MAN KAI TAK v. 梁妹 AND OTHERS

DCCJ 1806/2010

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 1806 OF 2010

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JUDGMENT

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INTRODUCTION

1.  This is the trial of the plaintiff’s claim for trespass and the 2^nd and 3^rd defendants’ counterclaim for adverse possession.

2.  The plaintiff Man Kai Tak (“Man”) is the registered owner of the premises situated at Lot No 995 in Demarcation District No 102, Yuen Long, New Territories (“the Premises”) since 25 May 1995.

The plaintiff’s case against the 1^st defendant

3.  By a written tenancy agreement dated 10 March 2005 (“the 2005 TA”), Man rented out the Premises to the 1^st defendant梁妹 (“D1”) at the annual rental of HK$600 from 10 March 2005 to 10 March 2010.  In breach of the 2005 TA, D1 failed to pay rent from 10 March 2007 to 10 March 2010.  By a letter dated 29 December 2009, Man’s then solicitors Messrs Wong & Poon demanded D1 to pay rent and threatened to institute legal proceedings.  By a further notice of expiration of tenancy dated 29 December 2009, Man’s solicitors gave notice to D1 that she was required to deliver vacant possession upon the expiration of the 2005 TA on 10 March 2010.

4.  Man issued the writ of summons on 24 May 2010.  No notice of intention to defend was given by D1. On 19 July 2010, Man obtained possession of the Premises and judgment against D1 in the following terms:-

(a) the sum of HK$1,800 as rental in arrears from 10 March 2007 to 10 March 2010;

(b) mesne profits to be assessed;

(c) interest on the sum of HK$1,800 at the rate of 8% per annum from 24 May 2010 to the date of judgment and thereafter at judgment rate until payment; and

(d) costs.

5.  Man is satisfied with the judgment obtained against D1 and is not asking the court to assess the mesne profits owed by D1 in this trial.

The plaintiff’s case against the 2^nd and 3^rd defendants

6.  After judgment was entered against D1 on 19 July 2010, the 2^nd defendant 梁根林 (“D2”) was allowed to join in these proceedings pursuant to Master B Mak’s order dated 6 April 2011.  The 3^rd defendant梁金水 (“D3”) was allowed to join in these proceedings pursuant to Registrar Lui’s order dated 31 October 2011.  Man says D2 and D3 entered into and occupied the Premises without his consent and/or approval.  This amounts to trespass.  He is claiming against D2 and D3 for the followings:-

(a) vacant possession of the Premises;

(b) damages for trespass at such rate and for such period as deemed fit by the court;

(c) interest; and

(d) costs.

The defence and counterclaim of the 2^nd and 3^rd defendants

7.  D2 and D3’s version is that their father Leung Sun 梁申 also known as Leung Chiu 梁釗 (“Leung Senior”), his wife Kwok Ah Nui (“Kwok”) and their six children including D2 and D3 started occupying 18 lots of land in Demarcation District No 102, Yuen Long, New Territories shortly after 19 March 1974 and these 18 lots include nos 880, 881, 899, 900, 901, 995 (ie the Premises), 996, 997, 999, 1000, 1001, 1002, 1003, 1004, 1005 (part), 1006, 1007 and 1008 (part) (“the 18 Lots).

8.  Their defence to Man’s claim is that Leung Senior, D2 and D3 had been in adverse possession of the Premises as joint tenants from 1 March 1984 up to the death of Leung Senior on 26 May 2001.  Afterwards, D2 and D3 have continued to be in adverse possession of the Premises.  As more than 20 years have elapsed, Man and his predecessors in title have been dispossessed of the same since 1 March 2004.  In the present case D2 and D3 are relying on the period of adverse possession from 1 March 1984 to 1 March 2004.

9.  D2 and D3 are counterclaiming for:-

(a) a declaration that Man’s title to the Premises has been extinguished and Man is statue-barred from recovering the Premises from D2 and D3 by virtue of the Limitation Ordinance 1965 (No 31 of 1965) and/or the Limitation Ordinance (Cap 347);

(b) a declaration that D2 and D3 have jointly acquired a possessory title to the Premises and that D2 and D3 are accordingly entitled to be registered as owners of the Premises as joint tenants; and

(c) costs.

CORE ISSUES

10.  D2 and D3 claim that they have been in adverse possession of the Premises since 1 March 1984 and Man’s title to the Premises was extinguished on 1 March 2004 upon the expiration of the 20-year limitation period imposed by the Limitation Ordinance 1965 (31 of 1965), section 7. Man is not disputing that D2 and D3 are in possession of the Premises.  What is in dispute is the nature of occupation by D2 and D3. The core issues of this case, as I see it, are as follows:-

(a) When did Leung Senior and his family (including D2 and D3) start occupying the Premises?

(b) What was the nature of the occupation by Leung Senior and his family?

(c) After Leung Senior’s death on 26 May 2001, what was the nature of the occupation by D2 and D3?

THE WITNESSES

11.  The plaintiff’s witnesses included Man himself, his sister-in-law侯新妹 (“Hau”) and his sister文苑湘 (“Sheung”). 

12.  D2 and D3 testified but called no other witnesses.

13.  These 5 witnesses confirmed and adopted their respective witness statements at trial.

Evidence of the plaintiff

14.  The plaintiff Man described that the Premises were owned by his father Man Kit Shing (“Man Senior”) since 1941.  Man Senior passed away on 18 May 1979.  Man and his mother Pang Kiu (“Pang”) became administrators of Man Senior’s estate.  Man became the owner of the Premises pursuant to an Assent dated 25 May 1995.

15.  Man’s family did not live on the Premises. Pursuant to a tenancy agreement dated 1 March 1979 (“the 1979 TA”), Man Senior rented out the Premises to D2 and D3’s father Leung Senior at the annual rental of HK$400 from 1 March 1979 to 30 February 1984.  In Man’s view, Leung Senior was all along a tenant.  Man’s family has never given up the ownership of and the rights over the Premises.

16.  Man Senior applied for the permit in relation to the iron hut erected on the Premises.  Man is still keeping the Modification of Tenancy Permit Receipts issued by the New Territories Administration, the Lands Department and the Government of the HKSAR for the years 1977, 1978, 1979, 1997, 2003, 2004, 2005, 2006, 2007, 2008 and 2009.  Crown rent receipts issued to Man Senior and Man for the years 1972, 1976, 1983-1988, 1988-1993, 1993-1995, 1995-1997 are also produced.  These show that Man’s family is all along responsible for liaising with the government authorities in relation to the iron hut.

17.  Man emigrated to Singapore in 1995 and the rental matters in relation to the Premises were dealt with by his mother Pang. Leung Senior’s wife Kwok was paying rental on behalf of her family. 

18.  After the expiration of the 1979 TA on 30 February 1984, the Man family and the Leung Family did not enter into another tenancy agreement.  But Leung Senior’s wife Kwok continued to pay rental to the Man family. 

19.  Around 2005, the daughters of Leung Senior approached the Man family saying that their mother had already passed away. After some negotiations, D1 represented the Leung family to enter into the 2005 TA with Man on 10 March 2005 for 5 years at the annual rental of HK$600. Man understands that D1 is one of the daughters of Leung Senior.

20.  D1 paid rental for the years 2005 and 2006 but did not pay afterwards.  In 2009, Man contacted D1 to chase for the matter but she told Man to contact her brother instead.  When Man contacted the brother, he did not give any direct reply on the issue.  Man could not get in touch with D1 again.Therefore, Man instructed his solicitors to issue a demand letter and then started these proceedings.

21.  In Man’s view, Leung Senior and his family were only tenant of the Premises.  Leung Senior’s wife Kwok paid rental to Man’s family.  After Kwok passed away, the rental was paid by D1.  Man does not agree that D2 and D3 have ownership of or rights over the Premises.

Evidence of 侯新妹

22.  侯新妹 (“Hau”) is the sister-in-law of Man.  She was married to Man’s elder brother Man Kai Shun in 1975. After marriage, she and her husband live at No 18 Fan Tin Tsuen, Yuen Long.  Her parents-in-law lived in a village house next to them.

23.  After becoming a member of the Man family, Hau learned that Leung Senior was renting the Premises from her father-in-law Man Senior.  Leung Senior lived there with his family.  Hau did not have interactions with Leung Senior and his wife.  But Hau recognised Leung Senior’s wife who also recognised Hau as Pang’s daughter-in-law.

24.  The rental matter in relation to the Premises was dealt with by her mother-in-law Pang until her death.  Leung Senior’s wife would come to Hau’s home to pay rent to Pang.  Sometimes Pang would go to the Premises to collect rent and when she did so, she would bring some fruits for the Leung family and chat with them.  Except during the period from 1985 to 1999 when Hau was staying in Germany, Hau knew that Pang was collecting rent from the Leung family.

25.  Around 2003, Pang had been admitted to an elderly home.  Leung Senior’s wife went to pay rent but there was nobody at home.  So she just left the rent to a neighbour and asked him/her to pass the same to the Man family.

26.  Hau does not know D1, D2 and D3.  But after returning to Hong Kong in 1999, she learned from her mother-in-law that Leung Senior’s children had already moved to live in the city for work convenience or had moved out of the Premises after marriage.

27.  One day in early 2005, D1 together with 2 males went to Hau’s home saying that Leung Senior’s wife had already passed away and they would like to continue renting the Premises from the Man family.  One of the males left a contact number and introduced himself as 梁根林 (ie D2).  Man, the owner of the Premises, had already moved to Singapore and so he left the renewal of the tenancy to be dealt with by his sister文苑湘.  Hau and her husband were not involved in the discussions for renewal of tenancy agreement.  But Hau later learned that the Premises were rented out to the Leung family for another 5 years.

Evidence of文苑湘

28.  文苑湘 (“Sheung”) is the younger sister of Man. She described that in early 2005, her eldest brother Man Kai Shun and sister-in-law Hau informed her that the daughters of Leung Senior had contacted them for renewal of tenancy.  Man, as owner of the Premises, authorised Sheung to discuss this matter with them.

29.  After a telephone conversation with D1, Sheung went to meet D1 and her siblings on 10 March 2005 at the pavilion of 惇裕學校 in Fan Tin Tsuen in San Tin.  Sheung was accompanied by her eldest brother Man Kai Shun and elder sister Man Yuen Fan.  On the side of the Leung family, there were about four to five people including D1.  D1 indicated that her mother passed away in 2004 and so she represented her siblings to negotiate for renewal of tenancy.  They told Sheung that they had checked the land search record and knew that Man is the registered owner of the Premises.  After discussions, the two sides entered into the 2005 TA and the agreed annual rental was HK$600.  D1 paid rent for 2005 on the spot and Sheung’s elder sister Man Yuen Fan issued a receipt to her.  The rent for 2006 was later paid by D1 to Man Yuen Fan at Fan Tin Tsuen and Man Yuen Fan also issued a receipt.

30.  D1 did not pay rental for 2007.  Sheung called her many times for chasing rental.  Sometimes it was D1 picking up the phone and sometimes it was her husband.  They made up excuses and said that the rental matter was handled by D1’s brother.  D1 gave her brother’s phone number to Sheung.  When Sheung contacted the brother, he refused to pay rental on the ground that he did not know who was the owner of the Premises.  Sheung reported the matter to her brother Man and gave him the phone number of D1 so that he could contact D1 directly.  Sheung knew that Man could not work out the matter with D1 and Man instructed lawyers to issue demand letter for outstanding rent and recovery of possession.

Evidence of the 2^nd defendant Leung Kan Lam

31.  D2 described that his family was originally from Macau and came to settle in Hong Kong in 1974.  D2’s father Leung Senior and his wife Kwok Ah Nui（郭呀女）had six children:-

(a) Leung Him（梁欠）, born around 1955.

(b) Leung Kam Mui（梁金妹）, born around 1959.

(c) Leung Kam Shui (ie D3), born in 1965.

(d) Leung Kan Lam (ie D2), born in 1968.

(e) Leung Kam Wah（梁金華）, born in 1969.

(f) Leung On Ting（梁安庭）, born in 1970.

32.  D2 does not admit that D1 is his sister or daughter of his parents.

33.  On a date before 19 March 1974, a man called Chan So had been in possession of the 18 Lots one of which was the Premises.  He made use of the same for growing sandworms.  The area of the Premises should be around 7,000 to 8,000 square feet.

34.  By a written agreement dated 19 March 1974, Leung Senior purchased from Chan So the following items which were all situated within the 18 Lots at the price of HK$18,200:-

(a) One wooden house for human habitation;

(b) Two chicken houses;

(c) Seven lots of sandworm fields;

(d) Two lots of vegetable fields;

(e) One unit of electric pump; and

(f) Miscellaneous items including water pipes and chicken manure.

35.  Shortly after 19 March 1974, Leung Senior and his family took possession of the 18 Lots and made use of the same, particularly the Premises, as their home for dining, resting, sleeping, playing and cycling.

36.  Over the years, Leung Senior and his family had been carrying out various farming and agricultural activities on the 18 Lots:-

(a) From 1974 to 1976, the Leung family made use of the Lots for raising sandworms for sale as goldfish feeds.

(b) From 1976 to early 1980s, they converted 6,000 to 7,000 square feet of the Premises into a pond for raising fish for sale to retailers and wholesalers.

(c) From 1976 to 1982, they used the Premises for raising about 20 pigs for sale to wholesalers.

(d) From 1978 to 1992, they constructed pigeon houses around the fish ponds for raising pigeons for sale to retailers and wholesalers.  These houses were registered in 1992 under the Livestock Waste Control Scheme of the Environmental Protection Department.

(e) From 1992 up to the present day, Leung Senior’s family has been growing fruit trees on the Premises for producing lychees, mangoes, longans and star fruits for sale.

37.  They have also constructed or installed facilities on the 18 Lots to support their daily life and agricultural activities:-

(a) Three water wells were dug on the Premises to obtain underground water supplies for human consumption and farming.

(b) Electricity supply to the Premises was connected and the Leung family has been paying the electricity bills up to the present day.

(c) Running water supply to the Premises was connected and the Leung family has been paying the water bills up to the present day.

38.  Around 1986, the Leung family erected a wire fence of at least 1.5 metre high along the boundaries of the 18 Lots and has been keeping three guard dogs on the Premises to deter trespassers and illegal immigrants.

39.  After the erection of the wire fence, the only access to the Premises is through a metal gate installed on the boundary of the Premises facing Lot Nos 1600 and 1601 in DD 102, Yuen Long, New Territories.

40.  The following members of the Leung family had moved out of the Premises over the years:-

(a) Leung Him left and lived apart around 1978.

(b) Leung Kam Mui ran away from the family home around 1976 to 1977 when she was forced by Leung Senior and his wife to get married.  Since then, the family had lost touch with her.

(c) Leung Kam Wah moved out of the family home and lived apart around 1990.

(d) Leung On Ting moved out of the family home around 1986 to 1987 to look for a job.  Since then, she had not returned to live on the Premises.

41.  For the periods from 19 March 1974 to 28 February 1979 and from 1 March 1984 to the present day, the joint possession by D2 and D3 is not pursuant to any oral or written tenancy, licence, consent or permission from Man or his predecessors in title.  The occupation by D2 and D3 was not conditional upon or subject to the payment of rent, licence fees or occupation fees and no such fees had ever been paid to Man or his predecessors.

42.  Apart from this legal action, Man or his predecessors had never instituted any legal proceedings against anyone of the Leung family.

43.  D2 says that he himself, D3 and Leung Senior had been in adverse possession of the Premises as joint tenants from 1 March 1984 to Leung Senior’s death on 26 May 2001.  After that, D2 and D3 have been in adverse possession as joint tenants.

44.  Man Senior and his family had never lived on the Premises.  The walking distance from Man Senior’s residence at G/F, No 18 Fan Tin Tsuen, San Tin, Yuen Long, New Territories to the Premises is about half an hour.  But they have never come to visit the Premises.  They have never collected or demanded rental from the Leung family.

45.  D2 had never met anyone from the Man family until the start of these proceedings.  D2 met Man’s brother Man Kai Shun at a court hearing on 6 April 2011.

46.  D2 says that he and D3 had no knowledge of the 2005 TA entered into between D1 and Man.  D1 had never taken possession of the Premises during the period of the tenancy from 10 March 2005 to 10 March 2010 and had never done so since 19 March 1974.  They had never authorised D1 to enter into any tenancy agreement on their behalf.

Evidence of the 3^rd defendant Leung Kam Shui

47.  D3 testified at trial.  He was just confirming that he agreed to the contents of his brother D2’s witness statement.  So his evidence is similar to that of D2.  

DISCUSSION

48.  The determination of the issues for this trial requires me to make a number of factual findings. 

Legal principles for fact findings

49.  I find what was stated by Deputy High Court Judge Eugene Fung SC in Hui Cheung Fai v Daiwa Development Ltd, HCA 1734/2009, as applied by His Honour Judge Andrew Li in Ricoh Hong Kong Limited v Wallbanck Brothers Securities (Hong Kong) Limited, DCCJ 2454/2013, instructive:-

“76. In making my findings of fact in this case, I am guided by a number of general principles which judges apply as to fact finding and the assessment of credibility.

77. Generally speaking, contemporaneous written documents and documents which came into existence before the problems in question emerged are of the greatest importance in assessing credibility: Onasis v Vergottis [1968] 2 Lloyd’s Rep 403 at 431 (Lord Pearce). It is right to point out, however, that some of the documents in this case are alleged by the Son to be sham and those documents obviously cannot be used to assess the credibility of the parties.

78. In deciding whether to accept a witness’ account, importance should also be attached to the inherent likelihood or unlikelihood of an event having happened or the apparent logic of events: eg Lam Rogerio Sou Fung v Tan Soon Gin George (unreported, HCA 2576/2005, 5 May 2011) paragraph 39 (Chu J).

79. In determining a witness’ credibility, I have also attached importance to the consistency of the witness’ evidence with undisputed or indisputable evidence, and the internal consistency of the witness’ evidence. The latter type of consistency is often tested by a comparison between the witness’ oral testimony and his or her witness statement.

80. I have cautioned myself against the dangers of too readily drawing conclusions about truthfulness and reliability solely or mainly from the appearance of witnesses (Ting Kwok Keung v Tam Dick Yuen (2002) 5 HKCFAR 336 at paragraphs 36-37 (Bokhary PJ)) or from the assessment of the witnesses’ character (Esquire (Electronics) Ltd v HSBC [2007] 3 HKLRD 439 at paragraph 135 (Stock JA)).

81. The practical approach to assessing credibility of witnesses in a case such as the present may have best been summarised by the words of Robert Goff LJ, as he then was, in The Ocean Frost [1985] 1 Lloyds’ Rep 1 at 57:

“Speaking from my experience, I have found it essential in cases of fraud, when considering the credibility of witnesses, always to test their veracity by reference to the objective facts proved independently of their testimony, in particular by reference to the documents in the case, and also to pay particular regard to their motives and to the overall probabilities.  It is frequently very difficult to tell whether a witness is telling the truth or not; and where there is a conflict of evidence such as there was in the present case, reference to the objective facts and documents, to the witnesses’ motives, and to the overall probabilities, can be of very great assistance to a judge in ascertaining the truth.”

82. Whilst these words were spoken in the context of a fraud case, I believe they are applicable to any case where a witness’ credibility features prominently in the court’s determination.  They are particularly apposite in a case like the present where very serious allegations (akin to allegations of fraud) have been made by the Son against the defendants.”

When did Leung Senior and his family first occupied the Premises?

50.  D2 and D3 allege that Leung Senior’s family started occupying the Premises shortly after 19 March 1974.  Their basis is the written agreement dated 19 March 1974 between Leung Senior and Chan So under which Leung Senior purchased from Chan So the followings:-

(a) One wooden house for human habitation;

(b) Two chicken houses;

(c) Seven lots of sandworm fields;

(d) Two lots of vegetable fields;

(e) One unit of electric pump; and

(f) Miscellaneous items including water pipes and chicken manure.

51.  However, there is no objective evidence to prove that the six items stood on the Premises.  While it might be possible that Leung Senior’s family was carrying out some agricultural activities on some parts of the 18 Lots or in the nearby area around that time, one is unable to tell whether such activities were conducted on the 18 Lots and, if so, which parts thereof. I do not accept that Leung Senior started occupying the Premises around 19 March 1974. 

52.  There is no mention in the agreement about the transfer of any land interest or any lot number.  From the land search record, Chan So has never been the registered owner of the Premises.  There is no evidence that Chan So had exclusively possessed the Premises for over 20 years. He should have no right to grant any land interest to Leung Senior.   I regard the agreement between Leung Senior and Chan So as a sale of business tools and equipment only.

53.  The document that throws light on Leung Senior’s time of occupation is the 1979 TA between Man Senior and Leung Senior.  From this one can infer that Leung Senior was occupying the Premises for the duration of 1979 TA which is stated to be from 1 March 1979 to 30 February 1984.  There should not be 30 days in the month of February.  I suppose Man Senior and Leung Senior intended that the 1979 TA should expire on the last day of February 1984.

54.  Based on the 1979 TA, I find Leung Senior started occupying the Premises from 1 March 1979.

55.  D2 and D3 say that they together with Leung Senior were in adverse possession from 19 March 1974 to 28 February 1979, ie the date before the start of the 1979 TA.  I find this contention illogical and lacking common sense.  Assuming D2 and D3’s contention were true, one could not explain why the registered owner Man Senior would allow Leung Senior, originally a trespasser, to continue occupying the Premises by entering into the 1979 TA with him.  One would expect the registered owner to take action to oust the trespasser instead. 

What was the nature of the occupation by Leung Senior and his family?

From 1 March 1979 to 18 May 1979

56.  From 1 March 1979 to 18 May 1979 which is the date of Man Senior’s death, the occupation of the Premises by Leung Senior and his family must be pursuant to the 1979 TA.  Leung Senior was the tenant and his family members were occupying the Premises as Leung Senior’s agents and/or licensees.

From 19 May 1979 to the last day of February 1984

57.  After the death of Man Senior on 18 May 1979, letters of administration were granted to his wife Pang and his son Man on 27 May 1983.

58.  The 1979 TA would not be terminated on the death of Man Senior but would devolve on the personal representatives of Man Senior. The following paragraphs from Woodfall: Landlord and Tenant, Volume 1, illustrate the point:-

“Paragraph 17.277

The death of the landlord or the tenant does not put an end to a tenancy, except in the case of a tenancy at will. Even where the tenancy is expressed to be a tenancy for the life of the tenant it takes effect as a tenancy determinable by notice on the death of the tenant, and does not terminate automatically on the tenant’s death.

The death of the landlord will not terminate the tenancy unless he himself had only a life interest and was not acting in exercise of statutory powers.  Even where this is the case, the tenant of an agricultural holding is entitled to continue to hold and occupy the holding until the occupation is determined by twelve months’ notice to quit expiring at the end of a year of the tenancy.”

Paragraph 16.226

The effect of the Administration of Estates Act 1925 is that the reversions devolve on the personal representatives of the landlord.  The landlord’s personal representatives may assent to the vesting in any person who (whether by devise, bequest, devolution, appropriation or otherwise) may be entitled thereto either beneficially or as a trustee or personal representative.  The assent must be in writing.

Paragraph 16.227

The personal representatives may sue for rent which became due and for breaches of covenant committed in the lifetime of the landlord, as well as for causes of action arising since the death of the landlord until assent or conveyance by them.”

59.  Section 36 of the Administration of Estates Act 1925 referred to in Woodfall: Landlord and Tenant is in similar terms as section 66 of the Probate and Administration Ordinance (Cap 10).

60.  I accept the evidence of Man, his sister-in-law Hau and sister Sheung that the rental matter of the Premises was handled by Man Senior’s wife Pang and that all along she collected rent from Leung Senior’s wife Kwok until she was admitted to elderly home in 2003.  I do not accept D2 and D3’s allegation that Man Senior and his family had never visited or inspected the Premises.  Man Senior and his wife Pang just lived at a walking distance of about 15 to 30 minutes from the Premises.  I do not believe that they had never inspected the Premises in all these years.  If the Man family had abandoned the Premises as alleged by D2 and D3, they would not even bother to pay for Modification of Tenancy Permit in 1977, 1978, 1979, 1997, 2003, 2004, 2005, 2006, 2007, 2008 and 2009 and the Crown rent in 1972, 1976, 1983-1988, 1988-1993, 1993-1995, 1995-1997.

61.  One could infer from the circumstantial evidence that Pang, as intended personal representative and subsequently as personal representative, on behalf of Man Senior’s estate, was performing the 1979 TA with Leung Senior up to the expiration date which was the last day of February 1984.  

62.  I have come to the conclusion that from Man Senior’s death on 18 May 1979 to the last day of February 1984, Leung Senior and his family were occupying the Premises pursuant to the 1979 TA.  Leung Senior was the tenant and his family members were occupying the Premises as Leung Senior’s agents and/or licensees.

From1 March 1984 to 24 May 1995

63.  Man became the registered owner of the Premises on 25 May 1995 pursuant to an Assent dated 25 May 1995.

64.  From 1 March 1984 to 24 May 1995, ie from the date after the expiration of the 1979 TA to the date before Man became registered owner, Leung Senior and his family were continuing the occupation of the Premises but such occupation was not pursuant to any written tenancy agreement.  Pang, as one of the administrators, continued to collect rent from the Leung family.  One could infer from the parties’ conduct that after the expiration of 1979 TA on the last day of February 1984, Pang, as one of the administrators acting on behalf of the estate of Man Senior, entered into another yearly tenancy agreement (which was unwritten) with Leung Senior on the same terms as the 1979 TA. (See: Dean & Church of Christ Canterbury v Whitbread (1996) 72 P & CR 9)

65.  As such, Leung Senior and his family’s occupation of the Premises from 1 March 1984 to 24 May 1995 was pursuant to the aforesaid yearly tenancy.  Leung Senior was the tenant and his family members were occupying the Premises as Leung Senior’s agents and/or licensees.

From 25 May 1995 to 26 May 2001

66.  Man became the registered owner on 25 May 1995. From that date to the date of Leung Senior’s death on 26 May 2001, Man’s mother Pang continued to collect rent from the Leung family.  I find the situation similar to the earlier period.  From the parties’ conduct, one could infer another yearly tenancy agreement (which was unwritten) being created by Man and Leung Senior on the same terms as the 1979 TA.  Pang was collecting rent from the Leung family as agent for Man.

67.  So during the period from 25 May 1995 to 26 May 2001, Leung Senior and his family were occupying the Premises pursuant to another yearly tenancy agreement. Leung Senior was the tenant and his family members were occupying the Premises as Leung Senior’s agents and/or licensees.

From 27 May 2001 to 9 March 2005

68.  After Leung Senior’s death on 26 May 2001, the yearly tenancy between Man and Leung Senior would not be terminated automatically.  Woodfall: Landlord and Tenant, Volume 1, Paragraph 16.299 illustrates the point:-

“On the death of a tenant, his real estate devolves on his personal representatives. Real estate includes chattels real (i.e. leaseholds). A tenancy belonging to a testator or intestate vests in his executor or administrator without any entry.”

69.  After Leung Senior’s death, his yearly tenancy with Man could have been terminated by one of the parties serving half-year notice (ie 182 days).  But there is no evidence of any such termination by notice.  So the yearly tenancy between Man and Leung Senior would continue for the benefit of Leung Senior’s estate.

70.  Pang continued to collect rental as agent from the Leung family until 2003 when she was admitted to the elderly home. Thereafter, Leung Senior’s wife arranged to pay rental to Man’s family members through their neighbour.

71.  So during the period from 27 May 2001 to 9 March 2005 which was the date before the 2005 TA coming into existence, Leung Senior’s family members were occupying the Premises pursuant to the yearly tenancy between Man and Leung Senior’s estate.  Leung Senior’s estate had replaced Leung Senior as the tenant and Leung Senior’s family were occupying the Premises as agents and/or licensees of the estate.

From 10 March 2005 to 10 March 2010

72.  The 2005 TA covers the period from10 March 2005 to 10 March 2010.  This tenancy agreement was between D1 and Man.

73.  D2 and D3 say they did not have knowledge of the 2005 TA or any relationship with D1.  They say D1 had never taken possession of the Premises during the term of the 2005 TA.

74.  On the other hand, Man’s case is that D1 is in fact the sister of D2 and D3. 

Identity of the 1^st defendant

75.  D1 signed her name as梁妹in the 2005 TA.  D2 and D3 say that the name of their sister is梁金妹and that she left home around 1976 to 1977 and had lost touch with the family.

76.  I find that D1梁妹is more likely than not the sister of D2 and D3. In other words, 梁妹and 梁金妹are the same person.  My reasons are as follows:-

(a) Looking at D1’s marriage certificate, she was married on 23 May 1983 at the age of 21.  Her age would match D2 and D3’s version that she was born around 1959. 

(b) While D1’s full name is梁金妹.  It would not be unusual that she skipped the middle character and signed the 2005 TA in her alias as梁妹.

(c) D2 and D3’s father Leung Senior梁申also used other aliases梁新, 梁釗and梁超.  The Chinese character for the surname was always the same.  But the second character was different.

(d) In D1’s marriage certificate, the name of D1’s father was stated to be梁超which was one of the aliases used by Leung Senior. 

(e) D2 denies that Leung Senior ever used 梁超 as alias.  But in a form of the Environmental Protection Department dated 27 November 1992 filed for the purpose of the Livestock Waste Control Scheme and signed by Leung Senior’s wife, Leung Senior’s name was clearly stated to be 梁超 which is the same name filled in D1’s marriage certificate.

(f) D3’s full name is梁金水but he also has an alias as梁啤.

(g) On the day of signing the 2005 TA on 10 March 2005, D1 could produce the earlier 1979 TA for Sheung’s confirmation.  If D1 were not the daughter of Leung Senior, there would be no reason why she could get hold of the 1979 TA entered into by Leung Senior.

(h) On the day of signing the 2005 TA on 10 March 2005, D1 introduced to Sheung that one of the males accompanying her was Leung Kam Wah （梁金華）.  This male is clearly the brother of D2 and D3.

(i) It would be unimaginable that D1, alleged by D2 and D3 to be a total stranger, would bother to enter into the 2005 TA and pay rent for 2005 and 2006 but never took possession of the Premises.  The payment of rent is evidenced by receipts issued by Man’s sister Man Yuen Fan (文苑芬) and countersigned by D1. D2 and D3’s version is unreasonable.

(j) I am not surprised by D2 and D3’s strenuous denial of the 2005 TA and any relationship with D1.  D2 and D3’s case is that they had been in adverse possession of the Premises since 1 March 1984.  If they admit the 2005 TA was entered into by their sister D1 for their benefit, this will be harmful, if not fatal, to their case of adverse possession.

(k) I accept Hau’s evidence that in early 2005, prior to the conclusion of the 2005 TA, D1 and D2 together with a male went to her home and indicated their wish to continue renting the Premises.  D2 introduced himself as梁根林 and left a telephone number for contact.

77.  I am aware that in D1’s marriage certificate, her father was stated to be deceased on the date of the marriage on 23 May 1983 while Leung Senior’s date of death was 26 May 2001.  Counsel for D2 and D3 relied on this to argue that D1 must not be Leung Senior’s daughter and she has no relationship with D2 and D3.  While I agree that this might give rise to a doubt, this does not change my view that D1 is the daughter of Leung Senior and the sister of D2 and D3 based on the overall evidence.  The possible explanation might be the one given by D2 and D3 themselves.  D1 left home in around 1976 to 1977 because Leung Senior and his wife forced her to get married.  As a result, the relationship between D1 and Leung Senior turned sour.  When D1 got married on 23 May 1983, she did not want to involve Leung Senior and simply stated her father as deceased.

78.  Even if I am wrong in my finding that D1 is the daughter of Leung Senior and sister of D2 and D3, I would still believe that D1 must be a member closely related to the Leung family including D2 and D3.  As stated before, it is unimaginable that D1, alleged by D2 and D3 to be a total stranger, would bother to enter into the 2005 TA and pay rental for 2005 and 2006 but never took possession of the Premises.  D2 and D3’s version is unreasonable.

79.  I have come to the view that D1, for the benefit of other members of the Leung family including D2 and D3, met Man’s sister Sheung around 10 March 2005 and entered into the 2005 TA so that her family members including D2 and D3 could continue to use the Premises.  D1’s mother Kwok passed away on 8 July 2004.  Before death, Kwok was the one liaising with Man’s mother Pang for the rental matter of the Premises.  The 2005 TA fits into the chronology of events.

80.  Therefore, I rule that during the period from 10 March 2005 to 10 March 2010, Leung Senior’s family was staying on the Premises pursuant to the 2005 TA.  They were agents and/or licensees of D1.

81.  Counsel for D2 and D3 argue that there was a discrepancy between Man’s version and Sheung’s version in relation to the signing of the 2015 TA.They point out Man’s evidence apparently was that the 2015 TA was prepared in advance and he signed first but Sheung’s evidence was that the 2015 TA was written out on the spot when Sheung met D1 on 10 March 2005 and so it was not possible for Man to sign first.  I do not agree there was a discrepancy necessarily.  To be fair to Man, he stated in evidence that he could not recall the time when he signed the 2005 TA.  As to Sheung, she said under cross-examination that she could not recall whether she witnessed the writing out of the 2005 TA.  I understand her to mean that she witnessed the writing of the rental receipt by her elder sister Man Yuen Fan on the spot when they met D1 on 10 March 2005.  She did not necessarily mean that the 2005 TA was also written on the spot.  In any event, assuming the discrepancy alleged by counsel exists, it is insignificant.  Whether Man or D1 signed the tenancy agreement first is not important.  What is important that they both signed on the agreement and agreed to be bound.  D1 performed the agreement by paying rent to Man Yuen Fan on the spot.

Conclusion on nature of occupation

82.  As can be seen, if one accepts that D2 and D3 were in occupation of the Premises from 1 March 1984 to 10 March 2010, their occupation was pursuant to the various tenancies under which Leung Senior, Leung Senior’s estate and D1 were tenants.  They were simply occupying the Premises as agents and/or licensees of the tenants.  As such, D2 and D3’s claim for adverse possession must fail.

Law on adverse possession

83.  To establish a claim for adverse possession, D2 and D3 need to prove:-

(a) factual possession; and

(b) intention to possess.

84.  On factual possession, Megarry & Wade: The Law of Real Property (8^th Edition), paragraph 35-017 states the following:-

“Factual possession.  “Possession is a legal concept which depends on the performance of overt acts”.  For squatter to prove that he has factual possession he must show that:-

he had an appropriate degree of physical control of the land;

his possession was a single possession: there can be a single possession by several squatters jointly but not severally;

his possession was exclusive: a squatter cannot be in possession at the same time as the true owner; and

he dealt with the land in question as an occupying owner might have been expected to deal with it and no-one else has done.”

85.  Paragraph 35-018 continues to state that:-

“Whether the squatter has taken a sufficient degree of control in a matter of fact, depending on all the circumstances, in particular the nature of the land and the manner in which such land in commonly enjoyed ...... The adverse possessor need not himself be in physical possession of the land. If he grants a tenancy or licence, the tenant or licensee possesses on his behalf and is estopped from denying the licence or tenancy.”

Finding on factual possession

86.  D2 and D3 allege that since 19 March 1974 their family had carried out various activities and had constructed various structures and utilities on the 18 Lots of which the Premises form part.  Even if one assumes that D2 and D3 were not licensees but trespassers from 1 March 1984 to 1 March 2004 (which I do not accept), it is incumbent on them to prove to the court their activities, structures and utilities were in fact on the Premises. There is no surveyor’s evidence on this aspect.  I am unable to say these alleged activities, structures and utilities (if existed at all) were on which parts of the 18 Lots and whether they related to the Premises at all or their scale.  In this connection, one must not forget D2’s saying that the Premises occupy an area of 7,000 to 8,000 square feet.  I find D2 and D3 not able to prove a sufficient degree of control of the Premises for a period of 20 years from 1 March 1984 as alleged by them.

87.  On intention to possess, Megarry & Wade: The Law of Real Property (8^th Edition), paragraph 35-017 states the following:-

“ANIMUS POSSIDENDI.  The squatter must have “an intention for the time being to possess the land to the exclusion of all other persons, including the owner with the paper title”.  As regards that intention:

(i) It is an intention to possess and not an intention to own.

(ii) It is 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 the 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 realise that he was trespassing on another’s land.

(iv) It is an intention for the time being to possess the land.  The intention does not have to be to exclude the owner with the paper title in all future circumstances.  As regards the true owner, the intention can only be to exclude him “so far as is reasonably practicable and so far as the processes of the law will allow.” Accordingly, it is not fatal to a squatter’s claim that he would have been willing to pay for his occupation had he been asked to do so by the true owner.

(v) The intention to possess must be manifested clearly, so that it is apparent that the squatter was not merely a persistent trespasser, but was seeking to dispossess the true owner.  If the squatter’s acts are equivocal then he will not be treated as having the requisite animus possidendi.  A request to the true owner to exclude trespassers is inconsistent with an intention to possess.  However, an acknowledgement of the true owner’s title, although it will cause time to start to run afresh, will not necessarily be inconsistent with the squatter having the necessary intention to possess.”

88.  I have considered the case of JA Pye (Oxford) Ltd v Graham [2003] 1 AC 419 where Lord Browne-Wilkinson stated the following points about intention to possess:-

“A similar manifestation of the same heresy is the statement by Sir Nathaniel Lindley MR in Littledale v Liverpool College [1900] 1 Ch 19, 23 that the paper owners “could not be dispossessed unless the plaintiffs obtained possession themselves; and possession by the plaintiffs involves an animus possidendi – ie, occupation with the intention of excluding the owner as well as other people”. This requirement of an intention to exclude the owner as well as everybody else has been repeated in subsequent cases. In Powell’s case 38 P&CR 452, 471-472 Slade J found difficulty in understanding what was meant by this dictum since a squatter will normally know that until the full time has run, the paper owner can recover the land from him. Slade J reformulated the requirement (to my mind correctly) as requiring an “intention, in one’s own name and on one’s own behalf, to exclude the world at large, including the owner with the paper title if he be not himself the possessor, so far as is reasonably practicable and so far as the processes of the law will allow”.”

“...... The question in simply, whether the defendant squatter has dispossessed the paper owner by going into ordinary possession of the land for the requisite period without the consent of the owner.”

89.  Another authority on the issue of intention to possess is the Court of Final Appeal’s judgment in Wong Tak Yue v Kung Kwok Wai David & Anor [1998] 1 HKC 1 at 13A-B where Chief Justice Li stated that:-

“The question of intention to possess, as with any other question of intention, in one of fact. Whether it can be established depends on an assessment of all the circumstances in a particular case.”

“Where the occupier has made self-serving statements as to what was his intention, whether during the period of occupation or when challenged in legal proceedings, the courts should approach them with some skepticism. The courts would scrutinize the circumstances in which they were made and would give them such weight if any as they may deserve. Conversely, where the occupier has made statements as to what was his intention and such statements are against his interest, the courts would usually accord to them considerable weight.”

Finding on intention to possess

90.  My earlier findings are that D2 and D3, even they occupied the Premises from 1 March 1979 to 10 March 2010, they did so as agents and/or licensees of tenants of the Premises at various stages namely, Leung Senior, Leung Senior’s estate and D1.  As licensees, they cannot be said to have any intention to exclude all other persons, including the registered owners.  D2 and D3 knew or should know that their licences would be terminated once the underlying tenancy agreements were terminated.

D2 and D3’s status after 19 July 2010

91.  The 2005 TA expired on 10 March 2010 and Man obtained possession of the Premises against D1 on 19 July 2010.  D2 and D3’s licence to stay on the Premises must have been revoked by 19 July 2010, if not earlier.  Since then, they have been trespassers on the Premises.

92.  Clerk & Lindsell on Torts (20^th Edition) illustrates this point at paragraph 19-47:-

“A licensee who remains on land after his licence expires or is properly revoked is a trespasser.”

OVERALL IMPRESSION OF THE WITNESSES

93.  In my discussion, I have already outlined the reasons why I reject D2 and D3’s version.  I would like to add a few words about my overall impression of the witnesses. 

94.  The only criticism that can be made of Hau is that when counsel for D2 and D3 put questions to her, she agreed that she did not know her mother-in-law Pang collected rent of the Premises from 1979 to 2003.  This answer is inconsistent with what she said in examination-in-chief where she confirmed that she witnessed Pang collecting rent from Kwok, ie Leung Senior’s wife.

95.  This inconsistency does not prevent me from accepting Hau’s evidence.  I believe Hau misunderstood the question put by counsel for D2 and D3 due to the length of the question.  Hau only received primary education.  She appeared to me as a simple and credible witness.  She admitted in evidence that she only witnessed Pang collecting rent from Kwok when Kwok visited.  But if Pang went to the Premises to find Kwok for rental collection, Hau would not follow.  From this, one can know that Hau is a witness who would only tell the court what she witnessed and would not be prepared to make up stories.  Most important of all, Hau clarified and confirmed her version in examination-in-chief during re-examination.

96.  On the other hand, I find D2 to be an incredible witness.  When he made an affirmation on 22 December 2010, he declared that he had occupied and managed the Premises for over 40 years.  D2 was born in 1968. That would mean that he started the occupation around 1970 and started managing the Premises when he was about 2 years old.  This not only lacks common sense but contradicts his evidence at trial.  D2’s evidence at trial is that he and his family started occupying the Premises shortly after 19 March 1974.  D3 gave a different date of first occupation as 1 March 1979 in his affirmation dated 24 October 2011.  D2 and D3’s inconsistency on this important date causes me to have a great reservation about their credibility. 

97.  Furthermore, D2 said his father Leung Senior told him that Leung Senior became the owner of the Premises pursuant to the agreement dated 19 March 1974 with Chan So.  If Leung Senior had truly believed that he had become the owner as early as 19 March 1974, it did not make sense for him to enter the 1979 TA with Man Senior as a tenant.  I believe it is more likely than not that Leung Senior did not say anything like that described by D2.  It is most probably D2 is making up a story.

98.  D2 and D3 do not recognise the 2005 TA and say D1 is a stranger not having any relationship with them.  If so, there was no reason why this important point was not made in D2’s earlier affirmations dated 22 December 2010, 26 January 2010, 10 March 2011, 18 July 2012 or in D3’s earlier affirmation dated 24 October 2011.

99.  In their affirmations filed in 2010 and 2011 while they were acting in person, D2 and D3’s original defence was that Chan So had dispossessed Man Senior.  Their father Leung Senior had obtained ownership of the Premises from Chan So as a result of the agreement dated 19 March 1974. But in the Amended Defence and Counterclaim, they changed the factual basis of defence and claim that Leung Senior, D2 and D3 were jointly in adverse possession from 1 March 1984 to the death of Leung Senior on 26 May 2001 and after that D2 and D3 were jointly in adverse possession.  This change of stance gives rise to a doubt on my mind regarding the truthfulness of their defence.

100.  I find D3 to be an unreliable witness.  Under cross-examination by Man’s counsel, he was angry and impatient.  Instead of answering counsel’s questions directly, D3 put questions back to counsel rhetorically.

101.  Under cross-examination, D3 said his elder sister 梁金妹 was present at Leung Senior’s funeral in 2001.  This clearly contradicted D2 and D3’s version in their witness statements where they said 梁金妹 left home around 1976 to 1977 and the family had lost contact with her.  But in re-examination, D3 retracted from what he said under cross-examination and stated 梁金妹 did not attend the funeral.  Instead, it was his younger sister who attended the funeral.  With respect, I simply do not understand why D3 would mix up his elder sister and younger sister.  In my view, D3 is simply untruthful.

OVERALL CONCLSUION

102.  I find Man, his sister-in-law Hau and sister Sheung to be honest and truthful witnesses.  Their evidence is straightforward and in accordance with common sense and the chronology of events.

103.  Based on the aforesaid, that D2 and D3 should give vacant possession of the Premises to Man.  They should also be liable to pay damages for their trespass.  In the absence of other information, I believe it is appropriate to adopt the rate of annual rental of HK$600 under the 2005 TA for this purpose.  These should be measured from 19 July 2010 (when D2 and D3 no longer had any licence to stay on the Premises) until the date of delivery of vacant possession. 

ORDER

104.  I order as follows:-

(a) the 2^nd and 3^rd defendants do give the plaintiff vacant possession of the premises described in the Re-amended Statement of Claim endorsed on the Writ of Summons as Lot No. 995 in Demarcation District No 102, Yuen Long, New Territories, Hong Kong.

(b) the 2^nd and 3^rd defendants do jointly and severally pay the plaintiff:-

(i) damages at the annual rate of HK$600 from 19 July 2010 to the date of delivery of vacant possession; and

(ii) interest on the said damages at judgment rate from the date of judgment until payment.

(c) The counterclaim of the 2^nd and 3^rd defendants be dismissed.

105.  Costs should follow the event.  Save and except for previous costs orders made by the court, I make a costs order nisi that the 2^nd and 3^rd defendants do jointly and severally pay the costs of this action including the costs of the plaintiff’s claim and the costs of defending the counterclaim, to be taxed if not agreed, with certificate for counsel.  The costs order nisi shall become absolute in the absence of application to vary within 14 days.

PLAINTIFF’S INTERLOCUTORY APPLICATION AT TRIAL

106.  I have already given my judgment for this trial.  But for the sake of completeness, I would like to say a few words about an application by Man on the first day of the trial.

107.  Man filed a Supplemental List of Documents the day before the start of the trial.  It covered 14 documents.  Items 1 to 12 of the list had been disclosed previously and were not in dispute.  Items 13 and 14 were new. Before the start of the trial, Man sought to adduce these new documents at trial.  D2 and D3 opposed the application.

108.  Item 13 consisted of 2 undated handwritten notes.  The 1^st note bore the name of Leung Kan Lam (ie D2) with a telephone number.  The 2^nd note bore the name of Leung Kam Wah with a telephone number and also the name of Leung Mui (ie D1) and another telephone number.  Leung Kam Wah is a sibling of D1, D2 and D3.

109.  Item 14 consisted of an envelope for a registered mail allegedly sent by Man Yuen Fan to D1.  Inside the envelope, there was a letter dated 1 November 2009 from Man to D1 requesting payment of rent.

110.  After hearing submissions from counsel on both sides, I refused Man’s application.  I gave my reasons as follows: -

(a) Man’s application was late by any standard.  There was no reason why the new documents were not disclosed earlier but only until the day before the start of trial.  In the Timetabling Questionnaire filed by Man on 6 November 2013, Man confirmed that he did not intend to take out further interlocutory application.  It was on this basis that Master Lam set this case down for trial on 6 January 2014.  Even at the pre-trial review before me on 8 April 2014, there was no application by Man to adduce these new documents. 

(b) Counsel for D2 and D3 referred me to a number of case authorities to show that the courts were reluctant to allow a party to adduce new documents at trial and these include Hong Lok School Ltd v Chow Sai Yiu & Others [2003] 2 HKLRD 782, Headwin Engineering Ltd v United Soundfair Engineering Co Ltd, DCCJ 5034/2006, Liu Chen v Chan Poon Wing, HCPI 779/2006, Fu Sau Kwok Barry v Foo Sau Chun Richard, HCCL 20/2004, Guangzhou Green-Enhan Bio-Engineering Co Ltd v Green Power Health Products International Co Ltd, HCA 4651/2002, HCA 2802/2003, HCMP 74/2004, Cheung Wei Man Vivien v Centaline Property Agency Ltd, HCA 286/2000 and Big Island Construction (HK) Ltd v Wu Yi Development Company Ltd, HCA 1957/2005.

(c) Paragraph 34 of Practice Direction 5.2 states that late interlocutory applications may be dismissed on the basis of delay alone.

(d) The new documents came from the hands of Man’s siblings Man Kai Shun and Man Yuen Fan but they would not be called as witnesses at trial.  I agreed with counsel for D2 and D3 that they would be deprived of the opportunity to cross-examine these two persons and call evidence to challenge the authenticity of the new documents if the same were adduced.

(e) The adducing of these new documents would cause prejudice to D2 and D3 unless the court adjourned the trial for them to make enquiries of the same and consider calling rebuttal evidence.  Such a course was highly undesirable.

111.  I refused Man’s interlocutory application to adduce new documents and ordered Man to pay D2 and D3 costs of and occasioned by the application in any event, to be taxed if not agreed, with certificate for one counsel.

EPILOGUE

112.  Lastly, I thank counsel for both sides for their assistance and thorough submissions.  The plaintiff’s counsel’s written submissions consisted of 33 pages.  The defendants’ counsel’s written submissions consisted of 94 pages.  A total of 17 authorities from decided cases and leading textbooks were submitted for my consideration.  It is sufficient for me to say that their points had been duly considered before reaching my conclusion.  It is unnecessary and counterproductive for me to set out each and every point taken by them.  I believe the above analysis sufficiently disposes the matter.