CHENG CHEUK WANG AND ANOTHER v. CHENG SUI WAN alias CHENG WANG AND OTHERS

DCCJ 5393/2017

[2021] HKDC 777

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 5393 OF 2017

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BETWEEN

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JUDGMENT

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1.  This is a claim for adverse possession by the plaintiffs.

Background

2.  The defendants are the registered owners and tenants in common of the property known as Lot No. 360 in Demarcation District 13 (“Lot 360”) which is within the village of Lin Au.

3.  The plaintiffs are and were indigenous villagers. On 19 April 1954, their paternal grandfather, the late Cheng Kwai Fat (“CKF”) was granted permission to erect 2 temporary structures on Lot No. 359 in Demarcation District 13 (“Lot 359”), the adjacent plot to Lot 360.

4.  It is not in dispute that CKF erected 2 houses and a courtyard (“the Property”) on Lot 360 instead of Lot 359 instead (“the Mistake”).

5.  The plaintiffs’ case is that the Mistake was not discovered until around 2000 by CKF’s son, the late Cheng Shun On and father of the plaintiffs (“CSO”). Nevertheless, the family of CKF and his family and descendants have continuous, exclusive and successive possession in the Property since its completion in 1954 until now.

6.  The defendants’ case is the Mistake was in fact discovered as early as 1958 and that CKF had agreed to pay a rent of HK$10 per month to the defendants’ father. The rent was paid until at least 1975 or until the death of CKF. And after 1985, the Property was abandoned. The 3^rd Defendant has re-entered the Property in 2009 using it for storage etc., and he has also been paying the rates and government rent of Lot 360 since then.

The legal principles for adverse possession

7.  The legal principle to establish adverse possession is trite: the claimant must prove both “factual possession” of and the requisite “intention to possess” (animus possidendi) the land for a duration of 20 years if the occupation commenced prior to 1991, and 12 years if commenced after 1991.

Issues in dispute

8.  The periods of possession can be divided as follows:

a) From 1954 (when the Property was first built and occupied) to 1975 (about 20 years after first occupation)

b) From 1975 to around 1982 to 1985 (the time when there was no dispute that the Property was still occupied by the plaintiffs’ family)

c) From 1985 to now (whether the property was abandoned)

From 1954 to 1975

9.  It is not in dispute that there was factual possession of the Property by the plaintiffs’ family from 1954 to around 1982 to 1985.

10.  The only dispute is whether there was the existence of a tenancy, that is, the issue of animus possidendi: whether the Mistake was discovered in 1958 and rent has been paid from then to at least 1975.

11.  The plaintiffs’ case is that none of the family members had paid or been asked to pay any rent and that the Mistake was only discovered around 2000 by CSO.

12.  Under cross-examination, the 1^st plaintiff was able to explain the circumstances of how the Mistake was discovered: at the time, CSO was enquiring about rebuilding the Property or to build “Ding houses” on the plot. This was also the reason why CSO approached the defendants to seek a transfer of the title to him: he realised that it was difficult to obtain permission to build “Ding houses” if he was not the registered owner of the plot.

13.  On the other hand, the defendants’ case was that the plaintiffs’ family was aware of the Mistake since 1958 and has been paying rent from then until at least 1975.

14.  However, I have serious reservation about the truth of the defendants’ version of events.

15.  The issue of tenancy was never mentioned in the first round of pleadings and witness statements by the defendants: instead, it was first mentioned in the witness statement of Cheng Lin Kiu (“CLK”). This was dated 14 October 2019 which was some 3 months after the first round of the defendants’ various witness statements (all dated 26 July 2019). CLK was the younger sister of the 1^st and 2^nd defendants and elder sister of the 3^rd defendants.

16.  The defendants then amended their defence on 4 November 2019 to raise this new case of alleged tenancy.

17.  The alleged circumstances of how CLK became aware of this alleged tenancy agreement was rather dubious.

18.  According to her witness statement, she claimed to be taken by her father to the Property in 1958 and saw and heard the following:

a) an apology by CKF to her father;

b) an admission by CKF of the mistake of building the Property on Lot 360 which belonged to the defendants’ family;

c) an offer made by CKF of HK$10 per month as rent for the Property for the sake of resolving the dispute;

d) an acceptance of this offer by her father; and

e) the handing over of HK$10 by CKF to her father.

19.  After this alleged agreement, CLK claimed she has witnessed CKF coming over to her house to hand over HK$10 to her father about 2-3 times a year. She left Hong Kong to live in South America in 1972 but when she returned for a holiday in 1975, she again witnessed CKF paying rent to her father. When she returned again to Hong Kong in 1983, she was told by her mother that CKF had passed away, and she had not witnessed any further rent payment by the plaintiffs’ family.

20.  There are many questions regarding the defendants’ version of events.

21.  Firstly, the “apology and tenancy agreement” supposedly happened in 1958, some 4 years after the completion and occupation of the Property. Yet there was no evidence as to what triggered the discovery of the Mistake, or, putting it another way, what could have made CLK’s father started to look into the ownership of the Property some 4 years after its occupation?

22.  Further, one would presume that some form of investigation must have been done to verify the Mistake, perhaps by commissioning a surveyor’s report. Otherwise, it would be hard to image that villagers would suddenly come up with terms like “Lot 360” (which CLK apparently overhead according to her witness statement) or being aware of its location and boundaries. However, there was no evidence as to any investigation done.

23.  There was also no information as to whether any such evidence of the Mistake (e.g. surveyor’s report) was ever produced to CKF (or other occupiers of the Property). One must remember that CKF had built the Property himself and his family had lived there for 4 years by then. It would be highly unlikely for him give up ownership so quickly and easily even, I would imagine, in face of strong evidence of the Mistake.

24.  CLK was 12 years old at the time. Why would her father bring her to the Property for this obvious adult conversation with possible confrontation?

25.  I would also question why a 12 year-old would be patient enough to sit through and witness a whole process of:

a) an open apology (which, rather conveniently, including a statement of the reason of the apology identifying precisely the Mistake and the lot number in dispute);

b) (likely) some form of negotiation;

c) then an offer and acceptance of a rental agreement, and

d) finally, the actual money being handed over.

26.  I have further questions: such “smooth sailing” settlement of a land dispute between two neighbouring villagers would appear rather unlikely in the best of times. Even more so that all this allegedly happened within one sitting with what appeared to be an instantaneous admission of the Mistake and an open apology, followed promptly by negotiation and an equally instantaneous agreement for tenancy, and concluded with an immediate payment of rent, and with the whole process conveniently witnessed from start to finish by a 12 year-old.

27.  There was a total lack of documentary evidence of this tenancy agreement. One would have thought that if CLK’s father had done so much to investigate the Mistake (including being able to name “Lot 360” and tell its location), he should have bothered to at least ask CKF to sign something to verify the Mistake and the tenancy agreement.

28.  Of course, I would also question how someone would be able to remember such a process occurring when she was 12 more than 60 years later and in such details?

29.  Furthermore, it would be rather strange that, of all her siblings, she was the only one aware of this alleged apology and tenancy agreement and the only witness of the monthly rental payments.

30.  Under cross-examination, CLK claimed that her father deliberately withheld the Mistake and tenancy agreement from his sons because “they would argue or fight with them”.

31.  I find this explanation illogical: why would the father think that his sons would “argue and fight” with the plaintiffs’ family given that they had admitted the Mistake and agreed to pay rent? Why would the sons object to a rental income?

32.  Secondly, given that the alleged concern was only about the “sons” fighting, CSL was asked why her elder sister was not told about this agreement. CSL answered that her sister was “up in mountains looking after cows”. She then changed the story and alleged that her sister had already married and had left the village by then.

33.  Further, if this was the reason for not telling the sons, I wonder why they were not told about it after CKF had passed away and the plaintiffs failed to pay further rent. Surely, this would be the appropriate time for the sons to help to chase the rent. Instead, there was no evidence that anything was done regarding this alleged default of rental payment.

34.  More importantly, under cross-examination, CLK admitted that she was close to the defendants (e.g. having “yum cha” meals twice a month with the 3^rd defendants since she returned to Hong Kong in 1997). She also admitted that she was aware of the dispute in the Property “for the past several years”.

35.  One would imagine that for someone who could recall an event that had happened some 60 years ago which such minute details, the event must have left an extremely deep impression.

36.  As such, when CLK was aware of the dispute in the Property, one would reasonably expect that the first thing she would mention to the 3^rd defendant would be: “They cannot claim our land! In 1958, I actually saw their grandfather apologised to our father for mistakenly building on our Lot 360. They agreed to pay a rent of HK$10 per month and I even saw the payments on many occasions!”

37.  Clearly CLK did not done so. When asked during cross-examination, CLK was very evasive. She eventually claimed that the reason was because: “I was not being sued. It does not concern me so I did not bother.” This was absurd.

38.  As such, I do not find CSL a credible witness. I do not accept that the Mistake was discovered in 1958 nor that there was ever an apology and a rental agreement. All these matters were likely to be drummed up by CLK after the first round of pleadings and witness statements in an attempt to bolster the defence.

39.  I therefore accept the plaintiffs’ case that their family have lived in and occupied the Property from 1954 to around 1982 to 1985 without paying or being asked to pay any rent, and the mistake was only realised much later around 2000.

40.  It does not matter that the occupation was based on a mistake. It is trite that aminus possidendi can be established even if the occupier mistakenly believes himself to be the owner of the land (Wong Luen Chun & Anor Secretary for Justice [1998] 4 HKC 122).

41.  As such, I found that adverse possession has already been established after 20 years from 1954, that is, around 1974 (the undisputed fact was the occupation continued well beyond this time to around 1982 to 1985). The defendants have long lost the right to bring any action against the plaintiff to recover the Property by virtue of section 7(2) of the Limitation Ordinance. Further, the defendant’s title, rights, benefits and interests, including the right to exclusive physical occupation of the Property has been extinguished by virtue of section 17 of the Limitation Ordinance.

From 1975 to around 1982 to 1985

42.  As stated above, it was not disputed that during this period, the Property was occupied by the plaintiffs’ family. As I found that there was no tenancy agreement, this period would only serve as an extremely wide “buffer zone” well beyond the period required to established Adverse Possession as found above.

From 1985 to now

43.  The defendants’ case was the Property was abandoned around 1985: “Since around 1985, anybody could walk into the 2 Housing Structures at any time as the doors were not locked”; “No one lived in the 2 Housing Structures” etc. (paragraph 4(b) and (c) of the Amended Defence and Counterclaim of the 3^rd defendant, page 36 of the Trial Bundle).

44.  Of course, this issue would only be relevant if there was a need to establish continuous exclusive adverse possession at this point of time.

45.  Given my finding above that adverse possession has already been established some 10 years before, this issue would be irrelevant.

46.  Nevertheless, I will still address some issues in this period.

47.  Much court time was spent in trying to verify how the doors of the Property were secured during this period: locked shut by padlocks (or the like), or secured shut by means of bamboo or metal rods tied by metal wires.

48.  The counsel for the defendants, Mr. Poon, referred to the evidence of Cheng Kam Wing (“CKW”), a village representative and a local villager, that the door of the village hall was also secured by this stick and wire method so that anyone can enter to worship. CKW said that this was a traditional way to secure the door in the village to prevent the doors being blown open by strong wind. Mr. Poon suggested that if the doors of the Property were secured by this method, it was not enough to establish animus possidendi.

49.  I disagree. There is no law to specify what form of enclosure, and how secured it should be, is sufficient to establish animus possidendi or, conversely, abandonment. It would be silly to suggest that the village hall was actually “abandoned” when the doors were secured by this method. In the context of the Property which was a private family residence, if it was actually abandoned, one would question why there was any attempt to secure the doors at all.

50.  CKW is a village representative who is familiar with the affairs in this village and indeed know both the plaintiffs and the defendants. He can reasonably be considered as an independent witness.

51.  CKW recalled that since 1996 (when he returned to live in the village), he saw that the doors of the Property were always secured. He also recalled seeing CSO in the village looking after the Property and the areas around until CSO passed away around 2014.

52.  In particular, CKW gave evidence that he recalled CSO brought his second wife and 2 children back to the village in around 1996 and 1997 and that they had lived in the Property for a period of time. CKW was able to give details of the incident of CSO’s efforts to secure electricity supply to the Property and also of another incident when the two children of CSO were severely bitten by mosquitos whilst bathing in the river in front of the Property.

53.  CKW stated that only around November 2016 that he was contacted by the 1^st plaintiff complaining that someone changed the locks to the door of the Property. The 1^st plaintiff subsequent put in a padlock and chain to secure the door and then put up a “private property” sign, and asked CKW to keep an eye on the Property.

54.  As such, I find CKW a credible witness. There was clearly no abandonment of the Property by the plaintiffs’ family.

55.  As such, I do not accept the defendants’ case that there was abandonment, even if this was a live issue during that time period.

The incident in 2000

56.  There is one further matter.

57.  As stated above, it is the plaintiffs’ case that CSO discovered the Mistake in 2000 and had approached the defendants in order that the title could be transferred to him. The 1^st plaintiff further explained in court that CSO discovered the Mistake during the process of trying to get approval to rebuild the Property and / or building “Ding houses”. CSO noticed that it would be very difficult to get such approval without paper ownership. This evidence was largely unchallenged in court.

58.  I accept this evidence. On balance, I find that the parties first became aware of the Mistake in 2000 and there were discussions between the parties. I would imagine that when no agreement was reached, there were increasing acts by both sides (much of which were documented by various witness statements) to try to “claim possession” of the Property.

59.  Nevertheless, I find that such discussions were not an acceptance or acknowledgment of the defendants’ title by the plaintiffs but rather indicated an “intention to rectify the lack of paper-ownership” in order for CSO to redevelop the Property which has been “in continuous possession over the years” (Law Bing Kee v Hung Wan Taxi Co. Ltd & Anor [HCMP 2270 of 2009]).

Order

60.  I will grant the following:

a) A declaration that the defendants have lost the right to bring any action to recover the Property being a portion of Lot No. 360 in Demarcation District No. 13 as shown and coloured pink and yellow on the plan annexed to the Statement of Claim (page 8 of Trial Bundle A) by virtue of Section 7(2) of the Limitation Ordinance (Cap. 347);

b) A declaration that by virtue of Section 17 of the Limitation Ordinance (Cap. 347), the title of the defendants to the Property or any part thereof has been extinguished in favour of the plaintiffs;

c) A declaration that the plaintiffs have been in adverse possession of the Property for a period exceeding 20 years prior to the commencement of these proceedings and has thereby acquired a possessory title and / or right to the Property;

d) An injunction restraining the defendants, whether by themselves or their agents, from interfering the use and possession of the Property;

e) The Amended Counterclaim of the 3^rd defendant be dismissed; and

f) Costs of the action be to the plaintiffs to be taxed if not agreed, with certificate for counsel.