TSANG CHO KIU v. LAM TSAT FUK

HCMP 1077/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1077 OF 2013

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REASONS FOR DECISION

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1.  These proceedings concern a piece of land in Pak Kong Village in Sai Kung, New Territories, known as Lot No 966 in Demarcation District No.222.

2.  According to the Land Registry’s records, the registered owner of the Property is one Lam Tsat Fuk (林七福) (“Lam”), being the named lessee of the Property under a Block Government Lease (then known as a Crown Lease) dated 27 March 1905 (Lam’s gender is not known but for present purposes I assume Lam was a man).

3.  Assuming, therefore, that Lam was an adult on that date, he would have been more than 126 years old when the present Originating Summons was issued on 15 May 2013.

4.  The Plaintiff, Mdm. Tsang Cho Kiu (曾灶嬌) is an indigenous villager of Sha Kok Mei Village in Sai Kung. She moved to live in Pak Kong Village since around 1935. In around 1954, she started to occupy the Property, which appeared to have been abandoned. She claims that she, and her children and families, have been in continuous occupation of the Property since then.

5.  She does not known Lam, the paper owner, never having met him. No one in the village knew anything about Lam either.  Her legal advisers’ enquiries with all relevant government departments revealed no record of Lam, or anyone with any connection with him. The Originating Summons was served on Lam by way of substituted service pursuant to the order of Master Hui dated 21 August 2013.

6.  On the basis of the unchallenged evidence before me, I am satisfied that Mdm Tsang has been in adverse possession of the Property for upwards of 20 years and has thereby acquired possessory title to the Property. I am satisfied that I should grant declaratory relief in her favour to that effect.

7.  The question for decision is whether I should also grant Mdm Tsang an order that:

“ the registration of the Defendant as owner of the Property be deleted and vacated from the Sai Kung Land Register of the Land Registry and substituted therein the Plaintiff Tsang Cho Kiu’s name.”

8.  The first thing to note is that the Originating Summons does not seek such an order. But that is not the reason for my reservation over the appropriateness of this relief: I am more concerned with whether the court should grant such relief at all in the circumstances of this case (and indeed in similar cases).

9.  Mr Lam Shun Chiu, counsel for Mdm Tsang, submitted that I have “inherent jurisdiction” to grant such an order as consequential relief. However, counsel is unable to cite any authority to support that contention. I am seriously doubtful whether the court can resort to “inherent jurisdiction” simply on the basis of convenience whenever a more solid basis of jurisdiction, or the exercise of the jurisdiction, is lacking.

10.  Mr Lam drew my attention to two previous cases in which similar orders had been made.

11.  First, in Ng Lai Sim v Lam Yip Shing & Lam Sing Fung, HCA 2863/1998, 22 November 1999, Cheung J (as Peter Cheung JA then was) was satisfied after a trial that the plaintiff had been in adverse possession of the land in question. His Lordship ordered that the plaintiff be substituted as the owner of the property in the record of the Land Registry. The Court of Appeal dismissed the appeal (CACV 57/2000, 19 January 2001) on the merits without mentioning the order made by the trial judge.

12.  The second case, Fan Kui v Li Kwai Wan, HCA 3860/2998, 25 February 2002, is a decision of Deputy Judge Gill. The case was uncontested. The plaintiff asked for “orders vesting the [subject land] in her and that she be registered as owner”: see judgment para. 8. The learned judge, having found on the evidence that the claim for adverse possession had been proved, simply said that the plaintiff was entitled to the declarations and orders she asked for: judgment para. 17.

13.  However, as Mr Lam quite fairly pointed out, it would appear from the judgments in those cases that there was no argument on the appropriateness of this form of relief. Thus the assistance I can derive from them is very limited.

14.  More importantly, Mr Lam drew my attention to the recent decision of the Court of Appeal in Wong King Lim v The Incorporated Owners of Peony House, CACV 3/2012, 29 May 2013 (Yuen and Lam JJA, Au J). In that case the plaintiff had been in adverse possession of a strip of land which formed part of the common parts of the property in question. The issue on appeal was whether as a matter of law, adverse possession is a valid defence to an action for possession commenced by the incorporated owners. In dismissing the incorporated owners’ appeal, the court referred to general principles which are relevant to the question before me.

15.  In judgment para.33.2, Yuen JA (with whom Lam JA and Au J agreed) noted that:

“It is important not to confuse land with title. Land A remained subject to the covenant in favour of land B, even though the title of the owner of land A had been extinguished by the squatter’s adverse possession. Thus Collins MR held [in Re Nisbet and Potts’ Contract [1905] 1 Ch 391] at p.402 that the whole (meaning the entirety of the) right the squatter acquires under the statute of limitations is the extinguishment of a title adverse to his own, and nothing else.” (original emphasis)

16.  Lam JA (as Johnson Lam VP then was) separately observed in judgment para. 37 that:

“Under common law, a squatter does not succeed to nor take over the title of the paper owner whom he has dispossessed, see Fairweather v St Marylebone Property [1963] AC 510.  As observed by Keith J in Chung Ping-kwan v Lam Island Development [1995] 2 HKLRD 228 at p.235, “the squatter’s possessory title was an independent title …” The title of the squatter stems from his possession of the land and it was defeasible by the paper owner’s title until the right of the paper owner against him has been extinguished under the Limitation Ordinance by dispossession for the requisite period of time.  In Fairweather, the majority of the House of Lords held that the paper owner’s title was only extinguished vis-à-vis the squatter.  It remains as a title as between the paper owner and his lessor and it could be surrendered, and upon such surrender the lessor’s right of possession started to accrue and basing on that right the lessor could recover the land from the squatter.  This outcome vividly demonstrates the proposition that a squatter does not acquire the title of the paper owner and the Limitation Ordinance does not operate as a statutory conveyance of that title to the squatter.”

17.  In my judgment, these principles apply to the present case. Mdm Tsang has established a possessory title as against the paper owner; but it does not follow that she is entitled to be substituted as owner in the Land Registry records.

18.  Nor do I see any merit in the point advanced by Mr Lam that substituting Mdm Tsang’s name on the Land Register would be helpful to the public. Once the judgment in this action granting the declarations as to Mdm Tsang’s possessory title is registered against the Property, any member of the public who may wish to know whether there is any encumbrance against the Property would be able to see it for him/herself.

19.  For completeness, I should mention that in an earlier case, Lai Wai Kuen v Wong Shau Kwong, HCA 3424/2003, Lam J (as Lam VP then was), on facts similar to the present case, declined to grant a declaration “in terms of Paragraph 4 of the Notice of Motion as the Land Registry is not a party to this action.” The judgment does not record what was the precise order sought in paragraph 4 of the Notice of Motion in that case, but it would appear to be a similar type of order that I am asked to make.

20.  In the circumstances, as presently advised, I am not satisfied that I should make the order sought even if I have jurisdiction to do so (as to which I express no view).

21.  Accordingly, the order I made on the Originating Summons is as follows:

“IT IS ORDERED AND DECLARED that:

1. Tsang Cho Kiu has been in adverse possession of the property known as Lot No.966 in Demarcation District No.222 (“the Property”) for a period exceeding 20 years prior to commencement of these proceedings, has thereby acquired an indefeasible possessory right to the Property;

2. The Defendant Lam Tsat Fuk’s title to the Property (if any) have been extinguished by virtue of sections 7 and 17 of the Limitation Ordinance, Cap. 347 of the Laws of Hong Kong;

3. The Defendant Lam Tsat Fuk is barred from commencing any action to recover the Property by virtue of section 7(2) of the Limitation Ordinance, Cap. 347 of the Laws of Hong Kong.”