1871) LR 7 CP 1 are generally accepted as the leading authorities. Parke B (later Lord Wensleydale) at 318 stated
Baron Parke added at 319
Covenant to Repair in Lease Extends to Encroachment 110.In White v Wakley (No 1) (1858) 26 Beav 17, 22 Sir John Romilly MR held that the effect of the presumption includes that the obligations under the lease as to repair and the use of the demised property, apply equally to the land encroached upon. “…I also consider it to be subject to all the same obligations, and clothed with all the same advantages as were to be found in the original indenture of demise.” 111.The English Court of Appeal confirmed this approach in Perrott (JF) & Co Ltd v Cohen [1951] 1 KB 705 where a tenant's encroachment involved the use of lavatories on non-demised land, owned by the landlord. At the determination of the tenancy, the landlord successfully claimed for repairs to the lavatories as being regulated too by the tenant's covenants for repairs contained in the lease. Denning LJ at 710 stated that estoppel was the basis for the encroachment presumption.
Presumption Not Restricted to Adjoining or Contiguous Land 112.In Earl of Lisburne v Davies (1866) LR 1 CP 259 the Court of Common Pleas (Erle CJ, Willes, Keating and Montague Smith JJ) concluded that while the presumption was a prima facie presumption of fact, the encroachment did not have to be to land either adjacent or contiguous to the leased land to be still within the presumption. 113.Willes J at 266 stated
At p288
114.Montague Smith J at p268 added
No Presumption Where Squatter in Possession of Land Before Grant of Tenancy to Squatter of Adjoining Land 115.The presumption does not apply where a squatter takes adverse possession of land and that landowner later grants the squatter a tenancy of other land adjacent that upon which the squtter is already in possession: Dixon v Baty (1866) LR 1 Exch 259, 261 per Pollock CB, Martin, Bramwell and Pigott BB. Whitmore v Humphries : The Rationale(s) of the Presumption 116.In Whitmore v Humphries (1871) LR 7 CP 1, 5 Willes J introduced his judgment by acknowledging that encroachment involved “considerations of some nicety”, then restated the rationale(s) of the rule
117.The explicated rationale for the rule was that tenants often could not resist the temptation to encroach, because of an opportunity provided to them by the landlord. Therefore, it was “considered more convenient and more in accordance with the rights of property” that the presumption operated. The presumption in favour of the landlord led to greater certainty in the law as to ownership of real property. The rule was not based on any notion that the encroacher was a wrong-doer (c.f. the censorious remarks of Erle J in Andrews v Hailes (1853) 2 E&B 349, 355) nor was the assent or dissent of the landlord to the encroachment, part of the rationale for the rule. First English Court of Appeal Consideration 118.The English Court of Appeal first considered the rule in Attorney General v Tomline (1880) 15 ChD 150 (CA), in a case involving the excavation of coprolites. At p156, arguendo, Cotton LJ after asking
was informed that Counsel knew of no such case and James LJ at p158, Cotton LJ at p159-160, Thesiger LJ at 161-162 all held that in those circumstances the presumption was rebutted. Cotton LJ added
119.Thesiger LJ at p161-162 stated that the doctrine “involves a presumption of fact which is capable of being rebutted…a landlord and tenant may so conduct themselves in the cause of transactions either by deed or otherwise as to shew that the landlord treated the encroachments as not enuring to his benefit.” Two Judgments at First Instance 120.In Tabor v Godfrey (1895) 64 LJQB 245, 247 Charles J held that the tenant is entitled to possession of the encroachment during the term of the lease. Channell J in East Stonehouse Urban District Council v Willoughby Brothers Limited [1902] 2 KB 318, 336, adopted the test of Thesiger LJ in Attorney General v Tomline (1880) 15 ChD 150, 161. Three Cases in the English Court of Appeal: Encroachment Doctrine 121.For almost the next 50 years, this doctrine was not litigated before the English Courts. Then in 1950, the English Court of Appeal considered it twice in the space of 8 months. In King v Smith [1950] 1 All ER 553 (CA) (Cohen and Asquith LJJ, Roxburgh J) the Court at 555H adopted the approach in Attorney General v Tomline. Cohen LJ at 557D in a short, separate judgment, also accepted that the presumption also applied in relation to land belonging “to an outside party.” In the second case, Perrott (JF) & Co Ltd v Cohen [1951] 1 KB 705, (Somervell, Cohen and Denning LJJ), the doctrine was confirmed as an exemplar of estoppel; see para [111] earlier. 122.Pennycuick V-C in Smirk v Lyndale Developments Ltd [1975] 1 Ch 317, 323 G considered that the law on encroachment had “got into something of a tangle.” After a review of the leading cases, the principle in Kingsmill v Millard was adopted at 332G. On appeal, at [1975] 1 Ch 335 (CA), his judgment was reversed (on another point). In an oral decision, the Court of Appeal (Cairns and Lawton LJJ, Walton J) the Court held at 337H that Pennycuick V-C's statement of the law as to encroachment, was correct. 123.The decision of the Court of Appeal in Smirk itself made no reference itself to any of the authorities considered by Pennycuick V-C, preferring to deal with its approbation of the analysis below, on a global basis. Rent Review Provision in Lease Extends to Encroachment 124.In Kensington Pension Developments Ltd v Royal GardenHotel (Oddenino's) Ltd [1990] 2 EGLR 117, 119D-E Harman J held, after considering Kingsmill v Millard, Whitmore v Humpries and Smirk, that where a tenant had encroached on land, the rent review provisions in the lease also apply to the land encroached upon. See also Halsbury's Laws of England 4 ed, Landlord and Tenant, Vol 27(1) para 164 fn2. Presumption Applies to All Land 125.In Long v Tower Hamlets London Borough Council [1998] Ch 197, 203 it was held that the presumption applied not only as to waste, but to all land. The rebuttable presumption operates
Critcism of Presumption Re Third Parties 126.In Trustees of the Michael Batt Charitable Trust v Adams (2001) 82 P&CR 406 Laddie J reluctantly accepted that the presumption applied to land not owned by the landlord; noting that the references in Kingsmill v Millard (and the cases following it) had been obiter in relation to third parties. Laddie J in para [38] considered that the presumption “may appear feudal when it applies to land belonging to third parties” while the presumption appears “sensible and fair to the extent that it covers a tenant's encroachment on his own landlord's land.” 127.He concluded that in English law the presumption in relation to third parties was too well-established there, even if it has grown beyond its logical origin to be uprooted in a court of first instance. 128.In Tower Hamlets LBC v Barrett [2006] 1 P&CR 132 (CA), in a judgment not referred to by Counsel, the English Court of Appeal (Thorpe, Wall and Neuberger LJJ) reviewed the encroachment doctrine that a tenant acquires possessory title for his landlord. 129.In para [28] Neuberger LJ for the Court stated
130.He added at para [31], after stating that the Court of Appeal was bound by its decision in Smirk, to conclude that the doctrine applied to encroachment upon the land of a third party.
Is the Encroachment Presumption Part of Hong Kong Law? 131.The presumption is rational, fair and sensible in relation to an encroachment on other land, also owned by the same landlord. The estoppel basis in those circumstances is compelling and a prima facie presumption in favour of the landlord is a proportionate complement to the landlord's rights of ownership and the grant of the tenancy, which have together provided the lawful opportunity for the tenant to be present on that land so as to be able to encroach on the other unrented land. The presumption in that scenario is a just solution. 132.In terms of risk-analysis, the presumption in relation to third parties, which operates in favour of the landlord, appears to give the landlord a windfall for little or no effort or anxiety. The tenant exposes himself to the tort of trespass and mesne profits. The landlord has no liability for the encroachment, even if he has assented to or acquiesced in the trespass by his tenant onto the third party's land. Throughout the entire period of trespass (12, 20 or 60 years depending on the date of the trespass and whether it is over Government land: ss 7(1) and 38A Limitation Ord) the tenant is presumptively annexing the encroached land for the landlord. At the effluxion of the necessary number of years of continuous adverse possession by the tenant, it is the landlord who is the beneficiary of the consummated trespass, and who by operation of law extinguishes the former ownership and becomes by dint of very little the new title owner. The landlord obtains all the benefit and has taken none of the risk: the tenant obtains no benefit and has taken all of the risk. This scenario is conceptually and pragmatically distinguishable from an encroachment onto other land owned by the landlord. In the former situation the landlord has evinced no conduct to unsettle his own lawful right of property so it is presumptively maintained; in the second, the landlord is as much a stranger to the lawful rights of the real owner as is the tenant. No issue of the possible displacement of the landlord's pre-existing property rights exists. 133.If I were realistically free to depart from the path-lighting of the settled English law, I would have held that the presumption did not apply in relation to the land of a third party and could only operate between the landlord and tenant and could not itself derogate from or impact upon the proprietary rights of the third party owner of land encroached upon. The rebuttable presumption of encroachment is on analysis the dynamic product of the passive estoppel arising out of the special contractual relationship between landlord and tenant. It is confined in its effect to the imputed or ascribed result which arises upon the reversion of the landlord's own land at the determination of the tenancy. Notions of convenience and orderliness have in my judgment nothing to do with its diameter or rationale; it is all about a displaceable proprietary estoppel created by implied representation between landlord and tenant in relation to the landlord's owned land. 134.In Hong Kong there is no binding authority on the issue. Indeed, there has not been any previous consideration of the Kingsmill v Millard common law line of authority at all; although in Tam Mo Yin v Attorney General [1996] 1 HKC 379, Smirk was without contrary argument accepted as correct, in an orthodox case where interestingly the Government was landlord. 135.In the present case, Counsel for the Defendants, has contended, but without any close argumentation, that Kingsmill v Millard should not be adopted, as here, in relation to third parties' land. In ‘Limitation Periods' 1998, 3 ed, the author Andrew McGee at p216 refers to the encroachment presumption doctrine as “a somewhat difficult line of authority.” 136.Any principled objection to the presumption though faces the formidable fact that in relation to third party land, as a concept it has a 150 year pedigree. English common law has always been widely followed in Hong Kong as providing a developed corpus of landlord and tenant and real property law as there is a real premium in predictability and certainty in those intertwined areas of the common law. In my judgment, the encroachment doctrine and the rebuttable presumption is a general principle of Hong Kong law, applying to the land of third parties as much as to that of other land of any landlord. The Presumption is Rebutted 137.I am well persuaded that the Defendants have rebutted the prima facie presumption by clear evidence, see paras [66], [79], [80], [83] and [84]. The most important evidence (which by itself is sufficient) relates to the Defendants' confrontation in August 1974 with the then landlord as to the 1st tenancy agreement (at which his son, who subsequently entered the 2nd and 3rd tenancy agreements as landlord, was also present). 138.The substance and effect of that meeting, which was after 2 or 3 earlier meetings about the same subject, was that Mr Lam Cheung Sing wholly disclaimed any interest, right or entitlement to the encroachments. He positively washed his hands of the whole issue. Although his motive may well have been based on a reluctance to become embroiled in downstream messy issues relating to the encroachments, he did assuredly inform the Defendants that “they were on their own” in all respects pertaining to the encroachments. He did not claim the encroachments, he expressly disclaimed them : he disassociated himself from any interest in the encroachment. He had no wish or intention to annex the encroachments to his land; nothing could have been further from his mind. He certainly did not countenance the Defendants' actions which he plainly saw as being problematic and troublesome. By conduct and by words he unequivocally let the Defendants deal with the encroachments as a matter for their own exclusive benefit and risk. This case is much stronger than the facts in Doe d Baddeley v Massey (1851) 17 QB 373, where the presumption was held to be rebutted. 139.In Stackhouse v Wade (1950) 26 MPR 312, 317-319 Richards CJ of the New Brunswick Supreme Court concluded that the presumption may be rebutted where a lease is renewed and the landlord does not include the encroachment in the new lease. That is in accordance with Attorney General v Tomline (1880) 15 ChD 150 (CA) where the same issue arose. That is also what happened in the present case. In the 3 agreements to lease the same piece of land was let from 1974-2004; the encroachments were not included in the 2nd and third agreements to lease. This is separately other evidence that also rebutted the presumption that the landlord was annexing the trespassed land to his own title. See also ‘Foa's General Law of Landlord and Tenant', 8th ed, p712-3. Specificity in a Prayer: Pleading a Declaration 140.O18 r18(a) RHC provides that a counterclaim shall be considered as a statement of claim under O18 r 15(1). An issue was properly raised by Counsel for the Plaintiffs, as to whether, by the modified Declaration now advanced by the Defendants, the Defendants' case meant that the Court could only grant “specifically the relief or remedy…claimed” and therefore precluded any Declaration as to a lesser amount of land, if the findings of fact would support such a conclusion. He relied upon 2 decisions of the English Court of Appeal decided within 6 weeks of each other: Harrison-Broadley v Smith [1964] 1 WLR 465 (Harman, Pearson and Davies LJJ) and Biss v Smallburgh Rural DistrictCouncil [1965] 1 Ch 335 (Harman, Davies and Russell LJJ). 141.In Harrison-Broadley the Court concluded that a Declaration could be granted although such relief had not been asked for in the statement of claim. That was a case where injunctions only were sought, which the Court of Appeal would not grant. But the Court held it was not hamstrung by the omission and Harman LJ said at 466 that the approach in Hulton v Hulton [1916] 2 KB 642, 656 to the equivalent of O18 r 15 (1) RHC entitled the Court “to grant declaratory relief if that be the right thing to do”; see also Davies LJ at 471. However Pearson LJ at 469 was slightly more circumspect, considering it unnecessary to decide what “the strictly correct practice should be, because it is perfectly plain that this court ought to make some declaratory order”, even though none had been pleaded. 142.In Biss, which was a claim for a Declaration that 35 acres of land was an “existing site” under the Caravans Sites and Control of Development Act 1960 [UK], the trial Judge decided that a small area only had been established. By a cross-appeal, the Plaintiffs sought to contend that a larger area of the site should be the subject of a Declaration in their favour. Harman LJ did not accept that the Plaintiffs could, without an amendment of the pleadings, seek a Declaration in terms different to that sought at trial. At p361, he emphasised that relief had to be specifically claimed and stated “a Plaintiff ought not to be allowed to ask the Court to make a Declaration covering whatever area the Court shall after an inquiry conclude ought to be counted…”. He deprecated the Plaintiff's approach on appeal which he said “was conducted after the manner of a Dutch auction where the auctioneer starts at the top price and comes gradually down till he finds a bidder. So here various lines of demarcation were suggested, coming down at last to about three acres round the house, and we were treated to a minute review of the evidence…”. 143.By contrast, Davies LJ at 369G more sympathetically and realistically stated
144.It is apparent that the astringent comments of Harman LJ were obiter as the Court found no relief in terms of the proposed Declaration was available. Further, the observations were made in circumstances where no amendment of the pleadings had been made c.f. the present case, where 5 alternative prayers as to the terms of the Declaration sought exist. 145.The starting point for consideration is s16(2) High Court Ord Cap 4 which provides that the High Court “…shall so exercise its jurisdiction in every cause or matter before it as to secure that, as far as possible, all matters in dispute between the parties are completely and finally determined…”. The fact that a Declaration is not specifically sought in the prayer for relief does not prevent one being granted: O15 r16 and O18 r15(1), Hulton v Hulton [1916] 2 KB 642, affirmed [1917] 1 KB 813 (CA), Loudon v Ryder (No 2) [1953] Ch 423, 429 (itself curiously a decision of Harman J) and Harrison-Broadley v Smith [1964] 1 WLR 456 (CA). It cannot be overlooked that, in an adverse possession case, the pleaded factual issues may permit of several possible variations and permutations as to the edges or boundaries of the disputed land at the material time. It would be unnecessarily demanding to require the party to plead in the prayer every precise possible variation of the underlying factual dispute that could be ultimately found to be proved. It would be like pleading all the results of the peeling of an onion - in which every single layer generates a slightly different and smaller variation of the one before it. The real test is whether there is genuine prejudice caused by this ambulatory approach. Here there was none. It will always be a matter of degree; but the Court should not indulge pedantry as being the same thing as prejudice. 146.It was objected that without absolute precision in the prayer the Plaintiffs did not know what they were facing and it was further contended that the Court would in effect be involved in an action to ascertain boundaries as in Spike v Harding (1878) 7 Ch 871. I cannot agree with this submission. The pleadings set out material facts and legal consequences which are sought to be drawn from those facts. A party is not precluded at the trial from asking the Court to draw different legal consequences from the pleaded facts. We are no longer “back in the bad old days” when pleadings had to state the precise legal result: In re Vandervell's Trusts (No 2), White v Vandervell Trustees Ltd [1974] 1 Ch 269, 321G per Lord Denning MR. 147.In Zamir & Woolf, ‘The Declaratory Judgment', 3rd ed p284, the authors conclude that the obiter remarks of Harman LJ in Biss should not now be regarded as of general application. I agree as the emphasis in Biss was too austere. Biss is also incompatible with the catechism in 16(2) High Court Ord. Both O15 r16 and O18 r15(1) should now be viewed against that imperative. The authors also state
148.These pragmatic considerations correctly represent the proper approach in Hong Kong. The position under Australian law, P W Young, ‘Declaratory Orders', 2nd ed p54, p188; Canadian law, Lazar Sarna, ‘The Law of Declaratory Judgments', 2nd ed p84 and New Zealand law, is to the same effect: Manga v Attorney-General [2000] 2 NZLR 65, 84. Gratitude of Court 149.I am sure Mr Lam will not begrudge the Court extending its considerable thanks to Mr Andrew Mak for the careful, thorough and well-researched arguments he skilfully presented and also for the wealth of comparative caselaw he placed before the Court in relation to the novel issues that have fallen for decision. Disposition 150.The 4th and 5th Plaintiffs case for trespass succeeds only in relation to the whole of Lot 136 SB ss1 (the rented land). No aggravated or exemplary damages are established. All questions of injunctive and other relief, including mesne profits are adjourned pending a further hearing. The 1st, 2nd and 3rd Plaintiffs fail in all respects. 151.The Defendants' counterclaim to the disputed land succeeds in relation to the whole of Lot 137 SA RP (which is D-E-F-G-H-I-Z-Q-D), and those portions of Lot 137 SA ss3, ss4 and ss5 that are within A-B-C-Q-D-E-F-G-H-I-A: the co-ordinates being those found in the Plan at para [6] herein. 152.The Plaintiffs' counterclaim to the Defendants' counterclaim (above), see para [15] herein, is adjourned to an early date to be fixed, before this Court. An amicus curiae will be appointed by the Registrar in the trial of the counterclaim to counterclaim. The parties are to inform the Secretary for Justice of these proceedings with a view to inviting the Secretary for Justice to appear as an Intervener in the counterclaim to counterclaim. The costs of the trial of the counterclaim to the counterclaim to be in the cause. 153.No costs order nisi of the trial to date is made. The parties are to fix a date to appear to argue what Orders should be made to give effect to this judgment and as to the issue of costs and any necessary directions. Directions will be given requiring the parties to provide detailed skeleton arguments on all such issues well in advance of the hearing date for these matters; that hearing estimated to take 2 hours.
Mr Andrew Y S Mak, instructed by Messrs Chan & Associates, for the Plaintiffs Mr Simon H W Lam, instructed by Messrs Chiu, Szeto & Cheng, for the Defendants |
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