KAN YAU SHAN AND ANOTHER v. MO YIU MUT AND ANOTHER

CACV 94/2017

[2018] HKCA 80

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 94 OF 2017

(ON APPEAL FROM DCMP NO. 1886 OF 2011)

________________________

________________________

________________________

________________________

REASONS FOR JUDGMENT

________________________

Hon Lam VP :

1.1.   I respectfully agree with the reasons for judgment of Cheung JA. Like His Lordship, with great respect, I also prefer the approach of Lord Neuberger in Zarb v Parry [2012] 1 WLR 1240 to that of Arden LJ.

1.2.   In respect of the distinction in the law’s treatment of the acts of the owner and the acts of a squatter, I would add the observations of Slade LJ in Buckinghamshire County Council v Moran [1990] Ch 623 at p.639H to 640A,

“ If in any given case the land in dispute is unbuilt land and the squatter is aware that the owner, while having no present use for it, has a purpose in mind for its use in the future, the court is likely to require very clear evidence before it can be satisfied that the squatter who claims a possessory title has not only established factual possession of the land, but also the requisite intention to exclude the world at large, including the owner with the paper title, so far as is reasonably practicable and so far as the processes of the law will allow. In the absence of clear evidence of this nature, the court is likely to infer that the squatter neither had had nor had claimed any intention of asserting a right to the possession of the land.”

1.3.   Further, as I have said at 66 in Hong Kong Kam Lan Koon Ltd v Realray Investment Ltd, HCA 15824/1999, 11 October 2007,

“ 66. It is also important to note that the primary question posed by the phrase ‘adverse possession’ for the purpose of the Limitation Ordinance is whether time has started to run in favour of a person in occupation. In other words, the test is whether the owner could have successfully brought an action for possession against that person to which he did not have any valid defence. This makes perfect sense because it would be unfair to the paper title owner to hold that time has started to run from a date when he could not have claimed successfully for possession against the occupier.”

1.4.   In the context of the present appeal, unlike what happened in Zarb v Parry, supra, there was a lack of inhibition or intervention by the defendants to the erection of fences by the plaintiffs in 2000 (and it took the plaintiffs’ agents more than one day in that exercise) notwithstanding that the defendants’ house was immediately next to the land in question (as Mr Leung emphasized in the course of the appeal).  In such circumstances, in respect of the use and occupation of the land during that period of time, it would clearly be impossible for the plaintiffs to sue the defendants for recovery of possession. Such a claim could be effectively met by a defence that the defendants did not do any acts to interfere with the plaintiffs’ possession of the land for such period.

1.5.   It is fairly accepted by Mr Leung that the repossession of the land for no matter how short a duration by the owner would have the effect of making time start to run afresh for the purpose of the Limitation Ordinance, see Randall v Stevens (1853) 2 E&B 641; Zarb v Parry, supra, [39] and [69].

1.6.   Another way of analysing the matter is that the quality of use and occupation of the land by the defendants in 2000 (assuming that they had been using the land throughout) at the time when the plaintiffs exercised their right as owner to erect the fencing in 2000 was simply insufficient to constitute adverse possession as the defendants failed to manifest their intention to exclude the plaintiffs. In this connection, the judgment of Slade J in Powell vMcFarlane (1977) 38 P & CR 452 at p.480 is apposite,

“ In view of the drastic results of a change of possession, however, a person seeking to dispossess an owner must, in my judgment, at least make his intentions sufficiently clear so that the owner, if present at the land, would clearly appreciate that the claimant is not merely a persistent trespasser, but is actually seeking to dispossess him.”

1.7.   The position of the defendants in 2000 was precarious as they had not by then acquired sufficiently long period of possession to extinguish the title of the plaintiffs.  Thus, they had no legal rights to resist the erection of fence by the plaintiffs.  Had they done so, the plaintiffs would probably have taken legal action.  On the other hand, by not having done so, they could not claim that they had maintained possession continuously notwithstanding the action taken by the plaintiffs over the land to manifest their possession of the same. In line with the underlying policy for the doctrine of adverse possession, adverse possessory title cannot be acquired surreptitiously when the owner has taken step to possess the land.  

1.8.   Viewed thus, the defendants’ claim for adverse possession must fail.

Hon Cheung JA :

I.   The appeal

2.  We allowed the appeal by the plaintiffs at the conclusion of the hearing.  I now give reasons for our judgment.

II.    Background

3.1.   The plaintiffs are the registered owners of two lots of land in the New Territories known as Lot Nos. 1506 and 1517 in Demarcation District No. 106, Yuen Long, New Territories (‘the properties’).  They acquired the properties in 1995.

3.2.   The plaintiffs claimed that the defendants had wrongly entered into possession of the properties and commenced proceedings against them on 29 July 2011 by way of originating summons under Order 113 of Rules of the District Court. The proceedings were ordered to be turned into a writ action. 

3.3.   The 1^st defendant claimed that she and her late husband were farmers.  In 1976, her late husband had entered into an agreement with one Mr Cheung who was not the owner of the properties to lease the properties together with four other lots of land (‘the six lots of land’) nearby for a term of seven years.  Since 1976, the 1^st defendant and her family including four children have lived and farmed on the six lots of land.  After the lease expired at the end of 1982, the 1^st defendant’s husband stopped paying rent.  The 1^st defendant and her family continued to live and work on the six lots of land without the consent of anyone.  From 1976 to 1993, part of the six lots of land was leased to other tenants, the rest of it was used by the 1^st defendant and her family for growing agricultural products.  After the tenants left in 1993, the 1^st defendant and her family had been managing and maintaining the entirety of the six lots of land. 

3.4.   The 1^st defendant claimed that she had obtained possessory title to the properties through her continuous adverse possession since 1983 and the paper title of the plaintiffs has been extinguished 20 years later in 2003 by virtue of the Limitation Ordinance (Cap. 347).

3.5.   The 2^nd defendant is described as the occupiers of the properties.  Apart from the 1^st defendant, no other person had come forward and claimed to be an occupier of the properties.   

3.6.   The case was tried before Deputy District Judge Simon Lui.  He found for the 1^st defendant that there was a continuous possession by the 1^st defendant and her husband since the beginning of 1983 for more than 28 years and she had acquired a possessory title to the properties at the time when the plaintiffs commenced the proceedings.  The Judge dismissed the plaintiffs’ claim. 

III.   Repossession by the plaintiffs

1)   The judgment below

4.1.   As can be seen from the judgment below, the real issue before the Judge is whether the plaintiffs had resumed possession of the properties in 2000 when they fenced off the properties.  This is the Judge’s finding on this event in 2000 :

‘ 42. I now turn to the evidence of the present case. According to the evidence of the Plaintiffs, in June 2000, there was a survey done on the Lots in Question by a Plaintiffs’ surveyor. In August or September 2000, the Plaintiffs through Mr. Tsoi instructed Mr. Leung to put up the notices, iron angles and wires for making a fence. Mr. Leung and Mr. Tsoi went to the Lots in Question and inspected and took measurement. After 1 week, materials were delivered to the roadside next to the Lots in Question. 2 days were spent to deliver the materials from roadside to the Lots in Question. 3 days were then spent on the works. On 13 September 2000, Mr. Tsoi and Mr. Leung went to the Lots in Question to inspect the completion of the works and took photo. This is largely not disputed by the 1^st Defendant and is supported by some objective evidence including the invoice and receipt for the works and photos marked as Exhibits “P1”, “P2” and “P3”, I therefore accept the evidence in full.’

4.2.   As apparent from the photographs exhibited below, the iron angles were iron bars that were fixed to the ground with wire fixed to the top and middle part of each bar forming a fence around the properties.  The notice put up by the plaintiffs said :

「此處乃是私人地方

未獲業主書面同意

不得非法佔用

如有違者必送官究治

業主示

聯絡電話：xxxxxxxx」

Translation :

‘ This is private property

No one can unlawfully occupy without the owner’s written permission

Anyone in contravention of this will be referred to the authorities to be dealt with

(The owner and contacting telephone number)’

4.3.   It is common ground that the fence put up by the plaintiffs in 2000 was removed although there is dispute when it was removed.  The plaintiffs’ case is that the fence remained on the properties for at least half a year.  The Judge found that the fence was removed eight to ten days after it was put up. 

4.4.   In relation to the significance of the plaintiffs putting up the fence in 2000, the Judge refers to Markfield Investments Ltd. v Evans [2001] 2 ALL ER 238:-

‘ Essentially, therefore, the true owners’ cause of action accrues once his land is in adverse possession, and continues to be treated as accrued unless and until the land ceases to be in adverse possession. Adverse possession may cease (a) by the occupier vacating the premises, (b) by the occupier giving a written acknowledgement of the true owner’s title (See ss. 29 and 30 of the Act), (c) by the true owner’s grant of a tenancy or license to the occupier .. or (d)bythe true owner physically re-entering upon the land.’ (emphasis added)

4.5.   The plaintiffs’ case is that they resumed possession of the properties in 2000 and time would only begin to run against them from 2000.  Thus when they commenced proceedings in 2011, the limitation period of 12 years (the limitation period was and is by then 12 years) had not expired.  The Judge rejected the plaintiffs’ case on retaking possession of the properties in 2000.  These are his reasons :

‘ 45. First of all, I do not consider the undertaking of land survey, having site inspection, taking measurement and delivery of materials at the Lots in Question could amount to possession at all and, in particular, I accept that there is strong evidence to show that there was some on-going agricultural activities of the 1^st Defendant and her late husband at that time.

46.   Secondly, based on the evidence before me and taking into account of the entire circumstances, including, but not limited to these factors, namely the nature of the land in question is a piece of farmland which had been used for farming for many years, the occupier is just living next to the land in question, the land in question is an integral part of a larger piece of land used together by the occupier, the paper owners are investor with no evidence showing that they have ever use[d] the land for any particular or useful purpose and they rarely visited the land in question, the duration of putting up the notices and the so-called “fence” was only about 8 to 10 days, the strength of the so-called “fence” was grossly insufficient to exclude any intruders or any potential trespassers, and most importantly, there was simply no effective physical control of the land in question, in my judgment, the answer must be insufficient.

47.   Further, Mr. Lam for the Plaintiffs also argues that there was no protest by the 1^st Defendant and her family when the notices, iron angles and wires were being put up in 2000. I agree that sometimes “protest” is one of the factors for consideration but, at the end of the day, the test is still whether possession had been re-taken by having effective control. First of all, I accept the explanation that the 1^st Defendant and her family were not aware when the notices, iron angles and wires were initially being put up. Secondly, judging from the nature of the notices, iron angles and wires, they could easily be taken down and removed. I therefore have reason to believe that it was not necessary for the 1^st Defendant or any of her family members to stage any protest after the discovery of them. They just had them removed at once.

48.   According to the authorities, putting up notices or sign boards are undoubtedly symbolic acts only and they have absolutely no effect at all in stopping the time to run. For iron angles and wires or the so-called “fence”, I have carefully assessed the photos marked Exhibits “P1”, “P2” and “P3” which shows the appearance of the so-called “fence” and I agree with the submissions of Mr. Leung that they could hardly serve the function to exclude any intruders or potential trespassers. From the photos, they look more like identification markings of the boundaries than fence to me. The fact that the Plaintiffs 10 years later in 2010 attempted to build a “wire-mesh fence” along the boundaries of the Lots in Question strongly suggests that the iron angles and wires erected in 2000 were grossly insufficient as an effective measure for taking possession or obtaining effective control of the land. In other words, the effective control was still with the 1^st Defendant and her family.

49.   Mr. Lam further argues that the 1^st Defendant is not allowed to argue the “quality of the fence” as this was not pleaded. In my view, this argument is misconceived. As a matter of law, this Court must consider the “quality of the fence” to determine whether there was any effective control of the land and the 1^st Defendant only admits that a “fence with iron angle and wire” was put up but does not admit to anything else including the effectiveness of this so-called “fence”. The issue is whether the so‑called “fence” could exclude, and did exclude, the whole world including the 1^st Defendant and not whether a “fence” was built. In my judgment, the burden of proof is on the Plaintiffs to show that there was effective control of the Lots in Question and it is a live issue between the parties. The 1^st Defendant is therefore entitled to raise it.’

2)   My view  

4.6.   In my view, the Judge’s decision on the plaintiffs failing to take back possession of the properties in 2000 is wrong. This is not solely a finding of fact but involves both questions of fact of law.  It is well established that adverse possession involves factual possession and intention to possess.  In the seminal case of Powell v. McFarlane and Another (1977) 38 P&CR 452 which has been recognised by the highest Courts in Hong Kong (Wong Tak Yue v Kung Kwok Wai & Another (No. 2) (1997-98) 1 HKCFAR 55) and the United Kingdom (J A Pye (Oxford) Ltd and another v Graham and another [2003] 1 AC 419) as the authority on adverse possession, there is clear discussion on how the issue of the intention to possess is to be considered from the respective positions of a paper title owner and a trespasser.   Slade J at page 472 held :

‘ The question of animus possidendi [intention to possess] is, in my judgment, one of crucial importance in the present case. An owner or other person with the right to possession of land will be readily assumed to have the requisite intention to possess, unless the contrary is clearly proved. This, in my judgment, is why the slightest acts done by or on behalf of an owner in possession will be found to negative discontinuance of possession. The position, however, is quite different from a case where the question is whether a trespasser has acquired possession. In such a situation the courts will, in my judgment, require clear and affirmative evidence that the trespasser, claiming that he has acquired possession, not only had the requisite intention to possess, but made such intention clear to　the world. If his acts are open to more than one interpretation and　he has not made it perfectly plain to the world at large by his actions or words that he has intended to exclude the owner as best he can, the courts will treat him as not having had the requisite animus possidendi and consequently as not having dispossessed the owner.’ (emphasis added)

4.7.   In my view, when Slade J referred to an owner in possession, he must, in the context, have meant an owner with the right to possession.  In the present case, starting from the premises that in 2000, the 1^st defendant had not yet acquired a possessory title and the plaintiffs, as the paper title owners who have the right to possession of the properties, are readily assumed to have the requisite intention to possess, the acts doneby the plaintiffs in the present case clearly established their repossession of the land.  The acts went beyond merely symbolic acts or merely acts done in preparation of taking back possession of the properties.  The properties are open fields in a countryside with no dwellings inside them.  A survey of the boundary was carried out.  Angle bars were erected in the ground along the surveyed boundary.  Each of the angle bars are connected by wire both at the top and middle part of the bars.  The purpose was clearly to fence off the plaintiffs’ properties.  On top of that, a written notice was posted up, informing the world that the properties belong to the plaintiffs.  These are clear acts of the plaintiffs staking their claim as owners to the properties.  One wonders under the circumstances what more is required to prove that the plaintiffs are taking back possession of the properties. 

4.8.   As to the Judge’s view that the fence was grossly insufficient to exclude any intruders or any potential trespassers which is to be contrasted with the wire-mesh fence attempted to be built later by the plaintiffs when they discovered someone had erected fences on their property, that must be viewed as a protective measure to prevent further intrusions into their properties.  In any event, one has to bear in mind that, even with an iron mesh fence, it would unlikely be effective to ward off a trespasser who is determined to enter the properties.

4.9.   The act of fencing off the properties negatives the notion of discontinuance of possession by the plaintiffs and points to them regaining possession. Furthermore, as recognised in Zarb and another v Parry and another [2012] 1 WLR 1240, the plaintiffs here have the advantage in law in that to effect repossession of the property, it is sufficient to show that the possession has been resumed for a short period of time.  Arden LJ held :

‘ 39 The paper title owner has the advantage in law that, to effect repossession of property, it is sufficient to show that possession has been resumed for a short time.  This was established in Randall v Stevens (1853) 2 E & B 641 where a landlord evicted a tenant who had failed to pay any rent for 20 years.  Statute provided that a house could not be repossessed simply by exercising a right of entry.  Lord Campbell CJ, giving the judgment of the Court of Queen’s Bench on appeal from a judgment given at assizes, held at p 652 that entry could be made “by stepping on any corner of the land in the night time and pronouncing a few words, without attempt or intention or wish to take possession”.  However, where possession was taken with an intention to possess, then “whether possession was retained by the landlord an hour or a week must for this purpose [i e taking possession other than by mere entry] be immaterial”.’

4.10.   Based on the Judge’s finding the fence was only removed eight to ten days afterwards, this period of time is clearly sufficient to establish repossession by the plaintiffs.  

4.11.   I will now discuss the issue of repossession canvassed in Zarb.  In that case the claimants and defendants owned adjoining land, the claimants having purchased their property in 2000 and the defendants in 2002.  The southern boundary between the two properties had been the subject of an unresolved dispute between the claimants and the defendants’ predecessors in title, the claimants contending that the true boundary as established by the paper title ran several feet to the north of a hedge which the defendants and their predecessors had always taken to be the boundary. 

4.12.   The issue before the Court was whether the defendants’ possession of the strip of land in dispute was interrupted by the following acts of the claimants.  On a day when the defendants were not in their own properties, the claimants went into the strip, removed some of the original fence and cut down an elderflower tree on the strip.  They had in addition wound a surveyor’s tape from the eastern boundary to a walnut tree on the western boundary temporarily enclosing the strip and declared to the defendants that the claimants were taking it by force as it belonged to them.  They initially refused to leave when asked to do so by the defendants.  They only left the strip when the defendants went to call the police.  

4.13.   The English Court of Appeal held that the claimants had not taken back possession. Arden LJ held :

‘ 35. ...... The [claimants] did not retake exclusive possession of the strip as they intended to do by banging in posts and starting to erect a wire fence. They decided to withdraw part way through that exercise, because of the protests from the [defendants]. The mere erection of a surveyor’s tape is not sufficient to enclose the land where it is laid out merely for the temporary purpose of measuring the line at which a fence is to go.’

‘ 38. ......In this case, the [claimants] had banged fence posts into the ground so that it might be said that the [claimant] lost exclusive control of the limited area affected by those posts. However, the area occupied by each post would have been small and could not justify a conclusion that adverse possession of the whole of the strip had been interrupted.’

‘ 43. ....... In my judgment, however, the principle on which Bligh v Martin was decided, namely that the factual possession of the adverse possessor must be brought to an end, is clearly correct and determines the result on this issue. The principle achieves a simple test for ascertaining whether the period of adverse possession has been brought to an end. Interruption will be overt and so it can be more easily proved or disproved if the question has to be litigated many years later. Furthermore, if the paper title owner did something less than exclude the adverse possessor, such as plant a flag, put up a notice or make an oral declaration of ownership, the adverse possessor would continue to have factual possession in the sense defined in the Pye case [2003] 1 AC 419. A person might, therefore, continue to have the intent to possess and factual possession throughout the period of any interruption of his adverse possession by symbolic acts such as I have mentioned. It would, in my judgment, be inconsistent with the Pye case if an adverse possessor could at one and the same time fulfil the requirements for adverse possession but yet have his possession effectively interrupted by the paper title owner. Finally, there is no need for the paper title owner to know that he is bringing the adverse possession to an end or to say that he is doing so: it is the quality of the acts which matters and not any oral declarations.’

4.14.   The principle extracted from Bligh v Martin [1968] 1 WLR 804 which Arden LJ referred to is that in the ordinary case, one must find that the true owner took possession in the ordinary sense of that word, to the exclusion of the wrongful occupier.

4.15.   This point was taken up further by Lord Neuberger of Abbotsbury MR when he held :

‘ 71. However, the decision in Bligh v Martin is valuable for present purposes in that Pennycuick J gave some guidance of general application, when he said at p 812 that “in the ordinary case of adverse possession ... one must find that the [paper title] owner took possession in the ordinary sense of that word, to the exclusion of the [person claiming adverse possession]”. Given the fact-specific and nebulous nature of possession, I consider that, in so far as general guidance can be given in relation to the task of deciding whether, on particular facts, the paper title owner has retaken possession at any time during the period of alleged adverse possession, that is probably as good as it can get.’

4.16.   Lord Neuberger held at paragraph 72 that, applying the general guidance, the claimants did not retake possession of the strip.  What the claimants did was to prepare to take possession but they never completed the exercise.  He held :

‘ 73 In other words, while the [claimants] embarked on an enterprise which, if it had been completed, would have involved their retaking possession of the strip, they were interrupted by the [defendants] before the enterprise had been completed, and, in the ensuing confrontation, they abandoned the enterprise. Accordingly, rather than retaking possession of the strip, it seems to me that, although they got some way towards achieving that aim, the [claimant] were thwarted in their attempt to do so, and had not completed it before the defendant appeared, and, thereafter, when challenged, the [claimant] backed down pretty promptly (and, most people would I think say, properly).’

4.17.   Jackson LJ held that he agreed with both judgments of Arden LJ and Lord Neuberger but in relation to the issue of interruption of possession, in so far as there is any difference of emphasis, he preferred the approach of Arden LJ. 

4.18.   As Lord Neuberger pointed out, in deciding whether, on particular facts the paper title owner has retaken possession, one must recognise the fact‑specific and nebulous nature of possession. 

4.19.   Zarb is clearly a decision on its own facts.  The distinguishing feature there was the interruption by the occupiers when the claimants were trying to retake possession.  It is not a case binding on this Court.  Leaving aside the question of interruption by the defendants, when Arden and Jackson LJJ held the acts by the claimants did not amount to repossession, I would say with respect that they had not fully taken into account the statement of Slade J that, ‘the slightest acts done by the owner in possession would be found to negative discontinuance of possession’.  In any event, I would prefer the approach of Lord Neuberger that, if not for the interruption by the defendants, the claimants there would have completed the retaking of possession.  This is consistent with the approach laid down in the statement of Slade J.

4.20.   Mr Leung argued that unlike the Limitation Act 1980 in England and Wales, section 15 of the Limitation Ordinance (the heading of which is ‘No right of action to be preserved by formal entry or continual claim’) expressly provides that no person shall be deemed to have been in possession of any land by reason only of having made a formal entry thereon, and no continual or other claim upon any land shall preserve any right of action to recover the land.  In other words, Mr Leung argued that an entry to vest possession in the person entering the land, and prevent the bar of the statute, must be an effective, as opposed to a merely formal or symbolic, one.  In my view, the acts of repossession carried out by the plaintiffs in the present case is clearly more than a formal entry and certainly are more than mere symbolic acts of taking possession of the properties.  Since the plaintiffs had effectively retaken possession of the land in 2000, time has to run again and by the time of the action in 2011, the 1^st defendant had not acquired the requisite length of adverse possession in order to defeat the title of the plaintiffs.  On this basis, the appeal must be allowed. 

4.21.   In view of my conclusion on the plaintiff resuming possession in 2000, it is not necessary for me to deal with the other issues raised by Mr Vincent Lam for the plaintiffs, such as the Judge was wrong to find that the fence was removed eight to ten days afterwards.  

4.22.   Mr Lam also complained about the delay by the Judge in giving judgment only two and a half years after trial.  While it is repeatedly said that delay in giving the judgment is not by itself a ground for overturning the judgment on appeal, the good administration of justice does require, and I urge judges to deliver judgments, particularly those involving factual disputes, promptly and within a reasonable time after the hearing.

IV.  Conclusion

5.  Accordingly, the appeal was allowed, the judgment below was set aside and in place thereof judgment was given for the plaintiffs that the 1^st defendant is to deliver vacant possession of the properties and the registration of the judgment below in the Land Registry against the properties be vacated.

V.  Costs

6.  The plaintiffs are entitled to the costs of the appeal and below.  The 1^st defendant’s own costs are to be taxed in accordance with the Legal Aid Regulations.

Hon Kwan JA :

7.  I agree with the reasons for judgment of Cheung JA and the additional reasons of Lam VP.