TAM MO YIN and Another v. ATTORNEY GENERAL and Others

1994, No.MP1868

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H E A D N O T E

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N.T. NEW GRANT LOT in 1931 - plan of the land at the time of the auction has been lost - only available evidence is the stated acreage of the land - is the acreage a certainty - comment on the casual way the land lot was plotted on DD Control Sheet and demarcation of the lot at time of sale - acreage is not a certainty - even if acreage is a certainty, it cannot establish the shape of the property - Held: 1. the Plaintiff is entitled to a declaration of paper title according to the area occupied by them and their predecessors-in-title.

The Plaintiffs and their predecessors had occupied the land for more than 60 years (1931-1991) - their occupation had however been interrupted by the New Territories (Renewable Crown Leases) Ordinance, Cap.152 enacted in 1973 - Lai Moon Hung v. Lam Island Development Co. Ltd [1994]2 HKC 11 C.A., decided that the renewal of the lease from 1 July 1973 is a new lease and not a continuation of the old one - accordingly the 2 periods before and after 1 July 1973 is short of the required 60 years period - Held: 2. The Plaintiff is not entitled to the second declaration of possessory title, although the court is of the view that Cap.152 was not originally enacted with the intention of defeating the claim of adverse possessors in the New Territories AND the legislative and/or executive Government should augment this situation.

1994, No.MP1868

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

MISCELLANEOUS PROCEEDINGS

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J U D G M E N T

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History

1. In 1931, Lot No.1510 of DD123 at Wang Chau (a quiet place North of Yuen Long) was "sold" by the Crown through public auction to Shing Chu Sau and Tsoi Po Tin in the name of Tai Chau company. It was in fact what was called a New Grant of lease for 45 years from 1 July 1928 (i.e. up to 30 June 1973) with a right of renewal for a further term of 24 years less 3 days (i.e. up to 27 June 1997).

2. According to the Government's notice in the Gazette dated 21 October 1931, the area of the Lot was stated to be 126.24 acres (i.e. 5,499,014.4 sq.ft.) and the boundary measurements were stated "as per plan deposited in the District Office, North". One of the special conditions was that the purchaser should, within two years from the date of sale, construct a bund on the seaward side and also on the line coloured yellow and should erect sluice-gates on those spots marked X as shown on the sale plan to the satisfaction of the Honourable Director of Public Works. (Sluice-gate is a structure commonly known as "Ky-Wei or Gei Wai" for the entrapment of sea lives such as shrimps, crabs and fishes.

3. In 1950, there was a division of the Lot between the Shing family and the Tsoi family into section A and section B respectively. Section A was said to be 52.84 acres and B, 73.4 acres. 52.84 acres of section A is equivalent to 2,301,710 sq.ft. It is not clear how any of the aforesaid measurements were made or arrived at.

4. In 1978, the Shing's family sold section A1 to Henderson Estate with an area of 1,355,580.06 sq.ft. The remainder became the land in dispute between Plaintiff and the Crown now before me i.e. the Remaining Portion of section A of Lot No.1510. Arithmetically according to the aforesaid calculation, it should be 966,130.34 sq.ft. (i.e. 2,301,710-1,355,580.06 sq.ft.).

5. Shing Chu Sau's two sons, Shing Yat Choi and Shing Yat Shing inherited part of the said land and they in turn conveyed their shares in the land to Tam Shiu Wing and Tam Shing Mo Yin (the daughter of Shing Yat Shing) with each one of them holding 4.5 shares out of 10. The 2nd Defendant, Shing Yat Yan, the 3rd Defendant, Shing Yat Chi, and the 4th Defendant, Shing Yat Yee (now deceased), altogether owned the other one share out of 10 shares of the said land. (These other 3 Defendants are not opposing the Plaintiff's action herein).

6. The Plaintiffs claimed that the said land i.e. section A.R.P. of Lot 1510 should be a piece of land delineated in red in the plan to the Originating Summons which has an area of 1,240,768 sq.ft. The 1st Defendant, who is the only Defendant disputing the Plaintiffs' claim herein contended that this claim is in excess of the calculated area by 274,638 sq.ft.

The Dispute

1. The Paper Title

7. The Plaintiffs claimed that the said land as delineated was originally intended to be the subject matter of the Lot sold in 1931. The Plaintiffs' case is that their predecessor-in-title had always been occupying section A since 1931 as delineated by them and in particular on the eastern side up to the Shan Pui River. The Crown, upon calculation back from the aforesaid figures, contended that 966,130.34 sq.ft. for Section A.R.P. would only have a eastern boundary very much short of the Shan Pui River leaving what is now called Ponds C and D out of the lot boundary (i.e. if one accepts the Plaintiff's North, West and South-boundary).

2. The Possessory Title

8. Further or alternatively, the Plaintiffs and their predecessor-in-title had since 1931 occupied the said land for 60 years up to 1991 and therefore in any event is entitled to possessory title by virtue of limitation against the Crown. The Crown, however, relied on the New Territories (Renewable Crown Leases Ordinance, Cap.152) and contended the period of 60 years had been intervened by the said Ordinance in 1973 and thereafter the lease renewed by the Ordinance was a new lease. Thus the 2 periods either before or after 1973 are short of the 60 years period required.

The Paper Title

(1) The 1st Defendant's case

9. Mr Johnny Mok, counsel for the 1st Defendant, in his usually persuasive submission started off with the legal principle as stated by Griffiths, L.J. in the case of Scarfe v. Adams [1981]1 All ER 843. At p.851, he said :

"GRIFFITHS LJ. Although we have had the benefit of a fairly extensive citation of authority, I do not find it necessary to review those authorities, as I regard the legal principle to be applied in this appeal as well established and the cases cited as illustration of the practical application of that principle. The principle may be stated thus: if the terms of the transfer clearly define the land or interest transferred extrinsic evidence is not admissible to contradict the transfer. In such a case, if the transfer does not truly express the bargain between vendor and purchaser, the only remedy is by way of rectification of the transfer. But, if the terms of the transfer do not clearly define the land or interest transferred, then extrinsic evidence is admissible so that the court may (to use the words of Lord Parker in Eastwood v Ashton [1915] AC 900 at 913) 'do the best it can to arrive at the true meaning of the parties upon a fair consideration of the language used'. The same case makes it clear that the admissible extrinsic evidence will include the auction particulars which formed the basis of the contract of sale."

10. Mr Mok submitted that the most certain term of the sale is in the auction particular which set out the area in acre to be 126.24 and the upset price was $1,270 which in turn was linked to the acreage of Lot 1510. Mr Mok further relied on the case of Moreton C. Cullimore (Gravels) Ltd. v. Routledge (1977)121 Sol Jo 202 :

"By a conveyance of October 1963 land which had passed under a conveyance of May 1955 was conveyed to the plaintiffs. The land conveyed was two parcels of arable land 'containing 10 acres or thereabouts' delineated on a plan annexed 'for the purposes of identification only' showing the boundaries but not the precise acreage. A boundary dispute arose with the defendant, an adjoining farmer. The plaintiffs claimed a declaration that their land was as shown on a scale plan annexed to their statement of claim which showed the two parcels as being of 6.030 and 3.970 acres respectively, and not together as being of approximately 9 acres as shown on the plan annexed to the conveyance of May 1955. On remission to the Banbury county court, Judge Clover granted the plaintiffs the declaration sought and held that what was conveyed was an area of 10 acres. The defendant appealed.

LORD DENNING MR said that it was submitted for the defendant that the plan to the conveyance of May 1955, giving the parcels as being of about 5 and 4 acres respectively, should prevail. Megarry J had accurately summarised the rules for the interpretation of phrases like 'for the purposes of identification only', in Neilson v Poole (1969) 20 P & CR 909, 916; and see Smout v Farquharson (unreported), 12 December 1972 (Bar Library transcript no 381 of 1972). The plan did not control the parcels in the body of the conveyance. It was only to be used to see roughly where the area of the land was situated and not to define its metes and bounds."

11. In the judgment at p.5, Lord Denning said :

"In this particular case it seems to me that the most accurate description which we must go by are the words 'containing 10 acres or thereabout.' That interpretation is reinforced by the fact that it was payable at ￡ 220 and acres and the total sum paid was ￡ 2,200. So it is quite plain that the buyers of the land paid for 10 acres."

12. In short the misapprehension of the Vendor and the inaccurate plan for identification only could not diminish one parcel of the land from 6.03 acres to 5 acres. The aforesaid quotation was cited with acceptance in the case of Wigginton & Milner Ltd. v. Winster Engineering Ltd. [1978]1 WLR 1462 per Buckley, L.J. at 1473D-E.

13. The case of Wigginton supports the proposition that when the plans under consideration cannot be totally relied upon, any contrary indications on the plan must yield to the indicated acreage. At p.1475E-F Bridge, L.J. said :

" I desire to add only a few words of my own as to the effect of the phrase 'for the purpose of identification only' and other similar phrases, when applied to a conveyance plan. When a conveyance plan which is said to be for the purpose of identification only shows a boundary line which differs in detail from some physical feature on the ground which the conveyance otherwise indicates as the intended boundary line, it is clear that the latter prevails over the former. Similarly, where the conveyance shows clearly that a certain acreage is intended to be conveyed, but the adoption of a boundary from the plan 'for the purposes of identification only' would leave only a reduced acreage, the boundary on the plan must yield to the indicated acreage."

Further Sir David Carns said at p.1476F-G :

"If it could be shown that the part coloured yellow does not measure exactly 5.926 acres, then it may be that the boundary line would have to be drawn in such a way as to include no more than that area, nor less than that area; but I do not think it is shown that there is any significant difference between the two."

In short, the 1st Defendant submitted that the most accurate description was the acreage of 126.24 acres and one must go by the words as contained in the auction particulars. This interpretation is reinforced by the fact that the upset price was linked to the acreage sold i.e. $1,270 and the annual Crown rent was also linked in the same way i.e. $127. This is similar to other lands in which the upset price and the annual Crown rent are linked to the acreage of the land in question as reflected in the Crown rent "A" book and the documents in the Land Registry.

14. Accordingly, the Crown now, with more sophisticated equipments and competent surveyors, measured 966,130 sq.ft. of the land in question and the eastern boundary line would come up to cover Ponds A and B, leaving Ponds C and D which were used to be occupied by the Plaintiffs and their predecessors-in-title outside the boundary, which is the "excess" area claimed by the Plaintiffs.

15. It should be pointed out here that there was a DD Survey commonly called the Indian survey in the years 1898 to 1904. Lot 1510 being a New Grant in 1931 would not have been included in the said earlier Indian survey. However, from the Indian survey, there was a DD Control Sheet and from the DD Control Sheet, someone had marked the boundary of 1510 in a pointed half fan-shape pointing to the western side. It is not known who plotted the boundary of Lot 1510 onto the DD Control Sheet. The area as shown in the DD Control Sheet is in excess of the acreage shown in the auction particulars. If one follows the shape and configuration of the boundary as plotted on the DD Control Sheet then the said land would intrude into the eastern side of the neighbouring Lot 1457. In the end Mr Mok, by this working-back method, relied on the green portion which instead pointed to the eastern side by accepting the boundary between Lot 1510 and Lot 1457 up to the limit of covering the area of 966,130 sq.ft. and thus include Ponds A and B only. He relied on the authorities aforesaid cited to the effect that when the area is certain and the plan is for identification only (and here there is no plan available at all which can form part of the sale) the area should be relied on instead.

(2) Is the area a certainty?

16. The 1st Defendant's argument hinged on the certainty of the area of 126.24 acres. However, is this area a certainty. Nobody knows how this figure was arrived at. Mr Tarrant, a very experienced surveyor called by the Plaintiffs, (whose expert evidence I accept) suggested that someone plotted the Lot 1510 on the DD Control Sheet casually without actual measurement. There was no demarcation of reference to any land marks on the site such as rock, drain, lamppost, track or the like. The area was a calculation by square and circle of the roughly drafted boundary on the DD Control Sheet. The plotting was casually made and thus the calculation from it was subject to errors. In the end, Lot 1510 was only estimated to have an area of 126.24 acres and in other words, it is not a certainty.

17. The aforesaid contention is consistent with the directions and warnings issued by the aforesaid government Acting Land Surveyor Mr S.C. Leung, a Crown servant, on 18 September 1987. In respect of The New Grant Lots he said at p.B123 :

"The New Grant Lots

7. Immediately following the DD Survey, all lands not claimed were declared as Crown Land and disposed of, in parcels known as New Grant (NG) Lots. These NG Lots once granted were pointed out to the new owners and roughly sketched on separate plans by staff without any survey training. These called grant plans were invariably at an extremely small scale with few, if any, details or reliable map references. These lots were also recorded on the DD Sheets but in an equally fictitious manner. It is probable that some grants were never recorded at all and this may explain the existence of a number of missing lots. In this connection, it is interesting to note that at one time, a missing lot was replaced with the lot number unchanged but with the letter 'A' added as the suffix. Subsequently, people not realising this, wasted time searching for the remaining portion (RP) of such a lot, in vain."

Mr Leung concluded at p.B126 as follows :

" In short, to determine the DD lot areas, the highest reliability should be given to the original ground occupation. Following this, the graphical data on the DD Sheet should be accepted, subject to intelligent interpretation. The registered area is less certain and the converted area which may include manufactured components is the least reliable. This grading of reliability must be observed in dealing with DD lot boundaries, including usage in the correlation exercise."

18. The general principle, in the determination of a Lot boundary, is by the proper construction of the conveyance and unless the answer is plain from the conveyance itself extrinsic evidence of material facts existing at the time of the conveyance is admissible. Extrinsic evidence may include what was to be found on the site at the time of the Crown. According to Halsbury's Laws of England, 4th ed. vol.4(1) para.904, it has been said :

"Boundaries may, and generally should, be fixed by the deed or deeds conveying one or both of the properties concerned. Nevertheless, conveyances of land commonly leave the exact line of the boundary undetermined ...

The construction of a deed is always a matter for the court, but in order to interpret its provisions extrinsic evidence is admissible of all material facts existing at the time of the execution of the deed, so that the court may have the same knowledge as the parties to the deed then had. ... Once it is admissible, there is no reason to limit the extrinsic evidence to what is found in earlier documents of title without regard to what is found on the site."

In the present case, the conveyance itself, is silent on the boundary of the Lot. When the auction particulars formed part of the conveyance, one could rely on those particulars. However the plan mentioned in the Gazette Notice had been lost. It probably is one of the causalities of the war. Extrinsic evidence is required. It is common ground that no surveyance or measurement was made in situ. Thus, it is more probable that the area arrived at was in the way suggested by Mr Tarrant and that was by way of a rough plotting of the Lot : the west boundary by taking the bordering Lot 1457 and the east boundary the Shan Pui River which I shall explain hereinbelow.

(3) The Court's findings

19. In this case, I intend to start with certain reference and common ground between the parties and put the pieces of evidence together to make up a picture. In 1918, the Crown granted the lease in Lot No.1457. Similarly, the boundary of this Lot was "as per plan deposited in the District Office, Tai Po" and this plan had also been lost. There were aerial photographs taken in 1924-1925 at B33 and 34. It is quite apparent from these photographs that the owners of Lot 1457 and indeed the vast piece of land on the western side of Lot 1510 had been taken possession of by the owners with bunds being built probably on its boundary. No more aerial photographs had been taken until November 1945.

20. In photograph 3 taken on 6 November 1945, it is quite clear that bunds were being built along the eastern side of Lot 1510 bordering Shan Pui River. Those sluice-gates referred to in the special conditions of sale were erected along the bund. They were the gei-wai used for allowing tidal water to come in and out and would trap sea-lives.

21. There are witnesses PW1, Shing Hon Chiu, PW2, Shing Wong Kam Yau, the widow of Shing Yat Wan and PW3, Shing Yat Kwong, who testified before me. In their earlier childhood they had been to the said land. The evidence of PW1 Shing Hon Chiu and PW3 Shing Yat Kwong is that the bund was constructed before their time of memory. PW3, Shing Yat Kwong, was born in 1930. When he was 5 years old, his father, Shing Muk Wun was already working in the fish pond. He said in evidence that when he was about 5, he went to the gei wai and the bund was already there and one could walk on the bund.

22. Evidence from PW2, Wong Kam Yau, shows that occupation by Shing Muk Sau had been in the capacity of a tenant of the Plaintiffs' predecessors.

23. If we compare photographs taken in 1924/25 with the DD Control Sheet, one can see that the shape and configuration of the whole Lot 1510 plotted on the DD Control Sheet is in the form of a long-handle knife with the upper part in a half semi-circle fan-shape and this is very similar in shape to the very piece of land between Lot 1457 and the Shan Pui River. The Dragon Boat Bay was about 1/3 from the top on the eastern side of the river.

24. However, whilst the DD Control Sheet plotting was similar in shape and configuration, to the said land as shown on the photograph, it is by no means accurate and precise. The upper part of the photograph is not the true North direction. That probably is the origin of the rough estimation of the area from the rough plotting of the said land onto the DD Control Sheet which gave an area of 126.24 acres.

25. Further the position of the bund on the eastern side to mark the eastern boundary of the said land is consistent with the purchaser's obligation to construct within two years the bund on the seaward side. This probably means the seaward side of the boundary of the Lot. From the oral evidence of the witnesses and the area of photographs taken later on in 1945, apparently the bund had been constructed to the satisfaction of the Director of Public Works. Accordingly, I accept the submission of Mr Yu, Q.C. for the Plaintiffs and summarise my Findings as follows :

(1) In 1931, the Crown intended to lease Lot 1510 for 45 years from 1 July 1928 with an auction to renew for further 24 years less three days up to 27 June 1997. Lot 1510 was intended to be a piece of land on the immediate eastern side of Lot 1457 up to the Shan Pui River on the east running down to the Dragon Boat Bay and to the south immediately north of Lot 1509.

(2) Probably before the said auction, plotting of the said land was made onto the DD Control Sheet. This was only roughly done. Certain calculations were made from this rough delineation and the acreage of 126.24 acres was reached.

(3) Before possession was taken, a staff without any survey training (who was commonly called a "demarcator") was sent by the then District Office to and he did point out to the new owners the boundaries of the said land as suggested both by the aforesaid Mr S.C. Leung and Mr Tarrant.

(4) Both parties intended the coverage of the said land to be as subsequently occupied by the owners as shown in photograph 3 with the bund marking the boundaries.

26. Accordingly, I cannot accept the submissions of the 1st Defendant that the boundary could be calculated by working backwards and the Plaintiffs would only have a piece of land excluding Points C and D which from all the evidence before me have been occupied by the owners and their successors for more than half of century since 1931. The 1st Defendant's argument places too much weight on the registered area and ignores all other evidence.

27. It has been said that the area of the Lot by itself cannot establish the shape and eventually the boundary of the property (see Sara : Boundaries and Easements p.5).

"Measurements contained in the parcels or the plan may be either dimensions or areas. Either have their pitfalls. To begin with they may simply be wrong. Equally it may be almost impossible to establish a datum point. Area measurements anyway can only be used as a check since they cannot establish the shape of the property."

A fortiorari where the area is not an absolutely precise measurement one cannot rely too much on such a stated acreage. Similarly it had been said in Eastwood v. Ashton [1915] AC 900 at pp.906-907 by Earl Loreburn that :

"The second guide, namely, the acreage of 84 acres odd roods and perches, is of no value for our purpose because it is, by the contention of both sides, not an absolutely precise measurement, and it therefore cannot help us to a strip of land about one-twelfth of an acre in area."

28. Even if the acreage is a certain term which formed part of the original contract at the time of the auction, the acreage itself cannot speak for the boundaries and in particular the eastern boundary. It is unexplainable why the Crown could rely on the other 3 boundaries on the North, West and South and only take the eastern side and receded it to reach the stated acreage. In other words one still cannot say whether the excess acreage is on the western, northern or southern side forming part of Tsoi Po Tin's area or even the part sold to Henderson Estates! Thus the working-back method of the Crown is highly unsatisfactory.

29. In short certainty of the acreage still does not mean certainty of the boundaries unless 3 boundary sides of a piece of land are also certain. In the end I find in this case that the intention of the parties in 1931 probably included Ponds C and D as part and parcel of the said land.

Possessory Title

30. As an alternative to the contention for paper title, the Plaintiffs contended that if the land in question falls outside Ponds C and D, the Plaintiffs have, in any event, adverse possession of these 2 ponds over 60 years from November 1931.

31. From the finding of facts above, I have no doubt that the Crown lessee or the Plaintiffs and their predecessors must have occupied the land delineated in pink and in particular Ponds C and D for over 60 years.

32. The evidence of PW1, Shing Hon Chiu, and PW3, Shing Yat Kwong, together with the aerial photographs clearly supported the fact that the Plaintiff's predecessors have occupied the land since the 1930s. In other words from the evidence before me, I find it very convincing that the Plaintiff's predecessors must have taken possession of the land shortly after the grounds in November 1931 and caused the bund and sluice-gate to be constructed.

33. Further the Plaintiff's predecessors had the necessary animus possidendi. This was made plain to the world at large that they intended to possess the land. The facts that they took no objection to other villages making a catch after they have finished, could not afford any ground to suggest that the possession of the Plaintiffs' predecessors was not adverse against the Crown. It was just a gesture of charitable kindness shown to their neighbours. The undertaking by the Plaintiffs' predecessors to construct the bund and the sluice-gates were so substantial as to constitute unequivocal acts of exclusive possession having regarded to the nature of the land and the manner in which the land could be used.

34. However if the Plaintiffs relied on adverse possession to establish their possessory title it must be made on the premises that Ponds C and D falls outside Lot 1510. It has been said in Megarry and Wade on the Law of Real Property (5th ed.) at p.1038 that :

"If the tenant occupies other land belonging to the landlord but not included in the demise, that land is presumed to be an addition to the land demised to the tenant ('a mere extension of the locus of his tenancy'), so that it becomes subject to the terms of the tenancy, and although the tenant may acquire a title to it against the landlord for the remainder of the term, he must give it up to him when the tenancy ends."

This is accepted by Mr Yu for the Plaintiffs and it was not suggested otherwise that, although the aforesaid presumption can be rebutted but in the circumstances of this case, this presumption has not been rebutted. In other words, it has not been suggested that the extra piece of land in question is otherwise not subjected to the lease.

35. Consequently, Mr Mok for the Crown, submitted that :

(1) There is no evidence to show that the encroached land had prior to 1 July 1973 been severed from the lease land e.g. by a conveyance of the encroached land to a 3rd party and the communication of such conveyance to the Crown. On the contrary, the evidence of PW1, PW2 and PW3 shows conclusively that the Plaintiffs' predecessors in title had held the encroached land as part of the leased land.

(2) The Plaintiffs and their predecessors in title had been occupying the encroached land adversely to the Crown only in so far as they did so by way of an addition of such tenancy but such right of possession had terminated with such tenancy on 1 July 1973 pursuant to s.4 of the New Territories (Renewable Crown Leases) Ordinance, Cap.152, followed by a grant of a new Crown lease by this very Ordinance for a term of 24 years less 3 days from 1 July 1973. Thus time stop running over the encroached land against the Crown on 1 July 1973 and the 60 years required period started to run again. In the end neither period before or after 1 July 1973 is sufficient for 60 years required period.

36. I am afraid I have to, although with some reluctance, accept the submission of Mr Mok from the authority cited by him. I shall start with the case ofSmirk v. Lyndale Developments [1975]1 WLR 317, the headnote of the case reads as follows :-

" In 1955 the plaintiff was granted a service tenancy of a house by his landlord employers. The tenancy was a weekly tenancy, the terms of which were set out in the rent book and provided, inter alia, that rent would be deducted from the plaintiff's wages. Without the landlords' authorisation, the plaintiff began cultivating adjoining land also belonging to them and by 1960 had taken exclusive possession of it. In 1967, the house and land, among other premises, were bought by the defendants who thereupon gave the plaintiff a new rent book containing conditions of tenancy, which were expressed to be effective where not inconsistent with an existing tenancy, but which were in some respects different from those in the existing rent book supplied by their predecessors. In 1973, the plaintiff brought an action against the defendants claiming, inter alia, a declaration that he had a good possessory title to the land, or alternatively a declaration that he held the land as an extension of the locus of his tenancy. Pennycuick V.-C. held, inter alia, that the plaintiff had been occupying the land adversely to his original landlords only in so far as he did so by way of an addition to his tenancy of the house but that that right to possession had determined with the original tenancy in 1967 and that no new right had yet accrued against the defendants.

On appeal by the plaintiff on the ground that there had been no determination of his tenancy in 1967 :-

Held, allowing the appeal, that the handing over of a new rent book, when the tenancy had been subsisting for many years, was wholly insufficient to justify the inference of an agreement to effect a surrender of the plaintiff's tenancy in 1967 and at the most showed a variation of the terms of the tenancy (post, p.339E-G); that, since the prefacing of the new terms with the condition that they were not to have effect if inconsistent with the terms of an existing tenancy indicated that the parties were contemplating the continuation of the existing tenancy and since the new terms did not constitute a substantial variation from the existing terms, there was no evidence from which an agreement to surrender and regrant could be inferred and, accordingly, the plaintiff's original tenancy together with his right to possession of adjoining land at the back of the house continued after the defendants became the landlords."

37. Thus, it is quite clear from the decision of the English Court of Appeal that the deciding factor is whether the tenancy held from the new landlord is a new tenancy or a continuation of the old existing tenancy. Pennycuick V.-C. held, it was a new tenancy whereas the Court of Appeal said it was not. The Court of Appeal in fact however unanimously approved Pennycuick V.-C.'s statements of the law but differed from him on the inference to be drawn on the fact in that there was no termination but a continuation of the same tenancy. Thus the Plaintiff was entitled to hold the adjoining land until the expiry of the tenancy when he would have to give up the same to the Defendants.

38. Is the lease after 1 July 1973 a new lease or a continuation of the old lease which provided an option to renew the old one up to 27 June 1997? The Court of Appeal in Lai Moon Hung v. Lam Island Development Co. Ltd. [1994]2 HKC 11 decided that although the relationship of the landlord and tenant continued between the Crown and the Crown lessee from 1 July 1973 as it had continued before and the lessee's right to a renewal of the Crown lease derived from the terms of the original Crown lease, the language of the ordinance clearly and unambiguously provided that renewal was to take the form of a new Crown lease. Further the words "the right of action" in the Limitation Ordinance Cap.347 could only refer to the rights of action on which the Crown lessee sued. That right of action did not accrue to it until 1 July 1973. Thus the necessary time of limitation (and in that case was 20 years) had not elapsed before the Crown lessee commenced those proceedings, they were not statute-barred. In attempting to rely on uninterrupted adverse possession of land for the necessary period of time, the person claiming adverse possession could not aggregate adverse possession prior to 1 July 1973 and adverse possession after that date. Further, the person claiming adverse possession were on 1 July 1973 only in the course of acquiring a possessory title. A possessory title which was in the course of being acquired was not an encumbrance on or right in respect of the land which the original Crown lease demised of a kind contemplated by s.4(4)(c) of Cap.152. It is therefore beyond doubt from the decision of Lai Moon Shing that the effect of Cap.152 was to create a new Crown lease after the expiration of the old one on 30 June 1973.

39. However I said I made the aforesaid decision with some reluctance. It is because if there was no enactment of Cap.152 and a Crown lessee simply exercised his right of renewal as provided in the original Crown lease, it might be argued that it is a continuation of the same lease as in the case of Smirk. The enactment of Cap.152 no doubt can assist all Crown lessees especially people in the New Territories to have an automatic renewal without any initiation from them to exercise their right to renew their leases. Many of the Crown lessees might not be found or there would well be a number of disputes as to who should be the proper or proper surviving Crown lessees. Cap.152 was enacted to overcome a number of these difficulties. This is consistent with the recital of Cap.152 which provided that the Ordinance was "to make provision for the renewal of certain Crown leases of land in the New Territories".

40. However, it has the side-effect of defeating many adverse possessors who have been occupying the land for one reason or another. This side-effect of Cap.152 might not have been anticipated at the time of the enactment. But the decision in Lai Moon Hung is binding on this court. Accordingly, with respect, I share the same sympathy of the judges as expressed in the case of Lai Moon Hung at first instance and in the Court of Appeal. In particular in this case, the blunder was created by the Crown in the improper delineation of the said land at the outset and the casual manner of so-called demarcator. The owners were all along misled into thinking that the said land included Ponds C & D and improved on it by building the bund. When Cap.152 was enacted it was passed with the sole intention of enabling Crown lessee to have a renewal without having to exercise his option probably which would have the effect of continuing an old lease. It was the Crown who enacted such a provision. The Crown lessee could say the Crown had waived her right to insist on a proper exercise of the option. Now when a dispute arose as in this case, the Crown pointed to the statute book and said : this is a New lease and your claim for adverse possession is defeated.

41. For the aforesaid reason I find the situation in this case is quite inequitable. However it is only for the legislative or executive Government to augment such a situation. The Court is powerless when the law is clear albeit on the side of the Crown. Accordingly the claim for declaration for possessory title has to be refused according to the legal position.

Conclusion

42. In this case, I am satisfied that the Plaintiff is entitled to the first declaration of paper title but not for the second declaration of possessory title. I also make an Order Nisi for costs for the Plaintiffs against the 1st Defendant only as the other Defendants are just necessary parties to this action but they have taken no part in opposing the Plaintiffs' action.