KIUWIDE COMPANY LTD v. TSEUNG DING MAN

HCMP 1003/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1003 OF 2013

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REASONS FOR JUDGMENT

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1. The plaintiff is the registered owner of Section J of Lot No 951 in DD 381 (“Property”) since 1986.  The Property forms part of Lot 951 in DD 381 (“Lot”) which is held under the terms and conditions of New Grant No 492 (“New Grant”).  The New Grant was for 75 years from 1 July 1898 renewable for a further term of 24 years less the last 3 days thereof. The grantee under the New Grant is the defendant. 

Lot

2. In the period from 1959 to 1962, the defendant sub-divided the Lot to Sections A to P and the Remaining Portion. Sections A to P of the Lot were assigned to various purchasers, but the Remaining Portion of the Lot is still registered in the defendant’s name and is presently used as a right of way giving access to and egress from Sections A to P of the Lot.

3. According to the plans annexed to the assignments of Sections A to P of the Lot by the defendant to various purchasers, it appears that the outer boundary of the demarcation and boundary of Sections A to P depicted therein (“Assignment Boundary”) was inconsistent with the demarcation and boundary of the Lot as shown in the plan annexed to the New Grant (“Old Lot Boundary”).

4. In about September 2001, the District Lands Office, Tuen Mun wrote to the plaintiff proposing realignment of the discrepant Old Lot Boundary so that the new boundary of the Lot would be the Assignment Boundary and the estate road, ie the Remaining Portion of the Lot. In about 2011, the boundary of the Lot was re-aligned as discussed (“New Lot Boundary”).

Property

5. The plaintiff’s director Poon Jing (“Mr Poon”) explained that since 1986 the Property was occupied by him and his family.  On the Property was a detached house with appurtenant garden all the way down to the seaside as shown in a survey plan prepared by the plaintiff’s surveyor Land Marker (1980) HK Co Ltd on 2 August 2012 (“Survey Plan”).

6. The Property depicted in the Survey Plan has four coloured areas (“Coloured Areas”).  The area coloured yellow was within the Assignment and Old Lot Boundaries. The area coloured orange was within the Assignment Boundary but outside the Old Lot Boundary.  The area coloured purple (“Purple Area”) was outside the Assignment Boundary but within the Old Lot Boundary.  The area coloured blue (“Blue Area”) was the garden outside both the Assignment and Old Lot Boundaries.

7. At the time of the Plaintiff’s purchase of the Property in 1986, there were already in the Blue and Purple Areas a swimming pool, trees and shrubs. After the realignment of the boundary of the Lot in 2011, the Blue and Purple Areas now lie outside the Assignment and New Lot Boundaries. Hence, the Purple Area forms part of the Remaining Portion of the Lot which is still registered in the name of the defendant. 

Possession

8. Mr Poon confirmed that since 1986 the plaintiff always intended to and did use the Coloured Areas including the Purple Area as his family house.  The plaintiff installed locks, gates and boundary walls around the Property since the purchase of the Property in 1986. Since then Mr Poon’s family had been using and enjoying the swimming pool and trees/shrubs in the Blue and Purple Areas as the garden and recreational area of the Property.  The plaintiff also paid rates and government rent since 1 July 1989 pursuant to demand notes issued in respect of Site No 3 House at Barbecue Gardens at 9 Lok To Street of the Lot, and Mr Poon believed such payment of rates and government rent covered the use of the Blue and Purple Areas. Mr Poon confirmed neither the plaintiff nor his family received any claims to title of the Coloured Areas from the defendant or any third party since 1986. 

9. Ms Eu SC (and with her Mr Nip) submitted that Mr Poon’s evidence showed that since 1986 the plaintiff had occupied and used the Purple Area for over 20 years prior to the commencement of the present action, they were entitled to a declaration that the defendant’s title, interest and/or rights in and/or over such area had been absolutely extinguished by virtue of section 17 of the Limitation Ordinance Cap 347 (“Ordinance”) and the plaintiff has thereby acquired and is entitled to the possessory title, interest and/or rights in and/or over such area.

Present proceedings

10. On 8 May 2013, the plaintiff commenced the present proceedings against the defendant to claim inter alia for:

(a) a declaration that the defendant’s title, interest and/or rights in and/or over the Purple Area had been absolutely extinguished by virtue of section 17 of the Ordinance;

(b) a declaration that the plaintiff has been in adverse possession of the Purple Area for a period of no less than 20 years prior to the commencement of the present proceedings and has thereby acquired and is entitled to the possessory title, interest and/or rights in and/or over the Purple Area.

11. The plaintiff attempted to serve on the defendant the originating summons and Mr Poon’s affirmation filed on 8 May 2013 by registered post and insertion into the letterbox at Flat A, 12/F, Block 1, Pokfulam Gardens, Pokfulam, Hong Kong (“Address”), being her last known address shown in her statutory declaration dated 19 April 2009 registered at the Land Registry regarding her name change to Chan Siu Yung.

12. No acknowledgement of service was filed, and the plaintiff filed a Notice of Appointment to Hear Originating Summons on 27 June 2013.  Such notice was also served on the defendant at the Address by insertion in the letterbox.

13. On 24 July 2013, the plaintiff filed Mr Poon’s supplemental affirmation. Mr Poon explained that in January 2013 the plaintiff conducted searches at the Probate as well as Births and Deaths Registries, and although letters of administration were granted in respect of the estate of a Chan Siu Yung who died on 14 March 2001 there was no record of death of Chan Siu Yung with the defendant’s identity card number as shown in her statutory declaration dated 19 April 2009.  The aforesaid letters of administration only revealed that the deceased person Chan Siu Yung formerly lived at an address in Shatin, New Territories. Despite inquiry by the plaintiff’s solicitors, they were unable to ascertain the identity card number of such deceased person.

14. The plaintiff served Mr Poon’s supplemental affirmation and the hearing bundle on the defendant at the Address.  But on 25 July 2013, Mr Poon’s supplemental affirmation was returned to the plaintiff’s solicitors with a note of complaint by the occupiers of the Address that the defendant did not reside there. It was followed by a fax to the plaintiff’s solicitors on the same day that confirmed the defendant was not at the Address and requested the plaintiff’s solicitors to collect the documents served thereat.  On 1 August 2013, enquiries raised with the occupiers of the Address revealed that the present owners (ie not the defendant) were the occupiers.

15. So at the hearing on 6 August 2013, Ms Eu SC applied for leave to serve the originating summons by substituted service, and the hearing of the Notice of Appointment to Hear Originating Summons was adjoined.

16. On 19 August 2013, a newspaper advertisement was caused to be made for substituted service of the originating summons, but it made no reference to any Notice of Appointment to Hear Originating Summons or any adjourned hearing date. In fact, the Notice of Appointment to Hear Adjourned Originating Summons was only filed on 13 September 2013 upon default of any acknowledgment of service.

17. Since no leave was obtained to serve such notice and Mr Poon’s two affirmations by way of substituted service under Order 65 rule 4 of the Rules of the High Court (“RHC”), and no newspaper advertisement was placed for any de facto substituted service, and bearing in mind that Order 28 rule 3(1) of the RHC requires that such notice of hearing must be served on every other party, the hearing was further adjourned for service to be effected.

18. On 3 December 2013, the plaintiff filed a Notice of Appointment to Hear Adjourned Originating Summons returnable on 19 December 2013. By an affirmation of service filed on 10 December 2013, the plaintiff effected substituted service of such notice and the two affirmations of Mr Poon on the defendant by newspaper advertisement, which also gave notice of the date, time and venue of the further adjourned hearing.

19. I am satisfied that plaintiff has taken all appropriate steps to notify the defendant of the present proceedings and of the hearing on 19 December 2013.

Discussion

20. The starting point in section 7(2) of the Ordinance which currently provides as follows:

“No action shall be brought by any other person to recover any land after the expiration of 12 years from the date on which the right of action accrued to him. …”

21. Before 1 July 1991 the period stipulated in section 7(2) of the Ordinance was 20 instead of 12 years.  Further, by reason of the transitional provisions as section 38A of the Ordinance, the relevant period for the plaintiff’s claim is 20 years.[1]

22. Section 17 of the Ordinance provides:

“Subject to the provisions of section 10, at the expiration of the period prescribed by this Ordinance for any person to bring an action to recover land (including a redemption action), the title of that person to the land shall be extinguished.”

23. To establish possessory title based on adverse possession, the squatter must be shown to have both factual possession of the suit land and the requisite intention to possess (animus possidendi) for the whole of the 20-year limitation period.

24. In Powell v McFarlane & Anor,[2] Slade J said this:

“(3) Factual possession signifies an appropriate degree of physical control. It must be a single and conclusive possession, though there can be a single possession exercised by or on behalf of several persons jointly. … The question what acts constitute a sufficient degree of exclusive physical control must depend on the circumstances, in particular the nature of the land and the manner in which land of that nature is commonly used or enjoyed. …Everything must depend on the particular circumstances, but broadly, I think what must be shown as constituting factual possession is that the alleged possessor has been dealing with the land in question as an occupying owner might have been expected to deal with it and that no-one else has done so.”

25. As to the requisite intention to possess, the principles can be found in Wong Tak Yue v Kung Kwok Wai & Another (No 2):[3]

“The requisite intention to possess had been referred in various authorities under its Latin tag ‘animus possidendi’. I shall refer to it simply as the intention to possess. As Slade J observed in Powell v McFarlane & Anor (1979) 38 P & CR 452 at pp 471-472, the intention to possess requisite for adverse possession:

…involves the intention to one’s own name and on one’s own behalf, to exclude the world at large, including the owner with the paper title if he be not himself the possessor, so far as is reasonably practicable and so far as the process of the law will allow.”

26. This has several consequences. First, although the squatter must intend to exercise exclusive control for his own benefit, he need not have a conscious intention to exclude the true owner. It is enough that the squatter intends to exclude the owner “as best as he can” or “so far as reasonably practicable and so far as the process of the law allow”. Secondly, an intention to own the land or even an intention to acquire ownership is not required for establishing the animus possidendi. Thirdly, the animus possidendi can be established even if the squatter mistakenly believes himself to be the owner of the land.

27. The burden of proof is on the party claiming adverse possession, and the evidence he has to adduce must be compelling. However, this does not alter the standard of proof, which remains the balance of probabilities. All it means is that the evidence adduced must be of such a quality and nature that, if accepted on the balance of probabilities, it is sufficient to establish both factual possession as well as an intention to possess.

28. Here, the defendant has not given any notice of intention to defend or adduced any affidavit evidence.  On Mr Poon’s evidence and the photographs of the Property exhibited to his affirmation, it is plain that the plaintiff through Mr Poon and his family have been in continuous and uninterrupted possession of the Property including the Purple Area since 1986. It is obvious that the swimming pool and garden in the Purple Area is part of the residential property used by Mr Poon and his family since the plaintiff’s purchase of the property in 1986.  This is also supported by the payment of rates and government rent in respect of the Property as explained above.  There is also no claim to title by the defendant or third party as known to the plaintiff, Mr Poon and/or his family since 1986.

29. In the circumstances, I am satisfied the plaintiff has established factual possession over the Purple Area for over 20 years before 2013. I am also persuaded that the plaintiff through Mr Poon and his family has occupied and used the Property including the Purple Area as the Poon family house exclusively and they have installed locks, gates and boundary walls around the Property.  I am satisfied the plaintiff has acquired the requisite intention to possess the Purple Area, and has established a possessory title over such land as against the paper owner, ie the defendant.

30. Accordingly, at the hearing on 19 December 2013, I granted the following order:

(a) a declaration that the defendant’s title, interest and/or rights in and/or over the Purple Area has been absolutely extinguished by virtue of section 17 of the Ordinance;

(b) a declaration that the plaintiff has been in adverse possession of the Purple Area for a period of no less than 20 years prior to the commencement of the present proceedings, and has thereby acquired and is enitled to the possessory title, interest and/or rights on and/or over the Purple Area;

(c) there be no order as to costs of this application.

31. For the avoidance of doubt, the plaintiff has leave to serve sealed copy of the order made on 19 December 2013 on the defendant by way of substituted service in the same manner as aforesaid.