POON CHI HANG v. LAI HO SUN

CACV 119/2017

[2021] HKCA 1611

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 119 OF 2017

(ON APPEAL FROM HCMP NO 1020 OF 2013)

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D E C I S I O N

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Hon Barma JA (giving the Decision of the Court):

1.  On 27 June 2019, this court handed down its judgment allowing the appeal of the plaintiff (by original action) against the judgment of Recorder Houghton SC (“the judge”) dated 5 May 2017, granted a declaration that the plaintiff had obtained possessory title of a residential flat in Ho Man Tin, and dismissed the defendant’s cross appeal seeking an award of mesne profits in addition to possession of the flat which had been granted by the judge.

The Notice of Motion

2.  On 24 July 2019, the defendant (by original action) filed a Notice of Motion seeking leave to appeal our judgment to the Court of Final Appeal.

3.  The essential facts are set out in [5] to [17] of our judgment, and will not be repeated here.  In this Decision, we use the same expressions and abbreviations as in our judgment.  Save where otherwise specified, “plaintiff” and “defendant” refer to those parties in the original action.

4.  By the Notice of Motion, the defendant seeks leave to appeal our judgment to the Court of Final Appeal on four questions which are said to be of great general or public importance, namely:

(1)  Whether, in adjudicating an adverse possession allegation, a judge is entitled to find in favour of the paper owner on the basis of the paper owner’s oral evidence alone, without identifying evidence of overt acts over and above the paper owner’s oral evidence. (“Question 1”)

(2)  Whether the mere act of occupying property without paying rent after the end of a tenancy agreement would be sufficient in establishing the mental element of an adverse possession allegation. (“Question 2”)

(3)  Whether the mere act of changing the locks of a residential apartment within a multi-storey building would be sufficient in establishing the mental element of an adverse possession allegation. (“Question 3”)

(4)  Whether evidence of willingness to purchase a property is in law fatal to a claim of adverse possession, just as evidence of willingness to pay rent is, on the authority of Wong Tak Yue v Kung Kwok Wai & Another (1997-1998) 1 HKCFAR 55 (per Li CJ at 69-C to 69-I), also fatal to a claim of adverse possession. (“Question 4”)

Question 1

5.  Question 1 relates to this court’s reversal of the judge’s finding that the flat was occupied with the defendant’s permission.

6.  We set out our analysis of the evidence pertaining to the issue whether a licence or permission had been granted by the defendant after the cessation of rental payments at [21]-[31] of our judgment, where we took into account the defendant’s oral evidence and also other relevant circumstances including:

(1)  the defendant’s evidence that the occupation was with the permission of Lai Senior or himself;

(2)  that occupation was initially taken up on the basis of a tenancy under which rent was paid, at a time when the Lais and the Poons were on good terms;

(3)  that the Lais and the Poons were not even on speaking terms for decades after the acrimonious end of the partnership;

(4)  the lack of an obvious explanation why Lai Senior should have felt disposed to allow the Poons to live at the flat without the payment of rent despite the acrimonious breakup of the partnership (which was also an observation made by the judge);

(5)  the four other matters raised by the defendant’s counsel at the hearing before this court, ie (a) the defendant’s payment of rates in respect of the flat, (b) that the defendant took no steps to recover possession of the flat, (c) that Poon Senior had asked the defendant in around 2004 whether the flat could be sold to the Poons at a favourable price, and (d) that the plaintiff did not ask any questions of his aunt concerning the basis on which the flat was occupied when he went into occupation in 1997.

7.  Taking account of the totality of the evidence, this court found it strained credulity that permission to continue to occupy the flat without payment of rent would have been given when the relationship between the partners and their respective families had deteriorated so significantly.  This court concluded that the behaviour of the defendant amounted at most to acquiescence in the plaintiff’s occupation, which was not sufficient to establish actual permission.  This was a conclusion reached through the process of inference, and was not a finding of primary fact where the judge would generally have the advantage of assessing the credibility of the witnesses at first hand.  Appeals against the former and those against the later are approached in very different ways (see for example Ting Kwok Keung v Tam Dick Yuen (2020) 5 HKCFAR 336, at §34).

8.  In these circumstances, we do not consider Question 1 raises a question of principle, or is a question of law of great, general or public importance.  There are a number of reasons for this.

9.  First, this was plainly an analysis of the facts and evidence and the assessment of the probative value of the evidence relating to the specific circumstances of this case.  Generally, fact-sensitive complaints relating to the specific circumstances of the case, or questions which cannot be answered in the abstract without retrying the facts will not be questions of great general or public importance: Safder Tehseen v Permanent Secretary for Security (2014) 17 HKCFAR 567, at [14]; and Tsang Chiu Wing Florence v Li Kin Kan Samathur (FAMV 38 & 39/2014, 10 February 2015), at [12]. 

10.  Second, in formulating a question of GPI, it is important to avoid raising questions unrelated to the actual circumstances of the case: Dr Leung Shu Piu v Medical Council of Hong Kong [2014] 3 HKLRD 328 (CFA) at [13].

11.  Question 1 is formulated on the premise that this court reversed the judge’s finding because it was based on the defendant’s oral evidence alone, and that this court held that it was necessary as a matter of principle to identify evidence of overt acts over and above the defendant’s oral evidence.  That premise is misconceived.  As set out at [6]-[7] above, this was not the basis on which this court reversed the judge’s finding.  This court came to a different conclusion upon a holistic assessment of all the evidence, and did not hold as a matter of principle that there must be evidence of overt acts over and above the paper owner’s oral evidence before a finding in favour of the paper owner could be made.

12.  Therefore, Question 1 simply does not arise from the judgment.

13.  Third, the defendant’s argument is, in any event, not reasonably arguable and would not lead to any ground capable of overturning our judgment.

14.  The defendant relied in connection with this point on Smith v Molyneaux (2017)1 P & CR 7, in which the Privy Council held that permission to occupy land may be given unilaterally and does not require the acceptance of the licensee.

15.  However, in that case, the Privy Council also held that permission to occupy land may be granted orally or in writing and by words or conduct (at [24]).  It follows that it remains necessary to identify some words or conduct showing that a licence was granted.  This is consistent with this court’s observation that it was “necessary to point to some fact that would be probative of such licence or permission having been granted after payment of rent had ceased”([24] of our judgment).  Given our conclusion that no such fact could be identified, Smith v Molyneaux does not assist the defendant.

16.  The defendant also argues that in requiring the identification of overt acts of the defendant to prove that permission was given, this court erroneously reversed the burden of proof.  As already observed at [6]-[7] above, this court did not require the defendant to identify such overt acts and therefore this argument does not arise.  Further, there being no facts probative of permission having been granted after payment of rent ceased, where the burden of proof lies does not affect the defendant’s position one way or another.

17.  For all of these reasons, Question 1 does not, in our view, raise any question of law of great general or public importance.

Questions 2 & 3

18.  Questions 2 and 3 relate to the mental element of adverse possession.  Again, these two questions are fact-sensitive complaints relating to the specific circumstances of the case; they cannot be answered in the abstract without retrying the facts.

19.  Further, Questions 2 and 3 as presently formulated simply do not arise from our judgment. In finding the that the mental element of adverse possession was present, we took into account the totality of the circumstances (see [32]-[33] of our judgment), including occupation of the flat without paying rent following a tenancy under which rent was paid for a period, the plaintiff’s changing of locks and payment of levies for building maintenance and renovation.  This court did not come to its conclusion in relation to the mental element of adverse possession by having regard to just one act or instance in isolation.

20.  Lastly, it is clear that the question of intention to possess is a question of fact which depends on an assessment of all factual circumstances in a particular case (Wong Tak Yue v Kung Kwok Wai & Another (1997-1998) 1 HKCFAR 55 at 69A).  There is no discernible reason (at least on the facts of this case) why the approach should differ on account of the property in question being a flat in a multi-storey building as opposed to a piece of farmland.  Great general or public importance does not arise simply because a party desires well-established principles to be revisited: Hong Kong Civil Procedure 2021 Vol.2, §E2/22/2.

Question 4

21.  Question 4 relates to our evaluation of the impact of Poon Senior’s enquiry as to the possibility of purchasing the flat on our finding concerning the mental element of adverse possession.

22.  Again, this is a fact-sensitive question which cannot be answered in the abstract without retrying the facts.  This court explained why the enquiry of Poon Senior as to the possibility of purchasing the flat is of little relevance or probative value at [29] of our judgment (essentially, we considered that Poon Senior might have made this enquiry to avoid disputes over the property, and there was no evidence to indicate that Poon Senior was speaking for the plaintiff, as a result of which Poon Senior’s enquiry could not be attributed to the plaintiff).

23.  Question 4 is a thinly veiled attempt to challenge the factual findings made by this court that were specific to the circumstances of this case.

24.  Contrary to the defendant’s submissions, the approach to the question of intention to possess is well-established in Wong Tak Yue v Kung Kwok Wai & Another.

25.  Thus, Question 4 also does not raise any question of law of great general or public importance.

The “or otherwise” limb

26.  The usual practice is for this court not to grant leave on this limb but leave the question for the Appeal Committee of the Court of Final Appeal to decide.  There are no special circumstances in the present case that warrant departure from this practice.

27.  For the foregoing reasons, the Notice of Motion is dismissed with costs to the plaintiff.

Variation of costs order nisi

28.  The solicitors for the plaintiff (by original action) and the 1^st, 3^rd and 4^th defendants (by counterclaim) applied by Summons dated 10 July 2019 to vary the costs order nisi at [36] of our judgment so that it would read “the costs here and below be paid by the defendant to the plaintiff (by original action, and also the 2^nd defendant by counterclaim) and the 1^st, 3^rd and 4^th defendants (by counterclaim), to be taxed on the party and party basis if not agreed”.

29.  The solicitors for the defendant (by original action) indicated by way of letter dated 6 August 2019 that he would agree to the proposed variation but that such agreement was without prejudice to his intended appeal to the Court of Final Appeal.

30.  The omission to include the 1^st, 3^rd and 4^th defendants (by counterclaim) at [36] of our judgment was an oversight.  Accordingly, application for variation of the costs order nisi is allowed, with costs to the plaintiff (by original action) and the 1^st, 3^rd and 4^th defendants (by counterclaim).

Re: Leave to appeal to the Court of Final Appeal

Re: Variation of costs order nisi