Wong Shing Chau v. To Kwok Keung

CACV 20/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 20 OF 2008

(ON APPEAL FROM DCMP NO. 2096 OF 2002)

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Before: Hon Rogers VP, Le Pichon JA and Stone J in Court

Date of Hearing: 28 May 2008

Date of Judgment: 28 May 2008

Date of Handing Down Reasons for Judgment: 12 June 2008

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REASONS FOR JUDGMENT

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Hon Rogers VP:

1.I agree with the reasons for judgment of Le Pichon JA.

Hon Le Pichon JA:

2.This was an appeal from an order of HH Judge Leung made on 21 June 2007 relating to a small piece of land in Shui Pin Tsuen in the New Territories which, for practical purposes, consists of a hut of about 300 sq. ft.  The plaintiff, who became the registered owner by an assignment dated 29 January 1996, successfully brought proceedings to recover possession of the land from the defendant whose counterclaim against the plaintiff based on adverse possession was dismissed.  At the conclusion of the hearing, the appeal was dismissed with written reasons to be handed down, which we now do.

Background

3.The plaintiff is a male descendant and member of the Wong Kwok Hing Tso (“the tso”).  It is common ground that prior to the assignment the land (together with other land not the subject of these proceedings) was in the registered ownership of the tso and its managers and that various male descendants of the tso were born after 1972 including one who was born in 1993.  In 1996, with the approval of the District Office, the managers of the tso sold the land to the plaintiff.

4.The defendant, who was born in 1965, claimed that he and his family have been in continuous exclusive possession of the land since 1972, “adverse to the title and/or interest of the Plaintiff and that of his predecessor-in-title”.

5.According to the defendant, prior to 1972, he together with his parents and his five siblings all resided in a single-storied stone house now known as House No.31.  The land was situated directly opposite House 31 and separated from House 31 by a pathway some 4 to 5 feet wide.  In 1972, because of the marriage of the defendant’s eldest brother, the defendant’s late father built the hut on the land and moved to live there with his family leaving House 31 as accommodation for the defendant’s eldest brother and his wife.

6.By 1980 the defendant’s father found that the hut had become too small to accommodate his growing family.  He therefore caused House 31 to be rebuilt into a three-storied building and moved his family other than the defendant to the new building.  The defendant, who then was about 15, continued to live in the hut which also stored some of his father’s cultivating tools.

7.The present proceedings commenced in 2002.

8.The two issues before the judge below were, first, whether given the nature of a tso and the circumstances of this case, the defendant could rely on adverse possession of the land against the tso and, if so, second, whether the defendant had made out adverse possession as a matter of fact.  On the tso issue, the judge applied Leung Kuen Fai v Tang Kwong Yu (or U) T’ong or Tang Kwong Yu Tso [2002] 2 HKLRD 705, and held that the limitation period had not been established because in the circumstances of the present case there could not have been any adverse possession of the land as against the tso immediately prior to the assignment.  The judge went on to consider whether the defendant had established adverse possession and found as a fact that he had not.

This appeal

The ‘tso issue’

9.In Leung Kuen Fai, Deputy High Court Judge Lam (as he then was) analysed the nature of a tso and the interests of its members.  Both parties accepted and did not seek to challenge the correctness of that analysis.  For the purposes of the present case, it may be summarized as follows.  Aspects of the principles of English trust law are applicable to a tso, the managers being the trustees and the members being the beneficiaries.  The members of a tso are the living male descendants of the focal ancestors from time to time.  The members for the time being are collectively entitled to the income of the tso.  The interest arises automatically on birth and extinguishes automatically when the member dies.  Such interest does not form part of the estate of the deceased member and there is no question of succession.  With the consent of all the members, the managers could partition or otherwise dispose of tso property.

10.Following from that analysis it was held that the existing members of the tso do not have the right to exclude future male descendants from the tso, that existing members of the tso have beneficial interests in tso property, such interests being within the meaning of ‘equitable interests in land’ in section 10(1) of the Limitation Ordinance, and that it was therefore open to a member of the tso as beneficiary to seek possession of tso land against a trespasser if, for whatever reason, the managers failed to take any action.  In that event, the member taking action would be doing so for the benefit of the members of the tso as a whole and the managers would have to be joined as parties.

11.As regards the operation of sections 10 and 22 of the Ordinance, in the context of a tso and its members, it was held (see § 45 of Leung Kuen Fai) that whenever a new member is born, a new equitable interest in the tso property is created.  A new limitation period under sections 7(2) and 22 would start to run and would not expire until six years after the member ceases to be an infant.  Further, by reason of section 10(2) of that Limitation Ordinance, the title of the trustees would be preserved so long as there is at least one beneficial owner whose right to recover the land is not barred.

12.As noted above, Mr Siu who appeared for the defendant did not seek to challenge the correctness of any of those propositions.  He put his case on the basis that (1) the plaintiff as a member of the tso (and thus a beneficiary) has had the right to evict the defendant from the land since 1972 when the defendant took possession of the land but the plaintiff has failed to exercise his right; (2) the plaintiff’s right to recover possession of the land thus was extinguished on 1 September 1990 being the sixth anniversary of his attaining his majority; (3) by 1 September 1992, the defendant already had dispossessed the plaintiff for 20 years.  Mr Siu submitted that the defendant’s counterclaim is against the plaintiff personally and independently and against no one else.  Thus it was said that what is in issue was not the concern of the managers of the tso or the newborn members of the tso or all members of the tso jointly because their interest was not affected by the present proceedings.

13.Underlying the plaintiff’s submissions is the premise that each member of the tso has a positive obligation to evict trespassers and to recover tso land from the moment a squatter happens to occupy any part of tso land.  For how else can it be said that the plaintiff’s right to recover the land which formed part of tso land had expired on his 27^th birthday?  While Leung Kuen Fai held that a member of a tso could claim possession of tso land against a trespasser, he would be doing so not on his own behalf but for the benefit of all members of the tso.  But as the judge observed in Leung Kuen Fai (at 720J) “usually, the managers would have taken action and the members do not need to initiate such action.”  (See § 33 of Leung Kuen Fai).

14.The defendant accepted that immediately prior to the 1996 assignment, there was nothing wrong with the tso’s title to the land and had the assignment been made in favour of a third party, that third party would have been in a position to evict the defendant.  In principle, the fact that the assignee was a member of the tso should not make any difference.

15.Prior to the assignment, the owner of the land was the tso.  In other words, the tso (and not the plaintiff) was the plaintiff’s predecessor-in-title.  Plainly it could not be argued that the tso’s title had been extinguished in view of the fact that new members of the tso had been born since 1972, including one born in 1993.  Given the defendant’s plea that his position was adverse to the title and/or interest of the plaintiff and “that of his predecessor-in-title”, I agree with the judge that the defendant has not shown and cannot show that the interest of the plaintiff’s predecessor-in-title has been extinguished by the defendant’s adverse possession.  Accordingly, his claim made on that basis must fail.

16.It would follow that the appeal must fail even if the defendant were to succeed in reversing the judge’s finding upon the specific issue of factual possession.  In deference to counsel’s submissions, I will address that issue briefly.

Adverse possession

17.The defendant’s case on factual possession was that the defendant and his family had, and continue to have, exclusive possession of the hut since it was erected in 1972.  Not only were certain personal belongings such as cultivating tools, the ancestral shrine, a bed and other belongings stored in the hut, it also was kept locked and the defendant resided there at least for part of the time.  The judge appeared to have focused primarily on the question whether the defendant actually lived in the hut “exclusively and continuously as his home” and found that the defendant did not actually live there.

18.Although the judge acknowledged that the hut was “secured from the outside world” in the sense that only the defendant and his family could have access to it, he appeared to consider that fact to be material only in the context of the defendant’s intention to possess.  He then digressed to consider the intention of the family since 1980 regarding control of the hut.

19.In my view, the evidence as to whether or not the defendant actually slept in the hut is neither here nor there.  What is clear, however, is the fact that the plaintiff and others were unable to gain entry to the land because the hut was kept locked by the defendant.  On the question of factual possession, given the clear evidence of physical control over the hut, there could have been but one answer.  However it was not one that the judge reached.

20.On the question of the intention to possess, the judge appeared to consider that the admission that the defendant and his family had treated the hut as their home to be inconsistent with the defendant’s intention to possess.  I agree with Mr Siu that the admission was not against the defendant’s interest.  In my view, the admission was entirely consistent with the defendant’s intention to possess the land as his home.

21.For these reasons, I do not consider the judge’s finding on the issue of adverse possession is sustainable on the evidence.  However, as I have said, this cannot affect the outcome of the appeal.

Hon Stone J:

22.I agree with the reasons for judgment of Le Pichon JA.

Mr Malcolm Lim, instructed by Messrs Wong, Fung & Co., for the Plaintiff/Respondent

Mr Stanley C K Siu, instructed by Messrs Wong, Kwan & Co., for the Defendant/Appellant