LEE YUNG SHING AND OTHERS v. CHAN HING KAI, the Executor of MADAM MOK NG (deceased) AND ANOTHER

HCA 2043/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2043 OF 2005

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J U D G M E N T

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Introduction

1.  In Tai Po, New Territories, there is a place called Ping Shan Chau.  It is not far from Tai Po Market railway station.  At Ping Shan Chau, there is an up scale village type housing development, consisting of 60 odd village type houses, called Hilltop Garden (“Hilltop Garden”).  It is situated to the north of a piece of land known as Lot No. 500 in D.D. 21 (“the Land”).  Immediately adjacent and to the west of the Land is a piece of Government land known as D.D. 21, Pun Shan Chau (“the Adjacent Land”).

2.  In 1991, the developer of Hilltop Garden, Rita Enterprise Co Ltd (“Rita”), wanted to build a road on the Land running from the south all the way to the north where the main gate of Hilltop Garden was situated.  Rita began to enter into negotiation with the owner of the Land.  The Land was owned by a family named Pong at that time.  Rita wanted to purchase from the Pongs Section A of the Land (the western portion) (“Section A”).  The negotiation progressed quickly. 

3.  Before the sale was concluded and in June 1991, Rita instructed Land Marker (1980) HK Co Ltd (“Land Marker”) to provide a survey of the Land.  In due course, Rita was advised by Land Marker that there were some structures built on the Adjacent Land which had encroached onto part of Section A.  The most significant of the encroachments was a temporary structure (“the Temporary Structure”) which was largely standing on Section A.  The Temporary Structure remains standing to date and this is an action by the relevant owners of Section A to recover possession of the encroached land.

This Action

4.  As will be seen below, Section A was subsequently divided into 10 sections and the encroaching structures stand on parts of Sections 6, 7, 8 and 10 of Section A.  This is an action by the owners of those sections.  At the beginning of this trial, Mr Chan who appears for the Plaintiffs informed this Court that the only encroaching structure in issue is the Temporary Structure.  In other words, the Plaintiffs are no longer seeking any relief in respect of the other encroaching structures.  The parties have agreed a plan, marked “P1”, which shows, inter alia, the location of the Temporary Structure.  A copy of P1 is annexed to this Judgment.

5.  There are two Defendants in this action.  The 1^st Defendant is the Executor of Madam Mok Ng (“Madam Mok”).  Madam Mok was the occupier of the Adjacent Land until she passed away on 3.7.96.  Mr Chan has informed this Court that the Plaintiffs do not seek any relief against the 1^st Defendant and he therefore drops out of the picture.  The 2^nd Defendant (“Madam Yau”) is a disciple of Madam Mok.  She has been living on the Adjacent Land since 1996.

6.  There is only one issue in this case, namely, whether Madam Yau can establish a possessory title (by adverse possession) in respect of the land (within Section A) on which the Temporary Structure is standing (“the Disputed Land”).

A Taoist temple

7.  On 1.5.1973, Madam Mok obtained a Crown Land Licence (“the Licence”) from the Government for the use of the Adjacent Land.  On the Licence, the “Structures permitted on the Licence Area” are stated as:

“1. shade

2. dwelling & kitchen

3. chicken shed

4. agri. Storage”.

8.  The Licence also states that the land may be used for “cultivation and temp. structures only”.  The Licence was initially granted for a period of 8 months – from 1.5.73 to 21.12.73. 

9.  In the Conditions annexed to the Licence, there is a small plan showing the Adjacent Land and the locations of the structures to be built thereon (see para. 7 above).  It does not appear that the Temporary Structure is one of those structures.

10.  Between November 1973 and January 1974, a two storey house (“the House”) and a storage were built at the instruction of Madam Mok on the Adjacent Land.  Madam Mok was a Taoist follower and the House was used by her as a Taoist temple as well as her home.

11.  In respect of the Temporary Structure, apparently it was not one of the structures to be constructed on the Adjacent Land as provided in the Licence.  However, according to the evidence of Mr Pong Chung Wai (“PW2”), he first noticed the Temporary Structure in approximately 1975.  I accept that the Temporary Structure was built about that time.  I prefer PW2’s evidence on this point instead of Madam Yau’s evidence which is hearsay in nature. 

12.  It is apparent that the Licence has been renewed on annual basis since 1973.  In 1988, Madam Yau became a disciple of Madam Mok.  The first time that she went to the House was in 1987.  According to Madam Yau, the Temporary Structure consists of two sections which are separated by a door.  Since 1988, the inner section had been used for the placement of urns and tablets whereas the outer section had been used as living quarters with two beds and miscellaneous articles.  However, due to water seepage at the inner section, the urns and tablets were moved into the outer section, and recently the urns and tablets have been moved from the Temporary Structure altogether. 

1991

13.  Before coming back to the events in 1991, it should be pointed out that the facts stated above are largely undisputed and I find them as proved.  However, some of the events which followed are controversial.  According to the Plaintiffs’ case, when Rita knew about the encroachments and before the purchase was concluded, its representative, Ms Cheung Fung Ying (“PW1”) together with two representatives of the vendor, PW2 and his brother, Mr Pong Kong Wai went to visit Madam Mok at the House.  It will be seen below that what transpired during this visit is of critical importance to the resolution of this action. 

14.  PW1 said that she was taken by the Pong brothers to see Madam Mok.  She asked Madam Mok why there were encroachments.  In reply, Madam Mok said that she did not know that parts of the structures in question had extended onto the neighbouring land.  She further said that if there was the need she would return the land.  In response, PW1 accepted what was said and told Madam Mok that if they needed the land she would notify her so that it could be returned.  To that, Madam Mok said that there would not be any problem (I shall hereafter refer to this conversation as “the 1991 Conversation”).  PW1 said that she inspected the Temporary Structure and saw that it was used to store dried branches and miscellaneous articles (I prefer Madam Yau’s evidence on this point, which is supported by photographs.).

15.  PW1 described Madam Ng as a short and thin lady of about 70 years old.  She was friendly but not very talkative.  Such evidence is not challenged.  Madam Yau’s evidence is that Madam Mok was a very peaceful and very private person. 

16.  In cross-examination, PW1 said that there was no mention during the 1991 Conversation about compensation and the cost of demolishing the encroaching structures or the like.  In answer to questions from this court, PW1 said that the 1991 Conversation started at the garden outside the House.  They then moved to an area near the Temporary Structure because they wanted to show Madam Mok the encroachment.  PW1 said to Madam Mok that there were other encroachments but she had not worked out where they were and had therefore not pointed those out to Madam Mok.  In response, Madam Mok said that when she had the structures built she did not know where the boundary was and perhaps because of that some of the structures extended onto the Land. 

17.  PW1’s evidence is largely corroborated by that of PW2.  PW2 said that he introduced PW1 to Madam Mok and told the latter that PW1 would probably become the new owner of the Land.  PW1 then told Madam Mok that she had been informed by her surveyor that some of the structures on the Adjacent Land had extended onto the Land and that Madam Mok had fenced off part of the Land.  In reply, Madam Mok said that if her structures were really encroaching the Land she would return the encroached land when there was the need or a request was made for the return.  The return would be made to the Pongs if the Land was not sold and to the new owner if the Land had been sold.  PW1 then said to Madam Mok that “if I buy the Land would you carry out what you said”, to which Madam Mok replied “no problem”.  PW2 confirmed that there was no mention as to who would demolish the encroaching structures. 

18.  I should mention here that the unchallenged evidence of PW1 is that apart from building a road, Rita had no immediate need for the rest of Section A.  On the other hand, the extra land was to add to Rita’s “land reserve”.

19.  As noted above, Madam Mok had passed away in 1996.  However, Madam Yau disputes the 1991 Conversation.  She said that since she became a disciple of Madam Mok they had been very close.  She visited Madam Mok at least once a week and often stayed overnight at the House.  As Madam Mok was getting old, Madam Yau had to look after her, which included bathing her.  Madam Mok would tell her everything and had never mentioned the 1991 Conversation. 

20.  Madam Yau said that the first ever complaint about encroachment took place in about 1994 (Mr Lau who appears for Madam Yau actually contends that the following events took place before the completion of the purchase by Rita of Section A.).  There was a visit at the House by PW2.  Madam Mok and Madam Yau were there.  PW2 said that they were selling the Land and his brother was going to talk to them later.  PW2 then left.  Later, another Mr Pong went to the House with PW1, one Mr Ha and his son.  Including Madam Mok and Madam Yau, there were 6 people there.  Mr Pong said to Madam Mok that they were going to sell the Land to Mr Ha but her house was encroaching the Land and it had to be demolished.  In response, Madam Mok said that if the Pongs were to demolish the house they would have to build one for her.  After some hesitation, Mr Pong then said that if they had to build one for Madam Mok, they should not regain possession of the land but give it to her to be used as a Buddhist shrine.  Mr Ha then said “Alright, give it to her to be used as a Buddhist shrine.” (“the 1994 Conversation”). 

21.  Madam Yau said that she remembered that the 1994 Conversation took place in about 1994 because it took place 3 to 4 years before Madam Mok passed away.  Although Madam Yau’s evidence is vague as to what it was that Mr Pong and Mr Ha had agreed to give to Madam Mok, looking at the totality of the evidence, in particular the suggestion that the conversation took place near the Temporary Structure, it is reasonably clear that the subject matter of the 1994 Conversation was the Temporary Structure. 

22.  I should mention that according to the evidence of Madam Yau, in the 1994 Conversation it was also said that the land which was used by Madam Mok and Madam Yau to grow fruits (“the Fruit Land”) belonged to the Pongs (marked pink on “P1”).  Madam Mok agreed to return the Fruit Land and did so later before a retaining wall was built by Rita (see below).  However, contrary to the promise of Rita, no compensation was paid for the return. 

23.  Section A was later purchased by Rita.  The Assignment in question is dated 13.11.91. 

Subsequent Events

24.  In 1992, Rita constructed a road on Section A as intended.  In addition to the road and at about the same time, a retaining wall (“the Wall”) was constructed running roughly parallel to and at a distance of about 20 feet from the road.  The Wall can be seen on “P1”.  It should be noted that all the encroaching structures were kept at the “other side” of the Wall, a point to which I shall return.   By a Will dated 22.10.95 (“the Will”), Madam Mok had bequeathed all her real and personal property to Madam Yau.  In 1996, after Madam Mok had passed away, Madam Yau started residing at the House.  In 1997, the Remaining Portion of Lot 500 was acquired from the Pongs by the 4^th Plaintiff (“Willet”).  Willet was and is a company related to Rita.  By an Assignment dated 14.10.99, Section A was transferred to Willet by Rita.  By a Deed Poll dated 18.12.99, Section A was divided into 10 Sections plus a remaining portion.  The foregoing matters are not disputed.

25.  However, PW1’s evidence that there were two other meetings involving Madam Yau is controversial.  The first one took place in early December 2003 when she, accompanied by Mr Tang On Sau (“Mr Tang”), went to look for Madam Mok after having received no response to a letter she sent her asking for the return of the encroached land [C/67].  It was the first time she met Madam Yau.  After having been told by Madam Yau that Madam Mok had passed away, PW1 told Madam Yau about Madam Mok’s promise to return the encroached land and asked for the same to be returned.  PW1 said that Madam Yau acknowledged her right and asked that the fence, which was to be built by Willet to separate its land, be put on hold until after the Chinese New Year.  The fence was indeed constructed later (see “P1”). 

26.  The second meeting took place in July 2005.  PW1 was accompanied by Mr Ha Ka Hong on this occasion.  They went to see Madam Yau at the House with the intention of telling her that they would demolish the Temporary Structure and that a container would be provided on the Adjacent Land as storage for her use.  Madam Yau was very happy about the provision of storage and raised no objection. 

27.  Madam Yau’s evidence is that there were a number of contacts between her and PW1 after the 1994 Conversation.  In particular, there were two meetings with PW1 in the company of Mr Tang.  On the first occasion, there was discussion by PW1 about building a fence, but Madam Yau protested and said that: “You have already said that you would give it to us.  Now you unreasonably say that you want to take it back and fence it off”.  The conversation of the second occasion was very similar to that of the first. 

28.  Madam Yau said that there was an occasion where PW1 went to see her with Mr Ha Ka Hong.  It took place in the same year as her meetings with PW1 and Mr Tang.  Madam Yau said that PW1 and Mr Ha also talked about getting back “that place”.  She was not agreeable to the proposition and repeated her protest that “it” was given to “us”.  There was another occasion when PWI went to see Madam Yau with Mr Ha Ka Hing.  On that occasion, PW1 tried to get her to agree to pay a HK$1 rent for the use of the encroached land, but that was ignored by Madam Yau.

The Arguments

29.  The law on adverse possession is well settled and there is no quarrel between Mr Chan and Mr Lau over the same.  Mr Lau accepts that Madam Yau bears the burden of proof here.  There are two elements which have to be established – possession and the requisite intention to possess. 

30.  It is common ground between the parties that Madam Mok was in possession of the Temporary Structure for more than 20 years (the 1991 amendment to s. 7 of the Limitation Ordinance, Cap. 347 does not apply) during her lifetime and subject to proving the requisite intention to possess, she could have obtained a possessory title over the Disputed Land.  Such a title could have passed to Madam Yau by virtue of the Will.  Hence, the 1991 Conversation and the 1994 Conversation are critical because they go to the issue of requisite intention. 

31.  It is accepted by Mr Lau that should this court find that there was an absence of the requisite intention to possess on Madam Mok’s part, then Madam Mok could not have obtained a possessory title and there was no title to pass onto Madam Yau. 

32.  Further, Mr Lau accepts that Madam Yau’s possession of the Temporary Structure in her own right did not start until 1996 and she was in possession for less than 12 years (the amended s. 7 of Cap. 347 applies) before the issuance of the Writ herein (18.10.05).

33.  However, Mr Lau contends if this court accepts Madam Yau’s evidence on the 1994 Conversation, that would constitute an abandonment or dispossession of the Disputed Land by the Pongs and adverse possession of the same would have started then.  Mr Lau argues that the conversation in fact took place in 1991 before the completion of the sale of Section A.  Therefore, the adverse possession started in 1991 by Madam Mok and continued in 1996 when Madam Yau took over the Adjacent Land.  By the time the Writ was issued, there had been adverse possession for over 12 years.  In this regard, Mr Lau has provided a draft amendment to the Defence and Counterclaim.  However, since this point turns on this court’s finding on the evidence of Madam Yau, Mr Lau agrees, without serious resistance from Mr Chan, that the issue of amendment be dealt with in this Judgment. 

Analysis

34.  First of all, I have no difficulty in finding that there must have been a conversation between Rita and Madam Mok prior to the completion of the purchase of Section A.  It would be very strange if there was no such conversation when Rita was advised by Land Marker that there were encroaching structures on Section A.

35.  PW1 is a person of some sophistication.  She appears to be well-rehearsed in her evidence and I am not comfortable about accepting her evidence by itself.  In particular, I accept Madam Yau’s evidence about PW1 trying to entice her into paying rent for the encroached land with the offer of money for joss-sticks.  The motive was of course to get Madam Yau to acknowledge Willet’s right over the encroached land.  It is unlikely for such evidence to be fabricated by an unsophisticated person like Madam Yau.  I therefore approach PW1’s evidence with caution.

36.  However, PW1’s evidence on the 1991 Conversation is largely corroborated by that of PW2.  I find PW2 to be an honest witness.  He is an impartial witness having no interest in the subject matter of these proceedings or relationship with the parties involved.  He is a serious looking person and was careful in answering all the questions as accurately as he could. 

37.  Further, there is nothing inherently improbable in the suggestion that Madam Mok was willing to return the encroached land to its rightful owner.  It is common ground that Madam Mok was a religious and honest person.  One would expect that such a person would react to a suggestion that his/her building was encroaching the neighbour’s land in the way which Madam Mok did.  Furthermore, Madam Mok did return the Fruit Land without compensation. 

38.  In respect of Madam Yau, she is an unsophisticated person and I find her evidence to be credible save for the 1994 Conversation[1].  First of all, Madam Yau was not living at the House in 1991.  It was therefore quite a coincidence that she was there when PW1 turned up to talk about the encroachments.  I must approach such evidence with a healthy degree of scepticism.  There was a moment during the cross-examination of Madam Yau when she talked about this particular area of her evidence where I observed a subtle but noticeable change in her demeanour.  She appeared uncomfortable. 

39.  Further, I find it inherently unlikely for Mr Ha to have made a decision there and then to give up the Disputed Land to Madam Mok in the manner suggested.  I expect that a reasonable businessman would have consulted the directors of Rita before making such a commitment and/or tried to reach a compromise with Madam Mok on the terms for the return of the Disputed Land and/or asked the Pongs to try to resolve the matter. 

40.  Furthermore, Madam Yau’s evidence on the 1994 Conversation is unsatisfactory as to when the conversation took place and its details.  On the latter, under cross-examination she said that Madam Mok actually demanded for measurement to be taken to confirm the suggestion of encroachment. 

41.  There is no independent support for Madam Yau’s evidence concerning the 1994 Conversation.  I have not lost sight of the fact that the Wall has the effect of separating all the encroaching structures from the rest of Section A.  Regrettably, the building of the Wall has not been properly explored in evidence as to, e.g., why it is so located.  Be that as it may, there are two reasons why the Wall cannot be regarded as supportive of Madam Yau’s evidence.  Firstly, the Wall “keeps out” more land than was given to Madam Mok (taking Madam Yau’s case at the highest).  Secondly, the existence of the Wall is not inconsistent with PW1’s unchallenged evidence that the extra land would be kept in reserve for future development (para. 18 above). 

42.  Apart from submitting that the 1994 Conversation in fact took place in 1991 prior to the completion of the sale of Section A, Mr Lau also submits that it took place after the 1991 Conversation on the ground that, based on the evidence of PW2, the conversation was not conclusive and there must have been another meeting where the location of the boundary was confirmed.  I do not agree with that submission because, on Madam Yau’s own evidence of the 1994 Conversation, that meeting was clearly the first meeting between Madam Mok and PW1.

43.  For these reasons, I accept PW1’s evidence on the 1991 Conversation and reject that of Madam Yau in respect of the 1994 Conversation.  This finding of fact is decisive on the outcome of these proceedings. 

44.  It is accepted by the defence that the requisite intention to possess is an essential element to any claim on adverse possession.  What is required is “[an] intention, in [the squatter’s] own name and on [his/her] own behalf, to exclude the world at large [from the land that is occupied], 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” [Powell v McFarlane & Anr., ChD, [1997] 38 P & CR 452 at 471-2].  Given this court’s acceptance of the 1991 Conversation, such an intention cannot be established and the case on Madam Mok’s adverse possession must fail.

45.  As stated in para. 32 above, Madam Yau has no sustainable case on adverse possession in her own right.  In respect of Mr Lau’s argument identified in para. 33 above, by reason of my rejection of the 1994 Conversation that argument must also fail and the application to amend the Defence and Counterclaim is refused. 

Relief

46.  First of all, the Counterclaim is dismissed.  The primary claim of relief by the Plaintiffs is a mandatory injunction for the demolition of such part of the Temporary Structure which is standing on the Disputed Land.  However, it is PW1’s evidence that the Plaintiffs are willing to bear the costs and expenses for removing the encroaching Temporary Structure and to put up an empty container for Madam Yau’s use as storage.  Such a position is generous, commendable and fully endorsed by this court, bearing in mind that Madam Yau is the keeper of a religious establishment and is plainly of very modest means. 

47.  It is evident that such part of the Temporary Structure which is standing on the Adjacent Land will not survive a demolition of the encroaching part.  I can therefore see that the demolition of the Temporary Structure should best be carried out in an amicable fashion with the agreement of both sides. 

48.  By reason of the foregoing, I invite the Plaintiffs to put forward the appropriate order to be made in this case. 

49.  As regards the claim for damages for trespass, there is no evidence of any actual or substantive loss.  On the other hand, the relevant Plaintiffs (2^nd, 3^rd and 4^th Plaintiffs) are entitled to nominal damages [see Clerk & Lindsell on Torts, 19^th ed., para. 19-62] and I make an award of HK$1 to them.  There should be no interest for such damages.

50.  On costs, Mr Chan does not quarrel with the proposition that no order for costs should be made in respect of the 1^st Plaintiff and the 1^st Defendant.  Apart from that, I order that the costs of this action and the counterclaim be to the 2^nd to 4^th Plaintiffs to be paid by the 2^nd Defendant and to be taxed if not agreed.  However, as Mr Chan has accepted that this action falls within the District Court’s jurisdiction, the costs I have awarded should be on District Court scales.

[1] In respect of the later conversations set out in paras. 27 and 28 above, if Madam Yau had asserted that the Disputed Land had been given to Madam Mok, I do not believe that there was proper justification for the same.