CHU PO LING v. CHUNG CHUN SHING

DCCJ 32/2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 32 OF 2012

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JUDGMENT

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Introduction

1.  This action is concerned with a parcel of land situated in the New Territories known as Section B of Lot No 1303 in Demarcation District (DD) 82 in Ping Che (坪輋), New Territories (“Lot 1303B”).

2.  The plaintiff, in her own capacity, is the registered owner of a 1/3 share and, as the executrix of the estate of her late husband, Chan Kwong (陳光), is the registered owner of the remaining 2/3 share of the leasehold interest in Lot 1303B.

3.  By a writ dated 4 January 2012, the plaintiff claims against the defendant for, amongst other things, vacant possession of Lot 1303B, payment of arrears of rent from 26 January 2009 to the date of issue of the writ and mesne profits thereafter up to the date of vacant possession.

4.  The defendant, on the other hand, denies any liability for rent or mesne profits, and counterclaims against the plaintiff for declarations that by virtue of inter alia sections 7(2) and 17 of the Limitation Ordinance(Cap 347) (the “LO”):-

(1)   the plaintiff has lost the right to bring any action to recover Lot 1303B.

(2)   the plaintiff’s title has been extinguished; and

(3)   the defendant has acquired a possessory title of Lot 1303B.

Lot 1303B

5.  Lot 1303B, together with 12 other parcels of land situated in DD 79 and 82 of the New Territories (collectively, the “Chan Man Yau Properties”), were previously owned by the late Chan Man Yau (陳萬有), who died in 1929.  The Chan Man Yau Properties consist of DD 79 Lot Nos 13, 33, 38, 833B, 834B, 933, 935BRP, 949, 951, 965, 1029 and Ping Yeung Tsuen (坪洋村) House Lot No 28, as well as Lot 1303B.

6.  Chan Man Yau had one son, Chan Sun Wun (陳新煥), who married one Yip Sun Giu (葉新嬌) (“Madam Yip”).  Chan Sun Wun had three sons.  Two sons, namely, Chan Tam Tai (陳譚帶) and Chan Kwai Ying (陳貴英), were borne by Madam Yip, whilst a third son, Chan Kwong, was borne out of wedlock by a mistress.

7.  Chan Kwai Ying was handicapped by polio and never married. He lived in Hong Kong and died intestate on 6 November 1998.  Letters of administration were granted to Chan Kwong on 13 September 2005.

8.  Chan Tam Tai married Cheng Tai (鄭帶) (“Madam Cheng”) and the two of them had two sons, Chan Wing Keung (陳永強) and Chan Wing Fu (陳永富), and one daughter, Chan Lin Tai (陳蓮娣) (“Madam Chan”).  Chan Tam Tai emigrated to the United Kingdom in 1958, and his wife, Madam Cheng, joined him in 1973.  Chan Tam Tai died in 1987.  Madam Cheng is presently 90 years of age and continues to reside in the United Kingdom, although she has returned to Hong Kong to visit from time to time.

9.  As an illegitimate son, Chan Kwong was shunned by Madam Yip during her lifetime. He did not receive any formal schooling and was illiterate. He was also not allowed to live in the Chan family home situated in Ping Yeung Tsuen (about a 15 minute walk from Lot 1303B).  Madam Yip died in 1993, and in 1996, Chan Wing Keung, Chan Wing Fu and Chan Kwai Ying asked Chan Kwong to return and live in the family home and to look after family matters. Chan Wing Fu and Chan Wing Keung both live in Europe.

10.  Chan Kwong married the plaintiff in 1997 when he was 66 years of age. The plaintiff was 26 years old at the time.

11.  On 7 June 1996, approval was given by the District Officer (North) pursuant to (the now repealed) section 17 of the New Territories Ordinance (Cap 97) and section 12 of the New Territories (Exemption) Ordinance (Cap 452) for succession of the Chan Man Yau Properties to the living male descendants of Chan Man Yau in the following shares:Chan Kwai Ying (1/3), Chan Kwong (1/3), Chan Wing Fu (1/6) and Chan Wing Keung (1/6).

12.  By an assignment made on 26 May 2006, all the beneficiaries of the estate of Chan Kwai Ying, namely, Chan Kwong, Madam Chan, Chan Wing Keung and Chan Wing Fu, assigned the estate’s 1/3 share of the Chan Man Yau Properties to Chan Kwong.  Chan Kwong thus became the registered holder of a 2/3 share of each of the Chan Man Yau Properties, with Chan Wing Fu and Chan Wing Keung each holding a 1/6 share.

13.  On 24 May 2010, Chan Kwong died, and probate was granted to the plaintiff on 31 March 2011.

14.  By an assignment made on 21 May 2011, Chan Wing Keung and Chan Wing Fu assigned each of their 1/6 share in Lot 1303B to the plaintiff. The plaintiff, in her capacity as the executrix of Chan Kwong’s estate and in her own capacity, thus became the sole registered holder of Lot 1303B and brings the present action against the defendants.

The plaintiff’s case

15.  The plaintiff’s pleaded case is as follows:-

(1)   Sometime in the mid to late 1970’s, Madam Yip, on behalf of Chan Man Yau as landlord, entered into an oral tenancy agreement with the defendant as tenant in respect of Lot 1303B at a yearly rental of HK$300. The rent was payable in advance for the period from the first day to the last day of the year in the Chinese lunar calendar.

(2)   The defendant through his wife paid rent for Lot 1303B up to 25 January 2009 (i.e. the last day of 2008 in the Chinese lunar calendar).

(3)   In breach of the oral tenancy agreement, the defendant has since failed and/or refused to pay rent, and as a result, the plaintiff was entitled to terminate the tenancy and to vacant possession.  By the commencement of this Action on 4 January 2012, the plaintiff terminated the tenancy.

(4)   The plaintiff therefore claims vacant possession and arrears of rent at HK$300.00 per year or at the prevailing market rental value (whichever is higher) from 26 January 2009 up to the date of issue of the Writ and mesne profits at the prevailing market rate thereafter until delivery of vacant possession.

The defendant’s case

16.  The defendant’s pleaded case, on the other hand, is as follows:-

(1)   Sometime in or about 1968, the defendant rented 4 parcels of land, namely, Lot Nos 1304, 1306, 1307 and 1308 in DD 82.  The defendant then erected structures on Lot Nos 1306 and 1307, one of which was a house for himself and his family (the “Chung Residence”). The defendant further used and occupied the other parts of the said lots, as well as a piece of crown land adjacent to Lot No 1304, as a vegetable farm.

(2)   In or about 1974, the defendant began to raise ducks on parts of the land he was occupying.  Further, he began to use and occupy Section A of Lot 1303 (“Lot 1303A”) and Lot 1303B as part of his duck farm.

(3)   One day in or about 1976, “an old lady” showed up to collect rent for Lot 1303A and Lot 1303B.  The defendant orally entered into a yearly tenancy agreement with her at HK$30 per year, which the defendant paid.  In the following year, “the old lady” turned up again and collected HK$30 rent for that year. However, thereafter, the old lady never showed up and the defendant “had lost contact with her.”

(4)   Therefore, since the expiration of the second yearly tenancy in or about 1979, the defendant has been in exclusive possession of Sections A and B of Lot No 1303.

(5)   Chung Chor Yuen (鐘楚源) (“Chor Yuen”) is one of the defendant’s children.  Since his birth, “he has been residing with his parents and siblings at the residence and/or the vegetable farm and/or the duck farm and/or, inter alia, Section A of Lot No 1303 and Section B of Lot 1303.”

(6)   At all material times, Lots 1303A and 1303B together with the other parcels of land occupied and used by “the defendant and/or the said Chung Chor Yuen” were enclosed with a wire mesh fence.

(7)   By reason of the matters above, “the defendant and/or the said Chung Chor Yuen” have been in exclusive possession of Lot 1303B for more than 30 years.

Preliminary observations

17.  There is no or no serious dispute that the defendant has had physical control of Lot 1303B since the mid 1970s. What is disputed is the basis of such control, i.e. whether he was a squatter or a tenant of the registered owner(s) (no case of licence, whether express or implied, having been advanced by the plaintiff).

18.  The defendant accepts, however, that in the period between 1976 and 1979, he occupied inter alia Lot 1303B as a tenant.  Although there is no admission as to the identity of the “the old lady”, it was not seriously challenged by the defendant at the trial that she was Madam Yip.  The defendant also appears to have accepted in earlier proceedings that the “old lady” was in fact Madam Yip (see further below).

19.  It is not entirely clear, however, what authority Madam Yip had in entering into the oral tenancy with the defendant. Chan Man Yau died in 1929, and approval for succession of the Chan Man Yau Properties (including Lot 1303B) was not given until 7 June 1996.  The Chan Man Yau Properties thus remained in Chan Man Yau’s estate until that date and any tenancy agreement would have to be entered into with Chan Man Yau’s estate. There is no evidence as to the basis of Madam Yip’s authority to enter into the oral tenancy agreement, or who was (or were) Chan Man Yau’s personal representative(s) in the period between 1976 and 1996. No issue, however, was taken by the parties on this point at the trial. Further, Mr Andy Hung, counsel for the defendant, accepted that if rent was paid by the defendant on a regular basis up to 2009, as asserted by the plaintiff, his client’s claim for adverse possession would fail.

20.  Although it is pleaded in the Defence and Counterclaim that “the defendant and/or the said Chung Chor Yuen” have been in adverse possession of inter alia Lot 1303B for more than 30 years, the sole defendant and counterclaimant in this Action is Chung Chun Shing.  Chor Yuen has not himself brought a claim for any possessory title to Lot 1303B. At the beginning of the trial, Mr Hung confirmed that:-

(1)   no independent claim of adverse possession was being brought by Chor Yuen; and

(2)   Chor Yuen’s occupation of Lot 1303B (as well as that by the other members of the defendant’s family) has all along been as the defendant’s licencee.

21.  I should also say a few words about Lot 1303A, which is not part of the Chan Man Yau Properties or the subject matter of this Action. The present registered owners of Lot 1303A are one Chan Ting Yau (1/2 share) and Shirley Shui Ling Chan and Gall Wai Chan, the executors of the estate of Chan Lin Yeung (1/2 share). Chan Ting Yau and Chan Lin Yeung are the grandchildren of Chan Man Ching, Chan Man Yau’s elder brother.  Lot 1303A is the subject matter of High Court Action 190 of 2012 commenced by the defendant and Chor Yuen claiming possessory title against its registered owners. Mr Hung informed me that the action has not yet proceeded to trial.

22.  As mentioned above, the defendant’s pleaded case (contrary to that of the plaintiff) is that the oral tenancy was in respect of bothLot 1303A and Lot 1303B.  There is no assertion or evidence as to what authority Madam Yip had to enter into a tenancy agreement in respect of Lot 1303A, which, unlike Lot 1303B, was not one of the Chan Man Yau Properties and with which Madam Yip had no connection.

Legal principles on adverse possession

23.  The principles concerning adverse possession in Hong Kong are firmly established (albeit the subject of some public debate[1]).

24.  A claim of adverse possession arises from the effect and operation of inter alia sections 7(2), 13(1) and 17 of the LO.

25.  The present version of section 7(2) (which came into effect on 1 July 1991 pursuant to the Limitation (Amendment) Ordinance 1991) provides that:-

“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.”

As the defendant’s possession is said to have commenced in the late 1970s, Mr Hung accepted that the defendant’s cause of action accrued before 1 July 1991 and the previous version of section 7(2) (in the Limitation Ordinance 1965) applies to this case.  The expiration of 20 years instead of 12 years is thus required.

26.  As to the date on which the right of action accrues, section 8(1) provides that:-

“Where the person bringing an action to recover land, or some person through whom he claims, has been in possession thereof, and has while entitled thereto been dispossessed or discontinued his possession, the right of action shall be deemed to have accrued on the date of the dispossession or discontinuance.”

Section 13(1) is also relevant:-

“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.”

27.  Section 17 further provides that:-

“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.”

28.  In Incorporated Owners of San Po Kong Mansion v Shine Empire Limited (2007) 10 HKCFAR 588 at §7, the Court of Final Appeal adopted the principles set out in Powell v McFarlane (1979) 38 P&CR 452, as follows:-

“…

(2) If the law is to attribute possession of land to a person who can establish no paper title to possession, he must be shown to have both factual possession and the requisite intention to possess (animus possidendi).

(3) Factual possession signifies an appropriate degree of physical control. It must be a single and conclusive possession, though there can be a single possession exercised by or on behalf of several persons jointly. … The question what acts constitute a sufficient degree of exclusive physical control must depend on the circumstances…acts of possession done on parts of land to which a possessory title is sought may be evidence of possession of the whole. Whether or not acts of possession done on parts of an area establish title to the whole area must, however, be a matter of degree….is that the alleged possessor has been dealing with the land in question as an occupying owner might have been expected to deal with it and that no-one else has done so.

(4)        …the animus possidendi involves the intention, in one’s own name and on one’s own behalf, to exclude the world at large, including the owner with the paper title if he be not himself the possessor, so far as is reasonably practicable and so far as the processes of the law will allow.”

…

The position, however, is quite different from a case where the question is whether a trespasser has acquired possession.  In such a situation the courts will require clear and affirmative evidence that the trespasser, claiming that he has acquired possession, not only had the requisite intention to possess, but made such intention clear to the world.  If his acts are open to more than one interpretation and he has not made it perfectly plain to the world at large by his actions or words that he has intended to exclude the owner as best he can, the courts will treat him as not having had the requisite animus possidendi and consequently as not having dispossessed the owner.”  (pp 470-472)

29.  The burden of proof lies firmly on the claimant to prove that his possession is adverse and the evidence he has to adduce must be compelling.

See e.g. Wu Yee Pak and Another v Un Fong Leung and Others (2004) 7 HKCFAR 498 at §§5 and 13

30.  As to the intention to possess, the following passage from the speech of Ma CJ in Wong Tak Yue v Kung Kwok Wai & Another (No 2) (1997-1998) 1 HKCFAR 55 at 69A-G is of particular relevance:-

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

…

Here, as was accepted by Mr Erik Shum appearing for the 14th defendant and as the Court would in any event have held, his affirmation and that of his daughter established as a matter of fact that since the expiry of the 7 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 ready and 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 14th defendant has therefore failed to show an arguable case on this essential ingredient. That being so, he has no arguable case on limitation.

The 14th defendant’s intention to pay rent if the owners had requested payment demonstrated that he was not intending to exclude the owner with the paper title but showed that he was treating himself as enjoying possession under a lawful title from the owners. His intention to possess was not “as of wrong” but was “as of right”. Such intention is similar to the occupier’s offer to pay rent in R. v. Secretary of State for the Environment Ex p Davies which was held to be inconsistent with the intention to claim possession for the purposes of adverse possession.”

31.  As I shall explain further below, the principle that a squatter’s willingness to pay rent is inconsistent with the necessary intention to possess is fatal to the defendant’s claim for adverse possession in this case.

32.  Mr Hung thus made a valiant attempt to argue that Wong Tak Yue was wrongly decided, for the reason that an earlier decision of the Privy Council in Ocean Estates Ltd v Pinder [1969] 2 AC 19 did not appear to have been cited to the Court of Final Appeal in Wong Tak Yue.  In Ocean Estates, Lord Diplock said at p 24 that an admission by the squatter that had he been asked by the paper owner to pay for his occupation of the disputed land or to take a lease he would have been prepared to do so was an admission “which any candid squatter hoping in due course to acquire a possessory title would be almost bound to make” and did not indicate an absence of an intention to possess.

33.  The dicta of Lord Diplock in Ocean Estates was cited with approval in the speech of Lord Browne-Wilkinson (with whom the other law lords agreed) in JA Pye (Oxford) Ltd v Graham [2003] 1 AC 419 at 438 E-G:-

“In my judgment, the decision of the Court of Appeal in R v Secretary of State for the Environment, Ex p Davies (1990) 61 P&CR 487 (the decision in Pinder not having been cited) was wrong. The decision in Pinder is to be preferred because it is consistent with principle. Once it is accepted that the necessary intent is an intent to possess not to own and an intention to exclude the paper owner only so far as is reasonably possible, there is no inconsistency between a squatter being willing to pay the paper owner if asked and his being in the meantime in possession. An admission of title by the squatter is not inconsistent with the squatter being in possession in the meantime.”

34.  The divergence between English and Hong Kong jurisprudence on this area of the law was noted by Recorder McCoy SC in Lau Wing Hong and Others v Wong Wor Hung and Another [2006] 4 HKLRD 671 at §§33 and 34.

35.  In the end, Mr Hung accepted, as he must, that I am firmly bound by Wong Tak Yue and any consideration as to whether that decision should be departed from will be a matter for a higher court.

Approach to assessing the witness evidence

36.  As will be apparent below, there is a sharp conflict in the evidence, and I have not found the task of resolving the conflict an easy one.  The court is further hampered by the fact that many of the events in dispute happened many years or even decades ago, and there is little by way of contemporaneous materials (other than materials filed by Chan Kwong in earlier proceedings – see below) to assist or guide the court.

37.  In evaluating the witness evidence, I am helpfully reminded by Mr Hung of the need to bear in mind the inherent probabilities and improbabilities of the conflicting versions of events In HKSAR v Kevin Egan (2010) 13 HKCFAR 314, Litton PJ said at §§303-304:-

“303. It might be helpful to recall what Blair-Kerr, SPJ said concerning the fact finding role of a trial judge in Kowloon Motor Bus Co (1933) Ltd v. Kong Tung [1973] HKLR 198. This was said in relation to a civil suit, but is equally applicable in a criminal case:-

“I cannot leave this case without repeating what I have said on numerous occasions during the last 10 years viz. that it is of the first importance that every judge of fact should indicate clearly in his judgment not only his findings of fact – primary and inferential – but, as regards his findings of primary fact, to what extent these are based on the view which he has formed of the witnesses’ demeanour and on what he regards as the inherent probabilities and improbabilities of the conflicting stories.”

304. Fact finding by a tribunal is a forward moving process. At the starter’s line are the primary facts relevant to the indictment (or to the pleadings in a civil suit). Most of these, generally speaking, would be non-controversial. From these, a picture of the inherent probabilities will often emerge. Take the present case concerning Mr Lam (D3): Is it likely that a solicitor would knowingly enter into a criminal conspiracy with a new client, within the first couple of hours of their first meeting? From this, and similar circumstances, the tribunal would then move on to evaluate the disputed evidence. “Evaluate” means just that: To measure, to weigh. Not every piece of evidence has equal weight. Here the tribunal is not seeking to penetrate the personality of the witness, to uncover his soul. In everyday life, how well does one know one’s neighbour? Is he or she a truthful person? How well does one know oneself? When a tribunal in giving judgment recites the testimony of a witness and says “I accept him as a truthful witness”, this is not evaluation: It is a conclusion which might be reached at the end, after weighing the relevant evidence.”

The witnesses

38.  The plaintiff gave evidence at the trial and adduced the following additional witnesses:-

Ho Shing Tak (何勝德) (“Mr Ho”)

(1) Mr Ho is a farmer and has been a tenant in DD 79 Lot No 13 and DD 77 Lot No 14 since 1978. His land is within close walking distance to Lots 1303A and 1303B. He rented the land from Madam Yip through an oral tenancy agreement back in 1978 for HK$400 per year.  Mr Ho is otherwise unrelated to the plaintiff and has no interest in the outcome of these proceedings.

(2) From 1978 onwards, Madam Yip went to his home, which is situated on the land he has rented, to collect rent at or around the beginning of each lunar new year. She would then go to the Chung Residence nearby to collect rent from the defendant and his wife, Siu Hou Guen (蕭巧娟) (“Mrs Chung”).  Madam Yip told him at the time that the defendant’s rent was HK$300 per year as Lot 1303B was smaller than the land rented to Mr Ho.

(3) In 1993 and 1996, Madam Cheng came in place of Madam Yip and collected three years of rent on each occasion. Madam Cheng told Mr Ho that she could not stay to chat as she was going to collect rent from the defendant afterwards.

(4) In 1998, Chan Kwong and the plaintiff went to his property around the mid-autumn festival to collect three years of rent. They also told him that they were going to the defendant to collect rent afterwards.

(5) From 1998 onwards, he paid his rent to Chan Kwong and the plaintiff every 3 years.

Madam Chan

(6) As mentioned above, Madam Chan is Madam Cheng’s daughter, and is now 61 years of age. She left Hong Kong to work in a restaurant in Holland in 1974. She returned to Hong Kong to visit on a number of occasions through the years, staying for about one month each time at the Chan family home.  She told the court that before she and Madam Cheng went to live abroad, she farmed yams and taro roots together with Madam Cheng and Madam Yip on Lot 1303B.

(7) In 1980, during one of her visits to Hong Kong, she accompanied Madam Cheng and Madam Yip to collect rent from the defendant and Mrs Chung. She recalled that the rent was a few hundred dollars, which was kept by Madam Yip.  Mrs Chung did not on that occasion request a receipt. In any event, both Madam Yip and Madam Cheng were illiterate.

(8) Madam Chan and Madam Cheng returned to Hong Kong in the lunar new year of 1993 to see Madam Yip, who was then 90 years old.  As Madam Yip was in poor health, she asked Madam Chan and Madam Cheng to collect the rent on her behalf. Madam Chan and Madam Cheng collected three years rent from the defendant and Mrs Chung on that occasion, which was then given to Madam Yip. Madam Yip died in July of that year.

(9) In October 1998, Madam Chan returned to Hong Kong together with her two brothers, Chan Wing Fu and Chan Wing Keung, to attend Chan Kwai Ying’s funeral.  She recalls that the plaintiff told her that she and Chan Kwong had collected rent from the defendant and Mrs Chung that year.

(10) In 2004, Chan Kwong told Madam Cheng that the defendant was refusing to pay rent. Hence, in October 2004, she accompanied Madam Cheng back to Hong Kong.  The two of them went to look for the plaintiff and Mrs Chung on several occasions, but no one answered the door. Madam Chan recalls that Madam Cheng later told her that she and the plaintiff found Mrs Chung at the parking lot of [雲泉仙館], the Buddhist temple next to Lot 1303B, and that there was an argument about the non-payment of rent.

The plaintiff

(11) The plaintiff is from the Mainland, and received education there up to the first year of secondary school. After her marriage to Chan Kwong in 1997, she made regular visits to Hong Kong through two-way permits and stayed with Chan Kwong at the Chan family home during such visits. In 2004, she was granted the right of abode in Hong Kong and lived with Chan Kwong at the family home until 2009, shortly before his death in 2010.

(12) The plaintiff therefore has no first-hand knowledge of matters concerning the Chan Man Yau Properties prior to 1998. However, she said that she was told of such matters primarily by Madam Cheng during visits to Hong Kong and by Chan Kwai Ying before he died in 1998.  Chan Kwong, on the other hand, was according to her often muddleheaded and did not really know what was going on in relation to the properties.

(13) Around the mid-autumn festival in 1998, she accompanied Chan Kwong to collect rent from the defendant.  The defendant and Mrs Chung paid HK$900, being 3 years rent for the period from 1998 to 2001.

(14) In 2002, Chan Kwong went to the Chung Residence to collect rent for the period from 2002 to 2004.  The plaintiff was unable to accompany him as she was pregnant at the time. However, Chan Kwong came back to say that the defendant refused to pay him the rent.

(15) In October or November 2004, Madam Cheng and Madam Chan attempted to contact the defendant and Mrs Chung to collect the outstanding rent, but were unable to find them at the Chung Residence. Shortly afterwards, however, she and Madam Cheng managed to find Mrs Chung at the parking lot of the Buddhist temple.

(16) On that occasion, Madam Cheng scolded Mrs Chung for not paying rent, subletting Lot 1303B to a third party (see further below) and attempting to take away their land.  Mrs Cheng replied that this was not her idea but rather that of her son and that she did not have any money with her at the time. Madam Cheng then said that if the defendant did not pay rent, she would ask her sons Chan Wing Keung and Chan Wing Fu to issue a legal letter to them and would not rent to them anymore.  (I shall refer to this incident below as the “parking lot incident”).

(17) Sometime around the lunar new year in 2005, when she was out, Chan Kwong telephoned her and told her that Mrs Chung had come to their house and wanted to pay the outstanding rent for the past 3 years (from the beginning of the lunar new year in 2002 to the end of the lunar new year in 2005) and the rent for the next 4 years (from the beginning of the lunar new year in 2005 to the end of the lunar new year in 2008), being HK$2100 in total (HK$300 x 7 years). As she was not home and Chan Kwong was illiterate, she asked him to go and find Ng Yuk Lan (伍玉蘭) (“Madam Ng”) to help him write a receipt as requested by Mrs Chung.

Madam Ng

(18) From 1996 to the end of 2005, Madam Ng lived in a house in Ping Yeung Tsuen near the Chan family home where Chan Kwong lived.

(19) Sometime in early 2005, Chan Kwong came to her house asking for her help. He said that someone had come to pay rent and wanted to have a receipt. However, as he was illiterate, he asked her to help him write a receipt on his behalf. She then went to the Chan family home and saw a woman about 60 years of age.  She asked the woman the name of the tenant, the amount of rent, and the property in question to write on the receipt. The woman then gave Madam Ng the name of the tenant.  Although Madam Ng does not remember the name of the tenant, she remembered that the surname was Chung.

(20) The woman then paid HK$2,100 to Chan Kwong and Madam Ng asked Chan Kwong to sign his name on the receipt. Although Chan Kwong was illiterate, he was able to sign his own name. He then gave the woman the signed receipt. Chan Kwong then told Madam Ng that the property was the one adjacent to the nearby Buddhist temple. Madam Ng knew the location as she operated a small stall selling fruits to visitors at the parking lot of the temple.

39.  The defendant, Mrs Chung and Chor Yuen also gave evidence at the trial:-

The defendant

(1) The defendant is presently 71 years of age. He came to Hong Kong from the Mainland in 1958, and he and Mrs Chung have four sons, including Chor Yuen, and one daughter.

(2) In his witness statement, the defendant repeated what was pleaded in the Defence and Counterclaim, namely, that he entered into an oral tenancy with “the old lady” in 1976 for HK$30 per year and that he had lost contact with her after 1977. The defendant denied having paid any rent for Lot 1303A and 1303B after 1977 and claimed never to have met the plaintiff or Chan Kwong.

(3) In cross-examination, it became apparent that the defendant knew very little about his claims of adverse possession in this action or the earlier proceedings (see further below).  Rather, Chor Yuen is the driving force behind the defendant’s claims, both in this action and in the earlier proceedings.

(4) In cross-examination, the defendant was then asked whether he would have continued to pay rent to the “old lady” had she continued to come and collect rent.  The defendant’s answer was unequivocal and given without hesitation: he would have paid because he knew “she was the landlord”. The defendant was further asked whether he would have paid rent had someone else come to collect rent and was able to show that he or she was the registered owner.  Again, his answer was in the affirmative.

(5) Although the defendant attempted to retract from these admissions in the course of Mr Hung’s skillful re-examination, I have no doubt that his initial answers correctly reflected his true intention.

(6) In his Defence and Counterclaim, the defendant pleaded that he and his family has resided all along at the Chung Residence.  That is not entirely correct. Although the precise dates are unclear, the defendant accepted that he and his family moved to live in the city for various periods of time.  However, during the periods that the defendant and Mrs Chung did not live in the Chung Residence, they nonetheless returned to stay from time to time, and the defendant and his family continued to operate the duck farm.

Mrs Chung

(7) Mrs Chung is said to have had a minor stroke in 2003. However, she did not appear to have any obvious mental impairment when she gave her evidence.

(8) Again, her evidence was that the defendant entered into an oral tenancy with “the old lady” in 1976 for HK$30 per year for Lot 1303A and Lot 1303B and that she and the defendant lost contact with her after 1977.

(9) She also denied having paid any rent for Lot 1303B after 1977 or that the parking lot incident took place.. She also said that she had never met the plaintiff and could not recognise Chan Kwong even if she had met him.

Chor Yuen

(10) Chor Yuen is the defendant’s youngest son. He completed high school in Hong Kong and attended university in the United States, where he studied for a degree in business administration. He returned to Hong Kong in 1995 and presently resides at the Chung Residence.

(11) After returning to Hong Kong from the United States, Chor Yuen held a number of different jobs, including working for a property management company and assisting his brother in his trading business.  He has also been involved in a number of business ventures and is presently in the business of trading in second hand pianos.

(12) Chor Yuen was also a director of a company known as Easterntech (Hong Kong) Co Ltd (“Easterntech”), a company partly-owned by his brother, Chung Chor Pun. Easterntech features in earlier proceedings concerning Lot 1303B (see further below), which was handled by Chor Yuen on its behalf.

(13) Chor Yuen personally funded and handled the conduct of the present action as well as the earlier proceedings concerning Lot 1303B (see further below). Although he is not personally a party to this action, he has at least an indirect interest in the outcome of these proceedings, as he currently resides at the Chung Residence and would likely benefit from any successful claim for possessory title of Lot 1303B.

(14) He also denied that, to his knowledge, the defendant or Mrs Chung paid any rent for Lot 1303A or Lot 1303B since 1977.

40.  As mentioned above, there have been earlier proceedings concerning Lot 1303B.  It is necessary to examine them in some detail as Mr Hung has relied heavily upon them to challenge the evidence of the plaintiff and her witnesses in this action.

DCCJ 6997/2000 and DCCJ 3912/2001

41.  The first set of proceedings is DCCJ 6997/2000 and DCCJ 3912/2001, which were subsequently consolidated. The parties to those proceedings were Ngan Chun Fai (trading as Tai Yuen Trading Co.) (“Mr Ngan”) and Easterntech.  The background to those proceedings may be summarised briefly as follows:-

(1) On 1 October 1997, Easterntech purportedly let Lot 1303B to Mr Ngan for a period of 5 years at a rent of HK$6,000 per quarter. Mr Ngan then erected a storage hut on Lot 1303B to store paints. Easterntech was said to have entered into the tenancy agreement as the defendant’s agent.

(2) Mr Ngan stopped paying rent to Easterntech after Chan Kwong told him in or around July 1999 that he was the true owner of Lot 1303B.

(3) On 29 September 1999, Easterntech commenced proceedings against Mr Ngan in the Small Claims Tribunal for outstanding rent, and Mr Ngan counterclaimed against Easterntech for misrepresenting that the defendant was the landlord and also for damage to his personal property. Easterntech succeeded in its claim for outstanding rent, and Mr Ngan’s counterclaim was transferred to the District Court as DCCJ 6997/2010.

(4) On 19 October 1999, Easterntech commenced further proceedings in the Lands Tribunal claiming outstanding rent and vacant possession.  In the absence of appearance by Mr Ngan, the Lands Tribunal gave judgment in favour of Easterntech on 3 December 1999 and ordered Mr Ngan to pay the outstanding rent from 1 October 1999, failing which he was required to give vacant possession of Lot 1303B.

(5) On 17 July 2000, Easterntech commenced new proceedings in the Small Claims Tribunal seeking the payment of rent from 1 January to 30 September 2000 and payment in lieu of notice for termination of the tenancy. The claim was transferred to the District Court as DCCJ 3912/2001.

(6) The two District Court actions were subsequently consolidated.

42.  In those proceedings, Chan Kwong filed a witness statement dated 4 July 2001, which appears to have been prepared by Mr Ngan’s solicitors (but who no longer represented Mr Ngan at the trial).  In his statement, Chan Kwong stated that inter alia:-

(1) He, together with his nephews, Chan Wing Keung and Chan Wing Fu, were the registered owners of Lot 1303B.  However, as his nephews had been abroad for the past twenty odd years, he was the one who dealt with any matters relating to the property.

(2) In or around 1986, he noticed certain unknown persons entering into and leaving Lot 1303B and that someone had erected a poultry kennel on the lot. At the time, he unsuccessfully raised the matter with a woman and man, whom he believed to be Mrs Chung and the defendant’s son. At the time, he was working and living in a dormitory in Wanchai and only returned to Ping Che every two years. Therefore, he did not take any immediate action.

(3) However, every 1 to 2 years thereafter, he would confront the defendant, his wife and his son about the title to the property, but to no avail.

(4) In 1995, he complained to the village representative, Mr Chan Wah Fu, and in 1996, Mr Chan Wah Fu accompanied him to Lot 1303B in an attempt to reclaim the land. Mrs Chung requested Chan Kwong to produce the title deeds. However, as the title deeds were kept by Chan Wing Fu, who was not in Hong Kong at the time, Chan Kwong did not take any immediate legal action.

(5) In 1999, Chan Wing Fu visited Hong Kong, and, together with Chan Kwong, went to confront the defendant with the title deeds to Lot 1303B.  However, this did not yield any results.

(6) On 14 December 2000, Chan Kwong instructed Messrs Weir & Associates, solicitors (“Weir”), to issue a demand letter to Easterntech (the “December 14 Letter”). In that letter, Weir stated that the firm acted for Chan Kwong, Chan Kwai Ying and Chan Wing Keung, that Lot 1303B had been leased as agricultural land to Easterntech by “our client’s predecessor in title about twenty years ago pursuant to an oral periodic lease”, and that “you have failed to pay rental to our clients and therefore you are in breach of the said lease”.

(7) The December 14 Letter further complained that Easterntech had (1) sublet the property to a third party, (2) misrepresented to that party that it was the legal owner of the lot, and (3) erected a storage hut and fenced the property without their clients’ consent and therefore was in breach of the Government Lease of the Lot. Weir then demanded Easterntech to forthwith dismantle the storage hut and fence and to surrender the lot to their clients within 7 days.

43.  Chan Kwong gave evidence at the trial of the consolidated action on 5 June 2003, and the defendant has adduced a transcript of his evidence.  It is unnecessary to set out his evidence in detail here, but it is relevant to make the following observations:-

(1) Chan Kwong was unable to confirm the contents of his witness statement, as he was illiterate and unable to read its contents. As the parties were not legally represented, the judge, Her Honour Judge M. Yuen, asked Mr Chan a series of questions to elicit his evidence.  However, the Judge had some difficulty eliciting this evidence as Chan Kwong appeared confused at times. For instance, he was unable to tell the Court simple matters such as the approximate year he was born, when his mother (Madam Yip) died or who helped him write his witness statement.

(2) More importantly, however, his evidence was inconsistent with his witness statement in a number of important aspects. Significantly, in his statement, he said that he was the one that all along looked after Lot 1303B, whereas in his oral evidence, he said that he never looked after the Chan Man Yau Properties, as he was illiterate and too old. Rather, he said that Chan Tam Tai managed the properties when he was alive, and after Chan Tam Tai died, the properties were managed by Madam Cheng and Chan Wing Fu.  He said, however, that he would walk around Lot 1303B a few times a year.

(3) Further, he said that he discovered the poultry kennel 5 or 6 years ago but was unaware when the storage hut was erected in its place. This was inconsistent with his witness statement where he said he became aware of the poultry kennel in 1986 and had raised complaints with the defendant every two years thereafter.

(4) He was also unable to remember when a dispute first arose over the issue of the defendant using Lot 1303B. However, he recounted an incident in 1999 when he and Chan Wing Fu, together with Madam Cheng, had a dispute with Mrs Chung.  He said that Madam Cheng said to Mrs Chung that the land belonged to them, that it was rented to the defendant to raise ducks and not for them to build upon. Mrs Chung then queried as to whether they owned the land, and so, on the next day, they showed her the title deeds. However, the dispute remained unresolved, and so he went to see the village representative, one Chan Wah Fu.

44.  Chan Wah Fu also filed a witness statement in that action. In short, he said that Chan Kwong complained to him in 1995 that the defendant and his family were trespassing on Lot 1303B and asked for his help. In 1996, he went with Chan Kwong to the lot to investigate. They met with Mrs Chung, who asked for documentary evidence to show that the land belonged to Chan Kwong. As the title deeds were kept by Chan Wing Fu, who was abroad, no further steps were taken. In 1998, Chan Wing Fu came back to Hong Kong with the title deeds, and he went  together with Chan Wing Fu to Lot 1304. They spoke to Mrs Chung and the defendant’s son, Chung Chor Bun, but to no avail. In 2000, he and Chan Wing Fu again went to reclaim the land, but was rebuffed by the defendant and his family.

45.  It should be mentioned here that Madam Chan in cross-examination said that she had no recollection of going with Chan Kwong or Chan Wing Fu to see Mrs Chung in 1998 or 1999.

46.  By a Chinese judgment dated 28 October 2003, the judge dismissed the parties’ respective claims in the consolidated action with no orders as to costs, for reasons that are not relevant here[2].

47.  In paragraph 19 of the judgment, the court made it clear that the action was not concerned with the title and ownership of Lot 1303B, and Chan Kwong should seek legal advice on whether he should take any steps to protect his rights in relation thereto[3].

48.  It appears that Chan Kwong took heed of the court’s suggestion, and on 27 June 2003, Chan Kwong, in his personal capacity and purportedly as the “intended administrator of Chan Kwai-Ying” commenced DCCJ 3806/2003 against the defendant, Chor Yuen and Easterntech.  In his Statement of Claim dated 28 November 2003, which was drafted by Weir, it was pleaded that inter alia:-

(1)   By a tenancy agreement or licence between Madam Yip and the defendant, Madam Yip permitted the defendant to use Lot 1303B for the purpose of raising ducks at a rent or licence fee of HK$300 per annum.

(2)   In breach of the tenancy agreement or licence, the defendant and/or Chor Yuen failed to pay the rent or licence fee at least from July 1993 when Madam Yip passed away.

(3)   By reason of the said breach, Chan Kwong was entitled to forfeit or revoke the tenancy or licence to Lot 1303B, and did so by the issue and service of the writ in that action.

(4)   Chan Kwong therefore sought vacant possession of Lot 1303B and arrears of the rent or licence fee.

49.  On 25 January 2004, a defence purportedly drafted by the defendant and signed with the Chinese character “Chung” was filed.  In the defence, it was pleaded that inter alia:-

(1)   The defendant began to occupy and use Section A and Lot 1303B to raise ducks in 1975.

(2)   An old lady who claimed to be the landlord came to collect HK$30 rent for the year. As she was old, the defendant gave her the rent out of sympathy.  However, after returning the next year, she no longer came and he lost contact with her.

(3)   There was never any agreement for a yearly rent of HK$300; and

(4)   The defendant had been in possession of Lot 1303B since 1976, i.e. for over 26 years, and therefore, he was entitled to the land pursuant to section 7 of the Limitation Ordinance (Cap 341).

50.  In the defendant’s cross-examination in this action, he disavowed any knowledge of the defence in DCCJ 3806/2003 and said that the Chinese character “Chung” was not his handwriting.  It later transpired from Chor Yuen’s evidence that the defence was in fact drafted by him and that he had conducted the litigation on his father’s behalf, apparently with little consultation with or input from the defendant.

51.  Pursuant to a Summons issued by Chan Kwong on 13 January 2005, Master Ko granted leave to Chan Kwong to discontinue DCCJ 3806/2003, with costs to the defendants in that action to be taxed.

52.  The reasons for the discontinuance of DCCJ 3806/2003 are the subject of some contention.  In her witness statement, the plaintiff explained that:-

(1)   Legal fees were very expensive and Chan Kwong had no experience in litigation.

(2)   Letters of administration had not yet been granted for Chan Kwai Ying’s estate, and the other owners, Chan Wing Keung and Chan Wing Fu, had not been joined as co-plaintiffs.

(3)   Therefore, Chan Kwong decided to wait until letters of administration had been granted and then issue new proceedings together with Chan Wing Keung and Chan Wing Fu.

(4)   Further, Chan Kwong telephoned Madam Cheng in 2004 and told her about the defendant’s non-payment of rent. Madam Cheng and Madam Chan returned to Hong Kong in October 2004 and attempted to collect rent from the defendant and Mrs Chung, which then led to the parking lot incident and the eventual payment of rent by Mrs Chung in the beginning of 2005.

53.  In her oral evidence, the plaintiff further said that:-

(1)   Chan Kwong had commenced the action without her knowledge, and had apparently borrowed money to instruct lawyers.  The plaintiff only learned of the action when lenders came to look for Chan Kwong for repayment around 2004.  At times, however, Chan Kwong was confused and said that the money had been borrowed for gambling.

(2)   The plaintiff admonished Chan Kwong and said to him that he did not know what he was doing. She pleaded with him not to proceed further until he had consulted with Madam Cheng.

(3)   Chan Kwong then contacted Madam Cheng, who said that as she knew Mrs Chung quite well and that she would return to Hong Kong to help resolve the matter with Mrs Chung.

(4)   She and Chan Kwong then approached Messrs Leung Kin & Co (“LKC”) (the plaintiff’s present solicitors), who had an office close to where they lived, and instructed them to discontinue the action.

54.  As mentioned above, the action was subsequently discontinued pursuant to the Order of Master Ko on 14 February 2005. From the transcript of the hearing before Master Ko, it could be seen that a representative of LKC and Chor Yuen attended the hearing.  LKC’s representative sought leave to discontinue the action. The discontinuance summons was not supported by an affidavit, and no reasons were given by LKC in their submissions as to the reasons for seeking discontinuance. Although Chor Yuen opposed the discontinuance, the Master granted leave with the usual order that Chan Kwong bear the costs of the action.  By an allocatur dated 14 October 2005, these costs were taxed at HK$9,548.00.

55.  I should also mention here that on 13 November 2004, Madam Cheng made a statutory declaration at the North District Office of the Home Affairs Department in Fanling, New Territories, where she declared that she had collected rent from Mrs Chung for Lot 1303B in January 1990, January 1993, May 1996, at a rate of HK$300 per year. Madam Cheng was accompanied by the plaintiff who signed a clause at the bottom that she had explained the contents of the declaration to Madam Cheng.

56.  In cross-examination and his closing submissions, Mr Hung challenged the evidence and credibility of the plaintiff and her witnesses.  The main grounds of attack included:-

(1)   The evidence as to collection of rent between 1993 and 2003 was inconsistent with the Chan Kwong’s evidence given in DCCJ 6997/2000 and DCCJ 3912/2001 and his stance in DCCJ 3806/2003.

(2)   If the discontinuance of DCCJ 3806/2003 was due to the receipt of rent from Mrs Chung of 7 years rent at the beginning 2005, this would have been explained to the Court by LKP and there would have been no reason why Chan Kwong would have had to bear the costs of the action, which was of a substantially greater amount than the rent received.

(3)   Mr Ho’s evidence is tainted by his personal animosity towards Chor Yuen, as a result of several disputes that had arisen between them.  On one occasion, Chor Yuen called the police to complain that Mr Ho was installing a water pipe that apparently trespassed upon the land occupied by the defendant.  Mrs Chung, whilst accepting that neither she nor the defendant had any quarrel with Mr Ho and that he was always courteous to them, said he might be jealous of her children’s financial success.  Mr Hung also criticised minor inconsistencies in the oral evidence of Mr Ho during his cross-examination.

(4)   The statutory declaration made by Madam Cheng was made in response to the defendant’s claims of adverse possession in his defence filed on 25 January 2004 and should be treated with circumspection.  There was also no mention of the parking lot incident in the declaration.

Factual possession

57.  As mentioned above, there is no serious dispute that the defendant has had physical possession of Lot 1303B, which was enclosed by a wire mesh fence together with the other parcels of land used or occupied by the defendant and his family, since 1976.  In the event that the defendant has, since 1979, been a squatter and not a tenant, I would have no hesitation in finding that the defendant has had factual possession of Lot 1303B since that time.

58.  However, as explained above, factual possession by itself is not enough.  The defendant must also prove the intention to possess.  Further, as mentioned above, as the defendant is the sole person claiming adverse possession, it is his intention and his intention alone that is relevant.

Willingness to pay rent if asked

59.  As foreshadowed above, the defendant’s willingness to pay rent to the “old lady” or anyone else who would have been able to show that he or she was the registered owner is, in my judgment, fatal to the defendant’s case of adverse possession, having regard to decision of the Court of Final Appeal in Wong Tak Yue.  The defendant did not intend to exclude Chan Man Yau or his successors-in-title but treated himself as enjoying possession under a lawful title from the owners.

60.  On this ground alone, the defendant’s claim of adverse possession must fail, irrespective of whether any rent was in fact paid by the defendant (or Mrs Chung on his behalf) after 1977.

61.  However, if I am wrong in my application of Wong Tak Yue, or if the principle in Wong Tak Yue were to be revisited by a higher court, it would be necessary for this court to consider and make findings of fact as to whether any rent was in fact paid after 1977.  As mentioned above, Mr Hung accepts that if I were to find that such rent was paid, the defendant’s claim of adverse possession must fail.

Findings on payment of rent

62.  It is important to bear in mind, first of all, that Lot 1303B is but one of 13 parcels of land originally registered to Chan Man Yau.  There is nothing to suggest that Chan Man Yau’s descendants somehow forgot about Lot 1303B after 1978 amongst the other lots.  As mentioned above, Madam Chan’s evidence was that she used Lot 1303B to plant yams and taro roots together with Madam Cheng and Madam Yip before she and Madam Cheng went abroad in 1973 and 1974.  This evidence was not controverted by Mr Hung.  The timing is also consistent with the defendant’s evidence that he began to use the land in 1974 to raise ducks.  It is likely that that Madam Yip subsequently discovered that the defendant was using the land, and therefore went over to collect rent.

63.  The defendant has not suggested that Mr Ho is also a squatter or that he had not paid any rent for the land used by him throughout the years.  Given that Mr Ho’s land was within close walking distance to the land occupied by the defendant, it would be inherently odd that Madam Yip, and subsequently Madam Cheng and Madam Chan, would have omitted to go also to the defendant to collect the rent for Lot 1303B, given that Madam Yip did so at least in 1976 and 1977.

64.  I should say here that I unequivocally reject the suggestion that Mr Ho would give false evidence to the court because of the supposed animosity between himself and Chor Yuen.  To the contrary, I found Mr Ho to be a candid and honest witness, and I accept his evidence. I do not find the minor inconsistencies as to dates in Mr Ho’s evidence complained of by Mr Hung to be of any moment, particularly given the lapse of time.  As mentioned above, Mr Ho’s evidence was that Madam Yip came to collect rent from him every year around the lunar new year until 1993.  In 1993 and 1996, Madam Cheng came in place of Madam Yip and collected rent from him for three years on each occasion.

65.  In response to Mr Hung’s questions on cross-examination, the plaintiff told the court that rent had been collected in respect of nine lots amongst the Chan Man Yau Properties even before the death of Chan Kwong.  She told the court that in addition to Mr Ho’s land, another 3 lots were each being rented for HK$600 per year, and the others were rented very cheaply because they were situated on a slope.  The plaintiff’s evidence in this regard was not challenged by Mr Hung. I should also mention that in DCCJ 6997/2000 and DCCJ 3912/2001, Chan Kwong appeared to accept in his oral evidence that rent was received from letting out the Chan Man Yau Properties.

66.  As Madam Yip did not pass away until 1993, there is no apparent reason why she would have stopped collecting rent from the defendant for Lot 1303B after 1977.  It is more probable than not that she would have continued to do so, unless there were good reasons to the contrary.  I accept Madam Chan’s evidence that she had gone with Madam Yip and Madam Cheng to collect rent on the several occasions mentioned above.  Although Madam Chan’s recollection of events some years ago may have faded, my impression is that she gave her evidence in a genuine and truthful manner.

67.  Similarly, there is no good reason why after the death of Madam Yip, the plaintiff and Chan Kwong would have omitted to collect rent from the defendant, whilst at the same time collecting rent from, amongst others, Mr Ho.  As mentioned above, I accept Mr Ho’s evidence that the plaintiff and Chan Kwong had come to collect rent from him in place of Madam Cheng beginning in 1998.

68.  Jumping for a moment to the beginning of 2005, I also accept Madam Ng’s evidence as to the event that occurred between her, Mrs Chung and Chan Kwong at the Chan family home.  I was particularly impressed with the evidence of Madam Ng.  Her recollection was clear and detailed and she was unshaken by the at times forceful (but not unduly so) cross-examination of Mr Hung.  Madam Ng has no interest in the outcome of these proceedings and there is no conceivable reason why she would fabricate evidence to assist the plaintiff.  I therefore find that Mrs Chung did in fact pay HK$2,100 in rent to Chan Kwong in early 2005 as rent for Lot 1303B.  It follows that I also accept the plaintiff’s evidence that she was told that such amount was the rental for 7 years, i.e. from the beginning of the lunar year in 2002 to the end of the lunar year in 2008[4].

69.  Insofar as it is necessary to do so, I would accept the plaintiff’s evidence as to the parking lot incident, which was likely to have brought about Mrs Chung’s payment in early 2005 of the outstanding rent.  The plaintiff’s evidence that Mrs Chung said that it was his son’s idea not to pay rent and to claim adverse possession is also consistent with my observation that Chor Yuen, rather than the defendant, is and has all along been the driving force of the defendant’s claims for adverse possession.

70.  One of the arguments made by Mr Hung was that Mrs Chung suffered a minor stroke in 2003 and would not have been in the parking lot outside the Buddhist temple alone without being accompanied by a maid or a family member. The plaintiff’s evidence, on the other hand, was that Mrs Chung was alone during the parking lot incident. There is no medical evidence of Mrs Chung’s health condition in 2005, and in any event, it is not suggested that Mrs Chung’s health was in such a state that she could not go anywhere unassisted.  In the circumstances, I do not accord much weight to such an argument.

71.  As to Madam Cheng’s statutory declaration, I accept that it was made some months after the defence was filed in DCCJ 3806/2003 and therefore the issue of adverse possession had been squarely raised. Madam Cheng has not given evidence in these proceedings, although that is perhaps understandable given her advanced age and that she is overseas. In the circumstances, I do not attribute any weight to the statutory declaration as evidence of payment of rent by the defendant.

72.  As to Chan Kwong’s evidence to the court in DCCJ 6997/2000 and DCCJ 3912/2001 and his stance in DCCJ 3806/2003, there is some force to Mr Hung’s arguments that they are inconsistent with the plaintiff’s case at least to the extent that rent had been collected from the defendant and Mrs Chung between 1993 and 2003.

73.  I have already pointed, however, to some of the more unsatisfactory aspects of Chan Kwong’s evidence in DCCJ 6997/2000 and DCCJ 3912/2001 above.  It is also important to bear in mind that Chan Kwong only returned to live in Ping Che in 1996, and prior to that time, he had little if any knowledge or involvement in the management of the Chan Man Yau Properties, including Lot 1303B.  Indeed, on his own evidence in those proceedings, he accepted that he never looked after the Chan Man Yau Properties as he was illiterate and too old.I also accept the evidence of the plaintiff and Madam Chan that Chan Kwong was rather confused and muddleheaded, and did not really understand what was going on in relation to the Chan Man Yau Properties even after he came back in 1996. The fact that Chan Kwong might have told Mr Ngan not to pay rent to Easterntech in July 1999 does not necessarily mean that the defendant was a squatter on Lot 1303B. As Madam Cheng said to Mrs Chung during the parking lot incident, the land was let to the defendant to use for farming and not for subletting to others.

74.  Mr Hung also relies upon the witness statement of Chan Wah Fu filed in DCCJ 6997/2000 and DCCJ 3912/2001 in support of the contention that, at the latest by 1996, the defendant and Mrs Chung were claiming possession of Lot 1303B. However, I do not attribute much weight to the statement for a number of reasons. First, Chan Wah Fu has not been called as a witness in this action, and there is no suggestion by the defendant that he can no longer be found or that he is otherwise unable to give evidence in this action. It is also unclear whether he was actually called in the trial of DCCJ 6997/2000 and DCCJ 3912/2001, and whether his evidence was challenged in cross-examination. More importantly, however, there is little evidence from the defendant and Mrs Chung in this action concerning the alleged events described in the statement. To the contrary, Mrs Chung said that she did not even know who was the village representative at the time.

75.  As to the reasons for discontinuance of DCCJ 3806/2003, and the costs associated therewith, I do not find those to be of decisive weight.  First, DCCJ 3806/2003 appears to have been defectively commenced in the first place, as Chan Kwong did not appear to have had any authority to commence proceedings on behalf of the estate of Chan Kwai Ying at the time, and the action may have been liable to be struck out in part.

76.  More importantly, it is clear that the plaintiff and Chan Kwong are not sophisticated individuals.  By a letter dated 26 February 2004 and signed by Chan Kwong, but somewhat curiously issued under Weir’s letterhead, Chan Kwong explained that due to financial reasons, he would thenceforth act in person.  A representative of Weir also signed the letter stating that the contents had been explained to Chan Kwong.

77.  I accept the plaintiff’s evidence that she and Chan Kwong did not fully appreciate at the time the amount of costs that they would be liable to bear, and merely wished to discontinue the action as quickly as possible.

78.  In his closing submissions, Mr Hung argues that, as LKC did not give any evidence in this action as to the reasons for the discontinuance, an adverse inference should be drawn against the plaintiff. However, any communications with LKC at the time must surely be subject to legal professional privilege, and it is established law that no adverse inferences may be drawn against a person asserting such privilege. See e.g. Thanki, The Law of Privilege 2nd Edn at paras 1.39 – 1.40, citing inter alia Sayers v Clarke Walker [2002] EWCA Civ 910, CA. It is not suggested that legal professional privilege is inapplicable or has been waived in this case. I therefore refuse to draw the adverse inference suggested by Mr Hung.

79.  For the reasons above, I find in favour of the plaintiff that rent had been paid by the defendant and Mrs Chung up to 25 January 2009 (i.e. the last day of 2008 in the Chinese lunar calendar).  In so finding, I am cognisant of the fact that I have effectively rejected much of the evidence of the defendant and Mrs Chung.  I have done so not without circumspection and have given careful consideration to the evidence and all the arguments presented by counsel, to whom I am grateful for their assistance. On the balance of probabilities, I prefer the plaintiff’s evidence to that of the defendant.

80.  In the circumstances, the defendant’s claim of adverse possession also fails in addition to the Wong Tak Yue point above.  It follows that the plaintiff’s claims for vacant possession, outstanding rent and mesne profits succeed.  The counterclaim is dismissed.

81.  As to the amount of the outstanding rent, the plaintiff shall be entitled to rent at the contractual rate of HK$300 per annum from 26 January 2009 to the date of the writ on 4 January 2012.

82.  As for mesne profits, no evidence has been adduced by the parties on quantum.  In the absence of any evidence as to market rent, the usual approach of the court is to assess mesne profits at the contractual rate, in this case, HK$300 per annum.  I so order.

See e.g. Clifton Securities Ltd v Huntley [1948] 2 All ER 283. Kin Tak Fung Co Ltd v Julian Electrical Centre Ltd [1989] 1 HKC 490

83.  I shall leave it to the parties to work out the precise amount of rent due and the mesne profits in the draft judgment to be submitted.

84.  There is no reason why costs should not follow the event.  I therefore make an order nisi that the plaintiff shall have the costs of the action, on a party and party basis, with certificate for counsel.