YOUNG IVY SHUI HEUNG v. YAU KOON SUM AND OTHERS

DCCJ 3807/2015

[2018] HKDC 500

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 3807 OF 2015

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J U D G M E N T

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Introduction

1.  The plaintiff claims adverse possession for a piece of land known as Lot 580 in Demarcation District 253, Sai Kung, New Territories (“Lot 580”). The defendants, currently the paper owner of Lot 580, counterclaim for vacant possession.

The plaintiff’s case

2.  Around September 1967, Madam Liu Koon Tai (“Madam Liu”), the plaintiff’s mother, purchased a dwelling house known as No. 5, Sam Long Village, Tseng Lan Shu, Sai Kung, New Territories (“House No. 5”) from Madam Yau Yin Mui (“Madam Yau”). House No 5 is situated at section B of Lot 568, section A of Lot 578 and Lot 580 in D.D. 253.  The kitchen of House No. 5 was built mainly on Lot 580. Madam Yau was the registered owner of section B of Lot 568 and section A of Lot 578 in D.D. 253.  It is the plaintiff’s case that House No. 5 which Madam Yau agreed to sell and Madam Liu agreed to buy included section B of Lot 568, section A of Lot 578 and Lot 580 in D.D. 253.  Section B of Lot 568 and section A of Lot 578 were subsequently assigned by Madam Yau to Madam Liu on 26th September 1967.

3.  It is not disputed that Lot 580 has never been assigned to the plaintiff’s mother Madam Liu or to the plaintiff.

4.  It is the case of the plaintiff that Madam Yau told Madam Liu that Lot 580 was given to Madam Yau by her senior family member to build House No 5 thereon. Although no formality had been undergone for the transfer, Lot 580 was sold to Madam Liu as well. The plaintiff’s case is that all along she and her mother mistakenly regarded Lot 580 as their own property and they possessed or occupied the same to the exclusion of the whole world.

5.  It is the plaintiff’s case that at all material times, the plaintiff’s and her mother’s use and occupation or possession of Lot 580 were never been interfered with or challenged by the defendants and/or their predecessors-in-title.

6.  Around early 1970, after discussion between the plaintiff and her mother, they allowed Chan Yuk Fui’s family, including Chan Yuk Fui, Chan Shui Ha, Chan Bing Hong and Chan Shui Mei, to move into House No 5 and lived there with the plaintiff and her mother. Chan Yuk Fui was the lover and cohabitee of her mother Madam Liu. Chan Shui Ha, Chan Bing Hong and Chan Shui Mei are the children of Chan Yuk Fui and Tsang Yuk Ying.

7.  The plaintiff went to study in the United States of America in around 1970. She kept a room in House No 5. The plaintiff’s mother Madam Liu passed away on 3^rd December 1975 and the plaintiff is the sole beneficiary of the estate of her mother. The room was demolished with her consent in around 1986 when Chan Bing Hong, the eldest son of Chan Yuk Fui, married Tong Siu Lai Amy (“Madam Tong”), the defendants’ witness in this case. 

8.  The plaintiff wished to get back House No 5 for her own use in about 1994, Chan Bing Hong refused. The plaintiff commenced legal proceedings against Chan Bing Hong evicting Chan Bing Hong and his wife Madam Tong. Chan Bing Hong passed away in around 2001 in Mainland China. Around 2003, Madam Tong decided not to contest the plaintiff’s claim and returned the keys of House No 5 to the plaintiff.

9.  The plaintiff claimed that at the material time, although she did not occupy Lot 580 personally, she permitted Chan Bing Hong to occupy the Lot and possession of the Lot was returned to her in around 2003. After 2003, she has been occupying the Lot personally to the exclusion of the whole world up to the date hereof.

10.  It is her case that she and/or her mother has been in adverse possession of Lot 580 since September 1967.

The defendant’s case

11.  The defendants averred that the 1^st defendant’s parents, the then owners of Lot 580, had granted a licence to Madam Yau to occupy and use Lot 580 or the kitchen of House No. 5 when the House was built. After the sale of House No. 5 in September 1967 by Madam Yau to Madam Liu, the 1^st defendant’s mother Madam Yip Ya Yun (葉亞壬) and Madam Liu entered into an oral agreement that part of Lot 580 on which the kitchen of House No. 5 was erected was let to the plaintiff’s mother for a term of 20 years for a lump sum payment of $500 paid by Madam Liu to the 1^st defendant’s mother.

12.  The defendants further averred that in around early 1988, the late Yau Kam Shing, the brother of the 1st defendant, let Lot 580 to Chan Bing Hong’s family for a term of 20 years for a lump sum of $2,000 paid by Chan Bing Hong to Yau Kam Shing. Therefore, Chan Bing Hong’s occupation of Lot 580 could not be adverse possession.

13.  Mr Sunny Chan, counsel for the defendants, submitted that the plaintiff’s occupation of Lot 580 cannot be said to be continuous or free from interference, Chan Bing Hong intended to occupy House No 5 for himself and did not occupy Lot 580 on the plaintiff’s behalf.

The issues in dispute

14.  The issues in dispute are:

i.	whether the plaintiff has occupied Lot 580 with the permission of the paper owner, that is, the defendants or their predecessor-in-title;
ii.	whether Yau Kam Shing had granted a licence/tenancy to Chan Bing Hong;
iii.	whether the plaintiff has continuously possessed Lot 580 for more than 20 years, that is, whether the plaintiff permitted her relative Chan Bing Hong and his family to occupy the Lot 580 at the material time;

According to Mr Sunny Chan, all the disputes are factual.

Legal principles

15.  Mr P K Chan, counsel for the plaintiff, quoted paragraph 35-019 of The Law of Real Property, (2012 edition), which states as regards to intention that:

“	(i)	It is an intention to possess and not an intention to own.
	(ii)	It an intention to exclude the world in the squatter’s own name and on his own behalf.
	(iii)	It is an intention to possess and not an intention to dispossess. Accordingly, animus can be sufficiently established even if both the true owner and the squatter mistakenly believe that the land belongs to the latter, or where a squatter did not realize that he was trespassing on another’s land.”

16.  Mr P K Chan submitted that a squatter can be in adverse possession of land through his licensee’s occupation of the land and referred to the case Cheung Yat Fuk v Tang Tak Hong & Others (2004) 7 HKCFAR 70.

17.  The above legal principles are not in dispute.

Credibility of the witnesses and analysis of the evidence

18.  The plaintiff gave evidence in the trial to substantiate her case. I find that the plaintiff gave her oral testimony in a frank and straight forward manner. Her evidence was not shaken under cross examination. I accept her evidence. She was already 20 years old when House No 5 was purchased.  It is believable that she remembered what had happened at that time. She was the sole beneficiary of the estate of her mother Madam Liu. It is reasonable that she permitted Chan Bing Hong to reside at House No 5 when she migrated to the USA. It is not in dispute that she enjoyed a harmonious relationship with Chan Bing Hong before their relationship turned sour.

19.  Mr Sunny Chan submitted that because formal conveyancing document of the adjacent lots was signed by the plaintiff’s mother Madam Liu, the plaintiff’s case of mistaken belief was unbelievable. I do not agree. The conveyancing document is a conveyance on sale prepared by the Land Office in English and both the Madam Yau and the Madam Liu signed by their cross marks and printing thumbprints. Such document cannot be said to be a contemporaneous document that contradicts the plaintiff’s case. Madam Yau and Madam Liu were likely illiterate and were not legally represented at that time.

20.  Madam Tong and the 1st defendant gave evidence for the defendants.  Madam Tong was the wife of Chan Bing Hong.

21.  I do not accept the evidence of Madam Tong. Mr Sunny Chan submitted that she is a “neutral” witness. I do not agree. She is not an independent witness. When she gave evidence, it is noticeable that she held grudges against the plaintiff. There had been litigation for House No 5 between her and the plaintiff before.

22.  Madam Tong was evasive and on a number of occasions, refused to answer questions. When she was asked whether she had told anybody that part of the kitchen did not belong to the plaintiff, she said she did not know. It should be something that is within her knowledge. She also gave contradictory evidence. For example, when she was asked whether her husband had paid rent to Yau Kam Shing in 1985, she responded that she did not know whether money had been paid. On one occasion, she agreed that no money had been paid.  But only moments later, she said that she was told by her husband that money had been paid.

23.  Madam Tong said that she and her husband did not have the ownership of House No 5, and she did not object to returning House No 5 to the plaintiff. She did not like the House anyway. It is perplexing that she and her husband defended the plaintiff’s claim for possession of House No 5 for years. She at first said that she did not know what Defence was adopted, but subsequently admitted that she knew it was adverse possession. She said that she only delivered the keys of the House to her solicitors, and she did not know how they would deal with the keys. She did not care.  I find it ridiculous, she should have known that the keys would be returned to the plaintiff.

24.  Madam Tong’s oral testimony is different from Yau Koon Sum (“Mr Yau”), the 1^st defendant’s testimony. Madam Tong said that it was the autumn of 1985 that Yau Kam Shing came to discuss the rental matter with Chan Bing Hong, but in Mr Yau’s witness statement, Mr Yau said that it was the beginning of 1988.  The amount of rent paid according to Madam Tong was nominal, which meant several hundred dollars, but it was $2,000 according to Mr Yau.

25.  I do not accept the evidence of Mr Yau. His evidence is inconsistent, and his oral testimony contradicts his own witness statement. Plenty of such inconsistencies and discrepancies are noted. In his oral testimony, he said when the House was built, Madam Yau were allowed to use the kitchen area only. The use of other parts of Lot 580 was not granted. In around September 1967, when the House was sold, only the use of the kitchen was granted. Only in around 1968, he was told by his brother Yau Kam Shing that his brother intended to allow Chan Bing Hong to use other parts of Lot 580. But in paragraph 4 of his witness statement, he said $20 red pocket (lai see) was given for the use of Lot 580 when the House was built. The limited use of the kitchen was not mentioned. The permission given by Yau Kam Shing in around 1968 for the use of other parts of Lot 580 was also not mentioned in his written statement.

26.  In paragraph 6 of Mr Yau’s witness statement, he said his parents asked Madam Liu to demolish the kitchen and stopped using any part of Lot 580. In his oral testimony, he said his mother did not ask Madam Liu to stop using other part of Lot 580. He then failed to explain why such words were stated in his written statement. Subsequently he changed his version and said that her mother might have said that probably out of anger, but he did not remember.  He said that he did not know whether deposit for the purchase of the House had been paid. Later he said that he knew that deposit had been paid.

27.  Mr Yau said that after his mother was aware that Madam Yau intended to sell House No 5, his mother asked Madam Yau to demolish the kitchen, and it was agreed that the kitchen would be demolished. But in his witness statement, he only mentioned that after the sale of House No 5, his parents requested Madam Liu to demolish the kitchen and stopped using any part of Lot 580.

28.  In paragraph 6(2) of his Defence, Mr Yau pleaded that “since Madam Yau’s occupation of House No 5, she was permitted by the 1^st defendant and the late Yau Kam Shing to traverse Lot 580 and to plant vegetation thereon. From time to time, Madam Yau Yin Mui would pay money to the 1^st defendant’s mother, Madam Yip Ya Yun (葉亞壬) as license fee of using Lot 580”. In his oral testimony, he said no permission to plant vegetation had been granted. The permission was only for the kitchen. Also he said that he had not discussed the matter with Madam Yau. But later, he said that he gave his consent to plant vegetation without authority.

29.  Furthermore, in his oral testimony, the permission given to Madam Yau was granted by his parents, not by him or his brother. He even gave a vivid description of how the permission was granted, how his mother gave detailed direction as to where the kitchen should be built. No such description was stated in his witness statement. In his statement, he only stated that at the time of building the House, both parties knew that part of the kitchen of House No 5 was erected on Lot 580 (在丘賢妹建造House No. 5之時, 雙方即使知道House No. 5 的部份廚房佔用了 Lot 580的空間, 本人父母亦容許丘英梅(丘賢妹)暫時使用Lot 580作為廚房和生活空間).

30.  In paragraph 8(4) of Mr Yau’s Defence, he pleaded that at the time the plaintiff’s mother took possession of House No 5, she gave several hundred dollars to the 1^st defendant’s mother as license fee for continuing to use the kitchen. In paragraph 6 of his witness statement, he stated that the plaintiff’s mother gave 500 dollars to the 1st defendant’s mother for the use of the Lot 580 for 20 years. But he did not state the exact amount and the license period in the Defence.  It seems that when preparing his Defence, Mr Yau gave a different story.

31.  In his oral testimony, Mr Yau said that it was the male, that is Chan Yuk Fui, who gave the 500 dollars. But in his witness statement, he said it was the female Madam Liu. When the cross examination was continued on the next day, before he continued giving evidence, he said that he had a headache and did not bring his glasses the day before and said he might give some incorrect answers. I find that he said so only to use it as an excuse to cover up some inconsistencies in his evidence. When he was asked again as to who made the payment, he said it was Madam Liu.

32.  According to his oral testimony, his brother Yau Kam Shing did not mention the period of 20 years after collecting the rent from Chan Bing Hong. Mr Yau failed to account how such period was included in his written statement.

33.  In paragraph 12 of his witness statement, Mr Yau stated that “the plaintiff indicated to me that they were willing to abide by the previous practice, to pay tea money to me for continue using Lot 580”. But when giving oral testimony, he said that the plaintiff at first proposed to pay a packet of lai see, but not sign any tenancy agreement. He refused. It is clear from his oral testimony that the occasion was only a settlement negotiation and the plaintiff did not agree to abide by the previous practice of acknowledging the ownership of the defendants, and as a result, parties failed to reach agreement. In his first version, he never mentioned that the plaintiff was willing to abide by the previous practice. He later changed his version and said that the plaintiff did promise to abide by the previous practice. But he himself did not agree to the term of 20 years. He counter proposed 10 years and requested the plaintiff to sign a written agreement. Those contents did not appear in his written statement. I find that he made up such evidence while giving testimony.

Findings

34.  This is a case of factual dispute. If the court accepts the evidence of the plaintiff and rejects the evidence of the defendants, the plaintiff’s claim will be successful. There is no dispute as to the boundary.

35.  Mr Sunny Chan submitted that the plaintiff had no ground to claim adverse possession of Lot 580 after she moved to the United States in 1970s. The reason being that because by her own admission, Chan Bing Hong did not acknowledge the plaintiff’s title over House No 5 and Lot 580. I do not agree to the submission. The plaintiff stated the fact that Chan Bing Hong claimed adverse possession against her and that was the reason she commenced legal proceedings against Chan Bing Hong, and eventually she successfully obtained possession of House No 5 and Lot 580. The fact that Chan Bing Hong refused to deliver possession to the plaintiff before could not be the admission of the plaintiff that she had no right to possession.

36.  I find that Lot 580 is adversely possessed by the plaintiff’s mother and the plaintiff. After her mother’s demise, it has been adversely possessed by the plaintiff. I find that she had granted license to Chan Bing Hong and was in occupation of Lot 580 through her licensee. It was argued by Mr Sunny Chan in the closing submissions that the plaintiff could not grant the license as she was not in occupation of House No 5 at the material time. I do not accept such argument. I accept the plaintiff’s evidence that she and her mother allowed Chan Yuk Fui’s family to live there. She kept a room in House No 5 until the marriage of Chan Bing Hong. She gave permission Chan Bing Hong to stay in House No 5.

37.  Notwithstanding the above, if it is regarded that before the death of Madam Liu, Lot 580 was only dispossessed by Madam Liu, I find that after her demise, the plaintiff may take advantage of the period occupied by her mother as successive squatter. In any event, the period of dispossession, if it is counted from the demise of Madam Liu, would exceed 20 years anyway.

38.  I do not accept that the plaintiff’s mother had paid money to the 1st defendants’ mother.  Nor do I accept that Mr Yau could vividly remember what happened at that time when he was at the age of 10. I also do not accept that Chan Bing Hong had ever paid rent to Yau Kam Shing, the brother of the 1^st defendant. I find that the defendants’ case of granting license to Madam Yau, Madam Liu, or Chan Bing Hong a total fabrication.

39.  In answering the issues in dispute,

i.	whether the plaintiff has occupied Lot 580 with the permission of the paper owner, that is the defendants or their predecessor-in-title? The answer is no;
ii.	whether Yau Kam Shing had granted a licence/tenancy to Chan Bing Hong? The answer is no; and
iii.	whether the plaintiff has continuously possessed Lot 580 for more than 20 years, that is, whether the plaintiff permitted Chan Bing Hong and his family to occupy the House and Lot 580 at the material time? The answer is yes.

Conclusion

40.  It is granted a declaration that the title of the defendants and/or their predecessors-in- title to Lot 580 in D.D. 253, Sai Kung, New Territories has been extinguished and that the plaintiff has acquired a possessory title to the same, and such title be vested in the plaintiff.

41.  The defendants’ counterclaim be dismissed.

42.  I also make an order nisi that the plaintiff shall have the costs of the claim and the counterclaim, and reserved costs, with certificate for counsel, to be taxed if not agree. The plaintiff’s own costs to be taxed in accordance with legal aid regulations. Unless application for variation is made within 14 days, such order shall become absolute.

43.  I thank counsel for their assistance.