YU KIT CHIU AND OTHERS v. LAM MING KWONG AND ANOTHER

DCMP 2706/2011

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 2706 OF 2011

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JUDGMENT

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INTRODUCTION

1.  This is the plaintiffs’ claim for possession of land against the defendants.  The 1^st defendant counterclaims that he has acquired possessory title by uninterrupted adverse possession.

2.  The plaintiffs are the executors of the estate of Yu Sui Tong, deceased (“the Deceased”), and they bring the action for and on behalf of the estate of the Deceased.  The Deceased had since 1937 been the registered owner of a piece of land known as Lot 242 RP in DD 116, Yuen Long, New Territories (“the Land Lot”) and upon his death on 18 June 1980, the plaintiffs have become and still are the registered owners of the same.

3.  This action started by way of an Originating Summons dated 1 November 2011 when the plaintiffs applied for an order for possession of the Land Lot under Order 113, rule 1 of the Rules of the District Court.  It was originally a claim against all and every person in occupation of the Land Lot.

4.  On 13 December 2011, Registrar C Lee granted an Order for Possession of the Land Lot to the Plaintiffs.

5.  On 23 January 2013, the 1^st defendant filed a Summons to set aside the Order for Possession on the ground that he and his predecessors-in-title had been in adverse possession of the Land Lot since 1998 for a continuous period of not less than 12 years.

6.  On 24 October 2013, Master D Ho set aside the Order for Possession dated 13 December 2011 and allowed the 1^st defendant to be joined in this case and the original defendant, i.e. “all and every person in occupation of the Land Lot”, was ordered to becoming the 2^nd defendant.  Master D Ho further ordered that these proceedings be continued as if the same had been begun by Writ, with directions as to filing of pleadings by the parties.

7.  In the 1^st defendant’s Defence & Counterclaim, the 1^st defendant asserted that he and his predecessors-in-title had been in adverse possession of the Land Lot (which he maintained up to 6 April 2016) and, on that basis, the 1^st defendant counterclaimed for a squatter’s title to the whole part of the Land Lot.  This assertion was supported by the witness statements of both the 1^st defendant and his father filed in the proceedings.

8.  During an interlocutory hearing before Master Yip on 20 January 2016 when the 1^st defendant applied for leave to serve supplemental witness statement and, upon invitation of the plaintiffs, Master Yip ordered a supplemental expert report to be made to ascertain the area of the Land Lot and the area of the temple claimed by the 1^st defendant to be in adverse possession.

9.  It was upon obtaining the supplemental joint expert report compiled by Mr Joseph Y C Wong of Land Marker (1980) HK Co Limited on 18 March 2016 (“Mr Joseph Wong’s JR2”) showing that the area in occupation by the 1^st defendant has always been (since 1970) 130.5 square meters (out of a total area of 331.8 square meters) of the Land Lot whilst the rest of the area was unoccupied.  Upon the availability of Mr Joseph Wong’s JR2, the 1^st defendant applied to amend his Amended Defence & Counterclaim on 6 April 2016 reducing the area of his alleged occupation and adverse possession by about 2/3.

10.  The 1^st defendant also made amendment to plead that the subject land in dispute which was adversely possessed was a temple known as 慈航臺 inclusive of certain structures on a portion of the Land Lot which is referred as “the Temple” (“the Temple”).  This clarified that the subject land purported to be adversely possessed by the 1^st defendant was only the Temple not the whole part of the Land Lot.

11.  In order to understand the parties’ arguments, it is important to identify the locality and boundary of the Land Lot and the Temple.  I append to this judgment the Survey Sheet dated 17 February 2016 extracted from Mr Joseph Wong’s JR2 in which the Land Lot was demarcated in black and the Temple was demarcated in red.  This Survey Sheet is exhibited as page 570 under the Trial Bundle.  This Survey Sheet shows a clear demarcation of the Land Lot and the Temple.  Only the title of the Temple is in dispute in the present trial insofar as the 1^st defendant’s position is concerned.

12.  As regards the plaintiffs’ claim against the 2^nd defendant, the plaintiffs applied for an Order for Possession of the remaining part of the Land Lot (“the Remaining Part of the Land Lot”), i.e. the whole of Lot 242RP with the Temple being calved out.  Apart from the 1^st defendant, there were other persons claimed to be in actual occupations, some of them have made unsuccessful attempts to join in as co-defendants.  Wong Hon Wang and Wong Lek being two of them who had acted through legal representatives, namely Messrs T K Tsui & Co, asserting that they had been in adverse possession of Land Lot for not less than 12 years but their applications for joinder had been dismissed subsequently.

13.  As such the 2^nd defendant has never filed any defence.  The 2^nd defendant was not represented and did not appear in the trial.

The parties’ case

14.  It is not in dispute that on a day not later than 29 August 1969, Yu Senior granted a licence (“the said licence”) to one Wong Sau Kam (“Madam Wong”) for her to use and occupy the Land Lot for agricultural and residential use.

15.  Pursuant to the said licence, Madam Wong applied to the Government for modification of the lease of the Land Lot for her to erect and build various structures on the Land Lot, resulting in (a) a Modification of Tenancy No 14447 dated 29 August 1969 and (b) a Letter of Approval No 14447 dated 29 August 1969 (collectively referred to as “the MOT”).

16.  The 1^st defendant contended that:-

(a) Madam Wong left Hong Kong in about 1972 and the Land Lot was abandoned.  One Madam Lam Hau Chun (“Madam Lam”), deceased, took over the Land Lot in about 1972 or 1973 a few months after it was abandoned.  Madam Lam fenced off the Land Lot with wire netting and started exclusive possession.

(b) In about 1973, Madam Lam claimed that she experienced the image of Guanyin.  She ceased cultivation and raising chickens.  She allowed a group of followers, including the 1^st defendant’s father Mr Lam Kwan Hoi, led by Mr Chan Shek Wu (“Chan”) to build a temple known as 慈航臺 inclusive of certain structures on a portion of the Land Lot.

(c) The Temple was built in about 1975 with a metal gate locked by metal pad lock.  A brick wall was also built with a metal gate locked by another metal pad lock.  Chan then took over the possession of the Temple from Madam Lam and started exclusive possession.  Chan was the only person who had the keys of the gates and would open the gates every day in the morning and lock up the gates in the evening.  He was the person in charge of the Temple and would allow followers to enter the Temple and worship Guanyin.  He collected donations from the followers to defray expenses of the Temple.  The electricity bills were also settled by Chan.  Since the donations were all along less than the expenses of the Temple, Chan and the 1^st defendant’s father were required to pay out of pocket.

(d) In 1989, Chan arranged the renovation of the Temple by using donations from the followers.  The donations were recorded on a plate hanging on a wall inside the Temple.  The brick wall was built higher while Chan was still the only person who had the keys of the gates.  The electricity bills were since about 1989 registered under the 1^st defendant’s father’s name.

(e) Since about 1997, after Chan’s retirement, the 1^st defendant’s father was given the keys of the gates and started to spend more time to assist Chan in managing the Temple.

(f) In early 1998, the 1^st defendant’s father took over the possession of the Temple and started exclusive possession of the same.  He took up the role of Chan and became the person in charge of the Temple.  He collected donations from the followers and defrayed expenses of the Temple including the electricity bills.  Again he was required to pay out of his own pocket.

(g) In 2003, the 1^st defendant’s father arranged the renovation of the Temple by using donations from the followers.  The pad locks to the gates of the Temple were changed.  Apart from the 1^st defendant’s father who possessed the keys, he also passed the keys to one Mr Wong Chun Hung (“Mr Wong”) who was the servant of the 1^st defendant’s father. The 1^st defendant’s father paid HK$600 per month to Mr Wong who assisted in opening and locking the gates.

(h) In 2012, the possession of the Temple was passed to the 1^st defendant.  He was the only person who possessed the keys to the pad locks and he continued the exclusive possession of the Temple.  The electricity bills were changed to be registered under the 1^st defendant’s name.  The 1^st defendant became the person in charge of the Temple that he would allow the followers to worship Guanyin from time to time.  He would collect donations from followers to defray expenses of the Temple but he was also required to pay out of his own pocket.

(i) Relying on the continuous exclusive occupation of the Temple by Madam Lam (1973-1975), Chan (1975-1998), the 1^st defendant’s father (1998-2012), the 1^st defendant (2012-present), the 1^st defendant now claims that the plaintiffs’ paper title in the Temple has been extinguished by virtue of the Limitation Ordinance Cap 347 (“the LO”) and the 1^st defendant has acquired a possessory title in respect of the Temple.

17.  The gist of the plaintiffs’ case is that:-

(a) The said licence was granted by Yu Senior to Madam Wong on or before 29 August 1969 with the MOT granted by the Government to Yu Senior as owner and to Madam Wong as permittee for erection of 3 structures (which was not disputed by the 1^st defendant).

(b) The periodical fees under the MOT were all along paid by Madam Wong or 1^st defendant or the 2^nd defendant (which is denied by the 1^st defendant), any rights to use and occupy the Temple by the 1^st defendant were derived from the said licence and hence no adverse possession can be established at all.

(c) The plaintiffs denied that the 1^st defendant, Madam Lam or Chan or the 1^st defendant’s father have ever had any exclusive possession of the Temple or the necessary animus possidendi.  The plaintiffs are entitled to claim mesne profit.

Relevant Legal Principles

Requirement to establish adverse possession

18.  The starting position to examine whether a piece of land has been adversely possessed is by looking at the provisions under the LO.

“Section 7(2): “No action shall be brought by any other person to recover any land after the expiration of 12 years from the date on which the right of action accrued to him or, if it first accrued to some person through whom he claims, to that person,…”

Section 13(1): “No right of action to recover land shall be deemed to accrue unless the land is in the possession of some person in whose favour the period of limitation can run (hereafter in this section referred to as adverse possession) and where under the foregoing provisions of this Ordinance any such right of action is deemed to accrue on a certain date and no person is in adverse possession on that date, the right of action shall not be deemed to accrue unless and until adverse possession is taken of the land.”

Section 13(2): “Where a right of action to recover land has accrued and thereafter, before the right is barred, the land ceases to be in adverse possession, the right of action shall no longer be deemed to have accrued and no fresh right of action shall be deemed to accrue unless and until the land is again taken in adverse possession.”

Section 17: “Subject to the provisions of section 10, at the expiration of the period prescribed by this Ordinance for any person to bring an action to recover land (including a redemption action), the title of that person to the land shall be extinguished.”

19.  The previous 20 years threshold in Section 7(2) has been changed to 12 years by the Limitation (Amendment) Ordinance 1991.

20.  The following legal principles applicable to a claim for adverse possession are well settled[1]:

(a) To succeed in a claim for adverse possession, the adverse possessor must prove: (i) a sufficient degree of factual possession; and (ii) animus possidendi (ie an intention to possess);

(b) The elements required of factual possession are: (i) there must be an appropriate degree of physical control; (ii) possession must be single and conclusive, though there can be single possession exercised by or on behalf of several persons jointly; (iii) factual possession must be exclusive, continuous, open, visible and notorious, and it must not be equivocal, occasional, or for a special or temporary purpose; and (iv) the question what acts constitute a sufficient degree of exclusive physical control must depend on the circumstances having regard to the nature of the land and the manner of possession;

(c) Unless there is contrary evidence the registered owner of the land is presumed to be in occupation, and the party claiming adverse possession has the burden of proving otherwise;

(d) Intention to possess is the intention, in one’s own name and on one’s own behalf, to exclude the world at large, including the owner with paper title so far as is reasonably practicable and so far as the processes of law will allow;

(e) In ascertaining the adverse possessor’s intention to possess, little regard should be given to self-serving statement of subjective intention, rather the court would make inference from the actions of the adverse possessor in the light of all the circumstances; and

(f) The burden is on the adverse possessor to prove both factual possession and the intention to possess, and the evidence adduced must be compelling although the standard of proof is still the normal civil standard based on the balance of probabilities.

21.  In relation to ‘intention to possess’, the adverse possessor must show that he had a ‘…plain and unequivocal intention to exclude the world at large…’.  Bolton Metropolitan Borough Council v Musa Ali Qasmi (1999) 77 P & CR 36, the judgment of Peter Gibson LJ at p 37

22.  In Civic Limited v 余綺妙and Ors (HCA225/2011, unreported, 28 March 2014), Deputy High Court Judge Marlene Ng J (as she then was) elaborated that (1) “although the occupier must intend to exercise exclusive control for his own benefit, he need not have a conscious intention to exclude the true owner”; (2) “an intention to own the land or even an intention to acquire ownership is not required for establishing animus possidendi”; (3) “the animus possidendi can be established even if the occupier mistakenly believes himself to be the owner of the land.”

23.  These observations do not impose a higher burden of proof on the squatter but indeed require more stringent and compelling evidence from the squatter to prove animus possidendi, and, in most cases, the oral evidence would be closely examined against independent and contemporaneous evidence as is available.

24.  Accordingly, the burden is on the 1^st defendant in the present case, who pleads and asserts the claim of adverse possession, to prove each and every element thereof, including:-

(1) the history of possession;

(2) the possession was continuous and exclusive to all, including the owners, for the whole limitation period; and

(3) that the 1^st defendant and the predecessors-in-title had the necessary animus possidendi throughout the period.

DISCUSSION

Issues in Dispute

25.  The issue of whether the 1^st defendant couldresist the plaintiffs’ claim for possession depends upon whether the 1^st defendant could establish that he has continued a ‘chain of exclusive and successive possession’ of the Temple for not less than 20/12 years immediately before commencement of the legal proceedings on 1 November 2011.  The 1^st defendant bears the burden of proving (a) possession and (b) animus possidendi of Madam Lam, Chan, the 1^st defendant’s father as well of his own since late 2012 to the extent that evidence in support both criteria must be ‘compelling’.

26.  As transpired from the pleadings and the parties’ submissions, the triable issues for resolution by this Court are as follows:-

I. It is the 1^st defendant’s case that, since late 2012, he continued with the exclusive possession of his earlier occupiers.  Since the plaintiffs have already commenced legal proceedings to recover the Land Lot on 1 November 2011, whether the 1^st defendant could still, after 1 November 2011, continue with earlier occupation for the purpose of satisfying the statutory period of 20/12 years and for the purpose of defending or counterclaiming?

II. Whether the 1^st defendant and the previous occupiers (i.e. Madam Wong prior to 1972, Madam Lam in 1972, Chan in 1973, the 1^st defendant’s father in 1998 and the 1^st defendant in 2012) have had possession of the Temple for 20 years or more since about 1972 or whether 1^st defendant’s father and/or 1^st defendant have had possession of the Temple for 12 years or more before the commencement of this action (“the Factual Possession Issue”).

III. Whether the factual possession was coupled with an intent to possession (“the Animus Possidendi Issue”).

IV. Whether the possession of 1^st defendant and the previous occupiers was pursuant to the said licence granted by Yu Senior to Madam Wong and, if it was, whether the said licence had been terminated upon the death of Yu Senior and, if so, whether the licence would have resuscitated and renewed upon the parties continue to perform the MOT at least up to 2010 (“the Licence Issue”).

V. Whether the possession of the 1^st defendant and the previous occupiers was pursuant to an implied licence (“the Implied Licence Issue”).

VI. If adverse possession is not proved by the defendants, assessment on damages in the form of mense profit for the Temple.  Further, whether the 1^st defendant is liable to pay mesne profits from 24 October 2013 up to judgment for the part of the Land Lot not occupied by the Temple.

The Expert Evidence

27.  There are 3 single joint expert reports before the Court:-

(1) Joint expert report on valuation of the Land Lot prepared by Mr Lucas H W Lau of Vigers dated 16 June 2015 (“Mr Lau’s JR”);

(2) Joint expert report on the use and occupation of the Land Lot prepared by Mr Joseph Y C Wong of Land Marker (1980) HK Co Limited dated 21 September 2015 (“Mr Joseph Wong’s JR1”); and

(3) Mr Joseph Wong’s JR2 referred to in paragraph 9 above.

28.  The disputed land in the present trial is the Temple purportedly used and occupied by the 1^st defendant and the previous occupiers and hence Mr Joseph Wong’s JR2 shall be focused on.

29.  Mr Joseph Wong opined in paragraph 8.3 of Mr Joseph Wong’s JR2 that “Aerial photos are the most reliable and conclusive evidence of the existence of the object(s)/structure(s) shown in the photos.  Therefore Aerial photos would be taken as primary evidence for investigation on the occupation history.”

30.  In paragraph 5 of Mr Joseph Wong’s JR2, Mr Joseph Wong made the following findings in respect of the aerial photos featuring the Temple from 1972 to 2011:-

(1) Year 1972: The Temple was made up of a number of temporary structures with an open area surrounded by walls in the center.

(2) Year 1978: The roofs of the temporary structures inside the Temple appeared to be renovated.  Walls were clearly seen bounding the open area in between the temporary structures.

(3) Year 2003: The roofs of the temporary structures were painted in red.

(4) Year 2008: The open area at center became a temporary structure.

31.  Mr Joseph Wong made the following opinions in paragraph 8 of Mr Joseph Wong’s JR2: -

(1) The Temple was already being occupied by temporary structures since year 1972.

(2) The temporary structures had undergone a few renovations in year 1978, 2003 and 2008 but the extent of their occupations within the Temple remained similar throughout the years from 1972 to 2011.

(3) Mr Joseph Wong concluded that the Temple has been occupying the Land Lot for 39 years from 1972 to 2011.

The evidence called by the parties

On behalf of the plaintiffs

32.  Insofar as the affirmation of Tsang Wai Man, Edwin (Senior Land Executive, South of District Lands Office, Yuen Long) is concerned, the affirmation evidence was obtained from an action for discovery from the records of the District Lands Office (“DLO”) and, as a result:-

(a) documents kept by the DLO, Yuen Long relating to the application, performance and payment of fees under and pursuant to the Modification of Tenancy were disclosed; and

(b) affirmation evidence relating to the payment of fees under the Modification of Tenancy up to 2010 was made.

33.  Given the Order of the Deputy Judge Chung made on 9 April 2016, the affirmation of Tsang Wai Man, Edwin has been admitted as part of the evidence without the necessity of Mr Tsang to be cross-examined.

34.  Mr Yu Kit Chiu (“YKC”) of the plaintiffs and Mr Tang Kam Chai (“Tang”) gave evidence and adopted their witness statements and the affirmation of YKC as evidence-in-chief.

35.  The gist of YKC’s evidence is as follows:-

(a) Since early 1930’s, Yu Senior had acquired many land lots in Yuen Long for rental income and he procured those land lots to be registered either in his own name or in the name of “Yu Luk Shun Tong (余六順堂)” (“the Tong”).  He also procured the Tong to acquire interest in land through the Heung (華人模範鄉).

(b) Since YKC was a child, he had learnt from Yu Senior and other family members that Yu Senior and his family had many landed properties in New Territories. Yu Senior had entrusted the managers of the Heung to manage those land lots.  When he was brought by Yu Senior to the Heung occasionally, he saw that the managers would report to Yu Senior about the rental income received from the tenants of the land lots owned by Yu Senior, the Tong and the Heung.  They would also discuss about other matters relating to the lands and the tenancies.

(c) In Court, YKC agreed during cross-examination that since Yu Senior owned a lot of lands in New Territories, he was not familiar with the details of the lands such as locations.  During re-examination, he stated that matters relating to the lands of Yu Senior, such as recovery of possession; engaging lawyers; inspection of land etc., were mainly handled by him.

(d) YKC during cross-examination stated that in early years the “rentals” received by the managers (收租佬) were in the form of crops but he could not answer whether there were rentals in the form of money.  He was not involved in dealing with tenancies or rentals in respect of the lands owned by Yu Senior.  It appears that those works were all along entrusted to the managers.

(e) The Land Lot was still a piece of agricultural land and no structures could be built or erected on it without the consent of the registered owner and the District Office.  The MOT was issued in 1969 upon Yu Senior’s consent and it was granted to Madam Wong who was acting on behalf of Yu Senior.  Madam Wong and/or someone claimed under Madam Wong had all along duly paid the periodical fees under the MOT.

(f) YKC during cross-examination agreed that he was not involved in the application of the MOT and he did not know Madam Wong.  Regarding the MOT, he was not sure whether he had seen it before and it might have been kept in a file.  When he was shown several correspondence addresses of Madam Wong, YKC had no idea.  He had never tried to find Madam Wong.

(g) In or about May 2010, he received the letter from DLO dated 3 February 2010 notifying the plaintiffs of illegal structures and requesting rectification.  YKC said that the building of the said illegal structures (the Temple) was done without the consent of him and Yu Hon Chiu.

(h) On about 27 July 2010, he instructed his solicitors to make a written demand to the occupiers of the Land Lot to demolish and remove the said illegal structures (the Temple) but received no reply.

(i) In Court, he stated that he would not allow any illegal use of the Land Lot.

36.  The gist of Tang’s evidence is as follows:-

(a) Since about 2010, he was employed by the plaintiffs as their servant to deal with the affairs in relation to the Land Lot.

(b) In Court, he stated that he worked for the Heung in respect of zoning and re-zoning of lands.  Apart from obtaining the plans of the Land Lot and conducted several inspections of the Land Lot by himself or with YKC and others, his duty was in fact to carry out negotiations with people of the Temple for recovery.

(c) In about April 2012, he together with Mr Lo of Messrs. Liu, Choi & Chan (“LCC”) visited the Land Lot with a view to posting up a copy of the Order.  He met Mr Wong who claimed to be the keeper (廟祝) of the Temple.  He explained to Mr Wong that an Order for possession was granted by court so all occupiers would have to vacate the Land Lot.  Mr Wong said he needed time to move away the ash urns and a statue of Guanyin and to convene a meeting with its members to discuss about the delivery of the Land Lot. 

(d) During a visit to the Land Lot in June 2012, he could not find Mr Wong.  He found that those ash urns and tablets have been moved away but the statue of Guanyin was still there.  He could not find Mr Wong but came across with one Mr Chu in the Temple whom he had known for years.  Mr Chu told him that a meeting could only be convened with all members in September when there was a celebration of Guanyin Goddess.

(e) In September 2012, he visited the Land Lot again.  He met Mr Wong in the Temple and Mr Wong told him that the members of the Temple wanted to purchase the Land Lot from the plaintiffs.  However the plaintiffs did not intend to sell and rejected the members’ offer. 

(f) In Court, during cross-examination, Tang said Mr Chu was a junior classmate of Tang in the school.  Tang met Mr Chu again a few years ago.  Tang tried to carry out his negotiation works with people of the Temple and did not want the matter be resolved in Court.  He found that it might be easier for Mr Chu to talk to the people of the Temple (易傾D) and hence sought his help.

On behalf of the 1^st defendant

37.  The 1^st defendant’s father did not attend court to give evidence.  The 1^st defendant’s counsel explained that the health of the 1^st defendant’s father was in an unsatisfactory state and he did not come to Court to give evidence.  No medical evidence or any other supporting document was adduced before the Court to prove that the health of the 1^st defendant’s father was in an unsatisfactory state.

38.  Only the 1^st defendant gave evidence and adopted his witness statement and supplemental witness statement as evidence-in-chief.  I would only make some highlights regarding his extra oral evidence given in Court:-

(a) The 1^st defendant said that he has been living in Tin Shui Wai since about 10 years ago but he still frequently went back to the parents’ home.

(b) He explained that he considered himself ‘living’ at Yeung Uk Village if he frequently visited his father who was residing there.

(c) The 1^st defendant went to the Temple with his father the first time in about 1973.  He went there every 1^st and 15^th of lunar month and during the 4 times of Guanyin Goddess Event per year.  When he was 14 or 15 years old, after 1975, he was more involved in the Temple.

(d) The 1^st defendant did not know or see Madam Wong before.  He had no idea about the correspondence addresses of Madam Wong.  The matters of Madam Wong were told by his father or the old people and he had no direct personal knowledge.  Regarding that Madam Wong left in 1972, it was told by his father.

(e) He had no idea about the MOT and who was all along paying the periodical fees.

(f) He met Madam Lam 1 or 2 times per month since 1973 and saw her raising chicken.  He saw cultivation outside (the Temple area) but he was not sure whether it was Madam Lam’s.  He did not see Madam Lam any more after 1975 and he did not know whether she was in Hong Kong.  He agreed with the Plaintiffs’ Counsel that he heard about matters of Madam Lam from his father and that he had no direct personal knowledge on the same.  Regarding that Madam Lam experienced Guanyin in 1973 and Chan led followers including the 1^st defendant’s father to raise funds for building the Temple, he was told by his father.

(g) Regarding the appearance of Madam Lam’s name on the donations records in 1989 and 2003, the 1^st defendant stated that he did not have her contact and he had not contacted her.  He suggested that it might be the case that Chan or the 1^st defendant’s father or other followers might be able to contact her and obtain her donations.

(h) Regarding the subjective mind or intention of Chan and the 1^st defendant’s father to possess the Temple, the 1^st defendant agreed with the Plaintiffs’ Counsel that he did not know the same. His evidence in this regard, i.e. Chan and the 1^st defendant’s father’s intention to possess, was made upon deduction.  He explained in details why he would think that they regarded themselves as owners during re-examination when he was expressly requested to explain that Chan and the 1^st defendant’s father had the intention to possess because of the following features: -

(1) They fenced off the Temple;

(2) They locked the doors;

(3) Other could go in only if the doors were opened;

(4) They carried out renovations and improved the Temple;

(5) They paid out of pocket expenses from time to time;

(6) They were the only ones (at different time) who had the keys of the pad locks.

(i) The 1^st defendant denied that all followers who donated would have the right to enter the Temple to worship.  They could only go in when they (Chan, the 1^st defendant’s father and the 1^st defendant) opened the doors.  The followers could not go in after they locked the gates in the evening.  When the occupiers were not convenient, they would not allow followers to go in.

(j) The 1^st defendant did not know that DLO took an inspection on 18 January 2010.  The 1^st defendant did not receive the letters of DLO dated 3 February 2010 and 15 April 2010 and knew nothing about them.

(k) In respect of the letter from DLO (in Chinese) dated 27 July 2010, the 1^st defendant said he received the same but he did not bother and dropped it because it was not issued to him.  He regarded himself as the owner and not occupier (佔用人) as stated in the letter.

(l) Regarding the resumptions of the Land Lot in 2002, he recalled that there were notices posted on lamp post and they might be dropped (攝) at the Temple.  He only recalled one time of land resumption regarding the construction of puddle.  Since the land resumed was far away and did not affect him (the Temple), he did not bother and no claim of compensation was made.  The 1^st defendant’s father knew about the resumption but did not know the boundary (of the resumption).  The 1^st defendant’s father and the 1^st defendant did not claim because the resumption did not affect them.  The Temple was not affected and the structures of the Temple were never changed.

(m) In respect of the offer of the 1^st defendant to Mr Chu of HK1,000,000.00, the 1^st defendant denied that the $1 million offered by him to Mr Chu was for the purchase of the Temple.  He claimed that this offer was made solely with a view to paying off a ‘trouble (麻煩)’.  It was made for the purpose of settling the matter and making him leave (打發佢).  He thought Mr Chu was from the plaintiffs’ lawyers but he was not even sure about this.

The Oral Evidence and Assessment

39.  The aforesaid issues involve serious dispute of facts. 

40.  The principles in relation to assessment of credibility of witnesses have been helpfully summed up by Recorder Eugene Fung SCin the case of Hui Cheung Fai and another v Daiwa Development Limited HCA 1735/2009 (unrep, 8 April 2014) at §§76-83.  I shall bear those principles in mind when assessing the credibility of the witnesses in this case.

41.  Generally speaking, I am impressed with the evidence given by the plaintiffs’ witnesses.  They were able to give their evidence in a clear, cogent and straightforward manner.  Further, they are internally consistent with the witnesses’ own evidence and compatible with the objective facts and overall circumstances.

42.  I am afraid that I cannot say the same regarding the 1^st defendant. The 1^st defendant has been discredited on various matters and in light of his motive for not giving truthful testimony which I shall explain in greater details below, I consider that the 1^st defendant as a witness is unreliable and incredible.  Apart from the issue of the 1^st defendant’s credibility, it is also necessary to consider the factual assertions of the 1^st defendant in support of his claim of the possession of Madam Lam, Chan and the 1^st defendant’s father, all such assertions of facts are hearsay and multiple hearsay.  This Court needs to consider what weightshould be given to the 1^st defendant’s evidence.  The 1^st defendant failed to call his father to give evidence.  Apart from the bare assertion that ‘this is my land’ and ‘there is no need’, no answer has been given by the 1^st defendant as to the reason for not calling a believer/member to support the 1^st defendant’s claim as there must be more than 100.  The 1^st defendant also did not call Mr Wong who is purported to be the servant of his father who assisted in opening and locking the gates.

43.  Applying the objective test of evaluation of the 1^st defendant’s viva voiceevidence, I consider that the 1^st defendant is not a crediblewitness. Some of his evidence are just inherently improbable and internally inconsistent.  They also contradict some of the objective facts and documents and do not fit in with the overall circumstances.  The following examples are incidents demonstrating that he is not credible:-

(a) The 1^st defendant, in his witness statement of 9 July 2015 (and supported by a Statement of Truth) asserted that, since his birth and for a continuous period of 53 years, he has been ‘living (居住)’ at Yeung Uk Village which was within 10 minutes’ walk of the Temple but, in truth and in fact, since latest 2006, he has been living at a flat in a resettlement estate at Tin Shui Wai miles away from the Temple.  It appears that the obvious purpose and motive of the 1^st defendant deliberately painting an untrue picture as to his residence being his attempt to trying to show that, for not less than 53 years and up to 9 July 2015, he had been physically close to the Temple and, hence, capable of testifying its condition and the occupation of the Temple.  Upon cross examination, the 1^st defendant also twisted the simple meaning of the word ‘living (居住)’ for he considered himself ‘living’ at Yeung Uk Village if he frequently visited his father who was residing there.  Further, the 1^st defendant under the same topic alleged that he was unable to recall distant matter as far as 10 years ago (eg where did the 1^st defendant live 10 years ago or when the 1^st defendant moved to the Tin Shui Wai address), yet the 1^st defendant in his witness statement was able to spell out matters back in the 1970s in great details.

(b) During cross-examination, the 1^st defendant was not willing to answer the following questions:-

‘Who stand to gain from continuation of the MOT between 1969 and 2010?’

‘Who take benefit from the continuous existence of the structures under the MOT?’ and

‘Who had the motive to pay for the annual MOT fees?’

(c) During his cross-examination, the 1^st defendant denied that the $1 million offered by him was for the purchase of the Temple.  He claimed that this offer was made solely with a view to paying off a ‘trouble (麻煩)’.  This assertion however is traversed by his own affirmation of 26 January 2013 when he affirmed that ‘17. Between September and December 2012, I negotiated with Mr Chu for the purchase of the land and a price was agreed, unfortunately according to Mr Chu, the owners eventually refused to sign any agreement.’  Reversing the assertion of his earlier affirmation was to avoid the implication of ‘offering to purchase land when the 1^st defendant claimed to be its owner’.  It was questionable whether the 1^st defendant was giving truthful testimony during cross-examination regarding the offer to purchase the subject land from the landowner.

(d) The assertion of the 1^st defendant and that of his father in witness statement that he had never seen Madam Lam, that she had disappeared ‘without trace (不知所踪)’ latest since completion of the ‘Temple’ (i.e. 1975) was obviously questionable as, on documents supplied by him, Madam Lam had been actively participated in the ‘Temple’ as she made donations in 1989 and 2003 for renovation of the ‘Temple’. 

(e) In respect of the renovation of the Temple, according to Mr Joseph Wong’s JR2, it stated that the Temple appeared to be renovated in years of 1978, 2003 and 2008. However, it was the 1^st defendant’s evidence that the Temple was renovated in about 1989, 2003 and 2007. There were some inconsistencies as to the years of renovation of the Temple between Mr Joseph Wong’s JR2 and the 1^st defendant’s evidence.

44.  I agree with the plaintiffs’ submission that the aforesaid issues are central to the dispute of facts and giving untruthful evidence or refusing to answer questions central to the issues reflect the credit or want of it of the 1^st defendant in dealing with these matters.  I find that the 1^st defendant had embellished his evidence in the witness box in order to bolster up his case against the plaintiffs. I also bear in mind the strong motives for the 1^st defendant in either lying or at least not telling the court the whole truth in order to claim possessory title to the Temple.

45.  Therefore, where there are discrepancies between the evidence given by the parties’ witnesses, I have no hesitation in accepting the evidence given by the plaintiffs’ witnesses and reject those given by the 1^st defendant.

Adverse Inference

46.  The 1^st defendant’s father did not attend court to give evidence.  The 1^st defendant’s explanation was that his father was too old as he was 91 (as at 7 December 2016) and he was suffering from ill health.  Insofar as his father’s age is concerned, the 1^st defendant’s evidence must be incorrect as, the 1^st defendant’s case is that his father was born in 1928 and, as at 7 December 2016, he would only be 88but not 91.  Insofar as his father’s health is concerned, no medicalevidence was produced to show his health conditions.  Neither has the 1^st defendant suggested that his father does not have a clear mind.

47.  The first time when the plaintiffs and this Court were informed of the unavailability of the 1^st defendant’s father testifying was on 7 December 2016 (the 2^nd day of trial).  The age and conditions of the 1^st defendant’s father were not new to the 1^st defendant, given the importance of his evidence, it was difficult to see any reason why for a period of not less than 5 years (between 2011 and 2016), no attempt was made to perpetuate his evidence by the process of taking deposition and, not only the 1^st defendant but the plaintiffs were also entitled to apply for taking of the deposition of the 1^st defendant’s father in circumstances suggesting that his evidence would have an important bearing to the case and that his health conditions might render him unable to testify in the trial.  The 1^st defendant’s father is a very material witness who may support the 1^st defendant’s case.

48.  I disagree with the 1^st defendant’s submission that there was no circumstances in the present case which warranted the Court to draw adverse inference against the 1^st defendant for failing to call the 1^st defendant’s father as witness.

49.  I agree with the plaintiffs’ submission that by that time when the plaintiffs and this Court knew about the unavailability of the 1^st defendant’s father testifying at the trial, it would be too late for the plaintiffs to apply to compel the 1^st defendant’s father to testify by the process of taking deposition.  This is a matter that would curtail the weight to be attached to the 1^st defendant’s hearsay (and multiple hearsay) evidence relating to the purported occupation of, inter alia, the 1^st defendant’s father.  Further, no disclosure has been made by the 1^st defendant as to:-

(a) the source of information of Madam Lam’s occupation and whether it was exclusive (from Chan or 1^st defendant or anyone);

(b) the source of information of Chan’s occupation and whether it was exclusive (from Chan or 1^st defendant or anyone); and

(c) the circumstances under which 1^st defendant’s father informed the 1^st defendant (if any) of the former’s occupation and, if so, whether it was exclusive.

50.  The Court’s attitude has always been consistent when dealing with an issue for not calling a witness when available.  Fuad JA, in adopting the well-established maxim omnia praesumunter contra spoliatorem, approved the judgment in Tullett & Tokyo International Securities Ltd v APC Secutiries Co Ltd [2001] 2 HKC 713, in his following judgment:-

“Failure to produce evidence, as indicating unfavourable tenor of evidence: (1) In general…The failure to bring before the tribunal some circumstances, document, or witness, when either the party himself or his opponent claims that the facts would thereby be elucidated, serves to indicate, as the most natural inference, that the party fears to do so; and this fear is some evidence that the circumstance or document or witness, if brought, would have exposed facts unfavourable to the party…”

Telings International Hong Kong Ltd v John Ho CACV 10 of 2010, judgment delivered on 22 October 2010.

51.  The Court would be particularly critical of the attitude of a party not calling a material witness in the trial when, throughout, he had represented to the Court and his opponent that such a witness would be called.  The reason for the Court’s stance being that the representation made by that party would have prevented his opponent from taking steps to compel the witnesses’ attendance (e.g. under Order 38 rule 1 RDC) or otherwise making other preparation to deal with issue that would be dealt with by that witness.

52.  The plaintiffs relied on Fastway (HK) Investment Ltd v Wing Bo Motor Col DCCJ 3507/2008, judgment delivered by Alfred HH Chan on 22 March 2013, a case in which the plaintiff sued the defendant for recovery of possession of land when the defendant counterclaimed for adverse possession but an important witness for the defence was not called to testify despite him having given a witness statement.  Decision not to call such witness was only revealed on the first day of trial.  The trial judge, applying Telings International Hong Kong Ltd (supra), drew adverse inference to the defence.

53.  In this present case, it is apparent that the 1^st defendant lacked personal knowledge in relation to the use and occupation of the Temple. The 1^st defendant was unable to read the mind of his previous occupiers’ (Madam Lam, Chan and the 1^st defendant’s father) regarding their purported intention to possess.  The 1^st defendant failed to produce any contemporaneous documents regarding the old photos of the squatters at the Temple, utility bills under the name of 1^st defendant’s father or the 1^st defendant, receipt or proof of expenses for renovation/repair of the Temple from the 1^st defendant or his father or similar documents to show that he and/or his father were in fact the squatter in occupation. Although 1^st defendant in his witness statement alleged that his father has been the one responsible for all the outgoing expenses of the Temple since 1997 and despite the plaintiffs disputed over the allegation of the 1^st defendant’s and his father’s possession, the 1^st defendant failed to produce any contemporaneous documents proving that he and his father have been responsible for all the outgoing expenses of the Temple since 1997.  This was unsatisfactory. The 1^st defendant alleged that “the electricity meter was registered under my father’s name” (電錶是由我父親的名字作登記的) and that “since 1998 and in relation to [the temple’s] expenses and those my father paid out of his own pocket, my father made records of the same from time to time” (由1998年開始，就相關的開支及由他自費的金錢，他是有定時作記錄的。)

54.  The 1^st defendant’s father was the key witness of the present proceedings. The witness statements made by the 1^st defendant are extremely self-serving. I agree with the plaintiffs’ submission that adverse inference should be drawn against the 1^st defendant for his father’s failure to come to court to give oral evidence or produce any contemporaneous documents proving that he and his father have been responsible for all the outgoing expenses of the Temple since 1997.  I thus would handle the defence evidence with circumspection and would draw adverse influences against the 1^st defendant wherever it appears to be reasonable to do so.

Findings on the Main Issues

I.   It is the 1^st defendant’s case that, since late 2012, he continued with the exclusive possession of his earlier occupiers.  Since the plaintiffs have already commenced legal proceedings to recover the Land Lot on 1 November 2011, whether the 1^st defendant could still, after 1 November 2011, continue with earlier occupation for the purpose of satisfying the statutory period of 20/12 years and for the purpose of defending or counterclaiming?

55.  The 1^st defendant contended that there was the passing of ‘possession’ of the Temple from Madam Lam, Chan and the 1^st defendant’s father and thus there was uninterrupted adverse possession of the Temple until the present proceedings without any action by the plaintiffs or their predecessors-in-title for recovery.  The 1^st defendant claimed that in late 2012, the possession of the Temple and/or possessory title of the Temple, was passed from the 1^st defendant’s father to him.  Hence, it is the 1^st defendant’s case that, since late 2012, he continued with the exclusive possession of his earlier occupiers.  The 1^st defendant was joined as a co-defendant upon his application in the action herein on 24 October 2013.

56.  The plaintiffs however contended that it would not be possible for the 1^st defendant to continue with his father’s adverse possession after 1 November 2011 for the purpose of defending or counterclaim for the following reasons:-

a. As a matter of law, timefor the purpose of the LO would ceaseupon the issue of legal proceedings. Hence, it would not be possible for the 1^st defendant to continuewith his father’s adverse possession after 1 November 2011 for the purpose of defending or counterclaiming. The 1^st defendant only took over exclusive occupation of the Temple since late 2012 and, by that time, proceedings for recovery of the Land Lot had already started for a year, the 1^st defendant cannot, as a matter of law, continue the earlier occupations of Madam Lam, Chan and the 1^st defendant’s father.

b. As regards the passing of ‘possessory title’ of the Temple by the 1^st defendant’s father to him, as a matter of law, a possessory title is an interest in land which is capable of being transferred by a squatter to another person.  However, interest in land (whether legal and equitable) could only be disposed of or transferred by and under a deed (i.e. contract under seal).  The plaintiffs relied on Section 4 of the Conveyancing and Property Ordinance, Cap 219 (“CPO”) for such contention.  It is neither the pleaded case of the 1^st defendant nor evidence in support of the existence of any assignment (i.e. a deed) from which the 1^st defendant obtained transfer of his father’s squatter’s title (whether legal or equitable) in the Temple so as would confer him with interest in land to sustain his defence as a person deriving title from his predecessor-in-title (Madam Lam, Chan or the 1^st defendant’s father).

c. The prior occupation (whether by Madam Lam, Chan and the 1^st defendant’s father) would have beeninterrupted since 1 November 2011 and it would not be possible for the 1^st defendant to continue the earlier occupation to count in his own ‘exclusive possession’ for the purpose of accumulation of the 20/12 years period.

d. The 1^st defendant was counterclaiming on his own rights.  Even should this Court were to find that the 1^st defendant’s father had been in exclusive possession of the Temple for the entire period of the LO with the necessary animus, this would not assist the 1^st defendant as his ‘exclusive possession’ of the Temple could not continue that of the 1^st defendant’s father and the 1^st defendant’s father had filed no defence or counterclaim in the action herein and the 1^st defendant could not defend or counterclaim on behalf ofthe 1^st defendant’sfather.

e. On either scenarios, of the 1^st defendant’s defence both in pleadings as well as in evidence, do not support a sustainable defence at law and, on this ground alone, it would be sufficient to dispose of the 1^st defendant’s defence.  Further, the 1^st defendant’s counterclaim should be dismissed.

57.  I do not accept the plaintiffs’ submission on the points set out in the preceding paragraph and its sub-paragraphs.  The central issue rests on whether the 1^st defendant’s father had obtained a possessory title (if proved) to the Temple through the purported successive adverse possession from Madam Lam to Chan to 1^st defendant’s father, or alternatively from Chan to 1^st defendant’s father, or alternatively by 1^st defendant alone before the commencement of the present proceedings being the cut-off date, and, if affirmative, whether the possessory title can be in law transferred to 1^st defendant after the cut-off date.  The next question is whether such possessory title, as acquired by adverse possession, is transferrable and can be transferred by what means.

58.  There is no dispute that the general rule is that time continues to run until the paper owner commences an action to recover the disputed land, or takes possession physically (Adverse Possession, 2^nd Ed, Stephen Jourdan QC, para 15-03).  Hence the time of counting the period of adverse possession stopped running on 1 November 2011 (“the cut-off date”) and the 1^st defendant’s part of possession, which is after the cut-off date does not count for the 12 years prescribed period.

59.  There is no direct authority provided by the plaintiffs stating that the possessory title cannot be transferred after the cut-off date.

60.  I agree with the 1^st defendant’s submission that the concept of “possessory title” is unique in the context of adverse possession.  It is described as a title acquired by a person who holds adverse possession of unregistered land (Adverse Possession (ibid), para 20-15).  In fact, it has general application to all lands (See Tower Hamlets London Borough Council v Barrett [2006] 1 P. & C.R.9, 132.  The land concerned is a government land.)

61.  It is further stated that:-

“Possession is title and evidence of title

20-16 Possession by a squatter has been explained as conferring a title in two quite different ways. First, it has been said that possession itself confers a freehold title in itself, good against all the world except the true owner or someone claiming under him. The expiry of the limitation period extinguishes the better title of the true owner, leaving the squatter’s title impregnable. Secondly, it has been said that possession acts as evidence of a lawful title. Until the expiry of the limitation period, the evidence can be rebutted by the true owner or someone claiming under him. After the limitation period has expired, the presumption becomes irrebuttable.” (emphasis added) (Adverse Possession (ibid), para 20-16)

62.  I agree with the 1^st defendant’s submission that possessory title is a “product” acquired by adverse possession which materializes at the time the paper owner’s title is extinguished under the LO, i.e. 12 years of adverse possession.  The possessory title will only become a legal title only by the operation of law, ie a declaration by the Court through legal process.

63.  As regards the next question whether such possessory title, as acquired by adverse possession, is transferrable and can be transferred by what means.  I also agree with the 1^st defendant’s submission that a possessory title is transferrable by conveyance, or will, or on intestacy, or simply by previous squatter allowing the subsequent squatter into possession:-

(a) “A possessory title can be transferred like any other title. It can be conveyed or can pass on death by will or on intestacy.”

(emphasis added) (Adverse Possession (ibid), para.20-33)

(b) “If C takes adverse possession of A’s land, and then C’s possessory title is transferred to D, by conveyance, or will, or on intestacy, then there is one continuous possession. Time for A to bring an action against D for recovery of the land runs from the date when C took possession.

(emphasis added) (Adverse Possession (ibid), para.6-51).

(c) The same is true if there is no formal conveyance of the possessory title from C to D, but C allows D into possession. In Tower Hamlets London Borough Council v Barrett, Neuberger LJ said:

“[36] The central point in this connection is what bars the paper owner from claiming possession is a continuous period of 12 years of dispossession – see s.15(1) of, and para.1 of Sch.1 to, the 1980 Act. Accordingly, unless there is a hiatus between the periods of possession of successive squatters (in which case para.8(2) of the Schedule would prevent the second squatter being able to rely on the period of adverse possession by the first) the second squatter, whether he has purchased from the first squatter or dispossessed him in some other way, can rely on the first squatter’s period of adverse possession. This view is supported by Asher v Whitlock (1865) L.R. 1 Q.B. 1 and Willis v Earl Howe [1893] 2 Ch.545.””

(emphasis added) (Adverse Possession (ibid), para 6-52).

64.  I accept the 1^st defendant’s submission that the commencement of legal action for recovery of land would not (1) “destroy” the possessory title, as a product of acquired by adverse possession; or (2) affect the transferability of possessory title, save and except that the period of possession after the cut-off date would not be counted for the purpose of extinguishing the paper owner’s title under the LO.  Any argument to the contrary is not supported by law and there is no authority provided by the plaintiffs to support their contentions.

65.  Going back again to Sections 7 and 17 of the LO, it is specifically stated that no action shall be brought to recover land and the paper owner’s title is extinguished at the expiration of the prescribed period, i.e. 12 years, before the cut-off date according to the 1^st defendant’s case.  The effect of Section 7 clearly refers to the extinguishment of the paper owner’s title but not “destroying” the possessory title.

66.  The plaintiffs sought to argue that the transfer of possessory title from the 1^st defendant’s father to the 1^st defendant is subject to Section 4 of CPO and hence can only be done under a deed.  I do not accept that there is a need of deed for transfer of possessory title under the CPO.

67.  Section 4(1) of CPO states that “A legal estate in land may be created, extinguished or disposed of only by deed.”  The exception, amongst others, in Section 4(2) of CPO states that “This section does not apply to (h) a creation, extinguishment or disposal of a legal estate in land by operation of law.”

68.  I agree with the 1^st defendant’s submission that a possessory title is not a legal estate in land caught by Section 4(1) of CPO as, explained above, it only becomes a legal title by the operation of law, i.e. the LO and legal process.

69.  The possessory title would only become a legal estate in land at the time of (indirect) operation of the LO(operation of law) and when it is declared by Court.  In an adverse possession case, the making of declaration that a plaintiff is entitled to recover possession of land is a declaration of legal title in land by operation of law which is specifically endorsed by Section 4 of CPO.  (U Po Chu v Tsang Pui Ling and others, DCMP 467/2013 unreported, at paras 15-17).  Hence, the transfer of possessory title is not subject to Section 4(1) of CPO. It falls within the exception in Section 4(2)(h).

70.  If, as argued by the plaintiffs, a possessory title is a legal estate in land for the purpose of Section 4(1) of CPO, every transfer of possessory title, no matter before or after the commencement of proceedings, must then be made under deed under Section 4(1) of CPO.  This will of course contradict the authority that a possessory title can be transferred by intestacy, without formal conveyance, or simply by allowing the subsequent squatter to possess.  

71.  In the premises, the position is that if in the event the 1^st defendant’s father could successfully prove to the Court that he has acquired a possessory title in the Temple, the passing of possession and possessory title from his father to 1^st defendant is plausible.  Subject to proof, the 1^st defendant could still, after 1 November 2011, continue with earlier occupation for the purpose of satisfying the statutory period of 20/12 years and for the purpose of defending or counterclaiming.

II.   Whether the 1^st defendant and the previous occupiers (i.e. Madam Wong prior to 1972, Madam Lam in 1972, Chan in 1973, the 1^st defendant’s father in 1998 and the 1^st defendant in 2012) have had possession of the Temple for 20 years or more since about 1972 or whether 1^st defendant’s father and/or 1^st defendant have had possession of the Temple for 12 years or more before the commencement of this action (“the Factual Possession Issue”)

72.  The following evidence was provided by the 1^st defendant in respect of the factual occupation of the Temple:-

(a) Madam Wong left Hong Kong in about 1972 and the Land Lot was abandoned.

(b) Since 1972 or 1973, the Land Lot was fenced off by wire netting by Madam Lam in about 1972 or 1973 for her exclusive possession for cultivation and raising chickens.

(c) There was a Guanyin temple (a hut) with a Guanyin statue placed for worship.  The Guanyin temple was simple and crude and in small scale.  Madam Lam lived there and treated Guanyin followers led by Chan.

(d) Since about 1975, the Temple was built by using donations from followers.  It was fenced off by brick wall instead of wire netting.  Metal pad locks were installed for the metal gates of the brick wall and also the door of the house placing the Guanyin statue.

(e) Madam Lam left Yuen Long and the exclusive possession of the Temple was passed to Chan.  Chan was the only person who had the keys of the pad locks and was also the person-in-charge of the Temple.

(f) A renovation of the Temple was done in about 1989 including raising the brick wall.  This was organized by Chan by using donations raised from followers.  Chan continued the exclusive possession of the Temple and his role as the person-in-charge of the Temple.

(g) In 1997, the 1^st defendant’s father retired and spent much more time to assist Chan in managing the Temple and possessed the keys of the pad locks (only Chan and, the 1^st defendant’s father).  Chan was old and unhealthy that he was not in Hong Kong from time to time.  The 1^st defendant’s father almost replaced Chan’s role in managing the Temple.

(h) In 1998, Chan seldom stayed in Hong Kong and passed the keys and exclusive possession to the 1^st defendant’s father. Since then, the 1^st defendant’s father started exclusive possession of the Temple and managed the Temple as what Chan did in the past.

(i) In 2003, the 1^st defendant’s father organized another renovation of the Temple by using donations from followers at a sum of about HK$100,000.00 and he changed the pad locks.

(j) In 2007, the 1^st defendant’s father organized another renovation of the Temple by adding a cover to the open area by using the donations from followers at a few tens of thousands.

(k) The 1^st defendant’s father’s exclusive possession of the Temple continued until mid-2012.  He passed the exclusive possession to the 1^st defendant by passing his and Mr Wong’s sets of keys to him.  The 1^st defendant continued the exclusive possession and managed the Temple.  Generally he would only allow the followers to enter the Temple on 1^st and 15^th of lunar month and upon advanced booking.

73.  The 1^st defendant relied on the contemporaneous donation records.  The Temple was renovated in about 1989 by using donations from followers.  The photographs of the donation records, i.e. the plate hanging on a wall inside the Temple, were produced by the 1^st defendant.  “己已年” was the Lunar corresponding year of 1989.

74.  The Temple was renovated again in about 2003 by using donations from followers.  The photographs of the donation records, i.e. the plate hanging on a wall inside the Temple, were produced by the 1^st Defendant.  “癸未年” was the Lunar corresponding year of 2003.

75.  The Temple was renovated again in about 2007 (adding a cover to the open area) by using donations from followers.  The photographs of the donation records, i.e. the red sheet posting on a wall inside the Temple, were produced by the 1^st defendant.

76.  The 1^st defendant also relied on the findings and conclusions made in Mr Joseph Wong’s JR2 which he contended were directly supportive to his case.  The 1^st defendant submitted that the 1^st defendant’s Defence and Counterclaim (before amendments) and the 1^st defendant’s and the 1^st defendant’s father’s witness statements were filed before Mr Joseph Wong’s JR1 and Mr Joseph Wong’s JR2.

77.  It is not in dispute that Mr Joseph Wong made the opinions in paragraph 8 of Mr Joseph Wong’s JR2that the Temple was already being occupied by temporary structures since year 1972.  The temporary structures had undergone a few renovations but the extent of their occupations within the Temple remained similar throughout the years from 1972 to 2011.  Mr Joseph Wong concluded that the Temple has been occupying the Land Lot for 39 years from 1972 to 2011.  On this front, it is clear that the Temple had been in possession of the Land Lot since 1972 to 2011.

78.  However, it is important to note that the fact of possession is not, by itself sufficient for the 1^st defendant to succeed in a claim of this nature.  The 1^st defendant must prove that the possession by the relevant predecessors was open, visible and notorious, and not equivocal in nature.  It is clear that evidence in support of the 1^st defendant’s counterclaim being the 1^st defendant’s evidence, both in chief as well as during cross-examination that, apart from paying visits during the 1^st and 15^th day of the lunar calendar and 4 important religious events annually, he himself had never been in exclusivepossession of the Temple prior to late 2012.  To sustain his Defence & Counterclaim, the 1^st defendant needs to rely upon prioroccupation which he allegedly has continued.

79.  Since it is the 1^st defendant’s case that he had never seen Madam Lam (neither has the 1^st defendant’s father), I rule that no weight could be attached to the 1^st defendant’s evidence as to what Madam Lam had acted or done between 1972 and 1975.

80.  Insofar as the occupations by Chan (1975 – 1997) and the 1^st defendant’s father (1998 – late 2012) are concerned, evidence of the 1^st defendant of their occupations has the following common features:-

(a) that prior to late 2012, the 1^st defendant’s visit to the Temple was confined to the 1^st, 15^th day of lunar calendar and 4 religious events in a given year;

(b) that there was no evidence of their possession of the Land Lot or the Temple as being ‘exclusive’ (e.g. no one else except Madam Lam, Chan and the 1^st defendant’s father had effective control over the Land Lot or the Temple);

(c) that there was no evidence of unbroken chain of possession of the Land Lot or the Temple by Madam Lam, Chan and the 1^st defendant’s father.

81.  The difficulty of the 1^st defendant’s case lies in the fact that only himself gave evidence and that he had no personal knowledge of the exclusive and unequivocal occupations of Madam Lam, Chan and the 1^st defendant’s father apart from hearsay.  The quality of his hearsay evidence is in doubt as has been pointed above.

82.  I agree with the plaintiffs’ submission that the fact that, since 1975, the Land Lot had been occupied by a ‘Guan Yim Temple (觀音廟)’, which as a matter of Chinese tradition, being a place ofpublic worship coupled with the fact that there existed a list of donors (over 100) demonstrates that ‘believers/donors’ would, as a matter of habit, access to the Temple, from time to time, to worship and this very fact would impose a heavy burden upon the 1^st defendant to discharge the claim of exclusive possession of a place of public(or private) worship by Madam Lam, Chan and the 1^st defendant.  It is necessary to bear in mind that, the evidence necessary to show exclusive possession must be ‘compelling’.

83.  The 1^st defendant submitted that the 1^st defendant and the previous owners or their agents (the 1^st defendant’s father for Chan; Mr Wong for the 1^st defendant’s father) possessed the keys of the pad locks while the followers (even have made donations) did not have.  They could only enter the Temple with the permission of the 1^st defendant and the previous owners, in respective periods of time of possession, and when they opened the gates of the Temple.  The followers did not enter and worship as of right.

84.  As I explained above that the 1^st defendant had no personal knowledge of the exclusive and unequivocal occupations of Madam Lam, Chan and the 1^st defendant’s father apart from hearsay and there was no cogent evidence to show that the previous owners or their agents had actually possessed the keys of the pad locks while the followers did not have.  As such, I could not accept 1^st defendant’s argument that 1^st defendant and the previous occupiers had exclusive possession of the Temple whereas the other followers who donated to the building/renovation of the Temple would not have the right to enter or use the facilities.

III.   Whether the factual possession was coupled with an intent to possession (“the Animus Possidendi Issue”)

85.  It is necessary to assess whether the occupations of Madam Lam (1972 - 1975), Chan (1973 - 1998) and the 1^st defendant’s father (1998 - 2012) had the necessary animus i.e. for himself/herself and with the intention to exclude the world at large inclusive of the landowner.

86.  The 1^st defendant relied on several matters to explain that Chan and the 1^st defendant’s father had the intention to possess because of the following features and the Court’s attention was drawn to the following evidence of the 1^st defendant, namely:-

(a) The Land Lot was fenced off by wire netting by Madam Lam in about 1972 or 1973.

(b) The Temple was built in about 1975.  It was organized by Chan using donations from followers.  A brick wall was built to fence off the Temple replacing the wire nettings.  Metal pad locks were installed for the metal gates of the brick wall and also the Temple.

(c) Chan was the only person who possessed the keys of the pad locks and also the donation box from 1975 to 1997.  No one could enter the Temple without Chan’s permission and opening the gates and doors.

(d) The extent of management and possession of Chan from about 1975 to about 1998 that he was required to spend money out of own pocket from time to time.

(e) The renovation of the Temple in about 1989 including raising the brick wall by using donations raised from followers.

(f) The electricity meter was since about 1989 registered under the 1^st defendant’s father’s name.

(g) The extent of management and possession of the 1^st defendant’s father from about 1998 to late 2012 and he was required to spend money out of his own pocket from time to time.

(h) Except Mr Wong as the 1^st defendant’s father’s servant who also possessed the keys since 2003 to 2012, the 1^st defendant’s father was the only person who possessed the keys of the pad locks and also the donation box from 1998 to 2012.  No one could enter the Temple without the 1^st defendant’s father’s permission and opening the gates and doors.

(i) The renovation of the Temple in about 2003.  This was organized by the 1^st defendant’s father using donations of about HK$100,000.00 raised from the followers.  The pad locks of the metal gates of the brick wall and the Temple were replaced by new pad locks by the 1^st defendant’s father.

(j) The renovation of the Temple in about 2007.  This was organized by the 1^st defendant’s father using donations of about some tens of thousands raised from the followers.

(k) The extent of management and possession of the 1^st defendant’s since mid-2012 that he was required to spend money out of own pocket from time to time.  He was the only one who possessed the keys of the pad locks and the donation box.  No one could enter the Temple without permission of the 1^st defendant.

(l) As observed and known by the 1^st defendant, Chan had in fact been the only person owning the Temple since 1975 until 1998.

(m) As observed and known by the 1^st defendant, the 1^st defendant’s father had in fact been the only person who possessed the Temple as his own property since 1998 until 2012.  No one could enter or use the Temple without his permission.

87.  I have already set out the relevant law concerning the Animus Possidendi Issue above.  I agree with the plaintiffs’ submission that this Court should disregard the self-serving evidence of the 1^st defendant’s father and the 1^st defendant as to their evidence of the intention of Madam Wong, Madam Lam, Chan, the 1^st defendant’s father in their alleged occupation of the Temple.  Instead, this Court should look into the actions and all circumstances, if any, of Madam Lam, Chan and the 1^st defendant’s father on the issue of occupation.

88.  No evidence has been given by the 1^st defendant as to the mental element of Madam Lam.  Insofar as that of Chan and the 1^st defendant’s father are concerned, the 1^st defendant, in his witness statements, asserted that they ‘owned (擁有)’ the Temple which is not evidence of fact but the 1^st defendant’s own conclusion and bare assertion.

89.  Upon cross-examination, the 1^st defendant asserted that his conclusion was drawn from the following facts:-

(a) the presence of fence; and

(b) the presence of a gate and with lock which would only be open and unlocked during daytime.

90.  In the absence of evidence that the occupations of Madam Lam, Chan and the 1^st defendant’s father being exclusive, presence of fence and gate with lock etc. would not support the 1^st defendant’s case.  In the case of the Temple with believers/members over 100 in number who would regularly attend for public or private worship, it is really difficult to see how each of Madam Lam, Chan and the 1^st defendant’s father could have intention to exclude the world at large inclusive of all ‘believers/members’ when they had made handsome donations for the renovation of the Temple presumably to enable them (or their relatives and friends) to worship from time to time.

91.  Presence of fence and locked gate would be of significance when they were used to secure a residential structure and to exclude non-residents. Their presence would be neutralwhen the structure is a place established for public or privateworship.  I find that the existence of fences and gates in the Temple is not to exclude the world at large but to provide security only.

92.  The 1^st defendant’s reliance of fence and (locked) gates as evidence of animus possidendi to exclude the world at large is therefore speculative and unwarranted in the circumstance of the case.

93.  It is also noteworthy from the following pleaded case in the Amended Defence & Counterclaim of the 1^st defendant concerning his father’s animus in the occupation of the Temple:-

“9. …In early 1998, the 1^st Defendant’s father took over the possession of the Temple and/or the possessory title of the Temple, and started exclusive possession, occupation and control of the Temple with intention to exclude anyone including any owner with paper title as if he was the owner thereof. He would open the gates every morning and lock the gates every evening.

10.   The 1^st Defendant’s father also became the person in charge of the Temple.  The followers, as revocable licensees, were allowed by the 1^st Defendant’s father from time to time to enter the Temple and worship Guanyin…”

94.  The pleaded animus of the 1^st defendant’s father can be summarized as follows:-

(a) Insofar as his own possession was concerned, the 1^st defendant’s father intended to exclude all persons in the world inclusive of the owner of the land; and

(b) Insofar as followers(i.e. believers/donors) were concerned, the 1^st defendant’s father granted revocable licences to them as their terms of entry into the Temple.

95.  The plaintiffs have dealt with issue (a) on the ground that it was the 1^st defendant’s evidence, during cross-examination, that he could not read the minds of others (inclusive of the 1^st defendant’s father) and he relied upon the existence of the fence and locked gate.  Insofar as issue (b) is concerned, there was no evidence (whether by the 1^st defendant or otherwise) as to whether ‘followers’ had been ‘permitted’ to enter and, if so, on what terms without mentioning that the terms of their entry would be ‘revocable’.

96.  I agree with the plaintiffs’ submission that the pleaded case of 1^st defendant under paragraphs 9 and 10 of his Re Amended Defence & Counterclaim is simply unsupported by evidence.

97.  In adopting earlier authorities on the issue as to the requirement of exclusive possession, Wells J said:-

“…it was again laid down by the Supreme Court that ‘to enable the [squatter] to recover he must shew an actual possession, an occupation exclusive, continuous, open or visible and notorious for twenty years. It must not be equivocal, occasional, or for a special or temporary purpose’”

Pflug v Collins, p 689

98.  The objective fact being that, between 1975 and 2012, the Temple has been a place of public or private worship with a large number of believers/donors.  Hence, given this factual background, it is extremely doubtful whether Madam Lam, Chan and the 1^st defendant’s father could have the intention to possess the Land Lot or the Temple for themselves (in sequence) and to exclude all persons in the world.  I consider that, given the fact that the Temple was, and still is, a place for worship with a large number of worshippers, whether the occupation of Madam Lam, Chan and the 1^st defendant’s father being exclusive would be equivocal, no case of factual possession would have been established.

99.  Lastly, it is important to discuss about the offer of HK$1,000,000.00 in 2012. The background of such offer has been discussed in paragraph 43(c) above.

100.  I note that when the 1^st defendant was questioned if he had discussed with his father before making an offer of $1 million to the landowner, the 1^st defendant’s answer was a straightforward yes.  I consider that the monetary offer made by the 1^st defendant, as pointed out above, was for the purpose of purchasing the land from the rightful paper title owner.  It has been well established and confirmed in Wong Tak Yue (supra) at 250D-F:-

“…where the occupier has made statements as to what was his intention and such statements are against his interest, the court would usually accord to them considerable weight.

Here… [the fourteenth defendant’s] affirmation and that of his daughter established a matter of fact that since the expiry of the seven-year tenancy in April 1964, his intention had been that he was willing to pay rent to the owners if they had requested payment and that he was able to do so. The statements on affirmation were against interest and the Court would give them considerable weight. In my judgment, such an intention is plainly and completely inconsistent with the intention to possess which is requisite for establishing adverse possession and the fourteenth defendant has therefore failed to show an arguable case on this essential ingredient. That being so, he has no arguable case on limitation.” (emphasis added)

101.  I agree with the plaintiffs’ submission that this Court shall accord considerable weight on not only the fact that the 1^st defendant negotiated for the purchase of the land and a price was agreed in subsequent, but also on the fact that the 1^st defendant discussed the same with his father before making such an offer.  Consensus must have been reached between them before the 1^st defendant made the said offer and I consider that such intention of the 1^st defendant and the 1^st defendant’s father is plainly and completely inconsistent with the intention to possess.  On this alone, the animus possidendi of the 1^st defendant and the 1^st defendant’s father are said to be equivocal.

102.  Based on the available evidence, I do not accept that the 1^st defendant has sufficiently demonstrated that Madam Lam and/or Chan and/or 1^st defendant’s father had the requisite animus possidendi.  I therefore hold that the acts of the 1^st defendant and his predecessors were, for these purposes, equivocal.  In my judgment, the 1^st defendant has not discharged the burden which lies upon him to show the necessary animus in order to make out the claim in adverse possession so as to be entitled to the order he seeks.

103.  All in all, I consider that the 1^st defendant relied upon various hearsayand multiple-hearsay evidence, in particular facts and matters relating to Madam Wong, Madam Lamand Chan, who were persons said to be directly involved in occupation of the Temple. Such evidence in my view, as explained above, does not constitute compelling evidence to satisfy the requirement of adverse possession. 

IV.   Whether the possession of 1^st defendant and the previous occupiers was pursuant to the said licence granted by Yu Senior to Madam Wong and, if it was, whether the said licence had been terminated upon the death of Yu Senior and, if so, whether the licence would have resuscitated and renewed upon the parties continue to perform the Modification of Tenancy at least up to 2010(“the Licence Issue”)

104.  The above is enough to dispose of the 1^st defendant’s defence and counterclaim in these proceedings, but in case I am wrong, and in deference to the arguments which have been presented to the Court, I think it right to express my views with regard to the other points that have been argued. 

105.  The plaintiffs heavily relied on the said licence granted by Yu Senior to Madam Wong before 29 August 1969 (date of the MOT) for agricultural, accommodation and raising chicken.  The MOT was applied by Madam Wong with the consent of Yu Senior or on behalf of Yu Senior and hence Madam Wong acknowledged Yu Senior’s title and derived her right to use and occupy the Temple under the title of Yu Senior.The MOT and Letter of Approval were granted in consideration of a periodical fee payable for the permission to use the Temple for purposes other than agricultural purpose.

106.  The plaintiffs contended that the periodical fees have been continuously paid by Madam Wong and/or for her behalf by the 1^st defendant (and the 2^nd defendant) up to the issue of the Originating Summons (i.e. 1 November 2011).  The plaintiffs also asserted that the 1^st defendant derived his title from Madam Wong and/or pursuant to the MOT in that the 1^st defendant used and occupied the Land Lot purportedly under the MOT.

107.  As transpired from the pleaded case and evidence of the plaintiffs, the plaintiffs (or Yu Senior) never paid attention to and knew nothing about the use and occupation of the Land Lot until they received the letter dated 3February 2010 from DLO. By a reply letter to DLO dated 17February 2010, LCC requested a copy of the MOT and the Revised Permit No 14447, and the correspondence address of the Permittee (Madam Wong).  In this letter it was stated that ‘the plaintiffs had no records of the permits and had no ideas of the occupier of the Land Lot. Certain receipts of the periodical fees from 1969 to 2010 (HK$11.00 per year) obtained from the DLO are produced by the plaintiffs but there is no evidence from the plaintiffs regarding who made these payments.

108.  It was not challenged that a personal licence was granted by Yu Senior to Madam Wong for the use and occupation of the Land Lot as permitted and confined by the MOT.  The issue rests on whether the 1^st defendant and the previous occupiers derived their rights to use and occupy the Temple, being a portion of the Land Lot, under the said licence or under the MOT as claimed by the plaintiffs.

109.  In respect of the said licence granted by Yu Senior to Madam Wong before 29 August 1969 (date of the MOT), it was for agricultural, accommodation and raising chicken as evidenced by the MOT.  The MOT and Letter of Approval were granted in consideration of a periodical fee (HK$11/year) payable for the permission to use the Land Lot for purposes other than agricultural purpose.

110.  Since about 1973 (by Madam Lam) or 1975 (by Chan), the use of the Temple was no longer agricultural, accommodation or raising chickens.  The subject portion had become the Temple which was (1) an illegal user; (2) illegal structures; (3) completely different from the legal user under the said licence and the MOT. 

111.  I agree with the 1^st defendant’s submission that the actual use of the Land Lot as the Temple is completely different from the legal user under the said licence and the MOT since as early as 1975.  This use has all along been in contravention of the legal user of the Land Lot and under the MOT.  The payment of periodical fees under the MOT would not create a right to use the Land Lot and the occupiers’ use could not be derived from the MOT.  By this fact alone, it can hardly be argued that the use and occupation of the 1^st defendant and the previous occupiers are derived from the said licence.  It can hardly be imagined that Yu Senior and the plaintiffs would have licensed the 1^st defendant and the previous occupiers for any illegal use.  The plaintiffs’ stance in this regard can be shown in LCC’s letter dated 27 July 2010 to all occupiers of the Temple for removal of any illegal structures.

112.  Certainly, the plaintiffs cannot be suggesting that Yu Senior or the plaintiffs had ever granted any express licence to the 1^st defendant and the previous occupiers to use the Land Lot as the Temple.  It is YKC’s evidence that the building of the Temple was done without the consent of the plaintiffs and he would not have allowed any illegal use of the Land Lot.  The plaintiffs’ first attention to the Land Lot was only in about February 2010 when they received DLO’s letter dated 3 February 2010.

Termination of licence upon death of Yu Senior

113.  A revocable licence is automatically terminated upon the death of the licenser and it is not necessary for the licensee to have received notice of the death.  (Ho Hang-wan v Ma Ting-cheung as Personal Representative of Ma Sz-tsang, deceased [1990] 1 HKLR 649 (CA)).

114.  The revoked licence upon death of licensor cannot be renewed simply by the squatter’s continuation of occupation without objection or comment from the licensor. This would only show acquiescence but could not, as a matter of principle, give rise to an implied licence. (J Alston & Sons Ltd v COCM Pauls Ltd [2009] 1 EGLR 93 para 114 (Lexis Nexis Version)).

115.  There is simply no evidence from the plaintiffs that the licence to Madam Wong was ever re-granted after Yu Senior’s demise on 18 June 1980.

116.  In such case, I rule that the purported use and occupation of the Temple by Chan, since 18 June 1980, to the 1^st defendant’s father, and to the 1^st defendant, was not under any express licence.

V.   Whether the possession of the 1^st defendant and the previous occupiers was pursuant to an implied licence as a matter of law (“the Implied Licence Issue”).

117.  It is the plaintiffs’ case if it should be found that the 1^st defendant’s father had been in occupation of the Temple since 1998 and continued by the 1^st defendant in 2012, the plaintiffs contended that the possession of the 1^st defendant, his father and the previous occupiers, their occupation was pursuant to a licence impliedfrom the conducts of the parties (namely Madam Wong, Madam Lam, Chan, the 1^st defendant’s father and the 1^st defendant) including payment of fees for the MOT for the use and occupation of the Temple when the MOT was terminated by the government.  And during this period the 1^st defendant and his father derived their right to occupy the Temple pursuant to the MOT in that all of the said parties paid or took benefit for payment of the waiver fees or fees for modification of the tenancy of the plaintiffs in respect of the Land Lot and that the Deceased and the plaintiffs performed and continued to perform the MOT.

118.  The plaintiffs submitted the following:-

(a) it is a settled legal principle that, even in the absence of a direct contractual relationship between the landowner and the occupier, the latter could nevertheless be a licensee in occupation of the land of the landowner.  This legal concept is licence implied from the conducts of the parties.

London Borough of Lambeth v Rumbelow unrep Ch D 25 January 2001 (Lexis Nexis Transcripts) the judgment of Etherton J.

Regina (Beresford) v Sunderland City Council [2001] 1 WLR 1327

(adopted and approved in both levels in Yu Kit Chiu & Anr v Chan Shek Woo (supra))

(b) this Court should follow the approach of Etherton J in the finding of existence or otherwise of an implied licence as his judgment was a summary of earlier judgments on the same point:-

“I conclude…that in order to establish permission in the circumstances of any case two matters must be established. First, there must have been some overt act by the land owner or some demonstrable circumstances from which the inference can be drawn that permission was in fact given. It is, however, irrelevant whether the users were aware of those matters… Secondly, a reasonable person would have appreciated that the user was with the permission of the land owner.”

   London Borough of Lameth v Rumbelow (supra)

(c) The requirements of the law to establish implied licence being:-

(a) (i) overt act by the land owner; or

(ii) some demonstrable circumstances

from which the inference can be drawn that permission was in fact given; and

(b) a reasonable person would have appreciated that the user was with the permission of the land owner.

(d) The plaintiffs invited the Court to apply the 2-tier test explained by Etherton J in London Borough of Lameth v Rumbelow (supra) in considering whether an implied licence exist between the plaintiffs and the 1^st defendant (and the chain of occupiers) having regard to the factual background of the case.

(e) Discovery of the presence of the Temple during the November 2002 survey consequential upon 2 resumptions of the Land Lot and the decision not to drive out the occupier would supply the ‘overt act by the landowner’.  Taking positive steps to find out the condition of the Land Lot in 2002 must be an overt act by the landowner.  Whether or not the 1^st defendant and/or his father were aware of those matters is irrelevant.

(f) As regards “some demonstrable circumstances” from which the inference can be drawn that permission was in fact given, this is an alternative to ‘overt act by the landowner’ and, hence, it is not necessary for the landowner to do any overt act.  The ‘demonstrable circumstances’ relied upon by the plaintiffs being the following undisputed or indisputable evidence:-

(i) the MOT was continuously performed since 1969 despite 5 changes in the addresses of the ‘Permittee’ so as would ensure that Demand Notes would be sent to the payer;

(ii) the annual MOT was paid for a continuous period of not less than 40 years to ensure the structures thereon might be continuously maintained;

(iii) despite having knowledge of the change of user from ‘agricultural’ to ‘religious’ in 2002 which would constitute breach of the terms of user under the MOT plaintiffs did not take action to drive away the occupiers; and

(iv) between 1969 and 2010, all occupiers of Land Lot inclusive of Madam Wong, Madam Lam, Chan, the 1^st defendant’s father took benefit under the MOT and from continuous performance of the MOT so as would enable they continue to use the structures and ‘temple’ thereon.

(g) By applying the ‘reasonable man test’ ie objective assessment by a man in the street, no person would fail to appreciate that the users of theTemple (or the Land Lot) (i.e. Madam Wong, Madam Lam, Chan, the 1^st defendant’s father and the 1^st defendant) must have had the permission of the landowner to use the land.  There has been no significant change in the basis of occupation of the Land Lot since 1969 i.e. under and pursuant to the MOT and annual fees being continuously paid to ensure continuous existence of the structures (i.e. the Temple).

(h) The conduct of payment by (or on behalf of) an occupier to enable his continuous use and occupation of land was analogous to a situation when the sameoccupier signed in the MOT as the ‘permittee’.

(i) The ‘overt acts of the parties or demonstrable circumstances from which inference might be drawn’ and secondly, ‘a reasonable person would have appreciated that the user was with the permission of the land owner’.

119.  In my view, the concept of implied licence is not any settled law in Hong Kong.  The law in this regard was considered in the Yu Kit Chiu Case in the Court of Appeal level.  The Rumbelow Case and the BP Properties Case were considered but the Court of Appeal refrained from expressing a view on these cases.

120.  In the House of Lords level in Regina (Beresford) v Sunderland City Council [2004] 1 AC 889, Lord Walker of Gestingthorpe held that “83 In the Court of Appeal Dyson LJ considered that implied permission could defeat a claim to user as of right, as Smith J had held at first instance. I can agree with that as general proposition, provided that the permission is implied by (or inferred from) over conduct of the landowner, such as making charge for admission, or asserting his title by the occasional closure of the land to all-comers.  Such actions have an impact on members of the public and demonstrate that their access to the land, when they do have access, depends on the landowner’s permission. But I cannot agree that there was any evidence of overt acts (on the part of the city council or its predecessors) justifying the conclusion of an implied licence in this case.” (emphasis added) (cited in the Yu Kit Chiu Case).

121.  In the Rumbelow Case, the 2-tier test was laid down by Etherton J (cited in the Yu Kit Chiu Case).

122.  In the present case, putting the plaintiffs’ submission to the highest in this regard, i.e. adopting the 2-tier test in the London Borough Case, I take the view that the plaintiffs’ argument on implied licence cannot be accepted based on the available evidence and the circumstances in the present case.

123.  Firstly, as pointed out, there must have been some overt act by the land owner or some demonstrable circumstances from which the inference can be drawn that permission was in fact given.  The express licence granted by the Deceased to Madam Wong was evidenced by the MOT, i.e. agricultural, accommodation and raising chickens. The actual use and occupation from Madam Lam to the 1^st defendant since about 1973 was undeniable the Temple for religious use, which was completely contrary to the express licence.  The plaintiffs’ stance was that they would not allow any illegal use of the Land Lot and the Temple was built without the consent of the plaintiffs.  There is simply no room for the plaintiffs to contend that there were any overt act by them from which inference can be drawn that permission was in fact given to the 1^st defendant and the previous occupiers to use and occupy the portion of the Land Lot as the Temple.

124.  I agree with the 1^st defendant’s submission that any inference ought to reasonably be drawn must be contrary to any permission by the plaintiffs.  Further, from the plaintiffs’ evidence, the behaviour of the plaintiffs and the Deceased, if any, would only amount to acquiescence but not as a matter of law giving rise to an implied licence (J Alston & Sons Ltd v COCM Pauls Ltd, ibid).

125.  Secondly, in the present case, I agree with the 1^st defendant’s submission that for the same reason that the actual use and occupation by the 1^st defendant and the previous occupiers was simply in breach of the express licence and the MOT, no reasonable person would have appreciated that the user, as the Temple, was with the permission of the Deceased/the plaintiffs.

126.  The plaintiffs’ reliance on the BP Properties Case for contention of unilateral licence is misconceived.  In the BP Properties Case, the subject licence was an express licence (distinguished from the present case).  The squatter there was held to know the unilateral express licence offered by the registered owner but she did not accept or refuse.  This would stop time running for the purpose of adverse possession.  However, in the present case, there was no express licence offered by the plaintiffs/Yu Senior to Madam Lam, Chan, the 1^st defendant’s father for the use of the portion of the Land Lot as the Temple nor they knew of any licence offered by the plaintiffs/Yu Senior.

127.  I therefore rule that the purported possession of the 1^st defendant and the previous owners was not pursuant to any implied licence in this case.

Conclusion on Liability

Case against the 1^st defendant

128.  I rule that judgment be entered in favour of the plaintiffs for an order for possession of the Temple.

Case against the 2^nd defendant

129.  Apart from the structures comprising the Temple, the rest of Land Lot was occupied by the presence ofother structures and this was shown in the relevant aerial photographs and revealed from Mr Joseph Wong’s JR1.  In the trial, the 2^nd defendant was not represented and did not appear.  In the absence of any defence or any evidence to resist the plaintiffs’ claim, I rule that the plaintiffs are entitled to judgment to recover possession of the Remaining Part of the Land Lot (i.e. the whole of Lot 242RP with the Temple being calved out).

VI   Damages

130.  Before I proceed to assess the damages in this case, it is important to set out some important findings on the following relevant issues in the joint expert reports.

131.  In Mr Lau’s JR, he has provided evidence on the Unit Rates as on 28 January 2013, 28 January 2014, 28 January 2015 on 2 different basis:-

(1) the permitted use; and

(2) the existing use (with upward adjustment of 100% in view of “the existing use, zoning and donation/offering from the worshipers etc.”).

132.  In page 144-145 of Mr Lau’s JR, he analyzed some comparable properties and carefully weighed against all respective advantages and disadvantages of the properties in order to arrive at a fair comparison of value.  The expert gave opinion on the “Average Monthly Unit Rent.”  In view of the nature of the existing use, zoning and donation/offering from the worshipers etc., an adjustment of 100% on top of the average monthly unit rate is made for the “Estimated Adopted Monthly Unit Rate”.  The relevant assessment was as follows:-

Valuation Date	Average Monthly Unit Rent $/sq ft	Estimated Adopted Monthly Unit Rent $/sq ft
28 January 2013	$2.98	$5.96
28 January 2014	$3.17	$6.34
28 January 2015	$3.44	$6.88

133.  Based on the “existing use approach”, in page 147 of Mr Lau’s JR, the expert opined that the market rent and the total rent receivable for the Land Lot based on the effective area of 1,985 sq ft or 184.48 sq m were as follows:-

The monthly market rent of the property in existing state as at 28 January 2013	Estimated Adopted Monthly Unit Rent x Effective Area $5.96/sq ft x 1,985 sq ft = $11,830.60 Say $11,830/month
The monthly market rent of the property in existing state as at 28 January 2014	Estimated Adopted Monthly Unit Rent x Effective Area $6.34/sq ft x 1,985 sq ft = $12,584.90 Say $12,580/month
The monthly market rent of the property in existing state as at 28 January 2015	Estimated Adopted Monthly Unit Rent x Effective Area $6.88/sq ft x 1,985 sq ft = $13,656.80 Say $13,660/month

Valuation Date	Market Rent $/month	Estimated Total Rent Receivable $ (Period)
28 January 2013	11,830	141,960 (28 January 2013 to 27 January 2014)
28 January 2014	12,580	150,960 (28 January 2014 to 27 January 2015)
28 January 2015	13,660	54,640 (28 January 2015 to 27 May 2015)
		Total $347,560

134.  In Mr Joseph Wong’s JR2, he made the following findings, namely:-

(a) the Land Lot was having an area of 331.8 sq m;

(b) the Temple was having an area of 130.5 sq m;

(c) the Remaining Part of the Land Lot (ie the whole of Lot 242RP with the Temple being calved out) was 201.3 sq m.

135.  It is well-established that the court is not bound to accept the evidence of an expert even if it is not contradicted.  Instead, the court must arrive at its own independent view of whether and if so to what extent to the expert evidence put before it is acceptable.

Damages as against the 1^st defendant

(a)   Damages in the form of mesne profit

136.  The plaintiffs submitted that the latest time when damages should be recovered should not be later than 1 November 2011, as it was the date when the Originating Summons was issued and the 1^st defendant refused to surrender possession.  The plaintiffs submitted that damages should be calculated from that date as follows:-

(i) Between 28.1.2013 and 28.1.2015 - $347,560;

(ii) Between 1.11.2011 and 27.1.2013 (assumed to be 1 year and 2 month based upon the assessed rent for the year at 28.1.2013) - $11,830 x 14/12 = $13,801

(iii) Between 28.1.2015 and December 2016 (assumed to be 1 year and 10 months based upon the assessed rent for the year at 28.1.2015) - $13,660 x 22/12 = $38,845

137.  In the plaintiffs’ closing submission, it was submitted that the amount of damages of the Temple would be adjusted as follows:-

($347,560 + $13,801 + $38,845) x 201.3/331.8

= $242,542.836

138.  I allow damages in the form of mense profit calculated from 1 November 2011, being the date when the Originating Summons was issued and the 1^st defendant refused to surrender possession, until the date of judgment.  I however take the view that the plaintiffs’ approach on the calculation and the purported adjusted calculation were not entirely correct.

139.  For assessing damages in the form of mense profit for this case, I agree with the 1^st defendant’s submission that Unit Rates on basis (1), i.e. the permitted use, should be adopted for calculation of mesne profit in this case but not basis (2), i.e. the existing use, because it is trite law that “if the defendant makes improvements on the land, rental value should be assessed upon the unimproved value.” (McGregor on Damages, 19^th Edn, para 37-045)

140.  I consider that basing on the “permitted use approach” and adopting the formula used in page 147 of Mr Lau’s JR, the expert opined that the market rent and the total rent receivable for the Temple with 1,404.18 sq ft or 130.5 sq m should be as follows:-

The monthly market rent of the property for permitted use as at 28 January 2013	Adopted Monthly Unit Rent x Effective Area $2.98/sq ft x 1,404.18 sq ft =$4,184.46 Say $4,184/month
The monthly market rent of the property for permitted use as at 28 January 2014	Adopted Monthly Unit Rent x Effective Area $3.17/sq ft x 1,404.18 sq ft =$4,451.25 Say $4,451/month
The monthly market rent of the property for permitting use as at 28th January 2015	Adopted Monthly Unit Rent x Effective Area $3.44/sq ft x 1,404.18 sq ft =$4,830.38 Say $4,830/month

Valuation Date	Market Rent $/month	Estimated Total Rent Receivable $ (Period)
28 January 2013	4,184	50,208 (28 January 2013 to 27 January 2014)
28 January 2014	4,451	53,412 (28 January 2014 to 27 January 2015)
28 January 2015	4,830	19,320 (28 January 2015 to 27 May 2015)
		Total $122,940

141.  Accordingly, the damages calculated from the date of issuance of the Originating Summons to the date of judgment should be as follows:-

(a) Between 1.11.2011 and 27.1.2013 (454 days based upon the “permitted use approach” with market rent of $4,184) - $4,184 x 12 x 454/365 = $62,450.50

(b) Between 28.1.2013 and 28.1.2015 – $122,940

(c) Between 29.1.2015 and date of judgment, i.e. 13 July 2017 (897 days based upon the “permitted use approach” with market rent of $4,830) - $4,830 x 12 x 897/365 = $142,438.69

142.  In the premises, I rule that damages in the form of mesne profit should be assessed in the sum of $327,829.19 ($62,450.50 + $122,940 + $142,438.69) and be payable by the 1^st defendant to the plaintiffs. I award interest on the due mesne profit at the judgment rate to run from the date of the issuance of the Originating Summons (i.e. on 1^st November 2011).

Damages for trespass to the Remaining Part of the Land Lot (i.e. the whole of Lot 242RP with the Temple being calved out) between 4.10.2013 and 6.12.2016

143.  Judgment for possession of the Land Lot in its entirety was originally granted by Master C Lee on 13 December 2011.  However, based upon the 1^st defendant’s affirmation evidence that he and his predecessors-in-title had been in adverse possession of the whole part of the Land Lot, the 1^st defendant applied for and was granted an Order by the Master D Ho setting aside the Order for Possession dated 13 December 2011 and the Writ of Possession dated 31 January 2012 on the ground that he had acquired a squatter’s title to the whole part of theLand Lot.

144.  It was upon publishing Mr Joseph Wong’s JR2 on 18 March 2016 showing that the area in occupation by 1^st defendant has always been (since 1970) 130.5 square meters (out of a total area of 331.8 square meters) of the Land Lot whilst the rest of the area was unoccupied.  Upon the availability of Mr Joseph Wong’s JR2, 1^st defendant applied to amend his Defence & Counterclaim reducing the area of his alleged occupation and adverse possession by about 2/3.

145.  The plaintiffs contended that after cross-examination of the 1^st defendant, it transpired that, despite not being aware of the boundary or extent of the Land Lot, the 1^st defendant had chosen to apply to set aside the default judgment and the Order for Possession and irrespective of his intention to possess was confined to the Temple.

146.  The plaintiffs contended that, whether deliberately or otherwise, the 1^st defendant had, by a conscious decision and by untruthfulaffirmation evidence, deprived the plaintiffs of their right to possess the rest of Land Lot and this constituted wrongful deprivation of the plaintiffs’ right as owner.  On that basis, the plaintiffs had been wrongly deprived of their right to possess 2/3 area of the Land Lot since 24 October 2013. The plaintiffs contended that the 1^st defendant by a conscious act exceeding his claim of right, prevented the plaintiffs from exercising their right over the rest of the Land Lot would, as a matter of law, trespass. (Clerk & Lindsell on Torts, 21^st edition, para 19-02)

147.  At the time of the trial, the plaintiffs therefore invited this Court to order the 1^st defendant to pay damages to the plaintiffs for the period between 24 October 2013 and 6 December 2016 calculated on the following basis:-

(a) $4.07 (being adjusted monthly unit rent) per square feet per month as equivalence to (x 10.76) $43.8 per square meter per month;

(b) $43.8/square meter x 201.3 square meters = $8,816.94 per month;

(c) $8,816.94 x 37 months (24.10.2013 to 6.12.2016) = $326,226.78,

with costs to be paid by 1^st defendant since 24 October 2013 as 1^st defendant should not have defended this part of the plaintiffs’ claim at all let alone applying to set aside the Order for Possession dated 13 December 2011 and the Writ of Possession dated 31 January 2012 in its entirety.

148.  I take the view that the 1^st defendant is not liable to pay mesne profit nor damages since he was/is not in actual occupation/possession of the Remaining Part of the Land Lot and there was/is no trespass on the Remaining Part of the Land Lot.  The claim of the plaintiffs against the 1^st defendant for mesne profit or damages of the Remaining Part of the Land Lot lacks cause of action and is misconceived.

149.  It is true that the 1^st defendant confined his claim of adverse possession to the Temple (as opposed to the whole Land Lot) only at the time of his Re-Amended Defence and Counterclaim filed on 7 April 2016.  However, this would not provide any cause of action to the plaintiffs in terms of cause of action or the plaintiffs’ pleaded case.

150.  Further, the plaintiffs in the present case are seeking possession of the Land Lot.  The plaintiffs bear the burden to properly prosecute and prove their own case, including ascertaining the boundary of the Land Lot and the boundary of the Temple in actual occupation by the 1^st defendant.  The plaintiffs were always free to recover the Remaining Part of the Land Lot and/or obtain summary judgment against the 2^nd defendant after ascertaining the respective boundaries of the Land Lot and the Temple occupied by the 1^st defendant.  The plaintiffs are always entitled to and should have done so.

151.  During the plaintiffs’ Opening Submissions, the plaintiffs’ counsel raised the argument that the 1^st defendant’s conduct in these proceedings amount to “constructive possession” of the Remaining Part of the Land Lot which rendered the plaintiffs a cause of action on trespass.  Certainly, this is not pleaded and cannot be relied upon.  Further, there is no authority supporting that the conduct of party in proceedings can amount to “constructive possession”.

152.  I therefore rule that the plaintiffs are not entitled to claim mesne profit or damages against the 1^st defendant in respect of the Remaining Part of the Land Lot.

OTHER MATTERS

153.  The parties’ written submissions also mentioned various other points.  These have not been expressly set out or dealt with above.  This is so only because of the need to balance between the length of the judgment and its comprehension.  It does not mean those other points are thought to be irrelevant or have been overlooked.  To avoid doubt, those other points have also been duly considered.

CONCLUSION

154.  I order that judgment be entered in favour of the plaintiffs against the 1^st defendant for the following:-

a. A declaration that the plaintiffs are entitled to the possession of the Temple which boundary is identified and delineated in the Survey Sheet dated 17 February 2016 attached hereto and that all persons in occupation, including the 1^st defendant, are in occupation without licence or consent;

b. An order that the plaintiffs are entitled to recover possession of the Temple;

c. The counterclaim made by the 1^st defendant against the plaintiffs is dismissed;

d. Damages in the form of mesne profit be assessed in the sum of $327,829.19 and be payable by the 1^st defendant to the plaintiffs with interest at the judgment rate from the date of issuance of the Originating Summons (i.e. 1^st November 2011) until payment; and

e. The 1^st Defendant shall pay the plaintiffs additional mense profit at the monthly rate of HK$4,830 together with post judgment interest at the judgment rate from the day after delivery of the judgment until vacant possession of the Temple is delivered to the plaintiffs.

155.  As regards the 2^nd defendant, I order that judgment be entered in favour of the plaintiffs against the 2^nd defendant for the following:-

(1) A declaration that the plaintiffs are entitled to the possession of theRemaining Part of the Land Lot (i.e. the whole of Lot 242RP with the Temple being calved out) which boundary is identified and delineated in the Survey Sheet dated 17 February 2016 attached hereto and that all persons in occupation, if any, are in occupation without licence or consent;

(2) An order that the plaintiffs are entitled to recover possession of the said Remaining Part of the Land Lot.

156.  As regards costs, as against the 1^st defendant, the 1^st defendant do pay the plaintiffs’ costs of the action, including the plaintiff’s costs in defending the 1^st defendant’s counterclaim against them, such costs to be taxed if not agreed with certificate for one counsel.  The 1^st defendant’s own costs be taxed in accordance with the Legal Aid Regulations. 

157.  I rule that there is no order as to costs against the 2^nd defendant.

158.  The order nisi on costs will become absolute 14 days after the date of this judgment unless the parties apply to vary the same.

159.  Lastly, I wish to thank counsel for their very able and helpful assistance in this case.

Survey Plan