CHENG KA SHING v. BONUS PLUS COMPANY LTD

CACV 85/2020 , [2023] HKCA 519

On appeal from [2020] HKCFI 277

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 85 OF 2020

(ON APPEAL FROM HCA NO. 674 OF 2013)

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JUDGMENT

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Hon Chu VP (giving the judgment of the Court):

A. Introduction

1.  This is the plaintiff’s appeal against the judgment of Peter Ng J (“the Judge”) given on 28 February 2020 dismissing his claim of adverse possession over four land lots in Demarcation District No. 105, Yuen Long, New Territories registered in the name of the defendant. 

2.  The plaintiff’s appeal is directed at the Judge’s finding that he failed to discharge his burden of establishing both factual possession and the requisite animus possidendi.

3.  The defendant has filed a Respondent’s Notice seeking to affirm the Judge’s judgment on additional or alternative grounds, which were issues that the Judge had determined against the defendant (see [31] below).  In response, the plaintiff filed a Respondent’s Notice to the Defendant’s Cross Appeal, which seeks to support the Judge’s rejection of those issues (see [32] below). 

B.   Background

4.  Two groups of land lots in Demarcation District No. 105 feature in the dispute between the plaintiff and the defendant:

(1)  The first group consists of Lot Nos 759, 860, 861 and 862 (collectively “the Defendant’s Lots”).  Since January 1984, the defendant has been the registered owner of these four lots. 

(2)  The second group consists of Lot Nos 863, 864 and 865.  The plaintiff has since 2002 been the registered owner of Lots 863 and 864 (collectively “the Plaintiff’s Lots”).  

5.  The Plaintiff’s Lots and the Defendant’s Lots adjoin each other.  Their relative locations are set out in the agreed Lot Index Plan annexed to the Judge’s judgment.

6.  The plaintiff claims that since about 1980, his father (“Cheng Senior”) and he himself have successively, exclusively, continuously and openly used and occupied parts of Lots 759 and 860 as well as Lots 861 and 862 (collectively “the Disputed Area”) without interruption or consent from any person or making payment to anyone for the use and occupation. 

C.  The plaintiff’s case

7.  The plaintiff’s case, as summarised by the Judge, is as follows:

(1)  In about 1979, Cheng Senior rented the Plaintiff’s Lots and also fenced off and enclosed parts of Lot 759, which were first used for chicken farming and subsequently pig farming.  The plaintiff’s parents and the whole family resided on Lot 864.

(2)  In about 1980, Cheng Senior rented Lot 865.  At first, he sub-let a significant portion of Lot 865 to Dah Chong Hong for use as a car park.  When the sub-lease expired in about 1982, the land was included as part of the farm. 

(3)  Meanwhile in about 1980, Cheng Senior began to occupy Lots 860, 861 and 862.  He grew pasture on them for feeding his pigs and also vegetables for the family’s own consumption.

(4)  In about 1982, Cheng Senior continued to occupy Lots 860 to 862 as an extension of his farm on Lots 863 to 865 and also part of Lot 759 as a single unit for chicken and pig farming. 

(5)  Also in 1982, Cheng Senior erected structures and fences on the farm, including (a) fences delineated in red on the plan annexed to the Statement of Claim (“Red Fences”); and (2) a fence (also delineated in red on the plan) at the southern-western boundary of Lot 860 which cut across some north-western portions of Lots 860, 861 and 862 and continued further up in a north-easterly direction into the south-eastern portions of Lots 863 and 864 (“Red Pig Fence”).  The Judge noted that the Red Pig Fence essentially separated Lots 863 to 865 from Lots 860 to 862 and had the effect of an internal barrier within the farm[1]. 

(6)  The plaintiff initially helped his father to run the farm.  In about 1988, when his father retired, he took over the running of the farm.

(7)  In 1996, the plaintiff applied to the Agricultural and Fisheries Department for a livestock keeping licence for the pig farm.  A licence was first granted on 11 December 2000, with two subsequent ones issued on 31 December 2003 and 8 March 2007 (collectively “the Licences”).

(8)  The plaintiff surrendered the Licence and ceased pig farming in about February 2007. Thereafter, his family continued to occupy the Disputed Area, which is approximately 3,054.5 sq m in size.  

D.  The issues at trial

8.  The plaintiff issued the writ below on 23 April 2013.  He seeks a declaration that the defendant’s right and title over the Disputed Area has become extinguished by reason of sections 7(2) and 17 of the Limitation Ordinance, Cap 347, and that he has acquired a possessory title to the Disputed Area.  

9.  The defendant disputes the claim and counterclaims for an order for possession of the Disputed Area and nominal damages for trespass[2]. As the Judge noted[3], while the defendant did not adduce evidence to contradict the plaintiff’s evidence on the historical use of the Disputed Area, it does not accept the plaintiff’s factual case and puts him to proof.

10.  The Judge identified six main issues for adjudication as follows[4]:

(1)  Whether the plaintiff has proved the requisite continuous period of factual possession of the Disputed Area coupled with the necessary animus possidendi, and that the possession was adverse.  (“Issue 1”)

(2)  Whether the plaintiff’s or Cheng Senior’s possession of the Disputed Area or any part thereof, if any, was under a licence granted by the Government by virtue of the Licences. (“Issue 2”)   

(3)  Whether the plaintiff’s or Cheng Senior’s possession of the Disputed Area or any part thereof, if any, was tainted by illegality involving the making of a fraudulent representation in a Chinese document dated 18 October 2000 (“the 2000 Pro Forma”) to the Director of the Agriculture, Fisheries and Conservation signed by the plaintiff and used in his application for a livestock keeping licence; and if so, whether the plaintiff’s adverse possession claim should be allowed to stand.  (“Issue 3”)

(4)  If the plaintiff or Cheng Senior had rented the land adjoining the Disputed Area, whether their possession of the Disputed Area or any part thereof, if any, is presumed to have been encroached for the benefit of the plaintiff’s landlord; and if so, whether the plaintiff can claim possessory title against the defendant over the land so encroached.  (“Issue 4”)

(5)  Whether the plaintiff had deliberately concealed from the defendant or its predecessor-in-title his use, occupation or possession of the Disputed Area or any part thereof, if any.  If so, whether section 26 of the Limitation Ordinance applies so that the applicable limitation period did not begin to run until the commencement of the present action.  (“Issue 5”)

(6)  Whether the defendant is entitled to possession of the Disputed Area or any part thereof and damages for trespass. (“Issue 6”)

E.  The Judge’s decision

11.  At the trial, apart from two factual witnesses, namely the plaintiff and the defendant’s project manager, expert evidence was received from two land surveyors, being Mr Leung Shou Chun for the plaintiff and Mr Chan Tat Wing for the defendant.  In addition to their respective expert reports, the experts had made three joint statements and supplemental joint statements setting out the areas of their agreement and disagreement as well as an agreed clarification.  

12.  The Judge noted there was no significant divergence of views between the experts except on one matter that concerned the occupation of the area enclosed by fences, which covered nearly the whole of Lot 862, the eastern part and about 80% of Lot 861, and the eastern part and about 70% of Lot 860 (“Enclosed Area”).  Mr Leung’s view was that the Enclosed Area must be occupied by someone, though he accepted that the occupier could not be ascertained by photo study.  Mr Chan disagreed.  His view was that the farm on Lots 863 to 865 did not encroach on the Enclosed Area in light of the erection of the Red Pig Fence and also the different land use and activity on either side of the fence.  The Judge considered this was a factual issue relating to the plaintiff’s case on the historical use of the Disputed Area and fell to be decided on the totality of the evidence in the case. 

E.1  Issue 1

13.  On Issue 1[5], the Judge pointed out that the plaintiff carried the burden of proving, with cogent and compelling evidence, continuous and uninterrupted exclusive possession of the Disputed Area together with the requisite intention to possess.  The Judge rejected the plaintiff’s evidence, and held that he had failed to discharge the burden of proving both factual possession and the requisite animus possidendi of the Disputed Area.  As the grounds of appeal are directed at the Judge’s holdings on Issue 1, we will set out his findings and reasoning in detail.

14.  First, the Judge found there were inherent improbabilities and self-contradictions in some of the plaintiff’s evidence, and a lack of contemporaneous documents from independent sources to corroborate the plaintiff’s testimony and his explanations for it were unconvincing:

(1)  In respect of the renting of the Plaintiff’s Lots in 1979 and Lot 865 in 1980,

(1.1)  The Judge noted there was no tenancy agreement for the renting of the Plaintiff’s Lots.  The Judge queried why would Cheng Senior rent Lot 865 on 1 January 1980 if he had rented the Plaintiff’s Lots in 1979 for use as a chicken farm. The Judge also queried why did Cheng Senior rent Lot 865 only to sub-let it for use as a car park if he was lacking of funds for his chicken farm.

(1.2)  The tenancy agreement for Lot 865 was in fact signed by the plaintiff and not Cheng Senior. The explanation for this was only proffered in the plaintiff’s 1^st supplemental witness statement.

(1.3)  There was no explanation for the purpose of fencing off a portion at the southwest corner of Lot 759 and a narrow strip on the southern side of the dirt track along the southern boundary.

(2)  There was a lack of evidence about the water and electricity supply for the operation of the chicken and pig farms:

(2.1)  The demand note for water deposit and the connection/installation fee statement issued to Cheng Senior was dated 29 June 1987.  The plaintiff explained that there was a well and water tank before 1987, but there were no documents evidencing the construction of them.

(2.2)  The earliest date of the documents evidencing an electricity account was 1999.  The plaintiff explained that since 1980 there was electricity supply but the documents could not be located due to lapse of time.

(3)  Apart from the 1980 tenancy agreement for Lot 865, there was no contemporaneous objective evidence showing the existence of the farm on the Plaintiff’s Lots since 1979 and at Lot 865 at a later date:

(3.1)  The Licence at the most evidenced the existence of the farm on the dates of the respective licences, but did not support the existence of the farm in 1979 or 1980.

(3.2)  While the plaintiff had stated in the document surrendering the Licence that the farm was located on Lots 860 to 865 since 1980, it was a self-serving statement and was not a contemporaneous document from an independent source.

(4)  Although the experts agreed that from the survey sheets and aerial photographs, structures and fences were observed on the Disputed Area, the crux of the matter is whether these structures and fences were built and erected by Cheng Senior and the plaintiff from 1979 onwards as part of and to delineate the farm as alleged with the intention of keeping out the world at large.   

15.  Second, the Judge found there were contradictions between the Statement of Claim, the plaintiff’s witness statements and his oral testimony, as well as continuous evolvement and embellishment of his factual case:

(1)  The first example was about the assertion that Cheng Senior erected the Red Pig Fence:

(1.1)  The Statement of Claim and the plaintiff’s witness statement stated that the Red Pig Fence was for the purpose of keeping the pigs off the pasture growing on the remaining areas of Lots 860A, 861 and 862.  However, in his 2^nd supplemental witness statement (at [13]), the plaintiff stated that the purpose was to “prevent our own farm animals from damaging the 橡草 being in different stages of growth there.” 

(1.2)  The plaintiff admitted under cross-examination that the pigs were kept in pigsties with gates and locks and would not be able to roam around freely.  This undermined the plaintiff’s pleaded case and evidence in the first witness statement.

(1.3)  There was in any event no explanation as to why other farm animals (such as dogs and cats, chickens and ducks) would go to the area where the special pasture (橡草) was grown and damage the pasture to the extent that in 1982 Cheng Senior had to incur the trouble and expense of erecting the Red Pig Fence. 

(2)  The second example related to the installation of a mesh door (“Mesh Door”) at a point along the Red Pig Fence to enable the plaintiff and Cheng Senior to egress from the farm area to the Enclosed Area: 

(2.1)  The Mesh Door was not mentioned in the Statement of Claim and the plaintiff’s first two witness statements.

(2.2)  It was mentioned for the first time in the plaintiff’s 2^nd supplemental witness statement.  This was after the defendant’s expert stated in the 1^st Joint Statement that the farm only occupied the peripheral area westerly outside the Enclosed Area for the reasons that if the farm did encroach on Lots 860 to 862, the Red Pig Fence should not have been completely closed and that there was obvious difference in the land use and activity on the two sides of the fence (see [12] above).

(2.3)  The plaintiff’s evidence about the Mesh Door was not corroborated by other available evidence.  It was, for instance, not shown on any survey plans.

(3)  The third example concerned the fencing off of the south-western boundary of the farm area (“865SW Fence”) by Cheng Senior and the plaintiff in 1984.  Although he was adamant that by 1984 the entire farm was fenced off subject to a small opening on the right hand side, the plaintiff could not explain why he did not mention the fencing work in 1984 in his witness statement and 1^st supplemental witness statement.

16.  Third, the Judge drew an adverse inference from the plaintiff’s failure to call available and relevant witnesses to corroborate his own testimony.  Such witnesses included his wife who had lived on the farm since 1979 or 1980, and his neighbours with whom he is on friendly terms.

E.2  Issue 2

17.  On Issue 2[6], the Judge applied Tsang Foo Keung and Key Kwong Development Ltd v Chu Jim Mi Jimmy [2015] 6 HKC 200 at [48]-[51] (CFI) and [2017] 3 HKC 527 at [22] (CA), and held that a claimant of adverse possession must show that he took possession of the land in his own right and not as licensee or representative of another person, and for the purpose of adverse possession, occupation by a licensee was to be regarded as occupation by the licensor. 

18.  In Tsang Foo Keung, the squatters’ occupation of private land was pursuant to fixed-pitch hawker licences issued by the Government and not in their own right.  It was held (by the Court of First Instance at [60] and the Court of Appeal at [2.8]) that this could not be regarded as possession for limitation purposes. 

19.  The Judge did not accept the defendant’s submission that the Licence in the present case bore similarities to the fixed-pitch hawker licence in Tsang Foo Keung.  The Judge held that there were material distinctions between the two cases, notably the hawker licences in Tsang Foo Keung granted permission to use the allocated pitch for hawking whereas the Licences in the present case were to control the livestock keeping activities on the land in question and did not relate to the right of occupation of it. 

20.  The Judge found that the plaintiff likely had at some unspecified time begun to occupy the Disputed Area without consultation and permission from anyone, and rejected the defendant’s argument that the plaintiff should be regarded as the Government’s licensee during the period the Licences were in force. 

E.3  Issue 3

21.  On Issue 3[7], the defendant’s argument in gist was that the plaintiff made a fraudulent representation in the 2000 Pro Forma to the effect that he was a tenant of Lots 860 to 865 and that he had looked for but could not locate the owners of these lots.  It was also said that the plaintiff had withheld the truth from the Government and the rightful owner, and that it would be an affront to public policy to allow the plaintiff’s adverse possession claim based on a licence issued in such circumstances.  

22.  The Judge considered it was unnecessary to make any finding on whether there was fraudulent misrepresentation as he was not satisfied that on the law the illegality defence could avail the defendant.  The Judge referred to the dicta of Chow J (as Chow JA then was) in Tsang Foo Keung at [77] to [78]:

“77. The law on the consequence(s) of illegality on a claim of adverse possession is not yet settled. As mentioned in Jourdan QC and Radley-Gardner, Adverse Possession, 2^nd Ed, at para 7‑140, a number of possible approaches could be taken:

(1) a person should not be granted a remedy where he has to rely directly on unlawful conduct to succeed;

(2) an alternative approach would be to consider whether the policy behind the statutory prohibition in question would be infringed if a squatter was allowed to rely on acts committed in breach of the prohibition in support of a claim to title by adverse possession.

78.  The nature and seriousness of the unlawful conduct in question would be relevant if the bar to making title by adverse possession is based on public policy considerations: see the discussion in Chung Man Yau v Sihon Co Ltd [1997] HKLRD 1221 (relating to a claim for loss of earnings from unlicensed hawking), at 1226-1228 per Mortimer VP, 1228-1229 per Godfrey JA, and 1229-1230 per V Bokhary J.”

23.  The Judge held that, on the first approach identified by the editors of Adverse Possession, the plaintiff did not have to rely on the alleged fraudulent representation in the 2000 Pro Forma in order to succeed on his claim as he could have continued his possession of the Disputed Area in and after 2000 with or without the Licences and with or without rearing pigs. There was also no suggestion that if the misrepresentation was found out, the licensing authority was entitled to evict the plaintiff from the Disputed Area.   As to the alternative approach, the Judge felt unable to come to a firm view on the public policy behind the prohibition of unlicensed livestock keeping, as (1) the defendant did not adduce evidence on the public policy; (2) it would appear that the public policy behind the licensing requirements was primarily concerned with protection of public health; and (3) there was no evidence or suggestion that protection of the rights of the paper title owner of the land was behind the licensing system. 

24.  The Judge further rejected the argument that it would be an affront to public policy to grant the plaintiff’s claim of adverse possession, taking the view that (1) the public policy considerations appeared to be primarily concerned with protection of public health matters; (2) the plaintiff’s adverse possession claim was against the paper title owner and not the public or the Government; (3) the public policy of regulating livestock keeping could still be served irrespective of who had a better title to the Disputed Area; and (4) if it was established that the Licence was obtained by fraudulent misrepresentation the licensing authority could have revoked the Licence or pursued other criminal sanctions. 

E.4  Issue 4

25.  On Issue 4[8], the Judge, following Secretary for Justice v Chau Ka Chik Tso (2011) 14 HKCFAR 889 at [17], [20] and [29], pointed out that the doctrine of encroachment on a third party’s land (in this case, the defendant’s land) would first operate to bar the defendant’s right to recover the land and extinguish his title to it, and then deprive the plaintiff of the benefit of such extinguishment by deeming the possessory title of the encroached area to be that of the plaintiff’s landlord.

26.  The Judge held that the doctrine of encroachment was a red herring and did not serve the defendant in that while it would work against the plaintiff, it would not entitle the defendant to its claim for an order for possession, or assist it at all.  

E.5  Issue 5

27.  On Issue 5[9], the defendant relied on section 26(1)(b) of the Limitation Ordinance and argued that the plaintiff had deliberately concealed the fact that he was applying for a licence by not seeking the defendant’s consent. 

28.  The Judge decided against the defendant for the reason that the defendant’s right of action to recover possession of the Disputed Area did not depend on whether the plaintiff had or had not applied for the Licence, and the fact that the plaintiff had applied for the Licence was not relevant to the defendant’s right of action.

E.6  Issue 6

29.  As he had found against the plaintiff on Issue 1 and rejected the plaintiff’s adverse possession claim, the Judge granted to the defendant vacant possession of the Disputed Area and nominal damages for trespass[10].

F.  The grounds of appeal and respondent’s notices 

30.  In his notice of appeal, the plaintiff raised two broad grounds of appeal, namely (1) the Judge had misdirected himself in law on the issues of factual possession and animus possidendi (“Ground 1”); and (2) the Judge gave incorrect weight to the evidence and his judgment was irrational (“Ground 2”). 

31.  The defendant’s Respondent’s Notice sought to affirm the Judge’s judgment on the following grounds:

(1)  The plaintiff’s possession or occupation of the Disputed Area was under the Licence.

(2)  The plaintiff’s conduct in accepting the Licence and its conditions was inconsistent with an intention to possess the Disputed Area as his own.

(3)  The plaintiff’s possession is tainted by illegality. 

(4)  Even if the requisite period of possession is established, the plaintiff’s possession was presumed to be encroached on behalf of his landlord of Lots 863 to 865.   

(5)  The defendant is entitled to rely on the plaintiff’s deliberate concealment of his application for the Licence to delay the accrual of the limitation period under section 26 of the Limitation Ordinance.   

(6)  The Judge’s decision on factual possession is further affirmed by various points advanced in the defendant’s closing submission but were not expressly mentioned by the Judge in his judgment.

32.  These grounds are essentially repetitions of the defendant’s arguments under Issues 2 to 5.  The plaintiff has filed a Respondent’s Notice in response to the Defendant’s Respondent’s Notice, which primarily sought to support the Judge’s determination on Issues 2 to 5. 

G.  Our reasons for judgment

G.1  Ground 1: The parties’ arguments  

33.  Ground 1 complains that the Judge misdirected himself in focusing on the evidence of the state of the farm in 1979 or 1980, when the real issue was whether there was adverse possession for 20 years or 12 years prior to the date of the writ and not whether the plaintiff together with Cheng Senior possessed the Disputed Area in 1979 or 1980.    

34.  Mr Shum, together with Ms Wong for the plaintiff, placed heavy reliance on this Court’s decision in Yu Siu Cheuk v Realray Investments Ltd (unreported) CACV 181/2009, 10 November 2009.   In that case, the plaintiff’s pleaded case was that he took possession of the property in 1979 and had been in continuous possession since. The Recorder disbelieved the plaintiff and his witnesses and dismissed his claim.  On appeal, the plaintiff argued that the issue was whether he had been in adverse possession for 20 years prior to the commencement of the action, which the Recorder should have addressed, but failed to do so.  At [17] to [19], Cheung JA held that:

“17. For the purpose of establishing his claim, the plaintiff has to establish that for at least 20 years prior to the issue of writ in February 2007 he has been in continuous adverse possession of the property thereby defeating the paper title of the defendant. This means that he must show that he has been on the property since at least 1987. For the purpose of deciding whether the defendant’s title has been defeated by limitation the Court does not need to decide the precise point of time when the plaintiff entered the property so long as it is satisfied that the plaintiff has proved that he has been there for twenty years with the necessary intention to possess. This is what the Court which is seized of the matter should decide. The plaintiff has, of course, stated he was there even earlier in 1979. If that is the case, then the title of the defendant would be defeated at an earlier time in 1999.

18. Even if the plaintiff cannot establish that he first entered in 1979, the Court still has to address the issue of the 20 years’ adverse possession. It is true that the plaintiff had not put forward some other specific alternative date or dates when he entered into possession of the property. He had chosen not to do so but it does not mean that the Court could ignore the plaintiff’s case that he had been in continuous possession since 1979 which encompasses the 20 years’ adverse possession issue.

19. The plaintiff certainly did not confine his case that either he had entered in 1979 or he had not entered at all.  To the contrary he had called evidence on the use of the land since he entered into possession: he had converted the structures on the land for domestic use, he had cultivated the land, he had kept domestic animals, he had fenced the land and obtained electricity and water.  Some of these activities were confirmed by contemporaneous evidence such as the aerial photographs on fencing and the connection of electricity and water to the property.  The Recorder has not made specific finding on these matters because he has not addressed the plaintiff’s case on the 20 years’ adverse possession.”

35.  Mr Shum submitted that because of his wrong focus, the Judge failed to consider material documentary and testimonial evidence of the activities of Cheng Senior and the plaintiff in the period from 1979 to the date of the writ (23 April 2013), and further failed to make finding on whether, after Cheng Senior’s death in 1988, the plaintiff had succeeded and remained in adverse possession of the Disputed Area from not later than 30 June 1991 (if under the old 20-year limitation period) or since not later than 22 April 2001 (if under the new 12-year limitation).  It was said that the Judge’s failure to make any finding on this was fatal as the issue of whether adverse possession for the requisite limitation period remained undecided.

36.  Mr Shum’s argument in the written submission was that the Judge erred in failing to determine whether there was adverse possession for either 20 or 12 years prior to the writ.  At the hearing, he readily acknowledged that the plaintiff’s pleaded case and focus at the trial was only on the 20-year limitation period, and did not seek to rely on the 12-year limitation period in this appeal.

37.  Under this ground, Mr Shum also argued that the Judge was wrong in applying the principle governing self-serving statement to the issue of factual possession (see [14(3.2)] above).

38.  Mr Chan SC, who together with Mr Derek JY Chan appeared for the defendant, submitted, firstly, the Judge was clearly aware that the issue of the case was whether the requisite continuous period of adverse possession had been made out, and this case is different from Yu Siu Cheuk. 

39.  Secondly, he argued that, in any event, the Judge was right to focus his findings on the events in or around 1979 and the early 1980s in light of how the plaintiff’s case was advanced.  In particular, Mr Chan referred to the objective evidence which showed that the fences were erected by 1984, and there was no material change in the occupational status of the Enclosed Area since the 1980s.  He submitted that in the circumstances it was natural for the Judge to test the plaintiff’s case on how he began occupying the Disputed Area in the 1980s because if this was not accepted, then there would be no basis to find that the plaintiff fenced up the Disputed Area at some later time in the 1990s.

40.  Thirdly, Mr Chan pointed out that the Judge had made a careful analysis of the plaintiff’s evidence on how he began to occupy the Disputed Area, with specific focus on the crucial aspect of the erection of the fences around the Disputed Area.  Having rejected the plaintiff’s evidence and factual case for the reasons given in the judgment, there was no evidential basis for the Judge to make any definitive finding as to when (or if at all) Cheng Senior or the plaintiff was in continuous and uninterrupted possession of the Disputed Area.  

41.  Fourthly, Mr Chan also disagreed that the Judge had wrongly applied the principle relating to self-serving statements, pointing out that it is a question of weight and the Judge was entitled to place less weight on self-serving evidence, irrespective of the issues involved.

G.2  Ground 1: Reasons for decision

42.  It is evident from the Judge’s discussion of the evidence and reasoning under Issue 1 (see E.1 above) that he had given consideration to all the evidence in the case, including evidence relating to the events or activities after 1980, such as the erection of the Red Fence, the Red Pig Fence and the 865SW Fence and the land use and activities in the 1980s and 1990s.  In considering the plaintiff’s complaint that the Judge had wrongly focused only on the evidence in 1979 or 1980 and had not addressed the core issue of whether the plaintiff was in adverse possession for the 20-year limitation period, it is important to bear in mind the factual context of the case. 

43.  On the plaintiff’s case, the farm operated by Cheng Senior and the plaintiff was initially situated on the Plaintiff’s Lots.  In about 1980 it was expanded to the Disputed Area and at a later stage to Lot 865.  It is also the plaintiff’s case that in 1982 Cheng Senior erected the fences, including the Red Pig Fence.  Over the years, the plaintiff’s family continued to occupy the Plaintiff’s Lots and the Disputed Area.  Save that pig farming ceased in February 2007, there was nothing eventful.   

44.  The expansion of the farm to the Disputed Area and the erection of fences are two salient aspects of the plaintiff’s case.  The erection of fences is relevant to both factual possession and intention to possess.  Normally, erection of fences and enclosure of the disputed land can be cogent evidence of possession by the squatter and dispossession of the paper owner, but it is not conclusive and has to be considered in the light of all other evidence: Jourdan, Adverse Possession (2^nd ed) at [13-09].

45.  In the present case, two points are clear on the objective evidence, which includes the expert evidence and the survey sheets and aerial photos.  First, the various fences existed latest by 1984.  Second, since the 1980s, there had been no material changes in the occupational status of the area enclosed by the fences (i.e. the Enclosed Area).  While the erection and existence of the fences is not in issue, whether the fences were in fact erected and maintained by Cheng Senior and/or the plaintiff for the purpose of fencing off the land in their possession is a matter in dispute and is something that the plaintiff is required to establish.

46.  One particular feature about the fences in this case is their location.  Given the plaintiff’s assertion that in 1980 the farm was expanded to the Disputed Area, one would expect the fences erected by Cheng Senior in 1982 to enclose the land on which the farm was operated. This, however, is not the case.  The fences, especially the Red Pig Fence, instead run along the boundaries of the Plaintiff’s Lots and the Disputed Area and cut across the farm, separating it into two parts.  Standing to the left was the Plaintiff’s Lots on which the chicken and pig farm was operated, and to the right was the Disputed Area which was said to be for growing pastures for the pigs and vegetables for the family.  As described by the Judge (at [52]), the fences had the effect of an internal barrier within the farm.  Instead of enclosing the whole farm or the entirety of the land which the plaintiff claimed to be in possession, the fences only enclosed the Disputed Area.   

47.  In these circumstances, it is imperative to examine the purpose of the fences, which is what the Judge did.  He found, as a fact, that the plaintiff had given different accounts on the purpose of the Red Pig Fence, which were shown to be incredible or inherently improbable (see [15(1)] above).   

48.  Mr Shum is correct to say that the Judge did not expressly hold that the fences were not erected by Cheng Senior.  However, it is obvious from the Judge’s discussions on this part of the plaintiff’s evidence, and it is to be inferred from his rejection of the plaintiff’s evidence, that the Judge did not accept the plaintiff’s evidence that Cheng Senior erected the fences in 1982.  Further, the contemporaneous documents adduced by the plaintiff (such as those about the water and electricity accounts) did not relate to the Disputed Area.  There is thus no other evidence to show who erected the fences and the purpose of the fences.  The plaintiff has therefore failed to establish that Cheng Senior erected the fences in 1982, or that the purpose of the fences was to fence off the land in the possession of Cheng Senior and/or the plaintiff.

49.  The second point that is apparent from the objective evidence relates to the land use and activities on the Plaintiff’s Lots and the Disputed Area, which stand on the two sides of the Red Pig Fence.  The aerial photographs taken in 1980, 1990 and 1992[11] show consistently that there were structures and buildings as well as parking activity on the Plaintiff’s Lots whereas the Disputed Area was unbuilt, vegetated and did not appear to have much activity.  This state of affairs remained more or less the same throughout the 1980s and into the 1990s.    

50.  In light of (1) the fact that the fences existed before 1984, (2) the plaintiff’s failure to establish that the fences were erected by Cheng Senior in 1982 for the purpose of fencing off the land said to be in his possession from the world at large, and (3) there had been no significant change to the occupational status of the Disputed Area which was essentially enclosed by the fences, once the Judge rejected the plaintiff’s case and evidence on the start of the farm in 1979 and its expansion to the Disputed Area in 1980, there would be no basis for him to further consider whether Cheng Senior and the plaintiff had been in continuous possession in the 20-year period before the issue of the writ in April 2013.  The present case is accordingly different from Yu Siu Cheuk.

51.  Mr Shum referred to [80] of the judgment where the Judge, in dealing with Issue 2, said (without the footnote):

“While this court is not satisfied that the Plaintiff (and Cheng Senior) have since about 1980 occupied the Disputed Area as part of the farm, on balance of probabilities, the likelihood is that the Plaintiff had at some unspecified time begun to occupy the Disputed Area, without consultation and without obtaining permission from any one.”

Mr Shum submitted that this supports his argument that the Judge had missed the focus of the case in that if it was before 1991 that the plaintiff began to occupy and trespass on the Disputed Area, then the plaintiff would have made good his claim for adverse possession.

52.  We do not think this part of the judgment assists the plaintiff.  As analysed above, there is no evidential basis for finding that the plaintiff was in possession of the Disputed Area at some point before 1991 given the Judge’s rejection of the plaintiff’s evidence that the farm started in 1979 and expanded to the Disputed Area in 1980 and the objective evidence that there was no significant change to the land use and state of occupation of the Disputed Area up to 1992.   

53.  Mr Shum also referred to the statement made by the plaintiff in his application dated 7 June 2006 for the surrender of the livestock keeping licence, to the effect that the farm had been situated on Lots 860 to 865 since 1980.  He contended that the Judge erred in applying the principle on self-serving statement to the issue of factual possession.  It is relevant to note that the application form in question is also for the purpose of applying for compensation for the surrender of the farm.  As pointed out by Mr Chan, the size of the pig farm had a bearing on the amount of compensation to be paid by the government.  As such, there might be other considerations or reasons for the plaintiff to put forward the statement in the application form, and the statement can be regarded as self-serving in nature. 

54.  It is also important to see how the Judge dealt with this evidence (at [49]):

“However, as Mr Chan SC rightly points out, this is a self-serving statement generated many years after – it is neither contemporaneous nor objective evidence from an independent source. In this court’s view, it is certainly not cogent or compelling.”

Plainly, the Judge was dealing with the weight to be given to the statement.  He considered that the document was not contemporaneous or an independent source of evidence, and did not assist the plaintiff in discharging his burden of proving factual possession with cogent and compelling evidence.  It is trite that the weight to be attached to a piece of evidence is a matter for the trial judge.  We do not accept that the Judge can be said to have erred in law.

55.  For the above reasons, Ground 1 fails.

G.3   Ground 2: The plaintiff’s arguments     

56.  Ground 2 is an attack on the Judge’s findings of fact.  It complains that the Judge had given improper or insufficient weight to various matters and evidence, namely (1) the defendant had never obtained possession after purchasing the Defendant’s Lots (which include the Disputed Area) and it had not pleaded a positive case on the historical use or occupation of the Disputed Area; (2) the application for and the grants, as well as the subsequent surrender of the livestock keeping licence; (3) the evidence of the defendant’s expert on the topology, use and occupation of the Enclosed Area; the existence of the Mesh Door; (4) the plaintiff’s evidence on the cultivation of the special pasture in the Enclosed Area; (5) the drawing of adverse inference against the plaintiff; and (6) peripheral matters such as the tenancy agreement for Lot 865 was not signed by Cheng Senior and the absence of documentation on the renting of the Plaintiff’s Lots, water and electricity supply to the farm area and construction of the well and water tank.

G.4  Ground 2: Reasons for decision   

57.  The principles governing an appeal on the findings of fact made by the trial judge are well established: see, for instance, China Gold Finance Ltd v CIL Holdings Ltd (unreported) CACV 11/2015, 27 November 2015 at [11]-[24]; and ZJW v SY (unreported) CACV 10/2017, 1 December 2017, at [28]-[34]. They are:

(1)  The appellate court will not interfere with findings of fact unless it can be demonstrated that the findings are plainly wrong.

(2)  Under the “plainly wrong” test, the court has to be satisfied that the first instance judge had fallen into palpable error in his findings of fact, such as where the finding was one (a) which there was no evidence to support, (b) which was based on a misunderstanding of the evidence, or (c) which no reasonable judge could have reached. 

(3)  An appeal is not a retrial.  Nor is it an occasion for the losing party to re-run arguments that have been rejected by the first instance judge.

(4)  Assessment of credibility and the weight to be placed on the evidence are matters for the trial judge.  Complaints that the judge’s findings are against the weight of evidence or certain evidence had not been mentioned in the judgment and therefore are said to have been overlooked by the judge do not amount to palpable errors that merit interference by the appellate court.

58.  Under Ground 2, the plaintiff effectively asks this court to conduct a fresh evaluation and assessment of the evidence in the case in the hope that this court will take a different view of the evidence and make findings that are favourable to him.  This is not permissible.  In our view, the Judge had considered all the material evidence in the case.  He is not required to discuss all the evidence in his judgment. The weight which he gave to the evidence in the case is a matter for him, subject only to the requirement that his findings are such as might reasonably be made.    

59.  Dealing specifically with the matters raised in the grounds of appeal and Mr Shum’s submissions, the fact that the defendant has not entered into possession of the Defendant’s Lots since its purchase is immaterial.  The fact that it does not plead a positive case does not reverse or lessen the burden of proof carried by the plaintiff.  The Judge was aware, and had borne in mind, the fact that the defendant had not pleaded a positive case (see [13] and [14] of the judgment).  The Judge correctly noted that the defendant was entitled to put the plaintiff to proof and to test his evidence. 

60.  Further, even though the defendant did not know or had not adduced evidence on the historical use of the Disputed Area, it does not mean that the plaintiff’s evidence in this regard must be accepted by the court.  Mr Shum’s written submission[12] gave a summary of the evidence that he submitted was corroborative of the plaintiff having factual possession of the Disputed Area.  These evidence had largely been referred to and discussed in the judgment.  Ultimately, the Judge, for the detailed reasons set out in the judgment, rejected the plaintiff’s account.  It has not been shown how he was plainly wrong in coming to that conclusion.

61.  As to the plaintiff’s application for the grant of livestock keeping licence and his subsequent surrender of it, again the Judge was aware of the relevant evidence and had taken the related documentation into account.  For the reasons in [53] and [54] above, we do not agree that the Judge had rejected the evidence as self-serving statements. We also do not consider he was plainly wrong in finding that the licences are at best evidence showing the existence of the farm at the dates of the licences (i.e. 2000, 2003 and 2007), and the statement in the application to surrender the licence and for compensation do not constitute cogent and compelling evidence of factual possession of the Disputed Area.   

62.  Turning next to the evidence of the defendant’s expert on the topology, use and occupation of the Enclosed Area, and the evidence of the plaintiff and the expert on the Mesh Door, again the Judge had given consideration to them.  The Judge is entitled to afford full weight to the uncontested expert evidence on the use and occupation of the Enclosed Area.  The same goes for his assessment of the plaintiff’s evidence on the possession and use of the Enclosed Area (i.e. cultivation of 橡草, a special pasture for feeding pigs) and the existence of the Mesh Door.  The Judge had carefully assessed the plaintiff’s evidence on these matters before making an adverse finding on the plaintiff’s credibility and concluding that the plaintiff failed to establish factual possession of the Enclosed Area (see [52] to [60] of the judgment).  As discussed under Ground 1, the judge found the plaintiff’s evidence on the purpose of enclosing the Enclosed Area with the Red Pig Fence to be contradictory and inherently improbable.  The Judge also considered the plaintiff’s belated mention of the Mesh Door should be treated with caution as there was no satisfactory explanation of why such a piece of crucial evidence was not disclosed before. 

63.  These are findings that the Judge may reasonably make in the circumstances of this case.  In our view, the matters advanced by Mr Shum, namely the defendant had not challenged the use of 橡草 for feeding pigs, the defendant’s failure to procure the plaintiff’s neighbour to pay rent for part of the Enclosed Area or to call him to testify do not afford proper basis for us to interfere with the Judge’s findings.   

64.  We also do not accept that the Judge erred in drawing adverse inference against the plaintiff for failing to call his wife and neighbour as witnesses to corroborate his evidence.  It is not in dispute that the Judge had applied the correct legal test.  Given the plaintiff’s evidence that his wife had lived on the farm since 1979 or 1980 and that his neighbours would know if and when the farm was fenced off, the Judge was entitled to expect the plaintiff to call other witnesses with personal knowledge of the relevant facts to support his case and to reject the plaintiff’s explanation that he did not think there was a need to do so.  The fact that the defendant could also have called the neighbour to testify will not render the Judge’s decision to draw adverse inference wrong, let alone plainly wrong.  The plaintiff carried the burden of proving factual possession; and the defendant is entitled to put him to proof.  

65.  There is further no merit in the general complaint that the Judge placed undue weight on some peripheral matters, such as the tenancy agreement for Lot 865 was not signed by Cheng Senior, and the absence of documentation relating to the renting of the Plaintiff’s Lots, water and electricity supply to the farm area and construction of the well and water tank.  It has not been suggested that these are irrelevant matters or the Judge had misunderstood the evidence or in what way the Judge was plainly wrong.  There is just no basis for us to interfere with the weight that the Judge put on these evidence.  

66.  For the above reasons, Ground 2 fails.

G.5  Conclusion on the plaintiff’s appeal

67.  As both grounds of appeal fail, the appeal is dismissed.

G.6  The Respondent’s Notices

68.  In view of our conclusion on the plaintiff’s appeal, there is no need to deal with the defendant’s Respondent’s Notice and the plaintiff’s Respondent’s Notice.  We would make no order on both Respondent’s Notices.

69.  We need only say that we agree with the Judge’s reasoning and holdings on the licence, encroachment, illegality and concealment (i.e. Issues 2 to 5, see E.2 to E.5 above).  We would have dismissed the defendant’s Respondent’s Notice if we had to go into the grounds raised in it.

G.7  Costs

70.  Applying the normal rule of costs follow the event, we would order the plaintiff to pay the defendant its costs of the appeal.  We would, however, make no order as to the costs of the defendant’s Respondent’s Notice and the plaintiff’s Respondent’s Notice, in light of the observations in the preceding paragraph.   

H.  Disposition

71.  For the reasons given above, we make the following order:

(1)  The appeal is dismissed.

(2)  No order is made on the defendant’s Respondent’s Notice and the plaintiff’s Respondent’s Notice.

(3)  The plaintiff pays the defendant the costs of the appeal to be taxed if not agreed, save that there is no order as to the costs of the defendant’s Respondent’s Notice and the plaintiff’s Respondent’s Notice.  There is a certificate for two counsel.