TANG KWAN TAI v. TANG KOON LAM AND ANOTHER

DCCJ 14951/2000

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO.14951 OF 2000

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JUDGMENT

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Background:

[1] The Kadoorie family is a name synonymous with philanthropy in Hong Kong. The family's charitable work started early with Sir Ellis Kadoorie and in the 1950's Horace Kadoorie continued with Sir Ellis' work. One of the many charitable programs was the family's encouragement of farming in the New Territories.

[2] In the 1950's, Horace Kadoorie through his company Sir Ellis Kadoorie & Son Co. took up many 10 years leases with local landowners and in turn sub-leased these lands, free of charges, to the many landless inhabitants of Hong Kong for pig rearing. Each sub-lessee would be provided with a small covered pigsty, a couple of sows and 7 or 8 piglets to get them started in the pig farming business.

[3] Thus, on 26/2/1953, Mr. Tang Tsun Yiu, a landed gentleman, leased a piece of land known as Lot No. 561 in Demarcation District No. 109 (the "Lot"), situated at Tai Hong Wai, Kam Tin, Yuen Long, New Territories to Sir Ellis Kadoorie & Son Co. for 10 years.

[4] Sir Ellis Kadoorie & Son Co. divided the Lot into four separate parcels and established two pig farms thereon. The Lot was later subdivided into Section A of Lot No. 561 D.D. No. 109 ("Section A") and the Remaining Portion of Lot No. 561 on D.D. No. 109 (the "Disputed Land"). One of the pig farms was located on Section A and the other was located on the Disputed Land.

[5] From 1953, with the consent of Sir Ellis Kadoorie & Son Co., the Plaintiff went into possession of the pig farm located on the Disputed Land and operated a pig rearing business thereon.

[6] On or about 25/2/1963, the 10 years lease to Sir Ellis Kadoorie & Son Co. expired. The Plaintiff continued his occupation of the disputed land as a pig farm until sometime in 1977 or 1978, the Plaintiff ceased operating his pig farm from the Disputed Land and erected a small cottage thereon. The cottage covered the whole of the Disputed Land. Since its erection, the Plaintiff has leased out the cottage for profit.

[7] In the mean time, it was not disputed that Mr. Tang Tsun Yiu passed away sometime in 1964 and by a Succession to Property registered as memorial No. 153984, title to the Lot was vested in his wife Tang Tse Lin, in trust for their son Tang Koon Lam, the First Defendant, who was then 17 years old.

[8] On 13/3/1990, by a Conveyance by Trustee to Beneficiary registered as memorial no. 420886, legal title to the Lot was conveyed to the First Defendant.

[9] On 20/1/1993, by an Assignment registered as memorial no. 542698 the First Defendant purported to convey all of his interest in the Lot to Tang Kui Chung, an elder brother of the Second Defendant. On 10/3/1998, by Deed Poll registered as memorial no. 805965, the Lot was subdivided into Section A and the Disputed Land.

[10] On 16/3/1998, by Assignment registered as memorial no. 807994, Tang Kui Chung purported to convey title to the Disputed Land to his brother, Tang Sing Wing, the Second Defendant. On 16/4/1998, Tang Kui Chung purported to convey title of Section A to another brother, Tang Ko Ming.

[11] On or about June 2000, the Second Defendant and Tang Ko Ming applied to the District Lands Office for approval to erect a small house on the Disputed Land and Section A, respectively. Notice of Erection was issued by the District Lands Office and on or about 29/8/2000 the Plaintiff wrote to the District Lands Office objecting to the application.

[12] The Plaintiff commenced this action for a declaration that the First Defendant's title to the Disputed Land had been extinguished under the Limitation Ordinance Cap. 347 and consequently the Second Defendant never acquired any title to the Disputed Land.

The Defendants counterclaimed for vacant possession of the Disputed Land.

The Plaintiff's Case:

[13] The Plaintiff stated that he has lived in Tai Hong Wai since he was born. In 1953, with the permission of Sir Ellis Kadoorie & Son Co., he occupied the Disputed Land and operated a pig farm on the said land. When he took over the Disputed Land it was surrounded by a low stone fence and a small and low pigsty had already been built there. In or about October 1956, he obtained a temporary permit from the District Commissioner to enlarge the pigsty to 15 feet by 22 feet.

[14] Although the Kadoorie lease expired in February 1963, the Plaintiff remained in occupation of the Disputed Land and maintained his pig rearing business there. In or about 1964, the Plaintiff had approximately 100 pigs and again enlarged the pigsty to cover approximately 70% to 80% of the Disputed Land. At the same time, the Plaintiff added some bricks to the stone fence and putted up a wire fence on top. The Plaintiff then added a pump to bring ground water to the pigsty and brought electricity to the property, by borrowing (I took that as tapping into the electrical wiring with the consent of the neighbor) from a neighbor's factory premises. The Plaintiff also added a chain and key lock to the entrance of the pigsty.

[15] By 1977, the Plaintiff's pig rearing business has prospered, he had over 2000 pigs and he needed more space. The Plaintiff leased a track of 20,000 square feet of land in Pat Heung. The Plaintiff stopped using the Disputed Land to rear pigs; however, by the end of 1977 or beginning of 1978 (he did not recall the exact time this occurred), the Plaintiff demolished the pigsty and caused a cottage, which covered the whole of the Disputed Land, to be erected thereon. The Plaintiff also obtained water and electrical supplies for the cottage. Since its erection, the Plaintiff had been leasing the cottage out for profits.

[16] The Plaintiff alleged that since the expiry of the Kadoorie lease and throughout his occupation of the Disputed Land, no one had ever questioned him on his use and occupation of the same. Although Tang Tsun Yiu and his family lived in Tai Hon Wai and the Plaintiff ran into them often, they had never once mentioned about the Disputed Land. Specifically, Ms. To Sum Mui ("Madam To"), Tang Tsun Yiu's daughter-in-law, had never mentioned any arrangement for the occupation of the Disputed Land with the Plaintiff.

The Defendants' Case:

[17] Madam To, the First Defendant's sister-in-law and the Second Defendant's mother, alleged that Tang Tsun Yiu and the Plaintiff came from the same branch of the Tang family (they shared the same paternal grandfather). Although Tang Tsun Yiu had prospered and owned several pieces of land in Tai Hon Wai, the Plaintiff's father passed away when he was very young and the Plaintiff's family was financially disadvantaged.

[18] Since the expiry of the Kadoorie lease, due to Tang Tsun Yiu's sympathy towards the Plaintiff's financial situation, he decided to allow the Plaintiff to remain on the Disputed Land free of rent, until such time when a decision has been reached on the use of the land. By that time Tang Tsun Yiu was already in poor health.

[19] In 1964, Tang Tsun Yiu passed away and title of the Disputed Land vested in Tang Tsun Yiu's wife in trust for the First Defendant. However, because the family was very upset, no decision was made on the use of the Disputed Land.

[20] As the wife of Tang Tsun Yiu's eldest son, Madam To had to assist her mother-in-law in the daily affairs of the family. As part of that duty, in 1969, Madam To verbally conveyed Tang Tsun Yiu's suggestion to the Plaintiff. The Plaintiff accepted Tang Tsun Yiu's suggestion and agreed to return the Disputed Land to Tang Tsun Yiu's family upon the family's request.

[21] Madam To and her family lived in Tai Hon Wai near to the Plaintiff and Madam To would run into the Plaintiff on occasion. Approximately once every two years, Madam To would remind the Plaintiff of his agreement to return the Disputed Land to her family when requested.

[22] In 1978, prior to the Plaintiff erecting the cottage and applying for water and electrical supplies to the same, the Plaintiff had given Madam To prior notice. Madam To allowed the Plaintiff to do so on condition that the Plaintiff would be liable for all payments. However, Madam To's family has paid all Government rents on the Disputed Land. Madam To knew that the Plaintiff was renting the cottage out for profit; however, due to the Plaintiff's financial situation, Madam To allowed him to do so.

The Law:

[23] The Plaintiff's case was one of adverse possession of land. The Plaintiff claimed that he had been in adverse possession of the Disputed Land since 1963 and the First Defendant's right in the Disputed Land had been extinguished by operation of the Limitation Ordinance, Cap. 347.

[24] Section 7 of the Limitation Ordinance states:

"...

(2) 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 or, if it first accrued to some person through whom he claims, to that person : ..."

[25] This section of the Limitation Ordinance was amended by the Limitation (Amendment) Ordinance 1991. Prior to the amendment, 20 years occupation was needed before the owner is statute barred. The amendment was not retroactive and as a result, an action for the recovery of land is statute barred after 20 years from the date that the right of action accrued where that right accrued before 1/7/1991, and 12 years where that right accrued after that date.

[26] The date that the right of action accrued is defined in section 8 of the Limitation Ordinance. Section 8 provides as follows:

"(1) Where the person bringing an action to recover land, or some person through whom he claims, has been in possession, the right of action shall be deemed to have accrued on the date of the dispossession or discontinuance."

[27] The Plaintiff's case was that he had been in continued possession of the Disputed Land since 26/2/1953. However, the Plaintiff had a sub-lease or license from the Sir Ellis Kadoorie & Son Co. to occupy the Disputed Land until 1963. Accordingly, the limitation period could not have begun to run until the Kadoorie lease expired and Tang Tsun Yiu retook possession of the same in 1963.

[28] The fact that title to the Disputed Land was later transferred to Tang Tse Lin, in trust for the First Defendant, had no impact on the time that the limitation period began to run. Section 10 of the Limitation Ordinance states:

" (1) Subject to the provisions of section 20(1), the provisions of this Ordinance shall apply to equitable interests in land, including interests in the proceeds of the sale of land held upon trust for sale, in like manner as they apply to legal estates, and accordingly a right of action to recover the land shall, for the purposes of this Ordinance but not otherwise, be deemed to accrue to a person entitled in possession to such an equitable interest in the like manner and circumstances and on the same date as it would accrue if his interest were a legal estate in the land."

[29] For the limitation period to accrue, the Plaintiff must show that he had both possession and the requisite intention to possess. In Wong Tak Yue v. Kung Kwok Wai David & Anor [1998] 1 HKC 1, the Court of Final Appeal held:

"... A person claiming to be in adverse possession must be shown to have both possession and the requisite intention to possess...."

[30] The fact that the Plaintiff had been in continuous possession of the Disputed Land since 1953 cannot be disputed. It was undisputed that from 1953 until sometime in 1977 or 1978, the Plaintiff had been operating his pig rearing business on the Disputed Land. In 1956, he had increased the size of the pigsty. Sometime in 1964, the Plaintiff again increased the pigsty's size and he built a wire fence surrounding the Disputed Land. The Plaintiff then kept the Disputed Land under lock and key.

[31] In or about 1977 or 1978, the Plaintiff built a cottage encompassing the whole of the Disputed Land. The Plaintiff brought in water and electrical supplies and had leased the cottage out to others for his own profit. Although Mr. Roland Lau, Counsel for the Defendants, stated in his final submission that the year the cottage was built was unreliable, irrespective of the fact that Defendant's witness Madam To had clearly testified that the cottage was built around 1978, approximately the same time her youngest son was born. I am afraid Mr. Lau is not entitled to contradict the testimony of Madam To and the Plaintiff. To do so, tantamount to asking the court to accept counsel's speculation, in place of facts agreed to by witnesses for both parties.

[32] All of the above showed definitively that the Disputed Land was under the physical control of the Plaintiff from 1953 until today. (Although the limitation period did not start to run until the expiry of the Kadoorie lease in 1963).

[33] As to what constitutes the requisite intention to possession or animus possidendi, quoting Slade J.'s (as he then was) holding in Powell v. McFarlane and Anor. [1989] 3 WLR 152 with approval, the Court of Final Appeal stated in Wong Tak Yue:

"...the intention to possess requisite for adverse possession 'involves the intention, in 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.' The question of intention to possess, as with any other question of intention is one of fact. Whether it can be established depends on an assessment of all the circumstances in a particular case."

[34] In Buckinghamshire County Council v. Moran [1990] 1 Ch. 623, the English Court of Appeal held that the requisite intention to possess was only an intention to exclude all others. Slade L.J. stated:

"What is required for this purpose is not an intention to own or even an intention to acquire ownership but an intention to possess-that is to say, an intention for the time being to possess the land to the exclusion of all other persons, including the owner with the paper title."

[35] In Powell v. McFarlane and Anor., Slade J. held that clear and affirmative evidence is required for a trespasser to show the world at large that he intended to exclude the rightful owner from the land. Slade J. stated:

"The question of animus possidendi 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. This 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 not treat him as not having had the requisite animus possidendi and consequently as not having dispossessed the owner."

[36] Accordingly, the burden of proving that there was the requisite animus possidendi was squarely on the Plaintiff; however, Slade J. did give us further guidance on what may constitute the requisite animus possidendi. In Powell v. McFarlane and Anor, he stated:

"There are a few acts which by their very nature are so drastic as to point unquestionably, in the absence of evidence to the contrary, to an intention on the part of the doer to appropriate the land concerned. The ploughing up and cultivation of agriculture land is one such act : ... The enclosure of land by a newly constructed fence is another. As Cockburn C.J. said in Seddon v. Smith 'Enclosure is the strongest possible evidence of adverse possession,' though he went on to add that it was not indispensable. The placing of a notice on land warning intruders to keep out, coupled with the actual enforcement of such notice, is another such act. So too is the locking or blocking of the only means of access."

[37] Accordingly, the Plaintiff's acts in 1964, fencing in the whole of the Disputed Land and putting it under lock and key, together with building a cottage over the whole of the Disputed Land in 1977 or 1978, had clearly and affirmatively demonstrated to the world that the Plaintiff had intended to possess the same.

[38] The only issue left to be determined is whether there was any evidence to the contrary. Madam To testified that in 1969 she had, on behalf of the family, told the Plaintiff Tang Tsun Yiu's intention to allow him to stay on the Disputed Land until the family needed the property. In other words, granting the Plaintiff an expressed license to occupy the Disputed Land. On the other hand, the Plaintiff's testimony was that no one had ever approached him in respect to his occupation of the Disputed Land.

[39] Since the alleged license was never documented in writing and there were no other witness to the conversations between Madam To and the Plaintiff, the outcome of this case thus depended on the veracity of the testimony of the 63 years old Madam To and the 73 years old Plaintiff.

[40] Before I made up my mind on this matter, I have reminded myself Slade J.'s statement that "... the slightest acts done by or on behalf of an owner in possession will be found to negative discontinuance of possession." Whilst I accept that the Madam To had the requisite authority to represent the various owners of the Disputed Land at the time being, I am however not satisfied that Madam To had in fact granted an expressed license to the Plaintiff. My reasons are as follows:

[41] (a)Whilst Tang Tsun Yiu passed away sometime in 1964, Madam To's testimony was that she first approached the Plaintiff about the occupation of the Disputed Land five years later, in 1969. Madam To's explanation was that the family was too upset about Tang Tsun Yiu's death to deal with the Lot.

[42] Although a period of mourning is to be expected after the death of the family patriarch, but being too upset to deal with the properties of the deceased for five years, was an extraordinary long period of time.

[43] (b)Madam To testified that she had often reminded the Plaintiff of his promise to return the Disputed Land to her family when they needed the land. Madam To's explanation for the reminders was because of her fear that the Plaintiff may forget or may break his promise. Under these circumstances, it was remarkable that Madam To had never tried to have the license documented in writing or at the minimum had some elders in the village witness the Plaintiff's promise.

[44] By documentation, I do not mean that I expected the parties to have a formal agreement drawn up by solicitors. All that was required was for someone in Madam To's family to write something to reflect the parties' intention and have the Plaintiff sign this document. Surely that could have easily been arranged, but it was never done.

[45] (c)Madam To also testified that in 1978, when the Plaintiff erected the cottage, she had reminded the Plaintiff again that she will need the Disputed Land to build a home for her sons, one of whom is the Second Defendant.

[46] In 1978, the Second Defendant was only 2 years old. By any stretch of imagination, Madam To's reminding the Plaintiff some 15 years in advance of the Second Defendant's eligibility to build a village house was clearly premature. In any event, if Madam To felt that the Plaintiff needed to be reminded in such an early date, it shows that there was really little trust between Madam To and the Plaintiff. It was more remarkable that Madam To did not put the license agreement into writing.

[47] (d)Madam To's explanation of allowing the Plaintiff to stay on the Disputed Land was Tang Tsun Yiu's concern over the Plaintiff's financial difficulties due to his father's early death. However by 1978, when the cottage was built, the Plaintiff was by all accounts a successful businessman. He had over 2000 heads of pigs, just leased a 20,000 square feet of land in Pat Heung and no longer required the Disputed Land for his business. Furthermore, the Plaintiff was building a cottage over the Disputed Land, with the expressed purpose of renting it out for his own profit.

[48] Madam To's testimony was that while she knew all of the above, she not only allowed the Plaintiff to continue to occupy her family's land, when the original purpose for Tang Tsun Yiu to allow the Plaintiff to occupy the land had long since passed, Madam To even allowed the Plaintiff to collect rent on the Disputed Property. Any reasonable person would agree that Madam To was within her right to ask the Plaintiff to vacant the Disputed Land when he no longer needed it to rear pigs. At a minimum, it would have been reasonable for Madam To to demand a portion of the rental income of the cottage from the Plaintiff. Yet, Madam To did nothing of the kind.

[49] (e)Madam To testified that in 1978, when the Plaintiff built the cottage, she told the Plaintiff not to spend too much money on the land since she would need the land back soon. Madam To specifically stated that even though the Second Defendant was only two or three years old at the time, the family wanted to give the Plaintiff advance notice that they would need the Disputed Land back to build a house for the Second Defendant when he grew up.

[50] In fact the Disputed Land was not transferred to the Second Defendant directly, but after the Lot was conveyed from Tse Lin Yau to Tang Koon Lam in 1990, it was first transferred to Tang Kui Chung, another one of Madam To's sons, in 1993. Tang Kui Chung subdivided the Lot into two lots in 1998 and it wasn't until 16/4/1998, that the Disputed Land was finally conveyed to the Second Defendant.

[51] Madam To had never explained why, when the family had in 1978 decided that the Disputed Land was for the Second Defendant to build a house, title of the Lot was first transferred to Tang Kui Chung in 1993 and not to the Second Defendant directly.

[52] If the family had changed their minds and wanted Tang Kui Chung to build a house, since he was over 18 years old and eligible to apply to build a village house in 1993, there was no reason for Madam To not to ask the Plaintiff to return the Disputed Land at that time.

[53] (f)Madam To had never satisfactorily answered Ms. Doris To, Counsel for the Plaintiff's, questions on whether considerations was paid by Tang Kui Chung to the First Defendant in 1993, and by the Second Defendant to Tang Kui Chung in 1998, for the Disputed Land. Madam To's answers were she did not remember.

[54] One must remember that in accordance with Madam To's testimony, she was the person entrusted with administering the Disputed Land since Tang Tsun Yiu's death in 1964. The Disputed Land was very important to Madam To. She stated that in 1978, her family had already decided the Disputed Land would be used to build a house for her youngest son, the Second Defendant. Madam To's lack of knowledge of the financial arrangements in respect of the Disputed Land is therefore highly suspicious.

[55] Additionally, Madam To was the only one who had any discussions about the Disputed Land with the Plaintiff. The Defendants' case of an expressed license depended on Madam To's recollection of events that happened 37 years ago. Madam To's inability to remember whether one of her sons had paid considerations to her bother-in-law in 1993 and whether her sons had paid money to each other in 1998, casts a giant shadow on her ability to recollect events since 1964.

[56] Accordingly, I found that there was no expressed license between the Plaintiff and Madam To, on behalf of the owners of the Disputed Land, for the Plaintiff to occupy the same.

[57] The Plaintiff having proved that he had both physical possession and the requisite animus possidendi for a continuous period from 1964 and consequentially had acquired a good possessory title to the Disputed Land in 1984. The First Defendant's title to the Disputed Land having been extinguished by the operation of the Limitation Ordinance, Cap. 347, Laws of Hong Kong, the Second Defendant had never acquired any interest in the Disputed Land.

Order :

[58] Judgment is therefore for the Plaintiff.

[59] The Defendants' counterclaim is dismissed.

[60] Costs of this action is to the Plaintiff, with certificate for Counsel. The said costs is to be taxed on a party/party basis, unless agreed.