Gotland Enterprises Ltd v. Kwok Chi Yau and Others
Read the full judgment text of HCMP 4550/2003 on BabelCite. This High Court CFI judgment was delivered on 25 November 2014.
1. This action concerns a dispute over a piece of land situated in Mai Po, Yuen Long falling within Sections C, D, E and the New Remaining Portion (“NRP”) of Lot No 76 (“Lot 76”) in Demarcation District No 101 (“Land”).
Cited by 1 case · Cites 2 cases
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HCMP 4550/2003 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE MISCELLANEOUS PROCEEDINGS NO. 4550 OF 2003 ___________________
__________________ BETWEEN
AND BETWEEN
(By original writ and order to carry on)
________________ J U D G M E N T ________________ 1.This action concerns a dispute over a piece of land situated in Mai Po, Yuen Long falling within Sections C, D, E and the New Remaining Portion (“NRP”) of Lot No 76 (“Lot 76”) in Demarcation District No 101 (“Land”). 2.In order to understand this action properly, it is necessary to go into some details concerning its history. History of this action 3.This action was started in October 2003 by the then paper title owner of Sections C, D, E and the Remaining Portion (“RP”) of Lot 76, Gotland Enterprises Ltd (“Gotland”), against 4 defendants, namely, the 1st defendant (“D1”); the 2nd defendant (“D2”), which is a company incorporated in 1999 by D1 for purposes of his family’s business[1]; the 3rd defendant, Leung Wai Kuen trading as Hop Shing Tyre Service (“D3”); and the 4th defendant (“D4”), persons in occupation of the disputed land (“Gotland’s Land”). 4.In response, D1 made an adverse possession claim which encompassed Gotland’s Land. His pleaded case was that he and his family had been in adverse possession[2] of a large stretch of land[3] which included Gotland’s Land. Insofar as D3 was concerned, it appears from the Re-Amended Defence and Counterclaim filed by D1-3 that he had little, if anything, to do with the occupation of Gotland’s Land. 5.In June 2011, the 5th defendant (“D5”), who is the father of D1, applied successfully to be joined in this action (order was granted in July 2011). D5 claims that, contrary to D1’s contention, he is the person in adverse possession in respect of the land which has been identified as the “1st Area” and “2nd Area” in Annex 1 to his pleading. Those areas largely overlap with that claimed by D1, and the majority of Gotland’s Land fell within the same. 6.There was a trial of this action (on liability) which took place in September 2013. It was adjourned as a result of an amendment of the pleading of D1-3, who were jointly represented. This is the resumption of the trial. 7.Shortly before the resumption, an agreement was reached between Gotland and D1-D3 whereby the dispute between them was resolved as follows :
8.There is no dispute that CML is D1’s alter ego. The shares of CML are owned by D1[4] and his wife (“C P Yeung”) and the 2 of them are the only directors of the company. The Land was acquired by CML from Gotland at the cost of HK$11 million. In a nutshell, what transpired was that there was no adverse possession claim over a small part of Gotland’s Land by either D1-3 or D5. The undisputed land was carved out of the RP and became Sections F and G. Those Sections are retained by Gotland and the disputed land was then sold to CML. 9.With this arrangement, Gotland has extricated itself from this action. Henceforth, a large part of this action is concerned with the competing adverse possession claims of D1 and D5 over the Land. 10.D3 is no longer a necessary party to this action as the land said to be occupied by him is outside the Land. The action against him was accordingly discontinued. The action against D4 was also discontinued given that all the occupants of the Land are before the court. The Land 11.Lot 76 was granted to Wong Fook Yin and Lai Hop Lam on 1 December 1962. Later, it was divided into Sections A to E and RP for sale. On 30 July 1977, Sections C to E and the RP (with a total area of 759,250.8 sq ft) were assigned to Fung Kau. 12.Pursuant to an Agreement for Sale and Purchase dated 7 August 1980 and a Conveyance On Sale dated 8 August 1981, Fung Kau sold his land to Gotland. 13.Asia Television Ltd (“ATV”) was the majority owner of Gotland and Gotland’s case was that its land was used for shooting TV drama. 14.By a Sale and Purchase Agreement dated 31 July 1992, ATV sold its shares in Gotland to a number of parties including New World Development Ltd. 15.There is a plan of the Land (“Plan”) which was produced by the expert witness of D5 (“G Leung”). There are minor disagreements over the Plan by D1’s expert (“SC Leung”)[5]. Those disagreements were explored in the cross-examination (“XX”) of SC Leung by Mr Fung SC, who appeared for D5 with Mr Lo and Mr Yan. I accept that the Plan accurately reflects Annex 1 to D5’s Amended Defence and Counterclaim, which is a plan of the 1st and 2nd Areas adopted by both D1 and D5 and was referred to in a Consent Judgment between Gotland and D1 to D3 dated 19 August 2014. I also accept that the Plan accurately identifies the Land. It is marked “A” and is attached to this judgment. 16.It can be seen from the Plan the Land is made up of 2 large ponds (“Pond 1” and “Pond 2”), an area which has been referred to as Reclaimed Area (“RA”)[6], an Amenity Pond (“AP”) and an area between Pond 2 and AP which has been referred to as the triangular area[7] (“TA”). Pond 1 and RA fall within the 1st Area, whereas Pond 2, TA and AP fall within the 2nd Area. The issues 17.Mr Li SC, who appeared for D1 and D2, has produced a list of issues, which is agreed, as follows :
18.There is no dispute that in order to defeat the title of CML, the adverse possession over the Land has to start from at least October 1983 (20 years prior to the start of this action). 19.Before I outline the competing cases, I should point out that the factual matters stated above are not controversial save where indicated otherwise. D1’s case 20.D1 married CP Yeung on 1 January 1977. Kwok Siu Leung and Kwok Siu Mei are their son and daughter. 21.D5 used to carry out fish farming and duck rearing at Ngau Tam Mei[8] and Lau Fou Shan[9] in the 1970s. In 1980, through the introduction of Cheung Chuen, D1 and D5 came to carry out fish farming with Fung Ngau (“Fung”) at Pond 1 and two other ponds to the North of it, ie, the 1st Area (one of the other ponds was later divided into 2). It should be noted that Fung was not the same person as Fung Kau, the registered owner of the Land then. The other ponds were situated on Government land to the North of Lot 76. 22.The fishing farming was carried out as a joint venture business, with the partnership ratio at 50% to Fung and the remaining 50% to D1, D5 and Kwok Shu Kwai (“Kwai”) (the eldest son of D5). A few months later, Kwai withdrew from the business and henceforth D1 and D5 each had 25% interest in the business. In 1991, Fung withdrew from the business. D1 and D5 then became equal partners in the same. 23.In addition to fish farming, duck rearing was also carried out at the 1st Area. However, Fung had no interest in that business. Originally, the 3 partners to the joint venture on duck rearing were D1, D5 and Kwai. After Kwai’s withdrawal, D1 and D5 became equal partners. 24.In addition to fish farming and duck rearing, D1 had also raised pigs on the land. Due to Government pollution control, raising pigs and duck ceased at the 1st Area in 1993. Later in 1999, D1 obtained a Livestock Keeping Licence. Although the evidence is not entirely clear, it appears that D1 had resumed the duck rearing business after obtaining the licence. In addition, D1 had branched out into other businesses such as feedstuff, transportation and chilled poultry. The names of “Kwok Yuen Farm” and “Kwok Yuen Fish Farm” had been used for D1’s business. D2 was incorporated in 1999 to carrying on the fish and poultry business. 25.It is D1’s case that he was in charge of the fish and duck business at the 1st Area and D5 seldom took part in the same as he was pre-occupied with his fish ponds at Lau Fou Shan and Wo Sang Wai. In addition, D1 had a joint investment with D5 in some fish ponds at Tai Long Kei[10] and Luen Yick Wai[11]. 26.D5 ceased to be a partner of the duck business in 1989. Further, he retired in 1996 leaving the 1st Area to D1. It is D1’s case that his father had expressly relinquished his interest in the 1st Area. 27.In respect of RA, it is D1’s case that he let a portion of it to his younger brother Kwok Shi Hing (“Hing”) in 1994. 28.As regards Pond 2, it is D1’s case that Tam Fuk Hung allowed him to raise duck around Pond 2 since 1983. In 1990, Tam Fuk Hung sold Pond 2 and the fish farming business carried on there by him to D1 at the price of HK$60,000. D5 has nothing to do with Pond 2. 29.After his retirement, D1 or CP Yeung had paid HK$3,000 per month to D5 for his living expenses starting from 2003. D5’s case 30.In or about the end of 1979, D5 began to adversely occupy the 1st Area at the suggestion of Fung. He subsequently asked his family, including D1, to help out with the farming business there. D1 was then invited by D5 to participate in the business, ie, sharing the profits and losses. There was, however, no intention of conferring any interest over the land to D1. 31.At the time when D5 started the occupation of the 1st Area, the 2nd Area was adversely occupied by Tam Kwong and Tam Fuk Wing. Tam Kwong passed away in the early 1990s. In about 1994, D5 bought out all the interest of Tam Fuk Wing in the 2nd Area and the business conducted there. D5’s case is that he authorized D1 to conduct on his behalf the negotiations and to handle the other details of this acquisition. Thereafter, the profits derived from the farming business operated on the newly acquired land were also shared equally between D1 and D5. However, D5’s case is that the possession of the 2nd Area was solely held by him. 32.In 1999, D5 retired. Insofar as the use of the 1st and 2nd Areas is concerned, D5 has been receiving rent from (a) Hing for the use of RA and (b) D1 for the remaining areas. 33.When this action was commenced by Gotland in 2003, D1 was entrusted with the task of defending Gotland’s claim for D5 and the rest of the family to whom the D5 was desirous of distributing the disputed land. However, D1 later wanted to claim the land all for himself and refused to report the details of the proceedings to D5. This triggered D5’s joinder application. CML’s case 34.The purchase by D1, via CML, of the Land has introduced a twist in this action. With the substitution of CML as the plaintiff holding the paper title to the Land, D1 is now in a position to run 2 diametrically opposing cases at the same time, ie, he is claiming adverse possession over the Land and at the same time has a fall-back position that if such claim fails (together with that of his father) the paper title owner’s case shall prevail. 35.On one view, D1 is entitled to this tactical deployment having paid for the Land. However, it may be said that the position is not an attractive one because the opposing cases are both run with D1’s instructions. There is no dispute that D1 is the directing mind and will of CML. Mr Tang, who appeared for CML, has not shied away from the fact that his instructions originated from D1. Hence, D1 is both saying that he has defeated CML’s title to the Land by reason of his adverse possession and challenging, via his alter ago, the very adverse possession. 36.The absurdity of the situation is highlighted by Mr Tang’s challenge over D1’s credibility[12]. Further, in the course of this trial Mr Li had objected to the evidence of G Leung, which was plainly in favour of the adverse possession claimant. The objection was no doubt made when it was perceived that the evidence was unfavourable to CML. It is inconceivable for Mr Li to have objected to that evidence had it not been the fact that his lay client had 2 opposite agendas. It is plain that Mr Li and Mr Tang have been acting in tandem in this trial. 37.In the circumstances, it is unsurprising that Mr Fung has taken issue with the way in which the cases of CML and D1 have been run. He submits, with some force, that litigation is not a game and suggests that the conduct of those cases may have given rise to ethical issue on the part of the professionals. However, this court has not been assisted with any authority on the ethical issue. Clearly, the court should not lightly arrive at an adverse conclusion in this regard given the unusual circumstances of this case. 38.CML has little evidence with which to contradict the case of adverse possession. Mr Tang accepts that he has no positive case to advance on behalf of CML. Instead, CML is putting the alleged adverse possessors to prove their case. Applicable principles of law 39.The legal principles concerning adverse possession are well-established. They have been set out in Powell v McFarlane (1977) 38 P & CR 452 which was cited with approval by the Court of Final Appeal in Wong Tak Yue v Kung Kwok Wai (1997-1998) 1 HKCFAR 55. 40.The person who claims adverse possession has the burden of proof to substantiate his claim against the paper owner. It is a heavy burden of proof : see Powell v McFarlane, supra, p 472. The evidence relied upon by such claimant must be compelling : see Wu Yee Pak v Un Fong Leung & Ors (2004) 7 HKCFAR 498 at 500E. 41.To establish a claim for adverse possession, the occupant has to show (a) a sufficient degree of exclusive physical control over the disputed land and (b) the requisite intention to possess (“animus possidendi”). These elements were explained in Powell as follows :
42.On the intention to possess, I have also been referred to Adverse Possession, 2nd edn, by Jourdan QC & Radley-Gardner, p 183, where Smith v Waterman[13] was cited :
43.However, it is unnecessary to show that there was a deliberate intention to exclude the paper owner or the registered proprietor : see JA Pye (Oxford) Ltd v Graham [2003] 1 AC 419, §71. 44.In Ng Lai Sim v Lam Yip Shing & Anr, unrep, HCA 2963/98 (22 November 1999), citing Willis v Earl Howe [1893] 2 Ch 545 the court stated at para 24 :
45.Possession of land may be held jointly but not severally : see JA Pye (Oxford) Ltd, supra, §70. Adverse possession of the Land (a) Sufficient degree of exclusive physical control The 1st Area 46.I consider, firstly, the issue of sufficient degree of exclusive physical control over the Land. I agree with Mr Li that the different parts of the Land (see para 16 above) require individual consideration. 47.I am inclined to accept D5’s case that he came to occupy (霸) the 1st Area in late 1979 at the suggestion of Fung, who was a local bully. D5’s case is consistent with the fact that he was the head of the family and, more likely than not, he had a leading role in the exploration of new business. At that time, D1 was only 22 years old, although he was married and had a son in 1977. According to D1’s witness statement, he did not start his own business until 1988[14]. However, he said under XX that he had his own duck rearing business in 1979 or 1980. I am not inclined to prefer such evidence when it is inconsistent with his witness statements. 48.D5’s evidence on when occupation began over the 1st Area is supported by the business record at Core Bundle (“CB”)/5. It is controversial as to who wrote “year 1980” on that document. However, I find D1’s explanation as to why the document was made in 1980 (see B/67, §8) credible, and it was not challenged under XX. On the other hand, D1’s suggestion that those words might have been written by his solicitors, to whom he handed over the document as relevant evidence in this case, is not a credible one. 49.It is reasonably clear that Fung had no real contribution to the fishing farming business[15] apart from introducing D5 to the 1st Area. He was merely a local bully. This is reflected by the fact that Fung was entitled to receive 50% of the profits derived from the fishing farming at the 1st Area without being responsible for any loss. 50.Evidence has been adduced from D1, D5 and Hing (D5’s witness) in respect of the occupation of the 1st Area and the works which the family had done on it to facilitate the farming and other business activities carried out there. I have been referred by Mr Fung in his Closing Submissions (§285) to the unchallenged evidence of D5. 51.The evidence is that a working platform was built at the edge of every fishpond after the land was levelled. Over the years, much improvement works had been carried out, eg, the ponds were drained, dredged and cleaned every year; bunds were built around the ponds; roads or paths were built or improved; and offices and car parks were built. 52.In respect of the duck rearing, the evidence is that there were some duck sheds built for the animals. The duck were free to roam around. They would be rounded up when they had to be sold and for that purpose wire mesh fence would be used. The weight of the evidence is that the animals were kept in the vicinity of the fishponds. It makes sense because the waste produced by the animals was used as food for the fish. 53.It should be pointed out that none of D5’s family had resided on the Land at any time. It was and is only used for business activities. The evidence is that fish farming and duck rearing required limited attention. Further, there is no evidence that there was any fencing on the Land. Nor is there any suggestion that dogs were kept on the Land to deter intruders. The only evidence about keeping the Land from unwelcome visitors is that when people were seen fishing at the ponds they would be stopped. 54.Insofar as Pond 1 is concerned, the unchallenged factual evidence is that it has been continuously used for fish farming since it fell into the possession of D1 and/or D5. I am satisfied that given the nature of the land and its use there is a sufficient degree of exclusive physical control by D1 and/or D5 over the same. I have considered the fact that the land has not been fenced off at any time. There is no evidence whether that is normally done for fishponds. However, Mr Li has identified an authority the facts of which show that link fence was erected around some fishponds from time to time (Mutual Luck Investment Ltd v Yeung Chi Kuen & Ors (No 2) [2003] 1 HKC 90). I do not know how substantial a structure was that link fence. I also bear in mind that Pond 1 is very large and I do not know if it is practical to fence off an area of such size. 55.The consideration for RA is quite different. It is evident from the Plan that it is a large piece of land. One of the witnesses suggested that RA has an area of about 60,000 to 70,000 sq ft. The evidence concerning its use since 1979 is vague and nebulous. The picture is not helped by the change of stance on the part of D1. In his pleading[16], D1 maintained that RA was used for rearing duck. It should be noted that at the time when the pleading was filed (2004), there was no argument between D1 and D5, and according to D5’s case his son was then conducting the defence on behalf of the family. However, in D1’s Points of Reply (§5) to D5’s Closing Submissions, it was stated that “D1 has made the wrong claim over the [RA]”. The fact that the “concession” was only made in final submission demonstrates that D1 was waiting to see the direction of the wind before committing himself. There is no question that he is taking full advantage of the unusual circumstances identified in para 34 above. 56.As stated in para 52 above, I believe that the duck were kept in the vicinity of the fishponds. It is a fact that RA is surrounded on 3 sides by the fishponds operated by D1 and/or D5. However, in light of its size, it cannot be said that the land was under the control of the fishpond operator without proper evidence. There is no support from the expert evidence concerning any duck rearing activity at RA. There is some suggestion by D5 that feeding materials were kept at RA. Apart from the vagueness of the evidence, it is more likely than not that such materials were kept in the vicinity of the fishponds for convenience. 57.According to CS Leung, which whom G Leung agreed[17], RA was under water prior to 1979. In an aerial photo dated 26 July 1979, land can be seen at RA from which it can be inferred that soil was dumped into the water for reclamation. The reclamation was completed in 1981. The photos taken prior to 1985 show that the land surface at RA was made up of soil. In 1985, some vegetation can be seen. According to G Leung, the lack of vegetation prior to 1985 is consistent with artificial activities on the land. However, G Leung could not be specific as to what those activities might be. 58.On balance, I believe that the expert evidence is against the suggestion that RA was controlled or occupied by D1 and/or D5 because there is no evidence that D5’s family had carried out any reclamation work. The reclamation work done at RA must have been very substantial in light of its area. 59.D1’s evidence that he started his animal feed business in 1990 and made use of RA for storage of animal feed is of no assistance to the case of the adverse possessor. The same may be said about the evidence of Hing concerning his use of the Land. Firstly, Hing’s evidence is that he made use of the Land since the middle or late 1980s for his own businesses of selling duck, transportation and chilled poultry. However, there is no or no clear indication as to the part or parts of the Land that was used by him. There is no clear evidence in respect of the use of RA by him until 1991[18]. I should add that the evidence of D1 and Hing concerning the use of RA in early 1990s is consistent with the Joint Expert Report that the land had been left vacant since 1985 and that in 1991 a lorry and 2 temporary structures were found on it[19]. 60.In the premises, I am not satisfied that D1 and/or D5 had exercised a sufficient degree of exclusive control over RA since 1983. Therefore, the adverse possession claims in respect of that piece of land must be rejected. The 2nd Area 61.The 2nd Area is largely made up of Pond 2. There is no serious dispute that Pond 2 had been used for fish farming by Tam Fuk Hung (“Tam”) and Tam Fuk Kwong[20] from about 1981[21]. In the XX of Tam (1 of D1’s witnesses) on behalf of CML, there was a suggestion that rent might have been paid for the use of the 2nd Area. Tam’s evidence is that he did pay HK$10,000 per annum to a man named Yeung who asked him for rent. Such payment continued until 1987. However, Tam does not know Yeung’s full name, where he lived, whether he had any relationship with the owner of the 2nd Area or whether he represented the same. The payment was made because Yeung demanded that if Tam was to be allowed to carry out fish farming at the pond, he would have to pay rent. I do believe that the payment in question was for renting the 2nd Area. It is reasonably clear that it was made to pay off a local bully. 62.Notwithstanding the lack of any details concerning what the Tams had done with Pond 2 over the years save for the fact that it was used for fish farming, I am prepared to accept that there was sufficient exclusive control of Pond 2 by the Tams prior to its transfer to D1 and/or D5. In particular, I bear in mind the uncontradicted evidence that in 1983 D1 was permitted by Tam to rear duck in the vicinity of Pond 2. 63.There is an important aspect of Tam’s evidence concerning the control over AP. There is no dispute that AP was at some stage used by ATV for filming. Tam said that AP was not included as part of “his pond” until ATV’s filming activity had stopped. The best evidence concerning when such activity ceased came from D1[22]. The filming stopped in 1989. Such evidence is consistent with that contained in a witness statement of Lin Chi Fun, who used to work as a film director for ATV. The witness statement was adduced by CML as hearsay evidence (Lin had passed away). I find as a fact that AP was not under the control of the Tams until 1989. 64.In the premises, CML’s title over AP cannot be defeated. For completeness, according to the unchallenged evidence of CML’s expert, there is a weir which separates AP and Pond 2 and the area of AP (coloured blue) can be seen on a map at Bundle D2/17a. I accept such evidence. 65.The evidence concerning the occupation or use TA is even more nebulous compared with that in respect RA. The evidence is confined to the bear assertion of Tam, when he was taken to a map at CB/1, that it fell within “my pond”. I am not satisfied that any exclusive control over TA has been made out. 66.Accordingly, the adverse possession claims over TA must also fail. (b) Intention to possess 67.It follows from the forgoing discussions that the court is now only concerned with Pond 1 and Pond 2. Pond 1 68.Adverse possession is made up of 2 elements. Whilst this court is satisfied that there is sufficient physical control over Pond 1 (see para 54 above), it is essential for D1 and/or D5 to discharge their burden of proof to establish the requisite intention (see paras 40-42 above). 69.Intention is normally inferred from actions. Self-serving statements of an occupier should be approached with scepticism (see Wong Tak Yue v Kung Kwok Wai & Anr (No 2) (1997-98) 1 HKCFAR 55 at 69A-C). 70.In this case, it is plain that Pond 1 has been used since late 1979 for fish farming by the Kwoks. Whilst they had invested a fair amount of resources in the land over the years (see para 51 above), I do not believe that the works carried out by them went beyond what was required for the farming enterprise. In other words, other than doing what was needed for the fish farming business, there was no investment made to improve the land. 71.Clearly, use of the land has been established. One may add that such use has continued for a very long time without interruption. However, there is no authority which suggests that use of land can be equated with adverse possession. 72.As pointed out above, no occupier had resided on the land and it was not fenced off (see para 53 above). Other than the fact that it was used, there is little from which one can infer the requisite intention. A parallel may be drawn with the situation where a vacant field was used to grow fruits for many years, but there was otherwise no indication of intention to possess on the part of the occupier like the existence of a fence. I do not believe that the court can infer the requisite intention from the use of the field alone. 73.I look further into the authorities for guidance. Mr Fung has placed considerable emphasis on the judgment of Lord Hutton in J A Pye (Oxford) Ltd. I quote the following from pg 447-448:
74.I do not believe that the present case can be regarded as one where the objective acts of physical possession are clear and unequivocal such as to constitute a sufficient manifestation of the intention to possess. It must be remembered that in J A Pye (Oxford) Ltd, the land in question was fully enclosed by hedges and was only accessible, save on foot, through a gate kept padlocked by the occupier. This is a facts sensitive issue. As submitted by Mr Tang, the evidence does not even suggest that a sign was put up at Pond 1 to indicate that it was private property or to warn off unwanted visitors[23]. What is there to suggest that the Kwoks were not merely making use of the pond for profits as opposed to occupying and using the land as their own? 75.It should also be pointed out that, in contrast with J A Paye (Oxford) Ltd, there is no evidence that the Kwoks had made full use of the land as if they were the owners. I am troubled by the fact that the land is not protected from unwelcome visitors. 76.I now deal with a clutch of other points to see if there is further evidence from which the intention to possess may be inferred. 77.Firstly, the following was said in the course of XX of D5 by Mr Tang :
78.Expectedly, this piece of evidence has given rise to a good deal of debate on whether it constitutes an admission by D5 that he was willing to pay rent to the owner for the use of Pond 1. There is no disagreement that the present state of Hong Kong law is that a willingness to pay rent is inconsistent with the requisite intention to possess (see Wong Tak Yue, supra)[24]. 79.I do not find that evidence constitutes a clear admission of willingness to pay rent. To begin with, the point was not squarely or fully explored. The question was couched in ambiguous terms. D5 might have in mind that if the owner appeared and demanded a small sum of money from him it would be advisable to agree to the demand rather than arguing about who was entitled to the pond. However, it has to be said that this piece of evidence certainly does not assist the case of D1 and/or D5. 80.Secondly, para 5 of the first witness statement of D1 (adopted as his evidence) stated as follows :
81.This evidence tends to suggest that D1 was only minded to use the pond for as long as he could until it had to be returned to the owner. Surprisingly, D1 was not XX on this statement. 82.I accept the submissions of both Mr Li and Mr Tang that as joint possessors the requisite intention to possess must be held by both D1 and D5 at the material times. This piece of evidence is therefore unfavourable to their adverse possession claims. 83.Thirdly, I do not agree with Mr Fung that I should attach weight to the fact that D5 was told by Fung to adversely possess (霸) the land. What that means is not free from ambiguity. The issue of adverse possession has to be determined on the basis of the evidence. 84.Fourthly, Mr Fung argues that D5 had exercised the right of an owner by letting D1 and Hing use the Land in return for the payment of rent (for the present purpose, the dispute between D1 and D5 as to who received the rent from Hing is put aside). I agree with Mr Tang that, taken at the highest, such evidence constitutes no manifestation of the subjective intention to possess (see para 42 above). Further, I am not inclined to place much weight on this piece of evidence because (taking the evidence at the highest) by the time when rent was received by D5 the Land had been in his physical possession (either solely or jointly with D1) for a number of years. In the family setting, I do not believe that the sons would have considered the legal issues before paying respect to their father. Furthermore, the rental payments were not large – HK$3,000 per month by D1 and HK$1,500 per month by Hing (which was subsequently increased). 85.Finally, Mr Fung argues that there was nothing else that D5 could have done with the Land[25]. Even assuming that the proposition is correct in respect of Pond 1, the real question is whether on the evidence the intention to possess has been proved. 86.I remind myself of the dictum of Slade J in Powell v McFarlane, p 480 :
87.In light of all the circumstances, I am not convinced that the requisite intention has been proved in respect of Pond 1. Accordingly, the adverse possession claims over the same must fail. Pond 2 88.There is no dispute that D1 and/or D5 have to establish that Pond 2 was in the adverse possession of the Tams since at least 1983 and until it was taken over by D1 and/or D5 in 1990[26]. I have accepted that the Tams had a sufficient degree of exclusive physical control over Pond 2 (see para 62 above). What about the intention to possess on the part of the Tams? 89.The evidence in this regard is equally, if not more, limited compared with that in respect of Pond 1. There is nothing apart from the fact that the Tams used Pond 2 for fish farming over the years. There is no evidence that it was fenced at any time. Indeed, Tam’s evidence is that he had problems with unwelcome visitors who took his fish. I take into account that permission was given to D1 to rear duck in the vicinity of the pond and that it was “sold” by Tam in 1990. In respect of the latter, the purchase price was a modest sum of HK$60,000[27]. For that price, his stock of fish and all his farming equipment were included. It tends to suggest that Tam did not regard his physical possession of Pond 2, which he was passing on, as very valuable. 90.Much of the analysis about Pond 1 is applicable equally to Pond 2, I am not satisfied that it is shown that the Tams had the requisite intention when they were occupying Pond 2. Accordingly, the adverse possession claims over it must also fail. The competing claims of D1 and D5 91.In light of the findings above, I shall be brief in explaining my determination on the disputes between D1 and D5. The 2 main disputes are (a) whether D5 had relinquished his interest in the 1st Area when he retired as contended by D1 or whether D5 had always enjoyed sole possession over the same and (b) whether Pond 2 was under the sole possession of D1 or D5 or was jointly possessed by them. 92.I reject D1’s case on his father’s alleged relinquishment of interest. To begin with, I find the evidence nebulous. There is no mention of it in D1’s 2 main witness statements, the second one was made after dispute had arisen between him and his father. 93.More importantly, there is a written document dated 23 May 2007 (CB/144) which set out the contributions made by D5’s children to the legal costs for defending Gotland’s action. According to this document, D1 was responsible for 50% of such costs. The other 50% was to be shared by the children (including D1) and the eldest grandson of D5 in various proportions. D1 accepted in evidence that his siblings wanted to contribution to the legal expenses in return for an acknowledgment of their interest in the land (D5’s evidence, supported by Hing, is that he was going to distribute ½ of the interest in the land to his children and eldest grandson). 94.D1’s explanation that he was forced to sign this document is incredible. He may not be highly educated but his is certainly not unsophisticated, and he is clearly a man with a strong mind. As an illustration of his ability, in 1992 D1 established an association of duck and goose farmers, which had a membership of about 1,000, and became its Chairman. His chairmanship continues to date. 95.Further, I see no reason why D5 would have relinquished his interest in the Land for nothing. I have no doubt, as suggested by the evidence, that he was and is a traditionally minded person who wanted to leave his assets to all his children and his eldest grandson. 96.There is further support for D5’s case by the payment of rent for the use of the Land by D1. Although this part of the evidence is highly contentious and it is not easy to determine factual dispute on oral evidence alone (I see no convincing documentary evidence on this issue). I am inclined to accept D5’s evidence that the HK$4,000 per month which he was paid by CP Yeung was made up of HK$3,000 for rent and HK$1,000 for his living expenses. It is not disputed that the other sons were each paying D5 HK$1,000 for living expenses, there is no explanation why D1 would pay more. More likely than not, the HK$3,000 was for the use of D5’s ½ share of the Land. I see nothing in the point that the payment of HK$3,000 was considerably below the market rent. It was clearly not a purely commercial transaction. 97.For completeness, I accept D5’s evidence that he retired in 1999. He was 65 years old that year. 98.I am equally unimpressed with D5’s case that he had sole possession of the Land. It is common ground that the fish farming and duck rearing businesses were conducted as an equal joint venture between him and D1 (ignoring for the present purpose the participation of Fung and Kwai). They shared the profits and losses, and were entitled to share the Government compensation paid for the cessation of the duck rearing operation. There is simply no reason to believe that the interest in the land should be treated different. Indeed, there is hardly any evidence adduced from D5 as to why he had sole interest in the Land. I believe that the truth is that any interest which D1 and D5 might have over the Land belonged to them jointly in equal share. 99.In respect of Pond 2, for the same reasons I do not see why it was acquired by D1 for himself only. No good reason has been advanced by D1. D5’s evidence that it was paid for by the profits generated from the fish and duck business is supported by the business record (CB/24). According to that record, the acquisition cost was shared equally. D1 agreed that the record was made by him. His explanation that it was a false record made up to fend off a request by his business partner to rent Pond 2 is a poor concoction. 100.I should mention 2 further points. Firstly, Tam denied knowing D5, which contradicts D5’s evidence. Although it may be said that Tam is an independent witness, I am surprised that the 2 neighbours did not know one another. Secondly, the record suggests that HK$160,000 was paid for Pond 2, but Tam’s evidence is that he only received HK$60,000. It is possible that the purchase price was overstated by D1. 101.On a balance of probability, I have no difficulty finding that whatever interest there might be in Pond 2 it was held jointly by D1 and D5 in equal share. 102.For completeness, I find D1 to be an unreliable witness. In addition to what has been said above, D1’s attempt to diminish the role of his family members during the occupation of the Land in order to advance his case that he had sole interest in it flies in the face of his first witness statement. Conclusions 103.By reason of the aforesaid, I give judgment in favour of CML. CML is entitled to, and I so order, vacant possession of the Land as against D1, D2 and D5. I grant liberty to CML to apply for an order for damages to be assessed within 14 days from the date of this judgment. All the counterclaims by D1 and D5 are dismissed. 104.As for costs, there is an indication in D5’s Closing Submissions (§44) that he may seek to apply for an order which differs with the usual one. I direct that the parties are to endeavour to agree on the appropriate costs order, failing which they should each file and serve a written submission on costs limited to 3 pages within 14 days from the date of this judgment. If appropriate, the matter will then be dealt with on papers.
Mr David W K Tang, instructed by Lee Chan Cheng, for the plaintiff Mr C Y Li SC, instructed by Tony Kan & Co, for the 1st and 2nd defendants Mr Patrick Fung SC, Mr Tommy Lo and Mr Yan Kwok Wing, instructed by Wong & Associates for the 5th defendant
[1] D2 is jointly represented with D1 in this action. Its case is adequately covered when that of D1 is dealt with. [2] Although the pleaded case was that D1 and his family had been in adverse possession of Gotland’s Land, there was an unparticularised allegation that D1 alone had acquired all the rights to the same. [3] Extending beyond Lot 76. [4] D1 is the majority shareholder. [5] CML’s expert has expressed no view on the Plan. [6] This has not been marked on the Plan. It is surrounded by Government land to the North, Section B to the East, Pond 2 to the South and Pond 1 to the West. [7] It is not marked on the Plan. [8] According to D5’s unchallenged evidence, it was from 1972 to 1982. [9] According to D5’s unchallenged evidence, it was from 1975 to 1988. [10] According to D5’s unchallenged evidence, it was from 1984 to 1994 but his recollection is not very clear. [11] According to D5’s unchallenged evidence, it was started in 1987. [12] See CML’s Closing Submissions, §100. [13] [2003] EWHC 1266 (Ch) at para 19. [14] Bundle B/p17, §24. [15] It is common ground that Fung had nothing to do with the duck business. [16] A1/30 and 40. [17] CML’s expert did not give evidence on this point. [18] B/102, §26. [19] D/215, §3.1.13. [20] According to D5, he passed away in early 1990s. The Tams were known to D5 by different names (see para 31 above). [21] There is a variance on the evidence as to when the Tams came to occupy Pond 2. D1 said that it was 1981, whereas D5 maintained that it was early 1980. The difference is irrelevant. [22] B/13, §8. [23] D5 said under XX that D1 did put up a sign “Kwok Yuen Fish Farm” with his permission, but he was unable to recall when it was done. Also, there is no evidence of the location of the sign. [24] In a recently published Report on Adverse Possession by the Law Reform Commission, it is suggested that Wong Tak Yue was wrongly decided. [25] There is no evidence to that effect. [26] D5’s evidence is that it was in 1994 that Pond 2 was purchased. It is unnecessary to resolve that issue for the present purpose. [27] It is unnecessary for the present purpose to resolve the disagreement by D5 over the amount of the purchase price because it is not disputed that Tam only received HK$60,000. |
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