Wu Han Sin v. Leung Fat

HCA 2430/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2430 OF 2005

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Before:  Mr Recorder B Yu, SC in Court

Dates of Hearing:  5 – 7 May 2008

Date of Judgment:  15 May 2008

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J U D G M E N T

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Introduction

1.This is a dispute over a small piece of land in Fanling.  The issue is the capacity of the defendant’s possession.  The plaintiff, who has the paper title since 1990, says the defendant was her tenant whose tenancy has been terminated.  The defendant denies that he was a tenant and defends the plaintiff’s claim for possession on the basis that her title has been extinguished under section 17 of the Limitation Ordinance.  Somewhat unusually, the defendant abandoned his counterclaim before the commencement of the trial.

2.I should mention that the defendant has originally pleaded a case of proprietary estoppel.  That case was not pursued by the time of counsel’s closing submissions.  That, presumably, is a recognition that the plea is not maintainable in the light of the evidence given at the trial.

The Facts

3.There is much that is in dispute in the present case.  Before setting out the parties’ respective cases, it will be convenient to state what is common ground.

4.The disputed land lies at the north east corner of Lot 1561 SA in Demarcation District 83, Wing Ning Tsuen, Fanling.  I shall refer to this piece of land as “the Disputed Land” and Lot 1561SA as “the Lot”.  The Disputed Land has an area of 64.3 sq m.  There is a brick house standing on it.  The defendant built it himself.  Over the years, he has done improvements at his own costs on the house.

5.There is no dispute that the defendant has been in physical occupation of the Disputed Land for over 40 years.  There is also no dispute that the plaintiff was his neighbour and was fully aware of his occupation.  The plaintiff became the registered owner of the Lot, and thus the Disputed Land, in 1990 through purchase.

6.On at least some 5 occasions between 2001 and 2004, the defendant paid the plaintiff a sum of $200, and on each occasion, the plaintiff gave him a receipt which described the payment as rent.

The defendant’s cases

7.I shall now briefly describe the parties’ respective cases.

8.The defendant is now 85.  Some 45 years ago, in 1962, he was looking for lodgings.  He went to Wong Cheuk Hin, his ‘godfather’ [契爺], for help.

9.Wong Cheuk Hin was at the time living in a hut at the northern part of the Lot.  He was a tenant.  He allowed the defendant to build a house right next to his. 

10.According to the land record, the Lot was then held by one Tsui Kong Lin as trustee.  The defendant gave evidence that Wong Cheuk Hin asked him to pay $500 to the owner of the land for the owner’s consent to an application to the Government for the grant of permission to erect a house.  $500 was a lot of money in those days, probably more than enough to buy the land.  The defendant said he gave Wong Cheuk Hin $500 and was told that he could have peace of mind in building his house and living therein.  There is no written record of this payment, nor was there any evidence that Wong Cheuk Hin actually paid the owner $500.  The defendant said he believed at the time that having paid the $500 he could live there permanently.  He did not, however, claim that this was what he was told.

11.According to the defendant, he was asked by Wong Cheuk Hin to contribute 50 catties of grain a yearfor his occupation.  He said this was a contribution to the land owner for the payment of Crown rent. 

12.The defendant does not deny that he paid the plaintiff $200 every six months between 2001 and 2004.  The plaintiff says that the $200 was rent.  The defendant denies he was paying rent, and alleges that he was only making contribution to the payment of Government rent.  He claims that he did not read what is stated on the receipt due to poor eye-sight.  He produces a medical report to the effect that he was diagnosed in December 2004 to have glaucoma in both eyes.  His right eye was completely blind.

The plaintiff’s case

13.The plaintiff is now 87.  She and her husband (who passed away in 1982) first came to Hong Kong in 1956 and moved to Fanling.  They rented a portion of Lot 1513 which is immediately to the west of the Lot.  They made a living by rearing pigs and growing vegetables.  Together, they raised 8 children.

14.Wong Cheuk Hin was their neighbour.  For quite a long period of time, the three families, that is the plaintiff’s family, the defendant’s family and Wong Cheuk Hin’s family lived harmoniously.

15.In 1972, Wong Cheuk Hin passed away.  The plaintiff’s case is that she and her husband decided to take over the tenancy of the Lot.  She said she paid $20,000 to the Wong family for the transfer of the tenancy.  The plaintiff’s evidence is that from then on, she collected rent from the defendant in the form of 120 catties of grain per year.

16.The plaintiff’s case, supported by evidence from her son Cheung Yau Cheung, is that in about 1989, one Lee Shui Lin representing the land owner approached all the occupiers to ask if they were interested to buy the land they were occupying.  Their evidence is that the defendant was asked but was uninterested, and the plaintiff decided to buy the whole of the Lot, since the owner was not prepared to sell the Lot in parts.  That transaction was completed in 1990.  The plaintiff’s case is that from then on, she had been collecting rent in the sum of $400 per annum in two instalments from the defendant, that he duly paid the rent although she only started giving rent receipts to the defendant in 2001.  More recently, in 2004, her sons drew up a written tenancy agreement.  She asked the defendant to sign the document as a written record of the relationship.  According to her son, this was to avoid dispute in future should either of them pass away.  The draft agreement (which was never signed) was for a 3-year tenancy at a monthly rental of $33.  This works out to be almost $400 per annum.  The defendant first said that he would consider the matter, but later when the plaintiff and his sons pursued the matter, the defendant declined to sign.  That was when the defendant started to deny that he was a tenant.  The plaintiff responded by serving a notice of termination, and later issued the writ for possession.

Findings

17.One feature of this case is that very little, if any, weight can be placed on the written statements prepared for the witnesses.  The plaintiff is illiterate.  When she was asked about the contents of her witness statement, she almost invariably contradicted what was set out in the statement.  Likewise, PW4 Wong Yiu Nam, who is Wong Cheuk Hin’s son, did not support various important parts of his witness statement.  I have already mentioned that the defendant had an eye problem.  He said he was unable to read.  He, too, was unable to support some of the contents of his witness statement put to him.  Generally, I find the oral testimony of the plaintiff’s witnesses to be credible.

18.The crucial question which falls for determination is whether the payments of $200 made by the defendant to the plaintiff were rent.  On this question, the evidence of the plaintiff is firm, and I accept her evidence.  I hold that the receipts produced by the plaintiff did properly record the parties’ transaction and reject the suggestion implicit in the defendant’s case (and espoused by Mr Wong) that the plaintiff and her children conjured up the Machiavellian scheme of writing out the rent receipts in order to create a record of a tenancy which did not exist.  I do not overlook the fact that in cross-examination, the plaintiff agreed that she was charging the defendant rent for the land.  That I understood to be a recognition that the defendant built his own house.  That was not an admission that he was only paying contribution towards Crown rent.

19.I find PW2 Cheung Yau Cheung to be an honest and reliable witness.  I accept his evidence that the owner’s representative, Lee Shui Lin, came to ask, amongst others, the defendant whether he was interested in buying the part of the Lot that he occupied.  I accept his evidence that in the end the plaintiff decided to purchase the entire Lot when the defendant turned down the offer to purchase.

20.On the defendant’s own evidence, it is reasonably apparent that he did not think that he was the owner of the Disputed Portion.  I find that when the plaintiff told him that she had purchased the Lot, he started to pay rent to her without any protest or demur. 

21.On the basis of these findings, the defendant’s case that he was in adverse possession must be rejected. 

Defendant’s argument

22.In his final submission, Mr Wong put forward the argument that if I accept the defendant’s version of facts, the defendant did have the necessary animus possidendi (intention to possess) within the meaning laid down in Wong Tak Yue v Kung Kwok Wai David (1997-8) 1 HKCFAR 55.  Since I find on the evidence that the defendant was a tenant of the plaintiff, the question does not strict arise.

23.I would, for completeness, record that I would, in any event, reject Mr Wong’s argument that the defendant could establish a defence by reason of limitation if I were to find the he was not in occupation as a tenant.  In my view, even on the defendant’s own evidence, it is reasonably apparent that he had, over the years, the consent of the owner to occupy the Disputed Lot.  This remained the state of affairs after the plaintiff bought the Lot in 1990.  I fail to see how in those circumstances the true owner could be said to have been dispossessed (see section 8 Limitation Ordinance and J A Pye (Oxford) Ltd v Graham [2003] 1 AC 419, 434H).  Mr Wong relies on the defendant’s own self-serving statement that he believed he had the right to remain in occupation forever.  Although this is a subjective belief, Mr Wong argued that it is sufficient to constitute the requisite intention to possess.  Reliance was placed on the judgment of Saville LJ in Hughes v Cork (14 February 1994 unreported), as applied in Wong Luen Chun v Secretary for Justice [1998] 4 HKC 122 and Wong Kar Sue v Sun Hung Kai Properties Ltd [2006] 2 HKC 600.  I do not think Hughes v Cork or these subsequent cases can support Mr Wong’s proposition.  All that was said in Hughes v Cork is that a person can have the necessary intention to possess even if he was mistaken in thinking that he was the true owner of the land.  A person thus mistaken can have the intention to exclude the rest of the world.  The same cannot be said of a person is in occupation as a licensee.  Even if one were to assume that he harboured a belief (be it reasonable or otherwise) that even the owner could not terminate his licence, his possession cannot be said to be adverse.  The very fact that he has the consent of the owner to remain in occupation must mean that the owner’s cause of action in trespass has not accrued until such time as the licence is terminated.  The defendant’s contention is inconsistent with the law as established in Wong Tak Yue v Kung Kwok Wai David and must be rejected.

24.In short, even if I were to accept the defendant’s version, I would still hold that he has failed to establish that he was in adverse possession.

25.For these reasons, I would grant judgment in favour of the plaintiff for possession of the Disputed Land, which is the same as the Property as defined in paragraph 7 of the Amended Statement of Claim.  I order that the defendant do pay to the plaintiff mesne profits in the sum of $400 per annum from January 2005 until the date when possession of the Disputed Land is delivered up to the plaintiff.  I make an order nisi that the plaintiff shall have her costs of the action.  I have not heard any evidence as to the rateable value of the Disputed Land.  I would have thought that this case is likely to fall within the jurisdiction of the District Court.  In the circumstances, my order nisi as to costs is that the costs be taxed in accordance with the District Court Scale.  There be liberty to apply to vary the costs order and generally within 14 days from the date of this Judgment.  The defendant’s costs be taxed in accordance with the Legal Aid Regulations.  I dismiss the counterclaim with a similar costs order nisi, i.e. that the costs of the counterclaim be to the plaintiff, to be taxed if not agreed on the District Court Scale; and the defendant’s costs be taxed in accordance with the Legal Aid Regulations.

Mr George F C Chu, instructed by Messrs Leung Kin & Co, for the Plaintiff

Mr Brian C W Wong, instructed by Messrs Waller Ma Huang & Yeung, for the Defendant