WINCO MANAGEMENT LTD v. LAW (OR LO) YIU WANG

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JUDGMENT

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1. The village of Shui Wai Tsuen ("Village") in Tai Po, New Territories was a small community with inhabitants being members of a particular Tang family/clan. Tang Shui Lun ("Tang Owner") was a member of the Tang family of that Village and was the owner of a piece of land being Lot No. 281 ("281 Lot"), consisting of an area something in excess of 2,000 square feet. In the New Territories, it was generally accepted that a male indigenous villager over the age of 18, upon application to the Government, would normally be granted permission to build on his own land, a ting house so as to enable such Chinese village male to raise a family from such a ting house.

2. The Defendant Law Yiu Wang was not from the Village. He was a rattan craftsman by trade and when he found himself in 1970 without any business premises in the city, through the introduction of Tang Kau, the Defendant became interested in the 281 Lot. The Defendant had some money and could build a house but had no land while the Tang Owner had 281 Lot but no money to build. The Tang Owner as an indigenous villager could be granted permission to build while the Defendant as a city person would not be granted permission to build. The agreement and arrangement the Defendant and the Tang Owner came to was a written Chinese document dated 30th June 1971 ("the Agreement"). By this Agreement the Tang Owner leased 281 Lot to the Defendant from 30th June 1971 to 29th December 1995 and the Defendant would build a house at his own expense and that at the end of the period of the lease, the Defendant would return possession of the land and of the house to the Tang Owner. The Agreement also provided that advance rent of $3,000 would be paid by the Defendant to the Tang Owner and no other rent could be demanded from the Defendant during the period of the lease. The Agreement was signed by the Defendant and by the Tang Owner and witnessed by Tang Po Sang, the Village Head and by Tang Kau.

3. Pursuant and according to this Agreement, application was made to the Government for the building of the ting house but as Lot 281 was only agricultural land with no building right, the Government divided Lot 281 into section A and the Remaining Portion. Section A consisted of about 1,000 square feet, something like one third of the whole 281 Lot and was surrendered to the Government in return for the grant of Lot 1008 which was building land, consisting of some 700 square feet which was the normal lot area for the building of a ting house in the New Territories. In the process of the surrender and regrant an area of about 300 square feet was lost to the Tang Owner but as will be seen later this made no difference to the final decision of the case. So far as the Remaining Portion of Lot 281 is concerned, there was no change to the status of that land and it continued to be non-building land. The house was built on Lot 1008 by the Defendant at his own expense as provided by the Agreement and at the trial there is no dispute that the Defendant from 1971 onwards had the benefit of enjoyment of the Remaining Portion of Lot 281 together with Lot 1008 and the house built thereon (hereinafter referred to collectively as "the Property").

4. Both the Defendant and the Tang Owner abided by the Agreement and acted according to the Agreement. No further money was demanded by the Tang Owner from the Defendant and as far as I could ascertain the annual crown rent for the Property must have been paid by the Tang Owner. The Defendant had the use and occupation of the Property and he regarded it was his obligation under the Agreement to return the Property to the Tang Owner at the expiration of the Agreement, namely at the end of 1995.

5. Some time in the late eighties the Tang Owner died and one of his sons went to the Defendant and asked if he could have the Property back and was willing to pay some $80,000 but the Defendant said no and relied on the Agreement as giving him the right to remain in possession of the Property until the end of 1995.

6. In April 1994 the heirs of the Tang Owner sold the Property to the Plaintiff which is a property development company. The Plaintiff discovered that the Agreement was not registered. In May 1994 the Plaintiff registered its own sale and purchase contract. The non-registration of the Agreement gave the Plaintiff the right to immediate possession of the Property and by a series of letters in April and June 1994, the Plaintiff requested the Defendant to vacate the Property. This eventually led to a letter before action dated 22nd September 1994 whereby the Defendant was required to give vacant possession of the Property to the Plaintiff by 19th December 1994. The Defendant refused to give possession to the Plaintiff and in early 1995 this Action for possession was commenced by the Plaintiff against the Defendant. It is to be noticed that when the Action began the time provided in the Agreement for the return of the Property by the Defendant had not yet arrived. The Defendant was angry that he was asked to leave the Property prior to December 1995 and this might have partly accounted for the strange course of the present proceedings and the intractable refusal of the Defendant to acknowledge his hopeless position in this Action and his persistence with his Counterclaim that he had acquired, by adverse possession, a good possessory title against the Plaintiff.

7. The Defendant defended originally by solicitors but by March 1996 the solicitors of the Defendant had gone and legal aid was refused. The Defendant appeared in person before me assisted by his son but although well over seventy, the Defendant was a tough and shrewd person and certainly well disposed to exploit the situation if he could or was given a chance to do so.

8. With the helpful and fair submissions of Mr. Louis Chan for the Plaintiff, at the end of the trial, the issues which required to be determined at this trial are really quite simple, namely:-

9. On the first issue, the matters of limitation and acquisition by the Defendant of title to the Property by reason of adverse possession for 20 years, turn on the question of whether the Property was being occupied by the Defendant as trespasser of Tang Owner or as tenant. The evidence showed clearly that all along, the Defendant regarded himself as the tenant of the Property and not as trespasser and therefore there was simply on the evidence no question of any adverse possession whether for 20 years or for any period. The evidence showed that at no time after the Agreement did the Defendant complain to the Tang Owner that he was not given his rights under the Agreement. He did not ask for the return of the $3,000 paid as the 24 year rent for the Property. He treated the Agreement as binding and even told the son of deceased Tang Owner to go away when asked for an early return of the Property. It was clear both from his own evidence and that of Tang Kau that everyone regarded the Agreement as subsisting and binding. There was simply no proper evidence that there was any animus possidendi by the Defendant, namely adverse possession against the will of the true owner. The evidence simply showed a case of possession pursuant to the authority and permission of the owner, conferred by the Agreement. In the circumstances, I have no difficulty in reaching my conclusion and I so find as a fact that there was no adverse possession by the Defendant. On the first issue, the case of the Defendant is therefore rejected and I hold against the Defendant on the limitation defence.

10. On the second issue, there can be only one conclusion. It is not in dispute that the Agreement was not registered. There is no suggestion that the claim of the Plaintiff for possession is in any way fraudulent. The fact that the Plaintiff might be aware of the Agreement in 1994 when it purchased the Property from the successors of the Tang Owner is neither here nor there. The important question is whether the Agreement was registered. It was not and therefore the Land Registration Ordinance bites and renders the Agreement void against the Plaintiff whose registration takes effect and overrides the Agreement. In the circumstances, the Plaintiff was quite entitled to seek possession against the Defendant and I hold therefore on the second issue also for the Plaintiff.

11. It follows from what I have decided that there must be Judgment for possession against the Defendant with mesne profits to be assessed. The Counterclaim must be dismissed. Costs of the Action and costs of the Counterclaim must be awarded to the Plaintiff. I will now hear parties as to whether there should be stay of execution.

12. After hearing the parties and with the special concession of Mr. Chan, a stay of execution of three months for the possession of the Property is granted to the Defendant.