CHAN SUK YIN AND ANOTHER v. HARVEST GOOD DEVELOPMENT LTD

HCA477/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.477 OF 2000

---------------------

----------------------

-----------------------

J U D G M E N T

-----------------------

1. This case arises out of a New Territories land dispute. It concerns a farm in Tai Po. The suit lots are Lots No. 6A RP, 7 RP, 8, 9 and 10 in Demarcation District 32, Tai Po. The defendant, which is a subsidiary of the Henderson Group, owns the paper title; it became the registered owner on 23 October 1997. The 2nd named plaintiff, who is now aged 81, claims to have occupied the suit lots since 1951. The 1st named plaintiff, who is her daughter, claims to have occupied them since she was born in 1964. They claim adverse possession of the suit lots against the defendant. They seek a declaration that the defendant is barred from bringing any action at law to recover the suit lots, pursuant to section 7(2) of the Limitation Ordinance, Cap. 347; and a declaration that any title of the defendant to the suit lots has been extinguished by virtue of section 17 of that Ordinance.

2. The dispute has a long history, and the pleadings have been amended, so it is as well to examine them in some detail. The defendant in its original Defence and Counterclaim denied adverse possession. It claimed that the suit lots were legally and beneficially owned by one Chu Suk Han. By a written lease of 1951, Chu Suk Kan leased land, including the suit lots to the 2nd defendant's husband, Tam Sun, for 10 years. Tam Sun and the 2nd named plaintiff entered into occupation as lessees. The lease expired by effluxion of time in 1961 and they continued to occupy as lessees holding over. On 9 May 1961 the lots were assigned to Lee Shau Kee, Fung King Hey and Wong Shiu Kin, subject to the then occupation of Tam Sun and the 2nd named plaintiff. The new owners then visited the suit lots, and expressly or by implication licensed Tam Sun and the 2nd named plaintiff to occupy the lots at will, subject to a sufficient period of notice to quit. Accordingly, the plaintiffs remained in possession as lessees holding over, or as licensees but not as trespassers; and time for the purpose of the Limitation Ordinance never started to run.

3. By way of counterclaim the defendant averred that its predecessor in title, Lee Shau Kee, the survivor of the original three new owners, had given the plaintiffs notice to quit on 29 June 1993 but they had remained. Lee later transferred the suit lots to the defendant which is a company controlled by him. The plaintiffs have been in wrongful possession since 1993. Accordingly, the defendant counterclaims for vacant possession and mesne profits from the date on which it became the owner, and continuing.

4. By way of Reply and Defence to Counterclaim the plaintiffs averred that by Action No 5763 of 1993 Lee Shau Kee had sought to recover from them Lots 7 RP, 8 and 9, pleading that they had wrongfully entered and taken possession of those lots on a date unknown to him and his predecessors in title. By their defence and counterclaim in that action the plaintiffs had claimed adverse possession, which the then plaintiff Lee did not admit. Subsequently on 14 June 1999 that action was discontinued.

5. The plaintiffs denied any licence having been granted by Messrs Lee, Fung and Wong and averred that if any licence was granted, it had died with Tam Sun on 28 November 1961; alternatively, if Tam had been a licensee, the 2nd named plaintiff had married one Chan Hon Piu in 1964 and the 1st named plaintiff was the child of that union, and Chan Hon Piu had remained in adverse possession of the lots until he died on 13 May 1976; and further alternatively, any tenancy at will was determined by virtue of the Limitation Ordinance in about 1962.

6. The defendant then on 26 June 2001 amended the Defence and Counterclaim to add Lots 6A1, 6A2, 6A3 and 7A as having been covered by the 1951 lease. It averred that the licence had been given to Tam Sun, the 2nd named plaintiff and family members residing with them, in respect of the suit lots and these added lots. The 2nd named plaintiff had delivered up vacant possession of the added lots, on different dates in 1962 and 1979 to the then owners who had surrendered them to the Government.

7. By way of an Amended Reply and Defence to Counterclaim the plaintiffs denied delivery of vacant possession of the added lots. They further pleaded if there had been a licence to Tam Sun, the 2nd named plaintiff and their family, the 2nd named plaintiff and her family members had by her marriage to Chan Hon Piu become members of Chan's family and he had been in adverse possession in his own right.

8. By way of a Reply to the Plaintiff's Amended Defence to Counterclaim the defendant on 9 October 2002 pleaded as follows. The defendant is a company within the Henderson Group, of which Lee Shau Kee is a director. As a result of legal advice in 1993, the Henderson Group and its affiliates had issued notices to quit and legal proceedings against persons on their lands who might be trespassers, with a view to preventing those persons from acquiring a possessory title by 1 July 1993. At the time of giving instruction to the Henderson Group's solicitors, its manager, Francis T. Lau knew that Lee had granted no written tenancy in respect of the suit lots in the 1993 action, but did not know of the factual background giving rise to the oral licence. Therefore the factual basis of the 1993 notice to quit had been erroneous. The licence had been impliedly granted to all the members of the 2nd named plaintiff's family. The death of Tam Sun would not affect that licence. The 1st named plaintiff derived her right of occupation of the land by virtue of the licence to the 2nd named plaintiff.

The Previous Action

9. As indicated, in Action No. 5763 of 1993 Lee Shau Kee, his co-owners having died, commenced proceedings in High Court Action No. 5673 of 1993 as the sole surviving trustee and by later amendment as registered owner of Lots 7 RP, 8 and 9 against "the occupiers" of those Lots for possession on the ground that the occupiers had entered into possession on a date or dates unknown to the plaintiff or his predecessors in title, and without their knowledge and consent; in other words, that the occupiers were trespassers. The Writ was issued on 30 June 1993. This was done on legal advice against the background of the decision at first instance in Chung Ping Kwan v. Lam Island Co. Ltd [1994] 1 HKC 613, that proceedings should be issued before 1 July 1993, to protect the paper owners' position. It will be remembered that the effect of the decision was that where a squatter was in possession of land before 30 June 1973, time began to run afresh from that date against the owner of the paper title. The decision was upheld by the Court of Appeal in October 1994 but reversed by the Privy Council in July 1996. The Writ was served on 28 June 1994. In it Lee Shau Kee wrongly claimed in respect of a one-third share of the Lots. The Writ was amended on 11 March 1996 and the Statement of Claim issued on 18 April 1996. The defendants defended the action, and counterclaimed for the same declarations as they now seek, on the ground of their adverse possession of Lots 7 RP, 8 and 9 for more than 20 years. The action did not, however, proceed to trial. It got as far as discovery and the exchange of witness statements. It was discontinued on 14 January 1999.

The Lots

10. The court held a view of the suit lots. It was agreed that no evidence would be taken at the view, because it was held at short notice and no recording facilities were available. The suit lots are in the hills behind Tai Po, not far from the old Tai Po Road. Lots 7 RP and 8 are at the mouth of a little valley which extends to the north-north-west. Behind them lies Lot 9 which takes up the flat valley floor. Part of Lot 8 extends up the slope on the west side of the valley, and so does part of Lot 9, with Lot 10 adjoining that part, up-slope of it. Above and around Lot 10 on the western slopes there is an area of Government land which was originally licensed by the 2nd named plaintiff's son Tam Khoo Hoi, and in respect of which the plaintiffs are still paying the licence fees.

11. There is a public road which runs across the valley mouth, in front of Lots 7 RP and 8. Lot 6A RP lies to the east of the valley mouth, between this road and a south-facing slope. In about 1979 there was a resumption by Government of part of Lots 6A and 7 to build the public road referred to above; which is why we are now concerned with the remaining portions (RP) of the original Lots 6A and 7.

12. There is a narrow tarred road leading from the public road up the east side of the valley on the gradient above the eastern edge of Lot 9. It provides access by way of paths from its end to two houses further into the valley. From that narrow road near its junction with the public road a concrete path leads between Lots 8 and 9, and up the western slope where it bifurcates on either side of Lot 10 and runs into the Government land. Another concrete path runs from a T-junction on that path across Lot 9 towards the western slopes, further into the valley.

13. Lots 7 RP and 8 appear to be enclosed by a gate, some fencing and bushes. There are two buildings on Lot 8, where the plaintiffs live. There is no particular enclosure of the other lots. Though there are bits of fencing or other barriers here and there, generally anyone can get into Lots 6A RP, 9 and 10, except for a fenced area with some huts in it on the west side of the T-junction of the path. There is fencing on the north side of this path, and a gate which leads either into this area, or into part of the licensed Government land above it.

14. There is no obvious cultivation on Lot 10, in the sense of lines of vegetables or the like, though there are various trees and bushes. Most of Lot 9 is covered with some kind of coarse green vegetation, which to the townsman's eye does not appear to be cultivated. On Lot 6A RP there are banana trees and some other trees and bushes, and a lot of overgrowth of grass and weeds. It does not look well cared for. That, of course, is only the position at the present day, and in the winter.

The Family Background

15. This appears from the plaintiff's evidence and is supported by certificates of registration. It is not in dispute. The 2nd named plaintiff was married in 1948 to Mr Tam Sun. They had a son named Tam Khoo Hoi, born in 1948, two daughters, Tam Kit Ying and Tam Kit Kwan, and another son, Tam Ku Chau. Tam Sun died suddenly on 28 November 1961.

16. The 2nd named plaintiff married Chan Hon Piu in 1964 and the 1st named plaintiff was born of that union on 8 April 1965. Subsequently the couple had another son, Chan Cheong Yin.

17. Tam Ku Chau went to Sweden in 1976 and has since resided there. Tam Khoo Hoi went to Sweden in 1978, but returned to Hong Kong in ill-health in 1980 and died in the same year. Tam Kit Ying married and left the family in 1971. Tam Kit Kwan married in 1979 and went to England with her husband in 1980 where she has since resided. Chan Cheong Yin has resided in England since 1984. Of the children of the family, only the 1st named plaintiff remains with her mother.

Evidence for the plaintiff

18. This comes from the plaintiffs themselves and from two of their neighbours. In brief it is the evidence of the plaintiffs that Tam Sun and his family started farming in the area in 1951. In that year he leased Lots 6, 7, 8, 9, 10, 11, 12 and 13 in DD 32 for 10 years from Chu Suk Han. Those lots were then collectively known as Chap Fung Farm or Tam Sun Kee in 1951, when he leased them. In 1954 he obtained a Crown land licence to use some adjacent land (contiguous to Lots 8, 9 and 10 on the western side of the valley) and this became part of the farm as well. The licence was transferred to Tam Khoo Hoi in about 1973 and it appears that the plaintiffs are still paying the licence fees up to now. The family lived in wooden huts on Lot 8. They grew fruit, rice, lotus roots, water chestnuts and raised pigs and chickens. Beside the family casual workers were also sometimes employed.

19. After Tam Sun died the family continued to work the farm. When the 2nd named plaintiff remarried in 1964 she and her new husband, the Tam children and the Chan children carried on as before. Stone houses were built on Lot 8 in place of the wooden ones in 1964. Mr Chan concentrated on growing fruit and flowers and raising pigs and chickens. He also dug three ponds on Lot 8 to raise ducks and fish. One pond now remains.

20. While the children were at home they all helped with the farming. The 1st named plaintiff says that she used to help while she was at school and then was on the farm full time after she finished school in 1979. From 1982 to 1987 she was working as a cook or an apprentice cook at Fo Tan, Shatin, from 9 a.m. to 4 p.m. but at the same time helping her mother with the farm work. It is their case that after the other family members left the two plaintiffs carried on working the farm and indeed they are still working it today. The 1st named plaintiff in particular identified various flowers, fruit, vegetables and herbs as being grown on the suit lots at different times up to the present. It appears however that the raising of pigs was discontinued in about 1979 when part of Lot 7 was surrendered to Government for the road widening and a pigsty thereon was demolished. The raising of poultry was discontinued at a later stage; the pigeons went in 1979, but it was not clear when the other poultry was discontinued. The 1st named plaintiff mentioned the last bird flu epidemic.

21. The 2nd named plaintiff says that she had never met Lee Shau Kee, Fung King Hey or Wong Shiu Hin at the farm and indeed she never knew anything about them before the first court action was raised. Nor had she ever met any agent or servant of any of them at the farm. She had never heard of any meeting between them or any of them and Tam Sun. She knew that there was a lease in 1951. No rent was paid since Tam Sun died. She did not know the agent who had entered into the lease. (His name in fact appears with others on a kind of schedule to the old lease which appears to show their obligation to contribute to rent though whether these other named persons are occupants of the same lands or what is not clear; the only "grantee" named is Tam Sun.) She did not know anything about the payment of rent under the lease and says that she never saw the rent collector though Tam Sun was paying rent up to the time of his death. After that no rent was paid.

22. Both the plaintiffs said they knew nothing of any sales of land or surrenders of land to Government of Lots 6A sections 1, 2 in 1962. They knew of the surrender of parts of Lots 6A and 7 in 1979 and claimed that the 2nd named plaintiff had received compensation from Government as owner in 1979. They identified payments of $3,000.00 and $36,370.00 into the 2ndnamed plaintiff's bank account in December 1979 as having been payments of compensation. The 2nd named plaintiff also identified a payment of $5,000.00 received by her in 1981 as being by way of compensation from one Wai Kee Construction Co. Ltd for damage done to a mud slide on to Lot 6A RP.

23. The 1st named plaintiff produced various photographs purporting to show fences of various types at various locations on the lots, as well as some of the vegetation. According to the plaintiffs the lots were always fenced. Old fences were renewed from time to time. Various old family photographs were also produced which show some of the history of the farm. In additional aerial survey photographs have been produced. The defendant also produced photographs taken by its employees from 1992 onwards. I will deal with the photographic evidence below.

24. The plaintiffs were cross-examined at length both with a view to getting them to admit that the farm, or most of the area of it, has been abandoned since the 2nd named plaintiff's second husband died and the children moved away. They did not admit it and insisted that farming has continued up to the present. So far as the alleged licence is concerned the 2nd named plaintiff denied that any licence was given, or that she had ever seen Messrs Lee, Fung or Wong. She also denied having told her daughter about such a licence. The 1st named plaintiff denied having made certain statements to the defendant's witnesses, which were recorded in a Memorandum, Exhibit D-4 to which I shall refer in detail below. However although it was her evidence that the suit lots were always fenced, with new fences being put up when the old ones decayed, she had to admit that some of the fences shown in her own photographs and which do not appear in the defendant's photographs taken between 1993 and 1996 were put up later.

25. The plaintiffs called two other witnesses. The first was Wong Lee Chuen. His evidence was that he had known the family, and had known that they lived on the suit lots, since 1962. He used to visit his grandparents, who lived nearby. He has visited the family tomb nearby, every year from about 1978 onwards.

26. The other witness for the plaintiffs was Lai Shu Kun. He owns the Kan Kee Garden, on the Old Tai Po Road, not far from Lot 6A RP. He says that he opened the garden there in the early 1970s, from Shatin, and became acquainted with the plaintiffs' family then. He says that they resided on Lots 6, 7 and 8 and that they were busy in looking after the flowers and fruit trees on their farm. He had seen the family three or four times a year, and he had known that the children had gone away. Sometimes he took ginger flowers at the request of the plaintiffs, from near their fishpond. He said that the condition of the lot "near the road", i.e. Lot 6A RP had been about the same since the 1970s and that the plaintiffs had grown bananas and guavas on it.

Evidence for the defendant

27. The defendant could produce no direct evidence to support its averments that the new owners, Messrs Lee, Fung and Wong, had given Tam Sun and his family a licence to occupy the suit lots in 1961. Nor was there any evidence to support the averments that in 1962 and 1979 the 2nd named plaintiff had delivered up vacant possession of parts of Lots 6A and 7 for the purpose of sale or surrender. Messrs Fung and Wong have died, and Mr Lee did not give evidence; it appears from the evidence of the defendant's main witness, Mr Mok, that Mr Lee could not remember if he had personally visited the suit lots.

28. The main plank of the defence was the evidence of Mr Mok Chi Ming, who was in 1992 a property officer working for the Henderson Real Estate Agency Ltd in its Agricultural Land Section. His duties including maintaining a register of all the land owned by the Henderson Group and its affiliates, and to carry out routine site inspections. With a colleague he designed a standard form or memorandum for such inspections. He says that he carried out an inspection of Lot 6A RP, 7 RP 8, 9 and 10 on 27 November 1992. These lots were in the name of "Three Friends", i.e. Messrs Lee, Fung and Wong, and they were apparently the only lands so held, and looked after by his company. He took some photographs and he made entries in his Memorandum, which has been produced as Exhibit D-4. This Memorandum is heavily relied on by the defendant primarily for the statements which, according to Mr Mok and other witnesses, were made by the 1st named plaintiff. I will reproduce below the relevant statements.

29. According to Mr Mok Lots 7 and 8 were occupied as a residence, for one family. Part of Lot 9 had articles on it; this meant the fenced area, with sheds on the western side of the T-junction of the path on Lot 9. Lots 6A RP, 9 and 10 and most of Lot 9 were deserted and uncultivated. There were bananas trees on Lot 6A RP but they appeared thin and as though no one had taken care of them for some time.

30. Mr Mok's next visit was on 11 May 1993. This time he was inspecting some lots, including the adjacent Lots 6A2 and 670, owned by a Henderson subsidiary, Team Rich. He noted that someone claimed to be farming and residing on Lots 6A RP, 7 RP, 8 and part of 9. This person was a woman whom he later knew to be the 1st named plaintiff. She was hostile. There was no material change in the state of the suit Lots since the last visit. Mr Mok reported to his superior, Mr Francis Lau Tak. The information about the plaintiff was sent to Henderson's solicitors.

31. The next entry is on 29 June 1996 when Mr Mok went to the Lots to serve the Notice to Quit. After that, there is an entry by Mr Lau (who was also called and has spoken to the entry) that he got a call from the 1st named plaintiff indicating willingness to discuss tenancy matters. She had apparently also contacted the solicitors at this time asking them to attend the premises to identify the places belong to the owner. The entry continues:

"She requested our staff to attend the subject premises to identify the places belonging to the owner and requested the owner to compensate (her) then (she) would move out (more than $100,000.00) or enter into a tenancy agreement but the rent must be low. $400 p.m. FL raised with the other party."

32. Mr Mok's next entry is for 9 July 1993. It is a significant entry and in translation it reads as follows :

"Checked the boundary with Ms Chan directly at the scene, the boundary as shown on the attached plan. The opposite party indicated clearly that she would not rent the subject lots; second, she admitted the ownership of the owner in respect of the land, meaning that the opposite party would not contest with the owner on land ownership, third, the main points concerned the structures, fruit trees, fish ponds, flowers and plants, etc. The opposite party requested for $600,000.00 for delivering vacant possession. According to Ms Chan her father had started using the subject land since 1951. She could correctly state the names of the three owners. She further indicated that when Lee, Fung, Wong purchased the subject land, they had inspected the subject land personally and told her family members that they could continue to use the subject land. They had never paid any rent."

33. The next entry is on 29 June 1994, after service of the Writ in A5763 of 1993 on 28 June 1994. It shows that the 1st named plaintiff telephoned Mr Mok to discuss a tenancy agreement but tended to talk about compensation for delivering vacant possession, but her attitude was not clear. The entry continues :

"She repeated saying that Wong Shiu Hin told (her) in the past that (they) could farm (the) land unconditionally."

34. Mr Mok then delivered the file to someone else on 29 June 1994 on being transferred to another section, but he came back into the picture on 20 March 1996 when he and others went with solicitors to the suit lots to serve the Amended Writ.

35. The next significant entry is on 23 March 1996, which deals with the state of the Lots found by the defendant's servants including the witness Mr Tong Shun Ting, Denny. They went there to inspect the suit lots and adjacent lots owned by a Henderson company, Team Rich. The indication was that, as before, Lots 7 RP and 8, and a fenced area on Lot 9 were occupied, there were weak banana trees on Lot 6A RP, but the rest of the area was apparently deserted.

36. Servants of the defendant went to the Lots again on 25 May 1996 to with a contractor to cut down banana trees and put up a wire fence round Lot 6A RP and Lot 6A2 which was by then owned by Team Rich. The 1st named plaintiff apparently appeared and told them to stop working, and then she reported to the police, who came to the scene. The entry, which was made by another person, though Mr Tong confirmed it, continues :

"We also heard from the statement taken by the police from Madam Chan that Chan Suk Yin claimed herself to be the occupier of DD32 Lot Nos. 6, 7, 8, 9, 10, 11, 12, 13, 15, 17 and 20 and that her father and mother, Wong Yam Tai were the tenants of the aforesaid land lots in the past. She also claimed that since the 50s (they) had been farming and living there and that (she) had the tenancy agreement but subsequently no rent was paid any more and currently she did not know who was the owner."

37. The entry shows that the police did not want to be involved in a civil dispute and went away and the contractor put up the fence. The entry shows that there was a later discussion with the two plaintiffs regarding the first action. It continues :

"Madam Chan indicated that she was defending purely on the question of compensation. However, when we enquired of the quantum of compensation they had in mind, the two of them prevaricated and refused to give a figure. (They) also requested us to contact their solicitor Ko Yuk Tong to discuss the compensation matter."

38. The entry then records the writer's belief that a huge amount of compensation would be requested, and a tactical suggestion that for the time being, the defendant should "try to make them spend a sum of money on their law firm before discussing compensation with them".

39. The next entry on 28 June 1996 shows that new banana trees had been planted on Lot 6A2 where they had been cut down before. It is not in dispute that the plaintiffs had themselves caused the wire fence to be removed.

40. As I have indicated, Messrs Tong and Lau gave evidence of dealings with the plaintiffs. The latter in particular dealt with the conduct of the first action; he had been in charge of that, and Mr Mok had been his deputy. I do not propose to go into this in any detail but will refer to it as necessary below. In addition the defendant called on subpoena a Mr Kwok Yu Cheung, a Senior Lands Officer, who produced Land Office or District Office documents, recently unearthed. These showed that a notice had been put up in 1979 that soil would be taken from the Lots, in particularly Lot. 6A RP, for land reclamation on the seashore. A Crop Compensation Schedule, produced as Exhibit D-3, showed that Wong Yam Tai had been paid $20,917.90 by way of crop compensation. Mr Kwok said that this was paid in connection with the soil excavation rather than the resumption of land on Lots 6A and 7 for the road building. In fact the 2nd named plaintiff's bank book also showed an entry for this sum. Other contemporaneous correspondence showed that the registered owners of the land had been compensated for the resumption by a payment of $1,026,610.00 and the issue of a Letter A. The District Land Office had not record of any other compensation claim.

41. The above is an overview of the evidence. I will deal with parts of it in more detail as necessary in evaluation.

The Law

42. To establish a possessory title based on adverse possession the plaintiffs must prove factual possession of the suit lots coupled with the intention to possess them (animus possidendi) for the whole of the limitation period which for the purposes of these proceedings is 20 years, though the period has since been changed to 12 years.

43. Per Li CJ in Wong Tak Yue v. Kung Kwok Wai & Anor (No. 2) 1997-98 1 HKCFAR 55 at 68 :

"A person claiming to be in adverse possession must be shown to have both possession and the requisite intention to possess. See the Court of Appeal decisions in England in R. v. Secretary of State for the Environment Ex p Davies (1990) 61 P & CR 487, Buckinghamshire County Council v. Moran [1990] 1 Ch 623 which treated as authoritative and applied the principles enunciated by Slade, J in Powell v. McFarlane (1979) 38 P & CR 452."

44. 0It is as well to set out those principles here because the defendant's case is that the plaintiffs have shown neither factual possession for the whole of the suit lots for the whole of the limitation period, nor the animus possidendi.

45. At pp.470-471 of the report Slade J said this :

"	It will be convenient to begin by restating a few basic principles relating to the concept of possession under English law :
	(1)	In the absence of evidence to the contrary, the owner of land with the paper title is deemed to be in possession of the land, as being the person with the prima facie right to possession. The law will thus, without reluctance, ascribe possession either to the paper owner or to person who can establish a title as claiming through the paper owner.
	(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. Thus an owner of land and a person intruding on that land without his consent cannot both be in possession of the land at the same time. The question what acts constitute a sufficient degree of exclusive physical control must depend on the circumstances, in particular the nature of the land and the manner in which land of that nature is commonly used or enjoyed. ... It is impossible to generalise with any precision as to what acts will or will not suffice to evidence factual possession. ... Everything must depend on the particular circumstances, but broadly, I think what must be shown as constituting factual possession 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, which is also necessary to constitute possession, was defined by Lindley M.R., in Littledale v. Liverpool College (a case involving an alleged adverse possession) as 'the intention of excluding the owner as well as other people.' This concept is to some extent an artificial one, because in the ordinary case the squatter on property such as agricultural land will realise that, at least until he acquires a statutory title by long possession and thus can invoke the process of the law to exclude the owner with the paper title, he will not for practical purposes be in a position to exclude him. What is really meant, in my judgment, is that 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."

46. The defendant has raised the issue of whether or not the "three friends" or any of them, after buying the suit lots, gave the then occupiers, Tam Sun and his family, a bare licence to remain there. In addition to the requirements of factual possession and intention there is a further requirement namely that the possession be "adverse to the rights of the paper owner. So licensee is not a trespasser. In Buckinghamshire C.C. v. Moran [1990] 1 Ch 623, C.A., Slade LJ said at p.636 :

"Possession is never "adverse" ........... if it is enjoyed under a lawful title. If, therefore, a person occupies or uses land by licence of the owner with the paper title and his licence has not been duly determined, he cannot be treated as having been in "adverse possession" as against the owner with the paper title."

47. Whether or not a licence has been granted is a question of fact but it seems that it also goes to the question of intention. If the occupier regards himself as deriving his right to possession from the paper owner he cannot be regarded as having the intention to dispossess the paper owner. It was on this basis that the Court found in Wong Tak Yue, following R. v. Secretary of State for the Environment Ex p Davies that an occupier who had been at all times willing to pay rent to the owner, and did not do so only because no one came to collect it, could not have intended to exclude the whole world including the owner of the land. (See the judgments of Li CJ at 69F and Litton PJ at 70E-G.) So although there is a factual issue as to whether there was a licence, I will deal with this as part of the consideration of whether the plaintiffs had the necessary animus possidendi.

Factual possession

48. It is argued for the defendant that what must be proved is a continuous period of not less than 20 years immediately preceding the institution of this action. With respect, this is not correct. Section 17 of the Ordinance provides :

"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."

49. This was explained by Millett LJ in London Borough of Hounslow v. Minchinton (1997) 74 P & CR 221 at 226 in the following words :

"It is sufficient for a claim to adverse possession that the defendant of his predecessors in title should have been in adverse possession of the land for 12 years whereupon the title of the true owner is extinguished. It is not necessary that the period of 12 years should continue right up until the commencement of the proceedings. If the adverse possessor goes out of possession and the true owner does not re-enter, the clock as it were continues to tick."

50. So what the plaintiffs must prove in this case is 20 years of adverse possession from the date on which time began to run. In this case, the 1951 lease expired at the lunar new year in 1961. At most the lessee could have been regarded as holding over for one year thereafter. Once no rent was demanded time would start to run. So time would start to run at the latest in January or February 1962. It is suggested for the defendant that since the 2nd named plaintiff said that Tam Sun paid rent till the day he died, the lease must have carried on until that date. I do not know whether it is factually correct that rent was paid up to the time of Tam's death on 28 November 1961. That could simply be the kind of rather wild statement one might expect from an old lady with no education, 40 years after the event. But it does not matter. In any event, if the family maintained adverse possession until about 1982, the plaintiffs' title would be established and that of the paper owners extinguished.

51. The defendant's argument is that these two women, one of them elderly and infirm, could not have kept the farm running to any real degree once the husband had died and 1st named plaintiff's siblings had all gone. It is also argued that, since farm produce started to come in from the Mainland in the 1970s vegetable and fruit farming in the New Territories has been uneconomical.

52. It appears that the defendant does not argue, or does not strongly argue, that the plaintiffs cannot show factual possession of Lots 7 RP, 8 and the enclosed area on Lot 9. They have always lived on Lots 7 RP and 8 and they still do; and they have always kept those lots enclosed. According to the 1st named plaintiff a gate to Lot 7 was put up in about 1983, and has since been renewed more than once. Also there has been and now is a notice near the gate to warn off trespassers. The 1st named plaintiff says that there was always one there, but it does not appear in the defendant's early photographs. This is however not particularly important by itself.

53. The real argument relates to Lots 6A RP, 9 and 10. According to the defence witnesses Lot 10 was always deserted and unfenced, though there are no photographs; there is a tomb near the Lot and Mr Mok said that he would not take a photograph which might include a tomb, for fear of annoying the local people. Lot 9, apart from the enclosed portion, appears in the photograph - even some of the plaintiffs' photographs - to have been sparsely cultivated and by 1992 or 1993 it appears to have been covered in the rough vegetation that can now be seen. Lot 6A RP, although it has banana trees on it, looks poorly kept in the defendant's photographs.

54. The plaintiffs themselves were at great pains to show that they had always continued to work the farm. I did not find them particularly credible on this. The 1st named plaintiff had to admit that a piece of fencing which she claimed had been there at all times was simply not there, in the defendant's 1993 photographs and she could not give any satisfactory explanation. Some of what she said, such as that weeds are cut on Lot 9 and thrown into the fishpond to feed a few "fung shui" fish seemed quite bizarre. I do not know what pond fish eat; I have no evidence of it; but it seems highly unlikely that they will eat weeds grown on the land. As for the 2nd named plaintiff, by the early 1980s she was in her 60s and on her own admission had bad eyesight and back pain. There would be a limit to what she could do.

55. So the extent of the plaintiffs' use of the whole area of the suit lots, since the late 1970s or early 1980s, is probably exaggerated. At the same time, the 1st named plaintiff says that apart from her work from 1982 to 1987 (during which time she also helped her mother with some of the farm work, such as the preparation and sale of flowers) she has had no other income but from the farm. She and her mother live on the produce that they grow, and get money by selling some of it. The 2nd named plaintiff, in cross-examination, said that she was able to earn perhaps $30 per day for 20 days a month by selling agricultural products, which is obviously not very much; and though it is clear from her bank passbook that money has been coming in from family members overseas the passbook shows little in the way of withdrawals. There is certainly nothing to suggest that the plaintiffs have any other means of support other than what they derive from the farm. I have no doubt, therefore, that they have continued to carry out some cultivation of the suit lots, even if not the whole of them, up to the present day.

56. Whether or not they have continued to use the whole of the farm up to the present day or even up to 1992 or 1993 does not matter, in my view. As indicated above, the limitation period would run from, at the latest, early 1962 to early 1982. There is absolutely nothing to contradict the plaintiffs' assertion that they were farming the whole of the lots for that period. Their evidence on this is not incredible given that the 1st named plaintiff and the youngest son were still at home up to that time.

57. In any event, once a squatter takes over land and establishes possession by actively farming it, it seems to me that he need not necessarily show that active farming continued on the whole of the farm he has established for the whole of the limitation period. Possession does not leech away with lack of use; it depends on there being some element of control. It is only if control is lost, for example where the land is taken over by another squatter or by the paper owner, that possession is lost. If the squatter remains on the farm, in a position to keep others off it, he remains in control. What is required is that he deal with the land as an occupying owner might have been expected to deal with it, and that no one else has so dealt with it. An occupying owner does not have to farm every square foot of his land and I do not see that a squatter, once he has established possession need do so either.

58. The defendant sought to rely on the fact that when there were changes in the title to parts of the suit lots on exchange and sale in 1962 and soil was taken for sea reclamation and the Government resumed land in 1979 no one made any opposition or claim. I do not see that these matters, taken individually or collectively, would show that the plaintiffs did not remain in possession or intend to remain in possession of the suit lots as they now stand. Apart from the fact of Government land resumption there is no evidence that anyone dispossessed the plaintiffs of these parts. I do not see that a Government officer's note that the parts of the land with which his inspection was concerned were "free from encumbrance" could be relied on as showing the plaintiffs were not in possession of other parts or indeed necessarily of the parts concerned. It seems to clutch at straws to say that this entry necessarily means that the relatively small areas concerned were not occupied.

59. It seems clear that the 2nd named plaintiff was paid compensation for the soil removal from Lot 6A RP. She would not have got that if she had not been in possession. She claimed to have had over $30,000.00 in compensation "as owner" for the Government land resumption for the road building in 1979. I think she must have been confused about this. Her bank account shows that she received two sums amounting to over $30,000.00 as well as the $20,917.90 which was clearly for crop compensation on soil removal. She could not have been paid compensation as owner on the land resumption; the records show that a handsome sum was paid to Messrs Lee, Fung and Wong. It does not appear from the Government records that anyone was paid crop compensation when the land was resumed, though how reliable those records may be after twenty odd years is open to question. In any event I do not see that the fact of Government land resumption would affect the squatter's rights against the owner of the parts not resumed. There was some argument about the 2nd named plaintiff's insistence that she was paid compensation "as owner", on both the question of her credibility and her intentions, but I do not think this makes any difference at all. One cannot expect an elderly illiterate to be reliable on the difference between ownership and possession and in any event, so far as animus possidendi is concerned, what is required is the intention to possess rather than the intention to own.

60. I do not see that there can be any doubt that the plaintiffs maintained factual possession of the suit lots for 20 years from when time began to run against the paper owners. I have no doubt that they remain in factual possession of the suit lots up to the present time even if they are not using them fully. Also there is no doubt that no one else, including the paper owner has dispossessed them of any part of the suit lots, except for those parts resumed by Government.

Animus possidendi

61. I turn to the question of the alleged licence and the related question of intention. The first question is whether in fact any licence was given. While the onus lies on the plaintiffs to prove factual possession and animus possidendi, if the defendants rely on a licence as a matter of fact it must be for them to prove the fact they aver. I will return later to the effect of what the 1st named plaintiff might have said about a licence even if its existence cannot be proved.

62. The defendant's case is that Messrs Lee, Fung and Wong in 1961 after buying the suit lots visited them, and expressly or by implication licensed Tam Sun and the 2nd named plaintiff to occupy the Lots at will, subject to a sufficient period of notice to quit. However, there is simply no evidence of this from the defendant's side. There is no written record. Messrs Fung and Wong are dead and Mr Lee has not given evidence. It appears from Mr Mok that he cannot remember one way or another. The defendant's witnesses can speak to nothing which happened before 1992. Insofar as Mr Mok sought to give evidence of a practice of giving such licences, this was no doubt the Henderson Group's practice but he only had records of one property bought by the "three friends", namely the suit lots, so he could not say that it was their practice.

63. There are no admissions in evidence by the plaintiffs, and only evidence on which the defendant can rely is Mr Mok's evidence of what the 1st named plaintiff said to him, as recorded in his Memorandum, Exhibit D-4. I have set this out above. The 1st named plaintiff for her part says that she never said any of these things. Although she gave her telephone number she never had the telephone conversation which Mr Lau recorded; and so on.

64. Counsel for the plaintiff sought to suggest that this record had either been made up after the event, mainly because it was not disclosed in the 1993 proceedings, or else it was inaccurate. The Memorandum is written by various Henderson employees including all the defence witnesses. There is no satisfactory explanation why the Henderson Group did not act on it, or get their solicitors to act on it, so as to give the plaintiffs notice to quit as licensees at will, though one might venture to suggest that the reason is fairly obvious; they had no positive evidence of a licence. In any event the witnesses say that the record is genuine, and there is nothing to suggest that it is anything other than a record properly made in the course of business. Mr Mok still works for Henderson but the other witnesses left it long ago and there is no reason to suppose that they would have lent themselves to the making of a fictitious report years after the event.

65. On the matter of what is recorded in Exhibit D-4 I prefer the evidence of the defendant's witnesses to that of the 1st plaintiff who obviously has a motive to deny anything that she has said. There is no reason why the Memorandum should not be genuine and I accept that it is. As to whether it is an accurate recording I accept that it is, as far as it goes. It is not a verbatim recording and each entry could have been made on the day after the incident recorded so one can only accept it as showing the gist of what was said.

66. The 1st named plaintiff's recorded statements are statements against interest. Mr Chong, counsel for the defendant, refers to a passage in the judgment of Li CJ in Wong Tak Yue at page 69B to this effect :

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

67. Slade J in Powell v. Macfarlane at p.476 expressed the same view. Obviously with regard to an occupier's intention this must be right. But we are not here dealing with what the 1st named plaintiff said as a statement relating to her intentions but as a statement of fact. As such, it is pretty much worthless, on any reckoning. It relates to something which happened before she was born. Someone must have told it to her; according to the 2nd named plaintiff it was not she, so we do not know who it was, nor whether that person was present when the alleged licence was given. We do not know whether the 1st named plaintiff was recounting faithfully what she had been told. If she was, the best that can be drawn from it is that the "three friends" or one of them had told her family members that they could farm the land. The only family members who could have been present were Tam Sun and the 2nd named plaintiff. Their children may be discounted. The 2nd named plaintiff was at pains to say that she knew nothing of any licence. Of course protestations of ignorance are easy to make, and tend to be suspect, but the patriarchal organisation of society in the New Territories is well known and it is not incredible that in 1951 any dealings would have been entirely with the male head of the household. If a licence had been given to Tam Sun it would have died with him.

68. I cannot therefore make a finding of fact on any sensible basis that a licence was given to the plaintiffs to occupy the land. Obviously a licence might have been given, if someone had given the 1st named plaintiff to understand that; but if it was given, it would probably only have been given to Tam Sun who is now dead. If it was given to Tam and his patriarchal family it would not follow that it would have continued after the survivors became members of Chan's patriarchal family. Such matters would depend on the intention of the licensor and there is no evidence of that.

69. As I understand Mr Chong, however, he also argues that if the 1st named plaintiff said these things, they amount to an implied admission of title of the owner, and show the plaintiffs' attitude in 1993. Reliance is also placed on the 1st named plaintiff's having shown the 1951 lease to the police, as indicating that the plaintiffs in some way thought they had a right to the land and to the fact that the 2nd named plaintiff seems to have regarded the lease as some kind of title deed. It is also argued that the 2nd named plaintiff's assertion that Tam Sun paid rent up to the time of his death, i.e. after the "three friends" took the title implies some kind of contractual arrangement and this also demonstrates that up to 1996 the 2nd named plaintiff treated herself as a tenant.

70. In short the argument seems to be that the plaintiffs have demonstrated that they thought they were licensees or tenants and therefore could not have intended to exclude the owner with the paper title. It is an ingenious argument, but I do not see that it takes the defendant anywhere. I do not see that either of the plaintiffs could have thought she was a tenant, in reliance on the long-expired lease. What an illiterate old lady says she thinks about the effect of a document she cannot read is not to be relied on. In any event even an illiterate peasant farmer knows that tenants pay rent. The plaintiffs did not pay it, and there is no evidence that they were ever willing to do so. It is true of course that rent of $400.00 per month was mentioned - a rather derisory sum given the figure of mesne profits for which the defendant counterclaims - but this was long after the limitation period had expired.

71. Did the plaintiffs regard themselves as licensees? In Ho Hang Wan v. Ma Ting Cheung [1980] HKLR 649 at first instance the judge had held that the squatters had regarded themselves as licensees throughout the time they were on the land (notwithstanding that the licensor had died) and concluded that the intent to exclude the owner had not been established. The Court of Appeal took a different view. It held that the licence had been revoked by the licensor's death and that the finding that the squatters thought of themselves as licensees could not stand against the established facts showing possession coupled with the squatter's assertion of right in the witness box.

72. The test of intention is objective. Intention is shown objectively by possession. In this case factual possession is clear. What the 1st named plaintiff said was not a clear statement of intention or lack of it, like the statement on affirmation in Wong Tak Yue of willingness to pay rent. To say "the owner said we could stay here", especially when it is said in the context of intention to exclude the owner unless he pays compensation seems to me not to indicate any lack of intention to exclude the owner. In any event what the 1st named plaintiff said years later cannot throw any light on the plaintiffs' intention during the limitation period. That is to me clear from their actions and what they have said in evidence; they intended to occupy the farm for themselves and against everyone else. I conclude that the plaintiffs have proved animus possidendi and that their possession was adverse.

73. It follows that the plaintiffs' claim succeeds and the defendant's counterclaim fails. There will be judgment for the plaintiffs for the declarations prayed for, with costs to be taxed if not agreed. The defendant's counterclaim is dismissed with costs to be taxed if not agreed.